Tax authorities in the U.S., Britain, and Australia today announced they are working with a gigantic cache of leaked data that may be the beginnings of one of the largest tax investigations in history.
The secret records are believed to include those obtained by the International Consortium of Investigative Journalists that lay bare the individuals behind covert companies and private trusts in the British Virgin Islands, the Cook Islands, Singapore and other offshore hideaways.
The hoard of documents obtained by ICIJ represents the biggest stockpile of inside information about the offshore system ever gathered by a media organization.
The U.S. Internal Revenue Service said in a statement the three nations “have each acquired a substantial amount of data revealing extensive use of such entities organized in a number of jurisdictions including Singapore, the British Virgin Islands, Cayman Islands and the Cook Islands.”
It said the data “contains both the identities of the individual owners of these entities, as well as the advisors who assisted in establishing the entity structure.”
The statement said early analysis had uncovered information that may be relevant to tax administrations of other jurisdictions that they would be willing to share, at the request of other countries.
“This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion,” said IRS acting commissioner Steven T. Miller.
"Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes.”
Gerard Ryle, director of the ICIJ, said he expected the collaboration between taxmen in the UK, US and Australia to lead to "the largest tax investigation in history".
He added: "We know from the data we obtained there are names of people from more than 170 countries. Some are prominent citizens – politicians, celebrities, businessmen, the elite of some societies.
"To have three major tax agencies collaborating – with the possibility of many more doing the same – is potentially a major blow to the secrecy of offshore jurisdictions."
The deputy commissioner of the Australian Tax Office, Greg Williams, told The Australian Financial Review that there were "very strong similarities" between the data cache and the ICIJ documents, but declined to confirm if they were the exact same records.
British tax authorities claim they have even more data than that unearthed by ICIJ.
The total size of the ICIJ files, measured in gigabytes, is more than 160 times larger than the leak of U.S. State Department documents by Wikileaks in 2010.
A statement from the British tax office puts the size of the data obtained by the three tax authorities at 400 gigabytes, compared to the 260 gigabytes gathered by the ICIJ.
“The 400 gigabytes of data is still being analyzed but early results show the use of companies and trusts in a number of territories around the world including Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands,” the British tax office statement said.
“The data also exposes information that may be shared with other tax administrations as part of the global fight against tax evasion.”
Last month, the ICIJ and 37 media partners began reporting on more than 2.5 million files that include the names of thousands of American, Australian and British citizens as well as families and associates of long-time despots, Wall Street swindlers, Eastern European and Indonesian billionaires, Russian corporate executives, international arms dealers and a sham-director-fronted company that the European Union has labeled as a cog in Iran’s nuclear-development program.
The files leaked to ICIJ provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike.
The records detail the offshore holdings of people and companies in more than 170 countries and territories.
The ICIJ publication sparked government inquiries, resignations and a new sense of urgency from European leaders to fight tax evasion. A few days after the articles ran, Europe’s five biggest economic powers — Britain, France, Germany, Italy and Spain — announced they would begin regularly exchanging banking and tax information as a way of identifying tax dodgers and other financial wrongdoers.
The stories we released in April are the first installment in an ongoing series. More ICIJ reports will be published throughout the year as we continue the investigation with our partners.
The files illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy to avoid taxes, fueling corruption and economic woes in rich and poor nations. The current banking crisis in Cyprus is one example of how the offshore system can impact an entire country’s financial stability.
The ICIJ worked with 86 investigative journalists from 46 countries and used data mining software and old fashioned shoe leather reporting to unveil the previously hidden but thriving world of fraud, tax dodging and political corruption.
To analyze the documents initially, ICIJ collaborated with journalists from The Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post, the Canadian Broadcasting Corporation (CBC) and 31 other media partners around the world.
Among the countries included in the data are: Argentina, Armenia, Australia, Azerbaijan, Belgium, Brazil, Bulgaria, Canada, Chile, Colombia, Costa Rica, Croatia, Denmark, Finland, France, Georgia, Germany, Greece, India, Ireland, Italy, Japan, Kosovo, Latvia, Malaysia, Mexico, Moldova, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Paraguay, Philippines, Romania, Russia, Serbia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Ukraine, United Kingdom, United States, and Venezuela.