Pandora Papers: US a 'go-to' for hiding wealth of world's richest, data leak reveals

Massive new data leaks revealed around 200 trusts created between 2000 to 2019 to hide wealth of politicians, billionaires with South Dakota on top


                            Pandora Papers: US a 'go-to' for hiding wealth of world's richest, data leak reveals
A screenshot of the ICIJ's website detailing the Pandora Papers (ICIJ)

The world's richest and most powerful have once again been exposed in a massive new document leak. Dubbed the 'Pandora Papers', a cache of 11.9m files exposes how over 300 world leaders, politicians, and celebrities have been hiding their wealth through various tax-havens. Among those named include Russian President Vladamir Putin, pop icon Shakira, King Abdullah II of Jordan, former British Prime Minister Tony Blair and Indian cricket legend Sachin Tendulkar.

The Pandora Papers have been dubbed as the "biggest trove of leaked offshore data in history", surpassing that of even the Panama Papers that exploded in 2016. Among other things, the Pandora Papers reveal the secret assets of some of the world's most powerful people, such as a $4.1 million apartment purchased by Putin's alleged lover in Monaco. Also named is Ukrainian President Volodymyr Zelensky, who allegedly moved his stake in a secret offshore company shortly before his 2019 election victory. 

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Notably, no US politicians or celebrities have been named just yet, but that doesn't mean the country is completely off the hook. The International Consortium of Investigative Journalists (ICIJ), which first reported on the documents noted that the nation is a major haven for offshore bank accounts. US-based trusts have been the "go-to" for financial secrecy, handling assets worth over $1 billion across the globe. The massive expose shows just how key the US is to the wealth of the rich and powerful, interestingly in Republican-controlled states. 

Russian President Vladimir Putin was among those named in the Pandora Papers data leak (Photo by Peter Muhly - WPA Pool/Getty Images)

What are the Pandora Papers?

The papers contain 2.9 terabytes of data including documents, images, emails, and spreadsheets among other forms of data. It documents how over 330 of the world's richest and most powerful people used offshore tax havens and entities to hide their wealth, and invest in assets so as to avoid paying taxes. According to the ICIJ, the papers "reveal how banks and law firms work closely with offshore service providers to design complex corporate structures. The files show that providers don’t always know their customers, despite their legal obligation to take care not to do business with people who engage in questionable dealings."

Over 27,000 companies have been identified, used as vehicles by the rich to hide everything from property and yachts, to incognito bank accounts and looted Cambodian antiquities. While numerous billionaires have been identified, the focus right now is on politicians. Ukraine leads the way in that regard, with 38 politicians being linked to the papers. The nation is closely followed by Russia, with 19 politicians. Other nations linked include Brazil, India, Khazakstan, China, and the UK. 

As described by The Guardian, "the leaked records vividly illustrate the central coordinating role London plays in the murky offshore world." Along with London, it appears the US has a crucial role to play. The US appears to be a leading tax haven, sheltering billions of dollars linked to "individuals previously accused of serious financial crimes." 

The US' role in offshore taxes

President Joe Biden and wife Dr. Jill Biden depart the Delaware State Building after early voting in the state's primary election on September 14, 2020 in Wilmington, Delaware (Photo by Drew Angerer/Getty Images)

According to reports, it appears the US is a major driver of offshore wealth through trusts house the wealth of billionaires, untaxed. ICIJ identified more than 200 trusts settled or created, in the U.S from 2000 to 2019, connecting people from 40 countries. "US trusts held assets worth a total of more than $1 billion. Those included U.S. real estate and bank accounts in Panama, Switzerland, Luxembourg, Puerto Rico, the Bahamas, and elsewhere," the ICIJ reported. 

Leading the way is South Dakota, with 81 trusts being located in the state. Other major states include Florida (37), Texas (24), and Nevada (14). In what is expected to be a major embarrassment for President Joe Biden, his home state of Delaware also appears to be a key player in the complex system, housing 35 trusts. In all, 15 US states have been identified in the papers. "Over the past decade, South Dakota, Nevada and more than a dozen other U.S. states have transformed themselves into leaders in the business of peddling financial secrecy," ICIJ reported

The expose reveals that the US is a major tax haven, alongside other notable tax havens like Panama, Monaco, Switzerland, and the Cayman Islands. The ICIJ has not yet named all those companies or individuals with US-based trusts, but that data is expected to be made available in the coming days. The group is working with major publishers like The Guardian, The BBC, and others to study and verify the data.