Czech Prime Minister Andrej Babis, one of his country’s richest men, rose to power promising to crack down on tax evasion and corruption. In 2011, as he became more involved in politics, Babis told voters that he wanted to create a country “where entrepreneurs will do business and will be happy to pay taxes.”
The leaked records show that, in 2009, Babis injected $22 million into a string of shell companies to buy a sprawling property, known as Chateau Bigaud, in a hilltop village in Mougins, France, near Cannes.
Babis has not disclosed the shell companies and the chateau in the asset declarations he’s required to file as a public official, according to documents obtained by ICIJ’s Czech partner, Investigace.cz. In 2018, a real estate conglomerate indirectly owned by Babis quietly bought the Monaco company that owned the chateau.
Sounds like at the very lest it was unreported. We have half the story, which in a lot of cases sounds like fraud. The other half of the story is in tax documents.
ETA: The other thing is a lot of these people have the power to fix these systems that enable corruption, and like Babis, publicly say they will. But are they going to fix the system if they're using it?
> “If the Jordanian monarch were to display his wealth more publicly, it wouldn’t only antagonize his people, it would piss off Western donors who have given him money,”
...
> Marwan Kheireddine, Lebanon’s former minister of state and the chairman of Al Mawarid Bank, also appears in the secret files. In 2019, he scolded former parliamentary colleagues for inaction amid a dire economic crisis. Half the population was living in poverty, struggling to find food as grocers and bakeries closed.
> “There is tax evasion and the government needs to address that,” Kheireddine said.
> That same year, the Pandora Papers reveal, Kheireddine signed documents as owner of a BVI company that owns a $2 million yacht.
> Al Mawarid Bank was one of many in the country that restricted customers’ U.S. dollar withdrawals to stem economic panic.
> Wafaa Abou Hamdan, a 57-year-old widow, is among the regular Lebanese who remain angry at their country’s elites. Because of runaway inflation, her life savings plummeted from the equivalent of $60,000 to less than $5,000, she told Daraj, an ICIJ media partner.
But my prior is, that if the public knew about it (in general "these are the ways the elites use to pay less tax than you", as well as specifically "this career public official actually amassed $100m wealth on $100k salary"), the laws would change (e.g. introduction of wealth tax, or equalization of capital and labour taxes).
When you get money from the offshore (as dividends or whatever) you pay taxes on that income, like normal ppl.
What happens with the money between these moments is different story though. Depends on how the money are spent. And to my understanding, if they used to buy a property, say in US, the offshore still pays the US property taxes.
Say you own a company in the UK which sells widgets, but you also own an offshore company that also sells widgets. If you are dealing with a Chinese company, you could use the offshore company to do the deal, paying little to no tax. The money then resides in the offshore company and has never gone through the UK - either as a business or personal. As an individual you could own a credit card that you use to spend in the UK, which goes back to the offshore company. In additional, the offshore company could buy property in the UK and no tax is paid. There are various other tricks and nuances that can be employed to help minimise tax paid - completely legally.
I can even give opposite examples, like when someone comes to the US to run a startup in California. For the country of their origin they definitely opened an offshore corp (in the US in this case) and don't pay taxes on it (they still pay to the US gov though). It's just more convenient to have a US corp rather that a corp in their home country, and not because of taxes which may be higher in the US.
The broader question and sentiment of this piece is: how exactly have people who supposedly work in Public Service amassed such wealth when these positions are paid so low, and what lengths will they go to do so, especially in developing countries. The subtext being if their are conflicts of interest in their investments which happen to also be tied to offshore havens.
This outrage is warranted, because it underscores how tiered the legal system is World wide (The US is least represented in the Pandora release but 2 Federal Reserve Presidents have just stepped down due to insider trading [0]) for those closest to power, whereas tax evasion is one of the most effective ways to get a criminal indictment for the average citizen in most of the World.
0: https://wgno.com/news/business/dallas-feds-kaplan-to-leave-i...
For those closest to the power, the easiest way to get around the law... is to follow it to the letter.
Biggest, and most famous Russian mafiosos live in the open in London, while diligently paying taxes on their multi-billion ill gotten wealth, and without using any offshore structures, or shady law firms at all.
And the British establishment, Downing St., is very happy with this arrangement.
What people forget about these things is that those offshores are a refuge for at most second grade rogue economic players, whose main rationale hiding their wealth is to hide it from other much bigger gangsters, and mafias from their home countries.
They themselves choose places like London not because it's a rich city to live in, but because of London offering much better protection from being gunned down in broad daylight than cities in their home countries.
I'd agree but not for the reason(s) you've outlined, what they they will do is get their crimes legalized. Or, if they get caught as in the case with Christine Lagrade [0], they will get convicted but serve no sentence and remain in their position. Proving that selective application of the Law, nepotism and the failing up method is as prevalent as ever within these circles.
The City of London Corporation is nearly autonomous to the greater UK with it's own political and legal framework [1], and given it's incredibly checkered past, you'd do well to keep that in mind when you decide to be an apologist for Russian tycoons and oligarchs.
To be clear: I'm not against wealth or the wealthy, I'm merely pointing out the hypocrisy (and my disdain) for those who use their relation to the State for their own largess.
0: https://www.bbc.com/news/world-europe-38369822 1: https://en.wikipedia.org/wiki/City_of_London_Corporation
Highly doubt it. A targeted assassination would be as easy in London as anywhere else.
Usually, those folks come from money to begin with, which makes the situation even worse.
I saw this a lot living down in Texas, state congressional pay is so low that you basically have to come from money in order to run and hold state office (base pay is $7.2K annually and tops out at $40k for a two year period, depending on how many days they're in session, basically minimum wage). Even though it's technically not a full-time job, it's demanding enough of one's time that they need a prior career with enough flexibility in order both hold office and make extra income, which excludes the vast majority of the population.