Highlights of Offshore Leaks so far

Introduction

April 2013 marked the beginning of one of the biggest financial leaks in history.

The International Consortium of Investigative Journalists has just released the first stories from a global collaborative project into the world of offshore money. The Tax Justice Network, an advocacy group claims that a third of the world’s wealth is tied up in the secret area of offshore.

For the past 15 months, journalists from over 40 countries have worked together to shed light on this issue.

And here’s some of what they found:

• The International Consortium of Investigative Journalists on June 14 released the Offshore Leaks interactive database that allows the public to search through more than 100,000 secret companies, trusts and funds created in offshore locales such as the British Virgin Islands, Cayman Islands, Cook Islands and Singapore.Thanks in part to the ICIJ “Offshore Leaks” investigation, tax evasion and offshore secrecy will be a central theme of next week’s meeting of G8 industrialized nations. The chair of that meeting, the British Prime Minister David Cameron, has gone on the record saying the time has come “to knock down the walls of company secrecy” that make the offshore system attractive to money launderers, fraudsters and other criminals.

  The Offshore Leaks Database helps remove a small part of this secrecy, opening up records that may help bring accountability to an industry that has long operated in the shadows.

• ‘Offshore Leaks’ records show the oldest son of South Korea’s former strongman president Chun Doo-hwan obtained a British Virgin Islands company in 2004 amid a tax evasion probe into his younger brother’s alleged involvement with their father’s bribery-fed slush fund. Prosecutors are aggressively seeking the ex-president’s hidden assets in the face of an approaching statute of limitations deadline for his unpaid fine of 167.2 billion won ($149.3 million).
• One of Europe’s top bankers offered his resignation one day after news broke that he secretly owned secrecy-cloaked offshore companies in the Caribbean and Asia. Raiffeisen Bank International chief executive Herbert Stepic said he was stepping aside to save the Vienna-headquartered bank from fallout over the latest revelations in the “Offshore Leaks” probe. Stepic denies wrongdoing, but said at a quickly arranged news conference in Vienna that he wanted to spare the bank from media reports that “threatened to do massive harm to my company.”
• British tax authorities said they were working with the United States and Australian tax administrations on analyzing a 400GB data cache “showing the use of companies and trusts in a number of territories around the world including Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands,” the British tax office statement said. The data cache is believed to be the same one obtained by ICIJ and used as a basis for the Offshore Leaks investigation.British authorities say they have so far identified “over 100 people who benefit from these structures … and are under investigation for offshore tax evasion,” as well as more than 200 UK accountants, lawyers and other middlemen who helped set up the offshore structures.
• A Canadian man who vanished a decade ago in a possible underworld killing set up offshore companies and bank accounts before he went missing, documents contained in the ICIJ data cache show.
• Bankrupt real estate mogul Hans Thulin had as much as $17 million sheltered offshore at a time when the Swedish government was pursuing him in court for millions of dollars in unpaid debts.
• Despite Finnish government promises to lead the fight against tax evasion, it turns out the state-owned postal service, Itella, has subsidiaries in offshore tax havens. Jutta Urpilainen, the Finnish finance minister, said she found the Itella revelation “repulsive”.
• Five directors of Banco Amambay, owned by Paraguay’s leading candidate in this month’s presidential election, Horacio Manuel Cartes, created a secret bank in the Cook Islands with no building and no staff.
• Crocodile Dundee star Paul Hogan is accusing his once-trusted tax adviser of absconding with $34 million he helped Hogan hide offshore in Switzerland.
• Clariden Bank, part of Credit Suisse, sought highly-secretive structures and pushed offshore service providers to bypass anti-money laundering checks for its wealthy clients.
• Baron Elie de Rothschild, the late guardian of the French banking dynasty, built an elaborate offshore empire in the Cook Islands involving at least 20 trusts and 10 holding companies, while managing to keep all assets and beneficiaries secret. One of the entities was named, appropriately, Anon Trust.
• Two members of India’s Parliament, the world’s largest producer of cut roses and other major business owners are among hundreds from the subcontinent revealed to have links to the offshore world, prompting a government investigation.
  
• Shares of an offshore company were held in trust for the daughters of one of Africa’s most popular pastors, televangelist Rev. Chris Oyakhilome.
  
• Dutch banking giants ING and ABN Amro helped set up offshore companies in faraway island states for their clients.
• Billionaires with ties to former dictator Suharto, two sons of former president B. J. Habibie andnine of the Indonesia’s richest 11 families, appear in the secret records of offshore trust and company owners.
• Fabio Ghioni, the former head of information security at Telecom Italia who was later convicted of hacking the data of 4,000 people, had an offshore company called Constant Surge Investments Limited. Internal documents reveal he was advised by the Singapore branch of Deutsche Bank to do business with Portcullis TrustNet. When interviewed by L’Espresso, he denied being the beneficial owner of CSIL: “I don’t know anything of this. I don’t even know where the Virgin Islands are located.”
• Zurich-based law firm Lenz & Staehlin has aided some of Europe’s richest families park their wealth offshore. “People don’t set up this kind of structure out of altruism, but to gain a profit,” says Christian Wanner, one of Switzerland’s leading authorities on tax collection.
• Scandal-buffeted Pakistani politician Moonis Elahi, whose father Chaudhry Pervez Elahi has just stepped down as deputy prime minister, owned a secret company in the British Virgin Islands. The company’s existence wasn’t unearthed during a recent government probe into Moonis Elahi involving illegal payments in an alleged land scam.
• Top Malaysian politicians and their families, including former prime minister Dr Mahathir Mohamad’s son Mirzan and current cabinet minister Raja Nong Chik Zainal Abidin, are among prominent Malaysians with secretive offshore companies housed in Singapore and the British Virgin Islands.
• “You’re certainly going to be using a nominee director if you’re doing anything bad,” says university professor Jason Sharman. The CIA, Iraqi dictator Saddam Hussein, the company which shipped arms to Rwanda during the 1994 genocide, the former Kazakhstan banking head Mukhtar Ablyazov, and alleged spy Paul William Hampel are some of the clients who have used nominee directors and offshore entities to conceal their activities and identities.
• Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct, an analysis by the Washington Post and ICIJ found. Offshore trusts and companies set up in the South Pacific and Caribbean are the common factor in several prominent financial scandals in the U.S.
• Offshore companies are ridiculously easy to establish, and effective at concealing your identity. Watch our animated video explaining the process.

