If You Want to be Anonymous, Delaware’s the Place to Go
While the war between Russia and Ukraine continues, with Russia adding to their status as pariah nation with their horrific war crimes, there is a region of the world that has slipped under the radar and gone completely unnoticed, all while their complicity in creating, aiding and abetting the world’s problems continues to fester.
I’m talking about an area in the world that is about 3,379 times smaller than Russia, 118 times smaller than Ukraine, and also 1,000 times smaller than Argentina and 48 times smaller than the UK.
A number of famous people have come from this region, including the rock musician George Thorogood, WNBA star Elena Delle Donne, Stephen Marley (son of Bob Marley), actresses Valerie Bertinelli and Elisabeth Shue, and of course, President Joe Biden.
This is the state of Delaware, in the good ol’ U.S. of A. Although Delaware is the second smallest state by size and sixth least populous state in the U.S., it has been nothing but trouble.
And it just might be high time war was declared on it.
Now before you proclaim me a war monger and say I’m just a shill for the military-industrial complex, I want you to hear me out.
It all started after the American Revolution, in the early days of the new country’s existence. As businesses started to sprout up, and companies thought about incorporating, the states were empowered to oversee the corporations. To receive a corporate charter, a bill to allow for a charter for an individual corporation to be established had to be passed by the legislature of the state the corporation was looking to operate in. It was an onerous process, which led to the existence of very few corporations.
By the 1830s, things started to change as corporations were no longer required to go through the burdensome process of being approved by state legislatures to exist. Corporations then started springing up left and right, leading to the situation in the latter part of the 19th century, the era known as the Gilded Age, when corporations gained monopoly power in certain industries, leading to obscene levels of wealth inequality in the U.S.
A countervailing reformist movement then occurred at the beginning of the 20th century, when anti-trust laws came into existence and monopoly power of corporations was put under control.
But anti-trust legislation didn’t stop corporations from still being created, and in the 1920s, the state of Delaware spotted an opportunity: they made themselves the place for corporations to establish themselves. State laws were passed that made Delaware very pro-corporate formation and very pro-corporation in general.
In Delaware, corporations don’t have to pay state income tax, and along with that, corporations don’t have to have any connection to Delaware, except for their legal status as being a Delaware corporation.
Delaware’s decision to become the most corporate friendly state in the U.S. has been a boon to the state’s economy—they currently make $1.5 billion a year from the fees corporations pay for the privilege of setting up a Delaware corporation. And this flow of capital into Delaware allows Delaware to not have a state sales tax, nor a property tax.
But it’s not because Delaware has become the king of corporations that I think it’s time the U.S. declared war on Delaware.
It’s because of something that links Delaware directly to the deaths of hundreds of thousands, the swindling of trillions of dollars, the ocean of dirty money circling the world, the looting of entire nations, the war in Ukraine, the partisan divide in America, the extreme levels of wealth inequality around the world, and the rise of right-wing populist leaders in various countries.
That something is the anonymous shell company, and it’s because of that invention that Delaware needs to be invaded.
The anonymous shell company is American born and bred, although it’s not precisely known how it came into existence. It’s the greatest financial secrecy tool the world have ever known; it serves no legitimate purpose, yet Delaware has been promoting and selling them for quite a number of decades.
Delaware’s promoting and selling of anonymous shell companies started in 1986, when Delaware’s lieutenant governor and secretary of state made a business tour of Asia to talk to businessmen, investors, and government officials. They were selling the anonymous shell corporation to these people, hoping to bring as much money as possible into Delaware.
This opened the floodgates, as people around the world, and in the U.S., saw what Delaware had to offer, and took them up on that offer.
The thing about an anonymous shell company is just that—it’s anonymous. No one knows who’s behind them. And along with that, they have no shareholders, employees, offices, or purpose. They exist just to hide money.
You want to set up an anonymous shell company in Delaware? It’s easy peasy. Give a call to the office in Delaware tasked with setting up anonymous shell companies. It can take as little as 15 minutes to set up, and it’ll cost you around $100 bucks of your hard earned cash. If you prefer someone helping you in setting up the anonymous shell company, there are numerous businesses in Delaware, known as company service providers, who can assist you with the task.
Once you have the anonymous shell company in place, you then go to your local bank and set up an account in the shell company’s name. The next step is for you to deposit money into your shell company’s account, and then, if you want to take it to the next level, you can set up anonymous shell company bank accounts at other banks, whether in other states of the U.S. or other countries. Just keep moving the money around, in the name of the shell company; as you do so, no one will know who’s behind the money.
