The Panama Papers
The International Consortium of Investigative Journalists publishes today a searchable database that strips away the secrecy of nearly 214,000 offshore entities created in 21 jurisdictions, from Nevada to Hong Kong and the British Virgin Islands. The data, part of the Panama Papers investigation, is the largest ever release of information about offshore companies and the people behind them. This includes, when available, the names of the real owners of those opaque structures. The database also displays information about more than 100,000 additional offshore entities ICIJ had already disclosed in its 2013 Offshore Leaks investigation.
ICIJ is publishing the information in the public interest. The new data that ICIJ is now making public represents a fraction of the Panama Papers, a trove of more than 11.5 million leaked files from the Panama-based law firm Mossack Fonseca, one of the world’s top creators of hard-to-trace companies, trusts and foundations. ICIJ is not publishing the totality of the leak, and it is not disclosing raw documents or personal information en masse. The database contains a great deal of information about company owners, proxies and intermediaries in secrecy jurisdictions, but it doesn’t disclose bank accounts, email exchanges and financial transactions contained in the documents.
In all, the interactive application reveals more than 360,000 names of people and companies behind secret offshore structures. As the data are from leaked sources and not a standardized registry, there may be some duplication of names.The data was originally obtained from an anonymous source by reporters at the German newspaper Süeddeustche Zeitung, who asked ICIJ to organize a global reporting collaboration to analyze the files.
More than 370 reporters in nearly 80 countries probed the files for a year. Their investigations uncovered the secret offshore holdings of 12 world leaders, more than 128 other politicians and scores of fraudsters, drug traffickers and other criminals whose companies had been blacklisted in the US and elsewhere.
Their status as outlaws or public officials didn’t prevent them from obtaining shell companies in locales where secrecy laws often make it impossible for prosecutors and other investigators to trace their assets.
The files revealed, for example, that associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies.
The reaction to the Panama Papers was immediate and viral.
Outraged citizens took to the streets in Reykjavik, Malta and London while the hashtag #panamapapers trended on Twitter for days after the story broke on April 3. The prime minister of Iceland resigned over the British Virgin Islands company he co-owned with his wife, while other world leaders scrambled to explain their secret holdings. It took UK’s Prime Minister David Cameron three days to publicly acknowledge he had profited from an investment fund, created by his father, that was incorporated in Panama and managed in the Bahamas. In Spain a minister resigned after being caught in a series of lies about his connections to offshore, and in Uruguay police arrested five individuals suspected of laundering money for a powerful Mexican drug cartel.
The Panama Papers underscore the fundamental injustices and inequalities created by the offshore system, media commentators and political leaders say.
“When taxes are evaded, when state assets are taken and put into these havens, all of these things can have a tremendous negative effect on our mission to end poverty and boost prosperity,” Jim Yong Kim, the president of the World Bank, said as he opened the spring meetings of the World Bank and IMF in Washington soon after ICIJ and more than 100 other news organizations began revealing the results of the media collaboration’s investigation.
President Barack Obama, meanwhile, pointed out that the biggest problem was that many of the schemes revealed by the Panama Papers were legal. “It’s not that they’re breaking the laws, it’s that the laws are so poorly designed,” he said.
The revelations reignited the debate about the need for public registries in which information about who ultimately controls a company be accessible to all. The UK has made disclosure of beneficial owner data mandatory and public, but British overseas territories such the British Virgin Islands and the Cayman Islands, some of the busiest offshore havens, have agreed to share that information only when it is requested by law enforcement.
Citing the Panama Papers, the US government also announced Thursday that it has sent legislation to Congress to create a centralized federal registry of the actual owners of any newly created company. The registry would help law enforcement authorities ferret out the real people behind anonymous companies used in money laundering and other wrongdoing.
On Friday, the anonymous leaker of the Panama Papers, known only as “John Doe,” spoke publicly for the first time in a written statement and called out for concrete steps to combat tax havens. “In the European Union, every member state’s corporate register should be freely accessible, with detailed data plainly available on ultimate beneficial owners,” the source wrote. Doe added that the US “can clearly no longer trust its fifty states to make sound decisions about their own corporate data.”
The searchable database that ICIJ publishes today allows users to explore the networks of companies and people that used – and sometimes abused – the secrecy of offshore locales with the help of Mossack Fonseca and other intermediaries. The leaked data covers nearly 40 years, from 1977 through the end of 2015.
The data, which includes postal addresses, displays links to more than 200 countries and territories, from China to Chile. Users can filter the information by country and by offshore jurisdiction. They can also explore the role of banks, law firms and other gatekeepers of the financial system in facilitating the creation of offshore companies for high net worth individuals. For the first time, they can see details about shadowy Panamanian private foundations, including when available information about who controls them.
