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#PanamaPapers: What the Rich and Powerful are Hiding From the Rest of Us [READ]

The Panama Papers have set off a tornado that has so far swept many countries across the globe, current and former heads of state, the rich and famous in films, sports, their family and associates besides criminals in its wake.

What are the Panama papers?

On April 3, 2016, the International Consortium of Investigative Journalists (ICIJ) put out an in-depth, investigated and analysed report that blows the lid off tax evasion and secret offshore dealings of the powerful, rich and famous across the globe in 21 offshore jurisdictions such as Nevada, Niue, Samoa, British Anguilla, Hong Kong, Tortola, Seychelles and the British Virgin Islands. The 12 current and former heads of state from Iceland, Ukraine, Pakistan, Saudi Arabia, Russia and Argentina also figure on the list.  It also provides data on some 214,000 companies.

The whopping 11.5 million confidential Mossack Fonseca documents were leaked, revealing 2.6 terabytes of data, covering nearly 40 years of records.

“It allows a never-before-seen view inside the offshore world providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues,” the ICIJ said.

Why is it called the Panama Papers?

The tax evaders stashed funds in Mossack Fonseca, a law firm and corporate service provider based in Panama.

The Republic of Panama is located between North and South America.

Mossack Fonseca, founded in 1977 by German-born Jurgen Mossack and Ramon Fonseca, specializes in commercial law, trust services, investor advisory and international structures. The law firm’s website claims it is one of the largest firms in the corporate services industry and has over 40 offices globally. It also offers intellectual property protection and maritime law services.

The Munich-based daily, Sueddeutsche Zeitung, which got the secret papers and shared it with ICIJ, says in its report that Mossack Fonesca sells anonymous offshore companies around the world. These shell firms enable their owners to cover up their business dealings, no matter how shady.

Mossack Fonesca is the world’s fourth biggest offshore law firm.

Why would anyone invest in a shell company?

It is not illegal to own a shell company. Usually, the world’s famous people who do not want to be seen as the real owners of assets prefer to invest in a shell company anonymously. However, that is not legal. Buying a shell company is a good source of stashing away money that you don’t want anyone to know– bankers, government, the taxman, and also your wife or husband. If the money is ill-gotten wealth, all the more reasons to invest in a shell company. A lawyer is a brilliant cover to buy a shell company, if you don’t want to do it yourself.

Who leaked information?

The story has the pulsating adrenalin rush of a James Bond film. The Munich-based daily Sueddeutsche Zeitun received 11.5 million data spanning a time-frame of 40 years (1997 to 2015) through an encrypted channel. Bastian Obermayer, a reporter of the daily,  says the whopping information was given gratis with a request for security in return.

After receiving the records of  214,488 offshore entities through emails, financial spreadsheets, passports and corporate records, the ICWJ put 370 journalists from across 80 countries on the job of tracing the hidden offshore assets of a roster of people in over 200 countries.

What is the Nigeria link?

The Panama Papers have a few Nigerian names so far partly identified by online newspaper Premium Times as well as the International Consortium of Investigative Journalists (ICIJ).

  1. Senator Bukola Saraki
  2. Senator David Mark
  3. Obi Asika
  4. James Ibori

Globally, who is implicated in the documents?

The documents reference 12 current or former world leaders, as well as 128 other politicians and public officials. In addition to allegations involving associates of Putin — the Russian leader isn’t himself mentioned by name in any of the documents — and FIFA, the papers also accuse the prime minister of Iceland, Sigmundur David Gunnlaugsson, of having ties, through his wife, to an offshore company that were not properly disclosed, while Argentina’s President Mauricio Macri is alleged to have failed to disclose links to a company in his asset declarations.

Is it clear anything illegal has happened?

The documents do not necessarily indicate illegal activity. But shell companies and offshore accounts can be used to mask the origin of financial transactions and ownership. The files include people and companies that the U.S. has blacklisted due to drug trafficking and terrorism links, according to the ICIJ.

 

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