I've spent half a century (yikes) writing for radio and print—mostly print. I hope to be still tapping the keys as I take my last breath.
While 59 percent of Jordan's population live on less than $10 a day, King Abdullah II has amassed a global real estate portfolio worth in excess of $100 million, according to revelations in the Pandora Papers. Western governments shovel billions of dollars into the country because it is one of the few states in the region that isn't hostile to Washington and its allies.
The Pandora Papers
In October 2021, the International Consortium of Investigative Journalists (ICIJ) released a report on a massive leak of documents detailing the ways in which wealthy people hide their money from tax collectors. More than 600 journalists from 117 countries have been digging through almost 12 million files.
To almost no ones surprise the so-called Pandora Papers reveal that prime ministers, presidents, royalty, and industrialists are using shell companies in tax havens to avoid tax liabilities and to deposit money in safer jurisdictions than their home countries. Some of the more prominent names among those revealed are:
- Qatar's ruling family bought properties in London worth £120 million ($160 million). The transactions were through offshore shell companies thereby avoiding £18.5 million ($25 million) in land tax;
- The Prime Minister of the Czech Republic, Andrej Babis, neglected to reveal that he had used an offshore investment company to buy property in France valued at £12 million ($16 million);
- Egyptian telecom millionaire Mohamed Amersi, who has donated £525,000 ($703,000) to Britain's Conservative Party, turns up in “documents that show how Mr. Amersi was involved in a controversial £220 million ($295 million) payment to a secretive offshore company in 2010” (BBC).
- British retail store magnate Sir Philip Green bought expensive London property through offshore accounts while his shopping empire was falling into bankruptcy; and,
- King Abdullah II bin Al-Hussein of Jordan bought property worth well in excess of £70 million ($100 million) in the United Kingdom and the United States through secretly owned businesses.
In the spring of 2021, Jordanians took to the streets to protest a number of issues; economic hardship, the increasing authoritarian behaviour of King Abdullah, and corruption among them:
- Between 2014 and 2021, unemployment in Jordan went from 11.9% to 18.5%;
- Security forces have cracked down on dissent, arresting lawyers, activists, and journalists who speak out against the king; and,
- An estimated $800 million a year is removed from the country and stashed in tax havens.
In a response to the unrest, a crackdown on corruption was announced in June 2020. According to the International Consortium of Investigative Journalists “Jordan would track every last dinar (Jordan's currency) that citizens had hidden in tax havens . . . No offshore wealth was beyond scrutiny.
“None, it seems, except the king’s.”
Queen Rania has also come in for criticism over her taste in clothes.
King Abdullah's Property
The Pandora Papers treasure trove reveals how the Jordanian monarch set up shell countries and then used them to buy high-end property in secret.
At the centre of the deals is a law firm in Panama, Alemán, Cordero, Galindo & Lee, better known as Alcogal. This company is the source of much of the data dump that make up the Pandora Papers, and it's not the first time the company has been linked to shady affairs, including money laundering.
Alcogal specializes in setting up what are called “letterbox companies” in tax havens such as the British Virgin Islands, Switzerland, the Seychelles, and Cyprus. (These companies get their nickname because their physical existence is limited to a brass plaque on a wall and a mail box.) Alcogal says it is squeaky clean and never does anything illegal; the Pandora Papers tell a different story.
The ICIJ writes that Alcogal “checked boxes to declare that no one connected to one of the king’s companies was involved in politics—even though the king has the power to appoint governments, dissolve Parliament, and approve legislation.” This is intended to provide cover should any people involved in criminal investigations come snooping.
The ownership of King Abdullah's many shell companies (at least 36 were revealed in the Pandora Papers) is made so murky that the gullible might be persuaded that he has no hand in running their affairs, such as collecting mail from the mail boxes.
However, we now know that through these letterbox enterprises, the king acquired:
- A cliff-top property in Malibu, California overlooking the Pacific Ocean for $33.5 million. The real estate is described as “resort hotel-like mega mansion,” and he then bought two neighbouring properties;
- Three luxury condominiums in Washington, DC with views of the Potomac River, priced at $13.8 million; and,
- Seven properties in tony sections of London, currently valued at about $48 million.
When the lid blew off the secrecy surrounding King Abdullah's property buying spree, ICIJ's website was blocked in Jordan. The king's lawyers issued the following statement: “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.”
Jordanian Living Conditions
The king's stewardship “in the best interests of his country and its citizens” has created what U.S. Congressional researchers describe as “extremely difficult” economic conditions.
In order to get International Monetary Fund loans, Jordan has applied austerity measures for 30 years. Subsidies for bread, electricity, and gasoline have been cut and taxes increased, although the king himself is exempt from paying taxes.
According to the Borgen Project, about 14 percent of Jordan's population lives below the poverty line and there is an absence “of a social welfare program that delivers meaningful benefits to unfortunate citizens. This is related to low economic activity and serves to trap citizens in poverty because there is little assistance available to allow anyone to rebound.” In addition, high inflation erodes the value of what little money people have.
The poverty-fighting non-profit says that foreign aid “aims to address poverty in Jordan, a major cause of discontent . . .” Is it working?
During recent demonstrations, people in the streets chanted “Oh, Abdullah, son of Hussein, where did the people’s money go? There are those stealing millions and the rest eating plain bread.”
- Mossack Fonseca & Co. was a Panamanian law firm that engaged in the same area of service to wealthy clients as Alcogal; that is setting up shell companies to hide assets. In 2016, a huge leak of documents covering its dealings led to the Panama Papers investigation. The revelations caused irreparable harm to Mossack Fonseca, which closed down in March 2018.
- The people at Alcogal went to extraordinary lengths to disguise the beneficial ownership of the properties bought by King Abdullah. In some internal communication he was not referred to by name but as “you know who.”
- In setting up his property portfolio, perhaps King Abdullah is reflecting on the fate of other Middle Eastern monarchs: King Farouk I of Egypt was deposed and exiled in 1952, King Faisal II of Iraq was deposed and assassinated in 1958, and, Mohammad Reza Pahlavi, the Shah of Iran was deposed and exiled in 1979. Should the same destiny be his he will need the financial resources of his real estate holdings to pay for the lifestyle to which he and his family have become accustomed.
- “Pandora Papers: A Simple Guide to the Pandora Papers Leak.” BBC, October 5, 2021.
- “King of Jordan Hidden Property Empire Worth more than $100m, Pandora Papers Reveal.” Simon Goodley and Michael Safi, The Guardian, October 3, 2021.
- “While Foreign Aid Poured In, Jordan’s King Abdullah Funnelled $100m Through Secret Companies to Buy Luxury Homes.” Will Fitzgibbon, International Consortium of Investigative Journalists, October 3, 2021.
- “Top 10 Poverty in Jordan Facts.” Shane Summers, The Borgen Project, April 15, 2018.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2021 Rupert Taylor