Outcry grows over hidden assets

Report revealed how world leaders, billionaires and others hide their assets from tax collectors.

Calls grew Monday for an end to the financial secrecy and shell companies that have allowed many of the world’s richest and most powerful people to hide their wealth from tax collectors.

The outcry came after a report revealed the way that world leaders, billionaires and others have used offshore accounts to keep trillions of dollars out of government treasuries over the past quarter-century, limiting the resources that could be put to work helping the poor or combating climate change. The report by the International Consortium of Investigative Journalists brought promises of tax reform and demands for resignations and investigations, as well as explanations and denials from those targeted.

The first installment of the investigation, dubbed the Pandora Papers, was published Sunday and involved 600 journalists from 150 media outlets in 117 countries.

Hundreds of politicians, celebrities, religious leaders and drug dealers have hidden their wealth in shell companies and used other tactics to hide their investments in mansions, exclusive beachfront property, yachts and other assets, according to a review of nearly 12 million files obtained from 14 firms located around the world. Many of the tax dodges are legal. Gabriel Zucman, a University of California, Berkeley, economist who studies income inequality and taxes, said in a statement one solution is “obvious”: Ban “shell companies — corporations with no economic substance, whose sole purpose is to avoid taxes or other laws.”

“The legality is the true scandal,” the activist and science-fiction author Cory Doctorow wrote on Twitter. “Each of these arrangements represents a risible fiction: a shell company is a business, a business is a person, that person resides in a file-drawer in the desk of a bank official on some distant treasure island."

The more than 330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former U.K. Prime Minister Tony Blair, Czech Republic Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and associates of both Pakistani Prime Minister Imran Khan and Russian President Vladimir Putin.

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. Some of those targeted strongly denied the claims Monday.

“The new data leak must be a wake-up call,” said Sven Giegold, a Green party lawmaker in the European Parliament. “Global tax evasion fuels global inequality. We need to expand and sharpen the countermeasures now.”

The European Commission, the 27-nation European Union’s executive arm, said in response to the revelations that it is preparing new legislative proposals to enhance tax transparency and reinforce the fight against tax evasion.

The Pandora Papers are a follow-up to a similar project released in 2016 called the “Panama Papers” compiled by the same journalistic group.

The latest investigation is even more expansive. The records date back to the 1970s, but most are from 1996 to 2020. The investigation dug into accounts registered in familiar offshore havens, including the British Virgin Islands. But some of the secret accounts were also scattered around in trusts set up in the U.S., including 81 in South Dakota and 37 in Florida.

AP FILE Tony Blair, exbritish prime minister, is named as one of 330 secret account holders.

AP FILE Russian President Vladimir Putin also is alleged to be hiding assets.

AP FILE Allegedly, Jordan’s King Abdullah II is a beneficiary of the secret accounts.