Secret world of the elite
Access capitalism and mammoth corruption have been laid bare by the Pandora papers, writes Danny Hammill
Over the last week we have had our minds boggled by the strangely fascinating Pandora papers. This is a stupendous leak of almost 11.9 million documents and files - comprising 2.9 terabytes of data - exposing the offshore accounts and extraordinarily shady dealings of 35 world leaders, including current and former presidents, prime ministers and heads of state, as well as more than 100 billionaires, celebrities and business leaders. Must be one hell of a USB stick.
The data was obtained by the Washington DC-based International Consortium of Investigative Journalists, involving more than 600 journalists from 117 countries, who examined 14 financial service companies in various states, such as Panama, Switzerland and the United Arab Emirates. In the UK, the BBC’s Panorama team and The Guardian have led the investigation - mainly into UK property held overseas (much of it anonymously), believed to be worth more than £170 billion. A lot of this work was cross-referencing UK Land Registry data on properties directly held offshore with leaked files in the Pandora papers that contain the names of the ultimate beneficial owners (UBOs) - in other words, the people in actual control of hundreds of offshore companies. UK-based property buyers are legally required to be identified via the Land Registry and Companies House, but a loophole means that those wealthy enough to hire the very best lawyers, accountants and corporate providers - the crème de la crème - can create offshore entities that hide their ownership from public view.
Marvellously, the ICIJ has surpassed its previously issued Pandora Papers released in 2016, which had 11.5 million confidential documents (unsurprisingly, it says it is not identifying its sources for the documents). After reading various reports and quickly using the calculator, you can reasonably estimate that up to $32 trillion may be hidden from the authorities - excluding ‘non-monetary’ valuables, such as real estate, art and jewellery. Yet the Tories are still cutting universal credit and raising national insurance contributions.
Of course, on one level this is just how we expect corrupt bourgeois politicians (especially Tory ones) and the ultra-wealthy to behave. Hence the world-weary headline on the satirical website, NewsThump: “Pandora papers reveal that bears shit in the woods” (October 4). Yes, in that sense, it is hardly a revelation that the filthy rich will use almost any means necessary to stay filthy rich or become even filthier. What do you expect? But the sheer level of detail in the Pandora papers gives you an intimate - and invaluable - glimpse into the monied world of the capitalist elite and their friends with extremely deep pockets, where everything is for sale and nothing is sacred. Where taxes are for little people, as is the law - except when it works to their benefit, which it does more often than not.
As it happens, King Abdullah II of Jordan is one of the main figures named in the papers. The documents show he has invested over $100 million in property across the UK and the US, including houses in Washington DC and London.
Other alleged culprits (sorry, entrepreneurs) mentioned are the Colombian singer, Shakira - who was incorporating new offshore entities, while going on trial for tax evasion; the German model, Claudia Schiffer; Indian cricket player and team leader, Sachin Tendulkar; Alexandre Cazes, the founder of the dark website AlphaBay, often used to purchase illegal products; several family members of Pakistan’s top generals; and the CEO of Channel One Russia, Konstantin Ernst. Elton John, Ringo Starr, Miguel Bosé, Pep Guardiola and Julio Iglesias are also named.
The papers reveal too how an office block owned by Azerbaijan’s ruling Aliyev family was sold to the Crown Estate, belonging to the naturally incorruptible British monarch as a corporation sole - making it in theory “the sovereign’s public estate”, which is neither government property nor part of the monarch’s private estate - a weird legal fiction.1 Anyway, the Aliyevs netted a £31 million profit out of that particular transaction. Getting even closer to home perhaps, a UK company controlled by Cherie Blair was shown to have acquired a £6.45 million property in London by purchasing Romanstone International Limited - a British Virgin Islands company. Had the property been acquired directly, then £312,000 would have been payable in stamp duty. Hey, stop being puritanical - a bit of extra money is always handy.
Needless to say, the offshore company owners exposed by the leaked data come from every continent, with 78 different nationalities represented. Around 10% are Nigerian, about 7% come from India. and around 5% are Russian citizens. But more than a quarter - by far the biggest group - are British, suggesting the offshore company structure is widely used by UK citizens seeking to own properties via tax havens. In fact, the UK as a whole is the money-laundering and tax-avoidance capital of the world - something else to be proud of.
