Summary
Here’s a summary of the main revelations from Pandora papers today and the fallout from them:
- Heads of government, oligarchs, business tycoons, ruling families and a Middle Eastern monarch are among the anonymous owners of at least £4bn in UK property, the papers reveal. The Guardian has been able to identify about 600 individuals who used secretive offshore companies to keep their British property acquisitions confidential.
- Millions of pounds of British real estate is tainted by money made at the heart of one of corporate history’s largest proven bribery scandals, the papers show. The documents suggest that proceeds made by, Unaoil, a firm owned by the British-Iranian brothers Cyrus and Shaman Ahsani were laundered through an intricate chain of offshore companies that secretly helped fund the acquisition of a string of UK properties.
- Ben Elliot, the Conservative party’s embattled co-chair, jointly owned a secret offshore film financing company that indirectly benefited from more than £120,000 of UK tax credits. The revelation that Elliot has a British Virgin Islands-based company – which he owns with Ben Goldsmith, the brother of the Tory peer and minister Zac – will raise fresh questions for the businessman, whose courting of ultra-wealthy but controversial political donors has already provoked widespread criticism.
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EU finance ministers have removed Anguilla, Dominica and Seychelles from the EU blacklist of tax havens, ignoring critics in the European parliament who described the move as wrong and “grotesque” in the wake of the Pandora papers revelations. Oxfam’s EU tax expert, Chiara Putaturo, said. “Today’s decision to delist Anguilla, the only remaining jurisdiction with a 0% tax rate, and the Seychelles, which are at the heart of the latest tax scandal, renders the EU’s blacklist a joke.
- Pressure is growing on the government to table new legislation that would unmask those who own property in Britain via offshore companies. Transparency International UK said the draft Registration of Overseas Entities bill should be debated before Christmas. The LibDems said it should be tabled as soon as parliament returns this month.
- Douglas Latchford, a leading scholar on Khmer antiquities, used offshore tax havens to pass his assets, including plundered artefacts, to his daughter to avoid them becoming liable to UK inheritance tax. The papers how how Latchford formed two trusts in Jersey, and named Julia Latchford and other members of the family as beneficiaries.
- Pakistan’s prime minister, Imran Khan, is to head an “investigative cell” to investigate the Pandora papers. The federal information minister, Fawad Chaudhry, said the investigation cell will probe all Pakistani citizens named in the leak and report to the nation.
That’s it for the blog today. You can follow all the latest Pandora papers here.
Updated
“Access to British politics – and in particular the Johnson Tories – has been bought wholesale by a new class of tycoon funders,” argues Peter Oborne.
They may be British citizens but in many cases they pay very little tax in this country, and are in many cases essentially based offshore.
It is Boris Johnson who has been the most shameless by far about this arrangement. On becoming Tory leader he appointed Ben Elliot, whose former business clients include Mohamed Amersi, who looms large in the Pandora papers) as Tory co-chair. This appointment changed the structure of the British Tory party. And it is no surprise to learn, courtesy of the Pandora papers, that Elliot jointly owned a secret offshore film financing business ...
The Ben Elliot model for the Tory party is based on his business. Quintessentially it is a concierge service for rich people who want introductions and invitations at the top level of society. Amersi has deliciously called the system “access capitalism”, a term that deserves to find its way into a dictionary of quotations. You buy your way in.
Elliot will be remembered for turning politics into a financial commodity. Now he needs to come out in public and answer urgent questions: who investigates Tory donors? Does it matter if they don’t pay tax? Do you care if they have a murky past? Where do you stand on tax havens?
It’s not just Elliot who needs to break the habit of a lifetime and answer questions. Now that Pandora’s box has been well and truly opened. Johnson, the big winner from this rotten financial system, needs to explain to British voters why the Tory party appears to be funded by a new class of super-rich tax avoiders.
And tell us what they get in return.
US Senator Elizabeth Warren says it “outrageous” that South Dakota is sheltering billions of dollars in wealth, as the Pandora Papers reveal.
