Paradise Papers: Names of the rich linked to offshore accounts

Last Updated Nov 6, 2017 1:59 PM EST

The Paradise Papers released over the weekend offers a trove of data on the offshore financial activity of some of the world's richest individuals and companies, raising a host of questions about investment ties and tax avoidance. 

The documents are also prompting fresh attacks on the House tax reform proposal, with critics saying that new loopholes that would be created under the bill would encourage more corporations to shift their profits outside the U.S. Several people within the Trump administration have offshore ties -- such as investments in companies and funds set up in tax havens -- including Commerce Secretary Wilbur Ross, according to a review of the documents from the International Consortium of Investigative Journalists and the German newspaper Süddeutsche Zeitung. 

The documents follow up on the disclosures revealed last year in the Panama Papers, a leak that linked politicians, actors and billionaires to a web of offshore holdings. While offshore accounts aren't in themselves illegal, they can help big corporations and the rich hide assets and avoid taxes, an issue that's increasingly in the spotlight amid widening income inequality. 

The Paradise Papers come as President Donald Trump is vowing to reform the U.S. tax system to benefit the middle class. But the Republican tax bill proposed last week includes some loopholes such as allowing deferred foreign income to qualify for a tax rate as low as 5 percent. That effectively rewards past profit-shifting behavior, said Kimberly Clausing, professor of economics at Reed College, on a conference call to discuss the Paradise Papers and tax reform. 

The release of the Paradise Papers should be a wake-up call to examine the GOP tax bill in greater detail, said Rep. Lloyd Doggett, D-Texas, ranking member of the Tax Policy Subcommittee of the Committee on Ways and Means. 

"These reports raise a number of questions about a number of Trump allies, billionaire buddies and multinational corporations that have much to gain from the GOP bill," Doggett said on the conference call. Offshoring profits "shifts the cost of government to people that aren't as fortunate as Mr. Ross and other billionaires."

The Paradise Papers represent corporate records spanning decades from a global offshore law firm called Appleby and corporate services provider Estera, which split from Appleby in 2016. More than a century old, Appleby helps its clients by setting up offshore entities such as shell companies and trusts, according to the ICIJ. 

In a statement, Appleby said its firm hasn't done anything illegal

"There is no wrongdoing. It is a patchwork quilt of unrelated allegations with a clear political agenda and movement against offshore," the company said. It added that the leak was "a serious criminal act" and it is investigating an illegal computer hack. 

American individuals and corporations represent the largest share of addresses in Appleby's records, according to the ICIJ. Its clients also come from the U.K., China and Canada.

The leaks link Ross to a shipping company called Navigator Holdings, which has ties to Russian President Vladimir Putin's inner circle. According to the ICIJ, Ross' private equity firm was one of Appleby's biggest clients. 

While Ross diverted most of his holdings when he took his post as commerce secretary in the Trump administration, he maintained a stake in Navigator through two chains of Cayman Islands companies, the group said, citing Appleby files and public records. 

Navigator's biggest clients include Russian energy company Sibur, which is partly owned by Putin's son-in-law, Kirill Shamalov, and oligarch Gennady Timchenko, a friend of Putin's who was sanctioned by the U.S. in 2014. 

Commerce Department spokesman James Rockas said Ross "never met" Shamalov and has generally supported the Trump administration's sanctions against Russia, according to the ICIJ report. Rockas added that Ross has withdrawn from matters related to transoceanic shipping vessels and has met the "highest ethical standards."

Ross told Britain's Sky network that U.S. ethics officials who had reviewed his finances earlier this year did not ask him to sell his Navigator stock, and that he had listed the holding in his government financial disclosure forms and wasn't hiding anything.

"This would have been something not good had it not been disclosed, but it has been quite fulsomely disclosed," Ross said.

Others in Trump's administration and inner circle tied to offshore accounts include Rex Tillerson, the U.S. secretary of state and former CEO of ExxonMobil, and Gary Cohn, Trump's chief economic advisor, the ICIJ said. 

Among those calling for a slowdown on the GOP tax bill was Senator Bernie Sanders, I-Vermont, who said an investigation was warranted. 

Most notably outside the U.S., Queen Elizabeth II was linked to offshore investments in medical and consumer loan companies, as well as the rent-to-own retailer BrightHouse, which has been criticized as preying on low-income customers. U2 singer Bono was also linked to an offshore account, with The Guardian reporting he had used a Malta-based company to invest in a shopping center. 

Corporations including Apple, Nike and global mining giant Glencore appear in the leaked papers, the ICIJ said. Apple asked Appleby whether moving an Irish subsidiary to an offshore tax haven would allow it to conduct business "without being subject to taxation in those jurisdictions." 

Nike, for its part, created an offshore shell company to hold its "Swoosh" logo, the ICIJ said. Commodities trader Glencore, meanwhile, had its own room at Appleby's Bermuda office and used offshore havens to conduct business. 

Below are some of the notable figures named by the ICIJ as having offshore ties:

  • U.S. Secretary of Commerce Wilbur Ross
  • U.S. Secretary of State Rex Tillerson
  • Former Secretary of Commerce Penny Pritzker
  • Gen. Wesley Clark 
  • Former Canada Prime Minister Paul Martin
  • Former Canada Prime Minister Brian Mulroney
  • Former Canada Prime Minister Jean Chrétien 
  • Queen Elizabeth II
  • Bono 
  • Robert Mercer, CEO of Renaissance Technologies and a Trump backer


-- With reporting by The Associated Press