The offshore billions
The Pandora Papers have sent shock waves across six continents, said The Washington Post. A cache of more than 11.9 million leaked documents, they show how the rich and powerful – including 35 current or former heads of state – use the offshore financial system to conceal their assets. The papers prove that King Abdullah of Jordan secretly spent $106m on luxury homes in California and elsewhere; that the leaders of the Czech Republic, Kenya, Ecuador and Ukraine squirreled away “millions of dollars in property and cash” abroad; and that a Russian woman, Svetlana Krivonogikh, acquired a waterfront property in Monaco soon after she allegedly gave birth to Vladimir Putin’s child. Such transactions are not necessarily illegal. But this investigation, jointly undertaken by media outlets in over 100 nations, exposes the “vast reaches of the secretive offshore system used to hide billions of dollars from tax authorities, creditors, criminal investigators and citizens around the world”.
“Perhaps more than anything else, the Pandora Papers tell a story about Britain,” said Adam Ramsay on Open Democracy. The British Virgin Islands, a UK overseas territory and a tax haven, features prominently in the leaks. So do many other UK territories also famed for allowing money laundering and tax dodging: the Cayman Islands, Anguilla, Bermuda and Gibraltar. Britain and its “offshore network” are thought to facilitate roughly a third of the total tax dodged globally. The system is a “global disgrace”, said The Guardian. “The ultra-rich are ripping off everyone else” as a matter of course. Worse still, the nations bearing the heaviest losses are often “among the world’s poorest”. We in Britain ignore this, partly because we delude ourselves that our country isn’t corrupt, said Ian Birrell on UnHerd. But the City of London washes “mountains of dirty cash” from abroad. Azerbaijan’s president Ilham Aliyev leads a brutal dictatorship, yet he and his associates were still able to trade almost £400m of UK property over the past 15 years. The UK establishment looks the other way – not surprising, when Tory donors feature prominently in the Pandora Papers.
Yes, it’s awful, but we know this already, said Chris Blackhurst on Reaction.life. Previous leaks such as the Panama Papers caused similar bursts of outrage, but nothing happened. There’s thought to be over $20trn in the offshore banking system. Occasionally, we catch glimpses of this “underlying disease”, but no one’s seeking a cure. There has been some progress in recent years, said The Economist. Tax havens have, under pressure, agreed to exchange more information on their clients with their home nations. The big economies are close to a deal on corporate tax avoidance that would see a minimum global tax rate of 15%. But given the vast sums involved, jurisdictions will always have incentives to keep loopholes open. “The Pandora Papers won’t be the last in the series.”