Washington: A new report sheds light on how world leaders, powerful politicians, billionaires and others have used offshore accounts to shield assets collectively worth trillions of dollars over the past quarter-century.
The report by the International Consortium of Investigative Journalists involved 600 journalists from 150 media outlets in 117 countries. It’s being dubbed the Pandora Papers because the findings shed light on the previously hidden dealings of the elite and the corrupt.
Hundreds of politicians, celebrities, religious leaders and drug dealers have been hiding their investments in mansions, exclusive beachfront property, yachts and other assets, according to a review of nearly 12 million files obtained from 14 firms located around the world.
The more than 330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former UK Prime Minister Tony Blair, Czech Republic Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and associates of both Pakistani Prime Minister Imran Khan and Russian President Vladimir Putin.
The billionaires called out in the report include Turkish construction mogul Erman Ilicak and Robert T. Brockman, the former CEO of software maker Reynolds & Reynolds.
Many of the accounts were designed to evade taxes and conceal assets for other shady reasons, according to the report.
“The new data leak must be a wake-up call,” said Sven Giegold, a Green party lawmaker in the European Parliament. “Global tax evasion fuels global inequality. We need to expand and sharpen the countermeasures now.”
Oxfam International, a British consortium of charities, applauded the Pandora Papers for exposing brazen examples of greed that deprived countries of tax revenue that could be used to finance programs and projects for the greater good.
“This is where our missing hospitals are,” Oxfam said 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.”
The Pandora Papers are a follow-up to a similar project released in 2016 called the ‘Panama Papers’ compiled by the same journalistic group.
The latest bombshell is even more expansive, relying on nearly 3 terabytes of data the equivalent of roughly 750,000 photos on a smartphone leaked from 14 different service providers doing business in 38 different jurisdictions in the world. The records date back to the 1970s, but most of the files span from 1996 to 2020.
In contrast, the Panama Papers culled through 2.6 terabytes of data leaked by one now-defunct law firm called Mossack Fonseca that was located in the country that inspired that project’s nickname.
The latest investigation dug into accounts registered in familiar offshore havens, including the British Virgin Islands, Seychelles, Hong Kong and Belize. But some of the secret accounts were also scattered around in trusts set up in the US, including 81 in South Dakota and 37 in Florida.
The investigation found advisers helped Abdullah, the king of Jordan, set up at least three dozen shell companies from 1995 to 2017, helping the monarch buy 14 homes worth more than 106 million in the US and the UK. One was a 23 million California ocean-view property bought in 2017 through a British Virgin Islands company. The advisers were identified as English accountants in Switzerland and lawyers in the British Virgin Islands.
Abdullah denied any impropriety in a comment Monday by the Royal Palace, citing security needs for keeping the transactions quiet and saying no public funds were used.
The details are an embarrassing blow to Abdullah, whose government was engulfed in scandal this year when his half brother, former Crown Prince Hamzah, accused the ruling system of corruption and incompetence. The king claimed he was the victim of a malicious plot, placed his half brother under house arrest and put two former close aides on trial.
UK attorneys for Abdullah said he isn’t required to pay taxes under his country’s law and hasn’t misused public funds. The attorneys also said most of the companies and properties are not connected to the king or no longer exist, though they declined to provide details.
Blair, UK prime minister from 1997 to 2007, became the owner of an 8.8 million Victorian building in 2017 by buying a British Virgin Islands company that held the property, and the building now hosts the law firm of his wife, Cherie Blair, according to the investigation.
The two bought the company from the family of Bahrain’s industry and tourism minister, Zayed bin Rashid al-Zayani. Buying the company shares instead of the London building saved the Blairs more than 400,000 in property taxes, the investigation found.
The Blairs and the al-Zayanis both said they didn’t initially know the other party was involved in the deal, the probe found. Cherie Blair said her husband wasn’t involved in the purchase, which she said was meant to bring the company and the building back into the U.K. tax and regulatory regime.
She also said she did not want to own a British Virgin Islands company and that the seller for their own purposes only wanted to sell the company, which is now closed.
A lawyer for the al-Zayanis said they complied with UK laws.
The consortium of journalists revealed Putin’s image-maker and chief executive of Russia’s leading TV station, Konstantin Ernst, got a discount to buy and develop Soviet-era cinemas and surrounding property in Moscow after he directed the 2014 Winter Olympics in Sochi. Ernst told the organization the deal wasn’t secret and denied suggestions he was given special treatment.
In 2009, Babis, the Czech prime minister, put 22 million into shell companies to buy a chateau property in a hilltop village in Mougins, France, near Cannes, the investigation found. The shell companies and the chateau were not disclosed in Babis’ required asset declarations, according to documents obtained by the journalism group’s Czech partner, Investigace.cz.
