Thanks to the efforts of the German-based newspaper Süddeutsche Zeitung, more than 13.4 million documents dubbed the ‘Paradise Papers’ were released to journalists internationally. The documents, which were passed along to the International Consortium of Investigative Journalists, reveal many of the methods that multi-millionaires and billionaires use to protect wealth in tax havens.
More than half of the leaked documents are related to Appleby, a law firm founded in Bermuda in 1890 that is now considered a leading offshore law firm, according to Business Day.
The leaks showed that some of Appleby’s clients cover 120 individuals including Queen Elizabeth II, the Democratic donor George Soros, Bono, Paul Allen and Madonna, among others. The documents also revealed the activities of multiple international firms, including banking institutions like JPMorgan and businesses like Apple.
Details in the documents reveal that after the U.S. and Ireland investigated Apple’s alleged tax-dodging behaviors in 2013, the tech company’s legal advisers reached out to Appleby with questions about which islands could offer guaranteed tax exemption, according to the BBC. The company ultimately selected the territory of Jersey, located in the English channel, which has a 0 percent corporate tax rate.
Corporate evaders
Apple currently has $252 billion in offshore reserves, according to the BBC. By comparison, the United States has $124 billion, less than half Apple’s offshore wealth.
The documents also included some political revelations, including the detail that President Donald Trump earned more than $68 million from his stake in a Russian energy business, Sibur, owned by Russian President Vladimir Putin’s son-in-law Kirill Shamalov, according to Business Day.
The social media giants Twitter and Facebook both received substantial investments from Russian companies linked to Putin, according to NPR.
DST Global invested $191 million into Twitter, earning more than $1 billion when Twitter went public. Yuri Milner, owner of DST Global, also invested nearly $1 million into a real estate company founded by Jared Kushner, Trump’s son-in-law, according to NPR.
Offshore accounts
The ICIJ revealed that more than 31,000 U.S. citizens or U.S. residents have offshore accounts with better credit, more than any other country. However, ICIJ said China, Canada and the United Kingdom also produced some of the most customers for offshore tax havens.
Documents showed that Queen Elizabeth II has more than $13 million in offshore accounts, and for holding a stake in a fund that owns the rent-to-buy company BrightHouse, according to The Guardian.
BrightHouse has been criticized for exploiting families with its practices. Her estate released a statement claiming she was unaware of her investment in BrightHouse, which continued for 12 years, according to The Guardian.
