The U.S. lambastes and strong-arms countries that help drug lords and millionaire investors hide their money from tax collectors. Critics say it should look closer to home.

America itself is emerging as a top tax haven alongside the likes of Switzerland, the Cayman Islands and Panama, those seeking reform of the international tax system say. And states such as Delaware, Nevada, South Dakota and Wyoming, in particular, are competing with each other to provide foreigners with the secrecy they crave.

“There’s a big neon sign saying the U.S. is open to tax cheats,” says John Christensen, executive director of the Tax Justice Network.

America’s openness to foreign tax evaders is coming under new scrutiny after the leak this week of 11.5 million confidential documents from a Panamanian law firm. The Panama Papers show how some of the world’s richest people hide assets in shell companies to avoid paying taxes.

Christensen’s group, which campaigns for a global crackdown on tax evaders, says the United States ranks third in the world in financial secrecy, behind Switzerland and Hong Kong but ahead of notorious tax havens such as the Cayman Islands and Luxembourg.

Under a 2010 law, passed after it was learned that the Swiss bank UBS helped thousands of Americans evade U.S. taxes, the United States demands that banks and other financial institutions disclose information on Americans abroad to make sure they pay their U.S. taxes.

But the U.S. doesn’t automatically return the favor.

More than 90 countries have signed on to a 2014 information-sharing agreement set up by the Organization for Economic Cooperation and Development; the U.S. is among the few that haven’t joined. American banks don’t even collect the kind of information foreign countries would need to identify tax dodgers.

“The banking lobby has resisted changes in the law that would allow more sharing of data,” says Peter Cotorceanu, a Zurich-based lawyer who specializes in private banking.

In a report last year, the Tax Justice Network complained that “Washington’s independent-minded approach risks tearing a giant hole in international efforts to crack down on tax evasion, money laundering and financial crime.” It said foreign elites have “used the United States as a bolt-hole for looted wealth.”

Pascal Saint-Amans, head of the OECD’s Center for Tax Policy and Administration, says the U.S. often makes information available to other countries upon request. But that means countries can get details only on those they already suspect of tax evasion.

Christensen says Swiss banks report that “many of their tax-dodging clients are talking about moving to the U.S. You go to Switzerland, and that’s all they’re talking about.”

Individual states, including Nevada, Wyoming and South Dakota, are making things worse, critics say.

They compete with each other to make it easier to set up corporations — few questions asked about who’s behind the business. “We have states that set up corporations where there’s no information about ownership,” says Jack Blum, a Washington lawyer who specializes in financial crime. “The states make a lot of money doing that.”

Nevada, for instance, makes it easy to incorporate secretly and charges a $500 annual business license fee for corporations and $200 for other businesses. The money is earmarked for teacher salaries.

“Nevadans will continue to see nefarious business practices like those reported in the Panama Papers if state officials don’t change the laws of incorporation,” says Rep. Dina Titus, D-Nevada, even though she voted as a state legislator for the law that protects shell companies that incorporate in Nevada. “For more than a decade, I have said that it is time for the state to tighten its disclosure and liability laws and remove the sign from our front yard that says: ‘Sleazeballs and rip-off artists welcome.'”

Nevada’s registered agent industry, which helps businesses incorporate in the state, supports about 1,000 jobs and pumps $110 million into the state economy every year, says the Nevada Registered Agents Association.

The group opposed a successful effort last year to raise the business license fee, saying it would jeopardize Nevada’s reputation and drive businesses to other states. “Nevada has promoted itself for decades as a ‘business friendly’ state, and that benefit is critical to keep new entities incorporating in Nevada,” says association president Matthew Taylor.

But doubts are rising, even in Nevada. Many of the businesses are mere shells, financial contrivances that don’t employ people or make any investments.

“Historically, we have marketed ourselves as kind of a Wild West, frontier sort of place,” says Pat Hickey, a Republican in the Nevada Assembly. Now, Hickey wonders, “Don’t we want businesses that actually reside here, provide services or manufacture things? … I don’t know it’s necessarily an industry that we need to bend over backward to keep.”

In 2014, a group of academics looked at tax havens for their book “Global Shell Games.” Posing as investors who wanted to set up businesses in different places, they kept track of whether the consultants helping them incorporate asked for basic information such as photo IDs or other documents that proved who they were. In the United States, only 25 percent did; in Delaware, only 6 percent.

The U.S. Treasury Department says it plans to propose regulations requiring foreign-owned “limited liability companies” to get tax identification numbers disclosing the identities of their owners. Once the rules are in place, Treasury says in a statement, the Internal Revenue Service will be better equipped to respond to requests for help from foreign governments.

Still, Treasury says, Congress needs to come up with a broader, better solution. Lawyer Cotorceanu doubts that will ever happen.

American lawmakers “do not want to hurt the U.S.’s banking industry,” he wrote last year in the journal Trusts & Trustees. “It is no secret that U.S. banks, particularly in Miami, are awash in undeclared Latin American money. … How ironic — no, how perverse — that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour.”

(AP)