SIOUX FALLS, S.D. (KELO) — A Congressional subcommittee is discussing the Pandora Papers and Hidden Wealth Wednesday in Washington D.C. 

In a news release, Chairman Bill Pascrell (D-New Jersey) said the House Ways and Means Oversight Subcommittee invited Gov. Kristi Noem to better understand how South Dakota is home to 81 of the 106 trusts discovered in the United States from the Pandora Papers.

Those trusts were identified from nearly 12 million leaked financial records. You can watch the meeting online.

Pascrell said Noem declined to speak with the committee, but lawmakers will “explore how South Dakota has become the Grand Cayman of the Great Plains.”

Parscrell notes South Dakota trust companies are home to $360 billion. 

Officials with South Dakota’s trust industry have told KELOLAND News the Pandora Papers only cited a few examples of people accused of crimes. Tom Simmons, a University of South Dakota law professor focused on trusts, posed the question of should Bill Cosby not be allowed to open a trust? 

“When you connect someone that’s maybe done some bad things and that they have an account somewhere, I’m not sure that in itself presents something that needs to be corrected,” Simmons said. 

Others have said the anonymous behavior that comes along with trusts is concerning. Four witnesses were scheduled to testify on Wednesday and they called for Congress to act to implement reforms.    

The 13-members on the committee along with Pascrell are Thomas Suozzi (D-New York), Judy Chu (D-California), Bradley Schneider (D-Illinois), Stacey Plaskett (D-Virgin Islands), Lloyd Doggett (D-Texas), Dwight Evans (D-Pennsylvania), Steven Horsford (D-Nevada), Ranking Member Mike Kelly (R-Pennsylvania), Jackie Walorski (R-Indiana), Brad Wenstrup (R-Ohio), Drew Ferguson (R-Georgia) and Lloyd Smucker (R-Pennsylvania). 

The main offender cited in a Washington Post story on the Pandora Papers was a South Dakota licensed trust company called Trident Trust. The Pandora Papers leak ties a number of trusts from some men and families located in Colombia (accused of money laundering for Colombia’s drug dealers), Brazil (accused of collusion to underpay local farmers) and the Dominican Republic (accused of exploiting workers) to Trident Trust’s South Dakota location. 

The South Dakota Trust Association said banks and trust companies in South Dakota are held to extremely high standards. 

“For more than thirty years, our state and community leaders have worked diligently to create a responsible, regulated financial industry that provides unmatched benefits to South Dakotans,” Angie Kuiper, spokeswoman for the South Dakota Trust Association, said.  

The South Dakota Division of Banking, a branch of the South Dakota Department of Labor and Regulation, oversees South Dakota’s financial entities, including trust companies. Dawn Dovre with the South Dakota Department of Labor and Regulation said the Division of Banking has an extensive application review process.

Dovre said because the number of trust companies has increased annually since 2006, the number of trust examiners has also increased. Currently, 14 trust examiners work for the S.D. Division of Banking overseeing South Dakota’s 100+ trust companies.

“The Division currently employs a Deputy Director for Trust; Chief Trust Examiner; Training Director – Trust (coming soon); and 12 trust examiners,” Dovre said in an emailed statement. “At least every 36 months, each trust company is examined with a review of internal policies, practices, and procedures; board and committee meeting minutes; affiliate relationships; external and internal audits performed; compliance with applicable fiduciary laws, rules, and principles including South Dakota situs requirements; account administration and compliance with governing instruments; earnings performance including a capital adequacy assessment; asset management; and operations. A Bank Secrecy Act assessment is performed in conjunction with the account compliance review.”