THE PANAMA PAPERS was the largest information leak in history. Revelations continue to unfold about how one Panamanian law firm, Mossack Fonseca, used anonymous shell companies to help its clients avoid taxes and scrutiny from law enforcement. These shell companies are created on paper and don’t disclose their true owners.

The Panama Papers scandal isn’t just about taxes. It’s about conflict, corruption, war, and human trafficking. It’s about whether or not our financial system will fuel conflict and instability around the world. If we think this is an “offshore” problem, then we are deeply mistaken. This is very much a U.S. problem. Americans don’t need to go to Panama to hide their money because they can do it here at home.

To paraphrase one analyst: The world’s largest financial secrecy jurisdictions are in fact islands, but not the islands we think of when we think of tax havens. They are the islands of the United Kingdom and the island of Manhattan.

It isn’t difficult to set up this type of company in the U.S., particularly in states such as Delaware and Nevada where financial secrecy is widespread. Currently no U.S. states require that these shell companies disclose the identity of their owners. Legislation in Congress—the Incorporation Transparency and Law Enforcement Assistance Act, which is supported by several religious organizations—could change that by giving law enforcement access to owner information. Shell companies have facilitated human trafficking, terrorism, weapons trafficking, and drug running. Jubilee USA notes that some U.S.-based shell companies are used to steal from the poor. One case Jubilee USA cites is that of the son of Equatorial Guinea’s dictator, who used U.S.-based anonymous companies to steal money from his starving people and to buy a mansion in Malibu, Calif., among other extravagances.

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