The revelation that the US presidential candidate paid no federal taxes for 18 years will come as no surprise to the global firms who funnel billions through taxation havens

It was one of the highlights of an unedifying US presidential race. The topic: Donald Trumps tax returns. Hammered by Hillary Clinton over the disclosure that hed paid no federal taxation, maybe for 18 years, Trump was unable to restrain himself.

There was no apology. That would have been out of character. Instead, the Republican nominee blurted out four terms: That induces me smart. For once Trump serial liar and alleged serial groper had unwittingly disclosed a great truth.

In the 21 st century the individuals who dutifully pay taxes are dupes. We are the losers in a modern game in which only smart people, as Trump indelicately set it, know the rules. In fact, the rich and powerful quietly exited from the business of paying taxation a long time ago.

The evidence is all around. A new analyze of Americas resulting Fortune 500 companies reveals that 367 of them some 73% have at least one or more subsidiaries in taxation havens. Some have hundreds. This allows them to legally ship gains offshore.

In Britain, meanwhile, it emerged that eBay paid just 1.1 m in taxation last year, despite telling US investors that the UK was its second largest marketplace, producing revenues of 1.1 bn. The cash originating in the UK flows to a parent company in Switzerland.

The mind-boggling scale of the problem is laid bare in a slew of volumes and reports that reveal the route in which multinational companies have excused themselves from paying vast amounts of tax.

The companies are a whos who of global brands: Apple, Nike, Google, Pepsi, Pfizer, Walmart, Goldman Sachs, and practically every other multinational in business.

The detail can be complicated, but the method is simple and legal. Companies set up subsidiaries in low or no-tax jurisdictions. These subsidiaries then charge the onshore parent for services or intellectual property or whatever, with the profits then funnelled legally offshore. US companies are merely obliged to pay tax when they bring the money back. Which they dont.

The study of Americas Fortune 500 companies shows that they collectively avoid an estimated $100 bn in federal taxes each year. The most popular taxation haven is the Netherlands. Bermuda and the Cayman Islands are not far behind.

Tim Cook said the EU ruling that Apple had to pay $14.5 bn in back taxes to Ireland was political crap. Photo: Toru Hanai/ Reuters

The worst offender is Apple. It has booked $214.9 bn offshore, a sum greater than any other companys offshore cash piling. If these gains were held in the US they would incur $65.4 bn in taxation. The European Commission recently ordered Apple to pay Ireland $14.5 billion in back taxes; its Irish subsidiaries were paying an effective tax rates of 0.005%. Apples chief executive, Tim Cook, dismissed the ruling as political crap.

As a outcome it is ordinary taxpayers who have to pick up the tab. Last year George Osborne introduced a diverted profit taxation aimed at large companies that shift income artificially offshore. Its unclear if the former chancellors initiative will work. Last weekend the Observer reported that Facebook had ended up with an 11. 3m taxation credit on its UK business. This is a company that made a global profit last year of $6.19 bn.

The new volumes include a page-turning account of the investigation into the Panama Papers. And an enterprising account of the wealth management industry by a novelist who spent two years undercover as a trainee.

Published last April, the Panama Papers were the fruits of a thrilling journalistic investigation. The newspapers some 11.5 m leaked documents from the Panamanian statute firm Mossack Fonseca give an unprecedented insight into the offshore world. They uncover something obvious, previously hidden in plain sight. Namely that the global offshore industry centred in taxation havens such as the British Virgin Islands was not, as had been supposed, a shadowy but minor part of our economic system. Rather it was the system. It is this system that has allowed the burden of taxation to move inexorably from multinational corporations and the well-off to the unsmart: the dupes; you and me.

The journalists who unearthed this bitter truth were Bastian Obermayer and Frederik Obermaier of Germanys Sddeutsche Zeitung .( They are not related, but their German and international colleagues fondly nickname them the brothers Obermay/ ier .) The paper, based in Munich, has an excellent track record of working on difficult and important investigations.

Reporters often get offered information, stuff. I know from previous investigations that this often turns out to be disappointing. As Obermayer recounts, in early 2015, late one evening, he received an anonymous message. It told: Hello. John doe here. Interested in secret data? Obermayer replied: Always interested in secret data. What is it?

