4 countries lead way in offshore tax evasion
People with offshore shell companies and trusts in the British Virgin Islands and nine other jurisdictions frequently used to evade taxes lived most often in China, Hong Kong, Taiwan and Russia, according to findings from one of the biggest data analysis and cooperative journalism efforts in history.
Organized by the Washington-based International Consortium of Investigative Journalists, a group of 86 journalists from 46 countries analyzed a computer hard drive containing more than 2.5 million files of corporate and personal information and more than 2 million emails.
The data included details of more than 122,000 offshore companies or trusts, nearly 12,000 agents or intermediaries, and about 130,000 records on the people and agents who run, benefit from or hide behind offshore companies from 170 countries and territories. About 40 percent of the files were duplicates.
Missing from the report released Thursday, the ICIJ acknowledged, were the names of the true owners for the vast majority of the secret accounts — an ongoing problem facing the United States and many other cash-strapped nations trying to locate tax evaders.
Journalists had hoped that with computer software used to dissect the hard drive “the data as to who was behind a company was a click away. In fact, database entries for ‘beneficial owners' were often empty.”
The report also furthers the oft-reported but erroneous notion that offshore accounts are used by large companies shifting tax burdens and “the mega-rich ... to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.”
As part of its “Shadow Economy” series last year, which recently won a national Scripps Howard award, the Tribune-Review showed that almost anyone can establish a shell company and offshore bank account in Belize for less than $1,000.
The Trib series found that more than half the world's money — between $21 trillion and $32 trillion — passes through financial secrecy havens, with the British Virgin Islands hosting 400,000 companies, or 13 companies for every legal resident of the British territory.
Offshore companies often use straw men — called “nominees” — to pose as shareholders and directors, a practice sanctioned by tax and secrecy havens, the Trib reported. Real ownership is contained in hidden private contracts, not as a stockholder.
The Trib reported that the use of nominees is one of the main attractions of secrecy havens because it provides just that — secrecy. The ICIJ reported that its participating journalists mostly found the nominees on accounts. But sometimes, on accessing a company record during their analysis, “an alert screen popped up over the registered date, giving the name and contact details for the person or persons who really owned the company or assets.”
Among the findings highlighted by the ICIJ group report:
• Government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have embraced the use of covert companies and bank accounts.
• Many of the world's topbanks have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.
“A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct,” the ICIJ report said.
Lou Kilzer is a staff writer for Trib Total Media. He can be reached at 412-380-5628 or firstname.lastname@example.org
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Legally blind Pirates fan hangs on every play, has kept score for decades
- Amid tears, Oakmont church members vow to rebuild from fire
- Columbia Gas offering $10 discount on furnance clean, tune-up
- Former Pennsylvania civil rights investigator from Penn Hills sues agency, alleges discrimination
- Police identify Penn Hills man as victim in Homewood shooting
- Boulevard of the Allies lane closure begins
- Teens charged after man stabbed in Karns City home invasion
- Teachers’ roles evolve as districts rely more on computers
- Newsmaker: Prince Matthews
- Medical research labs pinched by falling federal funding
- Job prospects drawing workers to Western Pennsylvania