It's outrageous that the US has become an international tax haven. We should use the reconciliation bill to close trust loopholes and give the IRS the resources to unravel the complex schemes of corporate tax cheats and the ultra-wealthy.https://t.co/qNCXiqTHgZ
— Elizabeth Warren (@SenWarren) October 5, 2021
The Liberal Democrats have demanded that the UK government bring in long-delayed legislation to tackle money-laundering through UK properties as soon as parliament returns later this month.
Liberal Democrat foreign affairs spokesperson Layla Moran said:
The stench of corruption and sleaze at the heart of the Conservative party is becoming hard to ignore.
The Conservatives have been sitting on this legislation for years, despite repeatedly promising to act. In that time millions of pounds-worth of UK property has been bought using offshore firms, including it seems by major Conservative party donors.
The government must introduce this long-delayed legislation as soon as parliament returns. The longer they wait, the more this looks like a deliberate delay to help their wealthy donor friends.
Updated
The Pandora papers may help HM Revenue & Customs claw back some tax as it did with previous financial leaks, according Rachel Clark, an associate barrister at Bright Line Law, a legal firm that specialises in financial crime.
In an email, she says:
HMRC will need to open the box and painstakingly compare the new data with information it already has on file, to decipher whether the Pandora papers contain any actionable information – for example, evidence of ineffective tax avoidance schemes, or even tax evasion.
There can be a crucial difference between embarrassing information, and information which allows HMRC to pursue an individual for unpaid tax. Only time will tell whether the Pandora papers are as rich in actionable information as they are in political reveals.
Bearing in mind the 2019/20 tax gap of £35bn, some funds may eventually be clawed back. HMRC has had some successes in the past – as at November 2020, its work on the Panama Papers had produced about £190 million in yield.
Updated
Notorious dealer used trusts to hoard Khmer treasures
Douglas Latchford, a leading scholar on Khmer antiquities, used offshore tax havens to pass his assets, including plundered artefacts, to his daughter to avoid them becoming liable to UK inheritance tax, the Pandora papers reveal.
They show how Latchford formed two trusts in Jersey, both named after Hindu gods: the Skanda Trust in 2011 and the Siva Trust in 2012. Julia Latchford and other members of the family were beneficiaries, and she was a trustee of the Skanda Trust. Another trustee was a company, Skanda Holdings (PTC) Limited, registered in the British Virgin Islands, with Douglas Latchford, and Julia’s husband, Simon Copleston, its directors.
Read more here:
Moonis Elahi, a prominent minister in Imran Khan’s government, is one of 700 Pakistanis named in the papers. The documents reveal he contacted an offshore provider in Singapore about investing $33.7m.
Elahi has pointed out that he does not own any offshore company or undeclared assets.
I do not own any offshore company nor do I have any assets which have not been declared. I refute all assertions to the contrary.
— Moonis Elahi (@MoonisElahi6) October 5, 2021
Luke Harding, who also worked on the Ben Elliot story, neatly sums it up:
Boom! #Tory party co-chairman Ben Elliot set up a secretive firm in the British Virgin Islands to fund a documentary, Fire in Babylon. The film made a loss - and received a £121K credit from the UK taxpayer, which went back offshore... #PandoraPapers https://t.co/eZuzaagMgS
— Luke Harding (@lukeharding1968) October 5, 2021
Boom! #Tory party co-chairman Ben Elliot set up a secretive firm in the British Virgin Islands to fund a documentary, Fire in Babylon. The film made a loss - and received a £121K credit from the UK taxpayer, which went back offshore... #PandoraPapers https://t.co/eZuzaagMgS
— Luke Harding (@lukeharding1968) October 5, 2021
No rules appear to have been broken and the documentary about the West Indies cricket side was a critical success. Experts, however, suggest the #offshore structure was used for tax avoidance purposes, with profits from TV sales abroad circumventing UK tax https://t.co/M0B4iEKFyo
— Luke Harding (@lukeharding1968) October 5, 2021
In July 2020 Elliot showed the offshore-funded film to Boris Johnson, Carrie, and the chancellor Rishi Sunak, at a private screening in the PM's No 11 Downing Street flat. Goldsmith was invited to come along too. "They loved it," he said
— Luke Harding (@lukeharding1968) October 5, 2021
Goldsmith told me a group of cricket enthusiasts chipped in 5K-100K each. All - bar two - were based in the UK. The "loan" used to make the documentary came from offshore, however, and at the time Goldsmith was a "non-dom". He says he is now registered in the UK for tax purposes
— Luke Harding (@lukeharding1968) October 5, 2021
Goldsmith told me a group of cricket enthusiasts chipped in 5K-100K each. All - bar two - were based in the UK. The "loan" used to make the documentary came from offshore, however, and at the time Goldsmith was a "non-dom". He says he is now registered in the UK for tax purposes
— Luke Harding (@lukeharding1968) October 5, 2021
Updated
Tory co-chair’s offshore film company indirectly benefited from £121k tax credits
Ben Elliot, the Conservative party’s embattled co-chair, jointly owned a secret offshore film financing company that indirectly benefited from more than £120,000 of UK tax credits.
