Once again it has been revealed that the rich are hiding money in tax havens. The third release of the Pandora Papers published by the International Consortium of Investigative Journalists reveals a multi-billion dollar fraud of hidden wealth, tax avoidance and money laundering by some of the world’s richest.
They exploit a complex system of banks and offshore zones to hide their ill-gotten gains. According to a study by the US National Bureau of Economic Research in 2017, these tax havens globally hold probably more than ten percent of the world’s total GDP.
There are at least 200 Swedes among the culprits. They include, according to Sveriges Television (STV) “a stock market CEO and one of the country’s richest families, but also a suspected eco-criminal, right-wing extremists (two Nazis) and a member of the Hells Angels”. SVT has been part of the global journalistic cooperation project that has gone through nearly 12 million secret documents to produce the review, sometimes dubbed ‘Pandora’s Leak’.
Czech Prime Minister Andrej Babis, a Trump type figure, who is the country’s second richest individual, ran for office promising to end tax evasion and corruption, The investigation shows that he has bought chateaux and other exclusive properties in France with the help of a series of shell companies in tax havens.
Babis is not the only powerbroker who has been exposed with his hands in the jam jar. The Pandora Papers expose at least 130 billionaires and 330 top politicians who have used the same scheme — shell companies and offshore accounts — to hide money or buy real estate, luxury yachts, private jets and more.
Among them Tony Blair and his wife who “saved” — that is avoided paying — £312,000 in stamp duty when they bought a London office by buying the offshore firm that owned the building. In what the Tatler magazine describes as the “Blair Rich Project” his family is estimated to now be worth over £100 million.
“It is Europe’s elite that has been exposed,” writes the German Deutsche Welle. And not just Europe’s elite, but that of the whole world, exposing the rottenness of the capitalist system. A total of 35 current or former heads of state and government are identified.
In addition to Babis, those identified include Chilean President Sebastián Piñera, Ecuadorian President Guillermo Lasso, Ukrainian President Volodymyr Zelenskyj, and Kenyan President Uhuru Kenyatta. The documents also show the finance ministers of Pakistan, the Netherlands, and Brazil all have ties to offshore companies, as do the former finance ministers of Malta and France. Brazil’s Central Bank Chief and ex-International Monetary Fund chief Dominique Strauss-Kahn are also implicated.
The Pandora leak further reveals that monarchies around the world are a kleptocracy. King Abdullah II of Jordan, for example, has built up a global real estate empire with at least 14 luxury properties via a network of secretly-owned firms.
According to iStories, ICIJ’s Russian partner, Russian is “disproportionately represented” in this scandal. 14% of the 27,000 companies named in the papers have Russian links. Many of those named, including Konstantin Ernst, CEO of Russian state television, Sergei Chemezov CEO of Russia’s state corporation RosTec and close associate of Putin, as well as Svetlana Krivonogikh, who it is alleged is Putin’s former ‘mistress’ hold property, superyachts and bank accounts hidden behind a complex screen of fake companies.
Behind each fortune lies not just one but several crimes, as the Pandora’s Tale shows in black and white. If a petty thief was caught by police, the few pounds stolen would be confiscated. Those named in the Pandora Papers should be treated in the same way — the offshore banks and tax havens closed down, and the wealth they contain expropriated and used for the benefit of the whole of society.
By Per Olsson, Rättvisepartiet Socialisterna–our sister organisation in Sweden