Lahore - The International Consortium of Investigative Journalists (ICIJ), which released Panama leaks, has now dropped another bombshell on hundreds of world’s rich and influential individuals who secretly invested vast amounts of cash in offshore tax havens.

Paradise Papers, as this leak has been named, is a database of around 13.4 million documents revealing over 25,000 offshore companies owned or shared by politicians, corporations and celebrities from around the world.

Spanning 180 countries and corresponding to the period from 1950 to 2016, the list realised Sunday night includes former Pakistan prime minister Shaukat Aziz and former National Insurance Corporation Limited chairperson Ayaz Khan Niazi.

As many as 127 politicians and public officials (14 of them current or former country leaders) from more than 47 countries have been named in the Paradise Papers.

Among the world leaders named in the new leak are British Queen Elizabeth II, Queen Noor of Jordan, US Secretary of State Rex Tillerson, Secretary of Commerce Wilbur Ross, Canadian Prime Minister Trudeau’s adviser and close friend Stephen Bronfman.

Among the former heads of government named in Paradise Papers are former Canadian prime ministers Paul Martin and Brian Mulroney, Former Japanese Premier Yukio Hatoyama, and Liberia ex-president Ellen Johnson Sirleaf.

The list also includes world renowned singers Madonna and Bono, and Tech mogul Yuri Milner.

Around 381 investigative journalists from 67 countries worked extensively to bring facts about the Paradise Papers before the people. The leak, which includes 13.4 million documents, comprises a major part of documents leaked from company ‘Appleby’. The documents were obtained from two companies in Singapore and Bermuda by a German newspaper Süddeutsche Zeitung and shared with the ICIJ.

Sunday’s revelations form only a small part of a week of disclosures that will expose the tax and financial affairs of some of the hundreds of people and companies named in the data. And before go into the details, it must be borne in mind that not every offshore firm is necessarily illegal.

Pakistanis named in leaks

Names of two prominent Pakistanis have so far emerged in the new ICIJ release.

Shaukat Aziz: Former prime minister Shaukat Aziz has been found linked with Antarctic Trust.

Aziz had set up the trust in Delaware (USA) before becoming finance minister. Its beneficiaries include Aziz’s wife, and their children and granddaughter.

Interestingly, the trust was neither declared during his stint as finance minister nor as prime minister.

Aziz served as prime minister from August 28, 2004, to November 15, 2007 and was appointed as finance minister in 1999. He settled abroad after his tenure came to an end in 2007.

Speaking through his attorney in New York, Shaukat Aziz told a local TV channel that he didn’t have to declare the trust in Pakistan as he was a ‘settler’.

When asked if his wife or children declared the trust, he responded that they didn’t have to do that because they were beneficiaries and not the beneficial owners.

 

 

Ayaz Khan Niazi: Former National Insurance Corporation Limited (NICL) chairperson Ayaz Khan Niazi has also been identified in the records in connection with four offshore holdings in British Virgin Islands.

One of them was a trust, Andalusian Discretionary Trust, while the other three were set up as companies: Andalusian Establishment Limited, Andalusian Enterprises Limited and Andalusian Holdings Limited.

All the three companies were set up in 2010 when Ayaz Niazi was the chairperson of NICL. In the record, however, his two brothers, Hussain Khan Niazi and Muhammad Ali Khan Niazi, were shown as the beneficial owners, whereas Ayaz himself, his father Abdul Razaq Khan and mother Fauzia Razzaq acted as directors.

 

 

World leaders on the list Queen Elizabeth II

Queen Elizabeth II has invested millions of dollars in medical and consumer loan companies, Appleby’s files show. While the Queen’s personal estate, the Duchy of Lancaster, provides some details of its investments in UK property, such as commercial buildings scattered across southern England, it has never disclosed details of its offshore investments.

The records show that as of 2007, the queen’s personal estate invested in a Cayman Islands fund that in turn invested in a private equity company that controlled BrightHouse, a UK rent-to-own firm criticised by consumer watchdogs and members of Parliament for selling household goods to cash-strapped Britons on payment plans with interest rates as high as 99.9 percent.

 

 

Queen Noor of Jordan

Queen Noor of Jordan was listed as the beneficiary of two trusts on the island of Jersey, including one that held her sprawling British estate.

 

 

Rex Tillerson

US Secretary of State Rex Tillerson was a director of Marib Upstream Services Co., a Bermuda-based company created to conduct oil and gas operations in Yemen’s Marib-Al-Jawf basin.

Tillerson joined the company’s board in March 1997, when he was the president of Exxon Yemen, and resigned in March 1998, according to Appleby’s client database.

Marib Upstream Services was a joint venture of three companies: the Yemen Gas Company, the Yemen Exploration & Production Company and the Yemen LNG Company. The Yemen Gas Company was state-owned, Yemen Exploration & Production Company was owned by Exxon Mobil and Hunt Oil, and the Yemen LNG Company had several shareholders, the largest of which is the French oil company Total. Marib Upstream Services operated in accordance with a production-sharing agreement between Yemen and the oil companies until 2005, when Yemen ended the production-sharing agreement and turned over production rights to a state-owned company.

ICIJ said Tillerson did not respond to a request from the Consortium and its media partner The New York Times to comment on the issue.

