(Washington Insider Magazine) -The most extensive investigation in the history of journalism reveals a shadow financial structure that enriches people and corporations who are among the world’s richest and most powerful. Over 600 journalists from 150 media sites in 117 countries have collaborated on the Pandora Papers investigations, which is the world’s largest-ever journalistic cooperation in history. The information was gathered by the International Consortium of Investigative Journalists (ICIJ) in Washington, DC.
An unprecedented leak of over 12 million papers exposes hidden riches, tax evasion, and in some instances, financial fraud by some of the world’s wealthiest and most influential individuals and corporations. These offshore nations or territories are those in which it is simple to establish businesses. The existence of regulations that make it very hard to trace the shareholders of corporations, as well as a low or non-existent corporation tax.
Among the exposed documents, there are email messages, memoranda, incorporation records, stock certificates, compliance reports, and intricate schematics depicting convoluted company systems. They often enable the first time identification of the actual owners of opaque shell corporations.
What do we know so far?
- A major Tory contributor who was implicated in one of Europe’s worst corruption scandals has been exposed so far, as has the King of Jordan’s £70 million spending spree on properties in the United Kingdom and the United States via secretly-owned entities.
- Involvement in property transactions in the United Kingdom worth more than £400 million by Azerbaijan’s ruling family is kept secret.
- The inability of the Czech prime minister to disclose an offshore investment firm that was used to buy two French homes for £12 million, as well as the Kenyan president’s family’s hidden ownership of a network of offshore businesses over a period of decades.
- According to the data, some of the world’s wealthiest individuals – including more than 330 lawmakers from 90 different nations – conceal their assets via the use of hidden offshore corporations.
As a secondary effect, the Pandora documents shine a bright light on the offshore financial sector as a whole. According to the leak, the United States has emerged as the world’s top tax haven, which is sure to be humiliating for President Joe Biden, who has promised to spearhead international efforts to increase openness in the global financial system as part of his inaugural address. In particular, the state of South Dakota seems to be hiding billions of dollars in assets connected to people who have been convicted of major financial crimes in the past, according to the documents.
It is not the case that everyone mentioned in the Pandora documents is guilty of crime. However, by forming businesses or trusts in tax havens, including the British Virgin Islands, Panama, or Switzerland, the wealthy may guarantee that their assets stay concealed, and in some instances, this allows them to avoid paying taxes.