A leak of millions of documents has revealed the hidden financial affairs of 35 current and former world leaders.
The documents also include the affairs of more than 330 public officials in more than 90 countries and territories.
The records – dubbed the Pandora Papers – were obtained by the Washington-based International Consortium of Investigative Journalists and shared with 150 news organisations worldwide, including The Irish Times.
The files come from 14 offshore services firms that set up shell companies and other offshore entities for clients, often seeking to keep their financial activities out of the public eye.
They expose dealings by the King of Jordan, the president of Kenya, the prime minister of the Czech Republic and former British prime minister Tony Blair.
Among the hidden assets revealed in the documents are:
- A $22 million chateau in the French Riviera – with a cinema and two swimming pools – purchased through offshore companies by the Czech Republic’s prime minister, a billionaire who has railed against the corruption of economic and political elites.
- More than $13 million tucked in a secrecy-shaded trust based in the great plains of the US by a scion of one of Guatemala’s most powerful families, a dynasty that controls a soap and lipstick conglomerate that has been accused of harming workers and the planet.
- Three beach-front mansions in Malibu, California, purchased through three offshore companies for $68 million by the King of Jordan in the years after Jordanians filled the streets during Arab Spring to protest joblessness and corruption.
It is not illegal in most countries to do business in offshore jurisdictions, but the complexity and secrecy of many jurisdictions means it is possible to avoid scrutiny by regulators.
The system is sustained by multinational banks, law firms and accounting practices headquartered in the US and Europe.
The Pandora Papers provide an insight into how South Dakota, Nevada and more than a dozen other US states have transformed themselves into leaders in the business of selling financial secrecy.
Well-known stars
The documents link many well-known figures to offshore assets including India’s cricket superstar Sachin Tendulkar, pop music diva Shakira and supermodel Claudia Schiffer.
Shakira’s attorney said the singer declared her offshore companies, which the attorney said do not provide tax advantages.
Schiffer’s representatives said the supermodel correctly pays her taxes in the UK, where she lives. An attorney for Tendulkar did not respond to requests for comment.
In all, the new leaks uncover the real owners of more than 29,000 offshore companies. The owners come from more than 200 countries, with the largest contingents from Russia, the UK, Argentina, China and Brazil.
The investigation also highlights how Baker McKenzie, the largest law firm in the US, and other law firms helped create the modern offshore system. The firm and its global affiliates have used their lobbying and legislation-drafting know-how to shape financial laws around the world.
A spokesperson for Baker McKenzie, John McGuinness, said the firm seeks to provide the best legal and tax advice to its clients and strives “to ensure that our clients adhere to both the law and best practice”.
Against the system
A number of political figures who have spoken out against the offshore system are mentioned in the documents. Some use the system themselves.
“Every public servant’s assets must be declared publicly so that people can question and ask – what is legitimate?” Kenyan president Uhuru Kenyatta told a BBC interviewer in 2018. “If you can’t explain yourself, including myself, then I have a case to answer.”
The leaked records listed Mr Kenyatta and his mother as beneficiaries of a foundation in Panama. Other family members, including his brother and two sisters, own five offshore companies with assets worth more than $30 million, the records show.
Mr Kenyatta and his family did not reply to requests for comment.
In February, a commentary from the Tony Blair Institute for Global Change urged policymakers to seek, among other measures, higher taxes on land and homes.
Mr Blair, the institute’s founder and executive chairman, talked about how the rich and well connected shirk paying their share of taxes as far back as 1994, when he campaigned to become the leader of the UK’s Labour Party.
The Pandora Papers show that in 2017, Mr Blair and his wife, Cherie, became the owners of an $8.8 million Victorian building by acquiring the British Virgin Islands company that held the property. The London building now hosts Ms Blair’s law firm.
The records indicate that Ms Blair and her husband, who served as a diplomatic envoy in the Middle East after stepping down as British prime minister in 2007, bought the offshore real estate company from the family of Bahrain’s industry and tourism minister, Zayed bin Rashid al-Zayani.
By purchasing the company shares instead of the building, the Blairs benefited from a legal arrangement that saved them from having to pay more than $400,000 in property taxes. The Blairs and the al-Zayanis said they did not initially know about each other’s involvement in the deal.
Ms Blair said that her husband was not involved in the transaction and that its purpose was “bringing the company and the building back into the UK tax and regulatory regime”. She also said that she “did not want to be the owner of a BVI company” and that the “seller for their own purposes only wanted to sell the company”. The company is now closed.
Through their lawyer, the al-Zayanis said their “companies have complied with all UK laws past and present”.