A real estate group owned indirectly by Babis bought the Monaco company that owned the chateau in 2018, the probe found.
Babis has denied any wrongdoing.
The Czech police’s organized crime unit said it would launch an investigation into the report.
Call for action in Asia
Malaysia’s main opposition leader called Monday for information found in the Pandora Papers data leak to be discussed in Parliament, after learning the country’s former finance minister and several current officials might have been involved with offshore firms set up in tax havens.
Opposition leader Anwar Ibrahim asked for a debate on this urgent issue, as it has mentioned some big names in the country. He identified former Finance Minister Daim Zainuddin as well as current Finance Minister Tengku Zafrul Aziz and three other politicians.
I believe this matter is in the interest of the people because it also mentions the names of government and opposition political figures, he wrote in a Facebook post to which he attached his formal request for a parliamentary debate.
Zafrul, a banker who was appointed finance minister last year, said in a statement that he had ended ties with the holding company and bank mentioned in the report by 2010.
He suggested he was considering suing online news portal Malaysiakini, the only Malaysian media organization that was listed as being involved in the leak of documents to the International Consortium of Investigative Journalists.
I have referred the matter to my lawyers for further advice and appropriate action,” he said.
Media organizations around the world collaborated through the ICIJ to review and report on nearly 12 million files obtained by the consortium from 14 offshore entities.
Elsewhere in the region, the periodical that collaborated on the document leak from Indonesia, the weekly Tempo magazine, reported that a government minister, Luhut Pandjaitan, had served as the CEO of a Panama-incorporated oil and gas company, Petrocapital SA.
His spokesman, Jodi Mahardi, confirmed that Panjaitan, the coordinating minister of maritime affairs and investment, had served in that role from 2007 to 2010, but said it was a time when the company had found no investment projects.
Along the way, there were various obstacles related to geographical location, culture, and investment certainty, so Mr. Luhut B. Pandjaitan decided to resign from Petrocapital and focus on his business in Indonesia, he told The Associated Press in a written statement.
In Australia, the Taxation Office said it would analyze the information to determine whether there were any relevant links, while stressing that it doesn’t rely on data leaks as it deals with offshore tax evasion year-round.
We are well connected locally and globally in our efforts to fight financial crime,” said Will Day, the Taxation Office’s deputy commissioner and the head of the Serious Financial Crime Taskforce. “We will certainly look at this data set and compare it with the data we already have to identify any potential connections.
In Malaysia, Malaysiakini’s report on the data leak focused primarily on former Finance Minister Daim, a businessman who served in that role from 1984 to 1991, and 1999 to 2001. It said he is implicated in setting up a firm in the British Virgin Islands for his sons, aged 9 and 12 at the time, among other things.
Having an offshore company is not necessarily illegal, and when contacted by Malaysiakini, Daim said all of his taxes had been fully paid in every jurisdiction where he did business and where income was earned.
He told the publication that not all the trusts linked to him in the documents were his and that some belonged to his children.
I’ve retired from business for some time already, and trusts are part of estate planning, he was quoted as saying.
According to Malaysiakini, Daim’s sons were named joint shareholders with their mother of Newton Invest & Finance Limited in 2007, which held properties in London worth some 10 million pounds at the time.
Malaysiakini reported that by the time the brothers were in their early 20s, they were owners of several offshore firms set up in tax havens, including Splendid International Ltd., which held London properties then worth 12 million pounds.
Daim was quoted by Malaysiakini as saying that he had been buying overseas properties since the 1960s, well before entering politics, and suggested that the news portal’s constant reporting and implying wrongdoing by innuendos and speculation are totally unprofessional and looks like a never-ending mission to shame and discredit me.
I was a successful and wealthy businessman long before I entered politics, and this has been sufficiently documented, he was quoted as saying.
The two companies whose Singapore offices were most frequently mentioned in the Pandora Papers for helping set up a trust or company in a tax haven, Asiaciti Trust and Trident Trust, Malaysiakini reported.
Asiaciti said the Pandora Papers articles are based on incomplete and sometimes erroneous information, including some confidential information that was illegally obtained from Asiaciti Trust as part of a global attack on industry service providers.
The company stressed in a statement emailed to AP and posted on its website that it was committed to ensuring our operations comply with all laws and regulations.
We are bound by statutory confidentiality laws that restrict us from commenting on specific matters, and the ICIJ and its partners have been informed of this fact, the company said. In our view, it is clear that they have chosen to portray information in a way that suits a particular narrative.
Trident Trust did not respond to emails from the AP for comment.
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