Emmanuel Dogbevi, a Ghanaian journalist and member of the International Consortium of Investigative Journalists (ICIJ), has claimed that the Pandora Papers leak, which was published on Sunday, October 3, has caught three unidentified top-ranking Ghanaian politicians.
Mr. Dogbevi said this on Monday, October 4 on TV3’s News 360.
According to him, the article does not specify who the politicians are, just that three Ghanaian politicians have been apprehended.
The ICIJ’s website lists Ghana as “number three” without providing any further information on these individuals.
“Criminals, murderers, people involved in grievous crimes are also mentioned because they are also moving moneys around the world,” Mr Dogbevi added.
He also mentioned the detrimental consequences of illegal capital flight, a circumstance that necessitates the publication of this study.
Bright Simons, Honourary Vice President of Imani Africa and Chief Executive Officer of mPedegree, also talked about this on Monday.
In a tweet on Monday October 4, he said “The International Consortium of Investigative Journalists claim that the Pandora Papers constitute the largest leak of confidential documents to the press ever. 3 Ghanaian politicians, 10 from Nigeria & 2 from Kenya are implicated. 49 African politicians in total are mentioned.”
The Pandora documents, according to the Guardian, are the largest ever leak of offshore data, exposing the financial secrets of the world’s wealthy and powerful.
The largest collection of stolen offshore data in history has exposed the secret transactions and hidden assets of some of the world’s wealthiest and most influential individuals.
The collection, dubbed the Pandora papers, contains 11.9 million data from firms hired by affluent customers to set up offshore structures and trusts in tax havens such as Panama, Dubai, Monaco, Switzerland, and the Cayman Islands.
They reveal 35 global leaders’ hidden offshore dealings, including current and past presidents, prime ministers, and heads of state. They also shed light on the hidden finances of over 300 additional prominent figures in over 90 nations, including government ministers, judges, mayors, and military generals.
The files include information on significant Conservative donors, which poses tough issues for Boris Johnson as his party gathers for its annual conference.
The stolen data includes more than 100 millionaires, as well as celebrities, music stars, and business executives. Shell corporations are often used to store luxury goods such as real estate and yachts, as well as secret bank accounts. There’s even art, from stolen Cambodian antiques to Picasso paintings and Banksy murals.
The Pandora documents provide a unique glimpse into the inner workings of a shadow financial world, giving a rare glimpse into the secret operations of a global offshore economy that allows some of the world’s wealthiest individuals to conceal their money and pay little or no tax.
The BBC also cited parts of the study that claim Kenyan President Uhuru Kenyatta’s family has been covertly owning a network of offshore businesses for decades.
The Pandora Papers are the largest data leak in history, with 12 million files.
Mr. Kenyatta and six family members have been connected to 13 offshore businesses.
He said that after he returned from a state visit overseas, he would “react fully” to the leak.
He did say, though, that the probe would “go a long way toward improving the financial transparency and openness that we need in Kenya and across the world.”
Hundreds of thousands of pages of administrative paperwork from the archives of 14 law firms and service providers in Panama, the British Virgin Islands (BVI), and other tax havens were discovered among the Kenyattas’ offshore investments, including a company with stocks and bonds worth $30 million (£22 million), according to the BBC.
Table of Contents
- What is the Pandora Papers about?
- Every corner of the world
- ‘You know who’
- ‘Coalition of the corrupt’
- ‘Pandora’s box’
- ‘Extraordinary expenses’
- ‘Our way of life’
What is the Pandora Papers about?
The Pandora Papers reveal the financial secrets of 35 current and past world leaders, more than 330 politicians and public officials from 91 nations and territories, and a worldwide list of fugitives, con artists, and killers in millions of private papers.
The confidential papers reveal the offshore transactions of Jordan’s King Abdullah II, Ukraine’s, Kenya’s, and Ecuador’s presidents, the Czech Republic’s prime minister, and former British Prime Minister Tony Blair.
The documents also reveal the financial dealings of Russian President Vladimir Putin’s “unofficial minister of publicity” and over 130 billionaires from Russia, the United States, Turkey, and other countries.
Many of the power players who could help put an end to the offshore system instead benefit from it, stashing assets in covert companies and trusts while their governments do little to slow a global flow of illicit money that enriches criminals and impoverishes nations, according to the leaked records.
The following are some of the hidden gems discovered in the documents:
- The Czech Republic’s populist prime minister, a millionaire who has raged against the corruption of economic and political elites, bought a $22 million chateau on the French Riviera, complete with a cinema and two swimming pools, via offshore corporations.
