U.S. House committee pushes for transparency in trust industry
WASHINGTON, D.C. - Democrats on the Oversight subcommittee for the U.S. House’s Ways and Means committee wants less secrecy in the trust industry, according to a hearing Wednesday.
Committee members discussed laws governing trusts at the federal level, and ways that they could be improved to provide more transparency.
Representative Bill Pascrell (D-New Jersey) referred to South Dakota as “Grand Caymans of the Great Plains,” due to the state having some of the most lenient laws governing trusts in the country.
“South Dakota is home to a stunning 81 of the 106 trusts located in the United States,” Pascrell said during his introductory remarks. “We are not talking about the Cayman Islands.”
The International Consortium of Investigative Journalists published the “Pandora Papers” in October, which offered a look into how some of the world’s most rich and powerful people hide their money in trust-friendly states.
“The Mount Rushmore state is home to assets of $360 million dollars, that amount has quadrupled in the last decade,” Pascrell said.
Governor Kristi Noem was invited to testify before the committee about South Dakota’s laws, but declined due to “prior commitments.” Noem attended a fundraising event in Washington D.C. suburb the same day.
The subcommittee sent Noem’s office questions to send back written replies to, which her spokesperson Ian Fury says that they are reviewing.
“We are reviewing the questions sent by the committee,” Fury said. “South Dakota’s trust industry has positively impacted our economy for decades, is well-regulated, and has contributed millions of tax dollars to both the state and federal governments. Governor Noem is grateful for those facts.”
Noem and other Republicans have defended the trust industry and South Dakota’s role in it, arguing that no laws are being broken and that trusts have a generally positive impact on the economy.
“No one here supports foreign nationals laundering money here in the United States, lets just be clear about that,” said Rep. Mike Kelly (R-Pennsylvania). “We also do not support conflating that issue with basic tax policy. I worry that the majority (Democrats) wants to go after trusts in the country with massive new reporting regimes and regulations. Farmers, small businesses, and millions of average Americans use trusts to plan for the future.”
According to the Washington Post, among those with money in trusts in South Dakota area a Colombian textile businessman who was caught laundering money from an international drug ring, and the family members of the former president of a sugar company in the Dominican Republic that has been accused of exploiting workers.
“It is imperative that Congress fulfill it’s oversight and appropriation role to aid the administration in denying financial safe haven not only to tax evaders, but also to drug traffickers, human rights abusers, kleptocrats, terror financiers and sanction dodgers,” said Erica Hanichak, Government Affairs Director for the Financial Accountability and Corporate Transparency (FACT) Coalition.
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