Thursday, December 9

The Pandora Papers: Everything you need to know about the massive leak of tax havens

On Sunday night, the International Consortium of Investigative Journalists (ICIJ) published an explosive investigation dubbed the Pandora Papers, which reveals how world leaders, personalities and business executives hid $ 11.3 billion ( 9.7 billion euros) in more than 29,000 companies offshore in countries or territories with favorable taxation.

After the Panama Papers of 2016, in which the ICIJ exposed those involved in one of the main companies in the world that incorporated offshore companies, the Pandora Papers are one of the largest data leaks in history, revealing how the rich and powerful have been hiding their investments in mansions, exclusive beachfront properties, yachts and other assets for the past quarter century.

Are you ready to open Pandora’s box? Here’s everything you need to know about the leak.

Who is involved in the leak?

The ICIJ has established links between assets in tax havens and a total of 336 top executives and politicians who created almost 1,000 shell companies.

More than two-thirds of these companies were registered in the British Virgin Islands.

According to documents released by the ICIJ, King Abdullah II of Jordan created at least thirty offshore companies. Through these entities, it bought 14 luxury properties in the United States and the United Kingdom for more than 106 million dollars (91.7 million euros).

As for the billionaire Czech Prime Minister Andrej Babiš, he placed $ 22 million (19 million euros) in shell companies that were used to finance the purchase of Château Bigaud, a large estate located in Mougins, in the south of France.

The president of Ecuador, Guillermo Lasso, has deposited funds in two trusts based in South Dakota, in the United States.

Other personalities implicated in the documents include former UK Prime Minister Tony Blair, Colombian singer Shakira, German model Claudia Schiffer and Indian cricket legend Sachin Tendulkar.

Venezuelan journalist Emilia Díaz Struck, who leads ICIJ’s cross-border investigations, explains to Euronews that in this massive leak we see more regions represented than in previous ones, such as in the Panama Papers.

Specifically, the presence of Latin American leaders is significant. Of the 330 politicians that appear in the pages of the Pandora Papers, about 90 are from Latin America, and of the 35 presidents and former presidents, almost half, a total of 14, belong to this region.

How extensive was the amount of data leaked?

ICIJ investigations are almost always illustrated by dizzying figures discovered in the course of its journalistic work.

In this case, Pandora Papers comprise some 11.9 million documents – a 2.94 terabyte trove of information – leaked from the confidential records of 14 overseas service providers.

These data were shared with journalists in various formats.

“More than half of the files (6.4 million) were text documents, including more than 4 million PDFs, some of which were more than 10,000 pages,” the ICIJ said.

“The documents included passports, bank statements, tax returns, company incorporation records, real estate contracts and due diligence questionnaires. There were also more than 4.1 million images and emails in the leak.”

Only 4% of the files were structured with data organized in tables (spreadsheets, csv files, and some dbf files). Other records included slideshows and audio and video files.

“To explore and analyze the information in the Pandora Papers, the ICIJ identified the files that contained beneficial ownership information by company and jurisdiction and structured it accordingly. Each vendor’s data required a different process,” the consortium said.

To make sense of the more complex cases, ICIJ used machine learning and other tools, “including Fonduer and Scikit-learn software to identify and separate specific forms from longer documents.”

Some vendor forms were handwritten, so journalists had to manually extract the information, according to the ICIJ.

What will be the consequences of this revelation?

In most countries, the legal consequences of these disclosures for those involved will be little or nil. But in the case of the leaders, the ICIJ observed how the anti-corruption discourse advocated by some of them does not square with their investments in tax havens.

In addition, Emilia Díaz-Struck points out the real impact that previous leaks had, such as the Panama Papers, and considers that this will be the case with this new journalistic investigation: “for several years we have been calculating the money that governments recovered as a result of the publication of the Panama Papers. For example, we are talking about billions of dollars recovered by governments as a result of that publication. “

“Part of the problem is the money that is lost and we have also seen the opening of court cases and changes in legislation,” says Díaz-Struck. “But there is still a long way to go, which is what we see in this new research.”

The journalist anticipates that in some countries it has already been announced that investigations will be opened. “And we will have to see what happens also at the legislative level,” he adds.

Who is the ICIJ?

The ICIJ is a unique organization.

Founded in 1997, it was formed by journalists from around the world to facilitate the investigation of issues that do not stop at national borders, such as cross-border crime, corruption and holding the powerful to account.

For the Pandora Papers, about 600 journalists from 150 media outlets in 117 countries were needed, including Britain’s The Guardian, the French newspaper Le Monde and the German news site Die Zeit.

“We are not talking about a couple of million dollars, but about a trillion dollars,” said Gerard Ryle, director of the ICIJ.

ICIJ became a fully independent entity in 2017.

Its network now includes 280 investigative journalists in more than 100 countries and territories, as well as some 100 associated media outlets.

The ICIJ serial disclosures began in 2013 with the Offshore Leaks. ICIJ obtains 2.5 million documents (emails, internal memos, accounting documents and others) relating to 122,000 offshore companies managed in Singapore and the British Virgin Islands.

China Leaks, the second installment of the Offshore Leaks disclosures, was published in 2014 following translation difficulties. The consortium revealed the investments of Chinese dignitaries in tax havens, including several close to Chinese head of state Xi Jinping.

In retaliation, the authorities blocked access to the ICIJ and collaborating media websites.

At the end of 2014 they followed the Luxleaks, which detailed a system of agreements between Luxembourg and 340 multinationals – including Apple, Amazon and Ikea – to minimize their taxes. The two whistleblowers Raphaël Halet and Antoine Deltour, who brought it to light, and the journalist Edouard Perrin were charged in Luxembourg with breach of trade secrets.

In 2015, the ICIJ unveiled the tax evasion practices of HSBC bank clients in the Swissleaks. Billions deposited in undeclared accounts in Geneva were hidden behind offshore structures, sometimes formed by the bank itself, implicating King Mohamed VI of Morocco, King Abdullah II of Jordan and a cousin of Syrian President Bashar al-Assad.

The publication of the Panama Papers in 2016 led to, among other things, the resignation of Icelandic Prime Minister Sigmundur David Gunnlaugsson and the removal of Pakistani Prime Minister Nawaz Sharif.

Following the Panama Papers, at least 150 investigations were initiated in more than 70 countries for alleged tax evasion or money laundering, according to the ICIJ.

At the end of 2017, the Paradise Papers, based on 13.5 million leaked financial documents coming largely from a Bermuda-based international law firm, revealed planetary tax optimization circuits used by personalities such as singer Bono, the Queen Elizabeth II and racing driver Lewis Hamilton, as well as multinationals like Nike, Apple and Uber.

The last international scandal uncovered by the ICIJ was that of the Luanda leaks in early 2020. It accused Isabel dos Santos, daughter of former Angolan president José Eduardo dos Santos, of having “diverted the Angolan economy.”

You can read more in English about what the Pandora Papers are in the economics and technology section of Euronews next.

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