Government authorities in at least eight countries have announced investigations into the financial activities of some of their most high-profile citizens and institutions as the world begins to react to the Pandora Papers, a globe-spanning investigation of offshore secrecy led by the International Consortium of Investigative Journalists.
On Sunday, Oct. 3, ICIJ and its media partners released a flood of investigative stories about offshore financial subterfuges. “Pandora Papers” soon became the No. 2 trending topic worldwide on Twitter.
Officials in Pakistan, Mexico, Spain, Brazil, Sri Lanka, Australia and Panama quickly promised inquiries while global watchdog groups demanded action in the wake of stories revealing how billionaires, politicians and criminals exploit a shadow financial system that covers up tax dodging and money laundering.
Authorities in the Czech Republic tweeted on Monday that they will investigate those named in the Pandora Papers, including the prime minister, Andrej Babis, who is in the midst of a re-election campaign. Leaked documents reveal how the self-styled man of the people hid his ownership of a $22 million chateau. Asked during a television debate hosted by CNN Prima News if he had broken any laws in relation to the property purchase, Babis said, “Of course not … it was taxed money.”
Russian President Vladimir Putin does not appear in the leaked files by name, but his close associates do, including his top image-maker and a woman with whom he was allegedly once romantically involved. Kremlin spokesperson Dmitry Peskov on Monday questioned the reliability of the reporting and said there were no plans to investigate further. “Honestly speaking, we didn’t see any hidden wealth of Putin’s inner circle in there,” he said, according to Reuters.
Pakistan’s Prime Minister Imran Khan vowed to investigate all citizens named in the investigation and to “take appropriate action” if wrongdoing is found.
“We welcome the Pandora Papers exposing the ill-gotten wealth of elites, accumulated through tax evasion & corruption & laundered out to financial ‘havens,’” Khan tweeted Sunday.
Khan was responding to a Pandora Papers story that revealed offshore holdings of key figures in his inner circle including his finance minister and one of his top financial backers. Khan assumed office in 2018 after promising reform following a wave of outrage sparked by the Panama Papers, which exposed the offshore dealings of the children of Pakistan’s then prime minister, Nawaz Sharif.
The government of Panama said it will begin a “supervision” of offshore providers mentioned in the Pandora Papers. One of those providers, a Panama-headquartered law firm known as Alcogal, plays a major role in helping Latin America’s political class set up shell companies in tax havens. It has also served figures involved in some of the most notorious corruption scandals in recent history, including the international soccer scandal known as FIFAgate.
In addition, Panama’s tax authority said it will audit all taxpayers in Panama that have been mentioned in the investigation.
In Brazil, the leader of the country’s opposition in the legislature, Alessandro Molon, announced that he will ask the country’s federal law enforcement to investigate the offshore activities of Brazil’s economics minister, Paulo Guedes, and the president of the country’s central bank, Roberto Campos Neto.
The Spanish tax authority announced Sunday afternoon that it will investigate the possible crimes of people identified in the Pandora Papers.
Mexico’s Financial Intelligence Unit, which monitors financial crime, also promised an investigation in response to the Pandora Papers.
The Australian Taxation Office said it will investigate any links to Australians that emerge from the Pandora Papers.
In Sri Lanka, the ministers of energy and ports said that the Commission to Investigate Allegations of Bribery or Corruption will have to investigate the assets of any politician named in the Pandora Papers. Nirupama Rajapaksa, a former minister related to the ruling family, is one of scores of politicians whose offshore dealings have been profiled by ICIJ.
Others have posted responses on Twitter, such as Dutch Finance Minister Wopke Hoeksta, Pakistani Finance Minister Shaukat Tarin, and former Panamanian president Ricardo Martinelli, who tweeted his response to ICIJ’s questions two weeks before the investigation went live. ICIJ made detailed requests for response from all individuals named in its Pandora Papers stories prior to publication.
Civil society groups, meanwhile, said that the Pandora Papers have laid bare the need for dramatic reforms.
“This is another shocking exposé of the oceans of money sloshing around the darkness of the world’s tax havens that must prompt immediate action, as has long been promised,” Susana Ruiz, tax lead for the global anti-poverty group Oxfam International, said in a statement. “Bravo to the whistleblowers and journalists for shining a light into this secret parallel system of capital, one open only to those with fat amounts of money and the greed to hoard it all untaxed, and those who facilitate it.”
“Here we are again, looking at clear evidence of how the offshore industry promotes corruption and financial crime while obstructing justice,” said Maíra Martini of Transparency International. “The jurisdictions whose corporate service providers have been caught red-handed have one thing in common: financial secrecy. This business model cannot go on.”
Alex Cobham, an economist and chief executive of the Tax Justice Network, said the “personal actions” of some of the people named the Pandora Papers investigation are “shameful,” but it is “important that we don’t lose sight of one crucial fact: few of the individuals had any role in turning the global tax system into an ATM for the superrich. That honor goes to the professional enablers — banks, law firms and accountants — and the countries that facilitate them.”
He said that the “biggest blockers to transparency” are the U.S. and the U.K., which is “the leader of the world’s biggest tax haven network. We need full transparency so we can hold tax abusers accountable, especially when our politicians are among them.”
The Pandora Papers is the biggest journalism partnership in history. The investigation has uncovered offshore entities tied to 35 current and former world leaders and more than 330 current and former politicians and public officials in 91 countries and territories.
Stay tuned for more Pandora Papers investigations and coverage.