Wednesday, July 18, 2018
Nation & World

Paradise Papers: Leaked documents reveal financial habits of the queen and Trump officials

A huge leak of financial documents, revealed by a group of about 100 media organizations on Sunday, provided deep insights into some of the mechanisms used by top politicians or celebrities to escape paying taxes.

Offshore funds are often used to escape high taxes and their use is not necessarily illegal, though when they are being used by the same people who set those tax rates, it tends to raise eyebrows. The majority of the individuals featured in the leaks come from the U.S., followed by Britain.

What do the "Paradise Papers" reveal?

The concealing of the wealth of billionaires, politicians and at least one head of state in offshore accounts comes as a major embarrassment to the individuals included in the documents.

The material could also end up being used as evidence in investigations looking into links between members of the Trump administration and entities affiliated with the Russian government.

RELATED COVERAGE: Millions of leaked files shine light on where the elite hide their money

In Britain, the revelations could support accusations that the ruling Conservative Party indirectly benefited from some of the offshore tax haven funds it has publicly condemned, which could add to the mounting pressure on Prime Minister Theresa May who has struggled to deal with multiple scandals recently.

Among the individuals or groups who are named in the 13.4 million documents is Queen Elizabeth II, whose private estate invested over $12 million offshore, according to the reports. Other documents in the leak refer to Trump administration officials, an aide of Canadian Prime Minister Justin Trudeau, a major donor of Britainís Conservative party and a Russian oligarch.

Last year, the Panama Papers ó revealed by the same consortium of journalists ó exposed a number of companies, top officials, oligarchs and politicians that benefited from tax evasion. At the time, the Panama-based law firm Mossack Fonseca was being portrayed by law firm industry representatives as an outlier. The companies where most of the new leakís documents originated from are generally considered to be industry leaders, however, which exposes the extent to which questionable practices may still be the norm rather than the exception.

Where do the documents come from?

The 1,400 GB of data were first leaked to German newspaper SŁddeutsche Zeitung, which shared the documents with the International Consortium of Investigative Journalists. The consortium collaborates with hundreds of media partners around the world, who were subsequently involved in the research, including the New York Times and Britainís Guardian.

About half of the leakís documents are believed to have come from the Bermuda-based Appleby law firm, and corporate services provider Estera which recently became its own entity after having operated as a part of Appleby for years.

Appleby assists corporations or individuals with setting up companies offshore and is considered the worldís most important player in the field. Some of the documents date back to 1950, whereas others were modified as recently as last year.

Who are the individuals the documents refer to?

Queen Elizabeth II ó Over $12 million of her private funds were invested offshore by the Duchy of Lancaster ó a portfolio of assets which provides the queenís income. Although a private estate on the same name may be the most well known part of the portfolio, it also held funds in Bermuda and the Cayman Islands and invested in a company accused of shady lending practices.

Speaking to the BBC in response to the allegations, Chris Adcock, the chief finance officer of the estate defended the investments, saying: "The Duchy has only invested in highly regarded private equity funds following a strong recommendation from our investment consultants."

U.S. Commerce Secretary Wilbur Ross ó The leaked documents reportedly show that U.S. Commerce Secretary Wilbur Ross holds business investments in companies tied to Russian President Vladimir Putinís inner circle, according to the Postís Carol Morello, who put the revelations into context:

"The documents leaked as the administration faces several investigations into possible collusion between the Trump campaign and Russia, including a probe by special counsel Robert S. Mueller III that brought its first indictments last week. The reports said Ross has maintained a financial interest through offshore investments in a shipping company called Navigator Holdings. One of the firmís largest clients is the Russian energy firm Sibur, a huge gas processing and petrochemicals company.

"Among the firmís major stakeholders are Putin associate Gennady Timchenko, who individually is under U.S. sanctions, and Leonid Mikhelson, whom Forbes magazine lists as Russiaís richest man and whose company, Novatek, is under sanctions. Another shareholder in Sibur is Kirill Shamalov, who is married to Putinís daughter. Neither Sibur nor Putinís son-in-law are sanctioned."

Yuri Milner, Facebook and Twitter ó Separately, the leak also appeared to show that a Russian billionaire, Yuri Milner, bought shares in American tech companies Twitter and Facebook. The purchases of Twitter and Facebook shares came from Russiaís VTB Bank and the state-led Gazprom company which are both under U.S. sanctions. Milner has disputed that the two entities financed his purchases.

There is so far no evidence that shareholders have used their influence in Silicon Valley to undermine the U.S. electoral system but the revelations follow new concerns that ads and fake accounts were used to sway voters in the run-up to last Novemberís U.S. elections.

