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Speaker 1: Everyday millions of people go online to search for local businesses. Does your small business show up in the results? When you create a website on wordpress.com, you make it easier for your customers to find you, to connect with you. Your business needs an online home. It needs a wordpress.com website. Come see why 28% of all websites run on WordPress, the web's most popular and most powerful site building platform. Go to wordpress.com/reveal to get 15% off your website today. That's wordpress.com/reveal.

Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson.

Last spring more than a hundred journalists crowded into a conference room in downtown Munich. There inside a gleaming office building with a perfect view of the Alps, this is the home of Süddeutsche Zeitung, one of Germany's biggest newspapers.

Speaker 3: Good morning.

Al Letson: Outside of the people in this room, almost no one in the world is supposed to know what's going on here.

Speaker 3: Our technicians tell us that there are still dozens of cellphones switched on. Please switch them off now.

Al Letson: The journalists came from around the globe. Many were here in 2015 to work on the Panama Papers, that's the huge leak of confidential documents that exposed how the rich and powerful hide their wealth in offshore tax havens. The information came from a Panamanian law firm called Mossack Fonseca. Now, there's a new leak and for these journalists, a new level of secrecy.

Frederik O.: We learned in the Panama Papers project that it's very important to stick to one rule. That rule is encrypt and shut up.

Al Letson: Frederik Obermaier is a reporter with Süddeutsche Zeitung.

Frederik O.: Basically encrypt every communication, every data you store on your computer. Encrypt it and so protect it. At the same time, shut up. Don't speak with people. Don't speak with colleagues in your media outlet that are not involved in the project because this is a very sensitive area.

Al Letson: Frederik and his colleague Bastian Obermayer, no relation, got their hands on the Panama Papers from an anonymous source. The two Obermayers also received this new leak and, like they did with the Panama Papers, they shared it with the International Consortium of Investigative Journalists in Washington, D.C. It's a group that specializes in big media collaborations. Marina Walker Guevara is the group's Deputy Director.

Marina W. G.: Cellphones can be tapped. The intelligent services from around the world can find ways to listen in. We didn't want to be paranoid because we think paranoia can cripple collaboration. But, why take unnecessary risks? Because they know our model, powerful people can try to disrupt it and that's the end.

Al Letson: In Munich, Marina, Frederik, and other top reporters and editors walk through a new database they've built. It's codenamed Athena, for the Greek Goddess of Reason.

Speaker 3: What is Athena? Athena is actually not only one leak. Athena, and it's very important to keep in mind, is actually several leaks.

Al Letson: Several leaks totalling 1.4 terabytes of data. Now, that's more than 13 million documents, including emails, contracts, and bank information. Most of the leaks come from a law firm headquartered in Bermuda called Appleby; no connection to the restaurant chain. Now, those leaks contain thousands of conference calls and voicemails between Appleby employees and their clients from all over the world.

Speaker 6: Hey, again. How are you? I'm actually on the island today.

Speaker 7: Just checking in on where we are with your list that still has to go to Bermuda.

Speaker 8: We have some questions around a counterparty located in Anguilla.

Speaker 9: Behind some convenience flight to get out of these.

Speaker 10: We are a full service development and construction firm based in the United States and we are currently looking at doing some work in Saudi Arabia.

Speaker11: Just give me a quick ring about those rugal payments.

Speaker 12: [inaudible 00:04:19] from out in Silicon Valley. I'm just wondering if I could chat with you, I have a possible engagement for you.

Frederik O.: Appleby is actually an offshore provider. It's a law firm helping you to set up and to administer and run companies in offshore jurisdictions, and Appleby considers and branded itself like one of the good guys in this industry, beating out the black sheep, like the Panama Papers law firm of Mossack Fonseca.

Al Letson: What he means by that, is Appleby considers itself a leader offshore legal services, working with some of the largest and most profitable companies in the world. Mossack Fonseca was exposed for helping corrupt politicians and dictators hide their wealth when the Panama Papers came out.

News Reporter1: [inaudible 00:05:14]

News Reporter2: Panama Papers

News Reporter3: Massive leak in documents from a firm in Panama City called Mossack Fonseca.

News Reporter4: Some of the names revealed in the document are a rogues' gallery of dictators and criminals, but also included are 12 world leaders who've allegedly evaded taxes in offshore accounts.

Al Letson: After the Panama Papers came out, people protested. Law enforcement agencies launched massive investigations, and two world leaders, in Iceland and Pakistan, were forced out of office. Marina says this new investigation is shining a light on how big corporations move their money from one island tax shelter to another.

Marina W. G.: Nearly 100 of them, and that includes everything from Apple to Facebook, Walmart, Uber. All the brands that we all used, all the brands that are around us all the time. What we are seeing is really industrial scale tax avoidance.

Al Letson: And it's not just mega corporations that show up in these leaks.

Frederik O.: When we met in Munich, we had already found some names of US government officials in the data.

Marina W. G.: Including several people working for President Trump, several people who donate to President Trump. But we didn't know the full extent of those stories, and we didn't know at the time that some of those individuals and some of those structures lead to people close, for example, to President Vladimir Putin in Russia.

