The Pandora Papers

On October 3, the International Consortium of Investigative Journalists began publishing findings of more than 12 million documents that show offshore accounts connected to wealthy and influential people around the world. The Pandora Papers is said to be one of the most comprehensive exposés of illicit financial activities in history.

The Pandora Papers are filled with an incredible amount of information showing the lengths taken by the wealthy to hide their money. Most of the offshore accounts revealed by the Pandora Papers were used to acquire real estate in different countries. The majority of what is found in the Pandora Papers was done through legal means, but it calls into question the morality of these schemes. 

However, some of the things found in the Pandora Papers have linked people to laundering money. According to the Washington Post’s investigation, “The investigation identified 206 U.S.-based trusts linked to 41 countries. Nearly 30 of the trusts held assets connected to people or companies accused of fraud, bribery or human rights abuses in some of the world’s most vulnerable communities.”

The Pandora Papers have also shown that places like the Cayman Islands, which are infamous for being tax shelters, are not the only havens in the world. According to the Pandora Papers, the state of South Dakota in the U.S. has become a favorite tax haven for billionaires over the years due to its favorable trust laws. Liberal tax laws in states like South Dakota have made the U.S. one of the go-to places for billionaires to hide their money.

The papers have exposed how more than 330 politicians from 90 countries were connected to offshore accounts. The papers also named celebrities, business leaders, and more than 100 billionaires. 

Of the people named, the most notable include:

• Jordan’s King Abdullah II 
• Chilean President Sebastian Pinera 
• Czech Prime Minister Andrej Babis 
• Kenya’s President Uhuru Kenyatta
• Ukraine’s President Volodymyr Zelensky
• Brazilian Economy Minister Paulo Guede

King Abdullah II of Jordan has come under the most scrutiny due to the Pandora Papers revealing that he has amassed about $100 million worth of property in the United States and the United Kingdom through secret offshore companies. Jordan receives some of the most foreign aid globally due to it being a key ally in the Middle East to western countries and its struggling economy. The Pandora Papers has made people worldwide angry at King Abdullah II as he bought luxury real estate. His country struggled and took more than $1.7 billion worth of aid from the U.S. He claimed he did nothing illegal as being king of Jordan exempts him from paying taxes. 

Several other politicians named in the Pandora Papers come from countries with struggling economies, further highlighting the inequality in such countries. Some of the leaders named in the documents have been called into question, with some even facing removal from office. In Chile, opposition leaders have started impeachment proceedings against President Sebastian Pinera over the possible irregularities in the sale of a mining company. Czech Police have said they will “act upon” the Pandora Papers and investigate Prime Minister Andrej Babis.

Another interesting thing revealed by the Pandora Papers was how Russian cleaning woman Svetlana Krivonogikh became the owner of a $3.6 million Monaco apartment. Krivonogikh bought the apartment through an offshore company incorporated on the Caribbean island of Tortola in 2003, after allegedly giving birth to a child of Vladimir Putin. 

Most of the celebrities named in the Pandora Papers used offshore companies to buy real estate for privacy reasons. An offshore company allows a person to buy real estate anonymously. This makes offshore accounts the go-to for people trying to hide their assets.  

There’s irony in the fact that governments around the world continue to attack and question the legitimacy of cryptocurrencies but have structures in place that allow criminals to launder money and divert funds. One would think that politicians have called for the closure of the loopholes that enabled the actions revealed by the Pandora Papers, but they have, again, shown their desires to perpetuate the existing regime instead of adopting blockchain technologies and cryptocurrencies that could help minimize illicit behavior through built-in transparency mechanisms. Think about it this way—if all heads of state were paid through public, verifiable cryptocurrencies addresses, at least some of their criminal activity would no longer be possible. That day will come.