While the interactive application opens up a world that has never been shown in this much detail, not every owner of a company that appears in the Panama Papers shows up in the public database. This is because ownership information is often buried in emails, power-of-attorney letters and internal notes of Mossack Fonseca employees and cannot easily be extracted in a systematic manner. In addition, Mossack Fonseca often failed to collect the necessary information about the ultimate owners of companies, relying instead on banks and other intermediaries to keep track of that essential data.
Still, it is expected that Panama Papers revelations will continue to surface as regulators and ordinary citizens from around the globe probe the newly available data and find new connections that may have escaped reporters. Concerned citizens are encouraged to share tips with ICIJ and the Panama Papers journalists who continue to investigate the documents. The full dataset is also available for download.
“Transparency is not going to move backward,” Kim said in his World Bank spring meetings remarks, warning that those trying to avoid taxes or steal money from public treasuries should be “very careful” because they will eventually be tracked down. “The world is only going to become more and more transparent as we move forward.”
The Panama Papers are a leaked set of 11.5 million confidential documents that provide detailed information about more than 214,000 offshore companies listed by the Panamanian corporate service provider Mossack Fonseca, including the identities of shareholders and directors of the companies. The documents show how wealthy individuals, including public officials, hide their money from public scrutiny. At the time of publication, the papers identified five then-heads of state or government leaders from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates; as well as government officials, close relatives, and close associates of various heads of government of more than forty other countries. The British Virgin Islands was home to half of the companies exposed and Hong Kong contained the most affiliated banks, law firms and middlemen. While the use of offshore business entities is not illegal in the jurisdictions in which they are registered, during their investigation reporters found that some of the shell companies may have been used for illegal purposes, including fraud, drug trafficking, and tax evasion.
An anonymous source using the pseudonym “John Doe” made the documents available in batches to German newspaper Süddeutsche Zeitung beginning in early 2015. The information from this unremunerated whistleblower documents transactions as far back as the 1970s and eventually totaled 2.6 terabytes of data. Given the scale of the leak, the newspaper enlisted the help of the International Consortium of Investigative Journalists (ICIJ, based in Washington, D.C.), which distributed documents for investigation and analysis to some 400 journalists at 107 media organizations in 76 countries. The first news reports based on the papers, and 149 of the documents themselves, were published on April 3, 2016. The ICIJ promises to publish a full list of companies involved in early May 2016.
Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.
Partner of Mossack Fonseca While no formal definition exists, a jurisdiction is typically considered an offshore financial center, sometimes less formally known as a tax haven, when its banking infrastructure:
- Primarily provides services to people or businesses who are not its residents
- Require little or no information disclosures before doing business
- Offer low taxes Their customers may require offshore accounts for any of a number of reasons, some entirely legal and ethically irreproachable.
However “the most obvious use of offshore financial centers is to avoid taxes”, as journalists and researchers such as The Economist and the Tax Justice Network have previously remarked. Igor Angelini, head of Europol‘s Financial Intelligence Group, also recently said that the shell companies used for this purpose also “play an important role in large-scale money laundering activities” and also corruption: they are often a means to “transfer bribe money”.
Law firms generally play a central role in offshore financial operations. Mossack Fonseca, the Panamanian law firm whose work product was leaked in the Panama papers affair, is one of the biggest in the business. Its services to its clients include incorporating and operating shell companies in friendly jurisdictions on their behalf. They can include creating “complex shell company structures” that, while legal, also allow the firm’s clients “to operate behind an often impenetrable wall of secrecy”. The leaked papers detail some of their intricate, multi-level and multi-national corporate structures. Mossack Fonseca has acted on behalf of more than 300,000 companies, most of them registered in financial centers which are British Overseas Territories. The firm works with the world’s biggest financial institutions, including Deutsche Bank, HSBC, Société Générale, Credit Suisse, UBS, Commerzbank and Nordea. The Tax Justice Network called Panama one of the oldest and best-known tax havens in the Americas, and “the recipient of drugs money from Latin America, plus ample other sources of dirty money from the US and elsewhere”, according to The Conversation. Panama has been repeatedly listed in the recent years as a jurisdiction does not cooperate with international tax transparency initiatives.[clarification needed]
Leak timeline and logistics:
More than a year before the April 2016 release of the leaked documents, an anonymous source, who identified himself as “John Doe” offered German newspaper Süddeutsche Zeitung (SZ) large caches of sensitive banking documents. The newspaper accepted and in the space of a year received 2.6 terabytes of data made up of Mossack Fonseca documents about 214,488 offshore entities with ties to public officials. The leaked documents number 11.5 million and were created between the 1970s and late 2015 by Mossack Fonseca. At his insistence, reporters communicated with the source over encrypted channels only. Anonymity and an understanding that they would never meet face-to-face were only his conditions for providing the documents. He said his life was in danger but declined remuneration. “There are a couple of conditions,” he said. “My life is in danger, we will only chat over encrypted [lines]. No meeting ever.”