- A member of one of Guatemala’s most prominent families, a family that owns a soap and cosmetics business that has been accused of hurting employees and the environment, has hidden more than $13 million in a secrecy-shrouded trust in the Great Plains of the United States.
- The King of Jordan bought three beachfront homes in Malibu for $68 million via three offshore corporations in the years after the Arab Spring, when Jordanians took to the streets to protest joblessness and corruption.
The International Consortium of Investigative Journalists obtained the trove of over 11.9 million confidential files and led a team of over 600 journalists from 150 news organizations through the process, which took two years to sift through them, track down hard-to-find sources, and dig into court records and other public documents from dozens of countries.
The documents were stolen from 14 offshore services businesses across the globe that set up shell companies and other offshore entities for customers who wanted to hide their financial activity. The papers include almost three times as much information on the activities of current and past foreign leaders than any prior leak of documents from offshore havens.
The Pandora Papers investigation provides an unparalleled perspective on how money and power operate in the twenty-first century – and how the rule of law has been bent and broken around the world by a system of financial secrecy enabled by the United States and other wealthy nations – in an era of growing authoritarianism and inequality.
The findings of the International Consortium of Investigative Journalists (ICIJ) and its media partners reveal how deeply secretive finance has infiltrated global politics – and provide insight into why governments and international organizations have made little progress in ending offshore financial abuses.
According to an ICIJ examination of the confidential papers, 336 high-level politicians and public figures, including national presidents, cabinet ministers, ambassadors, and others, are linked to 956 businesses in offshore havens. More than two-thirds of those businesses were established in the British Virgin Islands, which has long been seen as a vital cog in the offshore system.
According to a 2020 assessment by the Paris-based Organization for Economic Cooperation and Development, at least $11.3 trillion is kept “offshore.” Because of the offshore system’s complexity and secrecy, it’s impossible to tell how much of that money is linked to tax evasion and other crimes versus monies that originate from legal sources and have been disclosed to the appropriate authorities.
Every corner of the world
The Pandora Papers investigation reveals the hidden owners of offshore companies, secret bank accounts, private jets, yachts, mansions, and even Picasso, Banksy, and other masters’ artworks, revealing more information than is usually available to law enforcement agencies and cash-strapped governments.
Secret papers have connected Indian cricketer Sachin Tendulkar, pop music diva Shakira, supermodel Claudia Schiffer, and an Italian gangster known as “Lell the Fat One” to offshore holdings.
Raffaele Amato, a gangster, has been linked to at least a dozen murders. The papers reveal a shell corporation established in the United Kingdom that Amato used to purchase property in Spain soon before leaving Italy to start his own criminal organization. Amato is serving a 20-year jail term for his role in the critically acclaimed film “Gomorrah.”
The lawyer for Amato did not reply to an ICIJ request for comment.
Tendulkar’s lawyer said that the cricketer’s investment is legal and has been reported to the IRS. Shakira’s lawyer claims that the artist disclosed her businesses, which he claims do not offer tax benefits. Schiffer’s agents claim that the supermodel pays her taxes properly in the United Kingdom, where she resides.
It is not unlawful in most countries to hold assets abroad or to do business across national boundaries using shell corporations. International businesspeople claim that they need offshore firms to handle their financial affairs.
However, these dealings often result in earnings being transferred from high-tax nations to businesses that exist only on paper in low-tax jurisdictions. Offshore tax havens are particularly divisive among politicians because they may be used to hide politically undesirable or even illegal activity from the public eye.
The offshore system is often seen as a far-flung collection of palm-shaded islands in popular imagination. The Pandora Papers reveal that the offshore money engine is active in every corner of the globe, including the world’s most powerful democracies. Elite institutions based in the United States and Europe, such as international banks, legal companies, and accountancy firms, are important participants in the system.
According to a document in the Pandora Papers, Alemán, Cordero, Galindo & Lee, a Panamanian legal firm headed by a former ambassador to the United States, helped banks across the globe set up at least 3,926 offshore entities for its clients. According to the paper, the company – also known as Alcogal – set up at least 312 entities in the British Virgin Islands for customers of Morgan Stanley, an American financial services major.
“We do not establish offshore companies,” a Morgan Stanley spokesman stated. “This procedure is independent of the company and at the decision and direction of the client.”
The Pandora Papers investigation also reveals how Baker McKenzie, the country’s biggest legal firm, played a key role in the development of the contemporary offshore system and is a key player in the shadow economy today.
