What We Know About the Panama Papers

Jared Fel, Staff Writer

 

Süddeutsche Zeitung, a well-known German newspaper company, was recently involved in the leaking of 11.5 million confidential documents and 2.6 terabytes of information from a Panama-based law firm known as Mossack Fonseca. It is the biggest leak in human history, even larger than the information shared by Edward Snowden. Here’s what we know:

For the past 40 years, Mossack Fonseca has set up nearly 15,600 anonymous shell companies for their clients who could “store” their money and evade paying taxes on it. Some even used these shell companies to launder their money.

On this list of clients involved in evading taxes are people such as Petro Poroshenko, Ukraine’s current president, Iceland’s Sigmundur David Gunnlaugsson, who has just recently stepped down from the position of Prime Minister, and most notably, Russia’s Vladimir Putin. Putin’s best friend, Sergei Roldugin, is at the core of Russian involvement in Mossack Fonseca, in which two billion dollars were put into an offshore company. Another person worth mentioning is the father of Britain’s Prime Minister David Cameron, whose offshore investment avoided ever having to pay tax.

This does not mean that all people who use offshore structures are criminals. In fact, offshore structures are entirely legal. Countries such as Russia, Ukraine, and most notably the United States often put money in these places to protect it from criminal raids. However, it is when a government uses these offshore banks to launder money and evade paying tax money where we see the corruption associated with the Panama Papers.

Most people who have been named in corrupt shell companies have denied in the strongest terms that they have broken any laws. Putin has stated that the allegations are part of an American attempt to destroy Russian unity. Mr. Cameron has gone on record to say that neither he nor his family have benefited in any way from “offshore funds.” Even the people who run Mossack Fonseca are denying the allegations against them and are saying that they have done nothing wrong. The law firm’s co-founder, Ramón Fonseca, has stated in recent interviews that Mossack Fonseca has no responsibility for what their clients do with their offshore companies, and blaming the law firm for what people do with their companies would be like blaming a car maker “if the car was used in a robbery,” Ramón said.