Dubbed as the “biggest leak in the history of data journalism” by Edward Snowden himself, the Panama Papers brings to light the fiscal corruption prevalent among highly influential political figures throughout the world.
Panama, notoriously known for its tax haven policies, houses Mossack Fonseca, the world’s fourth biggest law firm offering off-shore services to the elite, according to the Guardian. On April 3, 2.6 terabytes of files from this firm were handed over to the International Consortium of Investigative Journalists (ICIJ) by an anonymous source. The ICIJ then shared them with a large network of partners including the Guardian and the BBC.
The 11.5 million documents leaked 40 years’ worth of documents on more than 210,000 companies, trusts, foundations and world leaders who utilized Mossack Fonseca’s services to facilitate money laundering, tax avoidance and criminal activity, according to the Guardian.
Mossack Fonseca, though based in Panama, operates in tax havens such as Switzerland, Cyprus, and the British Virgin Islands. The company itself has large ties to the United Kingdom, with the father of the British prime minister, David Cameron, being a client with an offshore investment funds in order to avoid having to pay tax in Britain, according to the Guardian.
This is made hilarious by the fact that David Cameron took to attacking Britain’s overseas territories and crown dependencies for not doing enough to tackle tax evasion and money laundering. Meanwhile, one of the country’s biggest perpetrators was sitting in his living room.
The law firm insists there are no violated laws or ethics, however, the latter is arguably up for debate. Politicians, dictators, criminals, billionaires and celebrities with exorbitant amounts of wealth are disguising their identities and assets to escape taxation. The economic ramifications on their countries alone are vast, but the question still remains if there will be consequences. The reckoning has yet to end as the information is still being released in waves. Over 400 reporters are combing through the documents released to the German daily Süddeutsche Zeitung and the ICIJ who have been collaborating on this cache of information for over a year. Then multiple governments, commissioners and prosecutors will have to determine the legal ramifications based on their individual judicial and legislative systems in place.
Despite resignation from the prime minister of Iceland, Sigmundur David Gunnlaugsson, Iceland’s president issued out a statement that the prime minister has not resigned, simply been relieved of his duties temporarily by the Vice-President of the Progressive Party. Meanwhile, the prime minister (or… ex-prime minister according to himself?) still serves as the Progressive Party’s Chairman.
Despite the comedic relief of the farcical reactions from global powers, this problem takes a darker twist when the current refugee problems in Europe coupled with the financial failures of several countries is addressed. While the leaders of nations agreed to address the issue of tax avoidance, the problem of offshore tax havens remains unresolved.
A large part of the problem is the 12 national leaders and 143 politicians that have been found in the Panama Papers alone. To reiterate, this is only the world’s fourth largest law firm that deals with offshore accounts for the elite. One can only imagine the pandora’s box of files from the biggest firm. Among the national leaders, we see Pakistan’s prime minister, Nawaz Sharif; Ex-interim prime minister and former vice-president of Iraq, Ayad Allawi; President of Ukraine, Petro Poroshenko; Son of Egypt’s former president, Alaa Mubarak; Russia’s president with his own $2 billion trail, Vladimir Putin; and of course the former prime minister of Iceland, Gunnlaugsson.
The papers spin a web of corruption ensnaring the international elite. The questionable riches concealed have yet to be investigated whether the reasons being to avoid taxation, prosecution or public wrath. The loopholes and legislative grey areas found in international finance point to the larger problem of policing offshore banking and the responsibility of multiple countries to work together on this issue. The lost tax revenue is a large problem, but the more malignant result comes from the identities of the perpetrators. Corrupt politicians with access to national assets have means to personally profit from their own country’s demise.
Jesseba Fernando is a staff columnist for The Daily Campus opinion section. She can be reached via email at email@example.com.