The it turned out to be bigger than anyone might have imagined. The source his or her identity remains unknown had get hold of Mossack Fonsecas entire internal database. The legal practice was founded in 1977 by an ambitious Panamanian lawyer and the son of a Waffen SS officer. It specialised in setting up anonymous offshore shell companies.

The sources motivating was simple. Like Edward Snowden, who lifted the lid on mass electronic surveillance, John doe was a whistleblower. He/ she wanted to expose the scale of injustice of the offshore taxation systems. Mossack Fonseca denies any wrongdoing.

The leak was an act of fearlessnes and amounted to the biggest data dump ever, delivered in real-time instalments. We got a whopping 2.6 terabytes. This was far larger than the top-secret Snowden files or the diplomatic cables leaked in 2010 by an unhappy US army private, Chelsea Manning, which disclosed Washingtons frank opinions of its global friends and enemies.

Leaked database from the Mossack Fonseca statute firm in Panama disclosed the extent of the use of offshore shell companies. Photo: Carlos Jasso/ Reuters

The Panama Papers include records of 214,000 offshore companies, names of real or beneficial proprietors, and passport scans. There are bank statements, electricity bills and email chains. Often these are between Mossack Fonsecas head office in Panama and mediators, typically other lawyers, accountants and banks.

Behind them were a large and diverse group of affluent people. We seemed, naturally enough, for politicians and those holding public office. But the majority of names in the database belonged to what you might call the non-famous international rich. There were French dentists, Spanish lawyers and Swiss aristocrats, all seeking to minimise their taxes.

The leak led to a year-long international collaboration in 80 countries. Sddeutsche Zeitung shared its material with the International Consortium of Investigative Journalists, which is based in Washington.

The ICIJ in turn devoted access to the data to 100 media organisations and nearly 400 reporters. In Britain that was my newspaper the Guardian and the BBC.

The journalists devoted the leaked files a name. The Panama Papers was a conscious echo of the Pentagon Newspapers: volumes of secret documents leaked in 1971 by Daniel Ellsberg which disclosed the true US war in Vietnam. Ellsberg swiped a mere 7,000 pages. We had enough reading material to last us about 25 years.

I received myself back in the Guardian s investigations bunker.( Actually, it had a bucolic view of Regents canal in London: houseboats, joggers, coots .) In 2013 Id been part of a small group which had studied the Snowden files here. We theorized at the time that MI6 had taken up mansion in the flats opposite.

This project was different. By means of a secure platform, called the iHub, journalists were encouraged not to compete with each other but to share information and to swap leads and tips. We did, in a flurry of encrypted emails. There were clandestine reporter meetings in Washington, Munich, and London.

Early on we looked for Trump. Perhaps the database would point us towards his alleged secret fortune? It didnt. I did dig up a Russian businessman escaping from Moscow who wanted to buy an apartment in the Trump Ocean Club tower in Panama City.( The agent knocked off $200,000, offering the Trump penthouse for a bargain price of $2.31 m .)

Other topics gradually became clear. Britain, it turned out, didnt just feature via UK Crown dependencies like Jersey, Guernsey and the Isle of Man. Rather, it was the heart of the Mossack Fonseca multiverse. True, many of those diverting monies offshore were located in far-away kleptocracies: Russian oligarchs, African despots, and bagmen for Syrias murderer-president Bashar al-Assad.

But it was British lawyers, banks and company formation agents that were facilitating this global taxation avoidance. Often, the enablers were top London law firms. Their websites look eminently respectable: a view of Georgian stucco, offices in exclusive postcodes, a smart Farrow and Ball front door with neatly topiaried trees.

The leaked documents told another story. Sometimes, the lawyers would lie about their clients identities and connections. Under banking regulations firms were “ve been meaning to” declare if a client was a politically exposed person or PEP. This would lead to stricter checks. The solution was to say nothing in the paperwork about a clients PEP status. In return, big fees.

