In a new investigation into major offshore business dealings in tax havens, a list of about 130 names of billionaire businessmen, politicians, corporations and world leaders connected to these businesses has been leaked to the public. The leak, which has now been termed the ‘Paradise Papers’ and is similar to the ‘Panama Papers’ of 2016, was from a law firm, Bermuda-based Appleby. It is the second largest leak in history, after the Panama Papers.
The Paradise Papers were leaked by an unknown person to German newspaper Süddeutsche Zeitung, who shared it with the International Consortium of Investigative Journalists (ICIJ), a consortium of about 95 media partners who also leaked the Panama Papers. The Paradise Papers leaked mostly from the offices of Appleby, an offshore law firm that specializes in offshore dealings and has offices in Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man and 16 others- all tax havens in The Caribbean. Unlike the Panama papers which originated from the offices of Mossack Fonseca, a law firm based in Panama that has since been discredited since 2016, Appleby prides itself on catering to the global elites.
The latest leak contains about 13.4 million files and reveals how wealthy people have used shell companies in tax havens to evade taxes in their countries, hide money, and generally put their wealth beyond the influence of their countries’ laws.
The global elites
World leaders and corporations who have “investments” in these tax havens, according to the papers, include the Queen of England, members of Donald Trump’s cabinet including his commerce secretary Wilbur Ross, Twitter, Facebook, associates of Russian president Vladimir Putin, Nike, Apple, mining giants Glencore etc. These papers, about 1.4TB in size are being released more than a year after the Panama Papers were also leaked in 2016, which also implicated most of these world leaders.
This latest leak from offshore deals, just like the Panama papers, also implicate African leaders. Incumbent Liberian president Ellen Johnson Sirleaf, Zambian opposition leader Sammy Hichilema, Uganda’s foreign minister Sam Kahamba Kutesa and Kenya’s former Minister of Agriculture Sally Kosgei all have at a time, used offshore companies in tropical islands to evade taxes, conceal money, or buy luxurious apartments and jets in Europe.
Nigeria’s very own…
Nigeria’s Senate President, Bukola Saraki, Central Bank Governor, Godwin Emefiele, and one of its biggest bank’s (Zenith Bank) chairman Jim Ovia have all been mentioned in the leak. Nigeria’s Bukola Saraki, who was recently cleared of a false declaration of assets charge, has once again had the light shone on him. He is reportedly director and shareholder of Tenia Limited, an investment holding/management company established in the Cayman Islands in 2001, but whose company address is listed as 30, Saka Tinubu Street, Victoria Island Lagos. Tenia limited was still active as at 2015 when Bukola Saraki became the Senate President of the Federal Republic of Nigeria.
Both Emefiele and Ovia imported luxury jets into Europe while avoiding the payment of about $11 million value added tax on them, according to Premium times Nigeria. Between 2007 and 2012, they both created shell companies in Bermuda, Switzerland and Isle of Man and then used these companies to purchase said jets, after which they leased it to their companies. It is reported that these schemes were purportedly used to avoid paying taxes in Europe.
Global income inequality
The leak of the Paradise Papers tallies with rising global rage against inequality in the world. Anticorruption protests have increased around the world in recent times, and especially after the Panama Papers leak last year. The world’s wealthiest people, 1,542 of them, are worth $6 trillion combined. The amount of wealth in the tax havens is worth $10 trillion, according to the Boston Consulting group, far more than the total amount of disclosed wealth accrued by the world’s richest people. This changes perceptions about the richest people in the world. It also implies that the global income inequality gap is much wider than earlier thought. While poverty levels continue to rise around the world, the rich also continue to find different ways to make their money and keep it.
This second leak in 2 years has surely put the spotlight on offshore financial dealings and tax havens. Tax havens inherently are not illegal, but when they assist wealthy people from other countries to hide their money away from the eyes of their governments, then they have contributed to an injustice. For many countries now, closing these escape routes would be paramount, and strengthening tax systems will be important.