On Oct. 3, 2021, the International Consortium of Investigative Journalists (ICIJ) published 11.9 million confidential documents exposing secret offshore bank accounts of current and former world leaders, celebrities, billionaires, business moguls and more.
The ICIJ collaborated with The Washington Post, British newspaper The Guardian and over 600 journalists in 117 countries in this leak, making it the largest of its kind after the 11.5 million Panama Papers leak in 2016 — also uncovered by the ICIJ. While both reports are incriminating, the Pandora Papers expose over 330 politicians and public figures — double the amount than the Panama Papers — and their ties to tax havens in nations such as Monaco, Panama, Switzerland, the Cayman Islands, the United Arab Emirates and American states like Delaware and South Dakota.
Revelations from the report have rippled around the world. Here’s VALLEY’s breakdown of the Pandora Papers.
The Pandora Papers
The “offshore world,” as The Guardian explains, “refers to a secret world made up of tax havens — places where you pay little or no tax all around the world.” Named after “Pandora’s Box,” an ancient Greek myth about a sealed container holding the world’s evils, the Pandora Papers were made possible by journalists who sifted through billions of e-mails, memos, spreadsheets, contracts and other forms of private communication leaked from 14 major firms in the offshore financial industry, uncovering just how far the wealthy are willing to go to avoid paying taxes.
According to the report, wealthy elites worked with their financial managers and offshore executives who helped them create anonymous “shell companies” — corporations existing solely on paper with no actual office or employees — to disguise their riches and ownership of luxurious properties ranging from yachts to penthouses and mansions.
One of the many world leaders mentioned in the report is King Abdullah II of Jordan. As Jordan receives billions in international aid from the U.S. and the United Kingdom, Abdullah, through a network of incognito financial firms, spent over $100 million on 15 properties in the last decade. This includes compounds in Malibu, Calif. and Georgetown, Md. in the U.S., and London and Ascot in the U.K.
Kenyan President Uhuru Kenyatta, who committed to an anti-corruption, pro-transparency tenure for his political legacy, and his family are linked to 13 offshore bank accounts. Documents show their assets come from the company Varies created in 2003, with stocks and bonds worth $30 million.
Businessman, billionaire and Prime Minister of the Czech Republic Andrej Babiš — who also centered his campaign against the economic corruption of politicians — was linked to a $22 million property in France purchased through offshore accounts.
While not explicitly named in the papers, Russian President Vladimir Putin is incriminated via his inner circle. He is linked to secretive properties in Monaco, specifically a waterfront home owned by Svetlana Krivonogikh, a woman with whom he allegedly had a years-long personal relationship and acquired the property just months after giving birth to a baby girl.
Musicians Elton John, Ringo Starr and Shakira were also listed in the papers. The ICIJ claims the artists set up P.O. box companies in popular tax haven nations such as the British Virgin Islands, the Bahamas or Panama to avoid taxation.
Why This Matters
You might be thinking: “Is this legal?” Luckily, VALLEY has the answer — yes and no. Most of the individuals listed in the papers have said they haven’t committed any wrongdoings, and that’s technically correct, considering the companies who offer shell corporations operate in jurisdictions where they abide by the laws of tax haven hotspots.
However, a large part of the offshore financial industry is either self-regulated or unregulated entirely — creating a multitude of problems. Lack of financial transparency makes the system vulnerable to greed, exploited by corrupt individuals with only self-gain in mind.
Furthermore, mass use of offshore systems leads to tax evasion — substantially widening the rich-poor inequity gap further exacerbated by the coronavirus pandemic. The Pandora Papers offer an unprecedented look into “how money and power operate in the 21st century,” as the ICIJ’s website says, “and how the rule of law has been bent and broken around the world by a system of financial secrecy enabled by the U.S. and other nations.”
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