tax havens, Wilbur Ross, Paradise Papers, Russia, US sanctions,

Trouble In Paradise Papers: Wilbur Ross

By David Malcolm

Last year, the Panama Papers caused an outcry as it revealed how some wealthy families and companies avoided tax. Now a new leak, dubbed the Paradise Papers, has created new havoc after it disclosed how the ultra-rich keep their money away from the tax collectors. Like the Panama Papers before,  the 13.4M documents have come from one leading firm in offshore finance for the most part.

More disturbingly, today’s revelations are only a small part of what promises to be a week of major disclosures that will expose the tax and financial affairs of powerful and influential individuals. The list ranges from the Queen of England’s private estate to  British football club Everton FC.

The biggest news is Trump’s commerce secretary, Wilbur Ross, who helped Trump stave off bankruptcy in 1990 when Trump launched his third casino, the Taj Mahal. Ross is finically tied to Navigator Holdings who has a major client in the Russian company Silbur. For the most part, Silbur specializes in exporting gas and oil into Western Europe and is one of Navigator Holdings’ many clients.

Where it gets interesting is the personal connections. Two the major shareholders of Silbur are under US sanctions while another shareholder is President Putin’s son-in-law, Kirill Shamalov whose father is under US sanctions as well. Ross’ company has Silbur down as one of its top five clients and Mr. Ross was on the board of directors for Navigator in March to November 2014. It was around that time that new US sanctions were handed down to Russia over the annexation of the Crimean peninsula.

On top of that, PDVSA, the Venezuelan state oil company was also a client for Navigator Holdings. It was targeted by US sanctions this year after the political crisis in Venezuela spiraled out of control. Dealing with these companies at such times means that Ross and his company may have helped enriched those under sanctions.

So far, there is no suggestion that Ross has broken any rules since, while he did declare some of the Cayman companies that Navigator is linked to, he did not have to disclose his financial interest in Navigator itself. However, it will be another blow to the credibility of Trump cabinet at a time when Trump can ill afford another scandal. The fact that Ross failed to disclose such activities will raise further suspicion over Trump’s Russian connections.

It also comes while Trump is on his trip through Asia which has been a case of ‘so far, so good,’ but likely to be overshadowed by the tax reform bill, the Russian investigation and now the Paradise Papers. Mueller will be most interested in this new information and, as we’ve seen thus far, will no doubt use it a lever to pressure Ross into disclosing Trump’s Russian connections.

There is a bitter taste in the mouths of many people who are still suspicious over the GOP’s new tax reform, seen by many as an excuse to give tax breaks to millionaires. The Panama Papers raised many uncomfortable questions over celebrities, politicians and high-worth individuals hide their wealth away.

Judging by the number of documents, this is just the start. Stay tuned for more twists and turns.

I’m a historian based in the UK who likes jumping from one thought to next. I love to learn new things and explore other ideas.

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