Last year, it was the Panama papers. This year, it is the Paradise papers. Whatever happens next year or the year after that, it should already be evident that the world has a serious problem of income inequality.
In a world where a huge number of people are wallowing in poverty and hunger, a minority is still able to acquire wealth in such a huge proportion that they take advantage of offshore accounts to save parts of their wealth and avoid taxation.
The bulk of files from a massive document leak, which came from companies that administer offshore accounts, is what is being dubbed as the Paradise Papers. As more and more journalists report on it, revelations are coming up about a vast financial network for the world’s wealthiest that lies beyond the reach of governments.
The 13.4 million documents come from Appleby, a law firm that is based in Bermuda. Its spin-off company Estera also experienced some leaks. The documents were leaked to the German newspaper Sueddeutsche Zeitung, which shared the files with the International Consortium of Investigative Journalists (ICIJ) and news organizations around the world.
Sueddeutsche Zeitung and ICIJ won a Pulitzer prize this year for their work on the Panama Papers and with the buzz the Paradise Papers are getting it may be another big news story for them.
All You Need To Know About The Paradise Papers
- The Paradise Papers are details of offshore accounts and despite the angst that they generate, it is necessary to know that offshore accounts are not usually illegal by themselves. They can be used to hide money from governments so that they will not be taxed.
- The papers showed that companies controlled by the Russian government quietly invested in several major Silicon Valley startups, including Facebook and Twitter.
- Queen Elizabeth II turned up in the Paradise Papers and has investments in several offshore funds which are seen as tax havens. The Duchy of Lancaster, the Queen’s estate, said that the investments were legal and did not provide her with any tax advantages. The Queen’s money was, however, through these offshore accounts invested in some controversial companies which he duchy said it was not aware of.
- One of the top advisers of Canada’s Prime Minister Justin Trudeau was also implicated in the Paradise Papers. It is proving to be an embarrassment for Trudeau who has made a point of bashing “people not paying their fair share of taxes.” In fact, in March, the Prime Minister promised to do a “better job of getting tax avoiders.” Stephen Bronfman, the adviser in question, has stashed millions of dollars in the Cayman Islands. The Guardian wrote that these may have helped him legally avoid taxes in Canada, the US, and Israel.
- Some members of Trump’s administration were also found to be involved with offshore accounts including US commerce secretary Wilbur Ross, chief economic adviser Gary Cohn, secretary of state Rex Tillerson, and Treasury secretary Steven Mnuchin
- A controversial deal in the Democratic Republic of Congo negotiated by Israeli billionaire Daniel Gertler saw mining giant Glencore secretly loaning him $45 million.
- Sam Kutesa, the Ugandan Foreign Minister, started a trust in the Seychelles to manage his wealth offshore.