Paradise Gains

  👤  3069 readers have read this article !
By 2017-12-14

By Padraig Colman

On 5 November 2017 (the anniversary of the day Guido Fawkes tried to blow up Parliament) the German newspaper Süddeutsche Zeitung published what became known as the Paradise Papers. The newspaper got hold of 13.4 million leaked records, mostly from offshore law firm Appleby, along with corporate registries in 19 tax jurisdictions. The papers reveal the financial dealings of corporate giants such as Apple and Google, business leaders, celebrities, royalty and, of course, politicians. Many Sri Lankans are justly proud of the corruption of their nation's political class. However, some delude themselves that Western politicians are less corrupt. The truth of the matter is that Western politicians are more subtle and devious in their corruption and have more sophisticated methods of facilitating it.

The newspaper called in the International Consortium of Investigative Journalists (ICIJ) to oversee the investigation. The BBC Panorama programme and The Guardian are among the nearly 100 media groups investigating the papers. The UK's top-selling magazine, Private Eye has published revelations of the involvement of prominent Britons.


The UK Prime Minister (at time of writing), Theresa May, made a somewhat lukewarm response to the revelations. Her husband, Philip May, is a senior figure in the private equity company, Capital First, which uses Appleby to manage its Cayman Islands operations.Steve Varley was appointed Chairman of UK and Chief Executive of UK and Ireland at Ernst & Young LLP and serves as Managing Partner of Ernst & Young UK and Ireland. The company now calls itself EY and plays a starring role in the Paradise Papers. In 2015, EY handed out huge bonuses to senior staff. There has been growing unease since the financial crash of 2008 that EY and the other bean-counters - KPMG, PwC, and Deloitte – have such a dominant role, especially in auditing and accounting of the wider corporate market. The big four held hundreds of business relationships with Appleby clients. Varley is a member of the group advising Theresa May and David Davis on Brexit. EY is also lead advisor to that old friend of Sri Lanka, Liam Fox, and his Department for International Trade. EY managed to snaffle up £15.3 million of taxpayers' money (that's my money) in nine months.

Strategies to help corporations

The papers show how accountancy firms mapped out strategies to help corporations minimise or avoid every significant tax. The standard response avoiders make is that their offshore investments were "wholly compliant with UK tax laws." George Osborne is now Editor of the London Evening Standard, which he uses as a platform from which to attack Theresa May. Osborne was once Chancellor of the Exchequer and therefore one of the people with most influence on the formation of UK tax law. Osborne was being paid over £650,000 a year by BlackRock for working one day a week. There are regular ports in the UK media about the distress and despair caused by Osborne's austerity measures. Incapacity testing has been farmed out to firms whose main aim is profit and consequently subject sick people to much torment. Some claimants reduce the benefit numbers by obligingly committing suicide. Osborne was criticized for taking the job because BlackRock may have benefited from reforms to pension rules made while he was Chancellor.The royal family featured in the Paradise Papers in relation to offshore investments by the Duchy of Lancaster in BrightHouse and Threshers. The Financial Times accused BrightHouse (which sells electrical goods and furniture predominantly to people on lower incomes via weekly instalments) of "preying on the vulnerable," charging interest rates of up to 94% and being ruthless in recovering debts through repossession. Threshers, the drinks retailer, paid no corporation tax for two years and when its high debts brought bankruptcy, 6,000 people lost their jobs.

Most workers are on PAYE (pay-as-you-earn), and cannot afford to pay experts to ease them of their responsibilities to the State which provides roads, hospitals, and schools from taxation. The State takes the tax out of their wages before they get their hands on it. The State can be very severe with those it believes to be fraudulently claiming social security benefits. The super-rich like the Queen can afford to buy the expertise to avoid their responsibilities.

PRINT EDITION

News

Read More

Teeninc

Read More

Scribbler

Read More