We know that corporations use offshore tax havens to dodge their fair share of taxes. According to Gabriel Zucman, an economist at UC Berkeley and author of The Hidden Wealth of Nations: The Scourge of Tax Havens, American companies avoid paying $70 billion in taxes every year by parking their profits in low- or no-tax countries.
But the release of the Paradise Papers—thousands of documents leaked from Appleby, an offshore law firm that advises companies and the wealthy on using the tax code to their advantage and is a major player in this market—has shed some new light on the network of financial firms, lawyers, and accountants that make the system work. They’ve also exposed how some of the wealthiest people in the world use various trusts and shell companies to not only make a killing but also to keep their positions from the public’s view.
The most prominent example of this is probably Commerce Secretary Wilbur Ross’s holdings in a shipping company called Navigator, which is closely tied to an energy firm controlled by members of Vladimir Putin’s inner circle, including his son-in-law. Another member of that inner circle controlling the energy firm is Gennady Timchenko, a Russian billionaire on the Treasury Department’s sanctions list. Experts told NBC News that the relationship should have raised red flags, but it wasn’t fully disclosed during Ross’s confirmation process. Senator Richard Blumenthal said members of Congress “were under the impression that Ross had divested all of his interests in Navigator. Furthermore, he said, they were unaware of Navigator’s close ties to Russia.”
But Ross is only one of many within Trump’s circle of advisers and donors whose offshore investments were unveiled in the Paradise Papers. They include Steve Bannon, his erstwhile backer Robert Mercer—who used untaxed money from his offshore holdings to finance Clinton Cash, a book accusing Hillary Clinton of corruption—the Koch brothers, Sheldon Adelson, Secretary of State Rex Tillerson, chief economic adviser Gary Cohn, casino magnate Steve Wynn, and Carl Icahn, among others. Their holdings may not violate any laws—when properly disclosed—but they certainly fly in the face of the “America first” rhetoric their president embraces.
A search of the International Consortium of Investigative Journalists database of the leaks finds two prominent Democrats in the Panama Papers. A holding company tied to former presidential candidate Wes Clark used Appleby to register a new subsidiary on the Isle of Man, where all of its intellectual property now resides. And Penny Pritzker, who served as Commerce Secretary under Barack Obama, appears to have used Appleby to transfer holdings to her children that she claimed on her ethics disclosures to have sold.