Offshore Leaks: a tool for geopolitical blackmail

The Cyprus expropriation was just the beginning of the worldwide war against the offshore jurisdictions. The Offshore Leaks scandal proves that the financial stability of the tax heaven grants no immunity to the holders of the offshore companies and accounts. The accounts that can’t be exposed to financial “haircuts” become the targets of outright informational warfare.

The so-called Investigative Consortium of Investigative Journalists has been given access to a set of highly confidential information regarding the owners of offshore companies and offshore bank accounts. The anonymity of the information source and the unwillingness of the ICIJ to share this information with state institutions clearly indicate that the Offshore Leaks are likely a result of a clandestine operation of secret services that try to either scare or blackmail certain political or business figures. It is obvious that this information was obtained through illegal means, because disclosure of such information is illegal in all jurisdictions involved in the Offshore Leaks scandal. So far, only minor political or business figures have been targeted by the ICIJ and it is unlikely that alleged principals of offshore corporations like Azerbaijan’s president Ilham Aliyev or the treasurer of François Hollande’s campaign will have their wealth confiscated. At the same time, the careers of the politicians targeted by the Offshore Leaks scandal are likely to be ruined. The “haircut” imposed on the Cypriot bank accounts proved that the European Union no longer respects the sanctity of private property and expropriation without a court’s decision will become a template for future European “bailouts”. The Offshore Leaks scandal demonstrates that the governmental agencies will try to ruin the careers and reputations of those politicians and businessmen who are hiding their wealth in the most opaque tax heavens. The right to privacy and bank secrecy is officially dead. There is no tax heaven that could guarantee complete privacy after the Offshore Leaks scandal.

The owners of the offshore trusts and companies deserve little to no sympathy, most likely they are hiding illicit profits using tax dodging schemes, but the opacity of the Offshore Leaks sources should be a source of concern. It is likely that the real cause of the scandal is not the desire to dismantle the offshore system. If that was the goal, the ICIJ would have released their whole dataset to the public. The ICIJ prefers to keep their data hidden and the only reasonable explanation is that the information will be used to blackmail the decision-makers or wealthy businesspeople who are involved in offshore schemes. It is likely that the blackmail is sanctioned by the governmental entity which commissioned the confidential data theft and the “investigation” performed by the ICIJ.

It is too early to tell, but judging by the people targeted by the scandal and the roster of the propagandists working with the ICIJ, it could be inferred that the organizations behind the scandal are not working for the public good but are working for the American government and try to advance their own geopolitical agenda. The politicians and the businessmen who hold offshore accounts and own offshore companies will have to make a tough choice. They can repent and try to become bona fide members of their respective national elites or they can try to hold on to their offshore wealth and do the bidding of blackmailers who will force them to act against their interests and the interests of their countries. Judging by the threats made by the initiators of the Offshore Leaks scandal, the members of the “offshore aristocracy” have a couple of months to make their final decision.