The “Panama Papers” are making a big splash. And well they should. We can only hope they will also create plenty of fall-out. Thanks to an astonishingly large leak, the papers provided the grist for what appears to be the most detailed look ever at how celebrities and crooks, politicians and plutocrats, hide their wealth to the detriment of nearly everyone but the international 1 percent.
Three hundred and seventy reporters of the International Consortium of Investigative Journalists at 107 media organizations working in 25 languages in 80 countries engaged in vetting and expanding on the information in what Fusion magazine calls the “Wikileaks of the mega-rich.” The media leader in the project was the popular center-left German newspaper, Süddeutsche Zeitung, to which the leak was sent in 2015 after preparatory contacts with the anonymous source. ICIJ has an interactive graphic in which you can explore what the Panama Papers reveal about world leaders and others.
Anti-corruption activists at Global Witness issued a statement Sunday in response to the revelations:
The recent exposé by the International Consortium of Investigative Journalists and their media partners have once again shown the insidious role that tax havens, corporate secrecy and shell companies play in aiding widespread crime, corruption and violence. These threaten the safety, security and well-being of people around the world.
What’s less well known is that, despite stereotypes portraying the problem of tax havens and shell companies as an ‘offshore’ problem, this is a big and homegrown issue in the U.S. as well.
After receiving a gargantuan leak of documents from an anonymous source—said by several news outlets to be the largest in history—the powers-that-be at Süddeutsche Zeitung decided there was so much to look into that they would ask the International Consortium of Investigative Journalists to be part of the effort.
That was early in 2015. On Sunday, the newspaper and several other newspapers released the first stories about a portion of what is contained in all that leaked data. This is from Süddeutsche Zeitung’s introduction to the papers:
Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world. These shell firms enable their owners to cover up their business dealings, no matter how shady.
In the months that followed, the number of documents continued to grow far beyond the original leak. Ultimately, SZ acquired about 2.6 terabytes of data, making the leak the biggest that journalists had ever worked with. The source wanted neither financial compensation nor anything else in return, apart from a few security measures.
The data provides rare insights into a world that can only exist in the shadows. It proves how a global industry led by major banks, legal firms, and asset management companies secretly manages the estates of the world’s rich and famous: from politicians, Fifa officials, fraudsters and drug smugglers, to celebrities and professional athletes.
The reporters go on to explain how they went about turning transforming data in 11.5 million documents into searchable files on 214,000 companies.
Some of the alleged miscreants will come as no surprise. Others were not suspected. Vladimir Putin is one of the biggest players. A story generated from the “Panama Papers” is that of Iceland. Here’s a tiny bit of Süddeutsche Zeitung’s story on that nation, which could spark another investigation in the wake of the one that sent several Icelandic bankers to prison:
The names of several Icelandic public officials show up in the internal documents of Mossack Fonseca (Mossfon), the Panamanian offshore provider. Among them are Prime Minister Sigmundur David Gunnlaugsson, Finance Minister Bjarni Benediktsson, and the Minister of the Interior, Ólöf Nordal. The data reveals that all three politicians have links to anonymous offshore companies, which they have neglected to disclose. The Panama Papers also include the names of Hrólfur.
Ölvisson, the chairman of the prime minister’s Progressive Party, several of Iceland’s wealthiest men, a number of former top bankers, and at least one high-level government advisor. The number of suspects is shockingly high for a country of just 330,000 inhabitants.
The Guardian, which participated in the project, published several stories of its own Sunday. Included in its summary of what’s in the Panama Papers is:
- Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.
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A $2bn trail leads all the way to Vladimir Putin. The Russian president’s best friend – a cellist called Sergei Roldugin - is at the centre of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin’s daughter Katerina got married. [...]
- In the UK, six members of the House of Lords, three former Conservative MPs and dozens of donors to British political parties have had offshore assets.
- The families of at least eight current and former members of China’s supreme ruling body, the politburo, have been found to have hidden wealth offshore.
- A key member of Fifa’s powerful ethics committee, which is supposed to be spearheading reform at world football’s scandal-hit governing body, acted as a lawyer for individuals and companies recently charged with bribery and corruption.
- One leaked memorandum from a partner of Mossack Fonseca said: “Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.”
The African Network of Centers for Investigative Reporting has also published at least 10 stories based on information in the leaked papers. Here’s a taste of one of those from Silas Gbandia in Sierra Leone:
He is De Beers’ most prolific diamond buyer, a supplier to the luxury jewelry brand Tiffany & Co., and an alleged criminal, accused of bribing the wife of a former Guinean president to land a multibillion-dollar iron deal. Given that profile, it’s not surprising that Beny Steinmetz and his eponymous company try to stay out of the limelight. But with the Steinmetz Group’s alleged tax avoidance scam in South Africa and an ongoing US grand jury investigation into corruption in Guinea, for the past two years, Steinmetz hasn’t been able to keep his name out of the headlines. So, to avoid exposing the company, the embattled billionaire allegedly sold his 37.5% share in the Steinmetz Group’s diamond segment, Diacore, to his brother, Daniel, in 2014.
Steinmetz left the Steinmetz Group’s diamond business, Diacore, but has kept a business in Sierra Leone diamonds through the British Virgin Islands-based entity Octea. The company, which he runs through BSG Resources (BSGR), counts the Steinmetz family as beneficiaries. Unlike BSGR which operates in West Africa, Diacore maintains a presence in Namibia, Botswana and South Africa.
We are going to need a lot of popcorn for this one.
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Galtisalie has a discussion on the subject here and nota bene has one here.