At a cost of many millions of dollars, euros, pesos, etc., 600 journalists from 148 media outlets and 117 countries have compiled the “Pandora Papers” over several months as part of the International Consortium of Investigative Journalists (ICIJ): 2.94 terabytes of data with 11.9 million documents on shell companies in numerous financial dossiers. Tax evasion, money laundering, fraud, corruption and the like among 330 named heads of state and government, other politicians, sports and cultural celebrities, and thousands of businessmen and billionaires are suspected, are probable.
29,000 shell companies
The heads of state and politicians are almost exclusively from dozens of smaller and remote countries such as Jordan, Montenegro, Kenya, Congo, Dominican Republic, Panama, Peru, Brazil, Argentina, Honduras, Colombia, Pakistan, Philippines, Indonesia, Qatar. Western prominent politicians are the major exceptions, and most are no longer in office: ex-British Prime Minister Tony Blair, ex-Italian head of government Silvio Berlusconi, ex-Israeli Deputy Prime Minister Haim Ramon, ex-Jerusalem Mayor Nir Barkat, ex-European Commissioner John Dalli. Only three incumbent Western politicians in smaller states are mentioned: “Christian” Dutch Finance Minister Wopke Hoekstra, Czech Prime Minister and oligarch Andrej Babis, and Ukrainian President Volodymyr Zelensky — that’s about it. USA, Germany, France, Canada, Scandinavia — all clean.
Among the cultural and sports celebrities, the ex-model Claudia Schiffer, the musicians Ringo Starr, Elton John, Julio Iglesias, the Nobel Prize-winning writer Mario Vargas Llosa, and the soccer coach Pep Guardiola (FC Bayern Munich, Manchester City) are all from the colorful pages’ picture book. From the aristocracy, a daughter of Moroccan King Hassan, the royal family of Qatar, and Corinna zu Sayn-Wittgenstein, entrepreneur and playmate of the resigned Spanish scandal king Juan Carlos I. Who would have thought it?
Among the many businessmen mentioned by name, there are similarly picture-perfect ones from Western-connected countries known for messy dealings anyway, such as India, Pakistan, Turkey, Montenegro, Bulgaria, Ukraine, Colombia, the Philippines and the Western-assumed territory of Hong Kong. However, there are also a few lost figures from more important countries: Robert Smith/Vista Equity Partners and Robert Brockman/Reynolds&Reynolds, two donors to the two leading U.S. parties; Alexander Temerko as donor to the British Tories; India’s richest entrepreneur Mazumdar-Shaw; the Israeli multi-billionaire Benny Steinmetz, sentenced to prison for money laundering and bribery; Formula I racing promoter Bernie Ecclestone.
In the margins, the US corporations Apple, Abbott, Nike and RJR Nabisco appear abruptly, also the most important US business law firm BakerMcKenzie (from which ECB chief Christine Lagarde comes), admittedly without naming individuals, without further elaboration and without justification for this tiny selection.
The largest unified group so far consists of 1,892 owners of shell companies from China, including a brother-in-law of head of state Xi Jinping and a daughter of ex-premier Li Peng. The second largest unified group from one state is formed by the dozen Russian businessmen described as “close friends” of President Putin. And one Svetlana Krivonogikh, once presented by german scandal sheet BILD as an “alleged” former mistress of Putin and since 20 years belonging to the jet set in the Principality of Monaco, was now punctually rediscovered by ICIJ investigators, with “alleged” 85 million euros in the mailbox.
All normal, isn’t it? But Putin! And Xi Jinping!
All in all, according to the information so far, the Westerners are involved in personal business deals. For example, Tony Blair and his wife bought a property in London for 7.5 million, as befits their status. Real estate purchases in Great Britain are anyway for a long time a popular object for foreign super-rich. Jordan’s King Abdullah, for example, bought 14 houses here, incidentally also from Crown Estate, the administration of the British royal family. And President Aliyev of Azerbaijan also got hold of as many as 27 properties in the United Kingdom without difficulty. The Czech Republic’s oligarch Babis bought a “mansion” in France. Dutch Finance Minister Hoekstra made do with pea nuts, taking a stake of a good 20,000 euros in a tourism company, together with friends.
All this shows that the use of shell companies is also routine in Europe and the EU. But the leading media evaluation focuses not on the states that tolerate and promote these practices, but on individuals who take advantage of the generous offer. Azerbaidjan’s Aliyev is otherwise powerfully denounced as authoritarian and corrupt — but that Britain enabled him to buy 27 properties with the help of shell companies — no criticism.
So people are pilloried who maintain shell companies. But the states and associations of states that promote the supply of shell companies, such as the USA, Great Britain, and by no means least the European Union, are not pilloried. We will come to that in a moment: The names of the Russian and Chinese owners of shell companies are known — but not the owners of the shell companies that are under the protection of BlackRock & Co.
When financial havens are part of the Western legal statehood after all
So far, the leading media portrayal has concentrated on a very special, tiny section: “Close friends of Putin” are the villains in the Pandora production. They use shell companies in financial havens! Financial havens that have been part of the system of US-led Western capitalism for decades.
When Western-friendly Russian oligarch Mikhail Chodorkovsky, owner of the privatized Yukos oil conglomerate, used several Western financial havens with the help of Western advisors, he was praised in the West for his skill and showered with loans and investments. He was convicted of tax evasion in Russia, facts he did not dispute. But the private arbitration court in The Hague, Netherlands, responsible for international financial relations, in 2014 ordered the Russian state to pay 50 billion in damages. By then, financial havens were part of Western rule of law, and no ICIJ investigators found anything wrong with that.
Missing: The most important financial havens
The most frequently mentioned financial havens are Panama, the British Virgin Islands, Belize, the Seychelles, Hong Kong, United Arab Emirates, Cyprus, and Switzerland. They traditionally specialize in hiding individual assets, money laundering and corrupt payments by individuals.
But missing are the financial havens that are central to corporations, banks and today’s leading investors: Right up front is the U.S. state of Delaware: for example, this is where most of the 500 U.S. companies on the Forbes and S&P lists have their legal and tax domiciles.
In the EU, the most important financial havens for tax avoidance, lending, license sales of companies are: The states of Ireland, Luxembourg and the Netherlands. In addition, the Cayman Islands (British overseas territory), Singapore and the British Channel Islands of Jersey and Guernsey are the most important.
Incidentally, they are all missing from the “black list” of the ICIJ and also from the financial havens drawn up by the EU, including the most recent one dated 22.2.2021. To demonstrate their ridiculousness, here are these insignificant financial havens branded by the EU: Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Seychelles, Trinidad&Tobago, Vanuatu.
In the Pandora Papers, 203 U.S. trusts also appear on the margin, domestic U.S. shell companies, so to speak. Most of them, 81, are located in South Dakota, in Florida 37, in Texas 24, in Nevada 14. Such trusts are also assigned to Delaware, 35. They are used by upscale layers of petty criminals. Here, too, the first league of US corporations and Wall Street is missing, which maintain tens of thousands of shell companies in the Cayman Islands, the British Channel Islands and, last but not least, in Ireland, Luxembourg, the Netherlands, Cyprus and Malta.
For example: Deutsche Bank in Delaware
The major players are not represented in the insignificant to ridiculous financial havens in which Pandora investigators also dive. The largest location of corporate and banking mailboxes in the world, the U.S. state of Delaware is not mentioned at all in this regard. Nor is the world’s largest capital organizer, BlackRock, which has its legal and tax headquarters here.
Let’s take an example from Germany: Deutsche Bank — in which BlackRock itself is also one of the leading shareholders — maintains many dozens of shell companies in the main financial havens of Delaware, Luxembourg, the Netherlands and the Cayman Islands.
Deutsche Bank in Delaware:
*Deutsche Bank Capital Finance LLC I
*Deutsche Bank Contingent Capital LLC II
*Deutsche Bank Contingent Capital Trust II
and four other dozens.
In Luxembourg, for example:
*Deutsche Bank Luxembourg S.A. Fiduciary Deposits.
*Deutsche Bank Luxembourg S.A. Fiduciary Note Programme
and four more dozen.
In Ireland, for example:
*Eirles Three Designated Activitiy Company.
*Eirles Two Designated Activity Company
and so on.
Attachment 1 shows an excerpt from Deutsche Bank’s list of shareholdings, last updated 2019. The place Wilmington mentioned therein is the capital of the U.S. state Delaware; Georgetown is the capital of the Cayman Islands.
Missing: Leading capital organizers BlackRock & Co.
Missing from the elaborate Pandora “disclosure” are not only the main financial havens and the companies and banks, but also today’s leading investors, capital organizers and asset managers who own the main Western companies and banks.
Foremost among these today is BlackRock: the largest capital organizer in the U.S.-led Western financial system, with $9 trillion in invested capital, has its legal and tax headquarters in Delaware.
BlackRock is currently a co-owner/shareholder of 18,000 companies and banks worldwide, in most of the 500 largest companies and banks in the U.S. (e.g., Amazon, Google, Facebook, Apple, Microsoft, Coca Cola, Goldman Sachs, Tesla, Exxon, Boeing, Lockheed), similarly in the UK, Germany, France, Belgium, Switzerland, etc.
In Germany, BlackRock is among all 6 major shareholders of all 30 DAX corporations, also in the just-mentioned Deutsche Bank, also in the fraud corporation Wirecard, and also in the 5 largest private housing corporations, namely Vonovia, Deutsche Wohnen, LEG, TAG and Grand City Properties.
[See Werner Rügemer: The Capitalists of the 21st Century. An Easy-to-Understand Outline on the Rise of the New Financial Players, 308 pages, editing houtse tredition 2020, harcover, paperback, eBook.]
Missing: BlackRock’s wealthy investors
Today’s leading capital organizers and investors like BlackRock, Vanguard, State Street, Blackstone, KKR & Co. get their capital from the super rich, if they have 50 or 100 million idle in one of their accounts, i.e. multi-millionaires and multi-billionaires, corporate foundations, entrepreneurs, top managers, pension funds. And these capital providers of BlackRock & Co are anonymized with the help of letterbox companies, and this capital and the proportionate profits from the 18,000 BlackRock companies and banks then enjoy the protection of the financial havens that are not on the EU blacklist.
