French local investigative website Médiacités and WeReport, a European collective of journalists based in Lyon, dove into ICIJ’s Offshore Leaks database to expose what they describe as “the banality” of tax evasion costing France millions of euros each year.
Since 2013, ICIJ has pored over data on hundreds of thousands of individuals and companies with an offshore presence – not all of them among the mega-rich or the Fortune 500.
Apple, Google and other big multinational corporations often make the front page when it comes to tax avoidance, but similar practices are also used by smaller players.
Médiacités and WeReport compiled the names of less well-known individuals and companies in the Lyon region whose financial dealings appeared in the Offshore Leaks, Panama Papers, Bahamas Leaks and Paradise Papers investigations to document tax minimization by small to medium enterprises, family businesses and individuals. It’s not as eye-catching as the machinations of celebrities and big businesses, but, collectively, it adds up and reduces funds available for public purposes.
Among the joint Opération Offshore investigation’s reported findings are:
- The offshore assets held in the names of the ultra-orthodox French rabbis behind a New York study center favored by Jared Kushner’s family
- The French pharmaceutical company Aguettant’s use of a Singapore subsidiary and the offshore service provider at the center of the Offshore Leaks investigation for alleged tax advantages
- U.S. insurance company Cunningham Lindsey allegedly sinking profits from its European subsidiaries into a Cayman entity for tax purposes
“We’re trying to understand why small companies use offshore entities,” reporter Mathieu Martinière explained. The group of reporters – who summarized their project as looking into tax avoidance “around the corner” – sought comment from all the individuals they found in ICIJ’s offshore data to show that those practices were not reserved to big multinationals.
Their research is based on public data published by ICIJ on its Offshore Leaks database. There are now more than 785,000 trusts, companies or funds, and more than 720,000 officers listed in the database – including data from the Panamanian law firm Mossack Fonseca and offshore provider Appleby.
We’re trying to understand why small companies use offshore entities.
Among the Mossack Fonseca clients, Médiacités found ultra-orthodox rabbi David Pinto whose New York study center has reportedly received generous donations from charities created by the family of Donald Trump’s son-in-law Jared Kushner.
Despite appearing in the offshore database with an address in France, Pinto was listed among the beneficiaries of a British Virgin Islands company. This matches previous reporting from Israeli newspaper Haaretz that linked Pinto to Swiss bank accounts that held $2.2 million dollars in 2007.
The Asian subsidiary of Lyon-based pharmaceutical company Aguettant was reportedly found with the same address as Portcullis Group, the offshore provider whose mailbox has been used by thousands of shell companies and whose documents were at the core of the 2013 Offshore Leaks revelations.
Reporters found that the email address of Aguettant’s Singapore subsidiary was redirected to an account with the company’s office in Vietnam. Most Asia-based employees work from Vietnam or Hong Kong, reporters found.
The lack of real activity in Singapore raises questions about why Aguettant incorporated in Singapore, a popular tax haven, and not in Vietnam where it has its Asian operational headquarters, according to Médiacités and WeReport.
U.S. insurance firm Cunningham Lindsey is fighting a lawsuit brought by French employees who allege the company used inflated management fees paid offshore to avoid corporate taxes. The company denied the claim.
“For management, it’s great, it reduces taxes in France,” the employees’ lawyer said. “But for employees, it’s less fun because it hurts the value of their shares.”
As part of the lawsuit, Cunningham Lindsey presented its company structure to Paris’s high court.
Using the Offshore Leaks Database and company registers, Médiacités sleuthed towards a fuller picture of Cunningham Lindsey’s true corporate structure. The company’s court submission left out branches in the Cayman Islands and Luxembourg, Médiacités reported.
The Paris court ruled in the company’s favor in March, citing a lack of evidence. Employees have appealed.
The Offshore Leaks database was first published in 2013 with the release of company information on entities incorporated by offshore providers Portcullis Trustnet and Commonwealth Trust Limited. Last February, the corporate registries of the Cook Islands, Samoa and Malta were added to the database.
Médiacités, which previously collaborated on the European Investigative Collaborations’ Malta Files investigation, found French leads in the Maltese registry, including insurance company April, previously revealed to have used the European island to reduce its taxes by more than $32 million (€28 million). In its reporting, Médiacités used the 2016 financial statements of the Maltese subsidiary to calculate that the company saved another $3.5 million (€3 million) in taxes.
WeReport and Médiacités started the investigation with 40 addresses in the public database that related to Lyon, France’s third-largest city. They extended their probe to Toulouse, Lille and Nantes. This was possible because the Offshore Leaks Database is searchable by addresses, unlike many corporate registries.
Interested in seeing what you can find in the data? ICIJ has published several tip sheets to help users navigate the Offshore Leaks database:
- How to explore networks and entity metadata in the Offshore Leaks Database: this explains how to navigate the data and explore relationships between entities and individuals.
- How to investigate companies found in the Offshore Leaks Database: the data can be downloaded directly onto your computer and corporate registries can be used to pursue leads found in the database.
Give it your best shot. And don’t forget to share your news tips with ICIJ!