When it comes to the Pandora papers having an immediate impact on British politics, or at least what should have an impact and alarm the Conservative Party, then it has to be the discoveries about the Kenyan-born corporate lawyer-cum-businessman, Mohamed Amersi, and the former Russian oil executive, Victor Fedotov. The former, together with his partner, has donated more than £750,000 to the Tories since 2018, including £10,000 to Boris Johnson’s leadership bid. Yet the papers show that the 61-year-old Amersi was heavily involved in one of Europe’s biggest corruption scandals, when he worked as a consultant between 2007 and 2013 for the Swedish telecoms company, Telia. Amersi in 2010 helped to organise a $220 million payment to a secretive offshore company that was controlled by Gulnara Karimova - the daughter of the then president of Uzbekistan - and the payment was described by the US authorities as a “$220 million bribe”. Telia was later fined $965 million following an American prosecution.
Mohamed Amersi became semi-famous in July for his comments about “access capitalism”, saying about major Tory donors like himself: “You get access, you get invitations, you get privileged relationships, if you are part of the setup” - which most people would regard as a simple statement of fact. But his remarks were particularly awkward for the Tories, as he was actually describing the approach of the party’s co-chair, Ben Elliot, nephew of Camilla, Duchess of Cornwall and personal friend of the prime minister. Elliot co-owns the Quintessentially Group - the luxury lifestyle company with a 24-hour global concierge service in London. After he became leader, Boris Johnson made Elliot his fundraiser-in-chief - he raised £37 million for the party’s 2019 general election campaign.
As a member of the party’s secretive ‘Leader’s Group’ of donors, Amersi has secured frequent access to ministers - claiming that Elliot also arranged for him to meet Prince Charles after years of ‘subscription payments’.2 Well, you’ve got to get your money’s worth, haven’t you? Apparently, it costs £50,000 a year to join the club and there is even an ‘Advisory Board’ for donors who give more than £250,000 - which allows them to meet the prime minister with no civil servants and no notes. Obviously cheap at the price. Amersi also seems keen to influence the party’s foreign policy, setting up a new group called Conservative Friends of the Middle East and North Africa.
Then we have Viktor Fedotov, a reclusive executive with a mansion in Hampshire. He is currently seeking permission from the government to build a controversial, £1.2 billion electricity interconnector between France and the UK, which the business secretary, Kwasi Kwarteng, is due to rule on within weeks. Fedotov’s company, Aquind, together with a related firm, Offshore Group Newcastle, have made generous donations to 34 Tory MPs - almost one in 10 of the parliamentary party. Alexander Temerko, a co-owner of Aquind, who just happens to be a friend of Boris Johnson, has together with the company donated £1.1 million to the Conservatives. Fedotov himself seems to have benefited handsomely from a massive $4 billion fraud operation in Russia in his capacity as a secret owner of a company called VNIIST.
For the likes of Amersi and Fedotov there appear to be magic money trees everywhere, though doubtlessly they will tell you that they have worked hard for their money and are innocent of all wrongdoing.
Rather pathetically, the Labour Party has called upon the Tories to hand back the money given to them by Mohamed Amersi. Labour’s chair, Anneliese Dodds, said it was “really concerning” that the Conservative Party had accepted hundreds of thousands of pounds from the businessman - going on to say that the Tories should “come clean about who else is getting exclusive access to the prime minister and the chancellor in return for cash”. Dodds could be waiting a very long time indeed for such a moment, though why on earth you would want to give back nearly a million pounds to an already fantastically wealthy capitalist remains a bit of a mystery. Why not put the money to better use?
Predictably, Boris Johnson - pretending to be angry - told reporters that all these donations are “vetted in the normal way” in accordance with rules that were set up under a Labour government, which is undoubtedly true. But it just shows that there is a big problem with the rules, which are pitifully inadequate and unable to counteract the corrupting influence of big money. As for Rishi Sunak, the chancellor, he declared that the Conservatives had used “due diligence” when it came to Tory donors and also promised that the tax authorities would look at the wider Pandora papers leak for evidence of criminality - whilst denying that London’s financial centre was a “source of shame”. Perish the thought. This would seem to make any investigation pointless, as the government has already made its mind up: nothing untoward here, no dodgy money, so please move on to something more important.
Dodds has also written to the Tory co-chair and buffoon, Oliver Dowden, saying it was “particularly concerning” that so many Tory MPs were receiving money from Viktor Fedotov, an “oligarch linked to an alleged corruption scandal at the heart of Vladimir Putin’s Russia”. In a series of questions, she asked: “What did the 34 Conservative MPs do with the money they received from Mr Fedotov’s companies? Can you be certain there is no link to the pursuit of Aquind’s business interests?” Dodds also called on Dowden to publish the list of all those who sit on donor groups paying £50,000 or £250,000 a year for different levels of access to the prime minister and his cabinet - as secretive cash for access is “deeply worrying, both for the sake of our democracy and for our national security”.
Dodds’ patriotic concerns are straight out of the Keir Starmer song book, of course!