The Volante
THE STUDENTS’ VOICE SINCE 1887 SPORTS (B1, B2)
W E D N E S D AY, N O V E M B E R 3 , 2 0 2 1
USD basketball back to prove themselves this season Both the men’s and women’s basketball teams will begin their seasons at home in the Sanford Coyote Sports Center in the next week. As the teams get ready to start competition, they both agreed they are excited to have a morenormal season again.
VOLANTEONLINE.COM VERVE (B3, B4)
Tarot reading fundraiser for Domestic Violence Safe Options Spectrum and Students for Reproductive Rights (SFRR) held their first ever tarot reading fundraiser. The fundraiser raised money for the Vermillion Domestic Violence Safe Options Services.
PANDORA PAPERS REVEAL SOUTH DAKOTA’S ROLE IN THE GLOBAL FINANCIAL SYSTEM
Jacob Forster
Jacob.R.Forster@coyotes.usd.edu
The International Consortium of Investigative Journalists (ICIJ) has recently begun publishing the Pandora Papers—11.9 million leaked documents showing the offshore accounts of 35 world leaders and more than 100 billionaires, celebrities and business leaders. The publication of these papers drew new attention to South Dakota’s role in the global financial system. Much of the Pandora Papers are concerned with trusts. Trusts are an arrangement between an asset holder and a trust company where a trustee administers funds on behalf of a beneficiary. The beneficiary may be a third party or, in the state of South Dakota, may even be the asset holder themselves. South Dakota is the state with the greatest number of trusts identified in the Pandora Papers. According to CBS News, of the 201 trusts identified, 81 were based in South Dakota. South Dakota has made efforts to be an attractive destination for business. The state is one of only seven with no income tax, and one of only two, along with Wyoming, with no corporate income tax. In 1983, South Dakota became the third state to eliminate the “rule against perpetuities,” a tradition inherited from English common law which places limits on the duration of trusts. According to the Washington Post, in doing so, the state became the first to allow trusts
to exist free of state income tax forever. Tom Simmons, a professor at USD’s School of Law whose work focuses on trusts, estate administration and the estate tax, said that South Dakota’s attractiveness as a destination for trusts isn’t just based on legislation. “Because the industry is developed here, there’s like 100 trust companies open for business in Sioux Falls alone. In Nevada, by contrast, I don’t know the exact number, but I imagine it’s in the single digits,” Simmons said. “So if you’re looking for a trustee, and you want a professionally trained corporate trustee with oversight and bonding and regulatory oversight... you’d look to a place like either Delaware or South Dakota.” Simmons said South Dakota also has extensive statutes governing trusts, which come from English common law traditions and were therefore usually governed by case law and judicial decision. “Basically, you can have too many rules, but generally, the more rules you have, the more there’s an answer to your question, which means you don’t have to litigate it and spend a whole bunch of money having the judge tell you what the answer is,” Simmons said. “So that’s probably number two, is just the comprehensive clarity of our trust laws.” The state’s lack of an income tax is a secondary attraction, Simmons said, because it only
exempts the funds from taxation so long as the trust doesn’t pay out to a beneficiary. “So that’s not a huge advantage, really, but if you’re comparing states, you’d kind of go, ‘oh well, the state also doesn’t have a state income tax,’” Simmons said. “There’d be that marginal tax savings.” Timothy Schorn, director of international studies at USD’s political science department, said the revelations in the papers leave the U.S. looking hypocritical. “We often complain when other countries, such as those in the Caribbean, Central America or even Europe allow for overly secretive banking and hiding of money,” Schorn said in an email interview with The Volante. “The involvement of a number of U.S. states indicates that perhaps our own national laws are not strong enough to address what is happening at the state level.” Simmons said that trusts are a relatively simple concept in how they are regularly used, and that the secrecy around specific trust accounts is similar to the expected privacy of an individual’s bank account. “The trust company can’t simply post, oh, Arnold Schwarzenegger has an account here and it has a million dollars in it, because that’s his private financial data,” Simmons said. Michael Card, an associate professor of political science at USD, said the trust law changes were part of a broader effort by the South Dakota state government to attract banking
and financial services companies to incorporate in the state. This included eliminating lending interest limits. Card said proponents argue that the arrangement benefits the state by creating jobs. “These are really good jobs. These are jobs for lawyers, these are jobs for accountants, these are just really good jobs,” Card said. “But they weren’t existing in high numbers in South Dakota. And as you know, one of our major exports is educated youth. And so this was a way to keep a number of them in South Dakota.” Schorn said the benefits to South Dakota are not great, as the state receives only a relatively small flat fee when trusts are set up. “Theoretically, countries— and American states—who allow this gain a particular economic benefit,” Schorn said. “The money may not actually be in South Dakota… It simply makes South Dakota look like it’s playing a role in money laundering, which it probably is.” While the number of jobs associated with these trusts is relatively small, Simmons said they still allow people to live in the state and contribute to the local economy. “Do those people just have to leave our state?” Simmons said. “It’s like, well, we would generally care about people that live here that have jobs, and we wouldn’t just say, ‘well, there’s only a few hundred of you, we don’t care about you.’” Simmons said the trouble with these trusts comes in cases
