Not the streaming service, the jewelry store, or the drag queen

October 3, 2021 11:04 AM

The Pandora Papers are a gigantic set of data about offshore finance that details hidden wealth, tax avoidance, and money laundering.

Reporting on this data has come from the Washington Post ('Billions Beyond Reach'), BBC ('A Simple Guide to the Pandora Papers Leak'), and other news organizations from around the world.

posted by box (42 comments total)

I've been spending the last half hour reading, there's an enormous amount here. And it's just the first day of publication.

The Washington Post has a good overview of highlights. Today's detailed stories didn't grab me too much, the linked Billions Beyond Reach story is the best of theirs so far. Tomorrow they promise major coverage of how North Dakota and Nevada are key players in the offshore networks criminals use to hide money.

Not that Americans need that since our tax law is so accommodating.

Financial experts said the uber-rich in the United States tend to pay such low tax rates that they have less incentive to seek offshore havens.

posted by Nelson at 11:09 AM on October 3, 2021 [10 favorites]

Yeah, remember about 5 years ago when the Panama Papers blew everything wide open and led to sweeping changes?
posted by Greg_Ace at 11:42 AM on October 3, 2021 [29 favorites]

The Guardian has it too
posted by mumimor at 11:44 AM on October 3, 2021 [6 favorites]

Not a good look for Tony Blair. Instead of buying a £6 million townhouse and paying the £300,000+ tax on the transaction, they bought the company that owned the property.
posted by CheeseDigestsAll at 12:02 PM on October 3, 2021 [11 favorites]

Not a good look for Tony Blair. Instead of buying a £6 million townhouse and paying the £300,000+ tax on the transaction, they bought the company that owned the property.

I bought the airline. It seemed...neater.
posted by fortitude25 at 12:07 PM on October 3, 2021 [6 favorites]

Me reading this article: "Oh? Interesting, although I wonder why they led with how much of a data organizing challenge it is, I'd rather th--"

WANT TO KNOW WHEN WE PUBLISH?

Me: (suppresses urge to send page to the outer darkness)
posted by JHarris at 12:14 PM on October 3, 2021

This journalism work matters.

remember about 5 years ago when the Panama Papers blew everything wide open and led to sweeping changes?

The Panama Papers certainly had a significant impact. As the WashPo says

A similar but narrower ICIJ investigation, known as the Panama Papers and published in 2016, revealed hidden wealth that ignited protests in several countries, forcing two world leaders from power.

The two world leaders were Sigmundur Davíð Gunnlaugsson of Iceland and Nawaz Sharif of Pakistan. Wikipedia has many articles about other parts of the fallout, too. ICJI has a thoughtful article on "the change inside people's heads".

If you're coming at this from an American perspective the Panama Papers didn't land quite so hard because there are relatively few Americans implicated in them. For many reasons, one of which (as I mentioned before) is because there are so many easier legal ways to evade taxes in the US.

I'm really looking forward to WashPo's article about American involvement tomorrow.
posted by Nelson at 12:21 PM on October 3, 2021 [59 favorites]

Matt Nippert, the excellent New Zealander investigative journalist, has tweeted his collection of stories so far. "as a financial journalist getting in on this is pretty much like getting one of Willy Wonka's golden tickets." Sories include money laundering from Moldova to Switzerland via NZ, the general role NZ foreign trusts play in global money laundering, and comments from former prime minister Sir John Key.

A lot of this stuff is paywalled btw, including (sometimes) the NZ Herald. I'm having good luck lately with the Bypass Paywalls Clean extension for Firefox.
posted by Nelson at 12:30 PM on October 3, 2021 [10 favorites]

I'm wondering how the WaPo will handle any mentions of Jeff Bezos in the papers.
posted by at by at 12:44 PM on October 3, 2021 [9 favorites]

johnoliverwegothim.gif
posted by photoslob at 12:46 PM on October 3, 2021 [1 favorite]

Of course the white collar criminal in chief of Chile, Piñera, is in it.
posted by signal at 1:38 PM on October 3, 2021

I'm wondering how the WaPo will handle any mentions of Jeff Bezos in the papers

Like this:
The United States’ wealthiest citizens— including Amazon founder Jeff Bezos, who owns The Washington Post; Tesla founder Elon Musk; Microsoft billionaire Bill Gates; and billionaire investor Warren Buffett — do not appear in the documents.
posted by dnash at 1:44 PM on October 3, 2021 [19 favorites]

The United States’ wealthiest citizens ... do not appear in the documents.

