The financial secrets of the rich and powerful are exposed in the Pandora Papers, a product of the largest investigation in journalism history. The International Consortium of Investigative Journalists, together with 600 journalists across 150 news outlets, analyzed nearly 12 million confidential files leaked from 14 offshore banks and tax professionals. In the files, they unearthed offshore money moves made in the shadows around the globe.
The Pandora Papers detail the hidden riches of 35 current and former world leaders and more than 300 politicians from 91 countries. The investigative journalists said many of the power players who could help bring an end to offshore tax havens instead benefit from it.
Jordan’s King Abdullah II is accused of using offshore shell companies to spend more than $100 million on luxury homes in the U.S. and U.K. while his own people struggle.
“There is nothing I have to hide from anyone,” he said the day after the Pandora Papers were released, claiming the leak was just an effort to target Jordan and sow discord.
Czech Republic’s Prime Minister Andrej Babiš is also denying wrongdoing after showing up in the files. Babiš rose to power promising to crack down on tax evasion and corruption, but the report shows in 2009, he used shell companies in tax havens to buy a $22 million chateau in France and never disclosed it.
Tax havens, the Pandora Papers proved, can be in unexpected places. The investigation revealed South Dakota’s friendly financial secrecy laws have elevated the state to international tax haven status.
A trail of tens of millions of dollars were moved from offshore accounts in the Caribbean to the Mount Rushmore state, according to the Pandora Papers. South Dakota is now a major destination for foreign assets and home to 81 trusts, more than any other U.S. state, though not the only state wooing big money.
It’s not necessarily illegal to move money to tax-friendly havens, and the defense of many implicated in the Pandora Papers is that they didn’t break any laws. But the papers do bring a shady financial system out of the shadows.
When the same group of journalists released the Panama Papers five years ago, the revelations led to disgraced exits from leaders in Iceland and Pakistan; the stories helped countries recoup more than $1.36 billion in unpaid taxes, fines and penalties; and governments changed laws to crack down on tax evasion.
