Paradise Papers: What Trump's Russian link and tax evasion by the Queen and 714 Indians reveal
Jayant Sinha has figured prominently, because of his links with Omidyar in the Appleby files.
They say it's the second biggest paper leak ever at 1.4 terabytes and 13.4 million documents. Paradise Papers - an year-long effort led by the International Consortium of Investigative Journalists (ICIJ) of Panama Papers fame - show how the world's wealthiest evade taxes through "offshore investments", this time mostly through a corporate law firm based in Bermuda called Appleby, called "Estera" following a buyout.
#ParadisePapers - 13.4 million documents, 94 media partners, more than 120 politicians and world leaders. https://t.co/lHHyt9eLTS pic.twitter.com/mecTosLSxD
— ICIJ (@ICIJorg) November 5, 2017
From the Queen of Great Britain, Elizabeth II to US president Donald Trump and his "influencers" in the 2016 US presidential election campaign with deep Russian pockets, to Yuri Milner, a billionaire with staggering investments in Facebook and Twitter - once again with huge Russian links - to Indian bigwigs like Union minister and BJP MP Jayant Sinha, the usual suspect Vijay Mallya, and many others, have figured in the Paradise Papers, making it an enormous mirror reflecting the ugly face of our financial elite. As many as 94 prestigious media outlets are part of the ICIJ, including the New York Times and The Guardian from the Anglophone world, The Indian Express from India, and the German Suddeutsche Zeitung.
The documents they have investigated are among the biggest "leaks" in history, covering the period from 1950 to 2016, involving the tax havens of Antigua and Barbuda, Aruba, the Bahamas, Barbados, Bermuda, the Cayman Islands, the Cook Islands, Dominica, Grenada, Labuan, Lebanon, Malta, the Marshall Islands, St Kitts and Nevis, St Lucia, St Vincent, Samoa, Trinidad and Tobago, and Vanuatu.
How wealth is transferred to offshore havens
Before we delve deeper into who all are involved, particularly from India, let's understand how this works. The financial elite - mostly from UK, China, Russia and the US, have used Appleby services for decades to pack off the wealth accumulated from evading taxes to the havens mentioned above, where there's little government jurisdiction on financial and banking matters.
In addition, shell companies, hidden companies and many other proxies registered in the tax havens are regularly used by these elites to reroute wealth or hold assets in property, aircraft, yachts, investments in stocks and shares, or make wealth disappear altogether to secret bank accounts. This means that the offshore empire is far bigger than previously thought. This empire is the global circuit of black money, which eats into the GDPs of respective countries.
Much like in Panama Papers, which inspected the firm Mossack Fonseca, in this case, the firm Appleby is at the centre of this murky universe of staggering tax evasion.
Who's who on Paradise Papers
The longest reigning British monarch might also be henceforth known as the "offshore queen", with millions of pounds from her private estate invested in firms in Cayman Islands, a notorious tax haven. Paradise Papers reveal that the Duchy of Lancaster - the Queen's private estate - put money into a retailer called BrightHouse criticised for exploiting poor families.
#ParadisePapers again prove what I said at #PMQs: There's one rule for the super-rich and another for the rest when it comes to paying tax. pic.twitter.com/QaNbCaeb21
— Jeremy Corbyn (@jeremycorbyn) November 5, 2017
The Queen being connected to a retailer with murky history of fleecing the poor and the disabled of UK will not go down lightly in the Brexit-torn country.
US President Donald Trump's uber-compromised election campaign was under FBI scrutiny even when it was ongoing. Since then, as a year rolls by, it has only gotten murkier, now prominently featuring in the Paradise Papers leak.
The president's "circle of influencers" has been known to have major stakes and assets in the offshore world, and Trump's promise of "bringing back trillions of dollars from American businesses that is now parked overseas" is therefore heavily compromised and hypocritical.
