University of Michigan experts are available to comment on the disclosure of the Paradise Papers by the International Consortium of Investigative Journalists—13.4 million leaked files that reveal the offshore activities of some of the world's most powerful, including Queen Elizabeth II, several members of the Trump administration, Mexican billionaire Carlos Slim and Colombian president and Nobel Peace Prize winner Juan Manuel Santos.
Cindy Schipani, professor of business law at the Ross School of Business, is an expert on corporate governance, with a focus on the relationship among directors, officers, shareholders and other stakeholders.
"This disclosure is particularly interesting given the current discussion of tax policy," she said. "This exposes how very wealthy individuals and corporations have been able to shield wealth from the U.S. taxing authorities, adding more steam to the argument that it is less wealthy individuals who bear a greater tax burden.
"And to the extent the hidden wealth of public officials has been exposed, citizens have grounds to distrust tax policy. Conflicts of interest raise serious questions regarding whose interests are being protected. Furthermore, the links to Russia, in light of the current investigations, also raise alarming red flags."
"The leak may not derail the GOP tax reform, but it should give pause to current proposals which impact the middle class—those who are not able to take advantage of the tax havens. Or, it could at least open a discussion about taxing offshore monies in connection with the discussions about an overhaul."
Reuven Avi-Yonah, the Irwin I. Cohn Professor of Law and director of the International Tax LLM Program, specializes in corporate and international taxation. He has served as a consultant to the U.S. Treasury Department and the Organisation for Economic Co-operation and Development on tax competition, and is a member of the steering group for OECD's International Network for Tax Research.
His research has included the intersection of tax law and human rights. In 2016, he co-authored the study, "Taxation and Human Rights: A Delicate Balance" that discusses how the ability of rich residents of developing countries and multinational corporations operating in those countries to evade or avoid taxation is directly linked to violations of human rights in those countries. The study also examines techniques used to achieve adequate revenue collection risk violating other human rights, such as privacy and the legitimate protection of trade secrets.
"In a better world, I have no doubt this kind of revelation would have an impact on legislation that is designed to reward the kind of behavior that is exposed by the Paradise Papers," he said. "For example it would make it more difficult to pass legislation allowing Apple to pay a maximum of 12 percent on $230 billion stashed in tax havens instead of 35 percent.
"But I am sure the GOP will just say that the revelations bolster the case for cutting taxes for giant multinationals and the super rich. Whether tax reform happens depends entirely on the push and pull of interests within the GOP and the influence of various lobbying groups, and I doubt the Paradise Papers will have an impact on this."
Melvyn Levitsky, professor of international policy and practice at the Ford School of Public Policy, spent 35 years as a U.S. diplomat under eight different presidential administrations. He served as officer-in-charge of U.S.-Soviet bilateral relations and as a political officer at the U.S. Embassy in Moscow. He can discuss the leak as it relates to the ongoing investigation of the Trump administration's alleged Russia connections.
"It seems clear that there are credible conflicts of interest between Trump campaign officials and some current government officials," he said. "The Papadopoulos indictment shows a traditional Soviet, now Russian operation to gain influence with the Trump campaign. Manafort's support of the pro-Russian president of Ukraine and his attempted concealment of funds through various offshore financial institutions at a minimum, indicates his and his partner's concern about the appearance of collusion.
"Now there are other reports of Russian links to members of the administration. There may not be direct collusion, but there was certainly something shady going on."
John King, professor of information at the School of Information, focuses on cyberinfrastructure. He can address the technical aspects of leaking such large amounts of data. He discusses how technology is blurring the line between private citizens, fact checkers and professional reporters, and the constitutional implications this might have.
"The Paradise Papers raises several issues," he said. "The first is the amazing speed with which information travels, not only the original information (e.g., the Paradise Papers themselves) which can be voluminous, but commentary on the original information. Within hours of the Paradise Papers release, there was a Wikipedia page up on the topic. Within 24 hours, that Wikipedia entry had grown to several pages, including a detailed list of all those named in the Paradise Papers. This is unprecedented, providing what is essentially news and commentary nearly simultaneously with the events reported on, compressing the 'news cycle.'
"Second, many people carry high-resolution cameras and video recorders on their persons in the form of smart phones. Millions of people are now photojournalists, covering much more than was covered before. Instant covering and sharing of even isolated events makes selection and editing more essential. News becomes choice in ways not heretofore seen.
"Third, this is happening in an era of highly disputed 'truth warrants.' Many 'channels' have proliferated. Accusations and discussions of 'fake news' and 'alternative facts' are now ubiquitous. The very notion of the 'fact checker' comes under suspicion. No single group controls the news. Some powerful companies from whom many get their news have carried fake news or claim they are not news organizations at all. Professionalism in news is called into question.
"This has constitutional implications. What is a free press? And if a free press is essential to the maintenance of civil liberties, what then? The Paradise Papers by themselves might be less important than the fact that such papers can be released and disseminated in this way."