The secret businesses and hidden assets of some of the richest and most powerful people in the world were revealed in the largest pool of leaked extraterritorial data in history, by Pandora Papers. Branded Pandora, the cache contains 11.9 million files from companies commissioned by wealthy clients to create offshore structures and trusts in tax havens such as Panama, Dubai, Monaco, Switzerland and the Cayman Islands.
They reveal the secret extraterritorial affairs of 35 world leaders, including presidents and former presidents, prime ministers, and heads of state, and shed light on the secret finances of more than 300 public officials such as government ministers, judges and mayors, and military generals in more than 90 countries. The files contain revelations about top Conservative Party donors who pose difficult questions to Boris Johnson at his party’s annual meeting.
The leaked data reveals for more than 100 billionaires, as well as celebrities, rock stars and business leaders, many of whom use letterbox companies to manage luxury goods such as real estate and yachts, as well as incognito bank accounts. There is even artwork, ranging from looted Cambodian antiques to Picasso paintings and Banksy murals. Pandora documents reveal the inner workings of a shadow financial world and offer a rare glimpse into the hidden operations of a global offshore economy that enables some of the richest people in the world to hide their wealth and, in some cases, pay little or nothing.
Other wealthy individuals and companies hide their assets overseas to avoid having to pay taxes elsewhere. After more than 18 months of analyzing the data in the public interest, The Guardian and other media outlets will publish their findings in the coming days, starting with revelations about the offshore financial affairs of some of the world’s most powerful political leaders.
These include the ruler of Jordan, King Abdullah II, who built a secret $100 million empire that spans Malibu, Washington and London, as shown in leaked documents. The Jordanian king declined to answer certain questions, but said there was nothing inappropriate about owning property through offshore companies. Jordan appeared to have blocked the ICIJ website on Sunday, hours before the Pandora documents were released.
Archives also show that Azerbaijan’s ruling Aliyev family has traded nearly £400 million in British property in recent years. One of his lots was sold to the Queen’s Crown Property, who are now investigating how he came to pay £67 million to a company, it acted as a façade for the family who run a country routinely accused of corruption. The Aliyevs declined to comment.
Pandora newspapers threaten to cause political upheaval for two leaders of the European Union as well. The Prime Minister of the Czech Republic, Andrej Babiš could be asked why an offshore investment company has a castle of $22 million in southern France. And in Cyprus, a controversial offshore hub, President Nicos Anastasiades could be asked to explain why a law firm he founded was accused of hiding the assets of a controversial Russian billionaire behind fake business owners.
Not all people named in Pandora newspapers are accused of wrongdoing. Leaked files show Tony and Cherie Blair saved £312,000 in property tax by buying a London building that was partly owned by the family of a prominent Bahraini minister. The former Prime Minister and his wife bought the £6.5 million Marylebone office through the acquisition of an offshore company in the British Virgin Islands (BVI). While the move was not illegal and there is no evidence that the Blairs proactively tried to avoid property taxes, the deal points to a loophole that has allowed wealthy homeowners to avoid a homeowner tax.
The leaked records vividly illustrate London’s central coordinating role in the dismal offshore world. The UK capital is home to wealth managers, law firms, company formation agents and accountants. They all exist to serve their ultra-rich customers. Many are foreign-born tycoons who enjoy “non-micro mobile” status, which means they don’t pay taxes on their wealth abroad.
Ukrainian President Volodymyr Zelenskiy, elected in 2019 to clean up his country’s notoriously corrupt and oligarchic-influenced economy, is also mentioned in the leak by a close friend who now works as the president’s top advisor, the lay Files close. Zelenskiy declined to comment, and it is unclear whether he is still a beneficiary.
Russian President Vladimir Putin, whom the United States suspects of having a secret fortune, does not appear by name in the archives, but numerous close associates do, including his childhood best friend the late Petr Kolbin, the critic as “Wallet” for Putin’s own wealth and a woman with whom the Russian leader allegedly once had a romantic relationship. No one responded to invitations to comment.
The Pandora Papers also put an illuminating focus on the offshore system itself. In a development that is likely to be embarrassing for US President Joe Biden, who has pledged to lead the international drive for transparency in the global financial system, on assets tied to individuals previously accused of serious financial crimes.
The offshore route also stretches from Africa to Latin America and Asia and is likely to pose tough questions to politicians around the world. In Pakistan, Moonis Elahi, a prominent minister in Prime Minister Imran Khan’s government, reported to an offshore company in Singapore with an investment of over $33.7 million.
In Kenya, President Uhuru Kenyatta has presented himself as an enemy of corruption. Back in 2018, Kenyatta urged all civil servants’ to publicly declare their assets so that people can know if these are legitimate, during an interview with the BBC. Kenyatta did not respond to questions about whether her family property had been turned over to the appropriate authorities in Kenya.
The Pandora documents also reveal some invisible effects of previous maritime leaks that resulted in modest reforms in some parts of the world, such as the BVI, which now keeps a register of the actual owners of the companies registered there. Recently leaked data shows that money is flowing overseas as wealthy clients and their advisors adapt to new realities.
Some clients of Mossack Fonseca, the now defunct law firm that was the focus of the 2016 Panama Papers publications, simply transferred their businesses to competing suppliers, such as a new treasure trove of leaked archives. When asked why the new company migrated, a customer informed how it was a business decision to exit Panama Papers. Another agent said the industry has always “adapted” to outside pressure.
Some leaked files seem to show, many in the industry are trying to circumvent the new privacy regulations. A Swiss lawyer refused to email a service provider in the BVI with the names of his valued clients. Instead, he sent them by airmail with strict instructions not to process them “electronically”. The identity of another final beneficiary was communicated via WhatsApp. When asked about this process, lawyer stated the purpose is to enable everyone to comply with BVI rules. Regarding Mossack Fonseca, the attorney added, service providers are obliged to keep the secret for clients and not to facilitate a second Panama Newspapers story that happened to one of their competitors.
Gerard Ryle, director of the ICIJ, said key politicians who organized their finances in tax havens had an interest in the status quo and would likely be an obstacle to reforming the offshore economy. He expected the Pandora Papers to have a greater impact than previous leaks, especially as they emerged amid a pandemic that had exacerbated inequalities and forced governments to borrow unprecedented amounts for ordinary taxpayers. These leaks were compared to the Panamanian newspapers and referred as wider, richer and more detailed. At least $11.3 trillion in assets are held overseas, according to a 2020 study by the Paris Organization for Economic Co-operation and Development (OECD), that could be used to recover from COVID, informed Ryle.
