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What are the Pandora Papers and why is the leak important to you

Written By | Oct 4, 2021
Pandora Papers, Off shore money

Splash Page – International Consortium of Investigative Journalists –

WASHINGTON — Mainstream media misses, or ignores, yet another story. And it may be because of who it involves. The Pandora Papers investigation is the world’s largest-ever journalistic collaboration of leaked documents of the uber-rich. The investigation involving over 600 journalists from 150 media outlets in 117 countries. The International Consortium of Investigative Journalists (ICIJ) has spent over a year researching, organizing, and analyzing more than 11.5 million records in the Pandora Papers leak.

An estimated $24 to $36 trillion in wealth,  is believed to be hidden in ‘secrecy jurisdictions’ or ‘tax havens’ around the globe.

That immense wealth is controlled by the world’s wealthiest 0.1 percent. The Pandora Papers leak is 2.94 terabytes of data of offshore secrets of wealthy elites from more than 200 countries and territories. These are people who use tax havens to buy a property and hide assets to avoid paying taxes to their governments, and worse. They include more than 330 politicians and 130 Forbes Identified billionaires, as well as celebrities, fraudsters, drug dealers, royal family members, and religious leaders from around the world.

While what they are doing is not illegal in some countries, their actions seem, at the least, nefarious. These activities are a common part of money laundering.

The leak is said to have come from documents obtained by the German newspaper Sueddeutsche Zeitung.

Sueddeutsche Zeitung sharing the data with the International Consortium of Investigative Journalists (ICIJ). The British Broadcasting Company (BBC) claims to not know the identity of the source but knows a firm that says it had been the victim of a computer hack attack from servers abroad.

The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations, and other entities in low- or no-tax jurisdictions. The entities enable owners to conceal their identities from the public and sometimes from regulators. Often, the providers help them open bank accounts in countries with light financial regulation.

One of the first to drop the story Sunday was the Washington Post:

‘What are the Pandora Papers?’

This massive data leak to ICIJ arrived in a variety of formats of: text documents, images, emails, spreadsheets, and more. The leaked confidential records included an unprecedented amount of information on so-called beneficial owners of entities registered in the British Virgin Islands, Seychelles, Hong Kong, Belize, Panama, South Dakota as well as other locations that protect financial disclosures from the public spotlight.

Most of the data reviewed by ICIJ were created between 1996 and 2020 but some were even earlier. It covers a wide range of matters some legal and some not so much. The ICIJ listed some of what they found as:

“The creation of shell companies, foundations and trusts; the use of such entities to purchase real estate, yachts, jets and life insurance; their use to make investments and to move money between bank accounts; estate planning and other inheritance issues; and the avoidance of taxes through complex financial schemes. Some documents are tied to financial crimes, including money laundering.”

The data implication is that those in the list conspired to conceal somewhere between $5.6 trillion to $32 trillion, according to the ICIJ.

The International Monetary Fund claims the use of tax havens costs governments worldwide up to $600 billion in lost taxes each year. It is to be noted that the use of tax havens is not illegal in some parts of the world. The Pandora Papers investigation offered a better look at how banks and law firms collaborate with offshore service providers to design corporate structures to evade tax payments. The investigation showed providers don’t always know their customers, even though they have a legal obligation to not to do business with people who engage in questionable dealings.

The investigation shows how US trust providers have taken advantage of some states’ laws. For example, South Dakota was mentioned as s state that promotes secrecy and helps wealthy overseas clients hide wealth to avoid taxes in their home countries.

Not many names have been released related to this leak thus far but those who have include:

Jordan’s King Abdullah II
Former UK Prime Minister Tony Blair
Pakistan Prime Minister Imran Khan
Colombian music artist Shakira
Russian President Vladimir Putin

If you are thinking this story about these newly released Pandora Papers sounds familiar, you may be thinking of two previous leaked paper investigations from years prior.