Al Letson: After months of intense investigative work, Reveal and other media outlets on six continents are lifting the curtain on this investigation and it's called the Paradise Papers.

Our coverage begins about 700 miles off the eastern seaboard of the US on the tiny island of Bermuda, his reveals, Michael Montgomery.

Michael M.: There's a nice spot overlooking Bermuda's capital, Hamilton, where you can get a good look at what's made this island prosper.

Tourists from a cruise ship are strolling along the waterfront of fancy restaurants and shops that sell everything from designer clothes to Cuban cigars. Taxis are taking others out to the island's famous pink sand beaches. A few blocks off the water, there's something else. Modern, but discrete office buildings, and if you look closely you'll see the name of big law firms, and insurance and financial services companies.

Will Fitzgibbon: You come Bermuda to see boats and yachts, you see sun burnt tourists, you see beautiful beaches.

Michael M.: I'm here with Will Fitzgibbon, he's with the International Consortium of Investigative Journalists, and we've come to Bermuda with a group of reporters from around the globe armed with the Paradise Papers.

Will Fitzgibbon: What you don't see is what's hidden behind glass fronts on office buildings, non-descript office buildings like we walked past this morning. But we, because of these documents, know that what's happening behinds those doors in some cases involves billions and billions of dollars or individual wealth and also of corporate wealth.

Speaker 19: Yeah, and some of it is a way to avoid taxes. Other situations certainly that come out in these documents, in these leaks, are let's say the darker side of that really kind of hiding your financial tracks that may lead to places that you don't want people to know about.

Will Fitzgibbon: People who come here sometimes they don't even care about the tax rate, they want to know that if they park money here, if they do business here, that their names' are never going to appear on any public documents. And what see in Appleby's files are sometimes specific requests of that nature. People from all over the world writing emails saying, "Can you ensure that my name will appear nowhere near this particular document?".

Michael M.: We'll meet up again with Will later in this story.

People can park their money in offshore centers, legally and tax-free. Sometimes it's through shell companies with no employees or office space, but doing this in places like Bermuda still requires a lot of legal work, and that's why the Paradise Papers are such a gold mine. Leaks of more than 13 million confidential files, many from Appleby, the law firm founded here in Bermuda, works with mega corporations and the super rich and has offices in other big tax havens, like the Cayman Islands.

When reporters started going through the Paradise Papers, they found records connected to Nike, Apple, the Queen of England, the rockstar Bono

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Speaker 1: ...connected to Nike, Apple, the Queen of England, the rock star Bono, the billionaire philanthropist George Soros, and more than 120 world politicians.

Sasha: The first thing that caught our attention was there were all these records of off shore companies connected to Wilbur Ross and his private equity firm in Appleby's files.

Speaker 1: Wilbur Ross is the U.S. Secretary of Commerce. He's also the richest person in President Trump's cabinet. He's worth about $2.5 billion.

Sasha: He was personally connected to about a dozen companies, and his firm, the W.L. Ross Group, had more than 50 companies that were being administered by Appleby. So we really wanted to take a close look and figure out what is Wilbur Ross doing offshore, and why does he do so much business in the Cayman Islands?

Speaker 1: The Cayman Islands offer two big things. Extraordinary financial secrecy, and huge tax breaks. Before signing on to the Trump administration, Ross was a private equity titan. He was known as the king of bankruptcy, for buying up bankrupt companies and turning them around, or chopping them up, for big profits.

The leaked documents show that some of his deals went through a chain of companies and partnerships in the Cayman Islands, including one investment he made that put him in the orbit of Vladimir Putin. It's a shipping company called Navigator Holdings. In 2012, Ross joined its board. That same year, Navigator landed a big deal to transport fuel for a company called Sibur.

Sasha: Sibur is owned by people who are in Vladimir Putin's inner circle. One of the key owners is Kirill Shamalov, who is Putin's son in law. Another key owner who is now the second largest shareholder is Gennady Timchenko, who was sanctioned by the United States in 2014 as a member of Putin's inner circle.

Speaker 1: Sasha says the deal was important for Russia.

Sasha: Russian energy sent to Europe is a crucial source of income and of leverage to Russia in its relations with both Europe and with the United States. And Putin and the Russian government have invested significantly in the Port of Ust-Luga.

Speaker 3: [Foreign language 00:12:34] [crosstalk 00:12:36]

Speaker 1: This is news footage of Vladimir Putin visiting Ust-Luga. He's wearing a smart overcoat with a understated fur collar, walking around with men in hardhats.

Speaker 3: [Foreign language 00:12:45] [crosstalk 00:12:46]

Speaker 1: In 2013, Navigator went public, and its stock price more than doubled. Ross was thrilled, and he called his investment a home run. But all this was happening just as other western companies were backing away from Russia, and for good reason. Russia had invaded Ukraine. The U.S. eventually retaliated with sanctions. Daniel Fried was in the middle of all this. He's a career diplomat who was in charge of overseeing sanctions at the State Department.

