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Objectives:
Students will be able to:
- Define offshore entity
- Articulate the process by which offshore entities shelter foreign profits from taxation
- Identify who is impacted positively and who is impacted negatively by a company’s offshore maneuverings and in what way
- Express the activities and impacts of offshore activities orally and in writing
Warm-up:
1. Make a list of things you would do if you could be anonymous. You will not be asked to share this list with anyone.
2. Now, go through your list and write down why you would want to be anonymous if you were doing these things. Take 60 seconds to share your reasons (not your list) with a partner.
3. Discuss as a class: What kinds of things do you think a public figure or wealthy businessperson might want to do anonymously and why?
Introducing the Lesson:
Today, we are going to explore the Paradise Papers and the secretive business dealings they reveal. With this project, the International Consortium of Investigative Journalists (ICIJ) has documented how political leaders, businesspeople, and the wealthy elite around the world use offshore entities and anonymous bank accounts to avoid taxes and cover up wrongdoing.
This is the second major document leak related to offshore activities that the ICIJ has investigated. The first, the Panama Papers, contained revelations that led to at least 150 investigations in 79 countries, the resignations of leaders in several governments, and billions of dollars in company devaluations. Many of the activities exposed by the Panama and Paradise Papers are legal, but that does not prevent them from doing harm.
In this lesson, we will examine the anatomy of offshore activities in order to evaluate their impact on various actors and consider what steps should be taken as a result of this investigation.
Introducing Resource 1: “Snax Haven: How to Hide the Secret Sauce and Save Millions”
Businessdictionary.com defines an offshore company as a “firm registered or incorporated outside the country where it has its main offices and operations, or where its principal investors reside.” We are going to watch a video that explains why a person or company might choose to do business offshore.
1. Answer the attached questions while watching the video.
2. Get into groups of ~4. You will be given one copy of the chart below, from the Snax Haven video you watched, and copies of one of the following stories that emerged from the ICIJ’s Paradise Papers reporting:
- How Nike Stays One Step Ahead of the Regulators
- Leaked Documents Expose Tale of Apple’s Offshore Island Hop
- The Isles Are Alive with the Sound of Music
- The Ships Glencore Wanted to Keep ‘Hush Hush’
As a group, fill out the chart below. Make sure each person in the group fills in at least one answer.
Please note that it is possible that your article may mention more than one headquarters, more than one subsidiary, etc. In such cases, you only need to choose one, but you should ensure that that the subsidiary you list is linked to the headquarters you list. For the questions “Who benefits?” and “Who loses out?”, list as many relevant parties as you can; again, ensure that they are linked to the headquarters and subsidiary you list.
(For a competitive game version and other variations on this activity, see Educator Notes.)
Use this chart to document the offshore activities in your story.
3. After filling in the chart, practice explaining the offshore activities in the story to your group. One of your team members will be called upon to share your findings with the class.
4. After explaining the offshore activities in your stories’ to the class, discuss:
- Can you make any generalizations about who tends to benefit from offshore activities?
- Can you make any generalizations about who tends to be negatively impacted by offshore activities?
- Do you use any of the products/services implicated in offshore activities in your stories?
- Based on what you have learned so far, what is your opinion of offshore activities?
Introducing Resource 2: “Paradise Papers: The Influencers”
Behind every company and subsidiary we have explored, there are individuals involved who are benefitting financially, and who are weighing the costs and benefits (for themselves and for others) of engaging in offshore activities.
1. Examine the interactive as a class. Do you recognize any names/faces? What can you tell about the story this interactive is telling without reading more about any of the individuals?
2. Together, click through to read one or more of the individuals’ stories. Consider the following:
- What offshore activities has this person engaged in?
- Why might this person’s offshore activities matter to people in the U.S.?
- What evidence of this person’s offshore activities does the ICIJ provide? Why do you think they do this?
- What was this person’s response to the ICIJ’s request for comment? Why do you think they responded the way that they did? Do you find their response satisfactory? Why or why not?
- What further questions do you have for this person?
Extension Activities:
Option 1. Should offshore entities be legal? Why or why not? Write a five-paragraph essay that addresses this question, including a thesis statement, an explanation of what offshore activities are, your argument, anticipated counterarguments, and a works cited page. You should cite sources from at least three stories, graphics, or documents from the ICIJ Paradise Papers investigation.
While we have been exploring wrongdoing connected to offshore activities in class together, complicate your assumptions by doing some research based on this quote from the ICIJ’s Frequently Asked Questions About the Paradise Papers:
Should I assume that everyone that appears in the Paradise Papers is involved in tax avoidance or evasion?
No. There may be legitimate reasons to create a company in an offshore jurisdiction. Many people declare them to tax authorities when that is required.
Option 2. Revisit the interactive. Read the introduction beneath the interactive and explore several stories. You may also find this story helpful. Finally, write a reflection that addresses the following:
- The Paradise Papers revealed the offshore activities of tens of thousands of individuals. Why did the ICIJ create an entire interactive based on these thirteen?
- Do you think the U.S. government should take any action steps based on the release of this information? If not, why not? If so, what steps?
Option 3. Dig deeper into the potential consequences of offshore activities by reading one of the following stories from the ICIJ:
- Development Dreams Stand Still While Mining Money Moves Offshore
- Leaked Records Reveal Offshore’s Role in Forest Destruction
- Big U.S. Political Donors Play the Offshore Game
Prepare a presentation for your classmates that summarizes your chosen reading and answers the following questions:
- What wrongdoing did the journalist identify?
- What parties are responsible?
- What role did offshore entities and/or activities play in that wrongdoing?
- Who has benefited from offshore activity in this story? Who has been negatively impacted?
Educator Notes:
CCSS.ELA-LITERACY.CCRA.R.1
Read closely to determine what the text says explicitly and to make logical inferences from it; cite specific textual evidence when writing or speaking to support conclusions drawn from the text.
CCSS.ELA-LITERACY.CCRA.W.2
Write informative/explanatory texts to examine and convey complex ideas and information clearly and accurately through the effective selection, organization, and analysis of content.
CCSS.ELA-LITERACY.CCRA.SL.4
Present information, findings, and supporting evidence such that listeners can follow the line of reasoning and the organization, development, and style are appropriate to task, purpose, and audience.
Introducing Resource 1:
Depending on grade level, reading abilities, and time constraints, you may wish to adapt this activity. Some learners may prefer to go through a single story as a class and fill in the blanks collectively.
This activity can also be adapted depending on resource availability. Students can work at a computer to read and fill in the chart(s); the chart(s) can be printed and provided to students; the chart can be drawn or projected at the front of the class and students can write down their answers to the questions on a numbered sheet of paper.
Following the activity, you should go through one of the examples as a class. For example, the chart for The Isles Are Alive with the Sound of Music should look like this:
FS Media Works Fund I offshore activities