As Nelson said above. It's because if you're rich in the US, you have a lot less of a need to use some arcane method to hide your assets. You just do it and dare the IRS to fuck around with you and find out by getting their budget obliterated by your pet congresspeople.
posted by tclark at 1:48 PM on October 3, 2021 [41 favorites]

If you're coming at this from an American perspective the Panama Papers didn't land quite so hard because there are relatively few Americans implicated in them.

Can't speak for the person you're replying to, but personally I come at this from a British perspective, where lots of people and institutions were very much implicated and the whole thing was a giant nothingburger after the initial few days of tutting in the papers.
posted by Dysk at 1:50 PM on October 3, 2021 [15 favorites]

I wonder what tips societies between people hiding their untaxed wealth and people flaunting their untaxed wealth.
posted by clawsoon at 2:00 PM on October 3, 2021

Rockets, clawsoon. It's always the rockets
posted by scruss at 2:19 PM on October 3, 2021 [4 favorites]

Rockets might explain Song-dynasty China, scruss, but what about today?
posted by clawsoon at 2:23 PM on October 3, 2021 [9 favorites]

I can't speak to the UK personal experience of the Panama Papers, thanks for sharing your read on it Dysk. But ICIJ claims credit for at least one significant change: UK backs Panama Papers crackdown on ‘dirty money’ havens.

The United Kingdom is to force its overseas territories, including the Cayman Islands, British Virgin Islands and other well-known corporate secrecy havens, to reveal the names of the ultimate owners behind companies in these remote locations.

This seems to have be happening, at least in the BVI: British Virgin Islands Intends To Create Public Register Of Beneficial Owners By 2023 (as of June 2021).

I'm not saying journalism magically solves all problems. It doesn't look like much happened to the House of Lords members who were in the Panama Papers, for instance. But good reporting and financial documents like this absolutely has an impact. Both nationally and internationally, and particularly in finance.
posted by Nelson at 2:47 PM on October 3, 2021 [8 favorites]

The very richest will never show up in these papers because they do not hire the kind of law firms that handle many different clients and who have been involved in these and other leaks, they have their own family offices who handle literally only their affairs and if they need someone in the Cayman islands or the Cook islands they will put an individual or two there who handle only their work.

One of the Guardian articles also mentioned certain clients whose lawyers were complying with the local "know your customer" rules by literally mailing physical documents or whatsapping names to be written down. That means that those names will be in the physical files but not available to be mass-leaked in this way (although everything else about the trust structures will be electronic as otherwise impossible to administer) the lynchpin document that says "btw this whole tree of companies belongs to X" will be a physical-only document.
posted by atrazine at 3:55 PM on October 3, 2021 [11 favorites]

I was going a little nuts when browsing this FPP because I was thinking, "Wait, didn't we discuss this, like, years ago?" Not only was there previously the Panama Papers, but there was also the Paradise Papers in between. So, hmm, crazy thought, but maybe whoever's naming these might not be so stuck on a theme?
posted by Halloween Jack at 4:14 PM on October 3, 2021 [11 favorites]

For people saying previous similar cases were a "nothingburger" (god that word grates on me), The Guardian points out that:

[The Panama and Paradise Papers] also upheld the law and saved the public purse, enabling governments to recoup more than $1.36bn in back taxes and penalties.

(My emphasis.) Obviously we need structural reform, but each one of these cases pushes public sentiment closer to making that reform possible, but even without having achieved those greater steps yet, these are clearly important and financially successful ways of serving the public interest.
posted by biogeo at 4:15 PM on October 3, 2021 [26 favorites]

Where are the 336 politicians in the Pandora Papers from?. A small map interactive. Counts only, no names.

US, Canada, Australia, and New Zealand are all conspicuously absent. UK has 9. Ukraine is the country with the most at 38. Clearly this is not a fair random sample of all people hiding money offshore.
posted by Nelson at 4:48 PM on October 3, 2021 [8 favorites]

I wonder what tips societies between people hiding their untaxed wealth and people flaunting their untaxed wealth.

It's also worth mentioning that Bezos doesn't need to hide his wealth in quite the same way politicians embezzling from their public do.
posted by pwnguin at 5:19 PM on October 3, 2021 [4 favorites]

I'm not suggesting no good at all came from the Panama Papers - I'm suggesting that nothing has changed in the UK. As a country, we basically went "huh" and then carried on as ever.

