Nick Shaxson ■ Delaware corporate secrecy and crime: a long-awaited debate begins


Delaware-photo-2A fascinating blog from Global Witness:

“Last November, a former special agent for the Treasury Department, John Cassara, wrote an op-ed for the New York Times with the headline “Delaware, Den of Thieves?”  Cassara described how the state of Delaware (along with Wyoming and Nevada) has become “nearly synonymous with underground financing, tax evasion and other bad deeds facilitated by anonymous shell companies”.
. . .
This week, a debate has started in Delaware about its role as a corporate secrecy haven. One-half of the members of the Delaware State Legislature have sent a letter to the Delaware Congressional Delegation, urging them to support bipartisan federal legislation introduced by Senators Levin (MI-D) and Grassley (IA-R) to deal with anonymous companies.”

The Global Witness blog provides a lot of background to Delaware’s deep involvement in global criminality and abuses, and read that NY Times story too: it’s a good ‘un. Global Witness adds details of these latest moves – a relatively rare fightback against the financial sector in a smaller-state secrecy jurisdiction:

“Led by the Delaware chapter of Americans for Democratic Action, 13 state-based organizations including labor, good government and social justice groups issued a statement raising concerns about the of use of anonymous companies to set up dirty deals in their state’s back yard, and calling on the state to strengthen its own transparency laws. Today’s letter to the Congressional delegation takes that initiative one step further by showing that local lawmakers want Delaware’s Members of Congress to be partners in this effort as well.”

The response to this, politically inside Delaware and more broadly, will be a fascinating study in political economy. And if it proves to have teeth it could bring welcome changes around the world.



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