Probing the tax havens

April 6, 2013
How the investigation was done

This article is the result of a collaboration between The Washington Post and the International Consortium of Investigative Journalists, a project of the Center for Public Integrity. ICIJ obtained 2.5 million records relating to more than 120,000 companies and trusts in 10 offshore jurisdictions.

The records represent the largest collection of internal records about the offshore financial system ever assembled and analyzed by a media organization. The cache is 160 times larger than the disclosure of State Department documents released by Wikileaks in 2010.

To analyze the records, ICIJ collaborated with The Post, Le Monde, The Guardian, the Canadian Broadcasting Corp. and 33 other media organizations around the world. A team of 86 journalists from 46 countries sifted through corporate records, e-mails, court documents, tax filings, account ledgers and other records relating to the offshore companies and trusts.

The records include the names of a few prominent prominent Americans. Grammy-nominated songwriter Denise Rich, whose husband, Marc, stood at the center of a pardon scandal at the end of President Bill Clinton’s second term, had $144 million in assets in a Cook Island trust in 2006. Rich, who renounced her U.S. citizenship and has become a citizen of Austria, did not respond to questions about her trust.

Another prominent American who gave up his citizenship is a member of the Mellon family dynasty, which started companies such as Gulf Oil and Mellon Bank. The records show that James R. Mellon used four companies in the British Virgin Islands and Liechtenstein to trade securities and transfer tens of millions of dollars to offshore bank accounts.

Reached in Italy, where he lives part of the year, Mellon said he set up the firms for tax and liability purposes, “but I have never broken the tax law.” Now a British national, Mellon said he has disposed of the offshore firms.

“There is nothing wrong with any of this unless you use these offshore vehicles to break the law,” he said.

— Scott Higham

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