Alexei Druzhinin/Sputnik via AP
On Sunday afternoon, the International Consortium of Investigative Journalists, in partnership with 150 media organizations around the globe, published a two-year-long investigation into the offshore finances of hundreds of politicians, public officials, and billionaires, based on 11.9 million financial records. It is the largest investigation of its kind, eclipsing the Panama Papers published in 2016.
The blockbuster investigation, called the “Pandora Papers,” reveals offshore holdings belonging to more than 130 billionaires and to dozens of heads of state, including the leaders of Jordan, Kenya, Ecuador, Côte d’Ivoire, the Czech Republic, Gabon, and Russia. The investigation found, for instance, a Panama law firm that reportedly set up three offshore companies to help superstar Shakira avoid paying millions in taxes, as well as a luxury apartment in Monaco purchased by a woman who’d allegedly had a child fathered by Russian President Vladimir Putin.
The files in this investigation come from 14 different offshore service providers scattered around the globe. (For comparison, the Panama papers were based on documents leaked from just a single law firm.) Several of their key findings highlight the role of American entities in shielding assets for the world’s wealthiest people. Those findings include:
- South Dakota, Nevada, and more than a dozen other US states have transformed into tax havens friendly to the globe’s wealthiest who are seeking financial secrecy. In particular, some of the world’s wealthy have moved tens of millions of dollars from havens in Europe and the Caribbean into trust companies based in Sioux Falls, South Dakota.
- The investigation highlights the largest law firm in the United States, Baker McKenzie, and its critical role in helping to create the modern offshore system, through extensive financial system lobbying.
- The investigation exposes a Panama firm nicknamed ALCOGAL that helped banks around the globe create thousands of offshore accounts where their clients could hide their money. The firm set up 312 companies in the British Virgin Islands at the request of major American bank Morgan Stanley.
- Several of the world’s preeminent museums, including the Metropolitan Museum of Art in New York City, are home to looted Cambodian antiquities trafficked through an offshore trust belonging to American art trader Douglas Latchford.
- $106 million worth of luxury homes across the US and UK purchased by Jordan’s King Abdullah II. This includes three beachfront homes in Malibu, together worth $68 million, as well as $10 million worth of condominiums in Washington, DC’s tony Georgetown neighborhood.
The investigation contains much, much more. And the massive scope of this trove of records is itself quite significant: It reveals the extent to which world leaders and global elites who have the power to crack down on offshore holdings instead take advantage of these tax havens themselves—depleting the coffers of their nations, and enriching themselves in the process.