 

 

US Secretary of Commerce Wilbur Ross

The Appleby files show how Wilbur Ross, Trump’s commerce secretary, has used a chain of Cayman Islands entities to maintain a financial stake in Navigator Holdings, a shipping company whose top clients include the Kremlin-linked energy firm Sibur. Among Sibur’s key owners are Kirill Shamalov, Russian President Putin’s son-in-law, and Gennady Timchenko, a billionaire the US government sanctioned in 2014 because of his links to Putin. Sibur is a major customer of Navigator, paying the company more than $23 million in 2016.

When he joined Trump’s cabinet, Ross divested his interests in 80 companies. But he kept stakes in nine companies, including the four that connect him to Navigator and its Russian clients.

These revelations come against a backdrop of growing concerns about hidden Russian involvement in US political affairs.

 

 

Singers Madonna and Bono

The Paradise Papers also reveal Madonna’s shares in a medical supplies company. Pop singer and social justice activist Bono – listed under his full name, Paul Hewson – owned shares in a company registered in Malta that invested in shopping center in Lithuania, company records show.

 

 

Tech mogul Yuri Milner

In 2011, the investment fund of tech mogul Yuri Milner acted as an intermediary when one of the Russian government firms, VTB Bank, quietly invested $191 million in Twitter Inc. Documents also show that a financial subsidiary of the Kremlin-controlled energy giant Gazprom funded a shell company that, through its ownership of a Milner-affiliated company, held roughly $1 billion in Facebook shares shortly before the social network’s 2012 initial public offering.

More recently, Milner invested $850,000 in Cadre, a real estate firm co-founded by Trump’s son-in-law and White House adviser, Jared Kushner.

Milner is a Russian citizen who lives in Silicon Valley. His ties to Twitter, Facebook and Kushner’s firm have been previously disclosed. But his links to the Kremlin financial institutions weren’t previously known.

 

 

Wesley Clark

Wesley Clark, a one-time Democratic presidential hopeful and a retired four-star US Army general who served as NATO’s supreme commander in Europe, was a director of an online gambling company with offshore subsidiaries, the files show.

In addition to disclosures about politicians and corporations, the files reveal details about the financial lives of the rich and famous – and the completely unknown. They include Microsoft co-founder Paul Allen’s yacht and submarines, eBay founder Pierre Omidyar’s Cayman Island investment vehicle,

 

 

Stephen Bronfman

The files reveal that Stephen Bronfman, Canadian Prime Minister Trudeau’s adviser and close friend, teamed up with Leo Kolber, another Liberal Party stalwart and former member of Canada’s Senate, and Kolber’s son to quietly move millions of dollars to a Cayman trust.

The offshore manoeuvres may have avoided taxes in Canada, the United States and Israel, according to experts who reviewed some of the 3,000-plus files detailing the trust’s activities.

As the offshore riches grew, lawyers for Bronfman, the Kolbers and other wealthy interests lobbied Canada’s Parliament to fight legislative proposals to tax income from offshore trusts.

Bronfman remains a key fundraiser for Trudeau, who has championed openness in government and promised a crackdown on offshore tax dodging. In September, Trudeau told the UN General Assembly: “Right now, we have a system that encourages wealthy Canadians to use private corporations to pay a lower tax rate than middle-class Canadians. That’s not fair and we’re going to fix it.”

 

 

 

Comparison of Paradise and Panama leaks

Panama Papers named 140 politicians and public officials from more than 50 countries, while Paradise Papers has named 127 such persons (including 14 current or former country leaders) from more than 47 countries.

Paradise Papers is bigger in number of records (13.5 million) than Panama Papers (11.5 million) but the latter is bigger in terms of size of the leaked data (1.4 Tb in Paradise Papers vs 2.6 Tb in Panama Papers).

There are more journalists working on the Paradise Papers than the Panama Papers at the time of the project release (381 Paradise Papers - 376 Panama Papers).

As for the number of media partners and number of countries, Panama Papers had 100+ media partners and the data relates to 76 countries while Paradise Papers involves 96 media partners and 67 countries.

 

 

 

What is offshore finance?

Essentially it’s about a place outside of your own nation’s regulations to which companies or individuals can reroute money, assets or profits to take advantage of lower taxes.

These jurisdictions are known as tax havens to the layman, or the more stately offshore financial centres (OFCs) to the industry. They are generally stable, secretive and reliable, often small islands but not exclusively so, and can vary on how rigorously they carry out checks on wrongdoing.

 

Should we care about it?

Well, a lot of money is involved – much of which is looted public money in case of countries like Pakistan.

The Boston Consulting Group of UK says $10tn is held offshore. That’s about the equivalent of the gross domestic products of the UK, Japan and France - combined. It may also be a conservative estimate.

Critics of offshore say it is mainly about secrecy - which opens the door to wrongdoing - and inequality. They also say the action of governments to curb it has often been slow and ineffective.

Brooke Harrington, author of Capital Without Borders: Wealth Managers and the One Percent, says offshore finance is not for the 1% [rich] but the .001% [mega-rich].

She says if the rich are avoiding tax, the poor pick up the bill: “There’s a minimal amount the governments need to function and they recoup what they lose from the rich and from corporations by taking it out of our hides.”

 

 

 

‘Paradise’ of filthy rich exposed