Pandora Papers revelations across Lusophone countries

Pandora Papers — a screenshot from the ICIJ YouTube channel, October 15, 2021

In early October 2021, a collaborative project by a network of international journalists published the most extensive revelations on international tax evasion to date. 

The report, consisting of around 12 million documents, is known as the Pandora Papers and reveals a network of opaque financial dealings by various high-profile figures, including politicians in Lusophone countries such as Mozambique, Angola, Portugal, and Brazil.

The report is the result of a collaborative investigation by the International Consortium of Investigative Journalists (ICIJ), which uncovered that many politicians, religious figures, public figures, and monarchs — including 300 civil servants, 35 heads of state, and 130 billionaires — had created bank accounts in tax haven countries in order to obscure their wealth and financial practices.

These reports include updates on previous investigations, including the Panama Papers and Paradise Papers from 2016 and 2017, respectively.

The first refers to the leak of more than 11 million confidential documents from the Panamanian law firm Mossack Fonseca, which detailed information about more than 214,000 offshore companies and the names of their shareholders. The second contained more than 13 million documents on the same topic.

Angola, Mozambique, and Portugal

Numerous politicians were implicated in Angola, Mozambique, and Portugal. Before that, their names had never been attached to offshore scandals. The report also revealed a shady financial network connecting Portugal and Mozambique: 

Nuno Morais Sarmento, vice-president of @RuiRioPSD (the man who came to give an ethics-wash to Portuguese politics), has been caught in the Pandora Papers. The former PSD Justice Minister used an offshore company based in the British Virgin Islands to do business in Mozambique.

According to the documents, Nuno Morais Sarmento reportedly used offshore money to purchase a diving school and a hotel in Mozambique in 2006. Offshore companies made it possible to bypass the restrictions around foreigners owning companies or properties in Mozambique. However, the politician denied any wrongdoings in the case. Besides Nuno Morais, the politicians Vitalino Canas and Manuel Pinho were also implicated.

It should be noted, though, that tax havens and offshore companies are not illegal. In other words, to be considered legal, they must declare their earnings to the country that the company is registered in. From that point, they can engage in international business.

In Mozambique, a local newspaper reported that the former prime minister, Aires Ali, was connected to more than 11 million Pandora Papers files:

Aires Ali implicated in #PandoraLeaks: he has hidden wealth registered in the Seychelles
and there is a link to #Portugal:
“In 2013, he and his daughter… authorized the company to open a bank account at a wealth management company based in Lisbon.”

Aires Ali has had a long career in Mozambican politics. He was prime minister for two years, from 2010–2012, until he was dismissed in a cabinet reshuffle. He served as the country's Education Minister from 2005–2010 and was a provincial governor twice. He also served as ambassador to China from 2016–2017. So far he has not publically reacted to the allegations. 

Meanwhile, no specific names have been revealed in Angola yet, but the information available indicates that at least nine Angolan politicians were implicated in the Pandora Papers. It should be noted that the ICIJ's most recent investigation was about corruption originating in Luanda (Angola) in early 2020 and became known as the Luanda Leaks. The Luanda Leaks accuse Isabel dos Santos, daughter of former Angolan president José Eduardo dos Santos, of embezzling money through various state dealings.

In Brazil, Bolsonaro's government is hit by scandal

The Brazilian reporters involved in ICIJ's investigation found about 2,000 Brazilians registered in tax havens. In Brazil, having offshore companies is not illegal, as long as they are declared to the federal revenue service and, when their assets exceed 1 million dollars, to the Central Bank.

Among the names are the two most important figures to Brazil's economic policy, Finance Minister Paulo Guedes and Central Bank president Roberto Campos Neto.  Numerous prominent business people who support Bolsonaro's government were also listed, including Luciano Hang and Otávio Fakhoury.

Both Hang and Fakhoury are under investigation by the Parliamentary Commission of Inquiry over the government's handling of the COVID-19 pandemic and the Supreme Court for financing fake news campaigns. Guedes and Campos Neto were summoned to provide explanations to the Senate's Economic Affairs Commission (CAE). So far, they have denied any illegality.

However, Article 5 of the Code of Conduct for the Senior Federal Administration prohibits high-ranking officials from holding financial interests in Brazil or abroad that could be affected by government policies. Since joining Bolsonaro's government in 2019, Guedes has increased his offshore assets by 14 million Brazillian reals (2.55 million US dollars).

Differing reactions 

Public reaction to the report has varied by country, largely depending on what information was revealed and how the media covered it. In Mozambique, one internet user observed that the affair went almost unnoticed, an example of how politicians dominate the nation's media:

So, journalism is still a political tool for use by politicians that the media “like”.
Impressive how no Mozambican newspaper reported the issue of Aires Ali appearing in the Pandora Papers

The same cannot be said for Portugal, where the case was widely discussed.

Pandora Papers ?
Three Portuguese politicians caught up in the international journalistic super investigation ??
?? Vitalino Canas (PS)
?? Manuel Pinho (PS)
?? Nuno Morais Sarmento (PSD)

João Paulo Batalha, an anti-corruption activist, says he expected Manuel Pinho's name to be involved in the Pandora Papers, but admits he was surprised by the names of Nuno Morais Sarmento and Vitalino Canas

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