Fallout from the Panama Papers global financial scandal widened Wednesday with the revelation that a number of current or former top Chinese Communist Party officials, including President Xi Jinping, reportedly have close relatives who have kept wealth in secretive offshore companies.
The aftershocks from the leaked findings of the International Consortium of Investigative Journalists come as the party scrambles to block all Chinese media Web coverage of the scandal. The revelations also raise a potentially sticky prospect for Mr. Xi, who has made anti-corruption policies a hallmark of his rule in Beijing.
The ICIJ, which worked with media organizations around the work to publish the leaked documents tied to a high-powered Panamanian law firm, has now identified close relatives of a total of eight current and former members of China’s Politburo Standing Committee who set up accounts and shell companies, presumably to hide income or wealth from tax officials.
One of the relatives is a grandson-in-law of Mao Zedong, the founding father of the People’s Republic of China.
“It is no secret that many of the children and grandchildren of China’s revolutionary heroes have found success in the business world,” the ICIJ said in an article on its website Wednesday. “But the extent to which some of the country’s most politically connected have tapped offshore networks to keep their assets hidden from the public eye is not well known. And the mechanics of how they do it is little understood.”
The latest revelations come as capitals from Moscow and Riyadh to Washington and Reykjavik were still absorbing Sunday’s blockbuster leaks, which expose offshore and potentially illegal financial dealings of dozens of wealthy, famous and powerful people around the world.
SEE ALSO: Global military spending up in 2015; Saudi Arabia surpasses Russia
The roughly 11,000 documents detail client records from the Panamanian firm Mossack Fonseca, one of the world’s top creators of shell companies that can potentially be used to dodge taxes and launder money. Such companies can also have legitimate business purposes and Mossack Fonseca has vehemently denied any illegal activity.
But several nations have opened formal legal probes and, on Tuesday, the prime minister of Iceland resigned amid outrage over reports that he had used Mossack Fonseca to protect large sums of personal wealth while his nation’s economy was in crisis.
The Xi government could be particularly vulnerable to a challenge to its credibility. Since rising to power in 2012, the Chinese president has overseen an intense anti-corruption campaign, arresting scores of officials and top military figures on charges of trading bribes for political favors. There have already been signs that Mr. Xi’s crusade is sparking a backlash, even as the president moves to consolidate more power in his own office.
Mr. Xi’s name was mentioned in the ICIJ’s opening salvo of reports examining the documents leak on Sunday, when it was revealed that his brother-in-law had purchased three offshore firms through Mossack Fonseca.
During the days since, Chinese authorities have censored news of the situation — going so far as to block Internet searches and online chats on the matter in China’s tightly controlled Web.
There was also no Chinese media coverage Wednesday when the ICIJ outlined how two other top officials presently serving alongside Mr. Xi on the seven-member Politburo Standing Committee also have close relatives with names in the leaked documents.
SEE ALSO: Executions surging worldwide; China, Iran leading the way
One is Vice Premier Zhang Goali, whose son-in-law was found to be a shareholder in three companies incorporated in the British Virgin Islands.
The other is Liu Yunshan, a Communist Party secretary and previously head of its propaganda department. His daughter-in-law was once the director and a shareholder of Ultra Time Investments Ltd., a company incorporated in the British Virgin Islands in 2009.
The ICIJ report also cited five former Politburo Standing Committee members with similar familial ties to offshore holdings mentioned in the Panama Papers.
Chinese official media have pushed the line that the Panama Papers leaks may have been orchestrated by the U.S. and its allies specifically to weaken rising rivals such as China and Russia.
In an editorial published Tuesday, China’s state-run Global Times newspaper did not mention the Xi-related revelations, but argued, “Information that is negative to the U.S. can always be minimized, while exposure of non-Western leaders, such as [Russian President Vladimir] Putin, can get extra spin.”
And a Chinese Foreign Ministry spokesman this week flatly declined to weigh in on the scandal, saying the ministry did not comment on “hearsay.”
• Guy Taylor can be reached at gtaylor@washingtontimes.com.
Please read our comment policy before commenting.