By Tom Kingsbury | Head of Politics
Beginning on October 3, international journalists began to report on a massive data leak, exposing a range of secretive financial practices by global elites.
Named the Pandora papers, the leak comprises 11.9 million files, coming from 14 different sources around the world. It is the latest in a series of data leaks in the last decade that includes the 2016 Panama papers, the 2017 Paradise papers and the 2019 FinCEN files, amongst others.
The International Consortium of Investigative Journalism (ICIJ) received the files, and worked with 140 different media organisations around the globe to analyse the data. In the UK, this effort was led by the BBC and the Guardian.
Much of the activity exposed in this leak is not illegal, but it has drawn scrutiny to a number of issues surrounding the activity, as many world leaders, politicians and other influential figures have been shown as participating in various secretive financial acts, including tax avoidance, the hiding of money using offshore companies and the hidden posession of overseas assets.
Among the revelations is the identities of secret owners of billions of pounds worth of UK property, many of whom have ties to foreign governments.
What has been uncovered in the Pandora papers?
The Crown Estate – the Queen’s property management company – appears to have bought a £66m London property from the ruling family of Azerbaijan, the Aliyev family, which has received repeated accusations of being highly corrupt. The papers reveal that the Aliyev family had bought 17 properties in the UK.
Farner & Co, the law firm of the Queen throughout her 70-year reign, has been shown to have worked with a Nigerian politician, Abubakar Bagudu, who the US Department of Justice alleges was instrumental in a scheme that stole billions of dollars from Nigeria.
Uhuru Kenyatta, the president of Kenya, and his family are owners of $30m in offshore assets, which includes property in London, according to the papers. Kenyatta campaigned as an anti-corruption candidate, at one point suggesting that all politicians should have to make their assets known to the public.
The Guardian reports that around 600 individuals have been identified as owning British property whilst using offshore companies to hide this fact. The property amounts to around £4bn, though this is only a small portion of the estimated £170bn of UK property believed to be owned by overseas figures, often covertly.
Among these figures are Thani Abdulla TJ al-Thani, a member of Qatar’s ruling family, and the family of Russian oligarch Mikhail Gutseriev, who the UK, EU and UN sanctioned for his links to Belarusian president Alexander Lukashenko, known as ‘Europe’s last dictator’.
These revelations, whilst not evidence of wrongdoing, will add further fuel to the ongoing discussion over the amount of influence wealthy foreign investors have in the British capital, as well as concerns that London acts as a ‘laundromat’ for money with dubious sources to be transformed into legitimate assets, a concern stressed by a recent inquiry into Russian influence in the UK.
Also discovered in the Pandora papers were the questionable connections of two Conservative Party donors. One of the donors, Mohamed Amersi, was found to have acted as an advisor on a deal that was later revealed to be a £162m bribe to the daughter of the president of Uzbekistan. Amersi’s lawyers have said he was not aware the deal would be a bribe.
Amersi has close ties to UK Prime Minister Boris Johnson, having donated to his party leadership campaign and later to the Tory party ahead of the 2019 General Election. He has also had high levels of access to leading Conservative politicians, due to his generous party donations.
Another donor, Lubov Chernuchin, has been shown to have received money through the corporate structures of her husband, who was a finance minister under Russian President Vladimir Putin, as well as a former Russian state banker. Chernuchin has donated £2.1m to the party since 2012.
Putin himself was named in the Pandora papers, with suggestions that he hid hundreds of millions of pounds by putting it in the hands of a childhood friend and an supposed former lover of his, whom he is alleged to have had a daughter with.
Ukrainian President Volodymyr Zelenskiy, who won a campaign that included anti-corruption pledges, has been shown by the papers to have had a stake in an offshore company, a stake he seemingly transferred to a friend just before his presidential victory. Zelenskiy ran for president after appearing in a television series where he played a teacher that ran for the office after being frustrated with the amount of corruption in Ukraine.
A British art dealer alleged to have made millions of pounds by knowingly selling looted Cambodian sculptures of great cultural value, Douglad Latchford, was shown to have passed on his assets to his daughter without facing inheritance tax by using trusts and offshore tax havens. Among the assets were more stolen items of immense value to Cambodia due to their link to the country’s cultural history before it was ravaged by French colonialism, war and genocide.
A further revalation of the papers was that the US state of South Dakota has become a tax haven on the level of Switzerland, Panama, and the Cayman Islands, due to its lax laws that allow trusts to be set up that protect what amounts to hundreds of billions of dollars from taxation and the public eye.
What has been the impact of the Pandora papers so far?
Australia, Brazil, the Czech Republic, India, Mexico, Pakistan, Panama, Spain and Sri Lanka have all announced investigations into the financial activity of citizens named in the Pandora papers.
The Conservative Party is facing calls to return the money it received from donors involved in the leak, and a petition calling for the UK to ‘close tax loopholes for the rich and powerful’ has received more than 70,000 signatures.
UK Chancellor of the Exchequer Rishi Sunak said Her Majestey’s Revenue and Customs (HMRC) will investigate the leak.
Labour MP Bell Ribeiro-Addy stated:
The Pandora Papers are a reminder that there is a magic money tree. It’s called tax avoidance and the City of London is a forest #PandoraLeaks
— Bell Ribeiro-Addy MP (@BellRibeiroAddy) October 4, 2021
Calls for reform following the Pandora papers are strong, but following a decade of revealing leaks, whether this one will gather enough momentum to lead to change is uncertain.
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