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Chuck Collins poses with his Bernie Sanders “scarecrow.” Collins, a Guilford resident, is the author of a book about wealth inequity.

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I’d like to apologize because I’ve been keeping a secret. Sitting in a Guilford, Vermont farmhouse, I’ve known for several months about the Pandora Papers. But like 600 journalists in 117 countries around the world, I was sworn to secrecy.

The Pandora Papers are the biggest leak of secret financial documents in history, unmasking the ways that the global super-wealthy play shell games with their wealth and avoid paying taxes. Convened by the International Consortium of Investigative Journalists, this team analyzed almost 12 million financial documents.

Now I can explain to my neighbors why I appeared distracted and missed a few of those committee meetings!

I’ve spent the last several months briefing journalists from around the world about the inner workings of the U.S. hidden wealth system. Because of my research job and recent book, “The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions,” I’ve been tracking this clandestine universe for over a decade.

I found it inspiring to talk to some of the best investigative journalists from Mexico, Brazil, France, Argentina, England, Sweden, Denmark – who were sifting through the leaks for disclosures about some of their own citizens. For example, in Mexico over 3,000 millionaires and politicians were exposed for shifting funds offshore through wealth advisory firms in Panama, the British Virgin Islands, and Belize.

For those in the U.S., the biggest revelation is that our country is now one of the world’s biggest tax havens. A tax haven — or “secrecy jurisdiction” — is usually thought of as a tiny Caribbean nation like the Cayman Islands or a small European protectorate like Monaco. These are countries or territories where wealthy individuals pay low or no tax and do not have to disclose if they are the beneficial owner of a bank account, corporation, trust, real estate, or other asset. But as the Pandora Papers exposed, you don’t have to go “offshore;” you can move your wealth to South Dakota, Nevada, Delaware or … New Hampshire.

Super-wealthy individuals — typically those with $30 million or more — and criminals from around the world are parking their assets in trusts and companies in the U.S. The accomplices are the “wealth defense industry,” the army of tax attorneys, wealth managers, and accountants who are paid millions to stash trillions.

Wealth defenders will tell you that “everything is legal,” but they are actively writing the laws, morphing the trusts, designing the loopholes, and defending them politically. Just because they are legal, and they have the power to win law changes, doesn’t make them it right or ethical.

For example, South Dakota has come under scrutiny in the Pandora Papers for its oversized role in aiding billionaires to form of trusts to sequester their treasure and dodge taxes. The Mount Rushmore state pioneered the “dynasty trust,” changing their state laws to accommodate a small but powerful trust industry.

Closer to home, New Hampshire competes with South Dakota to attract trust business. One firm, Perspecta Trust, acquired in 2020 by the Jordan Park Group, advertised wealth strategies to “ultra-high net worth individuals and families around the world,” according to The Washington Post. The Post reported that New Hampshire’s small trust industry employs an estimated 225 to 275 people and oversees $600 billion in assets (which is actually more in South Dakota trusts, which is $500 billion reported by state’s banking division).

I found that in 2017, wealth advisors in New Hampshire successfully lobbied for legislation to create a new ownership structure, the civil law foundation (not to be confused with charitable foundations). Their goal is to attract billionaire wealth from around the world that might be unfamiliar with the “trust” ownership form. Stay tuned for more data on this topic.

The U.S. likes to lecture other countries about cleaning up corruption. But clearly the U.S. needs to get its own house in order. Congress should convene hearings to look at the implications of the Pandora papers on tax policy, law enforcement, trust law, and interstate commerce. They should consider federal legislation to override porous state laws when it comes to ownership reporting and trust formation. There is a hopeful precedent: In 2020, Congress passed the Corporate Transparency Act to require LLCs to disclose their real owners to the law enforcement arm of the Treasury Department.

The hidden wealth system was formed by a wealth defense industry focused on the private desires of their wealthy clients rather than the larger public interest and the common good. It is time for the rest of society to assert our interest and shut down a hidden wealth system that enables global tax dodging, wealth hoarding, extreme inequality, and criminal activity.

Chuck Collins is the author of The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions (Polity Books). He directs the Program on Inequality at the Institute for Policy Studies where he co-edits the website, Inequality.org. The opinions expressed by columnists do not necessarily reflect the views of Vermont News & Media.


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