Explore our #ParadisePapers interactive to see the offshore connections of US president Donald Trump. https://t.co/yBG9gvFqwL? pic.twitter.com/hj6a2XFbFq
— ICIJ (@ICIJorg) November 5, 2017
As the first anniversary of Trump's election victory inches closer, his Republican and corporate supporters have been exposed as having deep pockets in the offshore havens, and also with - as expected - major Russia links.
Trump's promise to "swamp the drain" - much like PM Narendra Modi's promise to clean India of black money - sounds hollow because his very election campaign was funded with offshore money, or by those whose wealth is sheltered in investments in these tax havens.
Names like Gary Cohn, Trump's chief economic adviser, who's the force behind the White House tax reform effort; Rex Tillerson, the US secretary of state now driving the Middle East agenda with much dealing with the new crown prince of Saudi Arabia, Mohammad bin Salman, has been found to have his name as the director of an offshore firm used in a questionable multi-billion dollar oil and gas venture in the Middle East; Steven Mnuchin, the US treasury secretary, whose former bank financed private jets for wealthy clients, including those with criminal family histories.
Facebook and Twitter
Russian billionaire Yuri Milner, who has invested billions in Twitter and Facebook, is shown to have pumped in Kremlin cash into these social media behemoths that are at the forefront of the fake news menace, distorting history and compromising the dissemination of real information.
Leaked files show that a state controlled bank in Moscow, the VTB, helped Milner's ascent in Silicon Valley, and the Russia investigation therefore put the spotlight on the very tech companies that were supposed to usher in the information revolution. Instead, we are witnessing a devolution, with fascist and sectarian inclinations heightened among most.
#ParadisePapers spotlights Russian Billionaire Yuri Milner's partnership with Kushner Brothers via startup Cadre https://t.co/ndmx6n0Sx2 pic.twitter.com/ZyQ31l6STU
— Graph Commons (@graphcommons) November 5, 2017
According to the New York Times report on Milner - part of the Paradise Papers series -his Twitter deal is a "complex web of share transfers and offshore financial entities" that involve the bank VTB - a "slush fund for Putin" for his various strategic deals - and Gazprom Investholdings, leading Milner to own 8 per cent of Facebook and 5 percent of Twitter.
The Russian influence on these social media giants has been visible ever since, the pinnacle of which came with the Trump victory, and the ongoing re-engineering of the Middle East via Saudi Arabia. Milner's current dealings, among others, are with Trump's son-in-law Jared Kushner, who's also a key player in the Middle East now.
Canadian prime minister and poster boy of the new, socio-politically progressive policies, Justin Trudeau, is one of those named in Paradise Papers leak. In fact, Trudeau is among a host of former Canadian PMs featured in the leak, through his chief fundraiser and senior adviser Stephen Bronfman.
Multimillion-dollar cashflows between entities in the US, Israel and Cayman Islands, that resulted in huge tax avoidance and a coffer of slush funds to be poured into Trudeau's hyperactive PR drive, have illegality written all over them, with Bronfman - inheritor of the Seagram distillery fortune in Montreal - at the centre of this murky trail.
The Indian connection
The Indian Express has been investigating the Indian side of the Paradise Paper leaks, and the names that have cropped up include BJP Union minister Jayant Sinha, MP RK Sinha, absconding billionaire Vijay Mallya, corporate lobbyist Niira Radia and Sanjay Dutt's wife Manyata, among 714 in all. India ranks 19th in terms of the number of names, from a scrutiny of 180 countries.Interestingly, an Indian company, Sun Group, founded by Nand Lal Khemka, has been Appleby's second-largest client internationally, with as many as 118 offshore entities in different jurisdictions.
Firms that have already been under the scanner in India, such as in the Sun TV-Aircel Maxis case, the Essar Loop 2G case, as well as Ziquista Healthcare (with Sachin Pilot/Karti Chidambaram being early honorary/independent directors), and a fresh financial angle to YSR Congress chief Jagan Reddy, have come to the fore.
