After the Panama papers now come to the Pandora papers. Several major news organizations worldwide published a gigantic trove of financial documents that exposes a secretive offshore system.
Wealthy and powerful people use this system to hide billions of dollars from the government, tax authorities, and the public. The Pandora papers identified at least 14 world leaders that benefited from the system.
Offshore accounts do not automatically mean that these are illegal. However many companies and individuals use offshore trusts and shell companies for illicit purposes. This includes tax avoidance and funding criminal activities.
In fact, many memos and messages discussed ways on how to go around new transparency laws. Ironically, some conversations also talked about how to avoid exposure from another leak.
Explosive Revelations Involving World Leaders
The Pandora papers, released worldwide last weekend, included explosive revelations starring some world leaders. This includes King Abdullah II of Jordan, who reportedly spent more than $100 million on luxury homes. The spending spree happened even as Jordan is enduring financial and political turmoil.
In addition, 13 other world leaders find themselves embroiled in the data leak. This includes Russian President Vladimir Putin and leaders of the Czech Republic, Kenya, Ecuador, and other countries. Including the 14 current leaders, a total of around 300 current and former politicians appear in the Pandora Papers, the journalists.
United States Also Has Tax Havens in Delaware and South Dakota
While the US joins the chorus of protests over offshore havens, the country actually operates a few within their borders. The Pandora Papers exposed that many foreign political and corporate leaders moved their wealth from offshore tax shelters to secret American trust companies.
These companies have headquarters in South Dakota and Delaware. In addition, documents show that a Central American company serves as a one-stop-shop for American clients hiding their assets as they face criminal or legal issues.
For example, Ecuador President Guillermo Lasso has ties to more than 10 offshore companies and trusts. These companies operate in Panama, South Dakota, and Delaware. For example, Lasso authorized a transfer of companies to two new trusts in South Dakota in 2017.
Previously, the president said he does not have “any relation regarding property, control, benefit or interest of any type” with those trusts. In addition, he insisted he always complied with Ecuadorian law.
Many Wealthy Americans Don’t Need Offshore Accounts, Their Taxes Are Cheaper In America
Surprisingly, only a few Americans ended up with their names on the expose. A majority of the wealthiest Americans managed to steer clear. Pundits believe that the absence of prominent US citizens doesn’t mean a lack of offshore accounts.
New Yorker staff writer Philip Gourevitch thinks the reason is much simpler. He tweeted:” Why so few US names in Pandora Papers? Largely because US is itself a spectacularly corrupt tax haven. “Financial experts said the uber-rich in the United States tend to pay such low tax rates that they have less incentive to seek offshore havens.”
Robert F. Smith, the richest Black American, is the most prominent US citizen in the Pandora Papers list. Last year, Smith agreed to pay a $139 million fine for stashing his wealth offshore. He also admitted to falsifying tax records, which is part of a non-prosecution agreement with the Justice Department.
Even Respected Museums Involved
The Pandora Papers also told the story of how even respected US museums get involved. Documents show how art trader Douglas Latchford used an offshore trust.
He managed to get looted Cambodian artifacts into the market. Despite his death last year, many of his antiquities remain on display. Among the prominent ones is the Metropolitan Museum of Art and other museums.
Watch the Washington Post video explaining what the Pandora Papers are about:
What do you think of the Pandora Papers? Do you think the exposure will help end the practice of hiding wealth? Or, will this data leak go the way of the Panama Papers and fade?
Let us know what you think. Share your comments below.