Considered the largest offshore finance leak ever to be released — even larger than the Panama Papers in 2016 — the Pandora Papers, with over 12 million files, were published in early October by the International Consortium of Investigative Journalists (ICIJ), an international network of 280 members and investigators.

Obtained through an unidentified source, they have shed the light on systematic tax avoidance schemes operated by 14 firms, in order to help their hundreds of clients hide money on secret offshore bank accounts and trusts. According to early investigations, up to $32 trillion in funds were proved to have been concealed from tax authorities and prosecutors, notwithstanding non-monetary assets, such as art, real estate, yachts etc…
If transferring money through offshore accounts isn’t always considered illegal by definition — which is why many involved persons have not been actually accused of criminal wrongdoings — the discoveries of the Pandora Papers have had strong repercussions on the Art World, for example, by proving how some offshore accounts had been used for illegal schemes. All sectors in the Art World have been impacted by the leak, both the Art Market (dealers and collectors) and the Museums.

Indeed, through revelations on looted art and shady dealings, the Pandora Papers have involved many famous art institutions. As of now, one of the biggest cases related to this leak has revealed that looted pieces of Cambodian art have been exhibited for years in museums, such as the British Museum in London or the Metropolitan Museum of Art in New York.

It all started when Douglas Latchford, a famous English scholar fascinated by ancient Cambodian sculpture, started frequently travelling to Khmer Empire cities from the 1970s onwards. Each time, Latchford returned from his trips with many artworks: he soon owned one of the world’s largest private collections of Khmer treasures, mostly Hindu and Buddhist sculptures. Latchford wrote three books on this subject and then officially became an expert.
But a couple of years ago, investigations led to think that his collection was, in fact, full of looted antiquities and that he had greatly profited from the sale of some of them.

According to U.S. prosecutors, Latchford’s decade-long ransacking of Cambodian sacred sites must be now considered one of the most devastating cultural thefts of the 20th century. In 2019, Latchford was finally indicted when falsified records and proof of his illegal activities (also with several associates) were discovered. But he eventually died before the trial in August 2020, at the age of 88. The traces of the hundreds of looted art pieces he had owned or traded seemed to have disappeared into thin air.

In late 2021, investigations by the ICIJ and The Washington Post uncovered the existence of two secret trusts owned by Latchford and his family, set up on the Island of Jersey following the start of the first investigations on the provenance of his art collection. The trusts had been named after Hindu gods Siva and Skanda. The assets of the Skanda Trust (bronzes of Buddha, Lokeshyara and a looted Naga Buddha, valued at $1.5 million) were later transferred to the Siva Trust.

Even after this discovery, it was difficult to repatriate the potentially looted art. Latchford family explained these trusts had been set up for tax purposes and estate planning, that they included multiple family assets (also unrelated to Douglas Latchford’s collection) and they could not have been used to hide the origin of looted antiquities. Also, the trusts would have been set up even before the first investigations on Latchford activities. According to the lawyer of Douglas Latchford’s daughter, Julia (a.k.a. Nawapan Kriangsak), she had in fact only recently discovered that many pieces of her father’s collection had been illegally obtained. She then announced she planned to return more than 100 bronze, sandstone, copper and gold antiquities belonging to her father’s collection. The first five relics were repatriated to Cambodia in October 2021.

At the same time, a team of Cambodian officials, as well as journalists and investigators from The Washington Post, ICIJ, the BBC, The Guardian, Spotify and the Australian Broadcasting Corporation, began a hunt to track down all the other art pieces looted by Latchford and his associates. Several museums had already returned the pieces they owned from Latchford’s collection, but 27 items were still on display in famous art collections across the world, such as the MET (at least 12 either owned or sold by Latchford and another matching a piece description from his indictment), the British Museum in London (15 pieces), the National Gallery of Australia, the Denver Art Museum and the Cleveland Museum of Art. The Pandora Papers revealed these museums, along with a couple of others recently accused of selling stolen relics since they held 16 artefacts sold through an associate of Latchford.

Of course, Latchford and his associates did not exclusively deal in looted artworks, thus not all the objects from their collections need to be returned, though the museums’ lack of records and evidence that the art pieces on display have been legally exported, seem to indicate a more dubious origin. Such discoveries underline the importance for every museum to investigate very carefully and rigorously the origin of their artworks, especially when their provenance is potentially shady — for example when it has been part of Latchford’s collection.
When asked about a mistake on their part in thoroughly researching the provenance of purchased art, the British Museum officials indicated they had followed the industry guidelines to ensure the origin of the art pieces they were acquiring. Still, the standards for provenance research and the paper trail needed to prove the art’s authenticity did change a lot over the years.

