The British Virgin Islands office of the now-defunct Mossack Fonseca as it looked in 2016. The firm’s documents formed the source of the Panama Papers leak. (File photo: KEN SILVA )

After the release of global news coverage about some 12 million documents revealing the offshore assets of about 300 politicians and 35 current and former heads of state facilitated through 14 service firms, one of the journalists involved in breaking the Pandora Papers investigation called last week’s revelations “the tip of the iceberg.”

“We’re not just talking about Mossack Fonseca, as was the case
with the Panama Papers: We’re talking about a whole range of different corporate service providers and other offshore specialists, and that really has, I think, given us globally an insight as journalists — and now consequentially members of the public — into the system in a much deeper way than has been done before,” said Will Fitzgibbon, a senior reporter for the International Consortium of Investigative Journalists, a global media organisation that spent more than a year sifting through the leaked documents before goinglive with its findings last week.

Mr. Fitzgibbon and two colleagues spoke during a webinar on Friday hosted by the OffshoreAlert website.

‘Freaking out’
Mr. Fitzgibbon described Panamanian government officials “freaking out” when asked for comment on the investigation, thinking it was another Panama Papers.

“But of course this isn’t the Panama Papers,” he said. “The Pandora Papers is so much more global than that, and it’s so much deeper than that, and I think that’s one of the reasons so many journalists were involved in this project, because they recognised immediately just what this meant.”

As in previous leaks, the Virgin Islands played a central role in the leak. About two thirds of the companies named in the papers were incorporated here, and the two firms that served as sources for most of the documents — Trident Trust and Alemán, Cordero, Galindo and Lee — both have offices in the territory. However, Mr. Fitzgibbon said one of the most significant findings of the Pandora Papers involved a jurisdiction that previously had largely escaped the spotlight.

“The [United States] was one of my fascinations with the Pandora Papers,” he said. “For the first time in the Pandora Papers, wehad Trident Trust Company and its office in Sioux Falls, South Dakota, and we had an insight into those operations and how really over the past four or five years, a significant number of very, very wealthy and often controversial
foreign clients, particularly from Latin America, had been transferring assets, often from Jersey or the Bahamas or the British Virgin Islands, where these foreigners had had trusts in some cases for 20 years, and more recently redomiciling or decanting those trusts into South Dakota.”

VI financial service providers have warned often in recent years that with the VI increasingly subject to tightening international regulations, more offshore business is migrating to the US.

Unlike the VI, the US has not signed on to the Organisation for Economic Co-operation and Development’s Common Reporting Standard, which requires the automatic exchange of foreign account information between participating jurisdictions.


Despite the size and gravity of the findings, the ICIJ reporters said that the responses to the Pandora Papers have been more measured than those to the organisation’s previous investigations.

“There hasn’t been a similar reaction to what we saw in the aftermath of the Panama Papers, where heads were rolling almost immediately,” Mr. Fitzgibbon said.

The Panama Papers, which led to immediate resignations and in some cases the eventual arrest of some of the figures involved, including  Mossack Fonseca’s founders, included extensive email correspondence that in some cases suggested deliberate wrongdoing.

The Pandora Papers have not yet offered such evidence. Mr. Fitzgibbon added that politicians are better prepared for the leaks.

“There’s no doubt that the world we live in now is different from the world when the Panama Papers was published,” Mr. Fitzgibbon said.

“Things have changed; politicians have become more sophisticated.”
Kenyan President Uhuru Kenyatta, for instance, released a statement thanking the journalists for reporting on the documents, he said. “My jaw was on the floor,”

Mr. Fitzgibbon said, adding that Mr. Kenyatta “had not responded to multiple questions before publication.”

At the same time, however, the Kenyan president refused to explain why documents suggest that he was the beneficiary of a Panamanian foundation.

Here in the VI, Premier Andrew Fahie has yet to comment on the Pandora Papers leak, though BVI Finance CEO Elise Donovan last week released a brief statement praising the “strength and efficacy” of the territory’s regulations.

Long-term effects?

Despite the relatively muted reaction so far, the reporters said they believe the Pandora Papers will still bring profound longterm effects.

“In cases like the Republic of Congo, I heard from reporters there this morning who said for the first time in living memory in that country, despite decades of allegations of corruption there, the president [Felix Tshisekedi] had to go on record and respond to the Pandora Papers investigation and I think that’s a sign of just how far we’ve come.”

Criminal and civil prosecutions also take time to wind their way through the courts. It wasn’t until 2019, for example, that US prosecutors announced they had secured their first criminal conviction resulting from the Panama Papers, when German businessman Harald Joachim von der Goltz pleaded guilty to conspiracy to commit tax evasion, fraud and submitting false documents, the ICIJ reported.

“I wouldn’t be surprised if we saw similar things in a few years
time,” Mr. Fitzgibbon said of the Pandora Papers.

Data protection

The OffshoreAlert moderator said he would not ask the journalists about the exact source of the leak.

However, ICIJ Director Gerard Ryle said another lesson from the Pandora Papers is “we can’t be 100 percent certain about any data anymore.”
Mr. Ryle said such concerns may prove to be a disincentive to using offshore structures.

“I think after Panama people thought it would never happen again,” he said. “[But] we know that we have now 14 different firms that have been breached in some way. But we know there are at least almost 1,000 of them out there that are probably just breathing a sigh of relief that it
wasn’t them.”

Global reform

Meanwhile, efforts to reform the global financial system continue. On Saturday, 130 OECD countries agreed to back a new global minimum tax rate of at least 15 percent that companies would have to pay regardless of where they locate their headquarters.

However, VI experts have speculated that the move likely will not target the types of companies usually incorporated in zero-tax jurisdictions
like the VI.