Baker McKenzie and its worldwide affiliates have shaped financial regulations all around the globe with their lobbying and legislation-drafting expertise. According to ICIJ research, they have also benefited from services done for individuals linked to fraud and wrongdoing.
Among the clients of the company is Ukrainian billionaire Ihor Kolomoisky, who is accused of laundering $5.5 billion via a web of shell companies by buying industrial and commercial buildings throughout the United States’ heartland.
Baker McKenzie also worked for Jho Low, a now-fugitive financier accused of masterminding the theft of more than $4.5 billion from Malaysia’s 1MDB economic development fund by authorities in several nations. Low and his colleagues used Baker McKenzie and its affiliates to help them create a network of businesses in Malaysia and Hong Kong, according to ICIJ’s research. Authorities in the United States claim they utilized some of these businesses to launder money stolen from 1MDB.
Baker McKenzie’s spokesman said that the company tries to give the best advice to its clients and “to guarantee that our clients comply to both the law and best practice.”
Baker McKenzie’s involvement in the offshore economy was not explicitly addressed by the spokesman, who cited client confidentiality and legal privilege as reasons. He did say, however, that the company does thorough background checks on all prospective clients.
‘You know who’
The Pandora Papers investigation is bigger and more worldwide than the ICIJ’s historic Panama Papers investigation, which shook the globe in 2016 and resulted in police raids and new legislation in dozens of countries, as well as the resignations of prime leaders in Iceland and Pakistan.
The Panama Papers were obtained from the files of a single offshore services provider: Mossack Fonseca, a Panamanian law firm. The Pandora Papers shed light on a far broader group of attorneys and intermediaries at the core of the offshore economy.
The Pandora Papers include more than twice as much information on offshore company ownership. In all, the latest document dump exposes the true owners of almost 29,000 offshore corporations. Owners hail from more than 200 nations and territories, with Russia, the United Kingdom, Argentina, and China having the biggest contingents.
The Washington Post, the BBC, The Guardian, Radio France, Otro Croatia, the Indian Express, Zimbabwe’s The Standard, Morocco’s Le Desk, and Ecuador’s Diario El Universo are among the 150 news organizations that have joined the investigative collaboration.
Because the 14 offshore providers that provided the stolen papers are based all over the world, from the Caribbean to the Persian Gulf to the South China Sea, a worldwide team was required.
Former senior government officials own three of the providers: a former government minister and presidential advisor in Panama, and a former attorney general of Belize, who owns two of them.
Offshore service providers may assist customers set up a business whose true owners stay unknown for a few hundred or thousand dollars. Alternatively, individuals may set up a trust for $2,000 to $25,000 that, in certain cases, enables beneficiaries to manage their money while maintaining the legal illusion that they don’t — a piece of paper-shuffling ingenuity that helps hide assets from creditors, police enforcement, and ex-spouses.
Offshore workers aren’t isolated from the rest of the world. They collaborate with other global secrecy providers to build interlocking layers of corporations and trusts. The more complicated the arrangements, the higher the costs will be — and customers may anticipate greater secrecy and protection.
According to the Pandora Papers, an English accountant in Switzerland collaborated with attorneys in the British Virgin Islands to assist Jordan’s monarch, King Abdullah II, in covertly purchasing 14 luxury properties in the United States and the United Kingdom, totaling more than $106 million. Between 1995 and 2017, the advisors assisted him in the formation of at least 36 shell corporations.
Through a corporation based in the British Virgin Islands, the king purchased a $23 million property overlooking a California surfing beach in 2017. The monarch paid an additional fee to have a BVI firm controlled by his Swiss wealth managers serve as the “nominee” director for the BVI company that purchased the property.
Nominee directors are individuals or organizations hired to act as a front for whomever is actually behind a firm in the offshore sector. The employment of nominee directors, according to application forms given to customers by Alcogal, the king’s legal company, helps “preserve privacy by preventing the name of the ultimate principle… becoming publicly available.”
Offshore advisers used a code term for the monarch in emails: “You know who.”
According to the king’s lawyers in the United Kingdom, he is not obliged to pay taxes under Jordanian law and that he holds property via offshore entities for security and privacy reasons. They claimed that the king had never misappropriated state money.
Most of the businesses and assets revealed by ICIJ had no link to the king or no longer exist, according to the lawyers, who refused to give more information.
Experts believe the king has good cause to hide his riches as monarch of one of the Middle East’s poorest and most aid-dependent nations.
