By Charles Ike-Okoh
MON, NOVEMBER 6 2016-theG&BJournal-18 months after the damning Panama papers report of global tax dodger, comes another leak of financial data, the largest to-date, sniffed from two firms, the Bermuda Appleby and Singapore’s Asiaciti with 19 tax havens across the world which help the global rich and powerful move their money secretly abroad.
The leaked papers, “Paradise Papers” was obtained by German newspaper SUDDENEUTSCHE ZEITUNG and were investigated by the international Consortium of Investigative Journalists (ICJI) working in partnership with 96 media organisations across the globe.
The bulk of the of the records investigated emanated from Appleby which is not a tax advisor but a leading member of network of lawyers, accountants, and bankers who set up offshore companies and manage bank accounts for clients, mostly powerful clients and in the case of Africa, mostly politicians and cronies who have been numerously fingered in money laundering and outright theft of public fund and their country’s wealth while serving in office.
Among the names revealed in the papers are Bukola Sariki, the Senate President and James Ibori both of who have faced running encounters with the federal government on various charges of fraud or diversion of public funds.
Saraki, the third most powerful politician in Nigeria, as revealed in the document was a director and a shareholder of Tenia Ltd., a company established in the Cayman Islands in April 2001. Appleby’s records describe Tenia Ltd. as a “holding company.” In August 2013, Appleby had recorded Saraki’s company as “low” risk and listed the company’s address as 30 Saka Tinubu Street on Victoria Island in Lagos, which his lawyers said was rented by him.
According to the Paradise Papers leak, In 2016, Nigerian officials obtained a search warrant on the property, as part of an investigation examining alleged false declaration of assets, according to local media. In June 2017, a tribunal in Nigeria dismissed charges against him of having falsely declared assets, but Nigeria’s federal government vowed to appeal. Tenia Ltd was listed as active as of 2015.
Saraki’s lawyers told the ICJI that there was nothing unlawful of ownership of offshore company when contacted for their response. They told ICJI that Tenia Ltd. was incorporated two years before Saraki was elected as governor.
“Tenia Ltd. has never held assets nor conducted business and Saraki rented the property given as Tenia Ltd.’s address in Lagos, Nigeria, his lawyers told ICIJ.”
They also said that he believes the case against him is politically motivated and he is confident that the appeal will be dismissed.
Sariki was governor of Kwara State, Nigeria, for 8 years and had cases of illegal acquisition of wealth brought against him in Nigeria’s Court of Conduct Bureau (CCB) covering those 8 years of his tenure as governor.
In the data according to Paradise Papers report, Mossack Fonseca was the registered agent of four offshore companies connected to James Ibori, including Julex Foundation, of which Ibori and family members were beneficiaries. Julex was the shareholder of Stanhope Investments, a company incorporated in Niue in 2003.
Ibori was also connected to Financial Advisory Group Ltd. and Hunglevest Corporation, although Mossack Fonseca’s files do not specify the exact nature of his connection. In 2008, Mossack Fonseca received a request from the Seychelles government to produce documents as part of a probe by the Crown Prosecution Service, England’s principal prosecuting authority, of Ibori and alleged criminal activities. In 2012, Ibori pleaded guilty in a London court to laundering and fraud charges. During court hearings in the United Kingdom, prosecutors claimed that Ibori opened a Swiss bank account in the name of Stanhope Investments through which millions of dollars were later channeled to ultimately buy a $20 million private jet.
Ibori’s representative did not respond to repeated requests for comment, according to the report.
The Paradise Papers is the latest collaborative investigation into offshore and assets done by the ICJI. Among the key findings of the report are revelations of offshore interests and activities of more than 120 politicians and world leaders, including Queen Elizabeth II, and 13 advisers, major donors and members of U.S. President Donald J. Trump. It also exposed the tax engineering of more than 100 multinational corporations, including Apple, Nike and Botox-maker Allergan and revealed tax haven shopping sprees by multinational companies in Africa and Asia that use shell companies in Mauritius and Singapore to reduce taxes
The report’s also shines a light on secretive deals and hidden companies connected to Glencore, the world’s largest commodity trader, and provides detailed accounts of the company’s negotiations in the Democratic Republic of the Congo for valuable mineral resources while also providing details of how owners of jets and yachts, including royalty and sports stars, used Isle of Man tax-avoidance structures.
