It is the biggest leak of financial information in history, though the word leak may not be the right word for a release of this magnitude.
On April 3rd, 2016, Panama based corporate service provide Mossack Fonseca leaked 11.5 million documents that they had created between 1970 and late 2015. These documents name over 214,000 offshore companies connected to over 200 countries and territories and show how the world’s wealthy, including public officials, hide their money from the public eye in legal and sometimes illegal ways. This is the basis of what has come to be known as the Panama Papers.
According to the International Monetary Fund, an off shore center, or tax haven is defined as:
“A center where the bulk of financial sector activity is offshore on both sides of the balance sheet, (that is the counte-parties of the majority of financial institutions liabilities and assets are non-residents), where the transactions are initiated elsewhere, and where the majority of the institutions involved are controlled by non-residents.”
- Jurisdictions that have relatively large numbers of financial institutions engaged primarily in business with non-residents;
- Financial systems with external assets and liabilities out of proportion to domestic financial intermediation designed to finance domestic economies; and
- More popularly, centers which provide some or all of the following services: low or zero taxation; moderate or light financial regulation; banking secrecy and anonymity.
There are perfectly legitimate reasons why these offshore banking activities occur, and they are not technically illegal. Law firms often help to make sure of this, as Mossack Fonseca did for its clients. They are an industry leader as one of the biggest offshore law firms that handles business for different people all over the world, as well as creating complex shell companies for their well-over 300,000 clients.
The document sharing, consisting of over 2.6 terabytes of data, began with Süddeutsche Zeitung after an anonymous source offered the German newspaper large amounts of documents.
Who is involved?
So far, 140 politicians worldwide have been named, including current and former world leaders, as well as over 500 banks, and various celebrities from all over the world. This includes beloved action stars such as Jackie Chan, television producer Simon Cowell and soccer superstar Lionel Messi. It is unclear at this point whether the information released in the papers will lead to evidence of crimes committed, though several of the countries named thus far have launched investigations into the information that has been leaked.
These are just a few of those implicated in the papers.
- President Mauricio Macri of Argentina
- President Petro Poroshenko of Ukraine
- The personal secretary of the King of Morocco, Mounir Majidi
- The first family of Azerbaijan (Prime Minister Ilham Aliyev’s family)
- friends of Russian President Vladimir Putin
- members of the U.K. Parliament
- Stavros Papastavrou, International Affairs Secretary of the Nea Demokratia (Greece)
- Spanish film director Pedro Almodovar
- Bollywood star Amitabh Bachchan
- Prime Minister Sigmundur David Gunnlaugsson of Iceland
The map below depicts the different countries around the world that have been named in the Panama Papers.
(map will go here)
Noticeably absent on the map, however, is the United States.
So where are the Americans?
One of the things most shocking about the release of the data in the Panama Papers is the fact that no Americans or American citizens were named in the leak. Now, this may be because it is extremely easy to set up shell corporations in the United States, or because not all of the information has been released yet, and will be released in early May of this year. The reasoning is still unclear.
A theory on off-guardian.org posted by user Kit posits that perhaps this is because of the fact that Mossack Fonseca is, in fact, funded by Americans. According to the article, the International Consortium of Investigative Journalists (ICIJ), an apparently special project by the Center for Public Integrity (CfPI), gets their money from The Rockefellers, The Carnegie Corporation of New York, The Ford Foundation, Open Society Foundation, and The Goldman-Sonnenfeldt Foundation.
This came as a shock to many, as America is perhaps the largest global superpower. Kit likens it to America being a lizard, who can regrow their tails if they are cut off. They suggest that these different foundation and individuals who funded the ICIJ were simply cutting off the tails to draw focus away from the corruption in America itself. Either way, it is highly suspicious that no Americans have thus far been named on the list and the whistleblowers have instead chosen to focus on countries outside of North America. In espionage terms, this would be referred to as a limited hangout, meaning (according to Victor Marchetti, former Deputy Director of the C.I.A.):
“a favorite and frequently used gimmick of the clandestine professionals. When their veil of secrecy is shredded and they can no longer rely on a phony cover story to misinform the public, they resort to admitting—sometimes even volunteering—some of the truth while still managing to withhold the key and damaging facts in the case. The public, however, is usually so intrigued by the new information that it never thinks to pursue the matter further.”
At this time, the most unfortunate thing seems to be that shady behavior is now a global phenomenon. It serves to prove that the wealthy, in accordance with lawyers and accountants, seem only to care about their personal cheque books and will do whatever they can to hide their wealth from the government.