The 2016 Panama Papers investigation came about after a leak of 2.6 terabytes of data in 11.5 million documents.

The single provider and now-defunct Mossack Fonseca law firm was the source in that incident. In 2017 the Paradise Papers investigation was based on a leak of 1.4 terabytes in more than 13.4 million files from the offshore law firm Appleby and Asiaciti Trust. Asiaciti Trust was a Singapore-based provider. By contrast, the Pandora Papers leak provides 2.94 terabytes in more than 11.9 million records from 14 providers offering services in at least 38 jurisdictions.

In the previous ICIJ investigation of the 2017’s Paradise Papers data included more documents about multinationals. The jurisdictions with the largest presence in that leak were Bermuda and the Cayman Islands, popular tax havens for corporations.

In the 2021 Pandora Papers, ICIJ identified more than 700 companies with beneficial owners connected to the US Americans were also among the top 20 nationalities in the data. In the Pandora Papers, Russia, the United Kingdom, Argentina, China, and Brazil, are among the leading countries with the largest representation of beneficial owners. However, in the 2017’s Paradise Papers, US citizens had a larger relative presence.

The Pandora Papers leak also includes information on jurisdictions not explored in previous ICIJ projects or for which there was little data for tax havens such as Belize, Cyprus, and South Dakota.

The Pandora Papers contained information of more than 27,000 companies and 29,000 so-called ultimate beneficial owners of 11 providers. This represents more than twice the number of beneficial owners identified in the Panama Papers of 2016.

The Pandora Papers reveal a large proportion of beneficial owners appearing from Latin America.

It shows 90 of the more than 330 politicians and public officials in the data are from Latin America. Argentina, Brazil, and Venezuela are among the countries with the largest representation of beneficial owners. The leaked data, Alcogal headquartered in Panama, showed the largest number of Latin American clients. And the Pandora Papers’ 330 politicians and public officials, from more than 90 countries and territories include 35 current and former country leaders!

The leaked Pandora Papers represented a new challenge to the ICIJ. The 14 providers in the data had different ways of presenting and organizing information. The assimilation of the data took some time and required extra expertise. Some providers organized documents by the client, some by various offices, while others had no apparent system at all. A single document sometimes contained years’ worth of multiple documents such as emails and attachments.

ICIJ identified files in the Pandora Papers that contained ownership information by company and jurisdiction and organized accordingly.

Each provider’s data required its own process. Where the information came in spreadsheet form, ICIJ had to remove duplicate data and combine it into a master spreadsheet. PDF or document files require the use of programming languages such as Python to automate data extraction. Organizing it as much as possible. In more complex cases, ICIJ used machine learning and other tools such as Fonduer and Scikit-learn software, to identify and separate specific forms from longer data paths. Some provider forms were handwritten requiring information to be extracted manually. Another issue was languages. The documents were in English, Spanish, Russian, French, Arabic, Korean and other languages, requiring extensive coordination among ICIJ partners.

Once ICIJ assimilated the leaked information, they generated lists that linked beneficial owners to the shell corporation companies they owned in specific jurisdictions. In some instances, they could not determine where or when a company was registered based on the information available. In other, instances they could not determine when a person or an entity had become the owner of the shell company, along with other details.

After assimilating the data, the ICIJ used graphic platforms (Neo4J and Linkurious) to generate path sequences and make them searchable. 

This allowed reporters to explore connections between people and companies across the providers of tax havens. The ICIJ matched data in the leak against other data sets: sanctions lists, previous leaks, public corporate records, media lists of billionaires and public lists of political leaders. ICIJ’s Swedish partner, Sweden’s Television Stock Company SVT, generated spreadsheets of path sequences of data extracted from passports found in the Pandora Papers.

ICIJ then shared their findings with their many media partners using a computer program named Datashare. Datshare is a secure research and analysis tool developed by ICIJ’s technical team. Using this software journalists from around the world could use a batch-search function to help match some public figures with the data. The ICIJ used machine learning to tag other data from such sources as Wikipedia and World-Check in Datashare, enabling data to be extrapolated further.

