Thanks to Delaware’s strict corporate secrecy laws, more than 285,000 companies are registered, for tax reasons, at a two-story building in Wilmington—more than any other address in the world. Among them are holding companies belonging to Hillary Clinton and Donald Trump.
Within two weeks of stepping down as secretary of state in February 2013, Clinton registered ZFS Holdings LLC at 1209 North Orange Street, in Wilmington, Delaware, according to records maintained by the Delaware Division of Corporations. In 2014, her joint tax return with Bill Clinton shows, more than $16 million in speaking fees and book royalties passed through the holding company.
The former secretary of state has promised to crack down on “outrageous tax havens and loopholes that super-rich people across the world are exploiting in Panama and elsewhere,” and in March, Clinton called offshore tax loopholes a “perversion.” The New York Times estimated in 2012 that the so-called Delaware loophole, which allows companies to shift revenues there from other states, had resulted in $9.5 billion in lost tax revenue over the course of the decade preceding.
A Clinton spokesman told the Guardian: “ZFS was set up when Secretary Clinton left the State Department as an entity to manage her book and speaking income. No federal, state, or local taxes were saved by the Clintons as a result of this structure.” Bill Clinton also maintains a holding company, WJC LLC, at the same address.
Of the 515 companies on Trump’s official Federal Election Commission (FEC) filing, 378 are registered in Delaware, he revealed, after being questioned by the Guardian about why so many of his New York-based companies are incorporated in Delaware.
He said he asked his staff to find out how many entities he has in Delaware. “I figured they’d maybe say two or three, right?” Trump said at a rally in Harrington, Delaware, on Friday. “We have 378 entities registered in the state of Delaware, meaning I pay you a lot of money, folks. I don’t feel at all guilty, OK?”
Last year, the Institute on Taxation and Economic Policy issued a report describing Delaware’s tax code as “a magnet for people looking to create anonymous shell companies, which individuals and corporations can use to evade an inestimable amount in federal and foreign taxes.”