What the Pandora Papers are and who they involve

On 3 October, the Icij international investigative journalism consortium unveiled the Pandora Papers, a gigantic investigation based on 11.9 million documents on assets registered offshore, that is, in territories where particularly lax laws regarding taxation are in force, of some of the richest and most powerful people on the planet. 35 world leaders and hundreds of personalities, entrepreneurs, politicians and state officials are involved. The investigation involves over 90 countries, over a period of 25 years, from 1996 to 2020.

The Icij, which already published the Panama Papers in 2016 and the Paradise Papers in 2017, called the Pandora Papers “the largest investigation in the history of journalism”. Over 600 reporters worked two years to analyze the content of 2.9 terabytes of data contained in thousands of documents, images, emails and spreadsheets.

The data was leaked from 14 financial services firms based in so-called tax havens: places like the British Virgin Islands, Monaco, Panama, Singapore and Switzerland, with low or no corporate taxes, which make it easy to set up shell companies, created in purposes of tax evasion or avoidance.

The Pandora Papers reveal a lot of information about the global offshore economy, which allows billionaires, politicians and criminals to launder money, hide the extent of their wealth and pay little or no taxes. According to the International Monetary Fund, resorting to tax havens equates to a loss of at least $ 600 billion in taxes per year.

In many of the cases revealed by the Pandora Papers, there is not so much talk of tax evasion as of avoidance. Tony Blair, for example, exploited legal loopholes to avoid paying £ 312,000 in taxes on a building acquired in 2017. As the Guardian writes, the move is not illegal, but “highlights a loophole that allows wealthy landlords not to pay a a tax that any Briton has to face instead ”.

The revelations embarrass international leaders such as Jordanian King Abdullah II, who rules a country facing economic difficulties and heavily dependent on international aid. The investigation shows that the king has set up a network of offshore companies, amassing several luxury properties worth a total of over $ 100 million. The royal family defended itself by citing reasons of privacy and saying that the sovereign has personally assumed all the expenses.

There are also many Italians involved, including celebrities, politicians and mafia members. The first three names revealed are those of the Camorra boss Raffaele Amato, the coach Carlo Ancelotti and Delfo Zorzi, convicted in the first instance for the Piazza Fontana massacre and then acquitted.

Then there is the Czech Prime Minister, the “anti-establishment” billionaire Andrej Babiš, who bought 16 properties in the south of France, including a € 15 million castle, through an offshore company. The Czech police have opened an investigation into the case.

The United States does not come out unscathed: the investigation shows that states like South Dakota or Nevada protect billions of dollars linked to individuals accused of financial crimes thanks to bank account secrecy laws. A headache for President Joe Biden, who has made the fight against tax havens his own. After the publication of the Pandora Papers, Biden reiterated that he wanted to “counter unfair schemes that give big companies an advantage”. Several governments have said they will investigate the contents of the leak.

The Panama Papers – 11.5 million confidential documents published in 2016, mentioning leaders and government officials from over forty countries – also sparked similar promises, leading among other things to the fall of the prime ministers of Iceland and Pakistan and several investigations into Europe and the United States. At the time, several countries had announced that they would begin to fight more strongly the use of tax havens. Yet, according to Richard Brooks, author ofThe great tax robbery, we are still a long way from finding a solution to the issue. “The Panama Papers have put some pressure on the opening of tax havens, but it has not been enough and there is already evidence of a few steps backwards,” he told the BBC.

However, ICIJ director Gerard Ryle believes that the Pandora Papers may have a greater impact, given that the pandemic has only exacerbated inequalities. “This is lost money, which could have been used for economic recovery from the covid,” he said. “We are all missing out because some are gaining”.

Curated by Viola Serena Stefanello