ICIJ findings don’t necessarily confirm whether a person is hiding wealth in secrecy in a jurisdiction.

They only managed to track money amounts to their true source of origin. ICIJ only served in linking documents that contained secret information to the anonymous owners of offshore accounts. What they then found was nearly 3,700 companies with more than 4,400 beneficiaries who were mostly Russian nationals including 46 Russian oligarchs.

Another avenue the ICIJ opted to investigate was US Trusts. There they identified more than 200 trusts settled or created, in the US from 2000 to 2019. The largest number of them registering in South Dakota. Those trusts connect to people from 40 countries (not including the US). The data shows that US trusts held assets worth a total of more than $1 billion. Those included US real estate and bank accounts in Panama, Switzerland, Luxembourg, Puerto Rico, the Bahamas, etc.

ICIJ matched Forbes’s billionaires’ lists against the Pandora Papers where they found more than 130 who held entities in tax havens. More than 100 of those had a combined value of more than $600 billion in 2021!

The most shocking part of this latest leak of the wealthy elite was to find South Dakota is a popular tax haven right here in America.

One can only imagine this might become a new thorn to South Dakota Governor Kristi Noem who has already had to fend off attacks of infidelity and nepotism. But before you Noem attackers start licking your lips ready to pounce, Kristi Noem was born November 30, 1971.

In 1983 South Dakota was the first state in the nation to abolish the Rule Against Perpetuities. This cleared the way for the creation of the Dynasty Trust. Alaska, Delaware, and Nevada, also allow for Dynasty Trusts.

‘Dynasty Trusts’ – Bridgeford Trust

In 2009, the Obama administration made it harder for US citizens to hide money in foreign banks, passing laws like the Foreign Accounts Tax Compliance Act. This accelerated the popularity of South Dakota’s Dynasty Trusts.

And for those still thinking about attacking Governor Noem over these Pandora Paper leaks…

A remodeled but seemingly empty S.S. Kresge department storefront in Sioux Falls, South Dakota, is the street address for many of these trusts. There are 40 trust companies at that address of 201 South Phillips Avenue. Those companies managing an estimation $80 billion (American) worth of trust assets.

That building has offices belonging to none other than a branch of Chicago’s Hyatt Hotel chain Pritzker family, Illinois Governor J.B. Pritzker (D). Pritzker rents an office in this building. Down the hall from the Pritzker’s is the Minnesota Carlson clan of the Radisson hotel chain. Chicago’s William Wrigley (gum guy) is said to hold an office in the building to manage his trusts. The late John Nash, the hedge fund giant, also has an office in this unpretentious building.

Additional rumors say the building fronts ‘Miami and Hong Kong’ money.

If you wish to learn more about ICIJ’s data releases, subscribe to ICIJ’s email newsletter.


Read more from Mark Schwendau.

About the author:

Mark Schwendau is a conservative Christian patriot and retired technology professor (CAD-CAM and web development). He prides himself on his critical thinking ability. Schwendau has had a long sideline of newspaper editorial writing where he used the byline, “bringing little known facts to people who want to know the truth.”

Mark is “on alternative free speech social media platforms after lifetime bans from Facebook and Twitter and shadow bans from Instagram and Fox News commenting.

His website is www.IDrawIWrite.Tech

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Mark Schwendau

Mark Schwendau is a Christian conservative patriot and retired technology professor (CAD-CAM and web development) who prides himself on his critical thinking ability. Schwendau has had a long sideline of newspaper editorial writing where he used the byline, “- bringing little known facts to people who simply want to know the truth.” Mark is on alternative free speech social media platforms after lifetime bans from Facebook and Twitter and shadow bans from Instagram and Fox News commenting. His website is www.IDrawIWrite.Tech