Who’s Missing From the Pandora Papers: The Main Offenders and Accomplices


by Werner RÜGEMER, Strategic Culture:

Missing from the elaborate Pandora “disclosure” are not only the main financial havens, companies and banks, but also today’s leading investors.

At a cost of many millions of dollars, euros, pesos, etc., 600 journalists from 148 media outlets and 117 countries have compiled the “Pandora Papers” over several months as part of the International Consortium of Investigative Journalists (ICIJ): 2.94 terabytes of data with 11.9 million documents on shell companies in numerous financial dossiers. Tax evasion, money laundering, fraud, corruption and the like among 330 named heads of state and government, other politicians, sports and cultural celebrities, and thousands of businessmen and billionaires are suspected, are probable.

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29,000 shell companies

The heads of state and politicians are almost exclusively from dozens of smaller and remote countries such as Jordan, Montenegro, Kenya, Congo, Dominican Republic, Panama, Peru, Brazil, Argentina, Honduras, Colombia, Pakistan, Philippines, Indonesia, Qatar. Western prominent politicians are the major exceptions, and most are no longer in office: ex-British Prime Minister Tony Blair, ex-Italian head of government Silvio Berlusconi, ex-Israeli Deputy Prime Minister Haim Ramon, ex-Jerusalem Mayor Nir Barkat, ex-European Commissioner John Dalli. Only three incumbent Western politicians in smaller states are mentioned: “Christian” Dutch Finance Minister Wopke Hoekstra, Czech Prime Minister and oligarch Andrej Babis, and Ukrainian President Volodymyr Zelensky — that’s about it. USA, Germany, France, Canada, Scandinavia — all clean.

Among the cultural and sports celebrities, the ex-model Claudia Schiffer, the musicians Ringo Starr, Elton John, Julio Iglesias, the Nobel Prize-winning writer Mario Vargas Llosa, and the soccer coach Pep Guardiola (FC Bayern Munich, Manchester City) are all from the colorful pages’ picture book. From the aristocracy, a daughter of Moroccan King Hassan, the royal family of Qatar, and Corinna zu Sayn-Wittgenstein, entrepreneur and playmate of the resigned Spanish scandal king Juan Carlos I. Who would have thought it?

Among the many businessmen mentioned by name, there are similarly picture-perfect ones from Western-connected countries known for messy dealings anyway, such as India, Pakistan, Turkey, Montenegro, Bulgaria, Ukraine, Colombia, the Philippines and the Western-assumed territory of Hong Kong. However, there are also a few lost figures from more important countries: Robert Smith/Vista Equity Partners and Robert Brockman/Reynolds&Reynolds, two donors to the two leading U.S. parties; Alexander Temerko as donor to the British Tories; India’s richest entrepreneur Mazumdar-Shaw; the Israeli multi-billionaire Benny Steinmetz, sentenced to prison for money laundering and bribery; Formula I racing promoter Bernie Ecclestone.

In the margins, the US corporations Apple, Abbott, Nike and RJR Nabisco appear abruptly, also the most important US business law firm BakerMcKenzie (from which ECB chief Christine Lagarde comes), admittedly without naming individuals, without further elaboration and without justification for this tiny selection.

The largest unified group so far consists of 1,892 owners of shell companies from China, including a brother-in-law of head of state Xi Jinping and a daughter of ex-premier Li Peng. The second largest unified group from one state is formed by the dozen Russian businessmen described as “close friends” of President Putin. And one Svetlana Krivonogikh, once presented by german scandal sheet BILD as an “alleged” former mistress of Putin and since 20 years belonging to the jet set in the Principality of Monaco, was now punctually rediscovered by ICIJ investigators, with “alleged” 85 million euros in the mailbox.

All normal, isn’t it? But Putin! And Xi Jinping!

All in all, according to the information so far, the Westerners are involved in personal business deals. For example, Tony Blair and his wife bought a property in London for 7.5 million, as befits their status. Real estate purchases in Great Britain are anyway for a long time a popular object for foreign super-rich. Jordan’s King Abdullah, for example, bought 14 houses here, incidentally also from Crown Estate, the administration of the British royal family. And President Aliyev of Azerbaijan also got hold of as many as 27 properties in the United Kingdom without difficulty. The Czech Republic’s oligarch Babis bought a “mansion” in France. Dutch Finance Minister Hoekstra made do with pea nuts, taking a stake of a good 20,000 euros in a tourism company, together with friends.

All this shows that the use of shell companies is also routine in Europe and the EU. But the leading media evaluation focuses not on the states that tolerate and promote these practices, but on individuals who take advantage of the generous offer. Asebaidjan’s Aliyev is otherwise powerfully denounced as authoritarian and corrupt — but that Britain enabled him to buy 27 properties with the help of shell companies — no criticism.

So people are pilloried who maintain shell companies. But the states and associations of states that promote the supply of shell companies, such as the USA, Great Britain, and by no means least the European Union, are not pilloried. We will come to that in a moment: The names of the Russian and Chinese owners of shell companies are known — but not the owners of the shell companies that are under the protection of BlackRock & Co.

When financial havens are part of the Western legal statehood after all

So far, the leading media portrayal has concentrated on a very special, tiny section: “Close friends of Putin” are the villains in the Pandora production. They use shell companies in financial havens! Financial havens that have been part of the system of US-led Western capitalism for decades.

When Western-friendly Russian oligarch Mikhail Chodorkovsky, owner of the privatized Yukos oil conglomerate, used several Western financial havens with the help of Western advisors, he was praised in the West for his skill and showered with loans and investments. He was convicted of tax evasion in Russia, facts he did not dispute. But the private arbitration court in The Hague, Netherlands, responsible for international financial relations, in 2014 ordered the Russian state to pay 50 billion in damages. By then, financial havens were part of Western rule of law, and no ICIJ investigators found anything wrong with that.

Missing: The most important financial havens

The most frequently mentioned financial havens are Panama, the British Virgin Islands, Belize, the Seychelles, Hong Kong, United Arab Emirates, Cyprus, and Switzerland. They traditionally specialize in hiding individual assets, money laundering and corrupt payments by individuals.

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