Top 10 Need To Know Facts about the Panama Papers
It's possibly the biggest data breach in history, and a financial scandal with repercussions felt all over the world. Welcome to WatchMojo News, the weekly series from http://www.WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we're counting down 10 crucial facts you should know about the Panama Papers.
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Top 10 Panama Papers Scandal Facts
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It’s possibly the biggest data breach in history, and a financial scandal with repercussions felt all over the world. Welcome to WatchMojo News, the weekly series from WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we’re counting down 10 crucial facts you should know about the Panama Papers.
#10: What Are the Panama Papers? The Scandal
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The Panama Papers are a set of 11.5 million confidential documents, detailing the banking activities of more than 214,000 offshore companies operating through the Panamanian law firm, Mossack Fonseca. The papers, which date back to the 1970s, were anonymously leaked in early 2015, and the information they retain was first made public on April 3rd, 2016. As of April 11th, 15 current or former world leaders have been referenced in the documents, as well hundreds of other politicians, public officials, sports people and celebrities.
#9: What Are the Most Serious Allegations? The Numbers
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While each case is individual and using offshore business entities is not usually against the law in itself, offshore accounts can be set up to avoid taxation, and are sometimes linked to money gotten illegally or immorally. Allegations of tax evasion are being leveled at a number of high-ranking public figures, and the integrity of those listed in, or linked to, the papers is being brought under scrutiny. As 2.6 terabytes of data was given up by the anonymous source, Mossack Fonseca is at the center of what’s being called the biggest data leak in history. Furthermore, only a small percentage of the information has currently been published as of April 2016, and pressure is expected to mount on governments to reform tax systems to ensure that richer people are taxed correctly.
#8: Who Leaked the Papers and Where Can You Read Them? The Hack
The documents were given to the German newspaper, Suddeutsche Zeitung, by an anonymous source. The source reportedly claimed that his life would be in danger if his identity was revealed, due to the sensitive nature of the information held in the papers, and the powerful people to which they relate. Suddeutsche Zeitung shared the documents with the International Consortium of Investigative Journalists, which then distributed them to around 400 journalists at 107 media organizations around the world. The data was held for more than a year before initial reports were published; the ICIJ promised topublish a full list of companies involved with Mossack Fonseca by May 2016.
#7: Who Has Been Implicated? The Leaders
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Senior politicians from all over the world have been linked, some directly and some indirectly to the Panama Papers. Mauricio Macri, the President of Argentina, Khalifa bin Zayed Al Nahyan, the President of the United Arab Emirates, Petro Poroshenko, the President of Ukraine, King Salman of Saudi Arabia and Sigmundur Davíð Gunnlaugsson, the Prime Minister of Iceland have all been directly named – as well as the family members of Nawaz Sharif, the Prime Minister of Pakistan. Various friends of Vladimir Putin are also listed, as well as the late father of British Prime Minister, David Cameron, leading tospeculation that both have been avoiding tax through association. Away from politics, several famous faces have also been linked, including Argentine footballer Lionel Messi, former UEFA president Michel Platini, film director Pedro Almodovar, actor Jackie Chan, and American business magnate, David Geffen.
#6: Have There Been Immediate Consequences? The Resignations
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The Panama Papers have inspired a series of resignations, including that of the Icelandic PM Gunnlaugson. Within days of the papers going public, Gunnlaugson stood down from his role amid mounting pressure. The documents revealed that he and his wife, Anna Sigurlaug Pálsdóttir, had invested money offshore in 2007, after the sale of Anna’s father’s business. Juan Pedro Damiani, a prominent member of the FIFA Ethics committee, also resigned after being named in the leak. The documents connected Damiani toEugenio Figueredo, the ex-FIFA vice-president currently being investigated for corruption.
#5: What Has the International Response Been? The Investigations
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There have been calls for further resignations in the wake of the scandal, and pressure has increased on governments to reform taxation systems to allow for greater transparency. Britain, France, Australia and Mexico are among nations in which official investigations into potential tax evasion are being planned. FIFA has also launched a preliminary investigation into Damiani, though the JP Damiani legal firm has been quick to deny any wrongdoing or connection with Figueredo. There have been a series of denials issued out of Russia as well, with the Kremlin accusing the US of staging the leak in an attempt to discredit Vladimir Putin ahead of national elections.
#4: How Has This Affected Panama? The Impact
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The story has angered many Panamanians, as they believe that most of the blame for the scandal is being put on their nation, when it affects many. The local newspaper, La Estrella, carried the headline ‘The Panama Papers are a global attack against the financial system’, while an advisor to the foreign ministry described the criticism being aimed at Panama as ‘unfair’ and ‘media sensationalism’. Mossack Fonseca has released its own statement, addressing the data breach. ‘Our industry is not particularly well understood by the public,’ it said, ‘and unfortunately this series of articles will only serve to deepen that confusion.’
#3: Why Are So Few Americans Implicated (So Far)? The Financial Alternatives
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There is a notable absence of American clients on the Mossack Fonseca list. According to Marina Walker Guevara, the deputy director of the ICIJ, however, this ‘doesn’t show that the US is outside of the offshore system – the US is actually a big player.’ One reason why America features less prominently is that secretive banking is possible within America itself, with Business Insider listing Delaware and Wyoming as examples of states in which anonymous companies can be created to shield wealth. Another reason is that the US has strengthened its laws, and increased the severity of punishments, in recent years, so that many tax havens are now wary of American custom because it carries greater risk.
#2: What Is a Tax Haven? The Offshore Accounts
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Tax havens are places where significant amounts of money can be stored without being subjected to the usual levels of tax, often located on small island nations such as the British Virgin Islands or the Bahamas. Some people chooseto live in a tax haven because of the money that can be saved, while others set up ‘shell companies’ based in tax havens as a front for the money they have. A shell company appears to be a legitimate business, but it only really exists as a means of passing money around – it doesn’t actually provide a service, or it provides a very small service at odds with the amount of money being put through it. For shell company owners though, their fortunes are hidden away from the taxman.
#1: Will This Lead to Financial Reform? The Future
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The publication of the Panama Papers has exposed an ugly world truth, and confirmed what many already suspected; while the majority of people pay their taxes fairly, some of the richest have set about dodging their share. Perhaps the most shocking aspect of the Mossack Fonseca leak is that it likely represents just the beginning, with more names expected from this breach, and thousands more supposedly partaking in similar practices but with different firms. The calls for global financial reform can scarcely have been louder, but change could be a long time coming, as the scale of the problem is only just becoming clear. Did these facts get you thinking? To vote for which news story is covered next head over to WatchMojo.com/suggest, and be sure to hit that subscribe button for more newsworthy top tens published every week!
