UTS-based investigative journalists helping disseminate the multitude of leaked financial documents known as the Pandora Papers say further revelations are to come this week.

The global leak of nearly 12 million documents relating to offshore accounts is helping expose tax avoidance schemes and criminal activity by the megarich as well as politicians. 

Containing 2.94 terabytes of confidential information from 14 offshore service providers, a whistleblower shared them with the International Consortium of Investigative Journalists (ICIJ), whose Australian base is at UTS.

“This has been a long and rigorous investigation into a dataset that is both broad in scope and rich in detail,” said Hamish Boland-Rudder, online editor for ICIJ, and a UTS journalism lecturer.

Hundreds of politicians, as well as criminals, celebrities, sports stars, and some of the world’s richest people have all been funnelling money into secretive offshore havens.

“ICIJ and its media partners will have more stories coming out in the next days, weeks and months, and will continue to follow the story and the broader issues as our revelations ripple around the world.”

Together with more than 600 journalists in 117 countries around the world, the ICIJ worked around the clock to identify the most important stories hidden in almost 12 million documents and to coordinate reporting efforts. 

“We found hundreds of politicians, as well as criminals, celebrities, sports stars, and some of the world’s richest people who have all been funnelling money into secretive offshore havens where they can keep their assets hidden from public view and out of reach of tax authorities and law enforcement,” said Boland-Rudder.

So far the documents have exposed offshore dealings of the King of Jordan, the presidents of Ukraine, Kenya and Ecuador, the prime minister of the Czech Republic and former British prime minister Tony Blair, to name a few. 

The files also detail the financial activities of Russian President Vladimir Putin’s “unofficial minister of propaganda” and more than 130 billionaires from Russia, the United States, Turkey and other nations.

And the revelations have already resulted in the Australian Taxation Office freezing $80 million in assets of Gold Coast property developer Jim Raptis.

Kerrie Sadiq, Professor of Taxation in the School of Accountancy at the Queensland University of Technology Business School, said having an offshore company is in no way illegal and many are set up and used for legitimate purposes. 

“However, offshore companies are also set up with the intention to hide money and assets and evade tax obligations, this is what we’ve seen with the Pandora Papers,” she said.

“The problem isn’t so much about the corporate structure, but rather the fact that there is secrecy around the arrangements.”

The documents have highlighted the role of financial gatekeepers who have helped set up offshore services for more than 29,000 “beneficial owners”, those who are the hidden owners of offshore assets.

“Gatekeepers are the lawyers and the accountants who help their clients set up these complex arrangements, and the lawyers and accountants normally run the argument that they are fully compliant with the laws and regulations of the relevant jurisdictions,” said Professor Sadiq.

Of note from Australia is the presence of Asiaciti, one of the 14 service providers included in the leak, founded and run by an Australian accountant named Graeme Briggs. Westpac director Steven Harker was named in the leak as having tens of millions run through an offshore account but said it had been set up by Asiaciti, was above board and everything had been declared to the ATO.

So far the investigation has emphasised the role of US trusts, particularly in the States of South Dakota and Nevada. 

While most of the policy and law enforcement efforts of the world’s most powerful nations have stayed focused on “traditional” offshore havens such as the Bahamas, this new data shows the growing financial secrecy coming from within powerful nations such as the US itself. 

Ralph-Christopher Bayer, Professor of Economics at The University of Adelaide agrees that secrecy is the primary reason anybody sets up an offshore company however, is specifically concerned about the use of secrecy in association with organised crime. 

“So one thing we don’t hear a lot about is probably that some organised crime is hiding their money there because that might not be as big, you don’t know these people, and so on,” he said. 

“It would be a good thing if we could find a way to prevent that avenue of sheltering proceeds from crime so, it’s very nice that now most jurisdictions have some kind of expropriation laws for proceeds of crime, but if before getting caught, you can hide your stuff somewhere in a tax haven, then it’s not that great.

“In the long term what I think will happen will just be a continuation of what happened after the initial Panama Papers, that there will be more and more pressure from the international community on these tax havens to change their laws to lift some of their secrecy laws, and so on.”

While the media so far has focused on “naming and shaming” public figures who have appeared in the documents, the systems that allow this secrecy to occur in the first place should be openly criticised. 

Professor Sadiq said that it’s the poorest members of society that end up paying when the wealthy don’t contribute their fair share.

“The government needs a certain amount of revenue to budget, to spend on schools, hospitals, COVID initiatives, etc. So, when people are avoiding paying taxes, someone else has to pay more,” she added.

Main Image by Bermix Studio on Unsplash