Secret Files Reveal Rothschild’s Offshore Domain

The Cook Islands: where Baron Rothschild established at least 20 trusts and 10 holding companies to contain his assets. Photo: Alex Shprintsen

Late guardian of French branch of banking dynasty had a web of at least 20 secrecy-cloaked trusts in the South Pacific.

Baron Elie de Rothschild, the guardian of the French branch of the famed Rothschild banking dynasty, built an offshore empire in the palm-fringed Cook Islands between 1996 and 2003.

Rothschild, a businessman and arts patron who died in 2007 at the age of 90, constructed a complex network of offshore trusts and front companies, according to secret documents obtained by the International Consortium of Investigative Journalists (ICIJ) and reviewed by Le Monde.

An undated photo of Baron Elie de Rothschild.

The complex nature of the financial arrangements in the Pacific islands and their near-total secrecy made it difficult to identify his hand in the offshore entities. 

The internal documents reveal at least 20 trusts and 10 holding companies were set up for Rothschild in the Cook Islands, an independent territory in the South Pacific with close ties to New Zealand.

The trusts have typically opaque names, Anon Trust, followed by the Benon Trust (apparently set up by Rothschild’s daughter Nelly) and Denon Trust, being notable examples.

All of them are linked in a multi-layered, complicated web. Each of the companies is listed as trustee of one or more of the trusts. None of the documents that ICIJ or Le Monde examined lists the beneficiary of any of the trusts, although all but Benon list Rothschild as the settlor, the individual whose assets are put into a trust.

These documents also reveal that several of these trusts continued after the Baron’s death in 2007. The companies have a common shareholder called Mandalor Limited, an equally opaque company based in the Caribbean country of Saint Vincent and the Grenadines.

According to a document, when Portcullis TrustNet set up Agate, Begate, Cegate, Degate, Egate and Fegate Trusts, the appointed lawyer was not willing to disclose Rothschild’s identity.

Although PTN normally required the grantor to provide their full personal details and a deed of indemnity, in this instance PTN arranged for the lawyer to sign “for and on behalf of the grantor.”

The lawyer informed PTN “the grantor is the head of a wealthy and respected European family” whom he had known for several years.

PTN conceded, stating, “In this respect, we must rely entirely on your assurances.”

Despite repeated attempts, Le Monde was unable to speak to Rothschild’s heirs. Only Baron Eric de Rothschild, Elie’s nephew and a prominent Paris banker, agreed to answer questions, making it clear that their paths had separated in the 1980s when Elie de Rothschild moved to London.

Another source close to the family said Elie de Rothschild developed business activities in Great Britain and the United States in which no other member of the French branch invested.

Key Findings

• Government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have embraced the use of covert companies and bank accounts.
• The mega-rich use complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.
• Many of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.
• A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct.
• Ponzi schemers and other large-scale fraudsters routinely use offshore havens to pull off their shell games and move their ill-gotten gains

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Anne Michel is a reporter covering the banking industry for Le Monde.

 

Contributors to this story: Kimberley Porteous