How the US became the center of global kleptocracy

“The biggest single provider of anonymous shell corporations in the world isn’t Panama or the Cayman Islands. It’s not the financial secrecy stalwart Switzerland, or a traditional offshore haven like the Bahamas.

It’s Delaware. And the main reason is federalism.

Thanks to the US’s federal structure, company formation remains overseen at the state level, rather than in Washington.

So if you’re a budding autocrat interested in a bit of easy money laundering, you don’t turn to federal officials in Washington. Instead, you look to state officials in Dover, Cheyenne, or Reno to help construct anonymous shell companies to funnel and clean your illegitimate money.”

“Since there are no regulations in the US requiring that shell companies identify their true owners — known as “beneficial owners” – American states have been under no compunction to try to peel back who may be behind the anonymous shell companies mushrooming across the country.

These states and their constituents are raking in fees”

“Nevada, which actively marketed itself as the “Delaware of the West” in the early 1990s, directly linked company formation fees to funding teachers’ salaries. And Wyoming, which invented the limited liability company (LLC) in 1977, has been only too happy to capitalize on allowing shell companies to flourish in the state, generating millions of dollars for its general budget — yet another small state all too willing to participate in this “race to the bottom.””

“The criminal and corrupt of the world have taken notice. “Merchant of Death” Viktor Bout, the most prolific illicit arms dealer of the past few decades, used anonymous American shell companies to smuggle missiles and rocket launchers to rebels in Colombia.

Former Ukrainian Prime Minister Pavlo Lazarenko, who once joined Indonesian dictator Suharto and Serbian genocidaire Slobodan Milošević among the ranks of the world’s most corrupt leaders, relied on a network of anonymous shell companies in Wyoming to plunder Ukraine.

Even the ongoing impeachment saga in the US hinges in large part on anonymous Delaware shell companies, which Rudy Giuliani’s Ukrainian-born bag-men used to funnel foreign funds into American elections.

For the world’s warlords, criminals, and autocrats, there’s no gift finer than an anonymous American shell company.”

https://www.vox.com/policy-and-politics/2020/2/3/21100092/us-trump-kleptocracy-corruption-tax-havens

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