South Dakota Outed as Switzerland-Like Tax Haven

Every time he’s on the tail of a clandestine organization with seemingly endless financial resources, James Bond gets a trip to a swank destination where the world’s super-rich stash their cash, like Zurich or the Cayman Islands. His next destination…

Jennifer
Image Credit: iStock, Jacob Boomsma
Sign up for insightful business news.

Every time he’s on the tail of a clandestine organization with seemingly endless financial resources, James Bond gets a trip to a swank destination where the world’s super-rich stash their cash, like Zurich or the Cayman Islands. His next destination could be… Sioux Falls?

On Monday, a trove of millions of documents leaked to the International Consortium of Investigative Journalists revealed that South Dakota — the sparsely populated midwestern state where people say “you betcha” and eat loose-meat sandwiches called “taverns” — is one of the world’s top havens for tax dodgers. And some of the money there could be tainted.

‘We Fortify Thugs’

​​Since the late 1990s, South Dakota’s legislature has passed dozens of laws — amid heavy lobbying by the trust industry — that protect trust companies in the state from creditors, foreign governments, and tax regulators.

On Monday, the ICIJ’s “Pandora Papers” release revealed just what that’s done to the state:

  • $360 billion in customer assets are now held in trusts based in the Mount Rushmore State. That’s more than quadrupled in the last decade. One firm alone has clients in 54 countries.
  • Among those holding their wealth in South Dakota: a Colombian textile CEO who laundered money for an international drug cartel, a prominent Dominican family whose business is accused of illegally bulldozing poor people’s houses to build plantations, and a Guatemalan businessman whose company allegedly dumped toxic pollutants in a vital local waterway.

“It has become abundantly clear that our national interests are really dependent on keeping that kind of money out even if it’s not a financial crime,” Josh Rudolph, a National Security Council staffer under both the Obama and Trump administration, told The Washington Post. “We fortify thugs and crooks, fail to uphold our values and fuel popular resentment against America.”

Taxman Cometh: Tax authorities in the U.K. and Australia said Monday that they plan to review the leaked documents to see if anyone named in them broke the law. But if we’ve learned anything from 007, it’s that fat-cat villains often evade traditional justice (…at least until they’re hunted down by a libidinous British super spy who is allowed to shoot them into space, slice and dice them an airplane engine, or impale them on a plutonium rod with total impunity.)

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

Carmakers Circle as Vale Weighs Selling a Stake in Metals Unit

Lab-Grown Foie Gras Startup Scores Fundraising Round

US, EU React to OPEC+ Agreement to Slash Oil Production

Thrift Store King Goodwill Goes Digital

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>