U.S. Commerce Secretary Wilbur Ross
Wilbur Ross

IMPACT

Congress Members Call For Action In US After Paradise Papers

Former presidential hopeful Sen. Bernie Sanders (I-VT) called yesterday for the U.S. Senate to investigate offshore tax evasion following the revelations of the Paradise Papers, adding to the growing voices in Congress who have called for government to take action to address the investigation’s findings.

In a letter to Senate Budget Committee chair Mike Enzi (R-WY), Sanders called on the budget committee to launch a bipartisan investigation to determine how much the use of offshore havens has contributed to the U.S. national debt.

“The Paradise Papers reveal how corporations, billionaires and senior officials in the Trump Administration use complicated financial maneuvers to hide their income from the Internal Revenue Services,” Sanders wrote. “The Budget Committee has a responsibility to U.S. taxpayers to get to the bottom of this serious issue.”

The Vermont senator submitted a list of questions that he called on the Senate Budget Committee to investigate, including whether multinational corporations, major financial institutions or members of the Trump Administration have participated in illegal tax avoidance schemes.

Sanders joins Senate Minority Leader Charles Schumer (D-NY) and several other members of Congress who have called for further examination of Paradise Papers revelations and their implications for a tax bill recently proposed by Republicans that would significantly reduce corporate taxes.

“These documents pull back the curtain on a complex shell game, where corporations’ staggering profits disappear offshore and rematerialize when the time is right and the tax liability is the lowest,” said Senator Sheldon Whitehouse (D-RI) and Congressman Lloyd Doggett (D-TX), as they called on Congress to reexamine the Stop Tax Haven Abuse Act they introduced in April.

“Middle-class American families can’t set up their own Grand Cayman subsidiaries.  Instead, they’re left paying a bigger share of taxes than they should.”

Pressure is also mounting on Commerce Secretary Wilbur Ross, whose ongoing business ties to members of Russian President Vladimir Putin’s inner circle were revealed in the Paradise Papers.

Part of the controversy facing Ross has surrounded his ethics and financial disclosures, and whether he adequately revealed his interest a shipping firm, Navigator Holdings, that earns millions each year from a Russian energy company with close ties to the Kremlin.

Yesterday Forbes reported another alleged issue with Ross’ finances – in particular with $2 billion left off his government disclosure forms that Ross said he had shifted into trusts that benefit his family. Forbes investigated these assets and came to an unexpected conclusion:

And after one month of digging, Forbes is confident it has found the answer: That money never existed. It seems clear that Ross lied to us, the latest in an apparent sequence of fibs, exaggerations, omissions, fabrications and whoppers that have been going on with Forbes since 2004. In addition to just padding his ego, Ross’ machinations helped bolster his standing in a way that translated into business opportunities.

Ross was removed from Forbes’ list of America’s 400 richest people in 2017.

In a separate development, Ross announced that he had divested his shares in another shipping company, Diamond S Shipping.  Earlier this year, the Center for Public Integrity reported on potential conflicts of interest arising from the company’s funding from a Chinese investment fund, Chengdong Investment Corp., which is controlled indirectly by China’s communist government.

It was not clear when Ross divested his stake in Diamond S Shipping, which he had indicated in his ethics agreement that he intended to retain while he served as Commerce Secretary.

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