This mechanism of moving money around is a process known as the laundromat. Money comes in dirty, and comes out clean. Where does the dirty money come from? No one knows. It could be Russian oligarchs. It could be Vladimir Putin. It could be Donald Trump, or any other American politician. It could be dictators. It could be American billionaires.
That’s the beauty of the laundromat. Once the dirty money is put through the ringer, it comes out clean. and then the anonymous shell company can do whatever it wants with it—even potentially nice and tidy things, if it so chooses. The laundromat allows the owner of the clean money to go public if they so desire and let the world know they are a philanthropist, financier, benefactor, or political donor; or they may decide to run for political office—these days, there’s no shortage of ultra-wealthy people running for political office (and in many cases, winning).
The U.S. is the easiest place in the world to set up a shell company, thanks to its deregulatory approach to business and government, and Delaware is the leader of the pack—in other words, Delaware is the world’s leader in hosting anonymous shell companies. And because it’s so easy to set one up in the U.S., the U.S. has more anonymous shell companies than the next 40 global tax havens combined.
No one knows how much dirty money circulates the world, but the estimates are anywhere from tens of trillions to hundreds of trillions of dollars. Some have even speculated that the number is in the quadrillions of dollars.
This money originates from dictators, politicians, drug cartel leaders, businessmen, arms dealers, bankers, heads of industries, and many other corrupt and scurrilous kleptocratic creatures.
It’s Delaware that plays the central role in all this, and Delaware could care less about all the dirty money it has empowered to float around the world.
Delaware itself be may not be the root of all the vermin that walk the earth–-but it’s where the vermin go when they need to hide their money, cover-up their tracks, and transform all of their dirty money into untraceable assets—and sometimes, after putting the dirty money through the laundromat, to transform themselves from vermin to reputable, respectable, and upright patrons.
Dirty money is the cause of so much misery. In the U.S., one thing it becomes is the so-called “dark money” that pollutes the political process—it’s money given anonymously to politicians, with no ability to be traced back to its source; or it gets used to fund organizations looking to advance an agenda. And this money can originate from an American or a foreigner.
The politicians who receive dark money, and the organizations using dark money to push an agenda, are not using the money to advance causes beneficial to the common citizenry. Instead, the agenda of the politicians and organizations is to advance the narrow interests of the ones doing the donating, interests that go against the best interests of the citizenry and the planet.
Using anonymous shell companies is how the Sackler family was able to hide and protect their multi-billion dollar fortune. The Sacklers were the owners of Purdue Pharma, the company that created OxyContin; the Sacklers are singlehandedly responsible for the opioid addiction problem that plagues the U.S. and other countries.
After years of litigation and the Sacklers continually denying their role in opioid addiction, they finally agreed to a global settlement in 2021. But the federal courts could only extract so much from the Sacklers, because of the fact that most of their family fortune has disappeared into the black hole of untraceable shell companies.
Even with the U.S. and other countries sanctioning the wealth of Vladimir Putin and his alliance of Russian oligarchs, the money sitting in Delaware’s anonymous shell companies can’t be sourced or touched, so Putin and the Russian oligarchs are secure in their wealth.
In a way, it’s karmic payback for what capitalism has wreaked on the globe. Delaware was doing just what capitalism requires—looking for new ways to make more money and grow its economy. So they made themselves extremely corporate friendly, expanding the reach of its anonymous shell companies by sending its lieutenant governor and secretary of state on a world tour to promote Delaware as a safe haven for dirty money. And it has worked to perfection.
The only downside to the U.S. declaring war on Delaware is that other states, in a race to the bottom, have realized they also could get a piece of the action and have also set themselves up as good places to stash dirty money.
So now you have various states dotted around the U.S. that let you set up an anonymous shell company and stash your money, no questions asked. And as per usual, the money then goes through the laundromat and becomes clean—or becomes dark money that fuels the American political process, in order to corrupt democracy.
America is no longer the bright light of democracy. Now it is the dark home of secrets.
We don’t have to fight a war with Delaware, or the other U.S. states that have gotten into the business of hiding dirty money, the same way Putin is fighting Ukraine. We don’t need to bomb them into oblivion. We just need to cut off their figurative heads—meaning the financial secrecy tools they have created.
Dirty money, whether it stays dirty or becomes clean, is a disease. And it’s harming the well-being of all of us, along with the well-being of the planet.
It’s a phenomenon of only the last few decades, so it’s not like it’s been around for centuries. But it is a sickness, an aspect of the infectious blight that modern day, predatory capitalism has become. It is capitalism that is the true pandemic.
It’s time to tame the beast in order to heal the planet.