Jayant Sinha
Union minister of civil aviation Jayant Sinha has figured prominently, because of his links with Omidyar in the Appleby files. As per The Indian Express probe and data in the Appleby files, before he was elected a Lok Sabha MP from Hazaribagh in Jharkhand in 2014, Sinha worked with Omidyar Network as its MD in India.
Omidyar Netowrk invested in a US company called D.Light Design, which has a subsidiary in Cayman Islands, and Sinha served as director of D.Light Design in San Francisco, something that's omitted from his affidavit to the Election Commission in 2014, to the Lok Sabha Secretariat, and to the PMO as the MoS civil aviation.
Minister of State for civil aviation Jayant Sinha, is named in #ParadisePapers for his work part of @OmidyarNetwork pic.twitter.com/YEyK0vVc4L
— Srinivas Kodali (@digitaldutta) November 5, 2017
Both @jayantsinha & @OmidyarNetwork continues to push aadhaar (as part of their official work) even after Jayant Sinha joins in Ministry https://t.co/fG7kDNYrNO
— Anivar Aravind (@anivar) November 6, 2017
An important takeaway from this network of comprises and liaisons is Omidyar's connection to Aadhaar. Sinha, indeed the government of India's continued push for UID despite several privacy concerns and exclusions could be happening by design. That Sinha continued the Omidyar agenda, that has offshore dealings, therefore puts a huge question mark on the government's "cashless push", "war against black money" and demonetisation diktat, much of which seem to have strong connections with each other through corporate tax evasion trail.
You can read Jayant Sinha's response here, in which he's basically detailing that he had left the corporate job with Omidyar in 2013 once he took the political plunge. However, imprints of his past life can be seen writ large in his current role as a minister in Modi government.
Vijay Mallya
Paradise Papers throw more questions for Vijay Mallya, who's parked in London and is wanted by Indian authorities for willfully defaulting on loans worth Rs 8000 crore. The Indian Express report shows that "after he sold his United Spirits Limited India to the Diageo group in 2013, Diageo approached a London-based law firm Linklaters LLP to undertake a massive restructuring exercise to simplify the complex group structure", in the process waiving off USD 1.5 billion worth of Mallya's debt.
"As part of the restructuring, records show, Diageo also absolved Watson Limited, an entity owned by Mallya in his personal capacity, of its dues to a USL group company to the tune of 4.4 million pounds (around $5.8 million) through an exercise called novation — substituting one party in a contract with another, or replacing one debt or obligation with another. The $1.5-billion loan waiver and the novation seems to have resulted in Mallya taking away much more than the Rs 1,225 crore that Diageo reported to BSE – the amount actually works out to around Rs 10,000 crore going by Appleby documents".
Niira Radia
Lobbyist of the infamous Radia Tapes, whose name also figured in the Panama Papers – Niira Radia – was on boards of two offshore firms, and had established an offshore firm, Crownmart International Group Limited, in the British Virgin Islands in 1994. Of the offshore firms, Pegasus International Advisors Limited, incorporated in Malta in August 2011, changed its name multiple times and had the declared objective as wide-ranging as "to provide advisory, operational, logistical and consultancy services and assistance to banks, financial institutions, corporate and unincorporated bodies and authorities as well as private persons for the promotion and development of their businesses… to run the business of ship managers and operators, ship owners."
The range of the services provide a glimpse into the complex world of offshore wealth hiding, and the "financial services/consultations" become a euphemism for tax evasion processes that are stretched out and involve many from the super-rich. That they stay super rich by hoodwinking the general public and fleecing the nation's wealth is as obvious as daylight.
So much for "Anti Black Money Day"
It is both ironical and pertinent that the Paradise Papers leak has come just two days before the Narendra Modi government is slated to celebrate the "Anti Black Money Day" on November 8, the first anniversary of the demonetisation diktat. The GDP slump and massive impact on informal economy notwithstanding, the government's own claim to wipe out black money appears hollow and hypocritical, now with a Union minister and an MP featuring prominently in the investigative report. Will heads roll? Unlikely. And that's the saddest part.