A cache of 11.9 million files leaked from companies hired by wealthy clients to create offshore accounts and trusts in tax havens has been reported in a massive exposé known as the Pandora Papers, which shares information on the secret stash of 35 world leaders, more than 100 billionaires and 300 public officials.
Caught up in the exposé are current and former presidents, prime ministers and heads of state, government ministers, judges, mayors and military generals in more than 90 countries who hid money.
Some secret accounts were set up in well-known offshore havens such as Belize, Seychelles, Hong Kong and the British Virgin Islands, but the U.S. has emerged from the leak as a leading tax haven — something that will be an embarassment for President Joe Biden, the Guardian reported. Accounts were set up in U.S. trusts and structures including 81 in South Dakota and 37 in Florida, USA Today reported.
Setting up an offshore account is not illegal, but it offers secrecy in tax havens attractive to tax evaders, fraudsters and money launderers, some of whom are exposed in the files, the Guardian reported.
The Pandora Papers provide a rare glimpse into the hidden operations of the global offshore economy which helps some of the world’s richest people hide their money and sometimes pay little or no tax.
“The new data leak must be a wake-up call,” said Sven Giegold, a Green party lawmaker in the European Parliament, USA Today reported. “Global tax evasion fuels global inequality. We need to expand and sharpen the countermeasures now.”
Many of the accounts were designed to conceal assets and evade taxes. They were leaked to the International Consortium of Investigative Journalists, which released the report Sunday. The exposé involved 600 journalists working at 150 media outlets in 117 countries. Their work shines a light on previously hidden dealings of the elite and the corrupt, and how they used offshore accounts to hide assets collectively worth trillions of dollars.
The Pandora Papers are a follow-up to the Panama Papers, a similar cache released in 2016 compiled by the same consortium of journalists.
The Pandora Papers were based on nearly 3 terabytes of data — that’s about equal to 24 smartphones with 128 GB capacity each — leaked from 14 different service providers doing business in 38 different jurisdictions in the world, USA Today reported. The records date back to the 1970s, but most of the files are from 1996 to 2020. The Panama Papers, by comparison, combed through 2.6 terabytes of data leaked by one now-defunct Panamanian law firm Mossack Fonseca.
Celebrities often use shell companies to hold luxury items such as property, yachts and incognito bank accounts, Guardian reported. The report showed holdings including paintings by Picasso and murals by Banksy.
Former Nigerian Gov. Peter Obi was among the leaders whose secret accounts were exposed by the Pandora Papers, according to Sahara Reporters, a New York City-based news outlet that focuses on Nigeria. Obi set up and operated overseas accounts in tax and secrecy havens in ways that broke Nigerian laws, the newspaper reported. When the media outlet contacted Obi, he admitted that he did not declare the hidden companies, funds and properties in his asset declaration filings with the Nigerian Code of Conduct Bureau — the government agency that deals with corruption, conflict of interest and abuse by public servants. He claimed he was unaware he had to.
One Twitter user complained of a smear campaign against Obi. “some people are afraid of him becoming president of Nigeria, having a shell account abroad is not breaking the law,” Bendel @s_bendel tweeted.
“It’s not a campaign, these are leaked documents that were part of millions of documents leaked, has nothing to do with Peter obi,” train on a water boat on a track replied @ert_fgy.
King Abdullah II of Jordan was also accused of using shell companies registered in the Caribbean to buy 15 properties, collectively worth more than $100 million, in Washington, D.C., Malibu, Calif. and southeast England. The purchases were not illegal, but they suggest a double standards, the New York Times reported. The Jordanian prime minister, who was appointed by the king, cracked down on corruption in 2020. That included targeting citizens who used shell companies to disguise their overseas investments.
Former Prime Minsiter Tony Blair and his wife Cherie bought an office by acquiring a British Virgin Islands offshore company in a transaction that, though not illegal, highlights a loophole that allows wealthy property owners to avoid paying a tax commonly levied on ordinary Brits, Guardian reported.
Russian President Vladimir Putin, whom the U.S. suspects of having a secret fortune, does not appear in the files by name but numerous close associates and his best friend from childhood do, among others. Ukraine President Volodymyr Zelenskiy is also named in the leak
“This is where our missing hospitals are,” said Oxfam International, a British consortium of charities, in a statement. “This is where the pay-packets sit of all the extra teachers and firefighters and public servants we need. Whenever a politician or business leader claims there is ‘no money’ to pay for climate damage and innovation, for more and better jobs, for a fair post-covid recovery, for more overseas aid, they know where to look.”
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
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