Dirty Little Secrets (Money Laundering, Tax Evasion) of the Rich and Powerful have been exposed in the Panama Papers

The Panama Papers are 1,500 times larger than the “Cablegate” document dump at Wikileaks and entangle some of the most powerful people in the world.

With so much information released at once, it’s easy to lose track of what’s going on, so we prepared this guide to essential information about The Panama Papers and how they’re shaking the world.

What are the Panama Papers?

They’re not actually paper at all, and go far beyond Panama. The papers are a leak of documents from the Panamanian law firm Mossack Fonseca, which specializes in helping the rich, powerful, and — sometimes — the corrupt from all over the world hide their money.

An anonymous source provided the documents to the German newspaper Süddeutsche Zeitung, which in turn shared them with more than 100 other media organizations through the International Consortium of Investigative Journalists. Fusion was one of those partner organizations. Collaborating in secret over the past year, the partners sifted the documents for vital information and evidence of unethical or illegal behavior.

How big a leak are we talking about here?

The files consist of about 2.6 terabytes of data spread out over 11.5 million documents, making it one of the largest clandestine information dumps ever seen.

For some scale, it would take a stack of about two dozen 128 gigabyte iPhones to hold all the information.

What kind of stuff is in the papers?

All the kinds of documents a law firm typically generates: e-mails with and about clients, contracts, databases. Because Mossack Fonseca’s business is helping people hide their money, those e-mails include evidence of offshore money stashes, faceless shell companies, and other methods of making money disappear, as laid out in an investigative report by Fusion.

There can be perfectly legitimate reasons an individual or company might want to hide their assets, but it also can be a sign of tax evasion, money laundering and other questionable activity. And the documents also show some of the very prominent global leaders who make up the firm’s clientele.

So a lot of powerful people were exposed?

At least 12 current or former heads of state plus 60 more people with links to current or former world leaders were found in the data. You can find a list of some of the best-known clients here.

Any juicy names in there?

Perhaps you’ve heard of Georgian Prime Minister Bidzina Ivanishvili?

No.

What about former commander-in-chief of Venezuela’s armed forcesVíctor Cruz Weffer?

Who?

OK, what about Vladimir Putin? You’ve heard of him, right?

The Russian president and star of dank memes? He’s in there?

Source: Fusion

A LEAK HAS $PRUNG

One April morning in 2014, Jurgen Mossack, the tall, German-born co-founder of the prominent Panama City law firm Mossack Fonseca, shot off an agitated email with the subject line “Serious Matter URGENT” to three top members of his staff. There was trouble brewing in the British Virgin Islands, a “secrecy jurisdiction” whose white-sand beaches and blue Caribbean waters conceal a barely-regulated haven for people who wish to create shell corporations. Many of those people employ Mossack Fonseca to perform precisely this service.

“Swindled investors call the office constantly. We need to resign from this company immediately,” Mossack wrote. “At any moment, the police arrive, and we end up in the newspapers.”

As a “registered agent,” Mossack Fonseca provides the paperwork, signatures, and mailing addresses that breathe life into shell companies established in tax havens around the world — holding companies that often create nothing and sell nothing, but shelter assets with maximum concealment and a minimum of fuss.

Jurgen wanted to pull the plug on representing one such firm that was raising red flags. For weeks, investors in an entity called Swiss Group Corporation had been contacting Mossack Fonseca, wondering why their annuity payments had suddenly stopped, why they had received only vague emails, whether they had been a victim of a fraud.

“SWISS GROUP CORP has shown no transparency in their processes,” one woman wrote from Colombia on March 31, 2014, “and now, I am worried about the investment I made 5 years ago, which is my only means of living.”

Mossack instructed his underlings to “Please do what you have to do,” – and then, he added: “Use the telephone!”
Weeks after Jurgen issued his stern orders, queries continued to pour in from investors — including one woman who identified herself as a U.S. citizen, and others from Colombia and Bolivia. They were still groping in the dark, searching for shreds of information in the same black hole of offshore finance that routinely stumps tax authorities, law enforcement officials, and asset-tracers across the globe. By one estimate — based on data from the World Bank, IMF, UN, and central banks of 139 countries — between $21 and $32 trillion is hiding in tax havens, more than the United States’ national debt. That study didn’t even attempt to count money from fraud, drug trafficking and other criminal transactions whose perpetrators gravitate toward the same secret hideouts.

Mossack and his business partner Ramon Fonseca, a powerful political leader and best-selling author in Panama, are captains in an offshore industry that has had a major impact on the world’s finances since the 1970s. As their business has grown to encompass more than 500 employees and collaborators, they’ve expanded into jurisdictions around the world – including parts of the United States.

Source: Fusion

 

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