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'Panama Papers' leak sparks push for incorporation reform

Courtesy of Wikimedia Commons


World leaders, celebrities and sports stars have been linked to shadowy, offshore shell companies in a recent leak of more than 11.5 million documents.



Those all came from one Panamanian law firm, Mossack Fonseca, with open government advocates calling for further and worldwide disclosure of who actually owns the businesses to help prevent money laundering and tax evasion.


Many of those advocates point out you don't have to leave the United States to create these legal companies. TomCardamone, managing director of Global Financial Integrity, a Washington, D.C. thinktank is one of them.


“If it’s not Panama it could be the Caymans or the British Virgin Islands or Singapore or Luxemburg or Nevada or Delaware – it could be in many, many jurisdictions around the world," said Cardamone. "It’d be very difficult to say for sure, but I think this may be just a little bit of what’s potentially out there.”


Delaware and other states have the freedom to register a corporation with little more than an address and the name of a manager since federal lawmakers left decision on the process up each legislature.


Shifting away from that anonymity could jeopardize significant revenue streams for the First State, totaling more than $1 billion last fiscal year.


But Cardamone says implementing a federal law that would force company owners to register their names, which would be available through a warrant from law enforcement agencies, wouldn't leave states at a disadvantage to one another.


A bill in Congress doing has gotten little traction.



“Worldwide, [the problem is] systemic. The numbers are staggering, the dollar figures are staggering. To understand the magnitude of the problem and then to do nothing, I think, would be the bigger crime,” said Cardamone.