The rich and powerful live out of sight of the common man. It is a state of being that is no longer constantly debated, but not necessarily accepted by everyone either. A delicate balance is maintained by secrecy and wealth, which can often hide what is inadvertently revealed. In 2021, the disclosure of the Pandora filings has brought about a shaky balance sheet.
Hundreds of investigative journalists from around the world and from top news outlets including the ABC, Washington Post and BBC investigated one of the largest data breaches in history through the International Consortium of Investigative Journalists (ICIJ). The documents show how the rich and powerful continue to use offshore tax havens to hide ownership of their assets and funnel their money into what can aptly be described as a parallel economy.
The wealthy can use offshore territories to set up companies and benefit from laws that can easily disguise their identities as owners of these companies, which means they can evade and take advantage of taxation on these assets in their own countries. These offshore territories apply Tax laws are lower.
The information that emerged from the investigation involved several countries, including the United States, Australia, Singapore and Russia. It also covers multiple industries, including the oil industry, government agencies, and even agriculture. The documents also contain some shocking revelations involving bank executives and some world leaders.
It tells a story of embezzlement, multi-million dollar laundering and tax evasion. The nature of these crimes means there is a complex web at work behind the scenes that is difficult to crack. It is also difficult for governments, as there are so many countries involved and regulatory laws simply cannot cover all scenarios in which perpetrators will operate.
These documents prove that even unwitting accountants, lawyers, and other professionals can unknowingly be deceived and even help perpetrators. But they also demonstrate that the very people who benefit from these illegal practices are also the ones who can stop them. Of course, it’s not in their personal interest to have everything legally regulated the way it should be.
If you are interested in global financial issues and would like to peek into the invisible economy, you will be interested in this feature.
