Little discussion has revolved around the offshore corporate investment vehicles found in Andy's possession by his estranged wife, Patricia Bautista. Not many people are familiar with tax havens. It is a shadowy world inhabited by the extremely rich and the extremely corrupt. Just ask Andy Bautista. He did, after all, spend almost five years in the PCGG going after Marcos wealth hidden in offshore trusts. But it is here that the real wealth may lie.
Because they are "almost" perfect vehicles for evading taxes and concealing ownership of assets. They are routinely used by gangsters and dictators as well as by spouses seeking to hide wealth from their wives in an impending divorce. Tax havens are secretive, anonymous, and almost downright impenetrable. Half of the world's trade passes through tax havens. Eight percent of the world's wealth resides in tax havens. For developing countries like the Philippines, as much as 20% of the country's wealth resides in tax havens. Tax havens, therefore, are no laughing matter.
Offshore companies are easy to form. Company formation can take as little as three days and can cost as little as US $1,000.00. Companies can be started from scratch or bought off the "shelf" in the form of a dormant ready made company. Bank accounts can be formed in someone else's name, making it almost impossible to trace to the original owner. Company shares of stock can be in the form of bearer shares wherein the name of the owner/holder is not included in a physical stock certificate, concealing the ultimate beneficial owner. For as little as $500.00, company directors/officers can be appointed for you. These very same directors can sign a power of attorney handing control of the company back to you and thus remaining completely ignorant of your company's operations. All this serves to provide a deep level of secrecy that is so effective at hiding wealth, especially ill-gotten wealth.
Secrecy is paramount. Secrecy is often the sole reason that a tax haven exists. The more secretive a tax haven is deemed to be, the more dubious the source of money. The Tax Justice Network, a watchdog group focused on tax havens, has compiled a Financial Secrecy Index that rates the secretiveness of various tax havens. The higher the score on the secrecy index, the more impenetrable and untraceable the money is. The Philippines, for instance, has a secrecy index score of 63. Switzerland, the biggest and most well-known tax haven, scores a high 73.
Andy's Offshore Companies
All three of Andy's offshore companies were formed during Andy's time as PCGG Chairman. Little detail is known about them other than what was declared in Patricia Bautista's affidavit.
The first, called Bauman Enterprises Limited (Bauman), was incorporated in the British Virgin Islands (BVI) on September 29, 2010 - a mere six days after Andy Bautista assumed the office of PCGG Chairman on September 23, 2010. BVI is a well known tax haven. Around 500,000 or 40% of the world's offshore companies are incorporated in BVI. The BVI has a secrecy score of 60, slightly lower than the Philippines. Bauman has a bank account in Singapore, another well-known tax haven. The name Bauman sounds like a contraction of Bautista Management and it is not clear if Andy himself was listed as an incorporator or board member/trustee.
The second vehicle, Mantova International Limited (Mantova), was formed in Brunei Darussalam on April 26, 2011 - a mere seven months after Bauman was born and Andy"s assumption of the PCGG Chairmanship. Brunei is not well known as a tax haven. Instead it is well known for its oil reserves and the riches that oil has brought to its flamboyant King. Brunei's secrecy score is an impenetrable 83, one of the highest in the whole index.
The third vehicle, Mega Achieve Inc., was incorporated in Anguilla, a British Overseas Territory in the Carribbean on July 15, 2014, some three years after the birth of Mantova and towards the waning days of Andy's PCGG Chairmanship. Anguilla's secrecy score is 69, lower than Switzerland's but higher than BVI's.
Could these be "Shelf" Companies?
Did Andy acquire these companies while he was in PCGG or during his current tenure in the Comelec? Again, we don't know. But a scan of ICIJ's Offshore Leaks Database shows many companies with similar names but formed in other tax havens. Most of them are defunct, having been deactivated long before Andy assumed any government post. Here are some of the closest:
The similarity of names to the ones in Andy's possession is a strong indication that Andy could have purchased the companies "off the shelf" and in ready made form from a well known purveyor of offshore companies such as Mossack Fonseca, a Panamanian law firm that was subject to a massive information leak in 2016. Quite a few world leaders have already been outed as users of offshore companies. The Prime Minister of Iceland was forced to resign when a previously undisclosed offshore company linked to him popped up in this database.
Should Andy do the same?