‘Pandora Papers’ expose how world leaders and the ultra-rich move their money

The “Pandora Papers," written by a worldwide consortium of journalists, reveal how world leaders and the mega-rich can hide billions of dollars in secret offshore accounts, which investigators say drain money from government treasuries and can undermine national security. Nick Schifrin talks to Drew Sullivan, co-founder and editor of the Organized Crime and Corruption Reporting Project, or OCCRP.

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  • Judy Woodruff:

    A worldwide consortium of journalists has published what it calls the Pandora Papers, revealing a parallel financial universe in which world leaders and the mega-rich can hide billions of dollars in secretive offshore accounts.

    Investigators say the accounts drain money from government treasuries and can undermine national security and democracy.

    Nick Schifrin is back with that story.

  • Nick Schifrin:

    The International Consortium of Investigative Journalists shared 12 million financial records with 150 news organizations to provide an unprecedented window into how billions are hidden from authorities, investigators, and country's citizens.

    Jordan's King Abdullah's advisers created dozens of shell companies to buy homes worth $106 million, despite high poverty levels in Jordan and a corruption crackdown that targets citizens who use shell companies.

    Today, Jordan's palace said the king's properties were — quote — "not unusual, nor improper. These properties are not publicized out of security and privacy concerns."

    In Russia, President Vladimir Putin's alleged girlfriend became the owner of a Monaco apartment through an offshore company. And, in the U.S., states have passed secrecy laws that allow tens of millions to be sheltered from view.

    Joining me to discuss this is Drew Sullivan, co-founder and editor of the Organized Crime and Corruption Reporting Project.

    Drew Sullivan, welcome to the welcome to the "NewsHour."

    Your organization teamed up with the International Consortium of Investigative Journalists to publish these stories. Why do you think secretive offshore accounts are a threat to national security and democracy?

    Drew Sullivan, Co-Founder and Editor, Organized Crime and Corruption Reporting Project: Well, really, opaque money is opaque power.

    And what these offshore companies really are is, they're a device to move money around the world and to keep it secret. And the problem with that is, it can be money that is stolen and it can be money that you are trying to move for some business somewhere.

    But, a lot of time, it's really money people are trying to hide, people are trying to launder. And once that money gets into your country, you don't know what it is going to do. It could do something like create a real estate bubble, which is annoying, but not harmful. But it could also fund things like terrorist groups, extremists, political parties, bad actors in your country, terrorists.

    So it's just — in this day and age, we should be able to control the monetization of money in our countries. And we really can't because of this offshore industry.

  • Nick Schifrin:

    And one of the more interesting parts of this investigation is that it's not only offshore, is it? It's inside the United States.

  • Drew Sullivan:

    It's all over the world. And in the United States, they're proliferating too. So, you have places like South Dakota and Wyoming and Nevada and a lot of other states considering passing laws.

    Lots of organized crime gangs that we follow and track are more often using the United States now than they are some place like Dubai or something like that. And it is because the United States, a U.S. address seems to give an indication that that is a legitimate company. And U.S. companies are respected for the transparency.

    But, in fact, you are not getting the transparency. It's being hidden.

  • Nick Schifrin:

    As I mentioned before, offshore companies linked to King Abdullah of Jordan have purchased one of the hundred million dollars of homes in the U.S. and U.K.

    What does his story say to you?

  • Drew Sullivan:

    That is really a classic case of a ruler really not wanting their people to know what properties they have, because it will raise questions as to whether it is appropriate to have a $33 million mansion overlooking Malibu. Is that really the image for the king of Jordan?

    And so it basically helps them avoid the kind of scrutiny and the kind of questions as to whether they're really acting in the interests of their country. More importantly, increasingly, a lot of rulers — and I'm not saying this is about King Abdullah, but a lot of this money and a lot of other rulers, and potentially the king, it's stolen money.

    It is money that has been paid in bribes. It's money that is paid in getting part of a business deal and those types of things. And so they also want to keep those kind of interests and those kind of assets that they're purchasing from that outside of the public and the regulators' purview.

  • Nick Schifrin:

    I also mentioned Vladimir Putin.

    What does that story say? And what does it say how the Russian authorities have responded to the journalists who have exposed this?

  • Drew Sullivan:

    Putin has probably stolen somewhere around $200. And he's one of the most rapacious rulers in the world in terms of — we have we have studied how he gets kickbacks and steals money for years.

    And his system is simply he's going to take what he wants, and anybody who causes problems or raises these issues are crushed. And, in fact, just in the last four months or so, most of the large respected investigative reporting organizations in Russia have had to stop publishing in Russia.

  • Nick Schifrin:

    This is all out there. Of course, it's being dismissed and denied by the various people in these stories.

    What's the real-world effect, if any?

  • Drew Sullivan:

    Well, there will be some.

    I mean, there will be people who ask for sanctions. There will be people who will ask for Magnitsky filings, which will basically allow those properties to be taken away. So, I mean, there's a large civil society world out there that is really trying to police this by using sanctions and seizures of properties to get the money back for the citizens of those countries.

    And you will see that, especially in the most egregious cases, like Azerbaijan, where they had $700 million worth of property in London. I mean, that's obscene. And I think you will see a lot of people going after those public interest law firms trying to get these assets taken away.

  • Nick Schifrin:

    Drew Sullivan, thank you very much.

  • Drew Sullivan:

    Great to be here, Nick. Thanks.

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