Pandora Papers: Global Investigation Opens 'Pandora’s' Box of Financial Secrets of Super Rich

Washington/London: 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 (ICIJ) 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 UK 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-up 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 3 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 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 $106 million in the US and the UK. One was a $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 $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 $400,000 in property taxes, the investigation found.

The Blairs and the al-Zayanis 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 UK 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 the al-Zayanis said they complied with UK laws.

Imran Khan, the Pakistani prime minister, is not accused of any wrongdoing. But members of his inner circle, including Finance Minister Shaukat Fayaz Ahmed Tarin, are accused of hiding millions of dollars in wealth 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 revealed Putin's image-maker and chief executive of Russia's leading TV station, Konstantin Ernst, 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, Czech Prime Minister Andrej Babis put $22 million into shell companies to buy a chateau property in a hilltop village in Mougins, France, near Cannes, the investigation found. The shell companies and the chateau were not disclosed in Babis' required asset declarations, according to documents obtained by the journalism group's Czech partner, Investigace.cz.

A real estate group owned indirectly by Babis 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,” Babis tweeted in his first reaction to the report.

The Czech Republic parliamentary election is being held on Friday and Saturday.

“I've never done anything illegal or wrong,” Babis added.

INDIA: Leak exposes offshore dealings of Anil Ambani, Nirav Modi

Newsclick adds: The Indian Express, which is part of ICIJ, today exposed the names of 60 out of 300 Indians, mostly the super rich and elite, who had ringfenced their wealth in secret havens. Some of those named are business men Anil Ambani, Nirav Modi, Ajit Kerkar, cricketer Sachin Tendulkar, actor Jackied Shroff  among others.

The newspaper, which has so far investigated and corroborated only 60 names, said it would be coming out with new names in the coming days.

“ So, Anil Ambani, who declares bankruptcy in one UK court, has 18 asset holding offshore companies; fugitive Nirav Modi’s sister sets up a trust just one month before he fled India; the husband of Kiran Mazumder Shaw, promoter of Biocon, sets up a trust with keys to a person who banned by Sebi for insider trading,” revealed the investigation by the newspaper.

 On Monday, Kiran Mazumdar-Shaw,  however, said the 'Pandora Papers' had wrongly implicated her husband's offshore trust, and termed the organisation as "bonafide" and "legitimate".

"Media stories reporting on Pandora Papers wrongly implicate my husband's offshore trust, which is a bonafide, legitimate trust and is managed by Independent Trustees. No Indian resident holds “the key” to the trust as alleged in these stories," Mazumdar-Shaw, the executive chairperson of biotechnology major Biocon, said in a tweet.

According to the probe, one pattern is that individuals who have been accused in economic offences and are under investigation have created offshore networks in tax havens, such as Samoa, belize, Cook Islands, or bigger ones like British Virgin Islands. This has happened mainly after the Panama Papers leak.

Also, those who owe multi-crore rupees to Indian banks have diverted a “sizeable” section of their asstes to a maze of offshore companies.

 “Sports icon Sachin Tendulkar, for instance, asked for the liquidation of his entity in the British Virgin Islands just three months after the Panama Papers expose. There are other prominent Indians and NRIs too, who have, following the 2016 data leak, opted for a rejig or reorganisation of their offshore assets. Evidently, Indian businessmen have been setting up a plethora of offshore Trusts to project a degree of separation from their wealth and insulate their assets from creditors,” said the report.

In a dispute with three Chinese-controlled entities, Business tycoon, Anil Ambani, told a London court in February 2020 that his net worth was zero.

However, records with the Pandora Papers, investigated by The Indian Express, show that Anil Ambani, who is chairman of Reliance ADAG and some of his representatives own at least 18 offshore companies in Jersey (eight companies), British Virgin Islands (seven companies) and Cyprus (three companies).

These 18 offshore companies were set up between 2007-2010  and “seven of these companies have borrowed and invested at least $1.3 billion,” says the report.