The revelation that Elliot has a British Virgin Islands-based company – which he owns with Ben Goldsmith, the brother of the Tory peer and minister Zac – will raise fresh questions for the businessman, whose courting of ultra-wealthy but controversial political donors has already provoked widespread criticism.
The Pandora papers leak shines a light on a BVI company Elliot and Goldsmith created to fund the making of Fire in Babylon, the pair’s 2010 documentary film about the great West Indies cricket team of the 1970s and 80s.
Analysis of financial disclosures suggests the duo’s BVI company held a controlling stake in a British subsidiary that made the film. The UK company received a £600,000 loan from its BVI parent in 2008, plus £121,000 from a government scheme designed to incentivise film production in the UK between 2009 and 2011.
The film made a small loss, and without the tax credits the subsidiary would not have been able to fully repay its offshore creditors, the largest of which was Elliot’s and Goldsmith’s BVI company, which had loaned the UK business most of its funds.
While the arrangement does not appear to have breached any tax regulations or laws, it does raise questions about whether government film schemes should be helping to fund projects that are controlled in a tax haven. If Fire in Babylon had become profitable, then the structure might also have provided some tax advantages.
Elliot, a well-connected Old Etonian and the nephew of the Duchess of Cornwall, co-owns luxury concierge group Quintessentially, which has earned him a reputation as a fixer for the super-rich. He is credited with raising a record £37m for the Tories’ general election campaign in 2019.
Goldsmith, who also attended Eton, is a financier and a non-executive director at the Department for Environment, Food and Rural Affairs (Defra), where his brother is a minister.
Both Elliot and the Goldsmiths are close to Boris and Carrie Johnson. In July 2020, Elliot screened Fire in Babylon for the prime minister and his wife at their Downing Street flat, with the chancellor, Rishi Sunak, and Ben Goldsmith also present.
Read the full story here:
Updated
Money from ‘world’s biggest bribe scandal’ invested in UK property
Millions of pounds of British real estate is tainted by money made at the heart of one of corporate history’s largest proven bribery scandals, the Pandora papers show.
For 17 years, the British Iranian Cyrus Ahsani and his brother, Saman Ahsani, worked as fixers for multinationals such as Rolls-Royce, bribing officials in Algeria, Angola, Azerbaijan, the Democratic Republic of the Congo, Iran, Iraq, Kazakhstan, Libya and Syria.
The Guardian has seen leaked documents that suggest how proceeds made from the family’s firm, Unaoil, were laundered through an intricate chain of offshore companies that secretly helped fund the acquisition of a string of UK properties.
The Pandora papers contain a cache of documents that appears to show how at least £7.5m of Unaoil proceeds were funnelled via offshore companies into investment funds and blended with funds from outside investors.
It appears that this money was then invested on the advice of a separate Ahsani business in London to acquire seemingly unremarkable – and often unscrutinised – assets, including a multiplex cinema in Sunderland, a Humberside business park and an office block in Slough.
