Paradise Papers: Secret  Tax Boltholes Revealed

Paradise Papers is the latest in a series of leaks made public by the International Consortium of Investigative Journalists shedding light on the trillions of dollars that move through offshore tax havens.

Strangely but not surprisingly, the majority of the people featured in the leaks come from the United States followed by Britain.

Some 380 journalists collaborated to unravel the connections in the Paradise Papers' nearly 1.5 terabytes of data. The trove was acquired by the German newspaper Suddeutsche Zeitung, which says the records show how the wealthy and powerful sometimes duck taxes, regulations, sanctions and "at least their social responsibility", news outlets reported.

US Commerce Secretary Wilbur Ross, Britain's Queen Elizabeth and a key ally to Canadian Prime Minister Justin Trudeau are among the 120 rich and powerful people mentioned in the Paradise Papers—a massive trove of 13.4 million records—many of which were leaked from the offshore law firm Appleby, which was founded more than 100 years ago and operates in places ranging from Bermuda and the Cayman Islands to the Isle of Man, Mauritius, Shanghai and Hong Kong.

Reflecting millions of loan deals, financial statements, emails and other documents, the data reveals how specialty firms handle the money of wealthy individuals, families and corporations.

Some of the Revelations

Wilbur Ross: the commerce secretary in the Trump administration, shares business interests with Russian `President Vladimir Putin’s immediate family, and he failed to clearly disclose those interests when he was being confirmed for his cabinet position.

Ross—a billionaire industrialist—retains an interest in a shipping company, Navigator Holdings, that was partially owned by his former investment company. One of Navigator’s most important business relationships is with a Russian energy firm controlled, in turn, by Putin’s son-in-law and other members of the Russian president’s inner circle.

Jared Kushner: US President Donald Trump’s son-in-law and adviser, founded a tech fund that features a Russian named Yuri Milner as an investor. Milner has been described as Russia’s most important tech investor, and the Paradise Papers reveal that Milner channeled Kremlin funds into huge investments in Facebook and Twitter.

In 2011, the documents show, Russian state bank VTB funded a $191 million investment in Twitter, while Russia’s Gazprom Investholding “financed an opaque offshore company” that created a vehicle to hold $1 billion in Facebook shares. The investments flowed through Milner.

Queen Elizabeth: The papers reveal that about $13 million of Queen Elizabeth’s $650 million private holdings have been invested in funds based in the Cayman Islands and Bermuda. The duchy also invested close to $5 million into nontaxable funds in Bermuda, according to documents released.

Stephen Bronfman: The documents say that Canadian Prime Minister Justin Trudeau's top fundraiser and senior advisor Stephen Bronfman, heir to the Seagram fortune, moved about $60 million to offshore tax havens with ex-senator Leo Kolber.

Apple: Revelations shed light on Apple's tax avoidance strategy which shifted profits from one fiscal haven to another as well as loopholes employed by Nike and Formula One champion Lewis Hamilton.

Appleby helped the iPhone maker shift tens of billions of dollars from Ireland to the Channel Islands when it appeared to face a tougher stand on taxes by Dublin. The documents revealed that Apple stashed $252 billion in Jersey, a tiny island off the coast of France known for being a tax haven. Jersey typically does not tax corporate income and is largely exempt from European Union tax regulations.

Nike: The company used a loophole in Dutch fiscal law to reduce its tax rate in Europe to just 2% compared with a 25% average for European companies. The tax savings came from Nike's use of an offshore subsidiary which charged royalties to the company's European subsidiaries, the report said.

Lord Ashcroft: Britain's prominent Conservative Party donor Lord Ashcroft "ignored rules around the management of his offshore investments," according to a BBC report on the Paradise Papers, which says that he gave assets worth hundreds of millions of dollars to the Punta Gorda Trust in Bermuda in 2000.

Ashcroft could be the subject of an investigation by Her Majesty's Revenue and Customs, the BBC says, "if it was to take the view an overseas trust had been controlled from the UK."

Bono: U2, an Irish rock band from Dublin, frontman and charity advocate Bono is named in the Paradise Papers as having "used a company based in Malta to pay for a share in a shopping center in a small town" in the northeast of Lithuania in 2007.

Bono was an investor in the Maltese company Nude Estates, which bought the Ausra mall–named after the Lithuanian word for dawn–for €5.8 million ($6.7 million) shortly after it opened in 2007. Bono was a passive, minority investor in Nude Estates Malta Ltd., a company that was legally registered in Malta until it was voluntarily wound up in 2015.

Lewis Hamilton: Four-time Formula One World Champion is one of the richest people in racing. Hamilton is said to have completely avoided paying taxes on his nearly-$22 million private jet by establishing a shell company in the Isle of Man and renting the plane from himself.

Amitabh Bachchan: Bachchan, one of the most recognizable names in India's enormous Bollywood film industry, is named in the Paradise Papers as having been a "shareholder of a digital media company incorporated in Bermuda in 2002."

"Till the introduction of the Liberalized Remittance Scheme in 2004, all investments abroad made by resident Indians required prior approval of the Reserve Bank of India. It’s not clear if the shareholding was disclosed to RBI," the paper writes.

Malta Rejects Secrecy

Malta's government says the country has nothing to hide after being named among a long list of offshore entities. Its Finance Minister Edward Scicluna told reporters in Brussels on Monday that all the names associated with Malta in the so-called 'Paradise Papers' were listed on a public register.

"There was no secrecy whatsoever," he said, while noting the push for greater transparency is needed to fight tax evasion.

Speaking ahead of a eurozone finance ministers' meeting, Scicluna said many of the laws that had been agreed on at the EU level have simply yet to be implemented. "It takes time to implement changes, companies need to know ahead that changes are there and they need to act accordingly," he said.