Jordanian security forces arrived unexpectedly at Moayyad al-Majali’s home one day in October 2019, detaining the lawyer, confiscating his laptop and phones and accusing him of one of the kingdom’s most serious offences.
His crime was slandering the country’s ruler, King Abdullah II, simply by asking a single question: how much land does the king own?
In a country propped up by billions of dollars in international financial aid – and where unemployment has nearly doubled over the past seven years – the topic is considered too sensitive for the Jordanian public to know about.
But today, the Guardian can reveal part of the answer, thanks to documents that form the Pandora papers, the largest ever trove of leaked offshore data.
The files expose that the Arab world’s longest-serving current monarch has spent the past decades amassing an international luxury property empire worth well in excess of $100m (£74m), with its footprint stretching from the clifftops of Malibu, California, to Washington DC and on to central London’s most exclusive postcodes.
Abdullah built this property empire showing the same zeal for secrecy he has demonstrated when asked about his finances at home. He has disguised his ownership through a series of offshore companies incorporated in the British Virgin Islands (BVI) , according to records shared by the International Consortium of Investigative Journalists with the Guardian, the BBC and other media outlets around the world.
The multimillion-dollar properties were acquired as US economic and military aid to Jordan quadrupled and Jordanian citizens were subjected to austerity as part of an International Monetary Fund (IMF) bailout for the resource-poor country.
Using offshore companies to acquire property is not illegal and it is sometimes done to protect privacy or security. But the secrecy the offshore system confers on those wealthy enough to keep their purchases from public view can also open the door to money laundering.
Perhaps the most palatial – and certainly the most expensive – of the king’s purchases revealed in the Pandora papers is a vast clifftop property on California’s Malibu coast. It is described as a “resort hotel-like mega mansion” containing 26 rooms, overlooking a stretch of coastline made famous as the location of the dramatic final scene in the original 1968 Planet of the Apes film.
The Pandora papers are the largest trove of leaked data exposing tax haven secrecy in history. They provide a rare window into the hidden world of offshore finance, casting light on the financial secrets of some of the world’s richest people. The files were leaked to the International Consortium of Investigative Journalists (ICIJ), which shared access with the Guardian, BBC and other media outlets around the world. In total, the trove consists of 11.9m files leaked from a total of 14 offshore service providers, totalling 2.94 terabytes of information. That makes it larger in volume than both the Panama papers (2016) and Paradise papers (2017), two previous offshore leaks.
Where did the Pandora documents come from?
The ICIJ, a Washington DC-based journalism nonprofit, is not identifying the source of the leaked documents. In order to facilitate a global investigation, the ICIJ gave remote access to the documents to journalists in 117 countries, including reporters at the Washington Post, Le Monde, El País, Süddeutsche Zeitung, PBS Frontline and the Australian Broadcasting Corporation. In the UK, the investigation has been led by the Guardian and BBC Panorama.
What is an offshore service provider?
The 14 offshore service providers in the leak provide corporate services to individuals or companies seeking to do business offshore. Their clients are typically seeking to discreetly set up companies or trusts in lightly regulated tax havens such as the British Virgin Islands (BVI), Panama, the Cook Islands and the US state of South Dakota. Companies registered offshore can be used to hold assets such as property, aircraft, yachts and investments in stocks and shares. By holding those assets in an offshore company, it is possible to hide from the rest of the world the identity of the person they actually belong to, or the “beneficial owner”.
Why do people move money offshore?
Usually for reasons of tax, secrecy or regulation. Offshore jurisdictions tend to have no income or corporation taxes, which makes them potentially attractive to wealthy individuals and companies who don’t want to pay taxes in their home countries. Although morally questionable, this kind of tax avoidance can be legal. Offshore jurisdictions also tend to be highly secretive and publish little or no information about the companies or trusts incorporated there. This can make them useful to criminals, such as tax evaders or money launderers, who need to hide money from tax or law enforcement authorities. It is also true that people in corrupt or unstable countries may use offshore providers to put their assets beyond the reach of repressive governments or criminal adversaries who may try to seize them, or to seek to circumvent hard currency restrictions. Others may go offshore for reasons of inheritance or estate planning.
Has everyone named in the Pandora papers done something wrong?
No. Moving money offshore is not in or of itself illegal, and there are legitimate reasons why some people do it. Not everyone named in the Pandora papers is suspected of wrongdoing. Those who are may stand accused of a wide range of misbehaviour: from the morally questionable through to the potentially criminal. The Guardian is only publishing stories based on leaked documents after considering the public interest. That is a broad concept that may include furthering transparency by revealing the secret offshore owners of UK property, even where those owners have done nothing wrong. Other articles might illuminate issues of important public debate, raise moral questions, shed light on how the offshore industry operates, or help inform voters about politicians or donors in the interests of democratic accountability.
Public records show the home passed from Hollywood producers to dotcom billionaires, before, the Pandora papers reveal, it was bought by Abdullah in August 2014 for $33.5m, estimated to be a record price for property in the area. The king then acquired the two neighbouring properties. In the previous two years, Abdullah had acquired three condominiums in Washington DC for a total of $13.8m.
