'Pandora Papers' leak 11.9 million financial files on offshore tax havens of global elites, politicians

In the most extensive information leak since the Panama Papers, reporters from the Washington-based International Consortium of Investigative Journalists exposed affluent individuals' financial records and offshore fortunes globally. A confidential source leaked a total of 11.9 million files — consisting of everything from emails to bank statements, incorporation documents, and shareholder registries — from 14 firms that provide offshore services.

Known as the "Pandora Papers," the financial records disclosed that 35 world leaders and over 300 other public officials around the globe hold assets in or through tax havens, including religious leaders, drug dealers, and billionaires. The ICIJ provided 150 news organizations access to the files across 117 countries, with at least 500 Canadian citizens or residents named in the records.

Much like the Panama Papers leak in 2016, the massive information drop showed how certain global elites and high-profile criminals shield assets, dissolve themselves of their tax obligations, or hide their wealth. After the Panama Papers came to light five years ago, US President Barack Obama and British Prime Minister David Cameron repeatedly pledged to crack down on tax abuses committed through offshore finance. According to the Pandora Papers, the global offshore world continued to thrive despite that promise, reported CBC.

"When we published the Panama Papers a few years ago, there was a lot of outcry around the world saying that this was a system that needed to end," said Gerard Ryle, the ICIJ's director. "But we're now seeing the very people who could end the system … themselves benefiting from it."

The ICIJ report brought promises of tax reform and demands for resignations and investigations, including explanations and denials from those targeted.

The investigation dug into accounts registered in familiar offshore havens, such as the British Virgin Islands, Seychelles, Hong Kong and Belize, including 81 new trusts in South Dakota and 37 in Florida.

Though not inherently illegal if declared to tax authorities, many significant businesses operate overtly and legally in and through tax havens.

But the anonymity of offshore jurisdictions, coupled with little to no income tax paid, makes them a hotspot for money launderers, tax evaders, corrupt politicians, and other criminals.

Gabriel Zucman, a University of California, Berkeley, economist who studies income inequality and taxes, said one solution is "obvious":

Ban "shell companies -- corporations with no economic substance, whose sole purpose is to avoid taxes or other laws."

"The legality is the true scandal," the activist and science-fiction author Cory Doctorow wrote on Twitter. "Each of these arrangements represents a risible fiction: a shell company is a business, a business is a person, that person resides in a file-drawer in the desk of a bank official on some distant treasure island."

The European Commission, the 27-nation European Union's executive arm, said new legislative proposals are on the way to enhance tax transparency and reinforce the fight against tax evasion in light of the revelations. According to a study last year from the Organization for Economic Co-operation and Development, the equivalent of at least $14.3 trillion is held in offshore jurisdictions worldwide.