Thanks to whistleblowers who released a trove of documents, a team of journalists led by the International Consortium of Investigative Journalists (ICIJ) has released the first reports of what it calls the Pandora Papers. (Readers may recall an earlier expose called the Panama Papers.)

It reveals how vast sums of money are spirited away by politicians and wealthy people all over the world into tax-havens. Over 330 politicians from 90 countries are named. The US has become one of the biggest locations for tax dodging because of its laws involving the use of trusts. (This may be why the Panama Papers revealed few US names as using off-shore tax havens. It is not that they are more scrupulous but that they don’t have to. All the tax dodges they need are within the US.) News reports are careful to point out that these transactions may not be illegal but that is not the point. The global oligarchy makes the laws and we should not be surprised that they then use those laws to benefit themselves. But key questions that can and should be raised is how they amassed such wealth in the first place and why governments are allowed to connive in these schemes.

This article provides a quick guide to the revelations.

The files expose how some of the most powerful people in the world – including more than 330 politicians from 90 countries – use secret offshore companies to hide their wealth.
Lakshmi Kumar from US think-tank Global Financial Integrity explained that these people “are able to funnel and siphon money away and hide it,” often through the use of anonymous companies.
…

Loopholes in the law allow people to legally avoid paying some taxes by moving their money or setting up companies in tax havens, but it is often seen as unethical. The UK government says tax avoidance “involves operating within the letter, but not the spirit, of the law”.

There are also a number of legitimate reasons people may want to hold money and assets in different countries, such as protection from criminal attacks or guarding against unstable governments.

Although having secretive offshore assets is not illegal, using a complex network of secret companies to move around money and assets is the perfect way to hide the proceeds of criminality.

There have been repeated calls for politicians to make it harder to avoid tax or hide assets, particularly following previous leaks such as the Panama Papers.

But Mr Ryle said the Pandora Papers show that “the people that could end the secrecy offshore… are themselves benefiting from it. So there’s no incentive for them to end it”.

The major financial sectors in the developed world and their high-powered, highly-paid, tax lawyers and accountants work in tandem with legislators to enable this kind of tax avoidance. Ordinary people are the ones who are really paying for this because it deprives societies of the tax revenue they could have used to fund essential social services like health and education and basic safety nets.

This short video from the ICIJ describes the big picture.