The data covers information gathered on more than 27,000 companies and 29,000 so-called ultimate beneficial owners. It will ignite fresh controversy over what is the right boundary between legitimate client privacy and secrecy.
Details of 330 politicians’ financial affairs have been revealed by the Washington DC-based group of journalists who in recent years have shone a light on Panama and other international financial centres.
The International Consortium of Investigative Journalists has issued what it calls the Pandora papers, calling itself the “world’s largest-ever journalistic collaboration,” involving more than 600 journalists from 150 media outlets in 117 countries. The group report comes in the wake of its “Panama Papers” and “Paradise Papers” revelations of recent years.
Politicians in Pakistan, the Czech Republic Prime Minister Andrej Babis and Jordan’s King Abdullah, are among those mentioned. The consortium also takes aim at Switzerland, claiming that steps by the Alpine state to crack down on bad actors have not been successful. However, it is worth noting that some of the “leaks” relate to events which happened as far back as 2005, before Swiss bank secrecy laws were changed with regard to foreigners. “From 2005 to 2016, at least 26 Swiss firms that appear in the documents provided services to clients whose offshore companies were later investigated by authorities looking for evidence of money laundering and other financial crimes. In most of the cases, it said that the firms played the role of introducer, connecting clients to offshore service providers.”
“The investigation is based on a leak of confidential records of 14 offshore service providers that gave professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low- or no-tax jurisdictions,” the group said in a statement yesterday. “The 2.94 terabytes of data, leaked to ICIJ and shared with media partners around the world, arrived in various formats: as documents, images, emails, spreadsheets, and more.”
The ICIJ did not go into detail on how this data was provided, or by whom.
What is particularly notable about this particular leak is the number of politicians said to be involved, a damaging fact – assuming claims are correct – given how so many policymakers have been keen to go after offshore centres over recent years.
In a new departure, the consortium points the finger at US jurisdictions, for instance South Dakota, rather than traditional offshore hubs outside the US such as Switzerland, Panama and the Cayman Islands.
As with other “papers,” the ICIJ is careful not to directly accuse those whose data is “leaked” of criminal offences. And, as before, the behaviour begs questions about whether the group has violated legitimate privacy in acquiring such a huge trove of information.
The group says that the leaks are far larger than previous ones it has handled.
“The Pandora Papers information - the 2.94 terabytes in more than 11.9 million records - comes from 14 providers that offer services in at least 38 jurisdictions. The 2016 Panama Papers investigation was based on 2.6 terabytes of data in 11.5 million documents from a single provider, the now-defunct Mossack Fonseca law firm. The 2017 Paradise Papers investigation was based on a leak of 1.4 terabytes in more than 13.4 million files from one offshore law firm, Appleby, as well as Asiaciti Trust, a Singapore-based provider, and government corporate registries in 19 secrecy jurisdictions,” it said.
“The records include an unprecedented amount of information on so-called beneficial owners of entities registered in the British Virgin Islands, Seychelles, Hong Kong, Belize, Panama, South Dakota and other secrecy jurisdictions. They also contain information on the shareholders, directors and officers. In addition to the rich, the famous and the infamous, those exposed by the leak include people who don’t represent a public interest and who don’t appear in our reporting, such as small business owners, doctors and other, usually affluent, individuals away from the public spotlight.
“While some of the files date to the 1970s, most of those reviewed by ICIJ were created between 1996 and 2020. They cover a wide range of matters: the creation of shell companies, foundations and trusts; the use of such entities to purchase real estate, yachts, jets and life insurance; their use to make investments and to move money between bank accounts; estate planning and other inheritance issues; and the avoidance of taxes through complex financial schemes. Some documents are tied to financial crimes, including money laundering,” it said.
“The 11.9 million-plus records were largely unstructured. More than half of the files (6.4 million) were text documents, including more than 4 million PDFs, some of which ran to more than 10,000 pages. The documents included passports, bank statements, tax declarations, company incorporation records, real estate contracts and due diligence questionnaires. There were also more than 4.1 million images and emails in the leak,” it said.
The report said that the Pandora Papers gathered information on more than 27,000 companies and 29,000 so-called ultimate beneficial owners from 11 of the providers, or more than twice the number of beneficial owners identified in the Panama Papers.