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How Officials, Businesses and Traffickers Hide Billions from Cash-Starved Governments Offshore

02 January 2019

Author: Will Fitzgibbon

Government officials, arms merchants and corporations have spirited away millions of dollars from destitute West African nations through offshore tax havens, an investigation by journalists from the region and the International Consortium of Investigative Journalists has found. Offshore companies were set up for a global engineering firm that avoided paying millions in taxes to Senegal, one of the world’s poorest countries; for a little-known entrepreneur who won a contract to build West Africa’s largest slaughterhouse and for a well-connected arms trafficker from Chad. In several cases, the companies, as well as the companies’ transactions and offshore bank accounts, were not declared or are only now being revealed in more detail.
The findings were drawn from a collection of almost 30 million documents, representing several leaked financial records obtained by and shared with ICIJ since 2012. From Cape Verde’s islands of white-sand beaches and rocky volcanoes to Niger’s vast deserts, West African countries are plundered by companies and individuals, while governments do little to stem the flow.

An estimated $50 billion that leaves the continent

West Africa accounts for more than one-third of an estimated $50 billion that leaves the continent untraced or untaxed each year, according to the United Nations. Overall, a combination of corruption, drug, human and weapons trafficking and other furtive import and export activities strip Africa of three to 10 times as much as it receives in foreign aid. “For poor regions of the world like West Africa, the use of shell companies, tax evasion, aggressive tax planning, tax havens and offshore bank accounts can be dramatic” in the deprivation and suffering it creates, said Brigitte Alepin, professor of taxation at the Université du Québec. “These countries are in need of public finances, and these losses of tax revenues affect the basic services they can offer to their citizens.”

Deposit boxes in European banks

The money reappears in safe deposit boxes in European banks, as equity in high-rise New York condos and smooth limestone Parisian apartment buildings, far from the collapsing hospitals and other buildings of West Africa. It also fills wealthy investors’ pockets. ICIJ partnered with 13 journalists on West Africa Leaks to investigate high-profile individuals and powerful corporations in the region. The investigation included journalists from six countries where reporters hadn’t before examined files pertaining to the individuals and businesses. The source material is millions of files that make up ICIJ’s four offshore databases: Offshore Leaks, Swiss Leaks, Panama Papers and Paradise Papers.

From the Mali presidential election

The leaked records include the secretive Persian Gulf real estate plans of a candidate in this year’s Mali presidential election; the Swiss bank account of an intimate friend of Togo’s hereditary dictatorship who manages the country’s overseas real estate; and a Seychelles foundation directed by the childhood friend of Liberia’s Nobel Peace Prize-winning former president, Ellen Johnson Sirleaf. Often the offshore documents paint only a partial picture of the secretive financial affairs of prominent and wealthy West African individuals and businesses. In several cases, emails, spreadsheets and contracts don’t explain why a shell company was created or how much money was held in a far-flung offshore bank account. Yet the files provide rare insights about untouchable potentates who have long benefited from weak tax enforcement and supine courts in countries that struggle to hold them to account.

Small fortunes hidden offshore

While several European nations have recovered small fortunes hidden offshore by citizens and companies exposed by previous ICIJ leaks, no African country has confirmed recovering a cent after previous revelations from these offshore troves. Ousmane Sonko, a former Senegalese tax inspector who is now a member of parliament, said many West African tax authorities are doubly plagued: They don’t have the means to investigate complex foreign transactions, and, when investigators do make headway, politicians find ways to torpedo their small successes.
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Read the full story on the website of International Consortium of Investigative Journalists.

Source: https://www.icij.org/

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