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How the rich and powerful use secret offshore companies to hide vast amounts of wealth, leaked documents show

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Russian President Vladimir Putin speaks during the Opening Ceremony of the International Military-Technical Forum “Army-2021” held at Kubinka, outside Moscow, on August 23rd 2021.

Getty Images| AFP | Getty Images

According to an analysis of more than 12 million files from 14 companies around the globe, hundreds of powerful leaders, politicians, celebrities, drug dealers, and billionaires have hidden their assets in mansions, beachfront properties, yachts, and other assets over the last quarter century.

International Consortium of Investigative Journalismists released Sunday’s report. It included 600 journalists representing 150 media outlets across 117 countries. Because the report sheds light onto the past hidden transactions of elite and corrupt officials, as well as how they have used offshore accounts in order to hide assets totalling trillions of dollars, it’s been called the “Pandora Papers”.

More than 330 former and current politicians were identified as the beneficiaries of secret accounts. They include King Abdullah II of Jordan, ex-Prime Minister of Britain Tony Blair, Andrej Babis of Czech Republic, President of Kenya Uhuru Kenyatta and Guillermo Lasso of Ecuador.

The billionaires called out in the report include Turkish construction mogul Erman Ilicak and Robert T. Brockman, the former CEO of software maker Reynolds & Reynolds.

The report states that many accounts were set up to conceal income and avoid taxes.

Sven Giegold of the Green Party, an EU lawmaker, said “The latest data leak must serve as a wakeup call.” “Global tax evasion fuels global inequality. “We need to increase the effectiveness of countermeasures and do so now.”

Oxfam International (a British group of charities) applauded The Pandora Papers’ revelations of brazen greed which deprived nations of tax revenue, that could be used for programs and projects that benefit the greater good.

Oxfam stated in a statement that “this is where our missing hospital are.” This is where all our extra firefighters, teachers, and public servants are located. When a business or politician claims that there’s no money to pay for innovation and climate damage, and for better and more jobs after COVID, and for additional overseas assistance, it’s because they don’t know where to find it.

The Pandora Papers is a sequel to the 2016 “Panama Papers” project, which was also compiled in 2016 by the same journalistic team.

The latest bombshell is even more expansive, porting through nearly 3 terabytes of data — the equivalent of roughly 750,000 photos on a smartphone — leaked from 14 different service providers doing business in 38 different jurisdictions in the world. Although the records are from the 1970s and most files date to 1996, the majority of them span the period between 1996 and 2020.

The Panama Papers, however, analyzed 2.6 Terabytes data that had been leaked from a law firm named Mossack Fonseca. This was the same country that gave the project its nickname.

The most recent investigation focused on accounts that were registered in offshore havens such as the British Virgin Islands and Seychelles. Some of these secret accounts, however, were found in trusts in the United States. These included 81 in South Dakota as well 37 in Florida.

Some initial results released on Sunday paint a grim picture of some of those involved.

Jordan’s King Abdullah I speaks following his welcome by Nancy Pelosi (D.CA), to Washington on July 22, 2021.

Elizabeth Frantz | Reuters

According to the investigation, advisers were found to have helped King Abdullah II II of Jordan establish at least 312 shell companies between 1995 and 2017. This allowed the monarch to purchase 14 houses in the U.S. worth over $106 million. The other was a California property with ocean views that cost $23 million. It was purchased through a British Virgin Islands company in 2017. They were an English accountant in Switzerland, and British Virgin Islands lawyers.

Jordan’s Royal Palace did not immediately comment.

These details were a humiliating blow for Abdullah’s government, which was embroiled in scandal when his half-brother, the former Crown Prince Hamzah accused the “ruling systems” of incompetence and corruption. According to the king, he claimed that he had been victim of a “malicious plan”, placed his half-brother under house arrest, and brought two close friends on trial.

After the death of King Hussein, Abdullah assumed power in 1999.

U.K. lawyers for Abdullah claimed that he’s not required to pay tax under the law of his country and hasn’t used public funds in any way. They also stated that there are privacy and security reasons why he could have offshore holdings. They also stated that most properties and companies aren’t connected to Abdullah, or don’t exist anymore. However they refused to give details.

Blair was the U.K’s prime minister between 1997 and 2007. He purchased a British Virgin Islands corporation that owned the Victorian property for $8.8 million in 2017. The building is now home to Cherie Blair’s law office, the result of the investigation. They purchased the company from Zayed bin Rashid Al-Zayani, Bahrain’s tourism and industry minister. The investigation revealed that the Blairs were able to save more than $400,000 on property taxes by buying shares of the company instead of purchasing the building.

According to the probe, both the Blairs as well the al-Zayanis said that they had not known the other person was involved in this deal at the beginning. Cherie Blair stated her husband was not involved with the transaction. This purchase she claimed was intended to allow “the building and company” back under the U.K. tax system and regulation. An attorney for the alZayanis claimed they adhered to U.K. laws.

The investigation revealed that Andrej Babis, Czech Prime Minister, invested $22 million in shell companies in 2009 to purchase a Chateau property located in Mougins in France. It was near Cannes. Investigace.cz obtained documents from the Czech partner of the journalism group to verify that the shell companies as well as the chateau did not make it into Babis’ required assets declarations.

The probe revealed that Babis indirectly owned the Monaco-based real estate company which owned the chateau.

Babis wrote in his initial reaction to the report, “I was expecting them to bring something just before the election to hurt me and influence Czech election.”

This Friday and Saturday will see the Czech Republic hold their parliamentary elections.

Babis said, “I have never done anything illegal”

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