• Two major French banks, BNP Paribas and Crédit Agricole oversaw the creation of a large number of totally opaque offshore companies in the British Virgin Islands, Samoa and Singapore from the late 1990s until the end of the 2000s for clients in search of secrecy and lower tax rates.
• Nicky Hager provides an in-depth look at the offshore service provider Portcullis TrustNet. Roughly 45,000 of about 77,000 of the client list come from China, Taiwan, Singapore and other East and Southeast Asian nations. The firm is used by many of the world’s major banks, such as UBS, Deutsche Bank and Credit Suisse subsidiary Clariden, and by the world’s biggest auditing firms, such as PricewaterhouseCoopers, Deloitte and KPMG, to provide secrecy for their wealthy clients, and was implicated in New Zealand’s “winebox affair” scandal of the decade.
• Gunter Sachs, the late millionaire playboy, businessman and former husband of Bridgette Bardot is revealed to have had an intricate offshore scheme to manage his vast fortune, a scheme that remained inscrutable to the fiscal authorities until the end.
• Two Americans and one South African are revealed to have reaped $2.5 million dollars from the aborted sales of surplus military helicopters to President Lissouba during the civil war in the Republic of Congo.
• François Hollande’s treasurer during the 2012 presidential campaign, businessman Jean-Jacques Augier, is revealed to have investments in the Cayman Islands.
• Philippine government officials said Friday that they will look into the disclosure that Maria Imelda Marcos Manotoc, the eldest daughter of the late dictator Ferdinand Marcos was a beneficiary of a secret offshore trust in the British Virgin Islands. “We are duty bound to investigate and, depending upon informed preliminary findings, decide whether to pursue the matter,” said Andres Bautista, the chairman of the Presidential Commission on Good Government, tasked with recovering the Marcos family’s alleged ill-gotten wealth.
• Germany’s largest financial institution, Deutsche Bank, helped its customers maintain more than 300 secretive offshore companies and trusts through its Singapore branch.
• New light is shed on a half-billion-dollar Ponzi scheme in Venezuela that shuffled investor money among a maze of offshore companies, hedge funds and bank accounts stretching from the Cayman Islands to Switzerland and Panama, smoothing the way by funneling bribes to officials in Venezuela.
• Commonwealth Trust Limited, a BVI-based firm, is revealed to have set up companies involved in the Magnitsky affair, a case that’s strained U.S.-Russian relations and blocked American adoptions of Russian orphans
• One of Mongolia’s most senior politicians says he is considering resigning from office after being confronted with evidence that he has an offshore company and a secret Swiss bank account.
• Newly uncovered documents link Maria Imelda Marcos Manotoc, the eldest child of the late Philippine dictator Ferdinand Marcos and now a senior political figure in her own right, to two secretive offshore trusts and an offshore company.
• A prominent Canadian lawyer, husband to a Liberal senator, moved CA$1.7 million (US$1.1 million) to secretive financial havens while he was locked in battle with the Canada Revenue Agency over his taxes, according to documents in a massive leak of offshore financial data.
• A corporate mogul whose business empire has won building contracts worth billions of dollars amid Azerbaijani President Ilham Aliyev’s massive construction spree is tied to the president’s family through secretive offshore companies.
• The prominent Thais listed in secret documents as owners of offshore holdings includes the former wife of ousted Prime Minister Thaksin Shinawatra, a sitting senator, a former high-ranking defense ministry official, Forbes-listed tycoons, and a former government minister whose assets in the United States are frozen because of her alleged links to Zimbabwean dictator Robert Mugabe.
• Greek citizens who own or direct offshore companies in the British Virgin Islands and other tax havens rarely declare them to Greek tax officials, a review of more than 100 companies shows. Just four out of 107 offshore companies investigated by ICIJ are registered with tax authorities as the law usually requires, particularly when the firms hold assets or conduct business in Greece. Officials apparently have no record of the other 103 firms — or whether the owners declared any assets held by these entities or paid taxes on them.
• A list containing examples of some of the most high-profile names uncovered in this investigation, along with records of their offshore companies. Those named come in the form of politicians, businessmen, army generals, tycoons, relatives of dictators, and are scattered across 29 different countries.
• Finally, for those interested in how ICIJ managed to tackle records cache, the data manager of the project, Duncan Campbell, writes an in-depth explanation of how our journalists were able make sense of the 260 gigabytes of information obtained. Four large databases, half a million text, PDF, spreadsheet, image and web files were dissected to reveal over 130,000 records on the people and agents who run, own, benefit from or hide behind offshore companies.
• How one Zurich-based law firm, Lenz & Staehlin, has aided some of Europe’s richest families park their wealth offshore. “People don’t set up this kind of structure out of altruism, but to gain a profit,” says Christian Wanner, one of Switzerland’s leading authorities on tax collection.

We hope you enjoy these stories; there will be more to follow daily for the next couple of weeks.

If you have story tips, documents or other information about this issue, contact us at investigations@icij.org.