Pandora Papers and why American’s Richest not listed

Hundreds of prominent businesspeople, politicians, and leaders were uncovered as tax avoiders or evaders in a massive investigative report by the International Consortium of Investigative Journalists (ICIJ). 

Among the biggest names in the so-called Pandora Papers include the King of Jordan, former British Prime Minister Tony Blair, Presidents and Prime Ministers from Czechia, Ukraine, Chile, Kenya, and more, and people in Vladimir Putin’s orbit.

But on the map displaying where the 336 politicians named in the Pandora Papers are from, there is not a single politician from America. Additionally, no big names outside of politics have been named, despite the barrage of celebrities and business leaders from across the globe who are caught up in the scandal.

The United States did not escape unscathed; the Pandora Papers name several US states as tax havens for those looking to evade or avoid tax. The biggest revelation has been South Dakota, a smaller state that has not previously received much attention as a tax haven.

But why have no prominent Americans been caught up in the Pandora Papers scandal?

Some have pointed to America’s already low tax rate as a reason America’s most affluent do not use offshore bank accounts. Experts told NPR that billionaires like Elon Musk and Jeff Bezos might not feel any reason to use offshore services as they can use services within the states to avoid tax.

But others have pointed the finger at the ICIJ and its funding source as potential reasons Americans have been spared in the Pandora Papers and other similar document dumps.

ICIJ – Funded by the CIA?

The ICIJ is a massive consortium of over 100 media companies and hundreds of investigative journalists from over 100 countries. The journalistic organization has been behind some of the most prominent document dumps related to crimes in international finance, including the Panama Papers in 2016.

Similar to the Pandora Papers, the Panama Papers had a lack of American culprits despite the worldwide implications of the document dump.  For example, Maltese journalist Daphne Caruana Galizia was killed in a car bomb attack after she uncovered massive financial crimes within the Maltese government.

The ICIJ already received criticism in 2016 for failing to uncover many financial crimes committed by Americans. WikiLeaks said the ICIJ was “US-funded” and implied they were running an attack story on Vladimir Putin, despite “some good journalists” working on the project.

So, how true are accusations that the US State Department funds the ICIJ?

The accusations from WikiLeaks point to ICIJ’s partner, the Organized Crime and Corruption Reporting Project (OCCRP), who has received funding from USAID and the US State Department.

The OCCRP worked as a partner with the ICIJ on both the Pandora and Panama Papers, and it has clear leaks to the United States government.

Powerful billionaire donors also have donated to the ICIJ and OCCRP. Pierre Omidyar has made donations to the ICIJ and Democratic megadonor George Soros has made contributions to the OCCRP.

Both the ICIJ and OCCRP leaned heavily into the Trump-Russia angle during the Panama Papers, fueling accusations that the organizations work in tandem with certain elements of the US foreign policy apparatus.

While a dead-to-rights connection linking the ICIJ to the US State Department might not be currently visible, the funding of it and its partners do call into question the integrity of the operation.

America is a Tax Haven

Due to state control over budgets and taxes, state legislatures and governors have considerable control over their state tax code. With this power, several states have been long known to be tax-havens.

Delaware is perhaps the most well-known onshore tax haven in the United States.

Former Delaware Senator and current President Joe Biden told reporters in July, “now, look, I’m a proud capitalist. I spent most of my career representing the corporate state of Delaware.”

Biden and other Delaware politicians helped mold Delaware into a business-friendly tax haven, and his coziness with corporations extended to banks and credit card companies. A quick Google search reveals hundreds of articles detailing how you can form your LLC in Delaware as a non-resident.

While Delaware and other states have established reputations, other state governments have been working hard to become the next biggest tax haven in the US. South Dakota was the leader in the US, with 81 trusts uncovered in the Pandora Papers linked to the state. Texas came in at second with 37, followed by Delaware at 35.

South Dakota’s trust industry holds $367 billion in assets, a monumental increase from $75 billion just a decade ago. The state has been growing its reputation in recent years as a tax haven for wealthy people from the US and abroad. 

However, South Dakota politicians had yet to face much pushback before the Pandora Papers were revealed.