Pakistan Reader# 225, 9 October 2021
The data driven world is tending to Pandora leaks by glossing over the common man’s syndrome of big personalitiesAnkit Singh
On 3 October, the International Consortium of Independent Journalists (ICIJ) released almost three terabytes worth of data containing almost 12 million files pertaining to hidden wealth and assets of shadow financial systems operating from offshore companies. The estimated wealth revealed may range from USD 5.6 trillion to USD 32 trillion. The revelation does not provide any evidence of criminal activities but the data is certainly controversial. Pandora Papers contain leaked contracts of 14 offshore service providers which have names of eminent personalities, political leaders, commissioned officers both in civil and uniform and their associated relatives all over the world. Pandora Papers has revealed the names of more than 700 Pakistani citizens, from two serving ministers, politicians who were ministers in Musharraf regime, bankers, relatives of military officers and media scions, the list is endless.
Offshore companies: today and tomorrow
There are many offshore companies located in tax havens situated all across nations and territories which have soft and low tax jurisdictions. There is no official figure on the number of offshore companies; in the USA alone. Delaware is considered the hub of hundreds of offshore companies. The main purpose of such practices is to gain monetary privacy and avoid taxes for the potentially indisposed wealth. Offshore companies are a critical component of business strategy as intermediaries and are not always illegal but their instruments and legality are exploited by black money and corruption money hoarders. The money comes from various layers of criminal networks, drug trafficking, human trafficking, illegal weapon supplies and sex trafficking. Pandora Papers have mention of various billionaires, Olympian and porn industry stalwarts and even the current king of Jordan.
There is evident use of offshore companies used in confidential security affairs as well. Offshore companies are located in territories which do not possess indigenous natural resources and infrastructure and these tax havens in turn attract capital hoarders, who otherwise have to give accountability of their illicit or hidden income. The business conducted is very transactional, whereby the clients and their profile are usually not scrutinized and an essential element of privacy is maintained. That explains the concept of shell companies, which are shells of trust and they perform administrative holding, like those white gloves in a casino who manage all the transaction and trust-based transfer. The complex network of financial flows has a story in each node and the more one investigates, the more one finds how firms end up colored in blood, knowingly and unknowingly, they hide taxable earnings by enabling the companies to exist on paper and backed by properties and assets.
Panama papers revealed 21 tax havens and it destroyed the popularity of various political leaders across the world, their credibility was questioned. It led to the fall of many popular political leaders, especially it paved the way for Imran Khan to take over leadership from exiled former Prime minister of Pakistan, Nawaz Sharif. Imran Khan came to power on his appeal to eradicate corruption from Pakistan, maybe he meant in retrospect. Regarding the future impact of Pandora Papers in Pakistan, the current government may lose its already rusting public confidence. All of that will matter on speed of enquiry against the revealed names, However, recently Islamabad had suspended the 2018 verdict of accountability court against Maryam Nawaz Sharif regarding Avenfield Apartment case. Later she revealed how the previous DG ISI pressured the judge of accountability court to keep the Sharifs away from contesting elections. If such is the judicial compromise in Pakistan, then one must not be very hopeful about fresh investigations against latest names in Pandora Papers. The current Pandora leaks have names of Imran Khan backers, ministers and advisors as well. Already there is a controversy brewing over appointment of next National Accountability Bureau (NAB), it will be highly unlikely there will be timely accountability enquiry.
Offshore companies reflect the endemic problem of corruption, overtime from Panama leaks to Paradise papers to Pandora Papers now, there is a realization that laws are designed poorly and as Mahatma Gandhi had lamented legal experts for legitimizing the practice of twisting facts for the benefit of accused if he/she was wealthy in his book Hind Swaraj. The practice still persists and the meek citizen is segregated due to privileged access to knowledge of law and literature on finance. While for the layman citizen, the controversial part is not the amount of wealth but the social personalities involved in it. For example, the Pandora paper mentions names of the greatest cricketer of all time, Sachin Tendulkar, Colombian singer Shakira, but there is no evidence whether the money parked by these celebrities was legal or illegal. However, the story on TV and narrative in newspaper will not investigate the links rather would tend to discuss about the greed and amoral hidden shades of such famous figures and the threat they pose to young generation, which at the end would turn beef for viewers, categorically ‘all viewers’, as viewership itself is segregated and highly related to social interests and priorities of that section. Russian President Vladimir Putin who finds mention in Pandora Papers, may have moved his legal money but on the artificial digital plane of social media, his public acceptance is bound to get dented, both internally and externally similarly the Iman Khan government, will be receiving criticism from all corners. In the case of Pakistan, this is a curious situation, as the Army had hushed the media and social media influencers during controversy over victory for PTI in election results, maybe there is some space allowed for criticisms and issues in governance style of Imran Khan.
In a forward looking perspective, one (of course the meek citizen!) cannot help but have queer ideas about cryptocurrencies, as they are hallmark of privacy, its ledger-based accountability and hugely compromised role of central banks in such transactions. The fact that a large part of wealth will be transferred via legitimized spectrums of publicly accessible internet bandwidth and the transaction process will be mined by crypto users not by some office establishment. This seems worrisome, as after all what matters to the layman is his/her survival and greed rather than analyzing the process, the inclusivity and engagement of user-friendly cryptocurrency platforms needs to be seen as alert in terms of reduced capital equity and more misuse of the method.
Zahid Hussain, “The Pandora Papers,” Dawn, 06 October 2021
“Revealed: List of all Pakistanis named in Pandora Papers so far,” Dawn, 05 October 2021
“Pandora Papers expose wealth of Pakistan PM Imran Khan’s allies,” Al Jazeera, 04 October 2021
Emma Agyemang, “From Panama to the Pandora Papers, not enough has changed,” Financial Review, 07 October 2021
Anna Massgolia, “Pandora Papers reveal offshore finances of the global elite currying influence in U.S.,” Open Secrets, 08 October 2021
Tahir Naseer, “Maryam files new application with 'relevant facts' in IHC for annulment of Avenfield verdict,” Dawn, 05 October 2021
Robert Cribb, Marco Chown Oved, Sheila Wang, Billionaires, “Olympian and porn king among Canadians named in massive new leak exposing offshore accounts and secret tax havens of the global elite,” Toronto Star, 03 October 2021