Daniel Fried: We've often noticed that banks, businesses tend to stay well, well away from sanctioned individuals, and they often are hesitant to get anywhere near somebody who's sanctioned. It's as if there's, they're radioactive.

Speaker 1: Sibur itself was not under U.S. sanctions. Still, Fried says-

Daniel Fried: If I were advising private clients, which I am not doing, I would say, stay away. Don't stay an inch away, stay a mile away from that red line. If you know anything about the Russians, it's that under the current system, it's easy to get dirty. Don't go there, man. Don't go there.

Speaker 5: Mr. Ross, please proceed. Welcome.

Wilbur Ross: Thank you, Mr. Chairman, Ranking Member Nelson, and members of the committee. [crosstalk 00:14:16]

Speaker 1: By the time of Wilbur Ross's Senate confirmation hearing in January, there had been questions about his connections to Russia. He promised to avoid any conflicts of interest.

Wilbur Ross: I intend to be quite scrupulous about recusal in any topic where there's the slightest scintilla of doubt.

Speaker 7: Thank you. Well we'll get- [crosstalk 00:14:35]

Speaker 1: In an ethics filing he also said he intended to divest 80 companies and partnerships, but would keep a stake in nine others, including his assets in shipping. Ross told the Senate committee no shipping case had ever come before the Department of Commerce. [crosstalk 00:14:50]

Wilbur Ross: Cargo. We simply are like a taxi cab. They put cargo on it. We discharge it in another location, and we're paid a fee for so doing. [crosstalk 00:15:01]

Speaker 1: Ross's continuing stake in Navigator and its connections to the Kremlin never came up at the hearing.

Speaker 7: I think my question- [crosstalk 00:15:08]

Richard Painter: It is a very, very troubling situation.

Speaker 1: Richard Painter is a law professor at the University of Minnesota. He served for three years as the chief ethics lawyer under President George W. Bush.

Richard Painter: If United States government officials have off shore entities, it may be very difficult to detect payments from foreign governments or sovereign wealth funds, and profits from dealing with those entities that are a violation of the Constitution.

Speaker 1: Sibur is not a government owned company. But Painter says, in countries like China and Russia, the lines separating companies from the government are blurry.

Richard Painter: Want good relations with China and Russia, but we don't want our senior government officials dealing with large companies in those other countries at the same time as they're holding positions of trust in the United States government.

Speaker 1: Wilbur Ross left Navigator's board in 2014. He still owns a stake in the company. Let's get back to that idea that shipping companies are just like taxi cabs. That's what Ross said about another one of his companies during his confirmation hearing. It's another way of saying that cabs have nothing to do with the cargo they carry. But does that analogy really hold up when it comes to Navigator's ties to the Russian energy company Sibur?

To figure that out, I sat down with my colleague Matt Smith. We opened our laptops and went through Navigator's financial statements, its government filings, and other records.

Let's take a look at the SEC filings and where are we going here?

Matt Smith: Sure. Well, let's- [crosstalk 00:16:44]

Speaker 1: Matt pulls up one of Navigator's financial reports.

Matt Smith: We see an August 7th, 2017 form, so we have a list of ships, operating vessels, the list is called.

Speaker 1: Listed on the form are the ships Navigator leases to Sibur on 10 year contracts. Matt and I had talked to experts who said these long term arrangements provide a steady cash flow.

Matt Smith: If you're renting your house month to month, and different people are coming in the door to rent it every month, it's not as good an investment as if they're going to be there 20 years. It's just the way it is.

Speaker 1: We looked at a video, shot by Swedish television, showing a Navigator ship heading to a port in Sweden to deliver fuel. It's brand new, painted in bright red and yellow, and is specially designed to break through thick winter ice.

Matt Smith: Says Sibur on the side of the ship, Navigator on the front of the ship.

Speaker 1: So Navigator leased at least four ships to Sibur on 10 year contracts worth millions of dollars.

Matt Smith: This deal, basically was a partnership that solved very important problems for two companies working together.

Speaker 1: A partnership, not a taxi service, and that raises a question. Does the Russian energy company's contract with Navigator give the Kremlin any influence, direct or indirect, over Navigator, and by extension, over Wilbur Ross? Former White House ethics attorney Richard Painter says, cabinet members should avoid these kinds of connections.

Richard Painter: There could be a violation of the emoluments clause of the Constitution in this situation, if there are profits and benefits coming from the foreign government, directly or indirectly. There also could be a criminal conflict of interest.

Speaker 1: For a time, Ross and his investment funds were one of Appleby's top U.S. clients. But the leaks show there are many others. We tried to talk to Appleby while we were in Bermuda, about how they manage these complex networks of offshore companies.

On a warm sunny morning last month, I met up at a small café with Will Fitzgibbon. We were joined by a group of reporters and TV crews from the U.S., Australia, Denmark, and Japan.

Will Fitzgibbon: We're currently on our way to Appleby's office in Bermuda.

