Bombshell international investigation opens ‘Pandora’ box of financial secrets

AP — Hundreds of world leaders, powerful politicians, billionaires, celebrities, religious leaders, and drug dealers have been hiding their investments in mansions, exclusive beachfront property, yachts, and other assets for the past quarter-century, according to a review of nearly 12 million files obtained from 14 different firms located around the world.

The report released Sunday by the International Consortium of Investigative Journalists involved 600 journalists from 150 media outlets in 117 countries. It is being dubbed the “Pandora Papers” because the findings shed light on the previously hidden dealings of the elite and the corrupt, and how they have used offshore accounts to shield assets collectively worth trillions of dollars.

The more than 330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former UK prime minister Tony Blair, Czech Republic Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and former 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.

Many of the accounts were designed to evade taxes and conceal assets for other shady reasons, according to the report.

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

The latest bombshell is even more expansive, porting through nearly three 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. The records date back to the 1970s, but most of the files span from 1996 to 2020.

In contrast, the Panama Papers culled through 2.6 terabytes of data leaked by one now-defunct law firm called Mossack Fonseca that was located in the country that inspired that project’s nickname.

Some 565 Israelis are listed in the Pandora Papers, published by the International Consortium of Investigative Journalists, according to Shomrim, an investigative journalism nonprofit organization that took part in the investigation. More than two-thirds of the companies were set up in the British Virgin Islands.

Likud MK Nir Barkat is named in the report, which says he held assets under his name in Virgin Islands, then transferred them to his brother rather than to a blind trust, in breach of Knesset Ethics Committee rules; Barkat dismissed the claims as “ridiculous.”

The latest investigation dug into accounts registered in familiar offshore havens, including the British Virgin Islands, Seychelles, Hong Kong, and Belize. But some of the secret accounts were also scattered around in trusts set up in the US, including 81 in South Dakota and 37 in Florida.

Some of the initial findings released Sunday painted a sordid picture of the prominent people involved.

For instance, the investigation found advisers helped King Abdullah II of Jordan set up at least three dozen shell companies from 1995 to 2017, helping the monarch buy 14 homes worth more than $106 million in the US and the UK. One was a $23 million California ocean-view property, bought in 2017 through a British Virgin Islands company. The advisers were identified as an English accountant in Switzerland and lawyers in the British Virgin Islands.

UK attorneys for Abdullah said he is not required to pay taxes under his country’s law and he has not misused public funds, adding that there are security and privacy reasons for him to have holdings through offshore companies, according to the report. The attorneys also said most of the companies and properties are not connected to the king or no longer exist, though they declined to provide details.

Blair, UK prime minister from 1997 to 2007, became the owner of an $8.8 million Victorian building in 2017 by buying a British Virgin Islands company that held the property, and the building now hosts the law firm of his wife, Cherie Blair, according to the investigation. The two bought the company from the family of Bahrain’s industry and tourism minister, Zayed bin Rashid al-Zayani. Buying the company shares instead of the building saved the Blairs more than $400,000 in property taxes, the investigation found.

The Blairs and the al-Zayanis both said they did not initially know the other party was involved in the deal, the probe found. Cherie Blair said her husband was not involved in the deal, which she said was meant to bring “the company and the building back into the UK tax and regulatory regime.” A lawyer for the al-Zayanis said they complied with UK laws.

In 2009, Czech Prime Minister Andrej Babis put $22 million into shell companies to buy a chateau property in a hilltop village in Mougins, France, near Cannes, the investigation found. The shell companies and the chateau were not disclosed in Babis’ required asset declarations, according to documents obtained by the journalism group’s Czech partner, Investigace.cz.

A real estate group owned indirectly by Babis bought the Monaco company that owned the chateau in 2018, the probe found.

“I was waiting for them to bring something right before the election to harm me and influence the Czech election,” Babis tweeted in his first reaction to the report.
The Czech Republic parliamentary election is being held on Friday and Saturday.

“I’ve never done anything illegal or wrong,” Babis added.

Times of Israel staff contributed to this report.