In 2013, Offshore Leaks revealed the contents of 2.5 million files. In 2016, the Panama Papers showed the contents of 11.5 million files. In 2017 the Paradise Papers opened up for public scrutiny 13.4 million files. Two weeks ago, the Pandora Papers followed up these previous revelations by presenting to the public the contents of 11.9 million files. The data in the files in the most recent Pandora Papers exposures were obtained by the International Consortium of Investigative Journalists (ICIJ) in Washington DC, USA, comprising 600 journalists in 117 countries who examined files from 14 sources for months.
In each case, the leaks have revealed offshore property dealings, usually amounting to millions of US dollars, of the rich, the powerful, the famous and the politicians, many of the latter having previously publicly criticized offshore, tax avoidance schemes. Offshore banking activity is not generally illegal and could, in some instances, facilitate business activity. But by and large they facilitate lawful tax avoidance schemes. They also expose the hypocrisy of politicians and public figures who criticize these tax avoidance mechanisms and who, for many years, have vowed to bring them under the tax umbrella in their countries. While the politicians do nothing but criticize offshore banking and property activities but hypocritically utilize them for their personal advantage, it can be understood how the efforts to bring such schemes under the tax umbrellas are half-hearted and have been unsuccessful so far.
Reporting in the Guardian confirm that the Pandora Papers expose: “…the secret offshore affairs of 35 world leaders, including current and former presidents, and heads of state” and “300 other public officials such as government ministers, judges, mayors, and military generals in more than 30 countries.” They also include information on donors to the British Conservative Party and more than 100 billionaires including celebrities, rock stars and business leaders. “Many use shell companies to hold luxury items such as property and yachts as well as incognito bank accounts,” looted Cambodian antiquities and Picasso paintings.
More specifically, the BBC reveals that the Pandora Papers have revealed that: the owners of more that 1,500 UK properties have bought offshore firms including individuals accused of corruption; the Qatari ruling family avoided 18.5 million pounds tax on a London super mansion; Sir Phillip and Lady Green, leading Tory donors, involved in one of Europe biggest corruption scandals, went on a property spree after offloading BHS, the retail chain, which thereafter collapsed; the King of Jordan went on a 70 million pound spending spree on properties in the UK and US through secretly-owned companies; the hidden involvement of Azerbijan’s leading family in property deals in the UK worth more than 400 million pounds; the Czech prime minister’s failure to declare an offshore investment company used to purchase two French villas for 12 million pounds; the secret ownership for decades of a network of offshore companies by the family of Kenya’s president, Uhuru Kenyatta. 300 politicians from 90 countries were exposed as using offshore companies for hiding their wealth.
The Pandora (an ordinary looking object that produces harmful results) Papers reveal how the wealthy hide their wealth. Widespread, multi-national law and other firms are spread over tax havens in Panama, Dubai, Monaco, Switzerland and the Cayman Islands, including some US States such as South Dakota and Delaware, to assist the wealthy to hide their assets through anonymous companies and in many cases pay little or no tax. The Independent Commission for the Reform of International Corporate Taxation said: “The Pandora Papers reveal the inner workings of what is a shadow financial world providing a window into the hidden operations of a global offshore economy.”
Long before the publication of Thomas Piketty’s book in 2014, “Capital in the Twenty-First Century,” calls were being made for these hidden assets to be brought in the open, declared and a wealth tax to be imposed. Picketty demonstrated that the rise in return from investment has historically outstripped increases in income from wages and this phenomenon drives growing inequalities in capitalist societies. He proposed a wealth tax as a way to reduce the growing inequality which now become unconscionable. The depth of secrecy which exists over hidden wealth demonstrates the difficulty of enforcing such a wealth tax. Its imposition will also meet with resistance from the powerful owners of hidden wealth, many of whom are the decision makers.
Guyana has a wealth tax of sorts which, when imposed by the PPP government of the 1960s, was dubbed as “communist.” But it has somehow survived the passage of time. From about 2025 Guyana will be earning between 15 and 20 billion US dollars a year and will probably be more because recent analyses suggest that through 2050 there will actually be a shortage of fossil fuels and the price of oil will go up, even while the use of fossil fuels decline, the reason being reduced production due to declining exploration. If this is so, many Guyanese will become mighty rich – so rich that they will join the exclusive group that seeks to hide their wealth, if such mechanisms are not already in their infancy in Guyana in different and innovative ways.
This column is reproduced, with permission, from Ralph Ramkarran’s blog, www.conversationtree.gy
