Rich and mighty brought to book: Biggest-ever financial leak with global ripples

More politicians and tycoons appear to be marred by scandal as the International Consortium of Investigative Journalists (ICIJ) keeps adding names to its list of owners of secret offshore firms. ICIJ promises two more weeks of exposures.

A third of the world’s wealth is tied up in the offshore, according to the Tax Justice Network, cited by ICIJ’s website. That’s estimated at US$20 trillion.

Tax Haven Number One appears to be the UK-controlled British Virgin Islands (BVI), home to more than a million offshore entities, while Britons act as nominee directors for such companies, renting out their names to the actual business owners.

British MP’s urged Prime Minister David Cameron to act against the offshore industry and address the issue of tax havens at June's G8 summit, to be hosted by the UK.

Meanwhile, the fresh portion of names released by ICIJ includes Georgian Prime Minister Bidzina Ivanishvili. Apart from being the country’s top politician, he’s also its richest man and, according to ICIJ data, director of Bosherston Overseas Corp. in the British Virgin Islands.

Ivanishvili’s spokespeople were quick to explain that their boss “had no interest in the company… and therefore there was no obligation to report it in his declaration.”

One of the names on the list came as a real blow to French President Francois Hollande.  His former Socialist Party treasurer, Jean-Jacques Augier, invested in two Cayman Islands offshore companies. The news came at the moment Hollande was trying to save face following the ex-budget minister Jerome Cahuzac’s confession of having 600,000 euro hidden in a Swiss bank account.

The leak by ICIJ also shows prominent Canadian lawyer, Tony Merchant, who is also husband to a Liberal senator, moved CA$1.7 million (US$1.68 million) to secretive financial havens while he was locked in a battle with the Canada Revenue Agency over his taxes, according to documents in a massive leak of offshore financial data.

A senior politician in Mongolia is considering his resigning. Bayartsogt Sangajav, Mongolia’s parliament deputy speaker acknowledged his involvement in offshore business and said it was a mistake.

In the Philippines, the eldest daughter of the late dictator Ferdinand Marcos had her name found on the offshore owners list. Maria Imelda Marcos is governor of the country’s Ilocos Norte province. Now the Philippine government officials have promised her case will be investigated.

In Azerbaijan, members of President Ilham Aliyev’s family appear to have been shareholders in at least four offshore companies.

The ICIJ has also added some big Russian names to its list, including the wife of Deputy Prime Minister Igor Shuvalov and two top Gazprom executives, who have registered offshore companies in the British Virgin Islands.

The Kremlin is determined to put an end to its officials engaging in illegal or corrupt offshore activities. On Tuesday Putin submitted the bill to the Duma which will prevent officials from stashing any illegal wealth abroad. This is essentially a three-month deadline for all Russian officials with offshore accounts to get their finances tidied up.

Not only individuals, but financial institutions have also been targeted by the ICIJ research. Deutsche Bank, Germany’s largest financial institution, is one of these. It helped its customers maintain more than 300 secretive offshore companies and trusts through its Singapore branch, the probe reveals.

Crisis-stricken Greece is yet another focus for tax-haven exposers. While austerity measures force grassroots citizens to pay ever more in taxes, owners of the offshore companies seem to be avoiding them. Just four out of 107 Greek offshore companies investigated by ICIJ are registered with tax authorities. The Greek Finance Ministry said it would examine the data.

These and some other stunning revelations have been made by a team of 86 investigative journalists from 46 countries in just a couple of days. However, these two days were preceded by 15 months of research. As the ICIJ team has been dealing with around 260 gigabytes of leaked offshore data, which is 160 times more than WikiLeaks made public in 2010, politicians and tycoons, not mentioned yet in the research, have reason to feel uneasy.

The British Virgin Islands are administered by the UK, an EU member. But as accusations fly that London may not be willing to take onboard bloc measures to crack down on tax avoidance, Amelia Andersdotter, member of the European parliament for the Swedish Pirate Party told RT that Westminster may lack incentives.

“This is also a question of resources inside the public institutions. Very often public institutions have resources allocated to performing certain tasks which may not actually be sufficient proportion to the task. And in case the of London’s financial industry, its less regulated than other financial industries and this has proven advantageous for London and its region which is experiencing very fast growth,” Amelia Andersdotter explained.