Panama Papers Expose Many of the World's Wealthy And Corrupt


A startling 11.5 million files have been reportedly leaked from Mossack Fonseca, otherwise known as the fourth biggest offshore law firm in the world. German newspaper Süddeutsche Zeitung was tipped off by an anonymous source, sharing the records with the International Consortium of Investigative Journalists (ICIJ), who in turn spread the word to BBC and the Guardian, among a large network of international partners.

According to the documents, which some date back to 1970, the rich appear to have many options to exploit secretive offshore tax regimes, and over 143 politicians (including 12 national leaders), their families and other close associates worldwide have reportedly used some offshore tax havens.

The papers appear to link various individuals to Vladimir Putin in a $2 billion trail that especially shines a spotlight to Sergei Roldugin, cellist and best friend of the Russian president. According to sources, Roldugin lies at the heart of scheme which sees money from Russian state banks stashed offshore.

The son of Egypt’s former president Alaa Mubarak and Prime Minister of Iceland Sigmundur Davíð Gunnlaugsson reportedly join the list of national leaders with considerable offshore wealth, along with Pakistan’s Nawaz Sharif, Iraq’s Ayad Allawi and Ukraine’s Petro Poroshenko.

British Prime Minister David Cameron also reportedly has a mention in the Panama Papers. According to sources, the Prime Minister’s father ran an offshore investment fund that, since its inception, has filed detailed tax returns annually. The fund has been registered with HM Revenue and Customs right from the start, and by having some Bahamas residents sign its paperwork, has successfully managed to avoid paying tax in Britain.

Based in Panama, the Mossack Fonseca offers services including wealth management and administering offshore firms, like the British Virgin Islands, for an annual fee. Though Panamanian, the law firm essentially runs a global operation, with over 600 people working across 42 countries, according to its website. The firm includes the British Virgin Islands, Switzerland and Cyprus among its many tax havens, and has acted for over 300,000 companies to date.

The Panama Papers is currently one of the biggest leaks in history, even surpassing the 2010 WikiLeaks, with a record 2.6 terabytes of information taken from the firm’s internal database.

While using offshore structures are completely legal with various legitimate reasons to back its usage, including how Russian and Ukrainian businesspeople hide their assets offshore from criminal “raids”, the structure is also susceptible to some loopholes and corruption.

David Cameron explained in a speech last year in Singapore that “the corrupt, criminals and money launderers” are able to take advantage of the loopholes, especially with anonymous company structures.

The UK government is trying to avoid this, however. For the first time ever, UK companies will be required to indicate their “significant” owners, starting June.

As for Mossack Fonseca, the firm is reportedly citing client confidentiality in its refusal to discuss the exact cases of alleged misdemeanor. Mossack Fonseca also staunchly defends its conduct, maintaining its compliance with anti-money-laundering laws and its efforts in trying to prevent any possible misuse of its services.


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