It's great that other countries take corruption seriously. But here in the UK, the consequences have been effectively nil.
posted by Dysk at 5:39 PM on October 3, 2021 [4 favorites]

Most likely “leaked” by the five eyes as a return serve in the heightening financial Cold War.
posted by seanmpuckett at 6:00 PM on October 3, 2021 [2 favorites]

Most likely “leaked” by the five eyes as a return serve in the heightening financial Cold War.

Interesting conjecture, given the UK is one of the greatest enablers of tax evasion.
posted by aramaic at 6:17 PM on October 3, 2021 [4 favorites]

The Lusosphere seems to have gotten hit pretty hard on this one. Anybody have info on the 9 Angolan politicians mentioned on the ICIJ page?
posted by Not A Thing at 6:20 PM on October 3, 2021

$1.36bn in back taxes and penalties.

Total? From how many countries that were presumably cheated? That... doesn't strike me as being all that impressive.
posted by 2N2222 at 6:25 PM on October 3, 2021 [4 favorites]

US, Canada, Australia, and New Zealand are all conspicuously absent.

Note that's only counting politicians. The names of at least 500 Canadian citizens or residents are contained in the records.
posted by clawsoon at 6:40 PM on October 3, 2021 [5 favorites]

I wanted to learn more about South Dakota being a tax haven and the article I found does a really good job of explaining why people should care. Essentially, this is class warfare leading to a future where all wealth has been amassed by the rich and the poor shoulder the burden for basically everything.

Here is an example from one academic paper on South Dakotan trusts: after 200 years, $1m placed in trust and growing tax-free at an annual rate of 6% will have become $136bn. After 300 years, it will have grown to $50.4tn. That is more than twice the current size of the US economy, and this trust will last for ever, assuming that society doesn’t collapse altogether under the weight of this ever-swelling leach.

If the richest members of society are able to pass on their wealth tax-free to their heirs, in perpetuity, then they will keep getting richer than those of us who can’t. In fact, the tax rate for everyone else will probably have to rise, to make up for the shortfall caused by the wealthiest members of societies opting out, which will just make the problem worse. Eric Kades, the law professor at William & Mary Law School, thinks that South Dakota’s decision to abolish the rule against perpetuities for the short term benefit of its economy will prove to have been a long-term catastrophe. “In 50 or 100 years, it will turn out to have been an absolute disaster,” said Kades. “Now we’re going to have a bunch of wealthy families, and no one will be able to piss away that wealth, it will stay in the family for ever. This just locks in advantage.”

posted by xammerboy at 7:12 PM on October 3, 2021 [21 favorites]

Why do you pay high taxes? Because it turns out rich people don't pay taxes. That trend is just going to continue. Feudalism is the future.
posted by xammerboy at 7:13 PM on October 3, 2021 [9 favorites]

archive today:

Key Findings from the Pandora Papers Investigation [WAPO]

Why The Post published the Pandora Papers investigation [WAPO]

BILLIONS HIDDEN BEYOND REACH [WAPO]
posted by bendy at 7:52 PM on October 3, 2021 [4 favorites]

Can't speak for the person you're replying to, but personally I come at this from a British perspective, where lots of people and institutions were very much implicated and the whole thing was a giant nothingburger after the initial few days of tutting in the papers.

It is sort of wild that Jimmy Carr was punished more for tax evasion than most of these people, in the sense that he had to pay a fine and then front up to panel shows he'd already agreed to be on to have the mickey taken out of him by the UK comedy scene
posted by Merus at 9:33 PM on October 3, 2021 [9 favorites]

Carr was merely rich, and had the temerity to think he could get away with acting in a way that is the preserve of the truly wealthy. It is becoming increasingly difficult to see the situation through any other lens.
posted by Dysk at 10:24 PM on October 3, 2021 [5 favorites]

Interesting conjecture, given the UK is one of the greatest enablers of tax evasion.

Versimilitude.
posted by acb at 1:11 AM on October 4, 2021

US rich people have less incentive to offshore things because their worldwide income is subject to US rate tax - not only the income they personally earn but that of a significant class of income of foreign entities they control.

Everyone else in the world is subject only to territorial tax - they pay no home country tax on income they earn in foreign jurisdictions so there is a massive incentive to shift the tax locale of income.
posted by MattD at 5:06 AM on October 4, 2021 [1 favorite]

As an American overseas, I can kind of attest to the ridiculousness of having to deal with the US tax system as a resident of a foreign country (where I also pay taxes). While there is an exemption on income earned overseas, which is up to about $110k (which I'll never earn in a year) and under that, you don't pay, though if you don't file, you most certainly get nasty letters and don't get stimulus checks.