According to Annelle Sheline, an expert on political power in the Middle East, “if the Jordanian king were to flaunt his riches more openly, it would not only alienate his people, but it would also irritate Western donors who have given him money.”
The Pandora Papers reveal that prominent political and financial leaders in neighboring Lebanon, where comparable concerns about wealth and poverty have been playing out, have also adopted offshore havens.
Among them are Najib Mikati, the current prime minister, and Hassan Diab, his predecessor, as well as Riad Salameh, the governor of Lebanon’s central bank, who is being investigated in France for suspected money laundering.
The classified papers also include Marwan Kheireddine, Lebanon’s former minister of state and head of Al Mawarid Bank. He chastised former legislative colleagues for inactivity in the face of a severe economic situation in 2019. Half of the population was poor, and stores and bakeries had closed, making it difficult to obtain food.
Kheireddine said, “There is tax avoidance, and the government has to handle it.”
Kheireddine signed papers as the owner of a BVI firm that owns a $2 million boat the same year, according to the Pandora Papers.
To combat economic panic, Al Mawarid Bank was one of several banks throughout the nation that limited clients’ withdrawals of US dollars.
Wafaa Abou Hamdan, a 57-year-old widow, is one of the many ordinary Lebanese who are still enraged by the country’s elites. Her life savings, she told Daraj, an ICIJ media partner, had fallen from $60,000 to less than $5,000 due to out-of-control inflation.
“Everything I’ve worked for my whole life has been in vain. She said, “I’ve been working nonstop for the last three decades.” “We are still fighting to make ends meet on a daily basis,” says the author, “while politicians and bankers have all moved and invested their money abroad.”
Requests for comment from Kheireddine and Diab were not returned. Salameh stated in a written answer that he discloses his assets and follows all reporting requirements under Lebanese law. Mikati’s son, Maher, claimed that individuals in Lebanon often utilize offshore businesses “because of the ease of formation,” rather than to avoid paying taxes.
‘Coalition of the corrupt’
When the Panama Papers investigation by the International Consortium of Investigative Journalists (ICIJ) was published in April 2016, Imran Khan was overjoyed.
“The leaks are a gift from God,” claimed the Pakistani politician and former cricketer.
The Panama Papers showed that Nawaz Sharif, Pakistan’s prime leader at the time, had connections to offshore businesses via his children. This provided Khan with an opportunity to attack Sharif, his political rival, on what Khan referred to as Pakistan’s “coalition of the corrupt.”
“The way money is plucked from individuals in the poor world who are already deprived of basic amenities like health, education, justice, and work is disgusting,” Khan told ICIJ partner The Guardian in 2016. “This money is transferred to offshore accounts or Western nations and banks. The impoverished continue to deteriorate. Poor nations get poorer, whereas wealthy ones become wealthier. These criminals are shielded by offshore accounts.”
As a consequence of an investigation triggered by the Panama Papers, Pakistan’s highest court eventually ousted Sharif from office. Khan stormed in to take his position in the next national election.
The Pandora Papers, the most recent investigation by the International Consortium of Investigative Journalists, has re-ignited interest in Pakistani political figures’ use of offshore corporations. This time, the offshore assets of Khan’s close associates, including his finance minister and a major financial supporter, are being revealed.
Khan’s water resources minister, Chaudhry Moonis Elahi, approached Asiaciti, a Singapore-based offshore services firm, in 2016 about setting up a trust to invest the proceeds from a family property transaction funded by what the lender subsequently alleged was an unlawful loan, according to the papers. The loan was granted, the bank informed Pakistani officials, owing to Elahi’s father’s clout as a former deputy prime minister.
According to Asiaciti records, Elahi backed out of placing money into a Singapore trust when the provider informed him that the information would be shared with Pakistani tax officials.
ICIJ reached out to Elahi for comment, but he did not reply. A family spokesperson informed ICIJ media partners hours before the publication of the Pandora Papers articles that “misleading interpretations and facts had been disseminated in files for malicious reasons.” The family’s assets are “reported as per relevant legislation,” according to the spokesperson.
In a news conference today, Khan’s spokesman said that if any of his ministers or advisers had offshore businesses, “they will have to be held responsible.”
Other politicians have spoken out against the offshore system while surrounded by appointees and other supporters with offshore holdings. Some of those who have spoken out have utilized the system.