Speaker 1: We make our way past restaurants, pharmacies, and yoga studios. One of the things we want to ask Appleby has to do with a 2014 government audit. The audit found highly significant weaknesses in nine areas in one of the company's subsidiaries. One of the things that jumped out at us, the company didn't closely track where the money it was managing came from. That's an important step if you want to make sure you aren't helping people launder money.

We arrive at Appleby's office, a glass and steel building painted a soft green. The TV crews flood into the lobby, and Will approaches the reception.

Will Fitzgibbon: I'll give you those two [inaudible 00:19:44] for me, and-

Speaker 11: Yeah, just have a seat.

Speaker 1: We wait.

Will Fitzgibbon: I hope they're thinking, who is the best placed person who can answer ICIJ legitimate questions. [crosstalk 00:19:54]

Speaker 12: Okay, and-

Speaker 1: About 15 minutes later, a guy comes out. He's wearing a dress shirt, tailored Bermuda shorts, knee socks, and leather shoes.

Speaker 13: So what I unfortunately don't-

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Al Letson: ... Shorts, knee socks, and leather shoes.

Speaker 2: Unfortunately, there's no one here to talk to you right. Thank you for your business card.

Al Letson: He tells us no one is available for comment. Two weeks after our visit, Appleby released a statement saying the company only advises clients on lawful ways to conduct their business, and doesn't tolerate illegal behavior. When mistakes happen Appleby said it acts quickly to put things right. The leaks and the unwanted attention on the offshore industry are likely to deepen a long running debate among Bermudians about being a tax shelter for the rich and famous.

Are you Craig?

Craig Simmons: Yes I am.

Al Letson: Hi there. I pay a visit to Bermuda college to talk with Craig Simmons. He teaches economics, and has written extensively about the offshore industry.

Craig Simmons: As far as Bermudians are concerned, this is not a tax free place. If you're walking along Court Street, and you asked someone "Do you pay taxes?" They'll tell you, "Damn right skippy." When I get paid, a portion of my paycheck goes to the government in the form of payroll tax.

Al Letson: Simmons says people here have an afinity for the US going back to America's independence.

Craig Simmons: When you guys were fighting a war, I think it was your Revolutionary War, and George Washington was running out of gun powder, we people got you the gun powder.

Al Letson: More recently he says, "Bermuda stepped up again when America needed help."

Craig Simmons: Bermudians are very proud of the fact that after 9/11, the Bermuda reinsurance companies were some of the first to pay out, whilst the American insurance companies were busy debating "Was this one event or was it two?"

Al Letson: Helping big American companies park their cash here to avoid paying taxes in the US, he says "That's a stain for many Bermudians."

Craig Simmons: We don't want to do anything to harm you, but that tax haven label it undermines I supposed that relationship that has been built up over several hundred years.

Al Letson: But don't call Bermuda a tax haven to Bob Richards. He's the country's former finance minister.

Bob Richards: Bermuda is not a tax haven because we do cooperate, and not only do we cooperate, we go out of our way to cooperate. If the UK or France wants to know about businesses taking place in Bermuda through one of their companies and their subsidiaries, we will give you the information, so we provide that information. If you want to tax them, knock yourself out. Tax them. But don't expect us to do your work for you. We're not going to do that.

David Barchant: Bermuda is a tax haven.

Al Letson: David Barchant worked in Bermuda as a reporter in the 1990s, then he founded Offshore Alert. A closely followed industry newsletter.

David Barchant: For goodness sake, foreign owned companies in Bermuda are known as exempted companies, and the word exempted literally they're exempted from tax. Well, if you're exempted from tax, of course you're a tax haven. Foreign companies don't go to Bermuda because the paperclips are shinier than they are in the United States.

Al Letson: The CEO of Navigator Holdings declined interview requests, but just before we went to air, the commerce department issued a response. A spokesperson said, "Funds managed by Wilbur Ross' company never owned majority shares in Navigator, and that he never met any Russians who are under US sanctions." The spokesman also said, "Ross recuses himself from any matters focused on global shipping vessels." But Richard Payner, the former ethics council in the Bush administration says "Wilbur Ross needs to sever all business ties to Navigator, and any other shipping company." Payner says, "... That if the billionaire commerce secretary takes a loss on the investment, even a big one, well, he can certainly afford it." When we come back, the global money trail that leads from Silicon Valley to offshore tax havens, this is Reveal from The Center for Investigative Reporting at PRX.

Hey, it's Al, and the show you're listening to this week is the type of journalism you've come to expect from Reveal. We are the only journalists in public radio to break this story, and you, our listeners are the first ones to hear what's been found in this massive leak of documents. But, this kind of work isn't unique for us. Each week we're breaking stories, uncovering injustice, or shining a light on something that's just isn't right. We travel around the country, and around the world bringing you stories about police shootings in Baltimore, school pollution in California, the rise of the right in Germany, and here in the US. We take you along on our journey to find answers, and now we're asking you to join us in helping to keep strong, independent journalism alive.