Harihara (Cambogia, VII secolo, Musée Guimet, Parigi) simile a quello esposto al MET e descritto nei Pandora Papers.

Following the ICIJ’s leak about Latchford’s wrongdoings, officials from the Metropolitan Museum of Art have contacted U.S. federal prosecutors to announce their suspicion about some Cambodian items from their collection which might have been looted. According to the first investigations by ICIJ and The Washington Post, 12 pieces had been either owned and sold by Latchford, while 7 other pieces had been purchased through his associates. For experts and scholars, the simple fact they had been obtained and exported during wartime in Cambodia represents a big red flag. Also, according to Tess Davis, executor director of Antiquities Coalition (which fights against artefacts looting), the Metropolitan Museum of Art should have had more actively investigated its collection ever since one of Latchford’s associates, who had sold the MET an art piece, was indicted in 2016 — three years before Latchford.

While a sandstone statue from the MET, called Harihara, seems to correspond to a piece described in Latchford’s indictment (same religious figure, same dealer who helped Latchford sell his looted art in 1974 and sold it to the museum three years later, same ‘pre-Angkor’ period, same location etc.), the museum denied that, although agreeing to cooperate and research the provenance of their Cambodian artefacts.
Further investigations led to believe the MET exhibited around 45 looted art pieces, whose restitution has been now requested by the Cambodian government.

After being mentioned in the Pandora Papers as one of the institutions displaying art from the Latchford collection, the Denver Art Museum announced they were ready to return four pieces to their country of origin. In January 2022, the co-founder of Netscape, Jim Clark, announced he was returning the 35 Cambodian antiquities from his collection (worth around $35 million), bought from Latchford.

Unfortunately, many of these pillaged art pieces remain lost to us, also because only a small portion has ended up in museums while most sales were private.

The Pandora Papers have helped reveal and investigate art trafficking and smuggling cases, suggesting and in some cases proving the use of art assets in money laundering. When it comes to dealers and collectors, these findings have uncovered many secret offshore accounts with a quick, direct impact on the market.

Among others, the Papers revealed how Helena de Chair, wife of British conservative party politician Jacob Rees-Mogg, owned a holding company beneficiary of a trust that owns $3.5 million in Art. They also showed that Konstantin Ernst, head of a Russian TV network, owned one of the two versions of Jacques-Louis David’s The Anger of Achilles through an offshore company, worth $6.3 million — the other is currently exhibited in the collection of the Kimbell Art Museum, in Texas.

The Anger of Achilles (Jacques-Louis David, 1819, Kimbell Art Museum, Texas)

The files mention several secret transactions related to a Banksy mural, as well as artworks by Picasso, Modigliani and Monet. Although not openly accused of criminal activities, the Papers revealed how the Brussels-based Vedovi Gallery had succeeded in making its deals tax-free by registering in Hong Kong its catalogue of artworks (worth over 15 million euros): millions were made thanks to these sales. The disclosures published in Le Soir by ICIJ investigators De Tijd and Knack explain how Belgian dealer Paolo Vedovi had registered a “letter-box company, Global Art Portfolio Limited, in Hong Kong, with the sole mission of buying and selling the modern and contemporary works that the art dealer loves […] None were stocked in Hong Kong since, as documents extracted from the Pandora Papers explicitly state, Global Art has no activity, stores and employees there”.

According to the tax department in Hong Kong, even if the company was registered there, its income was not taxable in Hong Kong since operations and sales were done from Europe. Vedovi is a Belgian resident and the only employee involved in selling artworks, he frequently travelled within Europe and to the United States but, suspiciously enough, never to Hong Kong, ever since his gallery was founded 20 years ago.

The Pandora Papers also implicate one of the largest Indian Art auction houses, Saffronart, which has been linked to several offshore accounts in the British Virgin Islands. According to the first investigations, the records of Panamanian law firm Alcogal show that the founders of the auction house, Minal and Dinesh Vazirani, hid money in these accounts from 2006 until at least January 2017. The leaked documents also show how Sri Lankan politician power couple, Thirukumar Nadesan and Nirupama Rajapaksa, used foreign shell companies to acquire artworks.

As they have been only recently published, the extent of the consequences of the Pandora Papers is not yet fully known. In fact, more revelations should arrive. According to the ICIJ, the leak also “led to a broader examination of the global trade in art”. The story is far from finished, it is merely begun — even just thinking about the proportions of Douglas Latchford’s illegal activities. Many museums evidently need to investigate more thoroughly the provenance of artworks sold or donated. In any case, we are going to hear more about the impact of the Pandora Papers on the art world at a global level. For Tess Davis of Antiquities Coalition, the “Pandora Papers exposé confirmed that bad actors are exploiting the multibillion dollars art market, using legal loopholes to traffic artifacts, launder money, and hide ill-gotten gains”.
Needless to say, this recent leak just underlines once more how crucial is the need for a more transparent art market, where shady transactions and artefacts looting are not as easy.

