What do the paradise leaks reveal? And just how have our royals been involved?

By Mohammed Albader

Following the Panama Papers, which clearly detailed all illicit financial activities operated throughout the world by wealthy individuals and public officials, another set of documents have recently surfaced.

The Paradise Papers disclosed 13.4 million files of previously concealed financial operations, which accused major companies and global figures of illegally conserving their wealth, as well as maximising their profit. Some of the leaked files are reported to have been originated from AppleBy, which specialises in operating offshore accounts.

The leak disclosed the names of massive corporations and public figures who were involved in this scheme. Although some of the corporations aimed to have their wealth reserved, there is room to suggest that others were practicing tax avoidance, for example The Royal Family, Trump’s cabinet members, Twitter, Facebook, Apple, Lord Ashcroft and Glencore.

The Paradise Papers have disclosed the Queen’s million pound investment funds from her private estate, managed by The Duchy of Lancaster, in Cayman Islands as a part of an unknown offshore portfolio.

Although these investment funds are still in the possession of The Duchy, which substantially funded multiple businesses such as BrightHouse, a retailer that has exploited the poor and those diagnosed with mental illnesses, it has been claimed it had no recollection of this 12-year investment. In addition to this leak, The Duchy of Lancaster, via using its offshore private equity funds, managed to preserve assets of British investors from getting taxed in the US. Nonetheless, British investors can be taxed in the UK if they supply investment funds in the US. Meanwhile, Donald Trump’s cabinet members have been named in the leaks regarding tax evasion. Gary Cohn, Trump’s economic chief adviser, was revealed to have been a president or vice-president of 22 subsidiaries in Bermuda for Goldman Sachs.

Rex Tillerson, the US Secretary of State, was also revealed to have been governing an offshore subsidiary of a multibillion-dollar firm, ExxonMobil, which is known to have been involved in a heated case with Yemen. A report published a year ago by the campaign group Citizens for Tax Justice accused ExxonMobil of using a Tax Haven, as the company had approximately 35 subsidiaries in Bermuda, The Cayman Islands and The Bahamas, holding about $51bn offshore while Tillerson was its CEO. Leaked documents also reveal that two Russian associates of Vladimir Putin funded a considerable amount of money in Twitter and Facebook, which lead to the belief of US politics being manipulated through social media (especially) during the recent presidential campaign. These investments were made by Yuri Milner, alongside with Russian oligarch Alisher Usmanov. “I’m not involved in any political activity. I’m not funding any political activity,” said Milner. Additionally, VTB, a Russian state-controlled bank, has backed Twitter’s investments made by Milner – as a result of this, they are now under US Sanctions.

Apple has also been named in the leaks. Documents reveal that the tech company had dormant subsidiaries in Ireland, which is not subjected to most EU legislation, thus a popular tax haven. Following criticism in 2014 on how Apple had run their businesses in Ireland, the funds had been skillfully relocated to Jersey. Back then, the government of Ireland proclaimed that companies, like Apple, located within Irish jurisdiction could avoid paying taxes had they shown their capability of managing and controlling their businesses in a different country, where they would be held liable for tax.

Apple had disputed the statement regarding their tax avoidance, claiming that they had paid $35bn in corporate tax based on their income over the previous three years. Additionally, they claimed that they had paid billions of dollars in property, payroll and sales tax as well as VAT.

According to the leak, Lord Ashcroft, one of the largest contributors to the Conservative Party, has been involved in a prior unknown trust aimed at preserving his wealth which was located abroad.

The trustee was known of by the offshore firm Appleby, which terminated its relationship with Lord Ashcroft in 2016 due to “inadequate supervision of both transactions and distributions”. They also said that, following an investigation, “there is no evidence of any wrongdoing, either on the part of ourselves or our clients,’” adding that they are “a law firm which advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour.”

A disclosed financial record stated that his trust value was reported to be an estimate of £341m in 2006.

The findings from the Paradise Papers only serve as testament to the increasing levels of wealth disparity in modern society. It also raises questions as to where the Royal Family invests public money.

Even though the Queen doesn’t personally manage the fund, it seems as though there is still a moral obligation to have knowledge and oversight of her investments. As well as this, there is the issue of loopholes which allow tax avoidance and evasion to go unchecked. It is imperative that our governments ensure that bodies which profit from our business also contribute to fund public services.

Ultimately, in spite of their vast wealth, the elite in society should be subject to the same rules and regulations as the rest of us.

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *