By David Brooks on November 6, 2017
A massive leak of more than 13 million files partially exposed the emperors of finance, when the secret financial system of the rich and powerful was revealed and included members of Donald Trump’s cabinet, the Brazilian government, President and Nobel Laureate Juan Manuel Santos, from Colombia, approximately 120 politicians from different parts of the world, to billionaire entrepreneurs and music stars, such as Bono, companies such as Apple, and even the Queen of England, who resort to tax havens and other mechanisms to hide their fortunes and avoid paying taxes in their countries.
The massive leak about the offshore financial network, known as the Paradise Papers, released on Sunday November 5, by the International Consortium of Journalists (ICIJ, for its acronym in English), shocked thousands of clients from the global elite – both in politics and business, since the point of this whole system, and what sells the exclusive club that moves billions of dollars through this system is, above all, about secrecy.
Among the first revelations; more than a dozen Trump cabinet secretaries, advisers, and donors were identified as participants in the system. Wilbur Ross, Secretary of Commerce and close friend of the president, for example, has an investment in the shipping company Navigator, which since 2014, has received tens of millions of dollars in revenue from the Russian energy company, Sibur, whose co-owner is Vladimir Putin’s son-in-law, and it is happening at a time when the investigation into relations between Trump’s circle and interests linked to the Kremlin is accelerating.
Moreover, clues found in the documents link Russian investors, connected to the government, indirectly investing in Twitter and Facebook, adding fuel to the controversy about Russian meddling in the US political process. And there’s more: one of those Russian financiers invested 850 thousand dollars in Cadre, a real estate company co-founded by Jared Kushner, son-in-law and adviser to President Trump.
Other members of Trump’s circle involved in this offshore system, among others, are Rex Tillerson, now Secretary of State, Gary Cohn, Chief Economic Adviser to the president, and currently watchdog of the financial sector at the Federal Reserve, Jon Huntsman, and the new ambassador of the United States in Russia. Allegedly all are dedicated to putting “America first”, Trump’s motto, as his promise to return investments and jobs from abroad to the US. Maybe nobody told the cabinet. There are also Democrats, such as former Commerce Secretary Kenny Pritzker and billionaire George Soros, among others.
At the same time, a whole cast of characters appear in the archives, like the company, in Bermuda, of Marcial Maciel Degollado, founder of the Legionaries of Christ, the hidden interests of the biggest fundraiser for Prime Minister of Canada, Justin Trudeau, investments by the British monarchy and even Queen Noor of Jordan, the Minister of Finance of Brazil, Henrique de Campos Meirelles, and the former general and former NATO commander Wesley Clark, among hundreds more.
There are also the business deals of the wealthy, such as the yachts and submarines of Microsoft co-founder Paul Allen, the investments of Pierre Omidyar, founder of eBay, Madonna’s shares in a medical company, and Bono’s (with his real name Paul Hewson) in a Maltese company that invested in a shopping center in Lithuania.
The files come from two companies specialized in offering this type of financial services to the international economic elite and from 19 government registries in jurisdictions that serve as tax havens. The leak was obtained by the German newspaper Suddeutsche Zeitung and shared with the ICIJ, a network of 381 journalists and 96 media in 67 countries, many of which examined the 13.4 million files for a year.
Sunday the ICIJ began presenting the result of this effort through media associated with the consortium. They were responsible for the Panama Papers released in 2016, and this new effort broadens last year’s revelations.
The ICIJ, in its presentation of the documents, affirms that the tax havens offer a system to hide, or at least hinder, the tracking of funds to their owners. Although it emphasizes that for now nothing discovered is necessarily illegal, this system obviously attracts both those who move legal funds, and those who wish to hide illicit funds (drug traffickers, money launderers and the corrupt). At the same time, they serve as mechanisms to ensure that billions of dollars are not subject to taxes, thus depriving national treasuries of funds.
According to what Brooke Harrington, a professor at the Copenhagen Business School and author of the book Capital without Borders, told ICIJ, there is a small group of people who are purposely not subjected to the laws like the rest of us. He pointed out that when the rich get richer, the poor get poorer, because rich individuals are not paying their fair share of taxes thereby deepening the inequality of wealth.
Most of the leaked documents come from the Appleby specialized law firm, along with Estera (which previously operated under the same name), where most of the clients, about 31 thousand, are registered in the United States. The nearly 7 million documents that come from Appleby are from 1950 to 2016, including all types of transactions, receipts, bank statements and emails involving some 25,000 offshore companies linked to people in 180 countries, including Mexico. The company is headquartered in Bermuda, with offices in Hong Kong, Shanghai, the Cayman Islands and the Virgin Islands.
Other files in the leak come from the company Asiaciti Trust, specialized in offshore business, based in Singapore, but with branches in several countries, from Asia to the Caribbean.
In addition to politicians and the rich, or both, the archives also reveal seemingly legal maneuvers by mega-companies to transfer funds and avoid taxes. In addition to Apple, Appleby’s other corporate clients include Nike, Uber, the Middle East construction conglomerate, Grupo Saad, as well as the massive merchant company Glencore and the firm that operates the Fukushima nuclear plant in Japan.
Among the Latin Americans on the list are Alejando Gertz Manero, former secretary of Public Security between 2000 and 2004, who is identified as vice president of Jano, Ltd, a company in the Cayman Islands, from February 1998, shortly before being appointed chief of the police of Mexico City. Others: include: Blairo Borges Maggi, Minister of Agriculture of Brazil; José María Figueres, former president of Costa Rica, and Carlos Quintanilla Schmidt, former vice president of El Salvador, among others.
These names are added to the list disclosed by the Panama Papers, of the users of tax havens which included Mauricio Macri, President of Argentina, and numerous former Secretaries and officials from various parts of Latin America.
It is expected that in the coming days, when more information analyzed is disclosed by the ICIJ, the lists will expand to include entrepreneurs, stars and politicians both in Latin America and other regions of the world. (For the interactive list of politicians worldwide in the Paradise Papers as well as the Panama Papers).
ICIJ promises that every day for the next week will present more analysis and data collected in the massive leak.
Source: La Jornada, translation by Gloria Alonzo