The Panama Papers have exposed some of the world’s most powerful and wealthy people that may have used offshore bank accounts to create shell oil companies in order to conceal their wealth and avoid taxes.
In the papers, there were millions of leaked confidential documents from the Mossack Fonseca law firm in Panama. The papers exposed international politicians, millionaires, billionaire business leaders and celebrities involved in webs of suspicious financial transactions. These revelations have raised questions about secrecy and corruption in the global financial system.
According to CNBC, Mossack Fonseca claimed, “If we detect suspicious activity or misconduct, we are quick to report it to the authorities. Similarly, when authorities approach us with evidence of possible misconduct, we always cooperate fully with them.”
Mossack Fonseca is a Panamanian law firm and corporate service provider that has over 40 offices worldwide. It specializes in commercial law, trust services, investor advisory, and international business structures. The firm has allegedly helped foreign citizens circumvent their local tax laws and international sanctions.
According to CNN, the Mossack Fonseca representative said, “Our industry is not particularly well understood by the public, and unfortunately this series of articles will only serve to deepen that confusion. The facts are these: while we may have been the victim of a data breach, nothing we’ve seen in this illegally obtained cache of documents suggests we’ve done anything illegal, and that’s very much in keeping with the global reputation we’ve built over the past 40 years of doing business the right way, right here in Panama.”
Some of the most high-profile names include the President of Ukraine, Petro Poroshenko; Prime Minister of Iceland, Sigmundur Gunnlaugsson; Ex-prime minister of Iraq, Ayad Allawi; and the former President of Sudan, Ahmad Ali al-Mirghani.
Sigmundur David Gunnlaugsson resigned as Prime Minister of Iceland after the documents were released. Also, President Mauricio Macri of Argentina, and the soccer star Lionel Messi, one of the world’s wealthiest athletes, were listed in the papers.
Other soccer players, FIFA officials, the sport’s world governing body, and UEFA, the governing body of European soccer, were also tied into the Panama Papers through the Panamanian firm.
The FIFA officials can be tied back to the controversy of the decision for the location of Qatar for the next World Cup and the bribes and money laundering that came along with it.
Almost all people incorporated in the document have denied their link to doing business in the offshore companies, according to Telegraph U.K. news.
Those prominent names were among the hundreds of people that the papers tie to thousands of offshore shell companies. Such companies can be used to protect vast amounts of money from tax collectors, regulators, and creditors.
It is not clear if any of the documents were in violation or illegal. The protection of money in offshore companies is not illegal alone, but it may be done to hide illegal activity from certain scouting eyes, for example, by creating tax evasion or executing money laundering.
The Panama Papers is the biggest database leak of any corporation in history.