Some electronic Robin Hood has hacked 13.4 million files from the Appleby law firm, which specializes in providing “offshore services” to the very crème de la crème of corporations and individuals. Those services, the firm insists, are not tax evasion. They are tax avoidance. Evasion is illegal. Avoidance is, as Donald Trump remarked, smart business.
This document dump, released initially to Germany’s Süddeutsche Zeitung and then shared with 100 other media outlets, goes by the name Paradise Papers. Researchers who have combed the trove have already found interesting nuggets that point to questionable transactions by prominent individuals, ranging from the Trump cabinet to the British Queen, and corporations from Apple to Twitter. The article below, by Common Dreams staff writer Jon Queally, sketches the highlights found so far. It appears that Appleby’s client list is substantially bigger and wealthier than the rat pack unmasked a year ago by the Panama Papers.
Beyond the exposure of individual dark money transactions and beyond the airing of how corporations like Apple thumb their noses at US and foreign tax laws, this set of papers highlights once again how a thin financial elite, making up a tiny fraction of the top one per cent, operates in virtually complete disregard of national boundaries and the laws within them. Just like in the Middle Ages, this aristocracy is metanational and sociopathic, loyal to no boundaries and held back by no moral obligations. Bernie Sanders certainly hit the nail on the head by calling them an international oligarchy.
These papers also throw into sharp relief the boundless fakery of the current Republican tax proposal. The core of that plan is to cut corporate taxes. But, as the Paradise papers show, corporate taxation is already a game, where the nominal tax rates mean nothing because no corporation of any scale pays the nominal rates. Analysts have estimated that the Paradise papers point to a hidden hoard of about ten trillion dollars in mostly corporate funds that lie out of the reach of tax authorities.
That ten trillion in overseas funds sits on top of another ten trillion of corporate profits that glut the deposit accounts of major American banks, as the Wall Street Journal reported last year. Ten trillion here and ten trillion there, pretty soon we’re talking about real money.
There really is no lack of money to solve the world’s ills. The problem is that the money is in the wrong hands. It’s in the hands of people who don’t know what to do with it. The only expenditure they will consider is one that brings a profit at or above the going rate; in other words, that will make someone rich or richer. Those opportunities are few and far between. A health care system that serves everyone? Can’t make a lot of money on that! Rebuilding the rotting American infrastructure? No profit in most of that, either. Building public housing that working families can afford? Tried that, no money in it, tore them down. Free public education from zero to college graduation? How can anybody get rich doing that? And so, while the very very rich get very very very rich, the rest of the world goes to hell.
What major American corporations are planning to do, if the corporate tax cut goes through, is to buy up more of their own stock and/or to buy up and merge with their competitors in order to better control markets. They’re completely clueless and bankrupt when it comes to major social initiatives.
We are ruled by savages. Their suits and haircuts are costumes to deceive the naive. Behind those masks they are wild pigs. With boundless greed they exploit every weakness, gobble up every asset, rip up the land and defecate over everything. Civilization is only a thin veneer.
Here’s the story from Common Dreams, shared under a Creative Commons License.
Paradise Papers’ Reveal Tax Avoidance, Shady Dealings of World’s Rich and Powerful
From multiple members of Trump’s cabinet to the British Royal Family, document dump of offshore dealings shows how political leaders—joined by wealthy celebrities and the ultra-rich—shelter their assets, keep shady relationships secret, and game the tax systems of nations around the globe
Some of the world’s wealthiest and most powerful people will be waking up on Monday to discover that some of their best kept secrets—how they hide their vast wealth and avoid paying taxes—are now being read about in newspapers across the world after the release of a trove of offshore legal and banking documents were leaked to journalists and published Sunday as a joint project called the ‘Paradise Papers.’
First obtained by the German newspaper Süddeutsche Zeitung, the documents were then shared with scores of journalists and researchers associated with the International Consortium of Investigative Journalists and other media organizations, including the New York Times, BBC, and the Guardian.
“There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose,” said author and financial expert Brooke Harrington in response to the new insights about how these elites secretly manage their wealth.
As the ICIJ reports, the “trove of 13.4 million records exposes ties between Russia and U.S. President Donald Trump’s billionaire commerce secretary, the secret dealings of the chief fundraiser for Canadian Prime Minister Justin Trudeau and the offshore interests of the Queen of England and more than 120 politicians around the world.” According to the ICIJ, the documents show how deeply the offshore financial system is entangled with the overlapping worlds of political players, private wealth and corporate giants, including Apple, Nike, Uber and other global companies that avoid taxes through increasingly imaginative bookkeeping maneuvers.
One offshore web leads to Trump’s commerce secretary, private equity tycoon Wilbur Ross, who has a stake in a shipping company that has received more than $68 million in revenue since 2014 from a Russian energy company co-owned by the son-in-law of Russian President Vladimir Putin.
In all, the offshore ties of more than a dozen Trump advisers, Cabinet members and major donors appear in the leaked data.
At the center for the leak, explains the Guardian, is the law firm Appleby which has “outposts in Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey and Guernsey. In contrast to Mossack Fonseca, the discredited firm at the centre of last year’s Panama Papers investigation, Appleby prides itself on being a leading member of the ‘magic circle’ of top-ranking offshore service providers.”
According to a summary by the Guardian, the ‘Paradise Papers’ reveal:
- Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund – and some of her money went to a retailer accused of exploiting poor families and vulnerable people.
- Extensive offshore dealings by Donald Trump’s cabinet members, advisers and donors, including substantial payments from a firm co-owned by Vladimir Putin’s son-in-law to the shipping group of the US commerce secretary, Wilbur Ross.
- How Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions.
- The tax-avoiding Cayman Islands trust managed by the Canadian prime minister Justin Trudeau’s chief moneyman.
- A previously unknown $450m offshore trust that has sheltered the wealth of Lord Ashcroft.
- Aggressive tax avoidance by multinational corporations, including Nike and Apple.
- How some of the biggest names in the film and TV industries protect their wealth with an array of offshore schemes.
- The billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts.
- The secret loan and alliance used by the London-listed multinational Glencore in its efforts to secure lucrative mining rights in the Democratic Republic of the Congo.
- The complex offshore webs used by two Russian billionaires to buy stakes in Arsenal and Everton football clubs.
Speaking with the Guardian, economist Gabriel Zucman—who is releasing a study later this week about the interplay between tax havens and global inequality—says the two are intricately linked.
“Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”