3 min read (estimated)

By now, you may have heard of Pandora Papers and are wondering what it’s about. It is a great expose of how hundreds of wealthy, powerful, and influential people have been keeping their funds in such a way that the rules that apply to the rest of the world do not apply to them.

I STILL DON’T UNDERSTAND

Let me start this way: On Sunday, the International Consortium of Investigative Journalists (ICIJ) published its biggest ever investigations that reveal hidden wealth, tax avoidance, and money laundering by some of the world’s richest and most powerful people. This publication is a culmination of a 2-year effort.

2 YEARS?

Yeah. More than 600 journalists from 150 media outlets in 117 countries (including Nigeria’s Premium Times) have been sifting through nearly 12 million documents to reveal what was meant to be hidden. So far, they have discovered that the documents were linked to more than 330 politicians and public officials, including 35 current and former national leaders, in more than 91 countries and territories.

IS THIS LIKE THE PANAMA PAPERS?

That’s right. But this is much bigger. Panama Papers was in 2016 and the documents sifted through amounted to 2.6 terabytes of data. Another was revealed in 2017 called Paradise Papers and it was 1.4TB. The Pandora Papers is 2.9 TB, making it the biggest to date. According to the ICIJ, “The records (in the Pandora Papers) include information about the dealings of nearly three times as many current and former country leaders as any previous leak of documents from offshore havens.” For validation, they cross-referenced it to public records in many countries.

I STILL DON’T UNDERSTAND. WHAT DID THEY DO?

They use Tax Havens. Tax havens are places around the world where prominent people set up offshore companies and put their money for purposes of tax evasion and money laundering. They include Luxemburg, Bermuda, Cayman, and the British Virgin Islands, Panama, Dubai, Monaco, and Switzerland.

SWITZERLAND IS ON THE LIST. IS THIS STUFF ILLEGAL?

No, setting up businesses in offshore companies is not illegal in itself. Loopholes in the law allow people to legally avoid paying some taxes by moving their money or setting up companies in tax havens, but it is often seen as unethical. The UK government says tax avoidance “involves operating within the letter, but not the spirit, of the law”. Some also use offshore companies to protect their assets against criminals or even dictatorial governments and regimes. Almost every listed Chinese company owned by international investors, including tech giants like Alibaba and Tencent, uses offshore companies to bypass local laws that restrict offshore investment.

However, it’s been shown that tax havens are also used by those who hide the proceeds of criminality. It’s a perfect setup. Dodgy accountants also take pride in exploiting legal loopholes to help their clients minimize tax and shield assets from law enforcement. In other words, they use the resources of the state and decide not to give back their fair share as a way of paying it forward to future generations.

A curious case is those of politicians who campaign publicly against tax avoidance and corruption or advocated austerity measures at home. Pandora Papers reveal that they did not or are not practicing what they preach. Premium Times reveals that Peter Obi, the former governor of Anambra State set up offshore companies using paid nominees as directors and did not declare them as assets as stated by the law thereby violating Nigeria’s Code of Conduct law. It was also revealed from the Papers that he operated foreign accounts while in government contrary to the constitution. Premium Times also broke stories about how Stella Oduah secretly bought seven London properties – one in her name, two through her Nigerian-incorporated firm, and four secretly through her Seychelles offshore company. There is also the case of the current governor of Kebbi State, Abubakar Bagudu, who was helped by British firms as he worked to conceal the huge wealth he made as a key member of the Abacha plunder machine.

WOW. ANY PROMINENT AFRICAN INDICTED?

That has to be Kenya’s President Uhuru Kenyatta and his mother who are beneficiaries of a secretive foundation in Panama. The leaked document also showed that three of Kenyatta’s siblings own five offshore companies with assets worth more than $30m.

INTERNATIONALLY?

They are plenty. 330 public officials, including 35 world leaders have been tied to this leak.
Days ahead of the Czech Republic’s October 8-9 parliamentary election, the documents tied the country’s prime minister, Andrej Babiš, to a secret $22m estate in a hilltop village near Cannes, France. He said the leak is the work of the opposition to take him out of leadership. Can you mention the name of this fallacy?
The King of Jordan spent £70 million on U.S. and U.K. companies, including three beachfront mansions in Malibu, California.

A few other juicy details include the $40 million property in London the Azerbaijani president’s 11-year-old son allegedly owned. And the apartment in Monaco a president got his girlfriend. Even former UK Prime Minister Tony Blair was said to have used an offshore firm to help his family avoid over $400,000 in property taxes. Colombian singer Shakira was also exposed.

WHY IS THIS EXPOSE IMPORTANT IF NOTHING WILL CHANGE?

An estimated $5.6 trillion to $32 trillion could be hidden offshore, a lot of this illegally. And these revelations can help countries take back what is theirs. When Panama Papers were revealed in 2016, the investigation toppled government leaders and allowed countries to recoup more than $1.3 billion in unpaid taxes. And more importantly, itS ignited debates around tax abuse, corruption, financial crime, and inequality.

WHERE CAN I READ THE DOCUMENT ITSELF?

https://www.icij.org/investigations/pandora-papers/global-investigation-tax-havens-offshore/

Additional Info Sources: Wall Street Journal, The Economist, Premium Times, Financial Times, BBC, and Al Jazeera)