🔗 The legal links in the Pandora Papers
What’s going on with the Pandora Papers? And what might be the legal repercussions? Here’s a quick guide.
The gist of the Pandora Papers: Released last week, the Pandora Papers show hundreds of corporations and politicians engaging in offshore tax havens and shell companies, according to the WSJ. Those things generally aren’t illegal, but the report notes “these affairs often amount to shifting profits from high-tax countries, where they are earned, to companies that exist only on paper in low-tax jurisdictions.” The maneuvering means companies get added secrecy, and the public loses out on their tax contributions.
At least one huge law firm is involved: Ever heard of Baker McKenzie? According to the International Consortium of Investigative Journalists, the firm had a prominent role in helping companies and politicians -- including some connected to corruption and authoritarian regimes -- avoid taxes through shell companies.
The legal questions at hand: As mentioned, using tax shelters and making shell companies usually isn’t illegal on its face. But several countries have already announced they will initiate investigations of key figures. As for Baker McKenzie, law professor Richard Painter told the ICIJ, “Not being illegal doesn’t make it right.”