January 28, 2022 - Douglas Myser

Panama Papers and United States. The Panama Papers leak was a particularly revelatory story about Russians use of the offshore system. Once story reported that a Russian cellist, who had been friends with Putin since childhood, was secretly linked to offshore accounts holding up to $2 billion. Putin called the leak a "provocation", insinuating that U.S. intelligence agencies were involved as part of an effort to discredit the Russian Financial system and punish the Russian leader by targeting his inner circle. This time, although Russians account for a disproportionately large share of those exposed in the Pandora files, the records are more wide ranging, laying bare the hidden riches of U.S. adversaries and allies alike. Panama Papers and United States.

The United States wealthiest citizens, do not appear in the documents. Financial experts said the uber rich in the United States tend to pay such low tax rates that they have less incentive to seek offshore havens. But their absence from the files also may mean that very wealthy Americans turn to different offshore jurisdictions--including the Cayman islands--and different companies than those represented in the Pandora documents. Richard F. Smith, who is often portrayed as the United States richest Black person, is perhaps the wealthiest American whose offshore holdings are detailed extensively, Smith agreed last year to pay a fine of $139 million and admitted hiding funds offshore and submitting false tax returns as part of a non-prosecution agreement with the Justice Department. The agreement calls for Smith to cooperate in a separate case against Robert Brockman, a Texas billionaire who backed Smith financially and has been charged with hiding $2 billion in income, Smith declined to comment.

Perhaps the most troubling revelations illustrate that South Dakota, Nevada, and other states have adopted financial secrecy laws that rival some of the offshore havens that are hiding billions in taxable income. Records show leaders of foreign governments moving billions into U.S. based trusts. The IRS and Treasury Department are investigating such abuses.

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