There may not have been bodies on the street of Belgravia or Knightsbridge. But it was hard to escape the dispiriting sense that the British were the biggest felons on countries around the world. Behind the facade of legal piety “were in” enabling an orgy of transnational theft, and the looting of entire continents such as Africa.

The California-based French economist Gabriel Zucman estimates that 8% of the worlds wealth $7.6 tn( 5.3 tn) is currently stashed in taxation havens. Zucman sets the loss to global tax revenues at $200 bn per year. That includes $35 bn in the US and $78 bn in Europe. What might we do instead with this fund?

As President Obama noted taxation avoidance was a huge global problem, made worse by the fact that offshore structures are perfectly legal. Many of these havens operate under British jurisdiction. More than half of Mossack Fonsecas companies are registered in the British Virgin Islands, a territory administered from London. The BVI has stubbornly rejected calls for greater transparency. Successive British governments have failed to act.

We spent most of our bunker hours working the big names. They included David Cameron, who features indirectly, as well as a host of other colorful figures including Icelands prime minister and Vladimir Putins KGB-turned-oligarch pals.

The database revealed that the offshore money run by Camerons late father Ian had paid no British taxation. For three decades. The money, Blairmore Holding Inc, had gone to absurd durations to feign that it was based in the Bahamas, another major taxation haven.

It hired a small army of Bahamas residents to sign paperwork. One of them was a part-time bishop. All of this was legal but a pantomime designed to keep Her Majestys Revenue and Customs at bay.

In the run up to publishing, slotted for 3 April, we had two frets. One, that our investigation might itself leak. Journalists are a gossipy bunch. Two, that nobody would care. After all, when the Guardian published Snowdens revelations of state snooping in 2013 most people in Britain the land of James Bond reacted with a weary shrug.

In the end we neednt have worried. In Iceland the prime minister resigned. In Argentina there were protests. In Azerbaijan a small war abruptly initiated so some believed to confuse from revelations featuring the president and his daughters. In China censors blocked the words Panama Papers and jammed the website of the Guardian . In Russia officials fumed about a western spy conspiracy.

Downing Street refused to answer questions about Camerons tax affairs, saying that they were a private matter. Eventually Cameron went clean: hed owned shares in his fathers taxation haven money. He sold them for 31,500 just before becoming prime minister in 2010.

Cameron was reluctant to acknowledge what was obvious: that part of his familys fortune came from privileged offshore wealth.

More than half of the companies that appear in the Panama Papers are registered in the British Virgin Islands Photograph: Alamy

Viewed in retrospect, this was the beginning of the end of Cameron. Weeks afterwards he hosted a global anti-corruption summit in London. He announced a clampdown on offshore havens. The UK would introduce a new register that would oblige foreign companies owning British property to declare their owner, thereby cleaning up London as a centre for international money-laundering.

It was a start. But Cameron stopped short of obliging British overseas territories from outing the real proprietors of offshore firms. Without a public register the offshore industry with its spacecrafts of lawyers and banks was free to carry on as before. The BVI, meanwhile, boycotted the London summit and bided at home.

The picture, then, is a lousy one. But the Panama Papers offer a few rays of hope. In recent years the Organisation for Economic Co-operation and Development and western governments have tried to clamp down on tax evasion, mindful of the billions being lost during a time of austerity. Pressure has been growing on offshore centres to swap information. Increasingly, the Swiss and others are complying.

All this has induced a degree of paranoia among Mossack Fonsecas well-heeled clients. Emails show that the super-rich have adopted various protective strategies to stop the tax human from knocking. Some of them use fake names. We received Harry Potter, Winnie Pooh and Daniel Radcliffe.( Not the real one .) Plus Isaac Azimov, who turned out to be a taxation lawyer from Barcelona.

Offshore agents report that their Italian clients are going to desperate durations to avoid being caught. When visiting Switzerland they leave the Ferrari behind and take a less conspicuous car. They also seek to cover their road by layering: utilizing a chain of offshore companies, rather than just one, to inter an asset.

Still, the past six months have seen a victory of kinds for those of us, the little people, who do pay our taxes. From now on, the super-rich and other characters who use exotic offshore structures will be a nervous bunch. How long, they must be wondering, before the next leak?

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