Database Exposes Offshore Holdings of Prominent Germans
26 May 2020

The group’s name alone reflects its combative mission: The collective of transparency activists calls itself Distributed Denial of Secrets (DDoS), a name that recalls denial of service, a form of online attack that knocks out servers and websites by targeting them with huge numbers of superfluous requests. Committed as they are to the fight against secrecy, DDoS have made it their goal to publish as much confidential information as possible. They have assembled around two exceptional activists from North America: Emma Best and Lorax Horne, who are proponents of the freedom of both data and sexual orientation. Their motto: “Be gay, do leaktivism.” Both are 34 and neither of them see themselves as belonging to a binary gender. They feel neither male nor female and their pronouns are they/their.

Best and Horne are well versed in uncovering secrets that other people would prefer remained hidden. Best says that they used to do contract work for U.S. intelligence services and comes across as fearless and provocative. With their radical transparency, they and the DDoS team want to make progress in an area where politicians have found only limited success in recent decades: that of shutting down tax shelters around the world. Four months ago, they shared with DER SPIEGEL a large database from the corporate registry in one of the world’s most famous tax havens: the Bahamas. The role of DDoS is that of an intermediary, and the activists don’t want to reveal their source for the information.

DER SPIEGEL, in cooperation with the investigative journalism network European Investigative Collaborations (EIC) and the Henri Nannen School of Journalism in Hamburg, has reviewed around 1 million documents in total. The results of that search make it clear why the island nation continually resists international pressure to establish transparency. And why the country’s efforts no longer go far enough to protect its clients and their letterbox companies today.

In addition, the case shows how difficult the handling of massive leaks can be. DDoS wants to make the database available over the internet so that anyone in the world can have a look. Yet the data also includes people who have done nothing wrong and have reliably paid their taxes – at least the data doesn’t indicate the contrary. It isn’t forbidden, after all, to have a company or a letterbox company in the Bahamas.

The data does reveal the names of well-known Germans who have had a difficult time with their explanations, such as BMW majority shareholders Susanne Klatten and Stefan Quandt as well as former football legend Uwe Seeler and some of his sporting friends.

None of that was known until now.

The DDoS activists are focused on the big picture. “We currently live in a society that is very sick, and I don’t mean only with corona,” Horne says. “I mean economic inequality and the simultaneous planetary suicide with human-made climate change.” Tax evasion and avoidance is one of the major problems facing the world and is one of the causes of inequality, Horne says.

The Caribbean offers both private individuals and companies from abroad a full-service package for their money. They don’t have to pay corporate taxes or income tax, nor are there any levies on capital gains, wealth or inheritance – and it’s all legal as long as it is declared to the tax office back home. According to the Tax Attractiveness Index maintained by the University of Munich, the Bahamas is in third place in the world rankings. Thousands of companies have set up their headquarters there, at least on paper – some to take advantage of legal tax loopholes or to evade taxes illegally.

The key to the network of companies based in the Bahamas should be the publicly accessible corporate registry, but that’s a farce. The official website doesn’t allow users to search using the names of the people behind companies, they can only perform searches using the names of the companies and their registration numbers. And even if you have that information, you won’t generally find information about the people behind them. The data from DDoS, however, now makes that information publicly accessible.

Cold War Fears?

If it were up to the Quandts, the existence of their companies in the Bahamas would never have come to light. Susanne Klatten and Stefan Quandt are both the heirs of Herbert Quandt, the major industry figure who restructured BMW. Neither of them is prone to bombast or showing off. The siblings generally have a reputation of being responsible corporate citizens. But last week, BMW drew criticism for issuing a dividend of more than 700 million euros to the Quandt heirs in the midst of the coronavirus pandemic, which has seen the furlough of thousands of its workers.

The Quandt heirs’ history in the Bahamas apparently began in early 1985. At the time, Stefan Quandt was just about to graduate from high school while his sister, who is four years older, was studying business in Buckingham in the United Kingdom. They were both, in other words, still quite young. One day in February of that year, two companies with matching structures were set up in the Bahamas. The data trove shows that Susanne acted as a director of Suvel Holding, while Stefan headed up Stevel Holding. The shareholders for the two companies were identified as two companies called Wuhu and Winooski, both of them listed as being based in Nassau, the capital of the island nation. There are hundreds of other matches in the data trove for Wuhu and Winooski. The companies are used by the Swiss bank UBS as fiduciaries for its Bahamas-based companies. According to the corporate register, UBS is also responsible for the post boxes belonging to the Quandt family.

The Quandts, who are BMW’s primary shareholders, try to avoid the limelight, but when it comes to the structuring of their assets, they aren’t fully opposed to providing information. As such, it is known just how well organized the inheritance from family patriarch Herbert Quandt, who died in 1982, and his third wife Johanna was. And it is always in the public interest when the members of one of Germany’s wealthiest families comment on the taxation of assets, inheritance and gifts. Which makes it all the more surprising that there isn’t a word to be found about the Quandt family’s Bahamas activities in books or press coverage.

By Malta Born, Rafael Buschmann, Roman Höfner, Muriel Kalisch, Sebastian Mondial, Nicola Naber, Sara Wess, Sabrina Winter, Christoph Winterbach and Michael Wulzinger, Der Spiegel, 22 May 2020

Read more at Der Spiegel

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