Tag Archives: Pandora Papers

The Boundary Waters, Offshore: Luksic in the Pandora Papers

A chart of Luksic-connected offshore entities included with the CIPER report.

Last week, El Centro de Investigación Periodística (CIPER) published an investigative report on the offshore financial activities of Andronico Luksic Craig and the Luksic family, based on the Pandora Papers — a trove of over 11 million records leaked from tax havens in the British Virgin Islands. The investigation cast some new light on the elaborate network of offshore corporations, foundations, law firms, and corporate services companies involved in managing some of the Luksic family’s vast fortune, and brought me back to some of the records I’d uncovered in connection with Luksic’s purchase of the Washington, DC mansion where Jared Kushner and Ivanka Trump lived while serving in the Trump White House.

Luksic acquired that $5.5 million Kalorama property right after Trump won the 2016 election, right around the time Kushner-Trump were preparing for their move to the nation’s capital and at a critical moment when Antofagasta plc, the Chilean mining company controlled by Luksic, was counting on the Trump administration to reverse policies of the Obama administration (which it duly did). This neat arrangement may not have been a simple quid pro quo, a mansion provided in return for government approvals to mine copper and nickel on the edge of the Boundary Waters, but even to the casual observer it looks an awful lot like a foreign emolument. Unfortunately but not surprisingly, the matter never underwent a formal ethics review. (More on all that here, here, and here.)

While these new documents do not directly shed light on the Kalorama emolument, they provide some insight into how Luksic’s control of Antofagasta is connected to offshore schemes and how the Kalorama mansion might figure into a network of Luksic-controlled US property holdings.

One company called out in the CIPER investigation, FDMDA Corp, looks like a more elaborate version of a company I came across in Boston property records, LDMD Corp, which was registered as the owner of two Avery Street properties from 2011 to 2013. FDMDA carries the first initials of the names of Luksic’s five children, while LDMD appears to have been created solely for the male heirs. (I am assuming the L in LDMD stands for Andronico Luksic, the first-born son, with DMD representing Davor, Maximiliano, and Dax.) Two others, Beacon Eagle Corporation and Avery Eagle Corporation, also look like another iteration of Boston property-holding companies formed by Luksic attorneys, Avery Bicentennial Corp and The Avery Millennium Corp.

These corporations owned and still own condominiums on Avery and Beacon streets in Boston. The Beacon Street property includes a penthouse that Luksic (or, rather, Avery Bicentennial) purchased from quarterback Tom Brady in 2012 — which is right around the time that Luksic says he and Donald Trump “said hello” or exchanged a greeting at a New England Patriots’ game, where they would have been guests of Brady, a mutual acquaintance, or of billionaire owner Robert Kraft. So Brady connects Luksic to Trump — suggesting there might be a little more to the Kalorama mansion story than serendipity. What’s not clear is how the entities formed around the Boston properties, or even Luksic’s Miami and Washington DC properties, might be legally connected with the two Eagle companies mentioned in the Pandora Papers.

On April 28, 2017, FDMDA Corp and Beacon Eagle Corporation were relocated from the British Virgin Islands to Liechtenstein, where they were subsumed under an entity called The Lazare Tcherniak Foundation. (The disposition of Avery Eagle remains unclear.) The Lazare Tcherniak Foundation “provides for the economic furtherance of the descendants of Nadia Malvine Tcherniak” — Patricia Lederer Tcherniak is Luksic’s ex-wife and mother of his five children — “that bear the name Luksic as their first or second name and that are also biological descendants of Andronico Luksic Abaroa [Andronico Luksic Craig’s father]. They are all members of a generally defined and fully discretionary class of beneficiaries.”

While Beacon Eagle appears to be bound up with US-based real estate investments, FDMDA Corp. serves Lazare Tcherniak Foundation beneficiaries by managing and distributing stock dividends. Records reviewed by CIPER describe the source of FDMDA Corp’s funds as “mining activities in the Republic of Chile. The funds are mainly dividends indirectly received from Antofagasta plc, a public company listed on the London Stock Exchange.” Here, “indirectly” probably indicates that there is an entity — a partnership — to which the Antofagasta plc dividends are paid before they are distributed, in whole or in part, to the Liechtenstein-based FDMDA Corp.

Of course, all of this appears to be perfectly legal, as Andronico Luksic himself pointed out in a tweet responding to the CIPER report.

While technically true (“Liechtenstein is NOT a tax haven” because Chilean tax authorities don’t include it in their list of tax havens), this statement was rapidly ratioed. Along with President Sebastian Piñera’s own exposure in the Pandora Papers, Luksic’s exposure and his carefully lawyered response just provide more fodder for the debate over inequality in Chile.

Luksic’s  October 6 statement also prompts questions about corporate governance, the extent of the Luksic Group’s reach, and its attendant responsibilities. With a controlling interest in Antofagasta plc, the Luksic Group can easily thwart any shareholder resolutions not to its liking and effectively determine how the company and its subsidiaries are run, all from behind the scenes and with little accountability. That is shadow governance, and it’s the very model of corporate governance that Antofagasta brings to its Twin Metals project near the Boundary Waters.

Postscript. Oct 20, 2021. The same elaborate network of Luksic foundations, offshore companies, tax havens, and investment vehicles is evident in the disclosures filed by Antofagasta’s three lobbying firms: Brownstein Hyatt, Wilmer Hale, and The Daschle Group. I addressed the topic in this Twitter thread:

Read more about the Boundary Waters reversal here