Pandora Papers: The largest offshore financial leak ever!

On October 3, 2021 the International Consortium of Investigative Journalists (ICIJ) leaked what is called the Pandora Papers. According to various sources, this might be the biggest ever leak of offshore data exposing the financial secrets of the rich and the powerful. The 2.94 Terabyte sized data, with more than 12 million documents reveal the financial secrets of the wealthy elites from over 200 countries. These are individuals or associations which use secrecy havens to buy properties and hide assets for malicious practices like tax evasion and money laundering. The Papers include financial data of more than 330 politicians and 130 billionaires.

The list includes names of well-known Celebrities, Politicians, Royal Family members, Prime Ministers, Presidents and Fugitives. According to several economists, the data might reveal Trillions of Dollars of Assets acquired from untaxed and illicit forms of wealth. The Pandora Papers cast light on how the rich and powerful people are using various shell companies to hold luxury items like Property and Yachts.

Whose names have come upon?

According to the papers, British Virgin Islands, Seychelles, Hong Kong, Belize, Panama, and South Dakota have been the hotspots among all offshore locations found. The most Notable names have been, King Abdullah II of Jordan, Cherie Blair (Wife to former Prime Minister of U.K, Tony Blair), Uhuru Kenyatta (Kenyan President), Shakira (Celebrity Singer), Shaukat Fayaz Ahmed Tarin (Former Finance Minister of Pakistan), Mohammed bin Rashid Al Maktoum (Prime Minister of UAE) and several close associates of Russian President Vladimir Putin. Azerbaijan's ruling Aliyev family, and Ukranian President Petro Poroshenko, are the other notable mentions. While some of them have blatantly denied to the accusations, some have shown agreement to proper investigation.

What have they done wrong?

Wealthy and Powerful individuals and companies are often subject to accumulation of assets offshore in Tax havens. By Tax havens we mean that places where tax rates are comparatively lower, to First world countries. By purchasing these properties, these individuals or companies evade taxation in their own country, while still doing business in the same. These activities cost the government billions and who knows trillions of dollars in lost revenues, which affects the general society. How do they do it? By the use of Shell Companies.

Basically a Shell Company is a company which exists on paper, with no physical offices and employees. But are perfectly capable of holding investments and assets like properties. Hence, wealthy guys use such shell companies to buy properties and assets in tax havens to save off taxes. To be clear, this is one of the numerous ways, the Rich use to avoid taxation. As a matter of fact, having secretive offshore assets is in no way illegal, considering the fact that people might do so citing concerns over criminal attacks and unstable governments. But the issue arises when these companies start acting as a network for money laundering and complete tax evasions. The Pandora Papers, since its release have raised some serious questions upon the modern financial system. And how easy it has become for the Elites of the society to hide their wealth and resources.

Only further investigations could reveal, if the people named in the papers are guilty of any wrongdoings or not.

Accusations

• King Abdullah II, the ruler of Jordan has surely been the most talked about individual in the list. The leaked documents reveal the secret investment of the King into several properties all across the U.S and U.K. Which include houses in Malibu, London and Washington. The estimated cost of all those properties being $100 million.
• The other most talked about affair was of the Azerbaijan ruling Aliyev family, who have been accused of trading £400 million of U.K property in recent years. The Aliyev family has had a grave history of corruptions in its country. And the recent Pandora leaks have only added to their woes.
• Next on the list were senior statesmen and close members of the Imran Khan led administration of Pakistan. Although as much as 700 Pakistanis were mentioned in the papers, only a few were linked to the current administration. The list included present and past cabinet ministers, their families and some retired army generals and businessmen. Shaukat Tarin, Pakistan's present Finance Minister and Senator Faisal Vawda along with others were found to have links with foreign offshore companies, hiding millions of dollars in wealth.
• Although there have been no direct mentions of Vladimir Putin, the Russian President. His close associates like the late Petr Kolbin, and several others have found their way into the files. In fact, the papers have revealed that the largest proportion of beneficiaries from the offshore companies were Russian clients.
• Kenyan Prime Minister, Uhuru Kenyatta, whose whole campaign was all about anti-corruption in the country, would now face a hard time explaining how he and his relatives acquired $30 million worth of foreign assets.

How big is the Pandora Papers leak?

The Pandora Papers investigation directed by the International Consortium of Investigative Journalists is the largest ever collaboration of journalists world-wide. It took ICIJ over an year and 600 journalists from over 150 media outlets in 117 countries to prepare the so called "Pandora Papers". The whole investigation was based on the confidential records of 14 offshore companies, which were suspected to provide financial secrecy to wealthy and powerful individuals. The 2016 Panama Papers, which consisted of 2.6 terabytes of financial data was the most significant leak ever. But the Pandora leak has got one step further, with 2.94 terabytes of well documented and detailed data.

With over 6 million documents, 2 million images and a million emails, Pandora became the most conclusive data leaks ever. The ICIJ claims that the leaked data could hold anywhere from $5 trillion to $32 trillion worth of financial data.

What does this mean for us?

There are already growing concerns over the rich not paying their taxes appropriately, while still amassing a huge net worth. Jeff Bezos, Elon Musk, Warren Buffet are all accused of not paying their taxes for years now, and the worst part is governments can’t do much about it. The modern financial system presents certain loopholes, which harbours only the rich and elites of the society. The Pandora leaks is another showcase for how easy it has become for the rich and the powerful to hide off their assets from regulators. The taxes they evade, stagnates the social and economic development of societies as whole.

The reports suggested a record number of Politicians and Nation leaders, upon whom we rest our faith and development. Which means the people that could end the offshore secrecy are themselves, the biggest beneficiaries of it. Alcogal and Trident Trust from the BVI and Panama, were the companies which held most politicians and leaders as beneficiaries. Alcogal was the largest provider with half of all the politicians in the paper being its client.

Most of the governments have pledged proper investigations and punishments against those found guilty. More names are to come forward soon. It is worth seeing, if the Pandora Papers do manage to impact some changes in administrations worldwide.

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