The leak of papers also reveals how the Jordanian ruler secretly acquired a portfolio of seven luxury UK properties – including three in Belgravia, London. Purchased between 2003 and 2011, the UK properties are estimated to have a current market value of about £28m. The UK was sending up to £100m a year in bilateral aid to Jordan during much of the time covered by the papers.
The monarch says he owns his property in a personal capacity – but while there is no evidence of any wrongdoing, the king’s net worth and source of his income remain closely guarded.
The king’s lawyers said: “HM [His Majesty] has not at any point misused public monies or made any use whatsoever of the proceeds of aid or assistance intended for public use … HM cares deeply for Jordan and its people and acts with integrity and in the best interests of his country and its citizens at all times.”
Jordan appeared to have blocked the ICIJ website on Sunday, hours before the Pandora papers launched.
Abdullah has ruled Jordan since the death in 1999 of his father, Hussein, who positioned the kingdom as a key ally of the west and was known for his public displays of wealth. He would speed around the capital, Amman, in one of the dozens of sports cars he owned – most of which are now on display at a museum in the city.
His son has maintained the links to the west but is less publicly conspicuous in his spending – in keeping with economic conditions in the country described by US congressional researchers as “extremely difficult”, and which have driven several open challenges to his rule over the past decade.
About one in four Jordanians are unemployed, according to 2020 figures, while Jordan has implemented waves of austerity policies over the past three decades in exchange for access to IMF loans, a process Abdullah has accelerated.
The moves have led to successive tax hikes and cuts to subsidies on bread, electricity and fuel. The government is also launching a campaign to flush out tax cheats in order to rein in public debt, all of which contrasts starkly with the impact austerity has had on the king. “Under Jordanian laws, HM is not required to pay taxes,” his lawyers said.
Protests against cuts to the welfare state and for higher public sector wages have led Abdullah to dismiss several prime ministers over the past decade, in what is seen as a way to relieve public anger and deflect it away from the monarch. His lawyers say Abdullah gives a “significant percentage” of his personal wealth to charitable causes in line with his “vision towards achieving an equitable society”.
Nonetheless, the bulk of the Pandora papers property purchases came during a difficult past decade in which Abdullah has faced two public challenges to his rule.
The first came as part of the “Arab spring” that swept the Middle East in 2011. Those protests – in which the king and his wife, Queen Rania, were openly accused of “stealing” the country – were crushed by security forces while promises of more democracy have largely failed to materialise. The timing revealed by the Pandora papers raises questions about whether the monarch may have considered the need for a safe haven abroad for himself or his personal fortune.
The second challenge was an alleged coup plot in April of this year cultivated by the king’s half-brother Hamzah, who gained attention and support in some quarters by publicly criticising government corruption and attempts to reform the Jordanian economy by “repeatedly returning to people’s pockets”. Hamzah was placed under house arrest and his alleged accomplices in the sedition plot were sentenced to lengthy jail terms.
Eager to shore up a western-friendly ruler, the US has poured increasing financial aid into Jordan over the past decades amounting to a total of $22bn by 2018, and billions more in the years since.
Yet at the same time, according to the Pandora papers, the king has spent millions burnishing his property portfolio.
The most recent Jordanian budget shows an annual sum of approximately $35m in public funds spent on the upkeep of the country’s royal palaces, but does not list any salary for the king or other working royals. Abdullah’s lawyers said: “The source of HM’s personal wealth is not from public monies, rather from personal sources.”
The lengths to which Abdullah has gone to hide details of the purchases also suggest he is aware they will be a politically awkward matter to explain to his subjects.
The leaked Pandora documents include a February 2017 internal memorandum between compliance managers at the Panamanian law firm Alcogal, which state that a Jordanian national client called Abdullah Al Hussein, born 30 January 1962 (Abdullah II’s birth date) and with an address of “Raghadan Palace“ (which is located in the royal court compound of al-Maquar in Amman, Jordan), was the beneficial owner of 16 companies that variously held assets in the US, the UK and Jersey.
Among those companies are Nabisco Holdings SA, Setara Limited and Timara Limited – which acquired the three Malibu clifftop properties – plus a series of other entities that own the king’s property assets in Washington DC and the UK.
According to the leaked files, Alcogal staff appear to have worked hard to safeguard the king’s secrecy by not identifying him on internal documents as a politically exposed person (PEP) and discussing ways to avoid storing his identity as beneficial owner.
Their reticence reached almost farcical levels, with one December 2017 email between Alcogal employees discussing the “final beneficiary” as a resident of Jordan, then referring to the king simply as “you know who”.
Alcogal said it had never “deliberately failed to identify a politically exposed person as such in its due diligence processes”. It said in this case, the beneficial ownership identity details were recorded on the BVI’s beneficial ownership secure search (Boss) system in November 2017 in compliance with the territory’s laws.
Moayyad al-Majali, the Jordanian lawyer, was ultimately released but fined.
Guardian Newsroom: The Pandora papers
Join Guardian journalist Paul Lewis and guests in this special livestreamed event looking in-depth into the Pandora papers investigation. On Monday 18 October, 8pm BST | 9pm CEST | 12am PDT | 3pm EDT. Book tickets here
