Dutch Finance Minister held stake in Virgin Islands letterbox firm for years: Report

The current finance minister, Wopke Hoekstra, was an investor in a letterbox company based in the British Virgin Islands for the better part of a decade, according to documents leaked as part of the Pandora Papers. Hoekstra remained an investor in the group, Candace Management Limited, for the entirety of his tenure in the Eerste Kamer, the Dutch Senate, but he sold his investment stake before becoming the Minister of Finance in 2017, according to an analysis by investigative journalism collective Investico, the Financieele Dagblad and Trouw.

Hoekstra bought his share of the group in 2009, two years before becoming a Senator for the CDA, the party he now leads. During his time in the Senate, Hoekstra was a committee member tasked with helping to shape policy meant to combat tax avoidance. He did not disclose his investment in a letterbox firm located in a tax haven at the time, though the CDA responded to say he was not required to do so.

That failure is "unacceptable" and "below all international standards," said Professor Christoph Demmke to the newspaper. "Strictly speaking [he did not have to make the disclosure], but it would have been more ethical to report it," the European Parliament advisor said.

The members of the closed group of investors include Tom de Swaan, the supervisory board chair at ABN Amro. As Minister of Finance, Hoekstra was instrumental in appointing De Swaan to his role at ABN Amro. Hoekstra told the journalists reporting the story that he was unaware De Swaan was part of the investment group, and said he never saw the list of investors the group regularly shared with its members.

Other members reportedly include Wilco Jiskoot, a former investment banker now helping lead Hema and Jumbo, and Alexandra Schaapveld, a former leader at the FMO development bank who is now a supervisory director at Societe Generale.

The organization collected money from investors in many different countries, and put it into an African company called Asilia Africa, which offers safari tours, according to the report. The company's co-founder, Jeroen Harderwijk, also manages the letterbox firm. He said the Virgin Islands was selected because it made it easier to collect investment, and then send the money to Africa. He said it was not selected to accommodate tax avoidance, despite the Virgin Islands' reputation as a tax haven.

The investors approached by the investigative journalists all said they neither avoided taxation, nor evaded money owed to the Dutch State. Hoekstra said in response that he received a 4,800 euro profit on his original investment of 26,500 euros. He sold back his stake for the original 26,500, and donated the profits to charity.

Hoekstra also said he always reported his interest in Candace Management Limited to the Dutch tax office.

Nearly 12 million documents were leaked as part of the Pandora Papers disclosure, the latest in a series of documents which provide a glimpse into how global political, business leaders, and the richest people in the world manage their wealth. Over 600 journalists from 117 countries participate in the International Consortium of Investigation Journalists. The organization is based in Washington D.C. and acquired the documents.

Investico, Financieele Dagblad, and Trouw are members of the investigative journalism organization.