Financial who's who of the Paradise Papers

Published
  • November 09 2017, 12:31pm EST

The Paradise Papers

It was an unwanted publicity bombshell that rocked the world of the very, very rich.

Earlier this week, the International Consortium of Investigative Journalists released over 13 million heretofore confidential records documenting the offshore financial interests held by wealthy individuals and corporations who may have wanted to shield their involvement in offshore tax havens from public scrutiny.

Known as the Paradise Papers, the documents originate primarily from Appleby, a Bermuda-based law firm, says the ICIJ. The firm specializes in catering to UHNW clients and blue chip companies, according to its website. The documents were obtained by the German newspaper Süddeutsche Zeitung and shared with the ICIJ.

"The promise of tax havens is secrecy — offshore locales create and oversee companies that often are difficult, or impossible, to trace back to their owners," the ICIJ reported, adding that having an offshore entity is often legal.

In a statement, Appleby stresses that the firm has not done "anything unlawful. There is no wrongdoing. [The Paradise Papers are] a patchwork quilt of unrelated allegations with a clear political agenda and movement against offshore. We wish to reiterate that our firm was not the subject of a leak but of a serious criminal act."

Around 31,000 of the individual and corporate clients included in Appleby’s records are U.S. citizens or have U.S. addresses, more than from any other country, according to the news organization. They include prominent businessmen, entertainers and financiers, many with political ties, including cabinet posts.

Here is a Who's Who of individuals from the financial world identified in the Paradise Papers, along with their offshore connections.

Additional reporting by Sean Allocca

Wilbur Ross

The Panama Papers revealed that Ross, the U.S. Commerce Secretary, retained a stake in shipping company Navigator Holdings, which has close ties to the Kremlin.

According to the New York Times, "the ethics agreement Mr. Ross filed when taking office said he intended to retain several investment partnerships, but did not specify that they were used to hold his stake in Navigator."

The release of the Paradise Papers has prompted calls for further investigation of Ross' holdings in the Senate.

Dubbed the "King of Bankruptcy," Ross' private equity fund, W. L. Ross & Co., restructured failed companies and sold them later for a profit. The company was one of Appelby's biggest clients, the ICIJ reports. Appleby administered more than 50 Ross companies and partnerships, most in the Cayman Islands.

The Commerce Department said in a statement that "Reports that Secretary Ross did not disclose his Navigator holdings are completely false — they are listed in sections 10.14. 1.3, 10.15. 1.3, and 24.1.4. 2 of his Form 278, which can be viewed by the public on the Office of Government Ethics website oge.gov."

Ross' net worth was estimated by Forbes to be nearly $3 billion in 2016.

Content Continues Below

Warren Stephens

It's no secret that Little Rock, Arkansas-based investment banker Warren Stephens was no fan of the Consumer Financial Protection Bureau, and helped finance attacks on the bureau by its political opponents.

What wasn't known — until the release of the Paradise Papers — is that Stephens had a financial interest in an online payday loan company accused by the CFPB of questionable lending practices.

After reviewing the Paradise Papers, the New York Times reported that Stephens and a business partner asked Appleby to incorporate a holding company, Hayfield Investment Partners, in tax-friendly Delaware. Documents in Appleby's files, according to the Times, showed that Stephens and his funds owned 40% of Hayfield, which had a separate subsidiary called Integrity Advance, the loan company in the CFPB's crosshairs.

A spokesperson for Stephens said in a statement that the Times story "was not an accurate representation of Warren Stephens’ personal involvement in Hayfield Investment Partners."

Stephens "never had any involvement in, or knowledge of, the details of Hayfield’s day-to-day activities," the statement continued. "Moreover, there were no offshore accounts established for the Hayfield investment. Neither Warren Stephens, nor any of his employees, had any role in retaining Appleby’s services, nor were they involved in any discussions with Appleby."

Carl Icahn

Known as a corporate raider, prominent investor and hedge fund manager Carl Icahn was also drawn to corporate secrecy and offshore corporate tax relief.

Appleby documents show that Icahn was a director of a Bermuda-based biotechnology investment company for 11 years. Icahn, who has worked closely with Donald Trump for years and served as a presidential advisor through mid-August, has a net worth estimated by Forbes at over $16 billion.

According to the ICIJ, Icahn used Appleby for tax advice on his holding in a Brazilian mining company that uses "complex offshore structure utilized holding companies in tax havens."

Icahn's office did not respond to a request for comment.

Sheldon Adelson

This disclosure may shock you, but Adelson, ranked by the Forbes 400 as the 27th richest man in America, with a net worth estimated at over $35 billion, doesn't like paying taxes.

And according to the Paradise Papers, he did something about it.

Founder and CEO of Las Vegas Sands, one of the world's largest casino operators, the Paradise Papers disclosed that Adelson is also president of Interface Operations, a Bermuda-based company which provided airline services to his casino.

Las Vegas Sands paid tens of millions of dollars to Interface from 2010 to 2016, the ICIJ reports, "effectively shifting Adelson's money from the United States to a tax-free jurisdiction."

Adelson also owns newspapers in Israel and Las Vegas and is a major donor to Republican candidates and conservative causes. His office did not respond to a request for comment.

Content Continues Below

Gary Cohn

His tan must have faded.

It turns out that Cohn, the president's chief economic advisor and the director of the National Economic Council, was president of 20 companies incorporated in tax-free Bermuda that were affiliated with a fund managed by Goldman Sachs, where he was president and chief operating officer before joining the Trump administration.

Cohn's Bermuda connection lasted from 2002 to 2006, the ICIJ reports. His office did not respond to a request for a comment.

Paul Singer

Tax haven Cayman Islands caught the attention of hedge fund manager Singer, estimated by Forbes to be worth nearly $3 billion.

Kensington International Ltd ., a holding of Elliott Management, Singer's fund that purchases distressed assets, is registered in the Cayman Islands, the Paradise Papers showed. A company that sued Kensington in 2007 described it as "an opaque offshore entity."

Singer's office did not respond to a request for comment.

Stephen Schwarzman

Schwarzman is co-founder and CEO of the Blackstone Group, one of the biggest private equity firms in the world. He is worth over $12 billion, according to Forbes, and a close ally of President Donald Trump, who named him chairman of the White House business advisory council, which has since disbanded.

According to documents from the papers, Blackstone routed ownership of two large commercial properties in the United Kingdom through a chain of firms and trusts registered in the tax havens of Luxembourg and Jersey.

“Blackstone’s investments are wholly compliant with UK and international tax laws and regulations," a spokesman for Blackstone said. "The property investment structures in question were acquired from institutional investors and are of a type commonly used for decades for investments in UK real estate, including by listed companies and a variety of institutional investors, and were adopted after appropriate advice was taken from leading tax and legal advisers.”

Content Continues Below

James Simons

Simons, the founder of Renaissance Technologies, one of the world's most successful hedge funds, had an offshore trust fund in Bermuda worth billions of dollars, the Paradise Papers revealed.

The Bermuda address limited the IRS's ability to determine the trust's exact holdings and tax its funds until distributions were made to the Simons family

The New York Times reported details about the offshore trust, and in response to questions Simons told the paper that he had "transferred his share to a Bermuda-registered charitable foundation.”

A spokesman for Renaissance declined to comment.