“Every public servant’s assets must be disclosed openly so that the public may query and inquire about what is legitimate.” In 2018, Kenyan President Uhuru Kenyatta told the BBC. “If you, including myself, can’t explain yourselves, then I have a case to answer.”
Kenyatta and his mother were named as benefactors of a clandestine Panamanian organization in the leaked documents. Other members of his family, including his brother and two sisters, control five offshore businesses worth more than $30 million, according to the documents.
Kenyatta and his family did not respond to demands for comment.
Andrej Babis, the Czech Prime Minister and one of the country’s wealthiest individuals campaigned on a promise to combat tax fraud and corruption. Babis told voters in 2011 as he got increasingly engaged in politics that he wanted to build a nation “where entrepreneurs would conduct business and will be pleased to pay taxes.”
According to the leaked documents, Babis put $22 million into a series of shell companies in 2009 to purchase Chateau Bigaud, a large property in Mougins, France, near Cannes.
According to papers acquired by ICIJ’s Czech partner, Investigace.cz, Babis has not revealed the shell firms and the chateau in the asset reports he is obliged to submit as a public official. In 2018, the Monaco business that held the château was secretly purchased by a real estate firm indirectly controlled by Babis.
Requests for comment from Babis went unanswered.
According to an ICIJ spokesperson, the company follows the law. When asked about the purchase of the Château, he remained silent.
The spokesperson added, “Like any other business organization, we have the right to safeguard our trade secrets.”
‘A paradise for con artists.’
As governments across the globe grapple with budget shortfalls, a pandemic, climate change, and public mistrust, the secret files provide a layer of behind-the-scenes background to public statements this year about riches and offshore refuges.
In February, the Tony Blair Institute for Global Change issued a statement urging politicians to seek greater taxes on land and houses, among other things. Blair, the institute’s founder and executive chairman, has spoken about how the wealthy and well-connected avoid paying their fair share of taxes since 1994, when he ran for the Labour Party’s leadership in the United Kingdom.
“The tax system is a sanctuary of frauds, privileges… and profits for those who can hire the proper accountants,” he stated during a speech in England’s West Midlands. “We should not make our tax laws a playground for…. tax evaders who pay little or nothing while others pay more.”
According to the Pandora Papers, Blair and his wife, Cherie, bought an $8.8 million Victorian building in 2017 by buying the British Virgin Islands business that owned it. Cherie Blair’s legal business is currently located in the London skyscraper.
According to the documents, Cherie Blair and her husband, who served as a diplomat in the Middle East after standing down as Prime Minister in 2007, purchased the building’s offshore firm from the family of Bahrain’s industry and tourist minister, Zayed bin Rashid al-Zayani.
The Blairs benefitted from a legal structure that allowed them to avoid paying more than $400,000 in property taxes by buying business shares rather than the building.
The Blairs and the al-Zayanis both claimed they were unaware of each other’s participation in the transaction at first.
Cherie Blair said that her husband was not engaged in the deal, which had the goal of “bringing the business and the building back into the United Kingdom tax and regulatory regime.”
She also said that she “did not want to be the owner of a BVI business” and that the “seller just wanted to sell the company for their own reasons.” The business has since shut down.
The al-Zayanis’ businesses “have complied with all U.K. legislation past and current,” according to their lawyer.
The executive director of Tax Justice UK, Robert Palmer, told The Guardian, “These are loopholes that are accessible to rich individuals but not to others.” “Politicians must reform the tax code to ensure that everyone pays their fair share.”
Paulo Guedes, Brazil’s economics minister, presented a tax reform plan in June that included a 30% tax on income generated via offshore companies. Experts believe that the wealthiest 1% of Brazil’s population owns over $200 billion in untaxed assets outside the nation.
Guedes said, “You cannot feel embarrassed of being wealthy.” “You should be ashamed of yourself for not paying your taxes.”
Guedes, a wealthy former banker, decided to eliminate the planned tax on offshore earnings after bankers and industry leaders opposed tax increases in the law. The law is still being negotiated.
Guedes founded Dreadnoughts International Group in the British Virgin Islands in 2014, according to the Pandora Papers.
In response to inquiries from Revista Piau, an ICIJ partner in Brazil, a spokeswoman for Guedes claimed the minister had informed Brazilian authorities about the business. A question concerning the offshore tax being removed from the law was not answered by the spokesman.
The Bahamas passed laws in December 2018 mandating businesses and some trusts to disclose their true owners to a government register. Larger nations, notably the United States, pressed the island country to do more to keep tax evaders and criminals out of the banking system.
