Financial Secrets of International Elite Are Exposed in ‘Pandora Papers’
By Michael Liedtke and Jonathan Mattise
Hundreds of politicians, billionaires, celebrities, religious leaders and drug dealers have been hiding their investments in mansions, exclusive beachfront property, yachts and other assets for the last quarter-century, according to a review of nearly 12 million files obtained from 14 international firms.
The report, released Sunday by the International Consortium of Investigative Journalists, involved 600 journalists from 150 media outlets in 117 countries. It’s being dubbed “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.
Among more than 330 politicians identified as beneficiaries of the secret accounts are Jordan’s King Abdullah II, former UK Prime Minister Tony Blair, Czech Prime Minister Andrej Babiš, Kenyan President Uhuru Kenyatta, Ecuadorian President Guillermo Lasso and former associates of Pakistani Prime Minister Imran Khan and Russian President Vladimir Putin.
Billionaires called out in the report include Turkish construction mogul Erman Ilicak and Robert T. Brockman , the former chief executive of software maker Reynolds and Reynolds.
Many of the accounts were designed to evade taxes and conceal assets for other illicit reasons, according to the report.
“The new data leak must be a wake-up call,” said Sven Giegold, a German 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 greed that deprived countries of tax revenue that could have been used to finance programs 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 report follows a similar project released in 2016, “Panama Papers,” compiled by the same group of journalists.
The latest bombshell is even more expansive, encompassing nearly 3 terabytes of data — the equivalent of roughly 750,000 photos on a smartphone — leaked from 14 service providers. The records date back to the 1970s, but most of the files are from 1996 to 2020.
In contrast, Panama Papers culled through 2.6 terabytes of data leaked by a now-defunct law firm in that country, Mossack Fonseca.
The latest investigation dug into accounts registered in offshore havens, including the British Virgin Islands, Seychelles, Hong Kong and Belize. But some of the secret accounts were scattered around in trusts set up in the US, including 81 in South Dakota and 37 in Florida.
Some of the initial findings paint a sordid picture of the prominent people involved.
For example, the investigation found that advisors helped Abdullah set up at least three dozen shell companies from 1995 to 2017 and buy 14 homes in the US and the UK worth more than $106 million, including a $23-million California ocean-view property bought in 2017 through a British Virgin Islands company. The advisors 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 aides on trial.
Abdullah took power in 1999 after the death of his father, King Hussein.
UK attorneys for Abdullah said he isn’t required to pay taxes under Jordanian 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, who was UK prime minister from 1997 to 2007, in 2017 became the owner of an $8.8-million Victorian building in London by buying a British Virgin Islands company that held the property. 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; the purchase of company shares instead of the building saved the Blairs more than $400,000 in property taxes, the investigation found.
The Blairs and Al Zayani family 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 Al Zayani said the family complied with UK laws.
Khan, the Pakistani prime minister, is not accused of wrongdoing. But members of his inner circle, including Finance Minister Shaukat Fayaz Ahmed Tarin, are accused of hiding millions of dollars in secret companies or trusts, according to the journalists’ findings.
In a tweet, Khan vowed to recover the “ill-gotten gains” and said his government will look into all citizens mentioned in the documents and take action if needed.
The consortium of journalists also revealed that Konstantin Ernst, Putin’s image-maker and chief executive of Russia’s leading TV station, 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, Babiš put $22 million into shell companies to buy a chateau in a hilltop village in Mougins, France, near Cannes, the investigation found. The shell companies and chateau were not disclosed in the Czech leader’s required asset declarations, according to documents obtained by the journalism group’s Czech partner, Investigace.cz.
A real estate group owned indirectly by Babiš bought the Monaco company that owned the chateau in 2018, the probe found.
“I was waiting for them to bring something right before the election to harm me and influence the Czech election,” Babiš tweeted in reaction to the report.
The Czech parliamentary election will be held Friday and Saturday.
“I’ve never done anything illegal or wrong,” Babiš added. – Los Angeles Times