A spokesman for Queen Elizabeth II told ICIJ partner The Guardian that the Duchy has an ongoing investment in the Cayman Island fund and was not aware of the investment in BrightHouse. The Queen voluntarily pays tax on income from the Duchy and its investments, the spokesman said.
Queen Noor told ICIJ that “all the bequests made to her and to her children by [the late King Hussein] have always been administered according to the highest ethical, legal and regulatory standards.”
Wealthy people across the political spectrum use the offshore system, according to the report. The files reveal that Stephen Bronfman, Canadian Prime Minister Trudeau’s adviser and close friend, teamed up with Liberal Party stalwart Leo Kolber and Kolber’s son to quietly move millions of dollars to a Cayman trust. The offshore maneuvers may have avoided taxes in Canada, the United States and Israel, according to experts who reviewed some of the 3,000-plus files detailing the trust’s activities.
According to the report, in West Africa, Burkina Faso officials who monitor the tax payments of the largest companies doing business there work from cramped offices with broken air-conditioning units. Burkina Faso is among the poorest countries in the world. On average, a citizen there earns less annually than the owner of an offshore company in Bermuda pays in registration fees. The country’s tax office sought $29 million in unpaid taxes and penalties from Glencore, the world’s 16th-largest company and a major user of Appleby’s services. Glencore protested and the penalty was reduced to $1.5 million.
In the United States, the files reveal personal or corporate offshore ties of key Trump associates who are charged with helping to put “America First.”
The Appleby files show how Ross, Trump’s commerce secretary, has used a chain of Cayman Islands entities to maintain a financial stake in Navigator Holdings, a shipping company whose top clients include the Kremlin-linked energy firm Sibur. Among Sibur’s key owners are Kirill Shamalov, Putin’s son-in-law, and Gennady Timchenko, a billionaire the U.S. government sanctioned in 2014 because of his links to Putin. Sibur is a major customer of Navigator, paying the company more than $23 million in 2016.
When he joined Trump’s Cabinet, Ross divested his interests in 80 companies. But he kept stakes in nine companies, including the four that connect him to Navigator and its Russian clients.
These revelations come against a backdrop of growing concerns about hidden Russian involvement in U.S. political affairs.
Sibur is “a company with crony connections,” said Daniel Fried, a Russia expert who has served in senior State Department posts in Republican and Democratic administrations. “Why would any officer of the U.S. government have any relationship with a Putin crony?”
A spokesman for Ross said that the Commerce Secretary never met Putin’s son-in-law or Sibur’s other owners and that he was not on the board of Navigator when it initiated its relationship with Sibur.
Ross recuses himself from matters that relate to international shipping, his spokesman said, and “has been generally supportive of the administration’s sanctions” against Russian entities.
The leaked files also led to other discoveries about U.S.-Russian business ties. It also exposes a Russian firm’s investments in Twitter and Facebook.
About the Paradise Papers Investigation
The Paradise Papers is a global investigation into the offshore activities of some of the world’s most powerful people and companies.
The International Consortium of Investigative Journalists and 95 media partners explored 13.4 million leaked files from a combination of offshore service providers and the company registries of some of the world’s most secretive countries.
The files were obtained by the German newspaper Süddeutsche Zeitung.
The Paradise Papers documents include nearly 7 million loan agreements, financial statements, emails, trust deeds and other paperwork from nearly 50 years at Appleby, a leading offshore law firm with offices in Bermuda and beyond.
The documents also include files from a smaller, family-owned trust company, Asiaciti, and from company registries in 19 secrecy jurisdictions. The records range from complex, 100-page corporate transaction sheets and dollar-by-dollar payment ledgers to simple corporate registries of countries, such as Antigua & Barbuda, that do not publicly list names of company shareholders or directors.
As a whole, the Paradise Papers files expose offshore holdings of political leaders and their financiers as well as household-name companies that slash taxes through transactions conducted in secret. Financial deals of billionaires and celebrities are also revealed in the documents.
The Paradise Papers files include far more information about U.S. citizens, residents and companies than previous ICIJ investigations – at least 31,000 of them.
ICIJ collaborated with more than 380 journalists working on six continents in 30 languages. Many team members spent a year using online platforms to communicate and to share documents. Journalists tracked down court records, obtained financial disclosures of politicians in Africa, Europe, and Latin and North America, filed freedom of information requests and conducted hundreds of interviews with tax experts, policymakers and industry insiders.
Editor’s note: Most portions of this report by theG&BJournal is published unaltered from the ICJI initial report.