So far so good.

Mind you, that's for employment overseas. Self-employed? From what I've heard (and I hope I'm misinformed), no exemption for you. Own a business overseas? Too bad, you still have to file (and pay!) business taxes in the US, and allow the IRS to go through your books whenever they please.

That, and there's the FBARS system, which, from what I understand, was originally enacted to force organized crime out of the banking system around the world. Are you an American citizen overseas, with $10,000 or more in the bank (or have had more than $10k at any point in the calendar year)? Well, now you have to declare how much you have, and exactly where you got it from, and submit that information to the treasury department, on pain of actual jail time and up to $200k in fines. Again, originally enacted to chase down the mafia, now just something that adds another level of stress to any American trying to build a life outside of the States.

And then you have the various reporting requirements for banks, where, if even a single US citizen has a bank account, the bank is required to comply with US laws for transparency. Many banks in Europe, Japan, and other places have stopped allowing Americans to open accounts, and in some places, have actively pushed American customers out.

I'm honestly not surprised there aren't many Americans in these papers. As said above, it's butt-stupid easy to do all you need to do inside the country, while it's become more and more difficult to just exist as a citizen outside its borders.
posted by Ghidorah at 7:18 AM on October 4, 2021 [5 favorites]

I actually think that's wrong. In other words its much easier for high wage earners to take advantage of these off-shore dodges than anything available to the high wager earners in the US.

The US system is actually pretty tight so long as you are mostly generating income that shows up on a W-2/1099/K-1.

Like if you make a million usd/year you would probably like to be able to access some offshore structures, especially if in the normal course of your business you are transacting cross border or own assets cross border like a vacation home.

US tax dodges revolve more around what "income is" and intragenerational asset transfers. Basically it favors a few classes of investors (real estate mostly) and people who no longer generate income but have tremendous wealth as it offers pretty large leeway with respect to how and when capital gains are recognized.

In the Bush-ian sense its tilted towards the have-mores not the haves.
posted by JPD at 7:50 AM on October 4, 2021 [4 favorites]

Mind you, that's for employment overseas. Self-employed? From what I've heard (and I hope I'm misinformed), no exemption for you. Own a business overseas? Too bad, you still have to file (and pay!) business taxes in the US, and allow the IRS to go through your books whenever they please.

I am not a tax expert, but I've researched this previously and it's basically yes and no. Self-employment income can go under the FEIE (so no income tax) but you'd still owe self-employment tax (aka payroll tax, the ~15% for Social Security and Medicare).

And then you have the various reporting requirements for banks, where, if even a single US citizen has a bank account, the bank is required to comply with US laws for transparency. Many banks in Europe, Japan, and other places have stopped allowing Americans to open accounts, and in some places, have actively pushed American customers out.

A lot of American banks have done the same, not allowing Americans who live overseas to open accounts because of concerns over reporting requirements. The stupidest I've seen is USAA recently doing this - a bank specifically marketed towards military, most of whom are posted overseas at some point. I've known several USG employees living overseas who had to effectively lie and give a relative's or parent's address in the US to be able to simply open a checking account. Security theater run amok indeed.
posted by photo guy at 7:57 AM on October 4, 2021 [2 favorites]

Pentagon papers
Panama papers
Pandora papers
Noticing a pattern yet? Yep that’s right, they’re all printed on papers. Folks the destruction of the rain forest is a very serious matter

-@teranceray on Twitter

posted by JDHarper at 10:20 AM on October 4, 2021

WaPo has started to compile reaction stories.

Kenya's president refused to comment, blew up on social media while traditional media ignored it, now says he will. Russia says 'Mistress in Monaco? Putin never even met that woman.' and 'I heard there's corruption in South Dakota.' The Czech prime minister went with a Trumpian 'I categorically deny, also The Guardian is neo-Marxist.'
posted by box at 10:30 AM on October 4, 2021 [2 favorites]

Not a good look for Tony Blair. Instead of buying a £6 million townhouse and paying the £300,000+ tax on the transaction, they bought the company that owned the property.

The company that was almost certainly created specifically for the purpose of owning the property and dodging taxes. Corporations are people. Really really shitty tax and liability dodging people.
posted by srboisvert at 7:49 AM on October 5, 2021