In October 2021, the International Consortium of Investigative Journalists (ICIJ) released approximately 12 million documents leaked from 14 law firms and offshore trust companies. Known as the Pandora Papers, these documents revealed the financial dealings of hundreds of high-profile politicians, business leaders, and celebrities worldwide, including prominent politicians such as President Uhuru Kenyatta of Kenya, Prime Minister Andrej Babiš of Czechia, and Abdullah II, King of Jordan. The documents exposed secretive purchases of real estate, artwork, and other items acquired with the help of trust companies in offshore tax havens.
The UK: a long line of corruption scandals
In a rather embarrassing turn of events, the UK is at “the heart of the scandal” revealed by the Pandora Papers, and even has the honour of being in Transparency International’s list of ten countries which urgently need to act in light of recent revelations.
The UK’s implication in the Pandora Papers is three-fold. First, London has been shown to be a hub for tax avoidance. The Pandora Papers have revealed that many London properties have been purchased by foreign companies using offshore accounts which hide the owners’ identities. Although such purchases are legal under British law, they highlight the financial practices of the wealthy, which are far-removed from those of the average Brit. Individuals implicated include the Jordanian King Abdullah II, Azerbaijan’s President Ilham Aliyev and associates of Pakistani Prime Minister Imran Khan. Russian and Ukrainian oligarchs have also become common buyers on the London property market. This is not the first time the London property market has been called out for its lack of transparency. A 2019 report by Global Witness showed that around 87,000 properties in England and Wales were owned by anonymous companies registered in tax havens. Among the buyers are several Conservative Party donors, including Lubov Chernukhin, who has donated £1.8 million to the party since 2012.
This leads us to the second revelation: some Conservative Party donors are extremely corrupt. Russian tycoon Viktor Fedotov, whose company has donated over £1.1 million to the Conservatives, has been found to secretly co-own a company accused of serious corruption. Meanwhile, the Papers show that donor Mohamed Amersi advised on the structure of a telecoms deal which has since been found to be a £162 million bribe for the then Uzbek president’s daughter.
Thirdly, corruption in the British high street is rampant. £7.5 million in earnings from Unaoil has been funnelled offshore. This company was already disgraced back in 2016, when it was exposed for bribing officials in order to secure oil contracts. Meanwhile, retail tycoon Sir Philip Green (who is infamous in the UK for selling his department store BHS for £1 to a group of bankrupt investors with no retail experience, at the expense of 11,000 jobs and £571 million in pensions) bought a £15 million flat in London and a new £10.6 million home for his daughter as BHS collapsed around him.
To combat this long-standing corruption, the government published draft legislation in 2018 which would ensure the transparency of the owners of UK properties. However, this has yet to be presented before Parliament. This year the government reiterated their commitment to create a register of overseas owners of UK properties. None of this, however, was listed as a legislative priority in the Queen’s Speech. Ministers promise to introduce a new law when there is time to table it in Parliament. The government has also recently raised the risk of money laundering to “high.”
Health Secretary Sajid Javid has praised UK newspapers for bringing these stories to light (the irony being that he himself has been accused of tax evasion). Chancellor Rishi Sunak has defended the UK’s track record on tackling corruption, brushing it off as a global problem, not unique to the UK. However, the UK has long been accused of being a magnet for “dirty money”, and little has been done to stop it. Known-kleptocrats are kept in the government’s circle, as ultimately they are seen as “too big to jail”. The UK’s political and regulatory system is ineffective, and an inquiry is long overdue.
The Pandora Papers are just the latest in a series of corruption scandals, at the centre of which is the government. Robert Jenrick was in trouble in 2019 for helping a Tory donor avoid paying tax. During the pandemic, the government fast-tracked suppliers of personal protective equipment with political connections. Rishi Sunak and Matt Hancock were accused of corruption over the Greensill Scandal this year. Meanwhile, this government is raising taxes and cutting benefits for the poorest people.
The issue is that nothing sticks. Even the Pandora Papers seem practically forgotten in the UK within a matter of weeks. The latest scandal has seen Tory Members of Parliament voting to protect “one of their own”, Owen Paterson MP, from punishment for breaking lobbying rules. After uproar, Owen Paterson was pushed into resignation, but the government has yet to be held to account for the scandal. This Teflon government has learnt that they will not be held accountable for their actions. Therefore, while the Pandora Papers might uncover a broader pattern of corruption in the UK, it is unlikely that the findings will lead the government to finally take action.
Read my fellow authors' contributions to this article on European Waves
