States in the American federal system increasingly are raising financing by issuing bonds through special-purpose entities. Although this represents a significant portion—in some cases, the majority—of state financing, relatively little is known or has been written about these entities. This Article examines state special-purpose entities, comparing them to special-purpose entities used in corporate finance. States, even more than corporations, use these entities to reduce financial transparency and avoid public scrutiny, seriously threatening the integrity of public finance. The Article analyzes how regulation could be designed to control that threat while maintaining the legitimate financing benefits provided by these state entities.