The portfolio was worth in excess of £200m, according to the Guardian’s analysis of public documents .…
The disclosures are likely to raise questions for the Serious Fraud Office. The agency has not launched legal action to confiscate the money accumulated by the Ahsanis, even though the family was the focus of one of its most high-profile criminal investigations.
Read the full story here:
Updated
An editorial in The Times calls for transparency in offshore property. It says the Pandora papers …
Reveal the inner workings of a shadow economy in which wealthy autocrats, sometimes using money of unknown origin, can buy power and influence in the West. It is a process that strikes at the very heart of democracy and should shake up the British establishment which has made itself complicit in what some suspect is a Russian attempt to turn London and the Home Counties into a giant laundromat.
Liz Truss, the foreign secretary, suggested at the weekend her aim would be to build up “the freedom-loving pro-democracy grouping of countries ... so non-aligned countries aren’t pulled into the orbit of authoritarian regimes”. Ambitious words for an aspiring Global Britain but the country has put itself at the disposal of autocrats everywhere; a sprawling army of lawyers, financial fixers, property scouts and public relations advisers have erected a system that essentially sells secrecy to the super-rich. Through complex webs of shell companies and offshore tax havens, fortunes can be hidden. As long as Britain actively seeks these roles, no strongman in Russia or central Asia need worry overmuch about being accountable to his citizens.
The Spanish newspaper, El Pais, says tax havens undermine democracy:
The rotten system of tax havens creates a long list of nefarious consequences that undermine trust in democracy: it erodes collective morals on the duty to pay taxes, it reroutes trade and investment flows, it creates unfair asymmetries between some companies and their competition, it shifts capital to other territories, it corrupts the middlemen and foments a passive attitude by professional associations that engage in ethical relativism. Action on this front is not just a fair popular demand, it is a need of the state. Harmonizing tax rules at a global level is no doubt indispensable, but in addition, individual states urgently need to step up efforts against homegrown fiscal crimes, reinforce bans on eligibility for government contracts and subsidies (including the EU’s Next Generation funds) for companies and banks operating in tax havens, and to create “quarantines” for certain professionals, such as state solicitors and tax inspectors, who later go work for the same people they once used to track down. In short, there is still effective leeway for political action against perpetrators of high-level tax fraud.
“The stashing of vast quantities of cash in tax havens must be stopped”, says The Guardian.
As a matter of course, and in spite of their immense personal advantages, the ultra-rich are ripping off everyone else. They do this by refusing to pay their share towards the services and resources (health, education, energy, water and governance) on which everyone depends. And they are facilitated and encouraged in this by an industry whose purpose is to shield their wealth and conceal what they are up to.
Underpinning this international tax avoidance infrastructure is the idea that rich people and companies should be allowed to do what they want; that governments’ claims on their money are in some sense unreasonable or unjust. How deeply antisocial this belief and its adherents are has never been better illustrated than now, in the middle of a pandemic and on the brink of climate disaster. Rarely, if ever, has the pooling of global resources to solve our collective problems been more necessary.
Updated
Faisal Vawda, a Senator in Pakistan named in the Pandora Papers, has volunteered to be the first subject of a government investigation ordered into the leak.
The papers reportedly show that Vawda set up an offshore company in 2012 to invest in UK properties. The prime minister, Imran Khan, is to lead an investigation into the 700 Pakistanis named in the papers.
Vawda welcomed the probe.
Only Imran Khan can take bold decision of Pandora Papers inquiry. I welcome it and request PM Imran Khan to direct the inquiry team to work 12-14 hours on daily basis and bring the result in 5 days and nation should see it.They should START WITH ME taking it as a test case
— Senator Faisal Vawda (@FaisalVawdaPTI) October 5, 2021
The Washington Post’s Beirut bureau chief, Liz Sly, has this:
Lots of countries have ordered investigations as a result of the Pandora Papers eg India, Pakistan, Spain, Australia, Mexico.
— Liz Sly (@LizSly) October 5, 2021
-Two countries that haven’t: Lebanon and the UK.