Become a member of the Reveal team by supporting our work. If you're on your phone, all you have to do is text the word "Donate" to 63735. Again, that's "Donate" to 63735. We'll send you a link to RevealNews.org/give where you can sign up to become a member. Our mission has never been more important, and we can't do it without you. If you like the show, pitch in by becoming a member right now. Again, just text the word "Donate" to 63735. We'll send you a link to RevealNews.org/give where you can sign up to be a member. From the Center for Investigative Report in PRX, this is Reveal. I'm Al Letson.

Close your eyes. I want you to imagine a pile of money. US cash. How tall is it? Okay, well you probably have to make it taller. Pile on those bill. If you're imagining 20s or 100s, make them more. Imagine a million dollar bill. That's right. A million. Now, stack a couple million of those because that's what we're talking about. A truly mind boggling stack of cash. This is the amount of money major US companies make in other countries and don't bring home.

Speaker 7: It's been two and a half trillion for so long. Everyone said two and a half trillion, but it's gotten obviously a lot bigger.

Al Letson: Those companies pay little if any tax on that stack of cash, at least right now. President Trump says his tax plan would "change" that.

Donald Trump: Our framework encourages American companies to bring back the trillions, and trillions of dollars in wealth that's parked overseas.

Al Letson: That framework includes a lower corporate tax rate. But the paradise papers show us that no matter how low US taxes go, it might not be low enough. That's because corporate giants like Apple and Nike play an international shell game with their cash. Moving it around from one offshore tax haven to another to keep it out of the reach of tax collectors. We now turn to our couple of international colleagues who spent months digging deep into the paradise papers. I'll have Michael Montgomery take it from here.

Michael M: This chapter of Apple's offshore story starts just over four years ago. May 2013, Washington, DC.

Speaker 10: We pay all the taxes we owe. Every single dollar.

Michael M: Apple's CEO Tim Cook assured US senators his company goes fully by the book.

Speaker 10: We not only comply with the laws, but we comply with the spirit of the laws. We don't depend on tax gimmicks. We don't move intellectual property offshore, and use it to sell our products back to the United States to avoid taxes. We don't stash money on some Caribbean island. We don't move our money from our foreign subsidiaries to fund our US business in order to skirt the Repatriation Tax.

Michael M: When Apple's name kept showing up in the Paradise Papers documents, Simon Bowers wanted to get to the core. He's another reporter with the International Consortium of Investigative Journalists. Simon, Tim Cook, 2013. He is saying that Apple does not stash their money "on a Caribbean island." True or not?

Simon Bowers: True at the time.

Michael M: Yeah. What happens after that?

Simon Bowers: Well, an awful lot really because the revelations from the senate committee caused huge eruptions around the world in tax, and investigations all over Europe.

Michael M: At that time, the world learned Apple had been using subsidiaries in Ireland to avoid almost all taxes on money earned overseas. Under pressure, the company agreed to change. To figure out how to change the iPhone maker called Appleby. The law firm where a vast number of their Paradise Papers come from.

Simon Bowers: What they wanted to know was what would it be like if Apple were to have an Irish company that was quietly run from one of these islands? Grand Cayman, Bermuda, Jersey, Guernsey. What would it be like?

Michael M: Here's what happened.

Simon Bowers: We've also learned that after receiving the various feedback from Appleby, Apple did take two of its more important Irish companies to Jersey to tax residency.

Michael M: Jersey is an island, but it's in the English Channel, not in the Caribbean.

Simon Bowers: It's a distinction in geography, but not really in tax. They're both sort of classic tax havens in terms of corporate income tax.

Michael M: Simon Found that overall, the tax rate Apple pays on the money it earns overseas

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Michael M: ... that overall, the tax rate Apple pays on the money it earns overseas, remains, extremely low, just a fraction of the official 35% corporate rate.

Simon: They've got about $250 billion.

Michael M: Two hundred and fifty billion dollars?

Simon: Yeah. An interesting comparison is, the market value of the company is about $800 billion, right? Two hundred and fifty of that, is just cash.

Michael M: Mm-hmm (affirmative). Parked overseas.

Simon: Yeah.

Michael M: There's another fascinating layer to this story. Think about all the things that make an iPhone so cool.

Simon: What it feels like in your hand, the usability of the product, and how it fits in with the rest of your Apple world.

Michael M: Sure, it costs money to buy and assemble the hardware of the iPhone, that, usually, happens in a factory outside the US, but the real value of Apple's products is something you can't touch. It's the intellectual property or IP, the creative process, and as Tim Cook told the Senate, all that happens, here, in the US.

Tim Cook: You might be surprised to learn that much of that innovation takes place in a single US zip code, 95014. That's Cupertino, California, where we have built an amazing team. The brightest, most creative people on the planet.

Michael M: But all of those ideas, all of that intellectual property, it's very mobile. It can go anywhere.

Simon: Your intellectual property, you can sign it over to a company in anywhere in the world that suits you for tax purposes, so these are very, very mobile assets, and that makes them ideal for tax planners.

Michael M: Apple is hardly alone. Nike does it, too. Just like with Apple, Nike has one asset that's more valuable than all the plastic and fabric that goes into the shoes.

Yep. The Nike Swoosh. The company's signature design element is the reason why their shoes are so valuable.

