A financial Pandora's Box

Wealth and power are always associated; they come hand in hand.

This is a verity that has become inevitable as day by day, the world observes that leaders and politicians in high-ranking places often expand their economic prosperity using their privileged position.

But what if a hysterical abundance of this affluence exceeds the legal framework and becomes illegal? The solution for many of the world’s power players is simple: Offshore is the way to go.

This is what the Pandora Papers, a series of data and documents collected by 600 journalists worldwide, confirmed.

Released by the ICIJ (International Consortium of Investigative Journalists), the Pandora Papers consist of 2.94 terabytes of information that include emails, videos, memos, compliance reports and incorporation records. It incriminates a large circle of affluent people who have set up offset structures and trusts in tax havens such as Dubai, Switzerland, Monaco, Panama and the Cayman Islands.

Politicians, businessmen, lawmakers and celebrities are exposed as owners of shell companies and tax evaders, putting a large question regarding their ability to elude the law so far.

It is deemed the greatest exposé since the infamous 2016 Panama Papers, which consisted of 2.6 terabytes of leaked data.

Many first world and third world country leaders are implicated in the scandal, the most prominent of which are the following:

United States

Perhaps the worst culprit out of all the countries was the US, as it emerged as the leading tax haven. Despite President Joe Biden’s pledge to bring transparency to the global financial system, the Pandora files suggested that the State of Dakota in particular is covering billions of dollars in wealth linked to serious financial criminals.

United Kingdom

Former British Prime Minister, and architect of the Iraq invasion, Tony Blair, has saved “hundreds of thousands of pounds” in property taxes when he bought a London office building. Blair and his wife, Cherie, acquired the building from an offshore company partially owned by a Bahraini minister.

The transaction took place in 2017, and the $9 million building was acquired through the purchasing of a British Virgin Islands company owned by Zayed bin Rashid Alzayani, the Bahraini minister of industry, commerce, and tourism.

Tony & Cherie Blair.

The Blairs were able to save around $420,000 in stamp duty by buying the holding company, thus not buying the building directly.

Despite the seemingly legal nature of the transaction, two highly dubious elements persis: The first being the ability of Blair to indirectly evade taxes that all ordinary UK property buyers have to pay, the second being the suspicious structure of the transaction itself as the company bought and the identity of its owner remained secret until the reveal of the Pandora Papers.

Ukraine

Ukrainian comedian-turned-president Volodymyr Zelenskiy is caught in a tangle of corruption accusations after the Pandora Papers trove revealed that he owned shares in an anonymous offshore entity, along with business partners who later became close political allies. Zelenskiy owned a stake in a shell company in the British Virgin Islands, which he then sold to Sergiy Shefir, a business partner and friend who went on to become a top presidential aid in Kyiv.

Ironically, Zelenskiy’s role in his popular comedy show was that of a highly corrupt president - and, his campaign ran on the promise of eradicating Ukraine’s endemic corruption. Viewed as an important asset by the US and EU in their fight against Russia, his phone call with former US President Donald Trump regarding conditioned US military aid led to Trump’s first impeachment trial.

Azerbaijan

Having come back to the main headlines for some time during the Nagorno-Karabakh conflict, the Azerbaijan President, Ilham Aliyev, appears to enjoy the perks of his political status: Along with his family, Aliyev has traded close to $700 million in London real estate – including commercial developments, luxury apartments, and prominent historical buildings.

The Aliyev family.

The Aliyev family and its associates consist of the President’s two daughters, his son, his father-in-law, and two of their close associates. They have successfully acquired these estates and held them using a tightly interconnected network of 84 offshore companies.

Furthermore, the dictatorial president sold $91 million to the British Queen’s crown estate, prompting the latter to investigate how it paid a company operating as a front for the corrupted family.

The European Union

The EU is largely embroiled in the massive leak, not only with Switzerland being a central country in easing up monetary transactions, but also with two central EU leaders being caught in the middle of the scandal.

Czech Republic

Andrej Babiš, the prime minister of the Czech Republic, has acquired a $22 million villa named Chateau Bigaud in the south of France using shell companies in the British Virgin Islands and Washington D.C.

Interestingly, Babiš is up for reelection this week. Pandora’s timing could not have been worse.

Cyprus

The Mediterranean island is already a controversial offshore center, add to it now the scandal plaguing its president Nicos Anastasiades: The Cypriot president founded a law firm that is accused of hiding the assets of a billionaire Russian investor behind fake company owners.

Jordan

The Arab world’s longest-serving living monarch, King Abdullah II, has spent the better part of the past decades amassing an international luxury property empire valued at $100 million. The Jordanian king owns 36 front companies in Panama and the British Virgin Islands through shell companies used to disguise the purchase of more than a dozen luxury homes in the US.

Jordan's King Abdullah II.

His real estate empire stretches from central London to Malibu, passing by Washington D.C.

At a time where Jordan is suffering from a dire economic situation as a result of the pandemic with its unemployment rate doubling in the past seven years, the King’s expansive $100 million and spending spree seems to be tone-deaf, to say the least.

Lebanon

The Pandora Papers revealed that the debt-ridden crisis-fueled country is the first in terms of creating and relying on offshore companies. Key players in the political and economic scenery have been included in the papers, such as Central Bank Governor Riad Salameh who is already under investigation from France for alleged money laundering.

Lebanese Central Bank Governor, Riad Salameh.

Salameh, viewed as the US’ number one economic policymaker Lebanon, was revealed to have transferred more than $300 million in commissions paid by the BDL (Banque du Liban) for the sale of Eurobonds between 2002 and 2014.

The transaction directly benefitted Raja Salemeh’s - Riad's brother - company.

This reveal is only one of many that could further incriminate Salameh and his salacious approach to economic policymaking.

The offshore empire is filled to the brim with politicians and businessmen as shown in the papers, with powerful figures such as Prime Minister Najib Mikati and AlMawarid Bank owner and former minister Marwan Kheireddine.

Kenya

The self-declared enemy of corruption, Kenyan president Uhuru Kenyatta, has amassed more than $30 million of offshore wealth. Kenyatta’s financial ventures were conducted with his relatives and have seen him buying properties in London through a multitude of offshore businesses and foundations.

Now what?

The Pandora Papers come at a time when the pandemic exacerbated the rifts between the have and have-nots, pushing the average taxpayer to bear the cross of reviving economies while the rich and powerful further cement their affluence by trespassing laws and dismissing the people’s need.

This time, the papers could signal a true change in the way wealth is seen and treated by officials.

This time, the impact could be truly, and unironically, palpable.

*We will update the story as it progresses.*