Millions of Leaked Files Shine Light on Where Elite Hide Money…

By Michael Forsythe

It’s called the Paradise Papers: the latest in a series of leaks made public by the International Consortium of Investigative Journalists shedding light on the trillions of dollars that move through offshore tax havens.

The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year old company that caters to blue chip corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars.

The Paradise Papers

A series of stories that reveal the offshore financial dealings of some of the world’s biggest corporations and wealthiest people. Nearly 100 news organizations in an international collaboration examined more than 13 million leaked documents from a law firm, an offshore services company and corporate registries from tax havens.

  • Paradise Papers Shine Light on Where the Elite Hide Their MoneyNov. 5, 2017

  • Kremlin Cash Behind Billionaire’s Twitter and Facebook InvestmentsNov. 5, 2017

  • Commerce Secretary’s Offshore Ties to Putin ‘Cronies’Nov. 5, 2017

  • After a Tax Crackdown, Apple Found a New Shelter for Its ProfitsNov. 6, 2017

  • From Utah, Secretive Help for a Russian Oligarch and His JetNov. 6, 2017

The New York Times is part of the group of more than 380 journalists from over 90 media organizations in 67 countries that have spent months examining the latest set of documents.

As with the Panama Papers, the Paradise Papers leak came through a duo of reporters at the German newspaper Süddeutsche Zeitung and was then shared with I.C.I.J., a Washington-based group that won the Pulitzer Prize for reporting on the millions of records of a Panamanian law firm. The release of that trove of documents led to the resignation of one prime minister last year and to the unmasking of the wealth of people close to President Vladimir V. Putin of Russia.

This week, The New York Times is publishing stories from the Paradise Papers that were reported in cooperation with our I.C.I.J. partners. Here is a roundup of the four stories that have already been made public.

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Yuri Milner, a Russian billionaire whose holdings have included major stakes in Facebook and Twitter. Credit Patrick T. Fallon/Bloomberg, via Getty Images

Behind one of Silicon Valley’s most prominent investors, Yuri Milner, was hundreds of millions of dollars in Kremlin funding. The documents show that Mr. Milner’s investment in Twitter relied on money from VTB, bank controlled by the Russian state. One of his most significant investors in Facebook relied on funding from Gazprom Investholding, another government-controlled institution. Mr. Milner is also an investor in Cadre, a New York-based real estate technology company founded by Jared Kushner, President Trump’s son-in-law and White House adviser.

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Tim Cook, Apple’s chief executive, at a Senate hearing in May 2013 on the company’s tax strategies. Credit Andrew Harrer/Bloomberg, via Getty Images

Apple has come under scrutiny by Congress for shifting much of its earnings to Irish subsidiaries, avoiding income taxes. Documents from the leak show that after its chief executive, Tim Cook, said that the company didn’t just “stash money on a Caribbean island,” it found a new tax haven — an island in the English Channel. The use of complex offshore structures have helped keep much of Apple’s more than $128 billion in profit abroad free from taxation. The technique isn’t unique to Apple. “U.S. multinational firms are the global grandmasters of tax avoidance schemes,” said Edward Kleinbard, a former corporate tax adviser to such companies.

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Wilbur Ross during his confirmation hearing for the position of commerce secretary in January. Credit Al Drago/The New York Times

Wilbur Ross, the commerce secretary, invested in a shipping company whose top clients include a Russian firm controlled by an oligarch facing sanctions and President Vladimir V. Putin’s son-in-law. The ethics agreement Mr. Ross filed when taking office said he intended to retain several investment partnerships, but did not specify that they were used to hold his stake in the shipper, Navigator Holdings. The revelations of Mr. Ross’s continued investment led Senator Richard Blumenthal, a Connecticut Democrat, to call for an investigation. Mr. Ross said he had done nothing wrong, but would “probably” sell his Navigator shares.

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Leonid Mikhelson, Russia’s richest oligarch, used Bank of Utah as a stand-in so he could register his Gulfstream jet in the United States, which requires citizenship or residency. Credit Sergey Chervotkin

A bank in Utah is in the business of helping wealthy foreigners register private planes in the United States, which requires American citizenship or residency. The offshore files shed light on how a small financial institution, the Bank of Utah, served as a stand-in for citizenship purposes to allow Russia’s richest man, Leonid Mikhelson, whose energy company is subject to sanctions, register a $65 million Gulfstream jet.

Who Are Appleby’s Clients?

The predominantly elite clients of Appleby contrast with those of Mossack Fonseca — the company whose leaked records became the Panama Papers — which appeared to be less discriminating in the business it took on. The records date back to 1950 and up to 2016.

Appleby has offices in tax havens around the world. In addition to its Bermudan headquarters, it works out of places like the British Virgin Islands and the Cayman Islands in the Caribbean; the Isle of Man, Jersey and Guernsey off Britain; Mauritius and the Seychelles in the Indian Ocean; and Hong Kong and Shanghai.

Americans — companies and people — dominate the list of clients. Past disclosures, such as the 2013 “Offshore Leaks” from two offshore incorporators in Singapore and the British Virgin Islands, the 2015 “Swiss Leaks” from a private Swiss bank owned by the British bank HSBC and another leak in 2016 from the Bahamas were dominated by clients not from the United States.

The documents come not only from Appleby, but also from the Singaporean company Asiaciti Trust and official business registries in places such as Bermuda, the Cayman Islands, Lebanon and Malta.

Setting up companies offshore is generally legal, and corporations routinely do so to facilitate cross-border transactions such as mergers and acquisitions. Appleby, in a public statement on Oct. 24, after inquiries from I.C.I.J., said that it was “subject to frequent regulatory checks” in “highly regulated jurisdictions.”

“Appleby has thoroughly and vigorously investigated the allegations and we are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients,” the company said.

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