Remember October 3, 2021, as the day we all found out that what we thought about billionaires is actually true. 11.9 million files were obtained and reviewed by members of the International Consortium of Investigative Journalists (ICIJ) and reviewed by over 600 journalists within an 18-month span. These files show how powerful diplomats, wealthy bureaucrats, celebrities, rock stars, and business leaders evade taxes and skirt the law of the land. But to understand what these papers implicate, we need to go back in time to 2016 and 2017 to revisit the Panama and Paradise Papers.
PANAMA PAPERS – 2016
Exposing a rogue, offshore finance industry… Amazon has a series called “The Giant Behemoth that is the Global Economy,” starring Kel Penn. The pilot episode begins with the topic of money laundering and opens the door for the viewers into a world that most didn’t know existed. And in this world, massive amounts of money are moved around and sent overseas to places like Cyprus (highlighted in the episode), where shelf companies are created to help legally bring money back into America, or other countries with strict anti-money laundering laws. This money gets a “makeover” and looks legitimate to governments so people can bring it back into the country. Hence the term “laundering,” which is when dirty money is “washed” and made to look like it was acquired cleanly, or legally. The episode discusses these Panama Papers in more detail and how thousands of secret companies were exposed for laundering billions of dollars. 2.6 terabytes (TB) of data were included in this reveal and included more than 200 different countries involved in the laundering of all that money. If you’d like to learn more, check out more details here.
PARADISE PAPERS – 2017
Fast forward one year to find that (surprise!) more offshore activity is done, all “legally,” amongst those with the resources to do so. These papers, though not as vast as their predecessor, included details about the interests and activities of more than 120 politicians and world leaders, which included Queen Elizabeth II and major donors and members of former President Trump’s administration. Major companies included in these documents were Nike and Apple, which engaged in tax engineering tactics to avoid paying as much as possible. Shell companies were used by several companies to set up tax havens in other countries, such as Singapore and Mauritius, and other tax evasion tactics. Apple, for example, began shopping for a new tax haven in 2014 when its subsidiaries in Ireland bowed to pressure from prosecutors. If you’d like to learn more, visit this site.
PANDORA PAPERS – 2021
Fast forward again a few more years, and we make it to the Fall of 2021 when the latest documents, the Pandora Papers, were formally released to the public by the journalists at ICIJ. 11.9 million documents, worth 2.9 TB of data, exposed the secret offshore activities of approximately 35 world leaders, such as Azerbaijan President Iljham Aliyev and the Prime Minister of the Czech Republic, Andrej Babis. Both men, as well as others, acquired several various properties in several countries, such as the UK and France, worth upwards of hundreds of millions of dollars that went unreported to treasuries around the world. As was mentioned in the pilot episode of the Amazon series above, real estate is one of the easiest ways to launder money and hide it in tax shelters overseas.
Let’s look at how the United States was involved in these papers…
South Dakota played a role in being a tax haven for $367 billion in wealth. The papers even suggest that this state now rivals the likes of Switzerland and the Cayman Islands as a premier venue for wealthy individuals to park their money and avoid taxes. South Dakota trust funds were used by individuals and families to hide money from creditors and taxes and SD is also the state with the most identified trust funds (coincidence?). For more details on this, and the money laundering activities going on in one of the quieter states in the US, see here.
Other US Citizens Named in the Paper:
- Robert F. Smith, investor and CEO of Vista Equity Partners and Democratic Party donor
- Client of CILTrust, offshore provider in Belize
- Paid $139 million to US authorities to settle a tax probe
- Robert T. Brockman, billionaire and CEO of Reynolds & Reynolds and Republican Party donor
- Also a client of CILTrust
- Indicted by a US grand jury for “the biggest tax fraud in US history” and pleaded not guilty
- Robert F. Smith’s mentor and financial backer
- Jared Wheat, drug smuggler and former CEO of Hi-Tech Pharmaceuticals
- Convicted of selling adulterated and unapproved prescription drugs over the internet through a Belizean company set up by CILTrust
- History of selling iligal drugs
- Read more about his actions here
- David R. Hinkson, convicted criminal and founder of WaterOz
- Convicted in Idaho in 2005 for soliciting the murders of a federal prosecutor, judge, and IRS agent.
- Client of CILTrust
- Currently serving a life sentence in North Carolina
- Aleksandr Zingman, Belarusian-American businessman
Other Recognizable Individuals:
- Luis Suarez, Uruguay Soccer Player currently playing for Atletico de Madrid
- Russian President Vladimir Putin and his inner circle
- Former British Prime Minister Tony Blair and his wife, cherie
- Nicos Anastasiades, President of Cyprus
- Ukrainian President Volodymyr Zelenskiy
To read about the individuals, and the others listed, see here.
What does this have to do with the data Privacy Party?
To start, these papers highlight the importance of keeping your information and data as secret and secure as possible. Just because people are wealthy and in positions of power doesn’t mean their information is locked up with no way of leaking out. The title of “pandora” indicates that we’re opening a box and we don’t know what’s inside. Thankfully, we can always learn from other’s mistakes and take actions to make sure we don’t become victims, although our assets might not be in the trillions of dollars range. The details in the Pandora Papers are the results of a multi-year investigation by journalists hell-bent on uncovering corruption. So if you’re trying to cover up corruption, or just trying to keep prying eyes away from your info, some items listed below should help you take necessary steps towards protecting that information.
- Know the data protection laws of the country where your data will be. This can help you understand required data protection measures comapnies must have in place, notification of data breach requirements, allowable data collection methods, and user rights related to their data (erasure, access, portability, correction, opt out).
- As Kal Penn says, to know how to get around the law, know what the law says (paraphrased from the pilot episode mentioned earlier)
- Manage passwords appropriately using a password manager application, but make sure you do some research before using one.
- LastPass
- NordPass
- 1Password
- RoboForm
- For the data you can control, use data obfuscation and masking techniques. These will allow you to either replace sensative data with fake data (obfuscation) or create different versions, or substitutions, of data with a similar structure where the data type doesn’t change, but the value does (masking). Both of these reduce security risks to data.
- Obfuscation: Changing the value of New York, NY to Boston, MA
- Masking: Changing the value of New York, NY to XXX XXX, XX
- Monitor your own activity online and on your device. Typically, email alerts for login activity, as well as text messages are great for doing this. But you should also be weary of phishing and smishing attempts from threat actors trying to obtain exctly what you’re trying to protect. Making sure you have alerts set up with critical accounts, such as a bank account, are crucial to ensuring your account hasn’t been compromised and your data, and money for that matter, is protected.
- Know that there is a lot of information about you, and others, just out there on the internet. Social media accounts, employers, and other websites that you’ve interacted with might give away personal info you’re trying to keep secret. Make sure whatever is out there isn’t something that should be secret. Companies like Facebook and Google now allow you to download all your information they have on your specific account, but usually these comapnies try to dodge requests based on the state you call home.
- For example, a friend of mine attempted to retrieve his information from a company based out of California. Since he is not a California resident, they told him there was no data they could provide that was required under current Texas and Federal law… Wtf?
See the Newsletters page for the latest content and to subscribe to the regular update, see the About page for information around who DPP is, and check out the Contact page to reach out to DPP with any questions or concerns. These are my thoughts and should not be taken as professional advice simply because you are not paying me for my opinion.
Once you understand how valuable your information is, then you can begin taking steps to keep it private.