These Are the
Appleby is a market leader in the offshore business, with annual revenues of $100 million, 470 employees and offices in nearly every major tax haven. Appleby was founded in Hamilton, the capital of Bermuda. The building the law firm occupies there today may be unspectacular, but its roster of clients is not. It includes princesses, prime ministers and Hollywood stars, along with some of the world’s richest oligarchs from Russia, the Middle East, Asia and Africa.
Appleby likes to boast that its operations are absolutely clean and professional. But now Read the story: The Firmthe law firmRead the story: The Firm is at the center of the Paradise Papers, an international investigative reporting project that leads directly into the shadowy world of big money. The Süddeutsche Zeitung obtained close to 13.4 million documents. They demonstrate how some clients use offshore companies to mask criminal activity or conceal money from dubious sources. The documents, for instance, expose previously unknown links between a secretary in U.S. President Donald Trump’s cabinet and Russian oligarchs. In fact, information on more than a dozen of Trump’s advisers, cabinet members and major donors can be found in the leaked data.
A Network that Spans the Globe
The documents show how corporations like Nike, Apple, Uber and Facebook have found ways to reduce their taxes to astoundingly low rates. The Paradise Papers also provide evidence of assets in tax havens held by Read the story: Henry and the Queenthe British queenRead the story: Henry and the Queen, the rock star Bono and Stephen Bronfman, the chief fundraiser for Canadian Prime Minister Justin Trudeau. They reveal the extent to which political elites exploit this secretive world: More than 120 politicians from almost 50 different countries are involved in one way or the other.
In Germany, the trail leads to around 1,000 clients, beneficiaries or otherwise involved persons – although those links do not automatically imply illegality. Among those using offshore structures are billionaires, aristocrats, entrepreneurs, heirs, investors, individuals convicted of fraud and past politicians, but also companies like car rental giant Sixt, postal service provider Deutsche Post, the hotel chain Meininger, Siemens, Allianz, Bayer and Deutsche Bank. The Süddeutsche Zeitung is covering every instance in which there is an obvious public interest.
The documents offer a glimpse into a world that has been custom-tailored to fit the needs of major corporations, the rich and the super-rich. They crack open the door to an industry that promises utmost secrecy, exposing a previously invisible network that spans the globe.
The Paradise Papers show how inextricably linked the offshore world and industrialized nations have become. As part of the reporting for this project, economist Gabriel Zucman quantified the size of this discreet realm and found that multinational corporations shift more than 600 billion euros a year through tax havens.
That means in the time you’ve spent reading this article so far, corporations have shifted
through tax havens.
But tax havens don’t only help corporations avoid taxes – they do the same for private individuals, too. And besides skirting taxes, wealthy people can also circumvent laws they find bothersome, whether they concern inheritances, liability issues or even creditor protection.
“There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose,” said sociologist Brooke Harrington, a certified wealth manager and Copenhagen Business School professor who is the author of “Capital without Borders: Wealth Managers and the One Percent.” These people “live the dream” of enjoying “the benefits of society without being subject to any of its constraints.”
Two groups of people that are conspicuously absent from the Paradise Papers are those with average salaries and low-wage earners. After all, before anyone can profit from the offshore system, they have to be able to afford it. Ultimately, though, this system comes at a cost to everyone else. It deprives national economies of billions in tax revenues that are critical for things like keeping hospitals running, creating daycare facilities and making our streets safer.
The dimensions of the problem are illustrated in one of Zucman’s calculations: The super-rich have parked 7.9 trillion euros in tax havens.
The offshore system exaggerates wealth and exacerbates poverty. Business deals in developing nations in particular often include suspiciously favorable conditions – to the detriment of local populations. Documents from this leak show how the Swiss commodities giant Glencore exploited political power structures in Democratic Republic of the Congo with the help of an Israeli businessman. A reconstruction of events surrounding the jostling for mining licenses arouses suspicion that bribes were paid to one or more Congolese politicians or officials during the negotiations. The Paradise Papers shed light on this shadowy world. They illuminate the nexuses of the globalized economy and peek behind the closed doors of the rich and powerful.
Not One, But 21 Leaks
The new leak is comprised of information from 21 different sources. The Süddeutsche Zeitung was provided with confidential documents from two firms that specialize in providing services for offshore companies. The first is the aforementioned Appleby. The other is the smaller fiduciary company Asiaciti Trust, headquartered in Singapore. The Süddeutsche Zeitung also received internal data from company registers in 19 tax havens, including Bermuda, the Cook Islands and Malta. The Paradise Papers are, in effect, an amalgamation of 21 different collections of data. To protect its sources, the Süddeutsche Zeitung will provide no details regarding how the information reached the newspaper, who provided it or when it was received.
As with the Panama Papers before it, the Süddeutsche Zeitung shared the data with the You can also read ICIJ's reportingInternational Consortium of Investigative Journalists (ICIJ)You can also read ICIJ's reporting in Washington. And once again, an international team of reporters spent close to a year working to filter out the best stories.
Media organizations publishing the Paradise Papers include the New York Times, the Guardian, the BBC, Le Monde and La Nación, among many others. In total, more than 380 journalists from 96 media outlets in 67 countries were involved. In Austria, it was ORF and the Vienna-based weekly magazine Falter; in Switzerland, the Tages-Anzeiger and the Sonntagszeitung; in Germany, besides the team at the Süddeutsche Zeitung, public broadcasters Norddeutscher Rundfunk (NDR) and Westdeutscher Rundfunk (WDR) were also on board.
The Message the New Leak Sends
The team How the SZ conducted its research and reportingverified the authenticity of the documentsHow the SZ conducted its research and reporting with the aid of numerous sources. These included publicly accessible company registers, archives, court documents, material from previous leaks, interviews with tax experts, lawyers, investigators and government agencies.
The message of the new leak is clear: No politician, major corporation, sanctions violator, tax evader or behind-the-scenes puppet master can rest assured that their surreptitious business dealings will stay out of the public eye. Whatever happens in the dark corners of the world of international finance can always be brought to light.
And without further ado: the Paradise Papers.