Simon: Nike's done something very clever. What they've done is, they've separated out the Swoosh and the other trademarks, so that the trademarks are owned by different companies, for different territories. There'll be a company that owns the trademarks for the US, but there'll be another company, say in Bermuda, that owns the trademarks for the rest of the world, pretty much.

Michael M: Simon says that when someone in, say, Spain, buys a pair of Nike's, the full value of that intellectual property doesn't make it back to the US.

Simon: When the Spanish buyer of the sneakers buys those sneakers, the money trail from Spain gets stuck. It stops in Bermuda, and that is, exactly, where this tax planning process does its magic.

Michael M: A couple of years ago, Nike moved overseas ownership of the Swoosh, to a Dutch offshore company. Nike has a much smaller pile of cash overseas than Apple, but it's still about $12 billion. Here is President Trump's plan to lure those profits back home.

President Trump: We will impose a one-time, low tax on returning money that is already offshore, so that it can be brought back home to America, where it belongs, and where it can be put to work, and work, and work.

Simon: There's no question that the US has a pretty, dysfunctional tax code. A lot of places do, but the US, you've got a top official rate of 35%, and then, you've got these very, very loose rules where multi-nationals are able to differ their tax on their foreign earnings. This is why these big piles of cash are building up offshore. It's actively invested, but it's money that they can't bring home and return to shareholders.

Michael M: They can't bring it back, or they won't bring it back?

Simon: That's an interesting question, in a way, because, certainly, the way that Tim Cook presents it, is that they won't bring it back, unless the politicians lower the rate at which it can be brought back.

Michael M: Apple declined to answer questions about it's offshore tax strategy. A spokesman said the company had informed regulators of it's re-organization at the end of 2014 and the changes it made did not reduce tax payments in any country. Nike, also, declined to comment on specific questions. In a statement, the company said it's tax filings are fully aligned with how the business is run.

Marina Walker Guevara joined our conversation. She's the Deputy Director of the International Consortium of Investigative Journalists, and I asked her about the statement released by Appleby, the law firm where some of the Paradise Papers came from. The statement said Appleby only advised his clients on lawful ways to conduct their business, and doesn't tolerate illegal activity. It, also, complained about reporters using material that may have been obtained illegally.

Marina W.G.: It is perfectly, legitimate to use material that has been obtained by whistleblowers and then, passed on to journalists, as long as the journalists have not participated in any illegal obtention of the material, and that is crystal clear in this case. We have focused on issues of public importance and public interest.

Michael M: The reporters who received the Paradise Papers, aren't talking about their sources, but we know something about why people leaked the Panama Papers, the blockbuster investigation from last year.

Marina W.G.: Yeah, the sources of the Panama Papers, they call themselves John Doe, and to this day, we don't know if it is a John, or a Jane, or many people, but they wrote a very compelling manifesto a few days after we published the Panama Papers. In that manifesto they say that they wanted to expose to the world the intrinsic injustice of the offshore system. The first sentence of the manifesto is very telling. It says, "This is the story of inequality, which is one of the most important and urgent stories of our time."

Michael M: You would say that applies, also, to this new investigation, in terms of, inequality?

Marina W.G.: Absolutely. This is chapter two of the inequality story, but at a much higher level, because we are now looking into a very rare window in which we can see the wealthiest and the most powerful members of our society, both individuals and corporations.

Al Letson: That story from Reveal's Michael Montgomery.

The Paradise Papers show us how the world's of politicians, private wealth and global companies can overlap. One thing connects all of them; the promise of secrecy, and sometimes that wealth is hidden in unlikely places. Like, a giant warehouse in Switzerland, full of art.

Speaker 7: This painting was stolen. It belonged to Mr. [Stettner 00:37:23] and it needs to be returned.

Al Letson: The mystery of a stolen painting worth millions. Coming up next, on Reveal.

From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson.

Now that the Paradise Papers are out, what will happen next? We can get an idea by looking back at the first massive leak of documents, the Panama Papers. In the weeks and months after that story broke, governments were brought down, criminal investigations were launched, and authorities recovered millions of dollars in looted assets. CBC reporter, Frederic Zalac was on the story and he says the money didn't always come from where you might think.

Frederic Zalac: We often think about taxes all the time, but we don't think of the art world of one where offshore entities are being used.

Al Letson: The art world. That's where Frederic's story took him, and it revolves around just one document among millions. Here's Reveal's Emily Harris.

Emily Harris: We start in Paris. It's World War II. The Nazis are in charge.

Speaker 10: In 1940, darkness fell over the city of light.

Emily Harris: Their orders include seizing and selling off anything of value that Jewish families owned.

Kenneth Wayne: Art was a central aspect of the Holocaust.

Emily Harris: That's Kenneth Wayne, he's an art historian. He specializes in modern art.

Kenneth Wayne: They would loot from Jewish families and from museums, too.

Emily Harris: One of the paintings the Nazis looted was from a gallery owned by a Frenchman named Oscar Stettner. Stettner's descendants believe the looted painting was a portrait, now called, Seated Man with a Cane.

