What are The Panama Papers? The short answer is, a bunch of leaked documents that reveal the financial dark side of some of the most powerful people on earth. The long answer is, 11.5 million documents or 2.6 terabytes, that’s right terabytes (1 TB = 1,000 GB), of confidential documents that were taken from Mossack Fonesca, the fourth largest offshore law firm in the world. These documents were provided to Süddeutsche Zeitung, a German newspaper, by an unnamed source. Süddeutsche Zeitung then distributed these documents to over 100 global news organizations who are working around the clock to sift through the millions of documents to glean anything they can from it.
So far, the documents have reveled that nearly 215,000 offshore shell companies and over 14,000 clients were tied to Mossack Fonesca. Of these clients, 143 politicians were involved. In addition, 12 of these politicians were high political leaders. Just a few named were President Mauricio Macri of Argentina; President Petro O. Poroshenko of Ukraine; Mr. Gunnlaugsson, then the prime minister of Iceland; Prime Minister Nawaz Sharif of Pakistan; King Salman of Saudi Arabia; the former emir of Qatar, Hamad bin Khalifa al-Thani, and its former prime minister, Hamad bin Jassim bin Jaber al-Thani; and the Argentine soccer star Lionel Messi. Some of these connections allegedly implicates deals where hundreds of millions of dollars were funneled illegally from various sources including national banks.
The fallout has already been immense. The prime minister of Iceland, Sigmundur David Gunnlaugsson, stepped aside on Tuesday. In an ironic twist, Gonzalo Delaveau Swett, the president of Transparency Chile, a branch of a global anti-corruption group, stepped down on Monday. With more evidence mounting, you can expect more high powered officials and even more world leaders to be in the hot seat.
One of the burning questions is probably, are there any Americans that are in serious trouble based on these documents? Thankfully, perhaps disappointingly, the answer appears to be no. There are a few addresses and passports linked to the U.S. but there doesn’t seem to be any serious connections to Mossack Fonesca of any politicians or celebrities that are American citizens. But that doesn’t mean Americans are squeaky clean. Many experts say that one of the reasons why we don’t see Americans in The Panama Papers is because it’s so easy in the U.S. to set up shell companies. Other countries implicated in the documents resort to Panama because they have limited options. The economist, James Henry put it bluntly “Basically, we have an onshore haven industry in the U.S. that is as secretive as anywhere, really don’t need to go to Panama.”
Finally, do The Panama Papers actually show hard evidence of criminal activity? The short answer is, we don’t know. The majority of people sifting through The Panama Papers are news organizations, not an army of lawyers. While many people have stepped down from high level positions due to the papers, it is unclear on whether many of these actions constitute crimes based on whatever country they’re from. Afterall, that is exactly why these people came to Mossack Fonesca in the first place. To use any and all loopholes to make sure the legal grey area stays in the grey, perhaps off white, area. As we speak, anyone worth anything is probably talking to a team of lawyers to concoct some story to legitimize their offshore holdings. There are in fact a few legitimate reasons to have offshore holdings which is why it’s in the legal grey area. But whether anyone actually committed a crime or not, the implications are such that anyone’s reputations will take a massive hit. We’ll just have to see where the next page takes us.
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