What We Know So Far About the Bahamas Leaks
The leaked files reveal details concerning the offshore activities of prime ministers, governmental advisors, members of royal families, and convicted criminals.
This post originally appeared on VICE Greece.
A newly leaked cache of documents has put Amber Rudd, the UK's home secretary, under the spotlight, revealing the details of her business career before she entered politics. Among other things, she was director of two companies in the Bahamas, a tax haven, which she failed to mention when defending David Cameron over the Panama Papers revelations. She was also director of a company where her co-director was jailed for fraud. There's no suggestion that she was involved in any wrongdoing, but obviously this isn't a great look for a minister. Rudd has declined to answer questions, but says her previous business career is public knowledge. VICE has contacted Rudd for further comment.
The Bahamas Leaks are 1.3 million leaked files originating from the tax haven's corporate records. Just like in the Panama Papers, which were made public in April, they came to light after an unknown source handed files concerning offshore companies to Bastian Obermayer and Frederik Obermaier, journalists for the German newspaper Süddeutsche Zeitung. This latest leak is just one-tenth the size of the Panama Papers, but size isn't everything, and the leak sheds some light on yet another secretive offshore center, the Bahamas.
The leaked files reveal details concerning the offshore activities of prime ministers, governmental advisors, members of royal families, and convicted criminals. The ownership and management of an offshore corporation is not illegal and, in many cases, legitimate business reasons lie behind the creation of an offshore structure. Experts in transparency issues, however, stress how important it is for public officials to disclose their involvement in offshore entities.
The new data is available at offshoreleaks.icij.org, which is the same website featuring the Panama Papers that were published a few months ago, as well as the Offshoreleaks, which were made public in 2013.
Back in July, the two German journalists who received the leaked documents shared the data with the International Consortium of Investigative Journalists (ICIJ), a nonprofit association with hundreds of members in dozens of countries across the world. The publication of the Bahamas Leaks creates, for the first time, a free, online, and publicly available record of the Bahamas-based offshore companies. Along with data from the Panama Papers and other leaked documents regarding offshore companies, these documents shed light on the secretive world of offshore corporations and make up the world's largest public offshore record in history.
Another big name in the cross-hairs is European Commissioner Neelie Kroes, whose involvement in an offshore company during her term as European Commissioner has been revealed. Kroes participated in the offshore corporation Mint Holdings Ltd., serving as the company's manager from 2000 to 2009. Kroes failed to disclose this in her declaration of interests upon assuming her position as commissioner for competition in 2004. She failed to mention this once again in 2010, when she became the European commissioner for digital ggenda.
According to the European Commission rulebook, its members are "not to engage in any other occupation, whether gainful or not." They may only hold "honorary positions."
Kroes's initial response was that the allegations were false. Subsequently, the former commissioner's attorneys wrote that Mint Holdings never functioned properly and that due to an error of an administrative nature, Mrs. Kroes's name remained registered with the company, even though she never participated in the board of directors or any kind of business activities conducted by the company. Her attorneys admitted that the former commissioner never mentioned any administrative link to the offshore company in her declaration of interests. They also noted that Mrs. Kroes will inform the president of the European Commission and that she will accept full responsibility regarding this matter.
A Jordanian businessman, who was responsible for the United Arab Emirates's armament program in the late 1990s, and who later founded an investment firm, also participated in the same offshore company.
Also mentioned in the Bahamas Leaks is former Colombian minister of Mines and Energy, Carlos Caballero Argaez, who served between 1999 and 2001. He was registered as chairman and secretary of the Bahamas-based company Pavc Properties Inc. between 1997 and 2008. Argaez also appeared to be Norway Inc.'s manager, a company that had been registered in the Bahamas between 1990 and 2015. Argaez told the International Consortium of Investigative Journalists (ICIJ) that Norway Inc. maintained a bank account in Miami, which belonged to his father. He denied any conflict of interests and claimed the company was set up in the Bahamas for "taxation reasons."
Companies, trusts, and bank accounts have often appeared in the Bahamas, following cases of dictators' or politicians' confiscated funds. Former Chilean dictator Augusto Pinochet's son used such a company in the Bahamas, Meritor Investments Limited, to transfer $1.3 billion to his father. Pinochet's son, Marco Antonio, dismissed the allegations as "lies" and claimed no offense was committed. Pinochet himself owns another company in the Bahamas; Ashburton Company Limited, which was founded in 1996. Meanwhile, $350 million belonging to Aba Ampatsa, son of former Nigerian president Sani Ampatsa, remains frozen in Luxembourg and the Bahamas, due to a global "hunt" for the $3 million and other assets his father extorted from Nigeria during his five-year sovereignty.
The Bahamas have also been linked to politicians' and public officials' transactions mentioned in the Panama Papers. These include former prime minister of Qatar Sheikh Hamad bin Jassim bin Jabor al-Thani, who owned a Bahamas-based company called Trick One Limited. In January of 2005, while serving as Minister of Foreign Affairs, al-Thani signed a bank loan agreement of $53 million. To secure the loan, he pledged the bank an award-winning 435-foot yacht worth $300 million.
Argentinian president Maurizio Macri, his father, Fransisco, and his brother, Mariano, were heads of Fleg Trading Ltd.—a company that was established in the Bahamas in 1998 and dissolved 11 years later. Macri did not disclose his connection to the company in his property declaration in 2007 and 2008, when he was serving as mayor of Buenos Aires. Following the Panama documents publication, an Argentinian prosecutor sought information from the Panama and Bahamas authorities, as part of an investigation that was trying to determine whether Macri intentionally omitted his link to the company. Macri's spokesman told ICIJ that Argentina's president failed to report his connection to Fleg Trading Ltd. because he had no economic interests and did not hold any shares.
"Corporate registries are extremely important," said former FBI special agent Debra Laprevotte. "Offshore companies are often used as intermediaries to facilitate money laundering... thus the corporate registry documents, which might identify the beneficial owners, are part of the evidence."
*This article uses data from research conducted by ICIJ journalists' Will Fitzgibbon and Emilia Díaz-Struck, and the contribution of Juliette Garside (The Guardian), Gaby de Groot (Het Financieele Dagblad ), Michael Hudson (ICIJ), Carlos Eduardo Huertas (Connectas), Frederik Obermaier (Sueddeutsche Zeitung), Bastian Obermayer (Sueddeutsche Zeitung), Martijn Roessingh (Trow) and Vanessa Wormer (Sueddeutsche Zeitung).