Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Activists spell out #TaxTheRich at Times Square in New York City. (Photo: Erik McGregor/LightRocket via Getty Images)

Activists spell out #TaxTheRich at Times Square in New York City on March 4, 2021. (Photo: Erik McGregor/LightRocket via Getty Images)

US Denounced as 'Biggest Peddler of Financial Secrecy' After Pandora Papers Leak

"U.S. President Biden must match his own rhetoric on shutting down global illicit finance, and start with the biggest offender—his own country."

Jake Johnson

The leak of an enormous trove of tax haven files over the weekend offered a further glimpse into the secretive world of offshore finance—a system facilitated by the U.S. and other rich nations—and prompted calls for immediate changes to global rules that let the powerful hide their wealth, skirt their obligations, and starve governments of crucial revenue.

"This is where our missing hospitals are," Susana Ruiz, the tax policy lead at Oxfam International, said in a statement. "This is where the pay-packets sit of all the extra teachers and firefighters and public servants we need. Whenever a politician or business leader claims there is 'no money' to pay for climate damage and innovation, for more and better jobs, for a fair post-Covid recovery, for more overseas aid, they know where to look."

"The biggest blockers to transparency are the U.S. ... and the U.K., the leader of the world's biggest tax haven network."

"Tax havens cost governments around the world $427 billion each year," Ruiz added. "That is the equivalent of a nurse's yearly salary every second of every hour, every day. Ordinary taxpayers have to pick up the pieces. Developing countries are being hardest hit, proportionately. Corporations and the wealthiest individuals that use tax havens are out-competing those who don't. Tax havens also help crime and corruption to flourish."

Like the 2016 Panama Papers, the International Consortium of Investigative Journalists' (ICIJ) Pandora Papers shine additional light on the functioning of a "shadow economy" that world leaders, celebrities, and billionaire business moguls—including some accused of egregious crimes—are exploiting to shield trillions of dollars in assets from transparency and taxation.

The 11.9 million files obtained, analyzed, and leaked by the ICIJ reveal the closely-guarded financial maneuverings of more than 330 politicians and top public officials from nearly 100 countries and territories, including dozens of current national leaders.

"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," ICIJ notes in a summary of its sprawling cache of documents. "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 trove also links prominent athletes, models, and artists to offshore assets, including India's famous cricketer Sachin Tendulkar, pop music star Shakira, and supermodel Claudia Schiffer.

But Alex Cobham, chief executive of the Tax Justice Network, cautioned that a narrow focus on the individuals who have made use of an international tax system rigged in their favor diverts attention from the institutions and countries that have done the rigging.

"These personal actions are shameful and will no doubt come under great scrutiny in the coming days, but it's important that we don't lose sight of one crucial fact: few of the individuals had any role in turning the global tax system into an ATM for the superrich," Cobham wrote in a blog post on Sunday. "That honor goes to the professional enablers—banks, law firms, and accountants—and the countries that facilitate them."

Cobham observed that the Pandora Papers—the product of a nearly two-year investigation by more than 600 journalists in 117 countries and territories—confirm that the United States is "the world's biggest peddler of financial secrecy."

"The biggest blockers to transparency are the U.S. ... and the U.K., the leader of the world's biggest tax haven network," Cobham wrote. "We need full transparency so we can hold tax abusers accountable, especially when our politicians are among them. U.S. President Biden must match his own rhetoric on shutting down global illicit finance, and start with the biggest offender—his own country."

As the ICIJ notes, the new files show in some detail "how the United States, in particular, has become an increasingly attractive destination for hidden wealth, although the U.S. and its Western allies condemn smaller countries for allowing the flow of money and assets tied to corruption and crime."

 "We cannot allow tax havens to continue to stretch global inequality to breaking point."

"The Pandora Papers include documents from 206 U.S. trusts in 15 states and Washington, D.C., and 22 U.S. trustee companies," the ICIJ points out. "The documents provide details about the movement of hundreds of millions of dollars from offshore havens in the Caribbean and Europe into South Dakota, a sparsely populated American state that has become a major destination for foreign money."

"We in the U.S. should be embarrassed that we've become a magnet for kleptocratic funds," said Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies.

Conspicuously absent from the Pandora Papers is any mention of the wealthiest people in the U.S., including Bill Gates, Elon Musk, Warren Buffett, and Jeff Bezos—the richest man in the world. But as the Washington Post explains, that could be because "the uber-rich in the United States tend to pay such low tax rates that they have less incentive to seek offshore havens."

In response to the Pandora Papers revelations, Oxfam called on world governments to crack down on tax havens by taking a number of steps, including:

  1. Ending tax secrecy on individuals, offshores, and multinational corporations. Set up a public register on the real owners of bank accounts, trusts, shell companies, and assets. Require multinational corporations to publicly report their accounts where they do business, country-by-country.
  2. Increasing the use of automatic exchange, allowing revenue authorities access to information they need to track the money.
  3. Ending corporate profit shifting to tax havens via new rules, and by setting a global minimum tax under the OECD's BEPS deal, ideally of around 25%.
  4. Agreeing a global blacklist of tax havens and taking counter measures, including sanctions, to limit their use.
  5. Setting a new global agenda on taxing wealth and capital fairly; addressing tax competition between countries on high-net-worth-individuals, either on income or wealth, against agreed standards.

"Governments' promises to end tax havens are still a long way from being realized," said Ruiz. "We cannot allow tax havens to continue to stretch global inequality to breaking point while the world experiences the largest increase in extreme poverty in decades."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

'We Will Be on the Streets': Lula Vows Resolve as Brazil Heads Toward Runoff

"We don't have a break. We are going to work hard," said the leftist former president. "And we have 28 more days."

Jake Johnson ·


Brazil Votes Live: Lula Wins the First Round Over Far-Right Bolsonaro; Runoff Oct. 30

Lula took the lead as more rural votes counted but failed to reach 50%

Common Dreams staff ·


'Enough is Enough': Hundreds of Thousands March Across the UK

'As wages fall while profits soar, our message is clear... We are here to win.'

Common Dreams staff ·


California Gov. Newsom Proposes Windfall Profits Tax on Big Oil

Calls for windfall profits taxes have increased globally in recent weeks

Common Dreams staff ·


'Incredible': Omar and Khanna Staffers Join Levin's Office in Unionizing

"It is long past time the United States Congress became a unionized workplace, and that includes my own staff," said Rep. Ilhan Omar. "I am proud of all the people on my team who have played a leading role in the staff unionization effort. Solidarity forever."

Jessica Corbett ·

Common Dreams Logo