Money, it’s a gas
Grab that cash with both hands and make a stash
New car, caviar, four star daydream,
Think I’ll buy me a football team
(Pink Floyd, “Money”)
If it’s true that art imitates life, as the saying goes, it is equally true that money imitates art. By that I mean it money creates images, scenarios, and situations that are so fantastic they seem implausible, a sort of conspiracy theory ethos.
Want proof of the craziness that money creates? Look no further than the Pandora Papers. Aptly named for the Greek goddess Pandora, who opened up a jar and unleashed all manner of evil upon the world (Pandora’s “box”), the Pandora Papers are a cache of revelatory documents that “lays bare the global entanglement of political power and secretive offshore finance,” according to the International Consortium of Investigative Journalists (ICIJ), the organization that obtained the documents through “most expansive leak of tax haven files in history.”
The ICIJ findings sound like the bastard child of a James Bond and Wolf of Wallstreet union. As ICIJ puts it:
“An 11-year-old boy from Azerbaijan who owned nearly $49 million of prime commercial real estate in London. A Czech prime minister who loaned himself 15 million euros to buy a French chateau. The unofficial wife of a Kazakh president who received a mysterious $30 million payment. A Serbian politician who swore he didn’t own 24 seaside apartments, but really did.
What do all these stories have in common? We found them hidden deep within the files of the global offshore service industry: a coterie of bankers, lawyers, accountants, and registration agents who help hundreds of billions of dollars move undetected around the world every year.”
The list reads like a who’s who of the nexus where big money meets politics, where wealth seems to have no bounds or limitations and is exchanged for an even more potent currency: power and secrecy. The Guardian reports “They expose the secret offshore affairs of 35 world leaders, including current and former presidents, prime ministers and heads of state. They also shine a light on the secret finances of more than 300 other public officials such as government ministers, judges, mayors and military generals in more than 90 countries.”
The ICIJ identifies these people as “more than 130 billionaires from 45 countries including 46 Russian oligarchs,” adding that “In 2021, according to Forbes, 100 of the billionaires had a collective fortune of more than $600 billion” with clients that include “bankers, big political donors, arms dealers, international criminals, pop stars, spy chiefs and sporting giants.”
Take, for example, Heydar Aliyev, the 11-year-old son of Azerbaijan’s authoritarian president, Ilham Aliyev who “ managed to become the owner of 33.5 million pounds (US$ 48.9 million) of prime commercial real estate in the heart of London” according to the Organized Crime and Corruption Reporting Project (OCCRP).
Of course, nobody in the neighborhood was even remotely aware of who actually owned the real estate because Aliyev cloaked his identity in a shell company. As OCCRP points out, “On paper, the owner of the property was a company, Mallnick Holdings S.A., set up in the British Virgin Islands. The fact that it had been acquired by an associate of President Aliyev and then handed over to his young son was hidden, thanks to the Caribbean territory’s strict corporate secrecy.”
And the British apartments are merely the tip of the proverbial iceberg. Digging a little deeper, OCCRP found “84 previously unknown offshore companies, registered in the British Virgin Islands, that the Aliyevs and their associates have owned since 2006.” Moreover, OCCR found that “The companies appear to be managed as a closely-knit system: Again and again, the leaked records show, groups of them filed paperwork or changed directors on the very same day. Their owners and directorships were also frequently shuffled among the same small group of people.”
OCCRP evidence paints a disturbing picture of the ultra-connected who use a network of lawyers, offshore bank accounts, and shell corporations to hide and potentially launder their money, money obtained in questionable ways. And make no mistake, this is not just about money. This is how a ruthless dictator profited immensely even as his own people suffered under his authoritarian rule.
In response to the military conflict between Azerbaijan and Armenian forces, Ilham Aliyev used the rapidly evolving chaos as a pretext to strip Azerbaijan citizens of legal and civil rights.
