Burning Issues: The Money Hidden In Shell Companies

There is as much as $27 trillion hidden in shell companies around the world, outside of the reach of governments and public scrutiny, according to Porter McConnell, the director of the Financial Transparency Coalition.

That has a huge impact on the global economy, she says, from corporate tax evasion to international criminal trafficking. According to the Organization for Economic Cooperation and Development, developing countries lose because of money hidden in tax havens seven times as much as they receive in development aid.

The Panama Papers has brought global attention to the impact one Panama-based firm has had in setting up shell companies for wealthy individuals and politicians around the world. But the United States happens to be one of the easiest places in the world to establish a shell company through which a corporation or a wealthy individual can hide their wealth, and McConnell explains that there is a case to be made on both ends of the political spectrum for changing the rules so that there is more transparency and more capacity to police illicit activity.

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