Pandora Papers Unlocked: A Breakdown of the Damning Financial Corruption Leaks
Don’t open the box, Pandora was told, for it contains all the troubles in the world. Well, the box is open and 12 million documents have been released exposing blatant corruption at the heart of governments around the world. This involves hundreds of politicians, thousands of companies and trillions of dollars. Arguably, the revelations aren’t that shocking: the richest and most powerful people in the world have exploited financial systems to keep themselves rich and powerful. What’s new?
Still, there are a few key reasons for the significance of the Pandora Papers, but the most important is the reaction that followed. The Czech Republic held a general election after the Papers’ release, documenting how Prime Minister Andrej Babis used offshore companies to buy a luxury French mansion. Needless to say, he lost the election. The Czech case study shows the power of the Pandora Papers – they contributed to the removal of an oligarch from the government just five years after he was elected on an anti-corruption platform.
The Pandora Papers consist of over 11.9 million confidential records obtained by the International Consortium of Investigative Journalists (ICIJ) from 14 offshore service providers, which are essentially secretive organisations that set up trusts or companies in unregulated tax havens for those looking to avoid taxes in their country or hold assets like property, stocks and shares, aircraft, yachts, cars, and so on. By holding the assets in an offshore company, the “beneficial owner” (i.e., the real owner) is hidden. It should be noted that tax avoidance is a very common practice for wealthy individuals: singers like Shakira and Elton John, and sportsmen like Sachin Tendulkar and Luis Suarez were all named in the Papers but are unlikely to have broken the law.
So, if no one has broken the law, why do the Papers matter? Well, first of all, it is not a given that everyone named is innocent – criminal investigations have been launched in several countries to determine this. Secondly, and more importantly, the key is that, unlike Shakira, politicians have been caught abusing their power entrusted to them by the public for private gain. This is the Transparency International’s definition of corruption. Political leaders across the world have lied and, in many cases, covered up failings in governance – basically, corruption and incompetence go hand-in-hand. These lies matter, and as we’ve seen in the Czech Republic, they have the power to bring down those in power.
Now, who has been caught? Well, here’s the rundown:
According to the Pandora papers, former cleaner Svetlana Krivonogikh owns an offshore company that bought a $4 million apartment in Monaco after she reportedly gave birth to President Vladimir Putin’s daughter. Konstantin Ernst, a close Putin ally and CEO of Channel One Russia, a state-run television network, acquired a 23 per cent stake in a billion-dollar deal from a loan he received from a Cypriot bank partially owned by the VTB Bank, which has the Russian government as its main shareholder.
Ilham Aliyev, the president of Azerbaijan, holds five companies in his children’s names which were used to purchase over $120 million of properties in London between 2006 and 2009. Heydar Aliyev, at just 11 years of age, owned four Mayfair buildings. Queen Elizabeth II’s crown estate is also reported to have bought a £67 property from the Aliyevs. Aliyev has long been accused of corruption and authoritarianism in Azerbaijan – not only does this further prove that, but it also shows London property as a preferred target.
Lubov Chernukhin, the wife of a Kremlin-linked banker supplied £1.8 million in donations to British ruling political party, the Conservatives (Tories). Prime Minister Boris Johnson’s key leadership campaign donor, Mohammed Amersi, arranged the £162 million bribe of Gulnara Karimova, daughter of Uzbekistan’s President Islam Karimov by a telecoms company. Tashkent is on edge as Karimova is embroiled in a Swiss case against her to retrieve billions of dollars in bribes – this is seen as a test of how committed to reform current Uzbek President Shavkat Mirziyoyev truly is. Moreover, 34 Tory MPs received funds from Victor Fedotov, another Kremlin-linked oil executive seeking a lucrative infrastructure deal from the British government. Many other Russian donors to the party have in fact been sanctioned by the West.
Jordanian King Abdullah II channelled over $100 million into a vast property empire across the US and UK, despite his country suffering economically and receiving foreign aid. The offshore companies refer to the king as “you know who” as they bought properties in Malibu, London, Ascot and Washington.
Cypriot President Nicos Anastasiades’ lucrative law firm was revealed to be secretly owned by Kremlin-linked businessman Leonid Lebedev. The Panamanian law firm at the heart of the Pandora Papers claims it was misled by the president’s company – he denies he still has any say over the business.
Lebanese Prime Minister Najib Mikati bought a property worth over $10 million in Monaco via his company, the M1 Group. Mikati, worth $2 billion, was appointed in September 2021 after anti-corruption protests. Ex-PM Hassan Diab and ex-central bank governor Riad Salameh were also exposed.
Qatari, Emirati & Bahraini leaders have been implicated in million-dollar property scandals. Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and his family bought $187 million worth of one of London’s “most expensive” properties. Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum used three offshore companies to expand its parent company, Axiom Limited.
The family of Bahraini minister Zayed Al-Zayani owned a real estate firm with Romanstone International Ltd as a subsidiary. The former Prime Minister of Great Britain, Tony Blair, registered a UK company and bought Romanstone International, which owned a building worth $8.8 million. In doing so, the Blairs reportedly saved more than $400, 000 in taxes.
Nirupama Rajapaksa, who served as deputy minister of water supply and drainage between 2010 and 2015 and is the cousin of Sri Lanka’s president, Gotabaya Rajapaksa, and her husband, Thirukumar Nadesan, used a shell company to buy luxury property in London and Sydney.
$32 trillion of untaxed wealth is the estimate by the Pandora Papers. 400 officials, both former and current, from 100 countries were named – this article only mentioned a few key individuals but there are many more across the world from Chile to Malaysia, Serbia to Colombia. Overall, the future of global democracies depends on our reaction to the leaks. It should be clear that this is not just about rich people staying rich, but about governments compromising the trust of the people for the benefit of a few corrupt individuals. Going after these leaders will only solve the problem in the short-term, but removing them from office peacefully via the ballot box will set the precedent for years to come. As for the countries that do not hold peaceful or democratic elections, how can we expect anti-corruption sentiment to grow there if it is ignored in so-called democracies here? In the long fight against corruption and lies, the leak of the Pandora Papers is only the first step.
References:
https://www.icij.org/investigations/pandora-papers/
https://www.transparency.org/en/what-is-corruption
https://www.aljazeera.com/news/2021/10/4/pandora-papers-russia-dismisses-leaks-implicating-putin
https://www.rferl.org/a/pandora-papers-tax-havens/31490744.html
https://www.bbc.co.uk/news/uk-politics-58711151
https://www.icij.org/investigations/pandora-papers/jordan-king-abdullah-luxury-property/
https://www.bbc.co.uk/news/world-africa-58775944
https://cyprus-mail.com/2021/10/06/pandora-papers-anastasiades-again-denies-wrongdoing/
https://www.middleeasteye.net/news/pandora-papers-middle-east-leaders-implicated
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