The idea was met with opposition from certain Bahamian leaders. They said the registry would make it difficult for Latin American customers to conduct business in the Caribbean. “The United States states of Delaware, Alaska, and South Dakota are the winners of these new double standards,” one local attorney stated.
A secret document revealed months later that the family of Dominican Republic’s former Vice President Carlos Morales Troncoso had abandoned the Bahamas as a wealth-protection haven.
They selected Sioux Falls, South Dakota, as their new sanctuary since it was 1,600 miles distant.
According to stolen documents, the family set up trusts in South Dakota to stash different assets, including interests in the Dominican sugar business. Questions concerning the assets transferred from the Bahamas to South Dakota were not answered by the family.
The Pandora Papers show how tens of millions of dollars were transferred from offshore havens in the Caribbean and Europe to South Dakota, a sparsely populated American state that has emerged as a significant destination for foreign riches.
In Sioux Falls, South Dakota, an overhead picture of a building in the center of downtown that houses Trident Trust Co. Salwan Georges/The Washington Post image
South Dakota, Nevada, and more than a dozen other U.S. states have become leaders in the industry of selling financial secrecy during the last decade. Meanwhile, most of the world’s most powerful countries’ policy and law enforcement efforts have remained concentrated on “traditional” offshore havens like the Bahamas, Cayman Islands, and other island paradises.
The United States is a major player in the offshore globe. Because of its large role in the worldwide banking system, it is also in the greatest position to put a stop to offshore financial abuses. Most worldwide transactions move in and out of New York-based financial operations due to the dollar’s position as the de facto global currency.
Over the last two decades, US authorities have taken steps to compel banks in Switzerland and other nations to hand over information about Americans having foreign accounts.
However, the United States is more interested in compelling other nations to disclose information about Americans banking abroad than it is in providing information about money flowing through US bank accounts, corporations, and trusts.
The United States has rejected to join a 2014 deal backed by over 100 countries, including the Cayman Islands and Luxembourg, that would force American financial firms to disclose information on foreigners’ holdings.
Year after year, South Dakota legislators have passed legislation designed by trust industry insiders that provides more and more safeguards and advantages for trust clients in the United States and overseas. Over the last decade, customer assets in South Dakota trusts have more than tripled to $360 billion.
Susan Wismer, a former legislator, told ICIJ, “As a citizen, I’m very sorry that my state was the one that opened Pandora’s door.”
According to research by Israeli scholar Adam Hofri-Winogradow, by 2020, 17 of the world’s 20 least-restrictive jurisdictions for trusts will be American states. He claims that U.S. regulations have made it more difficult for creditors to collect what they are due, including child support payments from absent parents, in many instances.
ICIJ and The Washington Post discovered almost 30 U.S.-based trusts connected to foreigners individually suspected of misbehavior or whose businesses were accused of wrongdoing using information from the Pandora Papers.
Federico Kong Vielman, whose family is one of Guatemala’s economic powerhouses, is one of them.
Kong Vielman donated $13.5 million into a Sioux Falls trust in 2016. His family’s business, which produces floor waxes and other things, provided some of the funds.
For decades, Guatemalan media has covered the family’s political connections. The family was recognized as a major supporter of Gen. Carlos Manuel Arana Osorio, Guatemala’s former dictator known as the “Jackal of Zacapa,” in the 1970s. In 2016, the family’s premium hotel in Guatemala City gave then-President Jimmy Morales 100 free nights. According to Guatemalan news sources, a potential payment for “political favors” was suspected.
In 2014, labor authorities from the United States filed a complaint against Guatemala’s government, alleging that the family’s palm oil business underpaid employees and exposed them to hazardous chemicals. Kong Vielman was formerly the company’s treasurer, according to documents.
A year later, environmental officials from the United States, who were assisting Guatemala with technical support, discovered that the business had discharged contaminants into the Pasion River. Nacional Agro-Industrial SA, or Naisa, the family business, was not prosecuted.
The company, according to Naisa, obeyed the rules and did not contaminate the river. The labor dispute was settled by an arbitration tribunal, according to the business.
In response to inquiries regarding the South Dakota trust, Kong Vielman refused to comment.
Guillermo Lasso, a banker who was elected as Ecuador’s president in April, is another rich Latin American who established trusts in South Dakota. Lasso transferred assets into two South Dakota trusts in December 2017, according to leaked documents, three months after Ecuador’s parliament approved legislation banning public officials from keeping assets in tax havens. According to the documents, Lasso transferred two offshore businesses from two clandestine Panamanian foundations to the South Dakota trusts.
