The Pandora Papers & our offshore legacy

Huzaima Bukhari & Dr. Ikramul Haq

Based upon the most expansive leak of tax haven files in history, the investigation reveals the secret deals and hidden assets of more than 330 politicians and high-level public officials in more than 90 countries and territories, including 35 country leaders. The Pandora Papers lays bare the global entanglement of political power and secretive offshore finance—The largest investigation in journalism history exposes a shadow financial system that benefits the world’s most rich and powerful, International Consortium of Investigative Journalists (ICIJ)

A new investigation published on October 3, 2021 by ICIJ, titled, Offshore havens and hidden riches of the world leaders and billionaires exposed in the unprecedented leak,calledThe Pandora Papers, reads: “Millions of leaked documents and the biggest journalism partnership in history have uncovered financial secrets of 35 current and former world leaders, more than 330 politicians and public officials in 91 countries and territories, and a global lineup of fugitives, con artists and murderers. The secret documents expose offshore dealings of the King of Jordan, the presidents of Ukraine, Kenya and Ecuador, the prime minister of the Czech Republic and former British Prime Minister Tony Blair. The files also detail financial activities of Russian President Vladimir Putin’s “unofficial minister of propaganda” and more than 130 billionaires from Russia, the United States, Turkey and other nations”.

The Offshore havens and hidden riches of the world leaders and billionaires exposed in the unprecedented leak contains “the leaked records reveal that many of the power players who could help  bring an end to the offshore system instead benefit from it— stashing assets in covert companies and trusts while their governments do little to slow a global stream of illicit money that enriches criminals and impoverishes nations”.

The ICIJ obtained the “trove of more than 11.9 million confidential files and led a team of more than 600 journalists from 150 news outlets that spent two years sifting through them, tracking down hard-to-find sources and digging into court records and other public documents from dozens of countries. The leaked records come from 14 offshore services firms from around the world that set up shell companies and other offshore nooks for clients often seeking to keep their financial activities in the shadows. The records include information about the dealings of nearly three times as many current and former country leaders as any previous leak of documents from offshore havens”.

The details can be seen at:

The Pandora Papers, according to ICIJ, “in an era of widening authoritarianism and inequality”, provides “an unequaled perspective on how money and power operate in the 21st century—and how the rule of law has been bent and broken around the world by a system of financial secrecy enabled by the U.S. and other wealthy nations”. It is clear from the reading of the greatest leak so far the “deeply secretive finance has infiltrated global politics—and offer insights into why governments and global organizations have made little headway in ending offshore financial abuses.

According to ICIJ’s “analysis of the secret documents identified 956 companies in offshore havens tied to 336 high-level politicians and public officials, including country leaders, cabinet ministers, ambassadors and others. More than two-thirds of those companies were set up in the British Virgin Islands, a jurisdiction long known as a key cog in the offshore system”.

In fact, The Pandora Papers, “is larger and more global than even ICIJ’s landmark Panama Papers investigation, which rocked the world in 2016, spawning police raids and new laws in dozens of countries and the fall of prime ministers in Iceland and Pakistan.

While confirming the continuous legacy of offshore labyrinth, The Pandora Papers shows that “for a few hundred or a few thousand dollars, offshore providers can help clients set up a company whose real owners remain hidden. Or, for perhaps $2,000 to $25,000, they can set up a trust that, in some instances, allows its beneficiaries to control their money while embracing the legal fiction that they don’t control it—a bit of paper-shuffling creativity that helps shield assets from creditors, law enforcement and ex-spouses. Offshore operatives don’t work in isolation. They partner with other secrecy providers around the globe to create interlocking layers of companies and trusts. The more complex the arrangements, the higher the fees—and the more secrecy and protection clients can expect”.

The following part is relevant for Pakistan in The Pandora Papers:

• “The Panama Papers revealed that the children of Pakistan’s prime minister at the time, Nawaz Sharif, had ties to offshore companies. This gave Khan an opening to hammer Sharif, his political rival, on what Khan described as the “coalition of the corrupt” ravaging Pakistan”.
• “It is disgusting the way money is plundered in the developing world from people who are already deprived of basic amenities: health, education, justice and employment,” Khan told ICIJ’s partner, The Guardian, in 2016. “This money is put into offshore accounts, or even western countries, western banks. The poor get poorer. Poor countries get poorer, and rich countries get richer. Offshore accounts protect these crooks.”
• “Ultimately, Pakistan’s top court removed Sharif from office as a result of an inquiry sparked by the Panama Papers. Khan swept in to replace him in the next national election”.
• “ICIJ’s latest investigation, the Pandora Papers, brings renewed attention to the use of offshore companies by Pakistani political players. This time, the offshore holdings of people close to Khan are being disclosed, including his finance minister and a top financial backer”.

The Pandora Paper are thus a challenge for a man who have been reiterating time and again his resolve against corruption and retrieving of looting of national wealth. Now that his own people of Pakistan Tehreek-i-Insaf (PTI) are allegedly involved in the same nefarious activities what will be his next move. He has just ordered the action after thorough probe. Who will do this investigation? The same agencies and people who are the beneficiaries! It will be mockery of his tall claims of uprooting the corruption. He paid no heed to what was suggested in China’s lawfare against corruption—lessons for Pakistan—I, Daily Times, November 9, 2018 and China’s lawfare against corruption—lessons for Pakistan—II, Daily Times, November 10, 2018.The outcome is before him.  The Pandora Paper sums it up in the following paragraphs:

“The documents also show that Khan’s water resources minister, Chaudhry Moonis Elahi, contacted Asiaciti, an Singapore-based offshore services provider, in 2016 about setting up a trust to invest the profits from a family land deal that had been financed by what the lender later claimed was an illegal loan. The bank told Pakistani authorities that the loan had been approved due to the influence of Elahi’s father, a former deputy prime minister.

Asiaciti records say that Elahi backed off from putting money into a trust in Singapore after the provider told him it would report the details to Pakistani tax authorities.

Elahi did not respond to ICIJ’s requests for comment. Hours before the release of Pandora Papers stories, a family spokesman told ICIJ media partners that  “misleading interpretations and data have been circulated in files for nefarious reasons.” The spokesman added that the family’s assets “are declared as per applicable law.”

Also today, a a spokesperson for Khan told a press conference that if any of his ministers or advisors had offshore companies, “they will have to be held accountable.”

Other political figures have also spoken out against the offshore system while surrounded by appointees and other supporters who have assets stowed offshore. Some who have spoken out have used the system themselves”.

The above is not going to satisfy the Opposition and the masses. The Prime Minister Imran Khan despite having sincere resolve and unshakable belief of uprooting the corruption in the end trapped by the so-called electables and now is in the thick soup. The vast majority is suffering from policy of appeasement towards the rich and mighty. The skyrocketed inflation and lack of justice are pushing the marganalised and weaker section of society to the wall. In these circumstances, the empty slogan of establishing egalitarian society and process of selected accountability will lead the country towards more instability, economic meltdown and diplomatic isolation. The path is clear to take all to task and make the country a place worth living for all. It is not possible with present policies of appeasement and amnesties for real estate tycoons. Tax evasion is rampant and the nation is deprived of funds required for schools, hospitals, roads and other public services. 

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The writers, lawyers and partners of Huzaima, Ikram & Ijaz, are Adjunct Faculty at Lahore University of Management Sciences (LUMS), members Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE).