What Are the Paradise Papers?

The Paradise Papers are 13.4 million leaked files and 1.4 terabytes of leaked data from offshore service providers and company registries obtained by German newspaper Süddeutsche Zeitung. They reveal the offshore interests and activities of politicians, world leaders, and celebrities and the tax engineering of more than 100 multinational corporations spanning more than 65 years. This leak is important because if wrongdoing is found and exposed, these high-profile people could be forced from office and/or stripped of their powers.

Key Takeaways

  • Paradise Papers are 13.4 million leaked documents and 1.4 terabytes of leaked data of offshore activities of national leaders, wealthy individuals, and companies.
  • The leak originated from the Bermudian offshore law firm Appleby.
  • The leaked documents include loan agreements, financial statements, emails, and others.
  • German newspaper Süddeutsche Zeitung obtained the files and then turned them over to the International Consortium of Investigative Journalists (ICIJ), who then shared them with other media outlets.

Understanding the Paradise Papers

Over half of the files were leaked loan agreements, financial statements, emails, trust deeds, and other paperwork from a single offshore law firm headquartered in Bermuda named Appleby. Also included in the Paradise Papers are half a million documents from Singapore-based Asiaciti and 6 million documents from company registries in 19 secrecy jurisdictions.

Glencore PLC (GLCNF), the world's largest commodity trader and one of Appleby's biggest clients, is revealed to have diverted millions of dollars through tax havens. Glencore also conducted currency swaps of over $25 billion and made a $45 billion loan to Israeli billionaire Dan Gertler, a close friend of the President of the Democratic Republic of Congo, in exchange for Gertler's help in securing approvals from the country's government. 

The International Consortium of Investigative Journalists (ICIJ) along with 95 media partners in six continents explored the files before publishing stories on them on November 5, 2017. More details have since been revealed and are still developing.

Other noteworthy findings include investments in Facebook (FB) and Twitter (TWTR) linked to firms owned by the Russian government, commerce secretary Wilbur Ross's investment in a shipping firm with ties to Russian President Vladimir Putin, and Queen Elizabeth II's $13 million private investment in funds in the Cayman Islands and Bermuda.

Panama Papers vs. Paradise Papers

The Panama Papers, coined the largest data leak, are 11.5 million leaked files and 2.6 leaked terabytes of data from Panamanian offshore law firm Mossack Fonseca. Like the Paradise Papers, Süddeutsche Zeitung obtained the files and provided them to the ICIJ, who then shared them other media partners, such as the BBC.

The Panama Papers exposed the wealthy's - including 12 national leaders, 131 politicians, and others - exploitation of offshore tax havens. Leading the pack is Russian president Vladimir Putin, who put Russian state bank money into offshore accounts.

$2 billion

The amount of money connected to Vladimir Putin in the Panama Papers.

Although more papers were leaked with Paradise, it pails in comparison to Panama in terms of terabytes of data leaked. However, the Paradise Papers were much more complex, according to Gerard Ryle, who oversees ICIJ journalists.

Using offshore accounts is not illegal, and there are many valid reasons to use them. However, corruption exists, and these leaks could highlight the misappropriation of funds, money laundering, and other illegal transactions.