-The two countries with the most companies mentioned: Lebanon and the UK
EU ignores critics by removing three tax havens from blacklist
EU finance ministers have removed Anguilla, Dominica and Seychelles from the EU blacklist of tax havens, ignoring critics in the European parliament who described the move as wrong and “grotesque” in the wake of the Pandora papers revelations.
Meeting in Luxembourg on Tuesday, the bloc’s 27 finance ministers approved a decision to remove the three jurisdictions from the blacklist, saying that while they “do not yet comply with all international tax standards” they “have committed to implementing tax good governance principles”.
The EU tax haven list, created in 2017 to clamp down on tax avoidance and tax evasion, now has nine jurisdictions blacklisted as “non-cooperative”: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.
Responding to the decision, Oxfam accused the EU of closing its eyes to tax havens, including those used by political leaders and business tycoons featured in the Pandora papers.
Oxfam’s EU tax policy adviser, Chiara Putaturo, said in a statement:
Today’s decision to delist Anguilla, the only remaining jurisdiction with a zero per cent tax rate, and the Seychelles, which are at the heart of the latest tax scandal, renders the EU’s blacklist a joke.
📢 BREAKING: EU updates its #taxhavens list ‼️
— Oxfam EU (@OxfamEU) October 5, 2021
This update fails to penalise tax havens. Instead, it lets them off the hook...
Read @Oxfam's reaction 👉https://t.co/4LTZu0QUg7#ParadisePapers #TaxTwitter pic.twitter.com/79fD0Xw1nN
MEPs across the political spectrum have also criticised the EU blacklist for leaving out major tax havens. Ahead of the decision, German Green MEP Sven Giegold said removing the three jurisdictions was grotesque.
The Pandora papers should be a wake-up call, Giegold added:
The Pandora papers show that the advances in international tax cooperation are not enough. The global minimum tax only applies to large corporations, but not to the letterbox companies of the wealthy and corrupt. We need full international transparency about the real owners of letterbox companies and real estate.
Prior to the vast data leak, EU officials had begun discussions on whether to overhaul the criteria that determines which countries feature on the blacklist. Meanwhile, the European Commission has promised new legal proposals to crack down on shell companies before the end of the year.
In a change to its timetable, the European parliament will discuss the implications of the Pandora Papers on Wednesday.
Some of the issues on Parliament's agenda this week:
— European Parliament in ASEAN (@EPinASEAN) October 5, 2021
1️⃣ a more coordinated EU-US position on China
2️⃣ EU cybersecurity defence policy
3️⃣ the human rights situation in Myanmar
4️⃣ the Pandora Papers
5️⃣ action to halt global biodiversity loss.
More @ https://t.co/FtqqQo2zfn pic.twitter.com/TGjzq041Lh
Updated
Join us for a special livestreamed event looking in-depth into the Pandora papers investigation.
Speakers include the Guardian’s head of investigations, Paul Lewis, the director of the International Consortium of Investigative Journalists, Gerard Ryle, and the MP and former chair of public accounts committee, Dame Margaret Hodge.
Updated
London’s deputy mayor for housing, Tom Copley, criticises UK government inaction on offshore property held in London.
No surprise that a lot of this offshore-held property is in London. Action was promised on this by the Government as far back as 2015, yet six years later we are still waiting for legislation to introduce a transparent register of owners of UK property. https://t.co/QZQaGawuQs
— Tom Copley (@tomcopley) October 5, 2021
Guy Shrubsole, a campaigner for transparency on land and property ownership, points out that the biggest group of user of offshore companies are UK citizens.
'Pandora papers unmask owners of offshore-held UK property worth £4bn'
— Guy Shrubsole (@guyshrubsole) October 5, 2021
The most striking thing about this? How the biggest group of users of offshore companies are British: UK citizens making use of tax havens.https://t.co/B3stYYmyWK pic.twitter.com/2SAEZzOgs8
Updated
New legislation that would unmask those who own property in Britain via offshore companies should be tabled before Christmas, Transparency International UK has said.
