'this is where our missing hospitals are'
'Pandora Papers' reveal 14 world leaders, other elites hiding wealth in tax havens, including South Dakota
Five years ago, a massive leak of documents from a Panama law firm shed light on the widespread, often shady use of tax shelters by wealthy and powerful people around the world. After the "Panama Papers" were released, clients of another politically connected Panama law firm asked that security be strengthened so they weren't similarly exposed. That firm, Alemán, Cordero, Galindo & Lee — or Alcogal — represents one of the largest troves of leaked documents in what the International Consortium of Investigative Journalists (ICIJ) is calling the "Pandora Papers," a bigger, more comprehensive tax haven accounting released Sunday.
The Pandora Papers are based on nearly 3 terabytes of data from 14 different firms doing business in 38 jurisdictions. More than 600 journalists from 150 media outlets in 117 countries made sense of the 11.9 million financial records, which detail more than 29,000 offshore accounts held by more than 130 Forbes-designated billionaires and 330 current and former public officials in more than 90 countries, including 14 current heads of state.
Jordan's King Abdullah II secretly invested more than $100 million in luxury real estate, including three adjacent oceanside properties in Malibu, the journalists found. Czech Prime Minister Andrej Babis used shell companies to purchase a $22 million chateau near Cannes in 2009. Other leaders in the cache include Ecuadorean President Guillermo Lasso, Kenyan President Uhuru Kenyatta, Chile's President Sebastián Piñera, Dominican President Luis Abinader, and President Milo Djukanovic of Montenegro, as well as former British Prime Minister Tony Blair.
The tax havens include the usual suspects — the British Virgin Islands, Cyprus, Belize — but "the files provide substantial new evidence, for example, that South Dakota now rivals notoriously opaque jurisdictions in Europe and the Caribbean in financial secrecy."
Offshore accounts and tax havens are generally not illegal, and the leaders who responded to the ICIJ report mostly said they followed all applicable laws. But they do, by design, deprive those countries of tax revenue.
"The offshore financial system is a problem that should concern every law-abiding person around the world," former FBI financial crimes investigator Sherine Ebadi tells The Washington Post. "These systems don't just allow tax cheats to avoid paying their fair share. They undermine the fabric of a good society." Oxfam International agreed, saying in a statement that "this is where our missing hospitals are" as well as money for teachers, firefighters, and climate change mitigation.