That the clients of BlackRock & Co. use letterbox companies by default and are anonymized — this is not even mentioned in the Pandora Papers. And of course, these investors of BlackRock & Co. are then also not mentioned by name in the Pandora Papers — unlike the Russian and Chinese owners of shell companies.
BlackRock’s shell companies in the lignite group RWE
BlackRock is the largest shareholder in the German lignite company RWE, with 3.26 percent of the shares. This share currently represents a value of almost one billion euros. And this amount is distributed among 219 BlackRock subsidiaries/letterboxes, with an average amount of about 4 million euros.
BlackRock Deutschland AG is also one of these 219 companies.
Its supervisory board chairman until 2020 was BlackRock’s lobbyist in Germany, Friedrich Merz, who also wanted so much to become CDU chairman, chancellor or at least finance minister and was also supported in this by the business and banking lobby in Germany. Hello ICIJ-investigative journalists: Have you ever pursued the question whether Friedrich Merz has a letter box company, or perhaps even several?
But the vast majority of these 219 companies are shell companies in financial havens and contain the respective invested capital of BlackRocks anonymous investors. The financial havens are not the Seychelles, Belize etc. mentioned by ICIJ and the EU, but they are Delaware, the Cayman Islands, Luxembourg, Netherlands, Singapore.
Attachment 2 shows an excerpt from the list of these RWE-BlackRock shell companies; ticked are the shell companies in financial havens; the name part “Holdco” means: domicile in Delaware. (as of 6.10.2021) The fact that the average value of the shares is “only” 4 million should not come as a surprise: These shell companies belonging to individual investors also appear in numerous other companies and banks, thus uniting a much larger sum in themselves.
Missing: Joe Biden, the patron of Delaware
Oh, in case you didn’t know or forgot again, which can happen very easily nowadays, with this inundation of non-information: With the rise of Delaware to the largest corporate and investor financial oasis on earth also rose a certain Joe Biden, since 2021 president of “America First”.
Biden was a senator for the tiny U.S. state of Delaware from 1973 to 2009. He had already applied for this office as a 29-year-old business lawyer and held it for 35 years. The number of shell companies in Biden’s homeland is at least twice the number of eligible voters. Son Beau Biden became attorney general here without having to try very hard. Son Hunter Biden is an active financial speculator in Ukraine, among other places. When necessary, father Biden stood up for him on the ground in Kiev.
Joe Biden has recently received donations for his election campaigns from major digital companies such as Alphabet/Google, Microsoft, Amazon, Apple, Facebook and Netflix. But Delaware companies also promoted their influential senator, including credit card company MBNA and John Hynansky, who is from Ukraine and dominates the export of premium SUVs to Ukraine.
Biden, as a senator in Washington, always voted with Republicans on major financial sector deregulations. The largest financial oasis also includes an extremely “liberal” corporate constitution (extremely low liability, low disclosure requirements) and a judiciary to go with it.
And the largest company in the financial oasis, BlackRock and longtime lobbyist Joe Biden eventually found themselves quite close: Three top BlackRock executives became members of the Biden administration.
Pandora Papers: Funded by Soros’ Open Society Foundations
Like the similar Panama Papers and Paradise Papers, the Pandora Papers were coordinated by the Washington-based International Consortium of Investigative Journalists, ICIJ.
The associated media in the Western countries mainly include media outlets posing as “liberal” such as the New York Times (USA), Guardian and BBC (Great Britain), Asahi Shimbun (Japan) and from Germany the Süddeutsche Zeitung, WDR and NDR.
The sums of millions for the elaborate international research and coordination by the ICIJ come from the Open Society Foundations of the well-known major speculator and U.S. multi-billionaire George Soros. He financed the opening of entire states of Eastern Europe to Western “values” and investors with the help of numerous “colorful revolutions.” Oligarchs like Viktor Orban are his foster children, even if he later falls out with them. And against Putin’s Russia — Soros is always there. Against Putin’s corrupt and often drunken predecessor, Boris Yeltsin, the sellout of Russia, on the other hand, Soros and ICIJ had no objection.
“Enlightenment” in the Service of Counter-Enlightenment and Agitation
The Pandora Papers suggest personal, unclean dealings by the named individuals, such as fraud, money laundering, corruption and the like. This, we know from experience, will be true in many cases.
But the ICIJ investigators avoid making a clear distinction that is communicated in a publicly sustained way: In the case of the Russian and Chinese individuals mentioned, it is admittedly implied that the shell companies serve other purposes. For example, Alibaba, the largest Chinese trading company, organized its IPO in New York through a shell company. This was known to both the U.S. and Chinese sides — there was no other way, and it was because of U.S. rules. And when the Chinese leadership thus strengthens the Chinese national economy and subsequently gives Alibaba a proper regulatory squeeze, as happened, then this is something different from the permanent protection that the US and EU governments and now the ICIJ — “revelations” grant to the super-rich capital providers of BlackRock&Co.
If the Pandora Papers disclosures are followed by prosecutorial investigations,