Lasso said that his usage of offshore companies in the past was “legal and lawful.” Lasso said that he follows Ecuadorian law.
Despite the passage of the federal Corporate Transparency Act this year, which makes it tougher for owners of some kinds of businesses to conceal their names, trusts established in South Dakota and many other U.S. states remain shrouded in secrecy.
Non-U.S. nationals’ trusts are unlikely to be affected by the legislation. Another notable exception, according to financial crime specialists, is that many attorneys who set up trusts and shell corporations are not required to investigate their clients’ sources of income.
“Clearly, the United States is a huge, huge loophole in the world,” Yehuda Shaffer, the former director of Israel’s financial intelligence agency, said. “The United States is condemning the rest of the globe, yet this is a very, very severe problem in their own backyard.”
The building empire of billionaire Erman Ilicak enjoyed a banner year in 2014.
The Turkish mogul’s firm, Rönesans Holding, completed a 1,150-room presidential residence for Recep Tayyip Erdoan, despite media reports of cost overruns and corruption, as well as a court injunction seeking to halt the project.
In 2014, another noteworthy incident involving the Ilicak family occurred, this time out of the public eye. According to the Pandora Papers, the business titan’s 74-year-old mother, Ayse Ilicak, became the proprietor of two offshore corporations in the British Virgin Islands.
Nominee directors and stockholders were in charge of both businesses. According to the documents, one of the businesses, Covar Trading Ltd., contained assets from the family’s construction company. According to private financial records, Covar Trading generated $105.5 million in dividend income during its first full year of operation. The funds were kept in a Swiss bank account.
It was only there for a short time.
The business paid nearly the full $105.5 million as a “gift” recorded under “exceptional expenditures” the same year, according to the financial records. The financial statements make no mention of who or what got the funds.
Illiack did not respond to this story’s inquiries.
Ilicak and the other billionaires named in the Pandora Papers hail from 45 nations, including Russia (52), Brazil (15), the United Kingdom (13), and Israel (13). (10).
Two IT moguls, Robert F. Smith, and Robert T. Brockman are among the American billionaires named in the secret papers, and their trusts have been the subject of US authorities’ investigations. Both were customers of CILTrust, a Belize-based offshore firm run by Glenn Godfrey, Belize’s former attorney general.
Smith agreed to pay $139 million to the US government to resolve a tax investigation last year and is working with prosecutors. Brockman, Smith’s mentor, and financial supporter was charged by a federal grand jury in what prosecutors termed the country’s worst tax scam.
Smith remained silent about the subject. Brockman has entered a not-guilty plea.
CILTrust and Godfrey have not been charged with any misconduct. Requests for comment from Godfrey were not returned.
Nicos Chr. Anastasiades and Partners, a Cyprus legal company, is mentioned in the Pandora Papers as a major offshore go-between for rich Russians. The company bears the name of its founder, Cyprus President Nicos Anastasiades, and two of the president’s daughters work there as partners.
According to the documents, a compliance manager at the Panama law firm Alcogal discovered in 2015 that the Cypriot law company assisted Leonid Lebedev, a Russian oligarch, and former senator, in concealing ownership of four businesses by identifying law firm employees as owners of Lebedev’s organizations.
After police accused him of embezzling $220 million from an energy firm, Lebedev — an oil billionaire and movie producer with Hollywood links – left Russia in 2016. Requests for comment from Lebedev were not returned. The Russian case’s status is unknown.
The Cypriot legal company also produced reference letters for Russian steel tycoon Alexander Abramov, including one written only days after the US put his name to a list of billionaires linked to President Putin. Requests for comment from Abramov were not returned.
The legal firm’s managing director, Theophanis Philippou, told the BBC, an ICIJ partner, that it has never deceived authorities or hidden the name of a business owner. He refused to discuss specific clients, citing attorney-client privilege.
Konstantin Ernst, a television executive, and Oscar-nominated producer is another Russian named in the Pandora Papers who has connections to Putin. Putin’s top image-maker, a creative genius who persuaded the country that the president is “Russia’s strong-willed rescuer,” he has been dubbed.
Konstantin Ernst, the head of Russian television. Image courtesy of Artyom Geodakyan/TASS/Getty Images
According to the Pandora Papers, Ernst was offered a lucrative opportunity shortly after organizing the opening and closing ceremonies of the 2014 Winter Olympics in Sochi, a spectacle that enhanced Putin’s image both within and beyond the nation.