The UK government’s draft Registration of Overseas Entities bill would close a loophole which allows individuals to buy and sell UK property anonymously by using companies registered in secrecy jurisdictions like the British Virgin Islands. The legislation should incorporate reforms to Companies House, which the government committed to in 2020.
Duncan Hames, director of policy at Transparency International UK, said:
Transparency over who really owns property here would go a long way to help solve the UK’s £100bn-a-year dirty money problem.
The government has already done much of the hard work on legislation that would lift the veil of secrecy provided by offshore companies, with a bill drafted and MPs and peers having already provided positive feedback.
If ministers are serious about tackling the flow of corrupt and criminal wealth into the property market, we see no reason why this could not be tabled before Christmas.
Imran Khan to lead 'investigative cell'
Pakistan’s prime minister, Imran Khan, is to head an “investigative cell” to investigate the Pandora papers, ARY news reports.
Federal Information Minister Fawad Chaudhry said the investigation cell will probe all Pakistani citizens named in Pandora Papers and will present facts before the nation.
The three-member investigative cell, formed to probe Pandora Papers exposé, will be headed by Prime Minister Imran Khan.
Furthermore, Federal Investigative Agency (FIA) and National Accountability Bureau (NAB) will assist three-member inspection cell in the investigation, said sources.
The papers reveal that Moonis Elahi, a prominent minister of Khan’s government, contacted an offshore provider in Singapore about investing $33.7m.
Updated
Here’s how Kenya’s news channel NTV Kenya is reporting on what the papers exposed about the finances of country’s president, Uhuru Kenyatta.
He is coming under pressure to explain why he and his close relatives amassed more than $30m of offshore wealth. He has promised a full explanation when he returns from an overseas trip.
Mohammed Amersi, the Conservative donor who the papers revealed advised on a the structure of a telecoms deal that was later found to be a bribe, has called for a “special investigation” into conflicts of interest surrounding the Tory co-chairman Ben Elliot, Sky News reports.
In July, Amersi alleged that the Tory party was operating an “access capitalism” scheme for major donors like himself. “You get access, you get invitations, you get privileged relationships, if you are part of the setup,” he said.
After he became leader, Johnson made Elliot his fundraiser-in-chief. Elliot then raised a record £37m for the party’s 2019 general election campaign.
Speaking to Sky on Monday, Amersi said:
[Ben Elliot] has done a great job in terms of raising money.
If there are any lapses in governance … they can be easily structured and addressed. Then the party and the board has to see whether he is somebody who’s willing and able to work within those structures.
If the answer to that is yes, give him a chance. If the answer to that is no, then perhaps invite him to reconsider his position.
On Monday, Johnson insisted that all donations to the Conservative party were properly vetted.
Elliot refused to respond to questions by Sky’s reporter Joe Pike.
Updated
Boris Johnson was not asked about the Pandora Papers in a round of four media interviews this morning.
But in the US the leak did make the Late Show with Stephen Colbert.
Odd that in an extended interview Boris Johnson wasn’t asked once about Mohamed Amersi #r4todayhttps://t.co/XhoWNUs46l
— Aditya Chakrabortty (@chakrabortty) October 5, 2021
Updated
Welcome to our continuing live coverage of the fallout and reaction to the Pandora Papers - a massive data leak of previously secret offshore holdings.
The revelations have exposed EU plans on tax havens as inadequate and “absurd”, according to MEPs.
European politicians from across the spectrum have criticised the expected removal of Anguilla, Dominica and Seychelles from the EU tax haven blacklist, a decision expected to be rubber stamped by EU finance ministers on Tuesday.
Meanwhile, the Conservative Party is under pressure to return £750,00 of donations from Mohammed Amersi after the papers revealed he advised on the structure of telecoms deal that was later found to be a bribe.
You can watch Conservative MPs dodging questions on the issue at the party’s conference in Manchester, here:
On our Today in Focus podcast, the Guardian’s head of investigations, Paul Lewis, says the revelations raise important question about politics, money and transparency in the UK.
