PIERRE, S.D. — Republican legislative leaders expressed heavy skepticism on Thursday, Feb. 10, about an explosive report published last fall that suggested trusts in South Dakota were shielding the money of wealthy, international con men.
"I don't buy the report that was presented last fall," said House Majority Leader Kent Peterson, R-Salem. "It's a great industry in South Dakota. It's fantastic jobs."
The so-called Pandora Papers last year revealed that international moguls have stored their money in South Dakota-based trust companies, enabled by the state's generous pass-through laws. The most critical look came in an Oct. 4 article by The Washington Post with the assistance of the International Consortium of Investigative Journalists, who reviewed 11.9 million confidential documents, which, "come mostly from the Sioux Falls office of Trident Trust, a global provider of offshore services."
The state's top political brass, from U.S. Sen. John Thune to Gov. Kristi Noem , issued defenses of the industry or cast doubt on the reporting. But scrutiny has remained from national and international media about ties between the secretive industry and tony foreigners, including family members of an Dominican Republic sugar magnate .
Legislative leaders have, until Thursday, largely been silent on the topic.
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Pressed by reporters at a Thursday, Feb. 10, news conference about the absence of a perennial bill brought the a governor's task force on the trust industry, Senate Majority Leader Gary Cammack, R-Union Center, said he was assured by the industry that they vet potential clients to safeguard against bad actors.
"We just had a presentation from some of the folks in the trust industry, and after that presentation, I have every confidence in the world that sort of thing is not happening in South Dakota," said Cammack.
Asked if a small — even a fraction — of a tax on the industry might help aide property tax relief or fund education, Cammack said such provisions would open wide the door for the industry to leave.
"There's a reason that South Dakota has a really active trust industry," said Cammack. "It only takes a few days to move a bank franchise. It takes about 12 hours to move a trust."
For years, the industry has brought a so-called "clean-up" bill to update the state's trust-friendly laws. Often, lawmakers have admitted they do not fully understand what they're even being asked to pass.
On Thursday, Noem said the task force likely didn't bring a bill this year because they saw nothing to update.
"If they chose not to recommend those laws, and if legislators chose not to bring an of those bills, I don't know if there was necessarily anything to debate," said Noem.
According to the Washington Post's reporting , the trust industry amounts to nearly $400 billion in assets.
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Christopher Vondracek is the South Dakota correspondent for Forum News Service. Contact Vondracek at cvondracek@forumcomm.com , or follow him on Twitter: @ChrisVondracek .