Ernst became a silent partner in a state-funded privatization contract — a plan to purchase hundreds of movie theaters and other property from the city of Moscow – concealed behind layers of offshore corporations.
According to the leaked documents, Ernst’s personal interest in the property assets was worth more than $140 million by 2019.
Ernst told ICIJ that he “never made a secret” about his role in the privatization transaction and that it was not remuneration for his work during the 2014 Olympics.
“I haven’t done anything illegal,” he said. “I’m not committing any right now or in the near future. This is the way my parents brought me up.”
‘Our way of life’
Mae Buenaventura joined the battle for the repatriation of billions of money hidden by late Philippine dictator Ferdinand Marcos, his family, and cronies in Swiss banks and other hard-to-trace places as a human rights and anti-poverty activist.
Many people in Buenaventura’s native country “know that the affluent have methods and means to amass money and conceal it in a manner that regular people cannot get their hands on,” she added.
The Marcos scandal also educated the globe, spurring increased efforts to find and punish those who conceal illegal funds.
Political leaders have promised to “eradicate” tax havens over the last 20 years. Shell corporations and money laundering have been dubbed “threats to our security, democracy, and way of life.” They’ve enacted new legislation and signed international treaties.
However, since the offshore system is flexible, cross-border financial crime and tax evasion continue to flourish.
When one offshore provider or country is harmed by a leak or comes under pressure from authorities, others use the chance to advertise to customers looking for safe-havens.
Following the publication of the Panama Papers investigation, hundreds of offshore firms cut ties with the scandal-plagued legal firm Mossack Fonseca, according to an ICIJ study. As the businesses’ offshore agents, other providers took over.
The International Consortium of Investigative Journalists (ICIJ) welcomes reports of corporate, government, and public-sector misconduct from all around the globe. We do all we can to keep our sources’ identities hidden.
One of the businesses was owned by an offshore trust whose beneficiaries included the wife of Jacob Rees-Mogg, the current leader of the House of Commons and a member of the British Conservative Party.
According to the Pandora Papers, a holding company and a trust benefitting his wife, Helena de Chair, held $3.5 million in “pictures and artworks.”
A BVI firm owned by the widow and two sons of Indian underworld figure Iqbal Memon also moved away from Mossack Fonseca. Memon has been recognized as a prominent drug dealer with ties to terrorists in press sources. His widow and sons are suspected of laundering narcotics money and have been on the run in New Delhi since 2019.
Despite the focus on Marcos’ offshore fortune, money laundering remains an issue in the Philippines. The Philippines has been designated as a “major money laundering jurisdiction” by the United States in recent years.
Juan Andres Donato Bautista, a Philippine politician, is mentioned in the Pandora Papers. He was the head of the Presidential Commission on Good Government, which was set up to hunt for Marcos’ billions, from 2010 to 2015.
Secret documents reveal that a month after being chosen to head the panel, Bautista established a shell business in the British Virgin Islands with a bank account in Singapore.
Bautista was subsequently appointed to lead the country’s electoral commission, but he was impeached in 2017 by legislators when his wife alleged he had millions of dollars in unreported domestic and international accounts.
Bautista told ICIJ in a phone conversation and emails that he formed his BVI business on the advice of bankers. He claimed the bank account was established before he joined the administration, that it had never received substantial deposits, and that he had informed authorities of his financial interests. He denied any misconduct and said that he is not facing any official accusations.
Despite the Philippines’ and other countries’ inability to stem the flow of illicit funds, Buenaventura and other reform proponents believe there are grounds to be optimistic.
Following the Panama Papers, street demonstrators assisted in the overthrow of senior authorities in Iceland and Pakistan. The Philippines has joined dozens of other nations in requiring businesses to reveal they’re true owners. Authorities in the Philippines have recovered almost $4 billion stolen by Marcos and his associates, which they want to use to purchase land for landless farmers and compensate relatives of those killed or disappeared by the Marcos dictatorship.
There are still many hurdles to overcome. Stronger transparency standards and harsher enforcement against offshore abuses are often opposed by big banks, law firms, and other influential organizations. Anti-corruption campaigners face legal threats, arrests, and violence in the Philippines and many other nations.
Last month, police used water cannons to disperse protestors who were commemorating the 49th anniversary of Marcos’ declaration of martial law by drawing parallels between his reign and that of current Philippine President Rodrigo Duterte.
Buenaventura said that she and other grassroots activists would continue to fight to uncover “deeply concealed riches.”
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