Business
4:38 pm
Fri April 5, 2013

Investigation Finds Wealth Of Information On Tax Evaders

Originally published on Fri April 5, 2013 6:04 pm

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel.

The International Consortium of Investigative Journalists, which is what it sounds like, this week began releasing the results of a 15-month-long global investigation into offshore tax havens. The consortium is a project of the Washington-based Center for Public Integrity, and it says it enlisted 86 investigative journalists in 46 countries to, and I quote, "unveil the previously hidden but thriving world of fraud, tax dodging, and political corruption."

Gerard Ryle is the director of consortium and joins us now. Welcome to the program.

GERARD RYLE: Thanks for having me.

SIEGEL: And first I want you to describe the cache of information on a computer hard drive that I gather was at the core of this investigation.

RYLE: Well, if you want to talk in geeky terms, there's about 260 gigabytes of data, but in reality it was just an almost impenetrable collection of spreadsheets and documents and passports and financial transactions that spanned a number of years.

SIEGEL: Compiled by an investigator or by a bank? What kind of institution would have made such a...

RYLE: Well, I think it would have been compiled by someone who had access to information on offshore entities. The information came from about 10 offshore jurisdictions, and it was a mixture of everything. So there was no easy discernible pattern in the information. But it became very clear very soon that it was incredibly accurate. I mean, you could not make up all of these names and all of these historical events, basically, that you could match these names to and these companies to right across the world. I mean, we had information on more than 170 countries.

SIEGEL: Well, the information that you present, and I should say it's on an extremely artful, interactive websites, as well, is it's so vast that I have to ask you this. I mean, give me a lead here. I mean, surprise us with something beyond rich people and crime, government and business avoid paying taxes by banking in places like the Cayman Islands or, until recently, Cyprus.

RYLE: Well, you know, the biggest surprise to me, and it was also originally our biggest disappointment, was when we were looking at the names, and it wasn't the Romneys of the world, it wasn't always people that were recognizable. But, I mean, the range of people we saw, say, from the U.S., and there were about 4,000 names in the U.S., were, you know, lots of doctors and dentists and developers.

You know, we found that there was a pattern with doctors and that they were very keen to set up what were called asset protection trusts in particularly the Cook Islands.

SIEGEL: Yes, tell us about the Cook Islands which, frankly, I - to say I knew little about them until this morning is right there an understatement.

RYLE: Well, it's a little group of islands near New Zealand and it's got a population of about 20,000 people, and yet it's the home to a thriving offshore industry. Americans are very fond of it because of its very stringent tax laws. You know, even the IRS have found it very, very difficult to penetrate, the Cook Islands.

SIEGEL: One of the Americans you identify, James R. Mellon of the famous Mellon family, is quoted as saying that he set up firms for tax advantage overseas and for liability reasons as advised by his lawyer, but, quote, I have never broken the tax laws. Are these people typically breaking tax laws, or are they using laws that have been drafted to their advantage?

RYLE: You know, we didn't even go there in terms of proving that they were doing something illegal. We had a criteria that we found that we could not prove in most cases that people were doing things illegally.

SIEGEL: I gather one country where these disclosures had a knock-on effect was Mongolia.

RYLE: Yeah, that was a surprise. There weren't very many Mongolian names that we found, but one of the names we found was a former finance minister in the government and the current deputy speaker of the House, and by his own regard the potential future prime minister of the country.

SIEGEL: Whose career I gather is now in doubt because of disclosures of his holdings overseas, offshore?

RYLE: Well, we discovered that he had created a British Virgin Island company and then used that British Virgin Island company to acquire a Swiss bank account that was in the name of the British Virgin Island company rather than he. So, of course, we questioned him on this, and he basically said that this had been used to trade stock. He claimed he'd not cheated on his taxes, but he admitted he had never admitted it to the public.

SIEGEL: Your website includes, I should add, which people can go see for themselves, the interesting feature of how to do it section, how you can go about setting up your own offshore tax haven.

RYLE: Well, it's really very, very simple. There are so many providers that do this, and these are companies that work with the major banks, but they don't advertise. They're almost like this, you know, secret group of service providers inside a secret world. It's fascinating to see inside that and to see the mechanics of it.

SIEGEL: Well, Gerard Ryle, thank you very much for talking with us about it.

RYLE: You're very welcome.

SIEGEL: Gerard Ryle, who is director of the International Consortium of Investigative Journalists. Transcript provided by NPR, Copyright NPR.