A huge leak of documents that implicate government heads in the setting up of “shell” companies to harbor billions of dollars is set to cause upheaval on offshore hubs and shake up global political governance.
A team of journalists from around the world published what they called the “Panama Papers” on Sunday—more than 11.5 million encrypted internal documents from Mossack Fonseca, a Panamanian law firm.
An anonymous source began supplying the documents— dated from the 1970s to 2016—to German newspaper Süddeutsche Zeitung (SZ) a year ago. SZ assembled a group of media organizations, including the International Consortium of Investigative Journalists (ICIJ), The Guardian, the BBC and Le Monde, to analyze the data, before simultaneously releasing their findings.
Calling the leak “the biggest that journalists had ever worked with,” SZ said the documents revealed numerous shadowy financial transactions via offshore companies created by Mossack Fonseca.
The law firm, who has more than 40 offices worldwide, specialized in the sale of anonymous offshore companies, known as shell firms.
According to SZ’s findings, 12 current and former heads of state, 200 other politicians, as well as members of various Mafia organizations, plus football stars, 350 major banks, and hundreds of thousands of regular citizens were among Mossack Fonseca’s clients.
It is important to note that owning an offshore company is not illegal in itself, but SZ alleged that concealing the identities of the true company owners was the law firm’s primary aim in the bulk of cases.
While people often legitimately move funds to countries outside their national boundaries to access more relaxed financial regulations, offshore companies are also commonly associated with tax evasion as well as serious illicit activities such as money laundering.
We have not been able to independently verify the allegations made by media outlets that studied the documents.
Argentine President Mauricio Macri, Iceland’s Prime Minister Sigmundur Davíð Gunnlaugsson, Saudi Arabia’s King Salman, U.A.E President Sheikh Khalifa and Ukrainian President Petro Poroshenko are among those named in the documents as having set up shell companies, according to SZ.
Relatives and associates of other leaders, including Russia’s Vladimir Putin, China’s Xi Jinping, Syria’s Bashar Assad and Britain’s David Cameron, were also identified by the team of reporters that examined the documents.
Other prominent Asian officials named in the reports included Anuraj Kerjiwal, the former head of Indian political party Lok Sattam, as well as Cambodia’s Minister of Justice.
Ramon Fonseca, the director of Mossack Fonseca, told Reuters that the firm was not responsible for the activities of the companies it incorporated.
“We’re dedicated to making legal structures which we sell to intermediaries such as banks, lawyers, accountants and trusts, and they have their end-customers that we don’t know,” Fonseca said.
But revelations have caused a global uproar, with pundits warning of dire financial and political consequences to come.