Jacob Forster | The Volante where the trust may be used to dodge international laws. Notably, Ecuadorian President Guillermo Lasso funded a trust in South Dakota two months after an Ecuadorian state prohibited politicians from funding trusts in other countries. Simmons said that ideally, trust companies would be able to identify these kinds of laws and avoid these clients. “The trick with it is, especially if you think about a law that was passed in Spanish, I’m sure, two months ago, potentially not by the federal government of Ecuador but by one of its principalities or states, the idea that every trust company is going to be that up to speed on almost a monthly basis with all the legislative changes over the planet… I’m not sure how you do that,” Simmons said. Two other individuals named in the Pandora Papers were President Vladimir Putin of Russia and King Abdullah II of Jordan. Schorn said in both instances the countries struggled to excuse the activity. “It is embarrassing for (Putin) to be called out so publicly. It caused the Kremlin to scramble to come up with a plausible explanation or denial,” Schorn said. “In the case of King Abdullah II, the Jordanian government, at the request of the King, tried to paint the incident as a desire to protect the security of the royal family. But considering how poor Jordan is and how much it relies on foreign assistance, it looks particularly bad to have the See Pandora Page A6
Then Feed Just One packs over 30,000 meals to feed the hungry Allison Horkey
Allison.Horkey@coyotes.usd.edu
Then Feed Just One (TFJO) is an organization from LeMars, Iowa with a chapter at USD. Last Thursday, TFJO hosted its biggest event of the year, their annual packaging event in the Muenster University Center pit. This year, the organization packaged 33,264 meals to help feed the hungry Alex Bergeson, the president of TFJO, said the organization was started in 2017 by some USD students from LeMars who participated in the organization in high school. “We bring these people in from LeMars that run the event. They’re a group that does a mission trip to Honduras every single year. They take the meals we make along with the meals that they do with their other packing events,” Bergeson said. Richard Seivert was a high school teacher in LeMars when he started this organization in 2005. The meals TFJO packages are primarily sent to Honduras, but Seivert said the food has gone elsewhere too. “In all the years we’ve been doing this, actually our food has gone into South Africa, some into Tanzania and east Africa. We ship into Dar Es Salaam and from there some actually makes it into Rwanda,” Seivert said. Seivert said some meals even stay within the United States to fight hunger after hurricanes or to support impoverished areas.
The organization as a whole packs anywhere from 1.2 to 1.4 million meals a year. Bergeson said the event is usually wellreceived on campus. “In the past, we’ve had amazing turnout. Our last event was in the fall of 2019—we weren’t able to have one last year—at the last event we packed 22,680 meals. This year, the goal is 30,000,” Bergeson said. Seivert said he felt he needed to start this organization after a group of doctors went to Honduras as part of a separate organization called Mission Honduras LeMars, which he also started. Although the doctors were able to bring medicine, it quickly became clear that what the people really needed was food. “A couple of the doctors from Sioux City came to me and said, ‘never again send us into a village without food,’” Sievert said. TFJO received $4,900 from SGA, which made up the bulk of their fundraising for the packaging event. They raised an additional $900 over the course of the year with fundraising, though Bergeson said this was lower than usual because TJFO was limited by the COVID-19 pandemic. “We’ll do Pizza Ranch fundraisers, HyVee— like the HyChi fundraisers—and then our big one is we’ve run concessions at the basketball, volleyball and football games,” Bergeson said. Bergeson said this year, TFJO wants to try to do more to help the local community. “We’re trying to reach out into the
community more. So in the past, we have done stuff with (the) Welcome Table downtown, and then the backpack program, which is also ran through there. This year we want to do more of that and kind of have the fall packaging event as our big thing, and then in the spring we really want to get out into the community more and raise more awareness,” Bergeson said. The Fundraising Chair of TFJO, Sydney
Schorg, said the packaging event is especially important to raise awareness about issues in developing nations. “The biggest thing with this event and our organization is education. A lot of people just aren’t really aware of what’s going on in thirdworld countries. So I think that educating and doing this event is super important,” Schorg said.
Allison Horkey | The Volante
Then Feed Just One hosted their biggest event of the year and packaged over 33,000 meals helping feed the hungry.