The Paradise Papers Data Dump: What's Been Reported

(Bloomberg) -- A new set of data taken from an offshore law firm again threatens to expose the hidden wealth of individuals and show how corporations, hedge funds and others may have skirted taxes. A year after the Panama Papers, a massive leak of confidential information from the Bermuda law firm Appleby Group Services Ltd. has shone another light on the use of offshore accounts.

Here are the highlights so far of the reporting by the International Consortium of Investigative Journalists and partner news outlets on the so-called Paradise Papers. Bloomberg hasn’t seen the leaked documents:

• American colleges and universities -- including Duke, Dartmouth and Columbia -- have increasingly turned to secretive offshore investments that allow them to swell their endowments and avoid federal taxes, the files show, according to the New York Times. College endowment earnings are generally tax-exempt. But some schools have used offshore “blocker corporations” to avoid taxes on some complex investments and potentially escape scrutiny of ventures involving fossil fuels or other issues. The new report comes as House Republicans are proposing a 1.4 percent tax on the investment earnings of private colleges with rich endowments.
• The rich may be richer than you thought. Jim Simons, the billionaire founder of hedge fund Renaissance Technologies, has amassed more than $7.5 billion in a previously undisclosed, four-decade-old fund set up in Bermuda. Warren Stephens, an Arkansas banker and Republican donor, held a previously undisclosed stake in a payday lender under U.S. scrutiny, through an opaque structure with entities in Delaware and Bermuda, the New York Times reported. (Stephens made no attempt to use an offshore entity to reduce his tax bill or conceal his interest in the lender’s parent company, his lawyer said in response to an earlier summary of the reporting by Bloomberg.)
• to reduce his tax bill and conceal his interest in a payday lender under U.S. scrutiny. And George Soros, a liberal investor who has contributed to the ICIJ, used Appleby to manage a company that carried out reinsurance transactions that can be used to shield wealth from taxes.
  Read more about how hedge funds use reinsurers to shelter profits
• More than a dozen members of President Donald Trump’s inner circle, including Secretary of State Rex Tillerson and top economic adviser Gary Cohn, held undisclosed offshore companies. Robert Mercer, a Republican donor who just said he would step down as Renaissance Technology’s co-CEO, was revealed to be a director of more than eight of RenTech’s offshore subsidiaries, who used other offshore firms to shelter money his family funneled to political causes. The Blackstone Group, co-founded by Trump economic adviser Stephen Schwarzman, used trusts and companies registered in tax havens to avoid paying taxes on two U.K. commercial properties.
• After Irish officials closed a tax loophole that had allowed Apple Inc. to avoid billions of dollars in taxes, the U.S. tech giant enlisted international law firms to help it find a new tax home and settled in the English Channel island of Jersey, the New York Times reported. The documents helped solve a two-year mystery of where the world’s biggest company by market capitalization is booking a big share of its revenue.
• Want to register a private jet in the U.S.? Bank of Utah manages more than 1,390 aircraft trust accounts that obscure the identities of the jets’ (largely foreign) owners, the New York Times reported. Among the wealthy foreigners said to use the bank’s services: Russian oligarch Leonid Mikhelson, an ally of Russian leader Vladimir Putin whose gas company is under U.S. sanctions.
• U.S. Commerce Secretary Wilbur Ross faces questions about his financial disclosures to Congress and the government after a report that he didn’t disclose business ties to the son-in-law of Russian President Vladimir Putin and an oligarch under U.S. sanctions. The Appleby documents included details of Ross’s stake in a shipping company, Navigator Holdings, according to the New York Times.
• House Republicans should slow down their consideration of a tax-overhaul bill after the investigative reports alleged offshore tax-avoidance by U.S. multinational companies including Apple Inc. and Nike Inc., congressional Democrats and tax-advocacy groups said.
• The Monetary Authority of Singapore said it’s reviewing the documents and will take action against any financial institution or individual that breaches regulations. The regulator made the remarks on Wednesday after the consortium said that some of the files came from Asiaciti, a Singapore-based family-owned trust company. Asiaciti denied any wrongdoing.
• Canadian tax authorities are reviewing reports linking a key fundraiser for Prime Minister Justin Trudeau to offshore trusts in the Caribbean. Montreal-based businessman Stephen Bronfman, son of billionaire Charles Bronfman, was among the individuals cited by news organizations including the Canadian Broadcasting Corp., Radio-Canada and the Toronto Star in Sunday’s leak of bank documents.
• Commodities trader Glencore Plc was one of the top clients of Appleby, which even had a “Glencore Room” at its Bermuda office that kept information on the trader’s 107 offshore companies, according to the ICIJ investigation. (Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.)
• Prominent Silicon Valley investor Yuri Milner, who was an early backer of Facebook Inc., partnered in two investments with the Russian state-controlled bank VTB Bank PJSC before it was sanctioned, his spokesman confirmed Friday. Details about the relationship between Milner and VTB surfaced in the wake of the Paradise Papers.
• Indonesian authorities are investigating if former presidential candidate Prabowo Subianto and the children of ex-dictator Suharto, named in the leaked documents, are in breach of the country’s tax laws.
• A North Korean was listed in the leaked documents as a shareholder in a Malta-based company which may have been involved in the overseas transfer of North Korean construction workers, according to Newstapa, a South Korean partner of the ICIJ.
• Queen Elizabeth II of the U.K. made a series of investments in a Cayman Islands fund through the British Royal Family’s private estate, the Duchy of Lancaster, according to The Guardian newspaper.
• Lord Michael Ashcroft, a major donor to the U.K.’s Conservative Party, had links to a Bermuda-based trust with assets worth as much as $450 million, The Guardian reported.
• The Dutch Finance Ministry said it will review whether more than 4,000 cross-border tax rulings were issued in accordance with procedures. The decision follows the publication of an article in Het Financieele Dagblad reporting that correct procedures weren’t followed in an agreement between the Dutch tax authority and Procter & Gamble Co. "P&G has fully transparent relationships with governments and tax administrations worldwide," the company said in a statement. "We may seek confirmation from governments and tax administrations that our interpretation of tax laws is correct. This is what was done in this instance."

(A previous version of this article corrected the spelling of Stephen Schwarzman’s name, the timing of Robert Mercer’s exit as co-CEO and Mercer’s role in RenTech offshore firms.)

--With assistance from Kit Chellel Andrea Tan and Mary Romano

To contact the reporters on this story: Marcus Wright in Singapore at mwright115@bloomberg.net, David Kocieniewski in New York at dkocieniewsk@bloomberg.net.

To contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, Darren Boey, Alan Katz

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