Top U.S. administration advisers and officials ó ther individuals directly or indirectly mentioned in the leaks include President Donald Trumpís son-in-law Jared Kushner. A start-up company co-owned by Kushner and his brother received funding from Russian billionaire Milner in 2015.

The revelation is particularly relevant because Kushner later told the Senate Intelligence Committee that he had never "relied on" Russian money to finance his private business dealings, according to the Postís Morello. Other references in the documents refer to the chief economic adviser Gary Cohn and Secretary of State Rex Tillerson.

More top officials elsewhere ó Other top political advisers or former officials the documents refer to include Stephen Bronfman, a key adviser to Canadian Prime Minister Trudeau as well as Britainís Lord Ashcroft, a top donor of Britainís Tory Conservative party who fled to a bathroom trying to escape questions about the issue. An offshore fund allegedly operated by Lord Ashcroft and revealed by the documents may have been worth over $330 million.

Following the release of the allegations, the opposition Labour party urged British Prime Minister Theresa May on Monday to reveal what she knew about the origins of the money flowing into her Conservative partyís funds.

In the U.S., Canada and Britain, the web of complex offshore dealings appeared to extend far into the top ranks of politics, although it largely remained unclear to what extent the practices had been illegal or were conducted with the knowledge of some of the individuals named by the media outlets involved in the revelations.

Comments
Out of hospital, Thai boys recount moment they were found

Out of hospital, Thai boys recount moment they were found

CHIANG RAI, Thailand ó The 12 boys and their soccer coach rescued from a cave in northern Thailand described the moment they realized they finally had been found, as they appeared at a news conference Wednesday after leaving the hospital where they h...
Updated: 4 hours ago
Who gets the embryos? Whoever wants to make them into babies, new law says

Who gets the embryos? Whoever wants to make them into babies, new law says

When their marriage fell apart, the most contentious issue between Ruby Torres and John Joseph Terrell was the fate of their frozen embryos. There were seven in storage, created with her eggs and his sperm before Torres underwent chemotherapy and rad...
Updated: 4 hours ago
Bodies of 95 black forced-labor prisoners from Jim Crow era unearthed in Sugar Land after one manís quest

Bodies of 95 black forced-labor prisoners from Jim Crow era unearthed in Sugar Land after one manís quest

Today the city of Sugar Land is a sprawling suburb southwest of Houston, home to Imperial Sugar Co., shopping malls and endless cul-de-sacs. But, more than a century ago, it was a sprawling network of sugar cane plantations and prison camps. Sugar La...
Updated: 8 hours ago
Trump says he misspoke on Russia meddling

Trump says he misspoke on Russia meddling

WASHINGTON ó Blistered by bipartisan condemnation of his embrace of a longtime U.S. enemy, President Donald Trump sought Tuesday to "clarify" his public undermining of American intelligence agencies, saying he had misspoken when he said he saw no rea...
Published: 07/17/18
Trump returns from summit with Putin to forceful criticism

Trump returns from summit with Putin to forceful criticism

HELSINKI ó In an extraordinary embrace of a longtime U.S. enemy, President Donald Trump openly questioned his own intelligence agenciesí firm finding that Russia meddled in the 2016 U.S. election to his benefit, seeming to accept Russian President Vl...
Published: 07/17/18
Summit snippets

Summit snippets

No dirt on TrumpRussian President Vladimir Putin rejected allegations that Moscow collected compromising materials on President Donald Trump or his family. Putin, a former KGB agent, scoffed at the notion that the Russian security services try to gat...
Published: 07/16/18
Trump questions U.S. on 2016 intel

Trump questions U.S. on 2016 intel

HELSINKI ó President Donald Trump stood next to President Vladimir Putin of Russia on Monday and publicly challenged the conclusion of his own intelligence agencies that Moscow interfered in the 2016 presidential election, wrapping up what he called ...
Published: 07/16/18

Reactions to Trump statements in Helsinki

What theyíre saying"The damage inflicted by President Trumpís naivete, egotism, false equivalence, and sympathy for autocrats is difficult to calculate. But it is clear that the summit in Helsinki was a tragic mistake."Sen. John McCain, R-Arizona. Mc...
Published: 07/16/18
Trump offers little pushback to Putinís denial of interference

Trump offers little pushback to Putinís denial of interference

HELSINKI - President Donald Trump cast doubt on the conclusion of U.S. intelligence agencies that Russia interfered in the 2016 presidential election, saying after his summit here Monday with Russian President Vladimir Putin that the autocrat gave hi...
Published: 07/16/18
Judge halts deportations of reunited families

Judge halts deportations of reunited families

SAN DIEGO ó A federal judge has temporarily halted deportations of families who have been recently reunited after they were separated by the Trump administration. The American Civil Liberties Union filed paperwork saying attorneys were concerned abou...
Published: 07/16/18