So, to be continued…


References

Antiquities Coalition, “Pandora Papers caps off 2021 with consequences felt around the globe, says ICIJ in follow-up report on the October expose”, in Antiquities Coalition, January 6, 2022 (https://theantiquitiescoalition.org/ac-executive-director-commends-the-impact-of-pandora-papers-expose/)

Artlyst, “Pandora Papers Reveal Artworld Money Laundering”, in Artlyst, October 4, 2021

ArtNews, “The Pandora Papers and the Art World”, in ArtNews, October 5, 2021 (https://www.artnews.com/art-news/news/pandora-papers-art-world-moderna-galerija-morning-links-1234605653/)

The Brussels Times, “Pandora Papers: Belgian gallery sold millions worth of art without paying tax”, in The Brussels Times, October 9, 2021

Sarah Cascone, “The Pandora Papers Leak Reveals How the Late Dealer Douglas Latchford Used Offshore Accounts to Sell Looted Cambodian Antiquities”, in Artnet News, October 5, 2021 (https://news.artnet.com/art-world/pandora-papers-douglas-latchford-2017069)

Sarah Cascone, “The Denver Art Museum Is Returning Four Antiquities to Cambodia After the Pandora Papers Exposed Their Illicit Origins”, in Artnet News, October 18, 2021 (https://news.artnet.com/art-world/denver-art-museum-pandora-papers-restitution-2021888)

Constantine Cannon, “Pandora Papers Show the Value of Financial Transparency, the Critical Role of Whistleblowers — and the Need for Additional Regulation”, on Constantine Cannon, October 8, 2021 (https://constantinecannon.com/2021/10/08/pandora-papers-show-value-of-financial-transparency-role-of-whistleblowers-need-for-additional-regulation/)

ICIJ, “After Pandora Papers, Met officials contacted U.S. attorneys about relics Cambodia says were stolen”, ICIJ, October 25, 2021 (https://www.icij.org/investigations/pandora-papers/after-pandora-papers-met-officials-contacted-u-s-attorneys-about-relics-cambodia-says-were-stolen/)

ICIJ, ”The Denver Art Museum to return four artifacts to Cambodia after Pandora Papers investigation coverage of indicted art dealer”, in ICIJ, October 17, 2021

ICIJ, ”How we tracked Cambodian antiquities to leading museums and private galleries”, in ICIJ, October 5, 2021

Iain Marlow, “Here Are The Biggest Revelations From the Pandora Papers Leak”, in Bloomberg, October 3, 2021 (https://www.bloomberg.com/news/articles/2021-10-04/here-are-the-biggest-revelations-from-the-pandora-papers-leak)

Malia Politzer, Peter Whoriskey, Delphine Reuter and Spencer Woodman, “From temples to offshore trusts, a hunt for Cambodia’s looted heritage leads to top museums”, in ICIJ, October 5, 2021 (https://www.icij.org/investigations/pandora-papers/cambodia-relics-looted-temples-museums-offshore/)

Malia Politzer, Peter Whoriskey, Spencer Woodman, “After Pandora Papers, Met officials contacted U.S. attorneys about relics Cambodia says were stolen”, in ICIJ, October 25, 2021 (https://www.icij.org/investigations/pandora-papers/after-pandora-papers-met-officials-contacted-u-s-attorneys-about-relics-cambodia-says-were-stolen/)

Iain Marlow, “Here Are The Biggest Revelations From the Pandora Papers Leak”, in Bloomberg, October 3, 2021 (https://www.bloomberg.com/news/articles/2021-10-04/here-are-the-biggest-revelations-from-the-pandora-papers-leak)

Ritu Sarin, “Pandora Papers: Art auction major linked to clutch of offshore companies”, in Indian Express, October 9, 2021 (https://indianexpress.com/article/express-exclusive/pandora-papers-saffronart-art-auction-house-offshore-companies-7558991/)

Spencer Woodman, “Tech titan surrenders Cambodian relics sold by indicted dealer amid broader repatriation push”, in ICIJ, January 12, 2022 (https://www.icij.org/investigations/pandora-papers/tech-titan-surrenders-cambodian-relics-sold-by-indicted-dealer-amid-broader-repatriation-push/)

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