Tax secrets of heads of state to sports stars revealed

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The secret offshore business dealings of some of the world's rich and super-rich have been exposed in newly published leaked documents.

Present and former politicians, Russian oligarchs, entertainers, sports stars and even Britain's Queen Elizabeth feature in the documents from Appleby, a prominent offshore law firm, that have been cited by international media outlets.

One eye-catching relationship extensively cited by US media on Sunday concerned US Commerce Secretary Wilbur Ross who reportedly kept investments in a shipping firm with significant business ties to Russian President Vladimir Putin’s inner circle, according to Reuters.

US Commerce Secretary' ties to Putin circle

Partnerships used by Ross, a billionaire investor helping to shape President Donald Trump’s trade policy, have a 31 percent stake in Navigator Holdings, which the New York Times said earns millions of dollars a year transporting gas for Russian petrochemical firm Sibur.

Sibur logo/photo from public pool

Gennady Timchenko, a Russian oligarch and Putin associate subject to US sanctions, and Putin’s son-in-law, Kirill Shamalov, are Sibur stakeholders, said the Times, which based its report on the Appleby files.

US Secretary of Commerce Wilbur Ross speaking during a briefing at the White House on April 25. DC/VCG photo‍

In an emailed statement, a Department of Commerce spokesman said Ross "was not involved in Navigator’s decision to engage in business with Sibur ... has never met the Sibur shareholders referenced in this story and, until now, did not know of their relationship."

He added that Sibur had not been under sanctions when Navigator began its relationship with the publicly-traded firm and still was not.

According to the Times, Sibur said in a statement that any negotiations with Navigator over the years were carried out by its executives, not its major shareholders, and that "no meetings were held with Mr. Ross."

Neither Navigator nor Appleby were immediately available for comment Sunday evening. Reuters said it could not immediately reach Timchenko and Shamalov for comment.

The Appleby files are part of the so-called Paradise Papers, a trove of leaked offshore investment documents. They were obtained by Germany’s Sueddeutsche Zeitung newspaper and shared with the International Consortium of Investigative Journalists and some media outlets.

NBC also used the documents to report on Ross’s investments.

Scrutiny of Trump administration officials’ possible ties to Russia has intensified as a result of probes into alleged Russian interference in the 2016 US election.

US special counsel Robert Mueller is investigating whether Trump campaign officials colluded with Moscow. Putin’s government has denied interfering in the election and Trump has denied any collusion with Russia.

In its report, the Times said Ross had kept the investment in Navigator, which increased its business dealings with Sibur even as Western nations sought to punish Russia’s energy sector over Putin’s incursions into Ukraine.

Navigator was mentioned in Ross’s 57-page public financial disclosure report filed in December, before he officially joined the Trump administration. The Times said the latest batch of documents provided more insight into his financial holdings.

"The Secretary recuses himself from matters focused on transoceanic shipping vessels," the Commerce Department spokesman’s statement said, adding that Ross works closely with officials to ensure the "highest ethical standards."

Queen's taxes

Citing the Appleby documents, Britain’s Guardian newspaper said millions of pounds from Queen Elizabeth’s private estate, the Duchy of Lancaster, had been invested in a Cayman Islands fund as part of an offshore portfolio never before disclosed.

Reuters could not independently confirm the Guardian report.

Britain's Queen Elizabeth sits next to Prince Charles during the State Opening of Parliament in central London on June 21. /VCG photo

The newspaper said the Duchy had used offshore private equity funds designed to shield investors in the United Kingdom from having to pay US tax on their holdings.

A spokesman for Buckingham Palace declined to comment.

A spokeswoman for the Duchy of Lancaster said: "We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate."

The spokeswoman also said the Queen voluntarily pays tax on any income received from the Duchy.

CBC: three former Canadian prime ministers involved

According to Canadian broadcaster BC, in addition to the Queen, three former Canadian prime ministers have connections to the offshore world that show up in the Paradise Papers:

Former Canadian prime ministers Paul Martin, left, and Brian Mulroney appear in the Paradise Papers in relation to companies that had dealings offshore. /Photo from Canadian Press

Paul Martin's former shipping empire Canada Steamship Lines – now run by his sons – is one of Appleby's "biggest clients," according to a document in the leak. Martin offered no comment and CSL said it complies with all laws and regulations wherever it operates.

Brian Mulroney was on the board of Said Holdings, run by Syrian-born billionaire Wafic Said, who helped broker the biggest arms deal in British history. Through a lawyer, Mulroney said he considers Said "a good friend" and is "proud" to have served the company.

Jean Chrétien lobbied for an East African oil venture called Madagascar Oil. A register of the company's investors lists him as the recipient of 100,000 stock options, but Chrétien told CBC/Radio-Canada he never got, or even heard of, any such options. He confirmed he did briefly do some consulting for the company, and his law firm at the time, Heenan Blaikie, was paid for his work.

Music and Sports

The leaked papers also revealed how famous actors, singers and top flight sports teams have links with the world’s tax secrecy jurisdictions.

High profile names that appear in the leaked documents include U2 frontman Bono who used a company in the low-tax jurisdiction of Malta to make investments. And English Premier League clubs, Arsenal and Everton, were both mentioned in the leaked papers as Uzbek-Russian billionaire Alisher Usmanov and British businessman Farhad Moshiri both used Appleby to buy stakes in both clubs, which raises the concern that the premier league prohibits "dual ownership."

Source(s): Reuters