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The Washington-based International Consortium of Investigative Journalists (ICIJ) has released yet another cache of leaked documents that illustrate the fondness of politically exposed persons (PEPs) for the offshore world. The 2.94 terabytes of data from it are expected to appear on the databases of financial crime software vendors the world over. The ICIJ claims that this is the largest cache of all.
The consortium has linked 336 senior holders of public office with 956 companies in various offshore centres. More than two-thirds of the companies it has earmarked are registered in the British Virgin Islands. It is not claiming to have uncovered any illegality at this point.
Among other revelations, the papers link Czech Prime Minister Andrej Babis to the purchase of two villas in the south of France. An offshore investment company paid $15m for them, allegedly on his behalf. Meanwhile, Russian Premier Vladimir Putin is linked to secret purchases of property in Monaco.
The ICIJ's website proclaims: "Millions of leaked documents and the biggest journalism partnership in history have uncovered financial secrets of 35 current and former world leaders, more than 330 politicians and public officials in 91 countries and territories, and a global lineup of fugitives, con artists and murderers."
The consortium, which typically works with dozens of other media outlets to gather its data, is claiming that this leak is "unprecedented".
The financial dealings of Tony Blair, the presidents of Ukraine, Kenya and Ecuador, the prime minister of the Czech Republic and the King of Jordan are all on display on the ICIJ's new database. These and others are the beneficial owners of entities registered in Panama, Belize, the British Virgin Islands, the Seychelles, Hong Kong and other offshore centres. The ICIJ lists South Dakota as a "secrecy jurisdiction" — a phrase that the US government coined in the 1990s.
In an echo of the Panama Papers, which consist of 11.5m documents and 2.6 terabytes of information that emanated from the internal database of the Panamanian law firm of Mossack Fonseca, the data from the Pandora Papers is culled from many offshore law firms all over the world.
The Pandora Papers, which purport to expose the clandestine activities of "35 current and former world leaders", consist of 6,406,119 documents, 2,937,513 images, 1,205,716 emails, 467,405 spreadsheets and 886,923 other scraps of information, many on paper. They refer to 27,000 companies and 29,000 ultimate beneficial owners.
VIXIO approached Professor Louis de Koker of La Trobe University in the Australian state of Victoria, who is a veteran anti-money laundering (AML) expert, for his impression of the leak, which came from 14 firms that are active in the offshore world.
"Well it's marvellous! It's now highlighting another part of the globe and has shone the light on East Asia and the Pacific as theatres of — I don't want to call it abuse, but subterfuge. Not all of it is direct corruption. The law firms seem to have sailed rather close to the wind, taking on high-risk customers that nobody else would take. Maybe they tried to be too clever.
"If someone who wants your banking/payment services is rumoured to be dodgy, you try to protect yourself, but you need evidence that they wilfully moved ahead with wrongdoing. It's all about knowing the facts. The trouble is that you need people working for you as advisors, you can't do all the jobs yourself. If you sail that close to the wind, you attract associates and employees that do as well and they go further."
The Pandora Papers come roughly one year after the ICIJ's publication of the so-called FinCEN Files, which contained data from 2,000 suspicious activity reports (SARs) that banks sent to the Internal Revenue Service over several years.
The unauthorised disclosure of the contents of a SAR is a federal criminal offence. The Bank Secrecy Act Advisory Group, set up by Congress in the 1990s, has written: "[The] Group is committed to continuing to work with the Financial Crimes Enforcement Network ... to ensure that the information contained in SARs is safeguarded and that anyone who makes an intentional, unauthorised disclosure of a SAR is brought to justice, whether that person is inside or outside of the government."
Despite this, the ICIJ has so far escaped prosecution. VIXIO asked Professor de Koker how this could be.
"It's a good point. They did go after the lady who leaked the SARs, as I recall. It was an employee who leaked the SARs. I recall that she was convicted and sentenced. It's the most serious leak of finance data that has come from FinCEN."
Natalie Edwards is at present serving a six-month sentence for sending the data to Buzzfeed News, which published a joint exposé with the ICIJ.
An interactive map on the ICIJ website displays the countries of origin of the 336 senior PEPs who are supposed to have indulged in questionable offshore activity. The nation with the highest number of these people is Ukraine, followed by Russia. There is a white gap where the United States is located. This is an echo of the Panama Papers, which did not expose the dealings of a single U.S. politician.
Will Day, the chief of the Serious Financial Crime Taskforce at the Australian Tax Office, said: "We will certainly look at this data set and compare it with the data we already have to identify any potential connections."