Kenneth Wayne: It's a man seated, looking very dapper. He's got a mustache, he has a hat, and he looks like a Parisian gentleman. It has kind of a caricatural quality to it.

Emily Harris: That portrait was painted around 1918 by an Italian artist named, Amedeo Modigliani.

Kenneth Wayne: There were all these different movements during the time period he was working, but he really did his own thing.

Emily Harris: Modigliani died young. He never got rich, but now, his work is more popular than ever.

Speaker 12: We move to the beautiful Modigliani ...

Section 4 of 5 [00:30:00 - 00:40:04]

Section 5 of 5 [00:40:00 - 00:52:59]

(NOTE: speaker names may be different in each section)

Emily Harris: Popular than ever.

Speaker 2: We move to the beautiful Modigliani, lot eight, painted in Paris in ...

Emily Harris: Two years ago, a different painting by Modigliani sold for 170 million dollars.

Speaker 2: Sold here.

Emily Harris: That was one of Modigliani's famous nudes. That price puts his work into a very exclusive club, but let's head back to Paris. It's now 1944. July 3rd. A Monday. Allied troops have already landed in Europe. Paris will be free soon, but it's not yet. That Monday, Nazis order an auction at Oscar Stettiner's gallery. After that sale, Seated Man With A Cane, completely disappears; and nobody sees it publicly for more than 50 years.

Where does it go for half-a-century? Well, even when it turns up, there's very little information.

It's now 1996, Seated Man With A Cane appears for sale at the swanky auction house Christie's. Christie's doesn't mention Nazis or Oscar Stettiner in the information published for the sale. The descendants of Oscar Stettiner have no idea they might be the rightful owners. Enter the art hunter ...

James Palmer: My name is James Palmer. I'm the founder of Mondex Corporation.

Emily Harris: James is short and serious. He's a Canadian but he lives in London, in Hampstead, a leafy neighborhood he loves.

James Palmer: If we open this window here, I can give you a better view. You can see, for example, the wide expanse. You can see the lovely green area here.

Emily Harris: Inside James' apartment, art is arranged quite tastefully. Art is his passion. Hunting lost art is his business.

James Palmer: Our company is in the business of helping clients recover looted assets, and in particular, art that was looted during the second World War.

Emily Harris: Around 2009, James and his team are searching French archives for information about a completely different case.

James Palmer: We happened upon a document that referred to the court claim after the war by Oscar Stettiner for the Seated Man by Modigliani.

Emily Harris: James knows Modigliani's famous nudes but he's never heard of the Seated Man, and he's never heard of Oscar Stettiner. Why the big fuss about these old French court documents? Because, they tell him there is a looted painting out there, and he is going to find it.

The paper show that Oscar Stettiner went to court after the war to get the painting back.

James Palmer: Actually, won that course case and won an order for that painting to be returned.

Emily Harris: But he never got it back. Meanwhile, James finds Stettiner's grandson. He tells him about this mystery and, in 2011, he helps Stettiner's grandson file a lawsuit to claim the painting.

James Palmer: This painting was stolen. It belonged to Mr. Stettiner and it needs to be returned.

Emily Harris: This is where the fight over the painting goes around and around in circles. Manhattan Civil Court.

Fast forward now to April 2016, just last year. The Panama Papers hit headlines all over the world. Here's Canadian Broadcasting Corporation journalist Frederic Zalac, again ...

Frederic Zalac: On this edition of The Fifth Estate, stolen treasures. I'm Frederic Zalac in Paris on the trail of a priceless painting that disappeared during the Nazi occupation.

Emily Harris: Reporters collaborating on the Panama Papers first find emails about the missing painting. Then they dig deeper.

Philip L.: This case has multiple moving parts.

Emily Harris: That's New York lawyer Philip Landrigan. He's done commercial law for 35 years.

Philip L.: I wouldn't say that I'm an art lawyer. I prepare cases for trial.

Emily Harris: His favorite part of the job is appearing in court. He represents Oscar Stettiner's grandson trying to get the painting. They sued an extremely wealthy, big art dealing family named Nahmad. One Nahmad son owns a gallery that had tried to sell Seated Man With A Cane a couple of years before. But the Nahmads fight back in court. The very first paper they file, in fact, the very first line written in their defense says to Oscar Stettiner's grandson, "You're suing the wrong people." This is where the Panama Papers make the difference.

The Nahmads argue that a company called the International Art Centre, or IAC, owns and controls the painting. Philip Landrigan doesn't buy it.

Philip L.: We don't believe that there's any distinction between IAC and the Nahmads because the company's not operated under normal corporate formalities.

Emily Harris: The IAC was actually created by that Panama firm that specializes in shell companies, the firm whose documents were leaked. Deep inside their 11 million records, reporters find evidence that the Nahmads own the IAC. It appears they own the Modigliani painting, Seated Man.

Frederic Zalac: In court there was a big debate about, "Well, no it's not the Nahmads. They don't own the painting. They have nothing to do with it." Yet, in the Panama Papers, we could see that the ownership of the shell company was directly the Nahmad family. It was black and white there.

