•Tax Justice Network seeks UN summit to end financial crime
A huge new leak of financial documents has revealed how the powerful and ultra-wealthy, including the Queen’s private estate, secretly invest vast amounts of cash in offshore tax havens.
The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport, who have sheltered their wealth in secretive tax havens are being revealed in a major new investigation into Britain’s offshore empires.
According to Premium Times, Senate President Bukola Saraki, is among the more than the 40 world politicians whose offshore hideaways were exposed by the fresh Internation Consortium of Investigative Journalist (ICIJ) investigations.
The details come from a leak of 13.4 million files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.
The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners, including the Guardian, the British Broadcasting Corporation (BBC) and the New York Times.
Donald Trump’s Commerce Secretary is shown to have a stake in a firm dealing with Russians sanctioned by the United States (U.S.).
The leak, dubbed the Paradise Papers, contains 13.4 million documents, mostly from one leading firm in offshore finance.
Two Russian state institutions with close ties to Vladimir Putin funded substantial investments in Twitter and Facebook through a business associate of Jared Kushner, leaked documents reveal.
The investments were made through a Russian technology magnate, Yuri Milner, who also holds a stake in a company co-owned by Kushner, Donald Trump’s son-in-law and Senior White House Adviser.
The discovery is likely to stir concerns over Russian influence in U.S. politics and the role played by social media in last year’s presidential election. It may also raise new questions for the social media companies and for Kushner.
Alexander Vershbow, who was a U.S. Ambassador to Russia under George W Bush and to NATO under Bill Clinton, said the Russian state institutions were frequently used as “tools for Putin’s pet political projects”.
Vershbow said the findings were worrisome in the light of efforts by Moscow to disrupt U.S. democracy and public debate. “There clearly was a wider plan, despite Putin’s protestations to the contrary,” he said.
The Paradise Papers help to unravel complex arrangements that led Russian state money to fund investments in the U.S. social media companies.
They involve a bewildering array of companies using similar names and acronyms, some registered offshore in places that offer secrecy about ownership. The arrangements are legal, but have led campaigners to demand more transparency.
The trail begins in December 2005, when Gazprom Investholding began putting money into Kanton Services, a company registered in the British Virgin Islands. Usmanov was at the time General Director of Gazprom Investholding, which the Kremlin has used to renationalise assets sold off in the 1990s.
Gazprom in effect took control of Kanton in 2009 in return for $920 million. In 2011, Kanton in turn took a majority stake in DST USA II, a vehicle publicly associated with Milner. By 2012, DST USA II had bought more than 50 million shares in Facebook, according to filings at the U.S. Securities and Exchange Commission, amounting to more than three per cent of the social media company.
Over the following months, ownership of DST USA II was transferred to an Usmanov company, which sold off $1 billion worth of the shares in Facebook at a significant profit after the social network floated on the stock market.
The papers also involve two Premiership teams – Arsenal and Everton – and two billionaires as well as how their close relationship and the opaqueness and secrecy of the companies they own in offshore tax havens has led to questions over who owns what.
As a result, campaigners are calling for changes to the rules intended to safeguard the independent ownership of Premier League teams.
The story begins with Arsenal and a very rich supporter, the Uzbek-Russian oligarch Alisher Usmanov. Ten years ago, Usmanov decided to buy a stake in the London Premier League giant whose home is the 60,000-seat Emirates Stadium, and he turned to the Isle of Man law firm Appleby to get it done.
There are also details from 19 corporate registries maintained by governments in secrecy jurisdictions – Antigua and Barbuda, Aruba, the Bahamas, Barbados, Bermuda, the Cayman Islands, the Cook Islands, Dominica, Grenada, Labuan, Lebanon, Malta, the Marshall Islands, St Kitts and Nevis, St Lucia, St Vincent, Samoa, Trinidad and Tobago, and Vanuatu.
BBC is part of nearly 100 media groups investigating the papers.
As with last year’s Panama Papers leak, the documents were obtained by the German newspaper Süddeutsche Zeitung, which called in the ICIJ to oversee the investigation. The Guardian is among the nearly 100 media partners involved in investigating the documents.
Yesterday’s revelations form only a small part of a week of disclosures that will expose the tax and financial affairs of some of the hundreds of people and companies named in the data, some with strong UK connections.
Many of the stories focus on how politicians, multinationals, celebrities and high-net-worth individuals use complex structures of trusts, foundations and shell companies to protect their cash from tax officials or hide their dealings behind a veil of secrecy.
The Paradise Papers show that about £10 million ($13 million) of the Queen’s private money was invested offshore.
It was put into funds in the Cayman Islands and Bermuda by the Duchy of Lancaster, which provides the Queen with an income and handles investments for her £500 million private estate.
There is nothing illegal in the investments and no suggestion that the Queen is not paying tax, but questions may be asked about whether the monarch should be investing offshore.
There were small investments in the rent-to-buy retailer BrightHouse, which has been accused of exploiting the poor, and the Threshers chain of off-licences, which later went bust owing £17.5 million in tax and costing almost 6,000 people their jobs.
Most of the data comes from a company called Appleby, a Bermuda-based legal services provider at the top end of the offshore industry, helping clients set up in overseas jurisdictions with low or zero tax rates.
Its documents, and others mainly from corporate registries in Caribbean jurisdictions, were obtained by Süddeutsche Zeitung. It has not revealed the source.
The media partners say the investigation is in public interest because data leaks from the world of offshore have repeatedly exposed wrongdoing.
But Tax Justice Network (TJN) said that ‘Paradise Papers’ have once again highlighted the failure of governments around the world to deal with the scourge of tax dodging and financial crime facilitated by offshore financial centres.
Hailing ICIJ on their fearless investigative journalism, the Network called on world leaders to commit finally to ending tax abuse and financial secrecy.
