Part of a global investigation into the secretive business of offshore banking used by the super rich to avoid paying tax, the papers implicate several world leaders, their families and famous celebrities.
With more than 2.6 terabytes of data consisting of over 11.5 million documents, the release of the Panama-based law firm Mossack Fonseca’s records is one of the largest data leaks in history, bigger than both the intelligence records revealed by NSA whistle-blower Edward Snowden three years ago and the U.S. diplomatic cables made public by WikiLeaks in 2010.
The Panama Papers were initially obtained by German newspaper Süddeutsche Zeitung and subsequently the subject of a yearlong investigation, led by the International Consortium of Investigative Journalists (ICIJ) and involving more than 100 publications from nearly 80 countries.
The millions of documents include financial records, passports and correspondence stretching back 40 years, and detail 214,000 offshore entities across more than 200 countries.
While offshore accounts aren’t illegal they are often used as tax havens for money laundering and corruption.
Many of these entities were reportedly found to be shell companies established in order to help several of the law firm’s clients, through more than 500 top banks worldwide, allegedly hide income and transactions worth billions of dollars.
At least 140 offshore accounts have been linked to current and former politicians worldwide, with 12 current and former heads of state including Ukrainian President Petro Poroshenko, former Prime Minister of Iraq Ayad Allawi and Saudi Arabian monarch King Salman named in the list.
The family members and associates of several other world leaders, Pakistan’s Prime Minister Nawaz Sharif, President of South Africa Jacob Zuma, Syrian President Bashar Assad and Chinese President Xi Jinping, to name a few, have also been implicated. Iceland’s Prime Minister Sigmundur David Gunnlaugsson may face a snap election, and walked out of a recent interview when quizzed about his alleged dealings detailed in the Panama Papers.
The most high-profile individual tied to the leak, however, is Russian President Vladimir Putin, whose best friend and other close associates have been named by the ICIJ investigation for allegedly having helped launder more than $2 billion.
Several other prominent businessmen, celebrities and sportspeople are also named in the leak, including a top member of the ethics committee of football’s disgraced world governing body FIFA. The list also reportedly includes at least 33 individuals blacklisted by the U.S. government, for dealings in drugs and arms trade as well as with “rogue” nations like Iran and North Korea.
Founded in 1977, Mossack Fonseca has its headquarters in Panama but has a presence in dozens of countries including known tax havens such as Switzerland, the British Virgin Islands and Seychelles.
It specializes in helping companies and individuals set up offshore, tax exempt entities, according to its website, and is reportedly the world’s fourth largest provider of such services.
According to the Guardian, one of the two U.K. publications that partnered with the ICIJ in the investigation, one of the firm’s partners said in a leaked memorandum that “ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.”
Mossack Fonseca has strongly denied any wrongdoing, saying in an initial statement to ICIJ that it conducts “a thorough due-diligence process” before helping to incorporate companies. The company also sent a more detailed response, which can be read on its website:
“In providing those services, we follow both the letter and spirit of the law. Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing,” the statement adds. “We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it.”
Although many of the allegations made in the Panama Papers are yet to be confirmed, the far-reaching repercussions of the massive leak will likely continue to surface in the weeks to come.
UK Prime Minister David Cameron’s late father is one of the people named in the papers. He ran an offshore fund that avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents, including a part-time bishop, to sign its paperwork.
Ian Cameron was a director of Blairmore Holdings Inc, an investment fund run from the Bahamas but named after the family’s ancestral home in Aberdeenshire, which managed tens of millions of pounds on behalf of wealthy families.
Alledgedly in over 30 years of trading Blairmore has never paid a penny of tax in the UK on its profits.
The prime minister’s spokeswoman said that Downing Street had responded to allegations about Ian Cameron in the past.
To read more about The Panama Papers click on the following link to the International Consortium of Investigative Journalists website https://panamapapers.icij.org