Pandora Papers leak exploitation of offshore tax havens worldwide

Oct 15, 2021 | News

The Pandora Papers revealed worldwide riches hiding in shadowy tax havens by researching almost 12 million financial records over two years.

Journalists like Sheila Wang with The Toronto Star collaborated internationally to bring to light the explicit use of offshore tax havens and published them in October 2021.

Wang researched corporate registration records, ledgers, trading history of shares and other financial records to find Canadian leads in the documents in the ICIJ database.

“I made more than 30 phone calls to find information, to find something,” she said.

The International Consortium of Investigative Journalists (ICIJ) brought together 600 journalists from 117 countries to unveil their findings.

“We worked on international news without being abroad, all thanks to the journalists from around the world,” Wang said. She started working on the report in May.

Wang said the leak was given the name in September, this year, and refers to an artifact in the Greek mythology named Pandora’s Box.

“It evokes an outpouring of troubles and problems,” she said.

The leak includes 6.4 million documents, almost three million images, more than a million emails and almost 500,000 spreadsheets. The documents span five decades, with most created between 1996 and 2020.

“This entire world is set up as a hidden parallel economy that does all sorts of things that are clearly against the public interest,” said Marco Oved, a reporter at the Toronto Star who reported on the leak.

Offshore accounts are used to hide the businesses and finance of the wealthy from the rest of the world and avoid paying taxes, as information is limit to the public. It’s the largest data dump of tax havens, succeeding its predecessors, the Panama and Paradise Papers.

The Panama and Paradise Papers leaked in 2016 and 2017 included names and personal financial information of wealthy individuals and public officials who used offshore business entities for illegal purposes including fraud, money laundering and tax evasion.

This release found Bermuda, the British Virgin Islands, Panama, and the Bahamas are the most popular tax havens along with Russia, the U.K. and even Canada. The list of political leaders in the Pandora Papers include former U.K. Prime Minister Tony Blair, the King of Jordan Abdullah II bin Al-Hussein, and they indirectly tie Russian President Vladimir Putin to secret assets in Monaco.

Entertainers like Shakira, Jackie Chan, Elton John and others were exposed in the Pandora reports. During the investigation, reporters found an 11-year-old boy from Azerbaijan who owns nearly $50 million of prime commercial real estate in London.

More than 1,200 offshore companies were found to be tied to Canada. Among the Canadians who were identified include Formula 1 champion Jacques Villeneuve, money transfer mogul Firoz Patel, as well as dark web marketplace mastermind Alexandre Cazes, who died in Thai jail in 2017.

Wang’s biggest difficulty came in translating data from different languages and understanding the technical slang. She talked to experts and went over the documents line-by-line.

“Deciphering the documents was like learning a new language,” Wang said.

More than one hundred billionaires, 29,000 offshore accounts, 30 current and former leaders and 336 politicians were named in the first leak on Oct. 3.

“In today’s information era, people sometimes rather not know and that’s not right,” said Wang. “People say I don’t care about the rich but you should, because what they do has an impact on society.”

People can hold funds and assets in foreign countries for doing business, investing abroad and more. While owning an offshore company is legal, the secrecy it provides can mask illicit money flows, enabling bribery, money laundering, tax evasion, terrorism financing and human trafficking and other human rights abuses.

“One of the features of tax havens is that it’s basically impossible to figure out who’s behind them,” Oved said. “So this leak connects the dots for everyone and exposes the names and reasons behind these tax havens.”

Both Wang and Oved noticed multiple countries making changes after the leaks but Canada remained silent.

“People have gone to jail, presidents have toppled and lost power, so why not Canada?” Oved asked.

“Enforcement is important,” Wang said. “So far we’ve heard a lot of big talks but now people want to see it.”