Excerpt from: CREDO Action
The secret world of tax evasion by the world’s super-rich elite has just been blown wide open, in an explosive media leak being called the “Panama Papers.”1
More than 11 million documents from the secretive Panamanian law firm Mossack Fonseca were leaked to an international journalist consortium, which released a first wave of stories just recently. More than 140 world leaders, public officials, and major celebrities have been implicated already, with more names – including U.S. connections – expected in the next week. The documents, spanning almost 30 years, expose how the world’s elite use fake corporations called “shell companies” to launder money, evade sanctions, hide wealth, and dodge taxes.2
It is easy to think that the problem is limited to offshore tax havens in places like Panama. But what most don’t know is that the United States itself is one of the easiest and most popular places to set up anonymous companies.3
Legislation in Congress would crack down on tax evasion and criminal activity by forcing American corporations to disclose their true owners.4 The Panama Papers have put tax evasion in the center of the conversation and sparked an international controversy – so we are teaming up with our friends at Global Witness to seize this moment and demand an end to anonymous shell corporations in the United States.
Already, the prime minister of Iceland has resigned after the documents revealed he had an undisclosed stake in banks that were bailed out by his government.5 Associates of high-profile world leaders from Russian President Vladimir Putin and Chinese President Xi Jinping are also named in the documents. France, Austria, Australia, and other nations have already announced investigations. Reporters digging through the documents have suggested that news about U.S. figures will come to light in the weeks to come.6
What is incredibly clear is that the true scandal in the U.S. is what is already legal. Under current law, you can set up a shell corporation in the United States without disclosing its true owners. These anonymous corporations have been used by the Iranian government to escape sanctions and purchase a New York skyscraper, by Mexican cartels to launder millions in drug money through an Oklahoma company, by the super-rich to evade taxes – and even to donate millions in untraceable money to super PACs determined to sway our elections.7
By some estimates, elites around the world are sitting on around $21 trillion in hidden assets – escaping taxes that could be used to fund badly needed priorities here at home.8
The legislation in Congress would require all American corporations to disclose their “beneficial” owners – the real, living individuals who own and ultimately control a company – to the government when they are created, and to keep that information up to date. But even though transparency would undermine terrorist financing and criminal activity, it faces opposition from the Chamber of Commerce and other allies of the 1%. We need to show that Americans are outraged in order to break the gridlock.
The Panama Papers have already sparked press coverage and popular protests around the world. But here in the U.S., coverage has been muted. If enough of us raise our voices right now, we can seize the international momentum to end anonymous shell corporations – while driving the topic of tax evasion into the U.S. political conversation.
The Panama Papers could be one of the biggest political stories of the year. This is a crucial moment to crack down on tax evasion and nefarious schemes made possible by U.S. corporate secrecy.
- Tell Congress: Crack down on tax evasion and criminal activity. End anonymous shell corporations in the U.S.
- Petition to the United States Congress:
“Pass the Incorporation Transparency and Law Enforcement Assistance Act, which would end the use of anonymous U.S. shell corporations that fuel crime, terrorism, and tax evasion.”
Click below to sign the petition:
Thank you for speaking out,
Murshed Zaheed, Political Director
CREDO Action from Working Assets
BBC News, “Panama Papers: Leaks spur global investigations,” BBC, April 4, 2016.
Global Witness, “Moves to Stop Corrupt Politicians and Criminals from Hiding Behind Anonymous U.S. Shell Companies Welcomed,” GlobalWitness.org, November 14, 2011.
Camila Domonoske, “Iceland’s Prime Minister Resigns Amid Panama Papers Scandal,” NPR, April 5, 2016.
BBC News, “Panama Papers: Leaks spur global investigations.”
Global Witness, “ANONYMOUS COMPANY OWNERS,” GlobalWitness.org.
BBC News, “Tax havens: Super-rich ‘hiding’ at least $21tn,” BBC, July 22, 2012.
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