Secrecy for Sale: Inside the Global Offshore Money Maze
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DIGITAL NEWSBOOK SECRECY FOR SALE Inside the Global Offshore Money Maze The International Consortium THE CENTER FOR of Investigative Journalists PUBLIC INTEGRITY SHOW CONTENTS Secrecy for Sale ©2013 Center for Public Integrity 2 Table of Contents 4 Introduction: Secret Files 71 Offshore Companies Provide Expose Offshore’s Global Link Between Corporate Impact Mogul and Azerbaijan’s President 17 Caribbean Go-Between Provided Shelter for Far-Away 77 François Hollande’s Frauds, Documents Show Campaign Treasurer’s Investments in the Cayman 31 Lawyers and Accountants Islands Help Rich Manage Their Money 81 ‘Crony’ of African Strongman Among Thai Names in Secret 40 Faux Corporate Directors Offshore Files Stand in for Fraudsters, Despots and Spies 88 Mega-Rich Use Tax Havens to Buy and Sell Masterpieces 47 Ferdinand Marcos’ Daughter Tied to Offshore Trust in 95 Elites Undermine Putin Rail Caribbean Against Tax Havens 55 Taxmen Have Little Clue of 99 Ponzi Scheme Used Offshore Offshore Companies Owned Hideaways to Shuffle by Greeks Investors’ Money 64 Disclosure of Secret Offshore 106 Deutsche Bank Helped Documents May Force Top Customers Maintain Mongolian Lawmaker to Resign Hundreds of Offshore Entities 66 Canadian Senator’s Husband Shifted Money Into Offshore 108 French Banks Traded in Tax Havens Secrecy Go online for more about the ICIJ’s investigation into offshore secrecy including videos and related stories at: www.icij.org/offshore 3COVER CONTENTS FIRST ARTICLE4 Secrecy for Sale ©2013 Center for Public Integrity 3 Table of Contents 113 The Swiss Lawyers Who Help 171 Jailed Property Man Hid Europe’s Richest Families Assets Offshore During Park Their Wealth Offshore Divorce 120 Swiss Bank Pushed Offshore 174 Secret Files Reveal Middleman to Skip Anti- Rothschild’s Offshore Domain Money Laundering Checks for Wealthy Clients 177 Family of Televangelist Chris Oyakhilome Incorporated 124 Dutch Banking Giants Helped Secretive Company in Tax Clients Go Offshore Haven 126 After Multi-Million 183 India Says It Will Investigate Inheritance, Playboy Sachs Offshore Leaks Revelations Goes Offshore 187 Bank Owned by Paraguay’s 135 Offshore Documents Solve Leading Presidential Mystery of Pre-Civil War Candidate Linked to Tax Haven Helicopter Deal in Congo 192 Crocodile Dundee Actor Paul 144 Offshore Tax Havens Became Hogan Chases His Missing Traps for Investors Offshore Millions 154 Son of Leading Pakistani 196 Who Uses the Offshore World Politician Tied to Secret Caribbean Company 214 Methodologies: How ICIJ’s Project Team Analyzed the 159 Top Malaysian Politicians Use Offshore Files Offshore Secrecy 220 Follow-Up: Release of 166 Billionaires Among Offshore Records Draws Thousands of Indonesians Worldwide Response Found in Secret Offshore Documents 229 About the ICIJ Cover Graphic: Tim Meko/Shutterstock 3COVER CONTENTS FIRST ARTICLE4 Secrecy for Sale ©2013 Center for Public Integrity 4 Graphic: Tim Meko/Shutterstock Introduction Secret Files Expose Offshore’s Global Impact By Gerard Ryle, Marina Walker Guevara, Michael Hudson, Nicky Hager, Duncan Campbell and Stefan Candea Published Online: April 3, 2013 Dozens of journalists sifted CEACH of 2.5 million files has cracked open the se- through millions of leaked A crets of more than 120,000 records and thousands offshore companies and trusts, ex- posing hidden dealings of politi- of names to produce cians, con men and the mega-rich ICIJ’s investigation into the world over. The secret records obtained by offshore secrecy. the International Consortium of Investigative Journalists lay bare 3PREVIOUS ARTICLE SHOW CONTENTS NEXT ARTICLE4 Secrecy for Sale ©2013 Center for Public Integrity 5 the names behind covert compa- nies and private trusts in the Brit- Key Findings ish Virgin Islands, the Cook Islands ● Government officials and their and other offshore hideaways. families and associates in Azerbai- They include American doctors jan, Russia, Canada, Pakistan, the and dentists and middle-class Greek Philippines, Thailand, Mongolia and villagers as well as families and as- other countries have embraced the sociates of long-time despots, Wall use of covert companies and bank Street swindlers, Eastern European accounts. and Indonesian billionaires, Russian corporate executives, international ● The mega-rich use complex offshore arms dealers and a sham-director- structures to own mansions, yachts, fronted company that the European art masterpieces and other assets, Union has labeled as a cog in Iran’s gaining tax advantages and anonym- nuclear-development program. ity not available to average people. The leaked files provide facts ● Many of the world’s top’s banks and figures — cash transfers, incor- — including UBS, Clariden and poration dates, links between com- Deutsche Bank — have aggressively panies and individuals — that illus- worked to provide their customers trate how offshore financial secrecy with secrecy-cloaked companies in has spread aggressively around the the British Virgin Islands and other globe, allowing the wealthy and the offshore