After two years’ work, the International Consortium of Investigative Journalists, with the participation of more than 600 journalists from 117 countries, published the Pandora Papers on Sunday, which collected and sifted about 12 million confidential files and nearly 3 terabytes of data. 150 news outlets, including the Washington Post, the Guardian, the BBC and the Indian Express, contributed to investigating the leaked documents.
The leaked documents show the vast wealth – experts estimate between $11 trillion and $32 trillion – that is hidden from governments and the public eye. How is such a thing possible? And who are these people?
According to the Pandora Papers, about 35 current and former leaders and more than 300 politicians have taken their wealth out of their countries or are using the offshore system to evade taxes and hide their wealth. The names of celebrities such as Shakira, Claudia Schiffer and Sachin Tendulkar are also present, but the names of leaders and politicians immediately attract attention.
Jordan’s King Abdullah, Czech Prime Minister Andrej Babis and former British Prime Minister Tony Blair are among those who have tried to hide their wealth by using offshore companies. The names of about 100 billionaires from 45 countries are mentioned in these documents, mostly from Russia, Brazil, Britain and Israel.
Using tax havens to keep assets secret and avoid paying taxes is not illegal, and people can hide their identities. But some of those who hide their identities do not want to pay taxes or have earned their money in the wrong way. For example, King Abdullah, the king of a poor country, took more than $100 million of his wealth, or indeed the taxes paid by Jordanian citizens, to the United States and the UK to buy luxury houses, while the people who pay taxes in Jordan have minimal welfare and comfort in their own country.
Let’s look at other politicians:
- Czech Prime Minister Andrej Babis has invested $22 million in offshore companies to finance the purchase of a chateau in the south of France.
- Kenyan President Uhuru Kenyatta and six members of his family secretly owned a network of overseas companies. They are affiliated with 11 businesses, having amassed $30m of offshore assets.
- Close friends of the family of the Pakistani Prime Minister, Imran Khan, including cabinet ministers and their families, secretly own companies and funds worth millions of dollars.
The documents also reveal the 400 million pounds of assets belonging to Azerbaijani President Ilham Aliyev and members of his family and relatives in the UK. The revelations show that 17 properties, including an office in London, were bought for $44.6 million for the Aliyev’s 11-year-old son.
According to the ICIJ, the U.S. is one of the biggest players in the offshore world. It is also the country best situated to bring an end to offshore financial abuses, thanks to the outsized role it plays in the international banking system. Because of the U.S. dollar’s status as the de facto global currency, most international transactions flow in and out of New York-based banking operations.
Another reason this system is still working is because of the powerful people who have important and active roles in creating it. That is, politicians who say they are fighting corruption, money laundering, and tax evasion in order to gain the trust of the people, while themselves being secretly key players in the offshore system.
To end this kind of corruption, which are legal but in fact impoverish the people and increase the wealth of the rich, people around the world must first know who runs their countries. The second step is to support organizations such as Transparency International to fight the offshore system, and the companies operating in the system around the world, on behalf of the people.
Image credits: Pandora_Papers and U.S. Department of State
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