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The Pandora Papers is a massive international investigation by the New Zealand Herald and more than 150 other media organisations that lays bare the secret offshore financial arrangements of the rich and powerful.
Here are
answers to some of the key questions about the project:
What do the papers reveal?
The documents show the many ways in which the wealthy and powerful use highly complex financial structures in low-tax jurisdictions to move money and hold assets without being detected.
They show how an industry of professional advisers, including lawyers and accountants, facilitate those offshore flows and keep their wealthy clients from coming to the attention of financial regulators, tax authorities and others who may take an interest in their affairs.
The leak included the confidential records of an astonishing array of prominent figures from dozens of countries, including 35 country leaders, more than 330 politicians and high-level public officials, and 133 billionaires.
Other players in the Pandora Papers' global cast include celebrities, sports stars, and international criminals.
How big is the leak?
Enormous. It's believed to be the biggest leak of data ever.
The ICIJ obtained more than 11.9 million documents, amounting to 2.9 terabytes of data, which include spreadsheets, tax declarations, invoices, PowerPoint presentations, emails, regulatory filings, due diligence reports, and passport photos of clients.
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Advertise with NZME.The documents span five decades, dating back as early as 1971, and include information on tens of thousands of companies and beneficial owners spanning dozens of countries and multiple languages.
The amount of data, and the number of subjects it covers, exceeds that of previous major offshore financial investigations led by the ICIJ, including the "Panama Papers" in 2016 and the "Paradise Papers" in 2017.
Why is it called "Pandora Papers"?
The ICIJ named the project Pandora Papers because the collaboration builds upon the legacy of Panama Papers and Paradise Papers, and "because the ancient myth of Pandora's Box still evokes an outpouring of trouble and woe".
Why does offshore finance matter?
Publication of the Pandora Papers comes at a critical moment in a global debate about the fairness of the international tax system and the failure of governments to stop the flow of money into hidden companies and trusts.
At least US$11.3 trillion is held "offshore", according to a 2020 study by the Organisation for Economic Cooperation and Development, beyond the reach of national tax authorities. These complex and secretive structures allow income and assets to be shifted from high-tax countries to companies that exist only on paper in low-tax jurisdictions, limiting the amount of money that governments can raise to spend on schools, hospitals, roads, and other public services.
Poor nations are disproportionately harmed by these enormous international transfers.
In the popular imagination, tax havens are often perceived as a far-flung scattering of sleepy, palm-shaded islands. But the Pandora Papers show that the offshore money machine operates in every corner of the world, including financial capitals and the biggest Western economies.
It is only through leaks of confidential records to journalists that we have come to understand how this vast offshore world operates and the activity it conceals.
Does the Pandora Papers expose criminal activity?
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Advertise with NZME.Owning an offshore company or trust is not illegal, and there are legitimate reasons for individuals and corporations to have complex financial arrangements spanning numerous jurisdictions. Many of the people whose dealings have been exposed in the leak have done nothing wrong.
However, the secrecy of offshore shelters can also give cover to illicit activity, such as bribery, money laundering, tax evasion, terrorism financing, drug trafficking, and human trafficking. The ICIJ and its partners have uncovered numerous structures that appear to relate to criminal activity.
What is the New Zealand connection?
New Zealand has a small but significant role in the offshore industry. A legal structure known as a New Zealand foreign trust became popular with wealthy foreigners because it allowed them to hold assets and income in a stable jurisdiction without paying tax or disclosing their identities to tax authorities.
Documents exposed in the Pandora Papers include marketing presentations in which offshore providers promoted these New Zealand structures as "the premier private client wealth management structure" that amounted to an "onshore trust with offshore benefits".
Records from one offshore provider identified more than two-dozen foreign political figures connected to New Zealand-registered trusts. They included a controversial Moldovan oligarch, a Chinese billionaire, and senior Brazilian politicians.
What was the source of the leak?
The leaked documents come from 14 offshore service providers from around the world that set up and manage companies and trusts for wealthy clients.
An anonymous source shared the confidential files with the ICIJ in several batches over months. The ICIJ has not disclosed the identity of the source or details of how they obtained the information. ICIJ has a policy of not commenting on its sources.
No conditions were attached to the sharing of the information.
What is the ICIJ?
The International Consortium of Investigative Journalists is a non-profit news organisation based in Washington, DC, that has coordinated some of the biggest financial investigations in recent years.
For this project, it brought together more than 600 journalists at around 150 media organisations across the globe, including the BBC, the Australian Broadcasting Corporation, the Guardian, and the Washington Post.
The Herald and TVNZ are the only New Zealand-based media organisations involved in the project.
The hundreds of reporters involved in the project spent months analysing the documents and piecing together stories, using an enormous database built by the ICIJ and a secure communications platform.
Will all the documents be published?
No, the whole leak will not be made publicly available. The ICIJ and its partners will publish stories based on specific structures only after a rigorous journalistic process that involves carefully analysing the documents, conducting additional reporting to provide context, reaching out to the owners and their advisers to provide comment and clarification, and weighing the public interest in disclosure.
How does the investigation compare to the Panama Papers?
The Pandora Papers investigation is bigger than even the Panama Papers, which had far-reaching consequences when it launched in 2016, including in New Zealand.
While the Panama Papers came from the files of a single offshore services provider, the Panamanian law firm Mossack Fonesca, this investigation draws on records from a much larger group of professional advisers. It reveals the finances of many more country leaders, public officials and prominent business figures, and provides more than twice as much information about the ownership of offshore companies as the Panama Papers did.