In today’s digital era, offshore secrets are hard to keep. In its latest revelations, International Consortium of Investigative Journalists (ICIJ), the German newspaper Suddeutsche Zeitung and news organisations from Europe, South America, Asia and Africa reveal fresh information about offshore companies in the Bahamas. The leaked documents provides names of politicians and others linked to more than 175,000 Bahamian companies registered between 1990 and 2016
The data has brought to light details of the financial interests of politicians, entrepreneurs, financiers – and fraudsters.
Five months after the release of the Panama Papers, this new cache of information from the world of offshore tax havens contains the names of directors and some shareholders at nearly 176,000 shell companies, trusts and foundations.
Whose names are being revealed
Among the revelations are the offshore business dealings of the home secretary, Amber Rudd, along with her involvement in a fund where a fellow director was jailed for making misleading statements to investors.
The former EU competition commissioner Neelie Kroes has been forced to admit she breached the European commission’s code of conduct by failing to declare her directorship of an offshore company while she was actively policing multinationals.
The data also contains trails left by Cem Kinay (German), a property developer wanted by Interpol for bribery, and accused of making a possibly corrupt payment to Michael Misick, the former premier of the Turks and Caicos islands, a British overseas territory.
As previous reports have revealed, and the latest leak confirms, David Cameron’s father used the Bahamas as a base from which his Blairmore investment fund avoided tax for three decades.
It was also the offshore address of a Mongolian gold-mining company whose directors included Sukhbaatar Batbold, an entrepreneur who would go on to become Mongolia’s prime minister.
The son of former Chilean dictator Augusto Pinochet used a Bahamian company, Meritor Investments Limited, to move $1.3m to his father. Pinochet’s son, Marco Antonio, dismissed the allegations as “lies” and declared no wrongdoing through the Bahamas. Pinochet himself owned another Bahamian company, Ashburton Company Limited, set up in 1996. Abba Abacha, the son of former Nigerian president, Sani Abacha, had $350m frozen in Luxembourg and the Bahamas as part of a global asset hunt into the estimated $3bn stripped from Nigeria during his father’s five-year rule.
Bahamian companies and bank accounts have also played key roles in graft schemes involving former politicians from Greece, Ukraine, Kuwait and Trinidad and Tobago and in illegal kickbacks to Saddam Hussein’s Iraqi government under the United Nations Oil-for-Food program.
The Bahamas was also linked to the dealings of five politicians and public officials revealed in the Panama Papers.
They include Sheikh Hamad bin Jassim bin Jaber Al Thani, Qatar’s former prime minister and foreign minister until 2013, who owned Trick One Limited, a Bahamas company. In January 2005, when foreign minister, Al Thani signed a loan agreement with a bank for $53m.
Argentina’s president, Mauricio Macri, his father Francisco and brother Mariano, directed Fleg Trading Ltd, set up in the Bahamas in 1998 and dissolved 11 years later. Macri did not disclose his connection to Fleg Trading in asset declarations in 2007 and 2008 when he was mayor of Buenos Aires. Following the release of Panama Papers, an Argentine prosecutor sought information from authorities in Panama and the Bahamas as part of an investigation into whether Macri “maliciously” omitted his connections to the company.”
Reason for picking the Bahamas
There are many legal reasons for choosing a Bahamas letterbox, chief among them the absence of taxes on company profits, capital gains, income and inheritance.
Another reason is anonymity. The Bahamas claims to be a transparent jurisdiction with a public register of companies, but the information shared from the seat of government in Nassau is limited.
The corporate registry is supposed to contain the names and addresses of all directors and officers and can in theory be consulted online, but there is no requirement to register the owners of a company with the authorities. Unlike the Cayman Islands and Jersey, the Bahamas has not responded to public pressure to introduce government-held registers of beneficial owners.
The Bahamas registry website is often unavailable and the information it contains is patchy. Neelie Kroes, for example, does not appear in the online entry for the company of which she was a director. Complete information can often only be obtained by phone and fax or a visit in person.
Importantly, it is not possible to search for names of individual directors, but only by company name, which can make wrongdoing hard to track.
The Bahamas has bilateral information-sharing agreements with 32 countries, including the UK, Germany, France and the US, but has completed no new deals since 2013. Many of these agreements are of limited use because they are with other tax havens, such as Guernsey and Malta, or with tiny economies such as Greenland.
Even with a bilateral agreement, investigators cannot ask the Bahamas for all of the information it may have on an individual. They must first have the name of their bank or offshore company.
Sources: ICIJ, CBC, The Guardian