Paradise Papers: Data leak shines a light on the monies of the elite

Whether it was a hack or an insider leak, the 13.4 million records in the Paradise Papers detail the investments of offshore law firms and corporate investment firms.

Paradise Papers, data leak, insider, hack, data breach
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Over 13.4 million records, availed through as yet unspecified means, comprise the Paradise Papers. The leak reveals the investment records of the wealthy 1 percent, as detailed from client records of offshore law firm Appleby and those of offshore corporate services firms Estera and Asiaciti Trust.

The data was made available via an International Consortium of Investigative Journalists (ICIJ) investigative report, Paradise Papers: Secrets of the Global Elite, released by their extensive network of media partners.  The ICIJ is the same entity that regaled us with the Panama Papers in 2016

The ICIJ encourages whistle blowers to "Leak to Us" and securely submit their information to the consortium via a variety of means — SecureDrop, PGP-encrypted email, Signal, WhatsApp, Wire, Keybase, Peerio, and old-fashioned snail mail. This solicitation bore fruit when an as-yet-unidentified individual with access to the data shared the information with ICIJ.

Appleby has stated categorically the information was not leaked via an insider, "We wish to reiterate that our firm was not the subject of a leak but of a serious criminal act, and our systems were accessed by an intruder who deployed the tactics of a professional hacker."

Paradise Papers reveal hidden assets

Often offshore or foreign investment accounts are secret and by design, exist to shield and hide the existence of financial assets from one's home country's tax authorities. But that is not always the case. Many who declare these assets find that through the nuances of tax law, both personal and corporate, the math works in their favor in the end when they successfully avoid payment of taxes.

The breach (or leak) reveals legal, but unsavory practices

As noted by Appleby in their statement, "... there were no allegations of any wrongdoing on the part of Appleby." Indeed, the work of these experts in offshore financial actions benefited the wealthy in their effort to retain their wealth, and they assisted multinational corporations in reducing their tax burden, thus putting more dollars into the corporate kitty.

What's in the Paradise Papers? 

The list of individuals revealed in the Paradise Papers reads like a volume of Who's Who. They range from the Queen of England to the U.S. commerce secretary, Nelson Mandela's estate and global industrial icons. Companies whose offshore investments and processes take advantage of these tax avoidance schemes include well-known firms, including Apple.

In its reporting, ICIJ says information in the Paradise Papers:

Reveals offshore interests and activities of more than 120 politicians and world leaders, including Queen Elizabeth II, and 13 advisers, major donors and members of U.S. President Donald J. Trump's administration
Exposes the tax engineering of more than 100 multinational corporations, including Apple, Nike and Botox-maker Allergan
Reveals tax haven shopping sprees by multinational companies in Africa and Asia that use shell companies in Mauritius and Singapore to reduce taxes
Shines a light on secretive deals and hidden companies connected to Glencore, the world’s largest commodity trader, and provides detailed accounts of the company’s negotiations in the Democratic Republic of the Congo for valuable mineral resources
Provides details of how owners of jets and yachts, including royalty and sports stars, used Isle of Man tax-avoidance structures

Global reaction to the Paradise Papers

The European Parliament urged all member states to take steps to clamp down on tax avoidance schemes.

And the United Nation's called for an end to the practice, as the avoidance of tax payment essentially reduces the available resources for the provision of resources to the populace, including the firms and individuals engaged in tax avoidance. In a nutshell, they receive the goods and services of the nation but avoid contributing their fair share.

“Wealthy individuals and international corporations are continuing to engage in unethical practices, reducing their tax burdens to minimal levels by using tax havens, which undermines the realization of human rights,” said Juan Pablo Bohoslavsky, the U.N. Independent Expert on the effects of foreign debt and human rights.

Fallout will no doubt continue, as more and more individuals' finances and those of various corporations are brought to light. And eventually, we may learn who orchestrated the hack or if an insider facilitated the absconding of the sensitive data from these offshore magicians. 

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