Bombshell global tax evasion unearthed

Hundreds of world leaders, powerful politicians, billionaires, celebrities, religious leaders, and drug dealers have been hiding their investments in mansions, exclusive beachfront property, yachts, and other assets for the past quarter-century, according to a review of nearly 12 million files obtained from 14 firms located around the world.

The report released on Sunday 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, and how they have used offshore accounts to shield assets collectively worth trillions of dollars.

The more than 330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former United Kingdom 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 to a similar project released in 2016 called the ‘Panama Papers’, compiled by the same journalistic group.

The latest bombshell is even more expansive, porting through nearly three 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.

Some of the initial findings released Sunday painted a sordid picture of the prominent people involved.

For instance, the investigation found advisers helped King Abdullah II of Jordan set up at least three dozen shell companies from 1995 to 2017, helping the monarch buy 14 homes worth more than US$106 million in the US and the UK. One was a US$23 million California ocean-view property bought in 2017 through a British Virgin Islands company. The advisers were identified as an English accountant in Switzerland and lawyers in the British Virgin Islands.

There was no immediate comment from Jordan’s Royal Palace.

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, adding that there are security and privacy reasons for him to have holdings through offshore companies, according to the report. 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 US$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 US$400,000 in property taxes, the investigation found.