Pandora Papers shows US emerging as big player in offshore world

Dozens of world leaders and hundreds of public officials used offshore tax havens to hide assets worth hundreds of millions of dollars, with the US emerging as a big player in the offshore world, a massive investigation has found.

The Pandora Papers, published on Sunday, are based on documents leaked to the International Consortium of Investigative Journalism (ICIJ) and exposed the offshore dealings of kings, presidents and prime ministers, including Jordan’s King Abdullah II, Czech Prime Minister Andrej Babis and Kenyan President Uhuru Kenyatta.

The ICIJ – a network of reporters and media organisations – launched a two-year effort to sift through 11.9 million confidential files leaked to it, aided in that effort by more than 600 journalists from 150 media outlets.

The leaked records come from 14 offshore services firms from around the world – from Vietnam to Belize to Seychelles.

The ICIJ found that the documents were linked to more than 330 politicians and public officials, including 35 current and former national leaders, in more than 91 countries and territories.

Setting up offshores companies to do business is not in itself illegal, the ICIJ stressed, as some people might have legitimate reasons to keep their finances secret.

But such entities have often proven to be attractive as they can facilitate tax evasion and money laundering.

Such revelations are no less of an embarrassment for leaders who may have campaigned publicly against tax avoidance and corruption, or advocated austerity measures at home.

The investigation put the spotlight on the offshore system itself, with the US emerging as a big player in the offshore world.

South Dakota, the files show, emerged as the US state with the largest number of trusts – a financial mechanism used often to avoid or greatly reduce taxation.

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