hideaways. well-connected to dodge taxes and fueling corruption and economic ● A well-paid industry of accountants, woes in rich and poor nations alike. middlemen and other opera- The records detail the offshore tives has helped offshore patrons holdings of people and companies shroud their identities and business in more than 170 countries and ter- interests, providing shelter in many ritories. cases to money laundering or other The hoard of documents repre- misconduct. sents the biggest stockpile of inside ● Ponzi schemers and other large-scale information about the offshore sys- fraudsters routinely use offshore tem ever obtained by a media orga- havens to pull off their shell games nization. The total size of the files, and move their ill-gotten gains. measured in gigabytes, is more 3PREVIOUS ARTICLE SHOW CONTENTS NEXT ARTICLE4 Secrecy for Sale ©2013 Center for Public Integrity 6 than 160 times larger than the leak porate — can roil economies and pit of U.S. State Department docu- nations against each other. Europe’s ments by Wikileaks in 2010. continuing financial crisis has been To analyze the documents, ICIJ fueled by a Greek fiscal disaster ex- collaborated with reporters from The acerbated by offshore tax cheating Guardian and the BBC in the U.K., and by a banking meltdown in the Le Monde in France, Süddeutsche tiny tax haven of Cyprus, where lo- Zeitung and Norddeutscher Rund- cal banks’ assets have been inflated funk in Germany, The Washington by waves of cash from Russia. Post, the Canadian Broadcasting Anti-corruption campaigners ar- Corporation (CBC) and 31 other me- gue that offshore secrecy undermines dia partners around the world. law and order and forces average Eighty-six journalists from 46 citizens to pay higher taxes to make countries used high-tech data up for revenues that vanish offshore. crunching and shoe-leather report- Studies have estimated that cross-bor- ing to sift through emails, account der flows of global proceeds of finan- ledgers and other files covering cial crimes total between $1 trillion nearly 30 years. and $1.6 trillion a year. “I’ve never seen anything like this. ICIJ’s 15-month investigation This secret world has finally been re- found that, alongside perfectly le- vealed,” said Arthur Cockfield, a law gal transactions, the secrecy and professor and tax expert at Queen’s lax oversight offered by the offshore University in Canada, who reviewed world allows fraud, tax dodging and some of the documents during an political corruption to thrive. interview with the CBC. He said the documents remind him of the scene Offshore patrons identified in in the movie classic The Wizard of the documents include: Oz in which “they pull back the cur- • Individuals and companies linked tain and you see the wizard operat- to Russia’s Magnitsky Affair, a tax ing this secret machine.” fraud scandal that has strained U.S.-Russia relations and led to a Mobsters and Oligarchs ban on Americans adopting Rus- sian orphans. The vast flow of offshore money — legal and illegal, personal and cor- • A Venezuelan deal maker accused 3PREVIOUS ARTICLE SHOW CONTENTS NEXT ARTICLE4 Secrecy for Sale ©2013 Center for Public Integrity 7 of using offshore entities to bank- eager to find out whether any as- roll a U.S.-based Ponzi scheme sets in the trust are part of the esti- and funneling millions of dollars mated $5 billion her father amassed in bribes to a Venezuelan govern- through corruption. ment official. Manotoc, a provincial governor in the Philippines, declined to answer a • A corporate mogul who won bil- series of questions about the trust. lions of dollars in contracts amid Azerbaijani President Ilham Ali- yev’s massive construction boom Politically connected wealth even as he served as a director of The files obtained by ICIJ shine a secrecy-shrouded offshore com- light on the day-to-day tactics that panies owned by the president’s offshore services firms and their cli- daughters. ents use to keep offshore companies, • Indonesian billionaires with ties trusts and their owners under cover. to the late dictator Suharto, who Tony Merchant, one of Canada’s enriched a circle of elites during top class-action lawyers, took extra his decades in power. steps to maintain the privacy of a Cook Islands trust that he’d stocked The documents also provide pos- with more than $1 million in 1998, sible new clues to crimes and money the documents show. trails that have gone cold. In a filing to Canadian tax au- After learning ICIJ had identi- thorities, Merchant checked “no” fied the eldest daughter of the late when asked if he had foreign as- dictator Ferdi- sets of more than $100,000 in 1999, nand Marcos, court records show. Maria Imelda Between 2002 and 2009, he often Marcos Mano- paid his fees to maintain the trust toc, as a ben- by sending thousands of dollars in eficiary of a cash and traveler’s checks stuffed British Virgin into envelopes rather than using Islands (BVI) easier-to-trace bank checks or wire trust, Philip- transfers, according to documents Maria Imelda pine officials from the offshore services firm that Marcos Manotoc said they were oversaw the trust for him.