Is it the biggest bank heist in history with $32tn (£21tn) at stake? The electronic vaults of the Caribbean offshore financial system have been raided and 2.5 million secret files belonging to the global political and business elite have been downloaded.
The International Consortium of Investigative Journalists (ICIJ) – working with The Guardian, Le Monde, Washington Post and over 30 other media outlets – has accessed a huge data dump exposing the financial machinations of the super-rich in “the largest cross-border journalism collaboration in history.”
The investigative epic is called “Secrecy For Sale: Inside The Global Offshore Money Maze.”
As reported by IBTimes US, the findings explore the concealed world of tax havens, cracking open the secrets of more than 120,000 offshore companies and trusts and almost 130,000 individuals in over 170 nations. The big names in international banking, including Clariden, UBS and Deutsche Bank, face a potential new scandal.
Exposed are individuals associated with covert business dealings in the Cook Islands, the British Virgin Islands (BVI), Singapore, Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and many other places.
US doctors, Greek villagers, Russian executives, shady Wall Streeters, billionaires from Eastern Europe and Indonesia, dealers of international arms and family members of dictators have been able to employ intricate offshore structures to own mansions, yachts, art and other assets while gaining tax advantages and anonymity “not available to average people,” the ICIJ points out.
The key findings of the investigation nclude:
- A former US Republican presidential candidate, Mitt Romney, is said to have “a lot of money in the Cayman Islands.”
- One British property speculator, Scott Young, recently jailed for refusing to pay his wife alimony – he claimed he was penniless – had business interests in the BVI. According to The Guardian, Young’s lawyer, to whom he signed over power of attorney, appears to control interests in a BVI company involved in a $100m Moscow development.
- The prime minister of Georgia Bidzina Ivanishvili was the latest name to emerge.
“A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct,” the ICIJ reports, adding that ponzi schemers and other mega-fraudsters are among the tricksters who’ve often used “offshore havens to pull off their shell games and move their ill-gotten gains.”
The ICIJ warns that offshore financial secrecy was to blame for the recent Cyprus debacle and the tax raid on depositors.
Nearly 4,000 individuals from the U.S. are mentioned in the report. One of them is Denise Rich, a Grammy-nominated songwriter whose ex-husband “was at the centre of an American pardon scandal that erupted as President Bill Clinton left office,” according to ICIJ. In April 2006 Rich had $144m in a Cook Islands trust, records obtained by the ICIJ show.
Meanwhile, James R. Mellon, a member of the Mellon dynasty that launched companies like Gulf Oil and Mellon Bank, and an author of books about Abraham Lincoln and Thomas Mellon “used four companies in the BVI and Liechtenstein to trade securities and transfer tens of millions of dollars among offshore bank accounts he controlled,” ICIJ reports.
Mellon told ICIJ he owned “a whole bunch” of offshore companies but has since disposed of them. He set up the firms for “tax advantage” and liability reasons. “But I have never broken the tax law,” he said.
Of the use of nominees, Mellon noted that “that’s the way these firms are set up,” and that it’s useful for someone who travels a lot to have someone else in charge of his businesses. “I just heard of a presidential candidate who had a lot of money in the Cayman Islands,” he said. Mellon was “alluding to former U.S. presidential candidate Mitt Romney,” ICIJ notes.
The ICIJ, founded in 1997 as a project of the Center for Public Integrity, a Washington D.C.-based non-profit, worked with 86 investigative journalists from 46 countries to crunch high-tech data and report the findings.