As Amnesty International reports: “Authorities intensified a clampdown on dissent using the conflict with Armenia and the COVID-19 pandemic as a pretext. Dozens of opposition leaders and activists were arbitrarily arrested and detained. Freedoms of assembly and expression were further restricted in response to growing public discontent; freedom of association remained curtailed. Lawyers were harassed and reports of torture and other ill-treatment of government critics in detention remained widespread.”
Aliyez is emblematic of a darker, more sinister reality lurking below the surface of posh real-estate investments funded by dubious means. As OCCRP frames it, “But this system is also exploited by organized crime groups, and is also increasingly being used by corrupt leaders to stash their own ill-gotten gains abroad. Tax avoidance alone is estimated to cost the world’s poorest countries $200 billion a year — far in excess of what they receive in development assistance.”
These are not isolated or unrelated cases but are rather indicative of an elaborate system of interconnected organizations such as banks, holding companies, and a host of middlemen that form a complex and protective set of barriers that serve to insulate the most corrupt figures from outside prying eyes, including their own governments and international regularly authorities, by washing dirty money in an untraceable fashion. OCCRP states, “Over the years, OCCRP has exposed multiple massive operations for laundering dirty cash — known as ‘laundromats’ — connected to corrupt elites in countries such as Russia and Azerbaijan. Such schemes usually use layers of offshores and proxy owners in order to obscure their operations and the source of their money.”
Oliver Bullough, author of Moneyland: The Inside Story of the Crooks and Kleptocrats Who Rule the World, argues, “This is the place that I call Moneyland — Maltese passports, English libel, American privacy, Panamanian shell companies, Jersey trusts, Liechtenstein foundations, all added together to create a virtual space that is far greater than the sum of its parts. The laws of Moneyland are whichever laws anywhere are most suited to those wealthy enough to afford them at any moment in time.”
Bullough’s work focuses on the greatest movers and shakers in this world, a group of Kleptocrats who make up a loosely associated cabal of the world’s richest and most privileged that live in a universe of their own making and rules. In this sense, the Pandora Papers expose the ugly realities of globalization, namely those actors that regularly exploit its boundaryless megastructures.
As Bullough states, “It’s what I call the dark side of globalization, the way that money can move between jurisdictions and hide its ownership. And once you can hide your ownership of money, then you can essentially never have to account what you do with it or where it comes from. What’s happened to Russia is just one of the most grotesque examples of a sort of malaise that is afflicting the whole world. We prefer to talk about nasty Mr. Putin, when actually it’s this system of evading responsibility that’s causing all the damage.”
While many of the figures named are unknown to most people, some are likely to be recognized. Russian Television reports that “Ukrainian President Volodymyr Zelensky, Czech President Andrej Babiš, and former British Prime Minister Tony Blair as those storing money offshore.”
As more information comes forward from the OCCRP analysis, looking for more potentially vulnerable political figures to be exposed. OCCRP labels these folks as a “politically exposed person” (PEP), “someone who has been entrusted with a prominent public function, such as a member of parliament, a minister, an ambassador, or a judge, or an immediate family member of such a person.”
All of this information comes with caveats, however. As the ICIJ themselves state, “”There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any people, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.”
James Tweedy, writing for Sputnik Internations claims the report is “The latest ‘Big Nothingburger’ from the well-funded team behind the 2016 Panama Papers is heavy on the sauce, but thin on meat. But that hasn’t stopped the media from running wild with claims of shady dealings by leaders from the developing world and Eastern Europe.”
Moreover, journalist Max Blumenthal, formerly with Russian Television and currently editor-in-chief of The Grayzone, tweeted that the “Pandora Papers look like another US intel leak/hack-and-dump, complete with Luke Harding listed on the Guardian reporting team.”
More to the point Tweedie calls into question the funding of the IJIC, writing:
I’m sure Tweedeis background and Russian connections may raise a few eyebrows, as well, however. Once again, for the average person trying to get at the truth, it’s a bit bewildering.
To read more about the Pandora Papers firsthand, click here.
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