Emily Harris: Frederic takes that proof to the Nahmads' lawyer, Aaron Golub. Here's that interview from Frederic's CBC report last year.

Frederic Zalac: We have obtained internal documents of International Art Centre.

Aaron Golub: Have you public records?

Frederic Zalac: No, actually, internal documents that show for example that the ownership of International Art Centre is Mr. Nahmad's.

Aaron Golub: Mm-hmm (affirmative).

Frederic Zalac: 100% shareholder.

Aaron Golub: Right.

Frederic Zalac: Mr. Nahmad and IAC are one and the same.

Aaron Golub: No, they're not. That's your point of view, but that's irrelevant. Whoever owns IAC is irrelevant.

Frederic Zalac: The person owns the company that owns the painting-

Aaron Golub: That's your point of view.

Frederic Zalac: Well, it's not my point of view, it's the documents that I have here.

Aaron Golub: I don't know what the document says, and it doesn't matter what the document says. That document may be superseded. I don't know what that document means, and I don't know where you got it. It doesn't mean anything.

Frederic Zalac: The question here is-

Aaron Golub: I'd like to know that.

Frederic Zalac: We don't go into-

Aaron Golub: The interview's over with.

Frederic Zalac: We don't do that.

Aaron Golub: There's nothing else to say. I told you before, there's nothing else I'm going to say because who owns IAC is about as relevant to this as who's living on Pluto.

Emily Harris: I want to talk with Richard Golub further, but he declines. The lawyer on the other side, representing Oscar Stettiner's grandson, says the Panama Papers prove his allegations against the Nahmads.

Philip L.: We alleged that they were the alter ego, but we didn't have the documentary evidence that the Panama Papers provided. Specifically, the stock certificate showing that David Nahmad was the sole shareholder.

Emily Harris: Still, CBC reporters want to know more. Producer Ronna Syed finds a connection that blows her away. The man who bought the painting at the Nazi auction kept it all those years. His daughter and grandson sold it through Christie's to the Nahmads.

Ronna Syed: It just seemed too much of a coincidence that the surname was the same as the seller of the painting in 1996 to Christie's.

Emily Harris: Other reporters are also hot on the trail. A French TV crew manages to film the painting inside the tax-free warehouse in Switzerland where the Nahmads stash it away. That crew records something no one has ever seen publicly before.

Frederic Zalac: Before the painting was put back in place, the handlers turned it around.

Emily Harris: On the back, you can see a label from the Venice Biennale Art Show from 1930.

Frederic Zalac: There's a space for owner and it's scratched out. The address below is scratched out. But when you look at it closely, when the French team had some experts look at it, you could make out from the bits that are still there that the likely name that was there was Stettiner.

Emily Harris: For the art hunter, James Palmer, this seals the deal.

James Palmer: Lo and behold, there's Oscar Stettiner's name and address. That was stunning information.

Emily Harris: But it's still not enough to end the hard-fought court case. It does raise new questions. Did Christie's know the paintings full history or did it hide information when the Nahmads bought it in 1996? The grandson's lawyer says this ...

Philip L.: Their provenance in the 1996 catalog is demonstrably false.

Emily Harris: Christie's says in court filings that it "usually doesn't keep records going back that far." Next week, the auction house will ask the judge that details of the sale be kept under seal. Hidden, like the painting.

Al Letson: That's Reveal's Emily Harris. To close, just one more thing that can help you understand how one document among millions can actually have an impact. Those hundreds of journalists who worked together on the Panama Papers, and now on the new Paradise Papers, use a system called "Radical sharing."

Frederic Zalac: It means that you are not keeping everything to yourself. That you're sharing with other reporters and sometimes even competitors.

Al Letson: CBC's Frederic Zalat says, "It's hard."

Frederic Zalac: It slows things down. It's very cumbersome, but at the same time, it's very powerful because you are not alone. You double, triple, quadruple your investigative power.

Al Letson: A whole slew of folks radically shared to make this show happen too. Special thanks to Suddeutsche Zeitung and the International Consortium of Investigative Journalist for making this collaboration possible. More stories are going to continue to break about the Paradise Papers in the coming days, go to RevealNews.org to stay on top of all of it.

Thanks to Univision and SVT, Swedish television, for production assistance. And to the CBC for help with the mystery of the painting's story.

Today's show was edited by our executive editor Suzanne Reber. It was reported and produced by Michael Montgomery, Emily Harris, Amy Walters and Matt Smith. Our sound design team is Jim Briggs and Claire Mullen. Katherine Rae Mondo and Kat Schuknit provided engineering help this week. Amy Powell was our editor in chief. Our executive producer is Kevin Sullivan. Our theme music is by Camerado-Lightening.

Support for Reveal's provided by the Reva and David Logan Foundation, the Ford Foundation, The John D. and Catherine T. MacArthur Foundation, The John S. and James L. Knight Foundation, the Heising-Simons Foundation, and the Ethics and Excellence in Journalism Foundation.

Reveal is a co-production of the Center for Investigative Reporting and PRX.

I'm Al Letson, and remember, there is always more to the story.