According to Süddeutsche Zeitung reporter Bastian Obermayer, the source said that he decided to leak the data because he thought that Mossack Fonseca acted unethically. “The source thinks that this law firm in Panama is doing real harm to the world, and the source wants to end that. That’s one of the motivations,” said Obermayer. The International Consortium of Investigative Journalists (ICIJ) helped organize the research and document review once Süddeutsche Zeitung realized the scale of the footwork required to validate the authenticity of leak. Additional stories based on this data are in the works, and the full list of companies is to be released in early May 2016. They enlisted reporters and resources from The Guardian, the BBC, Le Monde, SonntagsZeitung, Falter, La Nación and German broadcasters NDR and WDR, and Austrian broadcaster ORF, and eventually many others. The sheer quantity of leaked data greatly exceeds the Wikileaks Cablegate leak in 2010 (1.7 GB), Offshore Leaks in 2013 (260 GB), the 2014 Lux Leaks (4 GB), and the 3.3 GB Swiss Leaks of 2015. In comparison, the 2.6 TB of the Panama Papers equals 2,600 GB.
About 400 journalists from 107 media organizations in 80 countries at some point received and analyzed leak documents detailing the operations of the law firm and its clients’ shell companies After more than a year of reporting, the first news stories based on the documents were published on 3 April 2016, along with 149 of the documents themselves. The data concerned the operations and workings of some 214,000 shell companies. Reporters sorted the documents into a huge file structure containing a folder for each shell company, which held the emails, contracts, transcripts, and scanned documents Mossack Fonseca had generated while doing business with the company or administering it on a client’s behalf. Some 4.8 million leaked files were emails, 3 million were database format files[clarification needed], 2.2 million PDFs, 1.2 million images, 320,000 text files, and 2242 files in other formats.
Journalists indexed the documents, using open software packages Apache Solr and Apache Tika, and accessed them by means of a custom interface built on top of Blacklight. Süddeutsche Zeitung reporters also used Nuix for this, proprietary software donated by an Australian company also named Nuix. Using Nuix, SZ reporters also performed optical character recognition (OCR) processing on the millions of scanned documents, and the data they contained became both searchable and machine-readable. Most reporters then used Neo4J and Linkurious to extract individual and corporate names from the documents for analysis, but a few used Nuix for this as well. They then cross-matched the compiled lists of people against the processed documents. In the next step the reporters analyzed their information, trying to connect people, roles, monetary flow and structure legality.
Mossack Fonseca notified its clients on 1 April 2016 that it had sustained an email hack. When the document leak became public, the firm dismissed any connection to the email hack and described it[clarification needed] as limited in scope. ICIJ had already had the leaked data for more a year by then, so possibly[improper synthesis?] the two were indeed entirely separate events. Data security experts noted, however, that the company had not been encrypting its emails and furthermore seemed to have been running a three-year-old version of Drupal with several known vulnerabilities.
‘Russia poses threat to US designs for global domination’
READ MORE: Pentagon chief seeks reforms, calls Russia ‘No. 1 strategic threat’. Carter said reforms were necessary to make the US military more “agile” and able to address the five strategic challenges it faces, which he identified as ‘Russia, China, North Korea, Iran and terrorism.’
Gerry Sussman (GS): I think Russia, just as the Soviet Union in an earlier era, serves as a kind of unifying theme for putting together a very disunified foreign policy around a common target. We can see this again and again. I was looking at the ‘Panama Papers’ reporting on CNN and the main focus was on President Putin rather than some of the American allies; Mr. Poroshenko in Ukraine, who has been actually listed where as you know Putin is not even listed, but there is an inference made about his associates, is the word they use. So, I think it serves as a unifying force to build a kind of a new Cold War consensus, to give some semblance of direction to American foreign policy where there really isn’t any.
The US has actually lost quite a bit of power over the years in the Middle East and Eastern Europe, and I think it’s just a way of creating an old bogeyman in the person of President [Vladimir] Putin and in Russia itself. And I think it is also because various US agencies involved in foreign policymaking – the State Department, the CIA, the military – are all in disarray with regard to working closely together and having one voice. I think it is also a reflection of this weakness of this particular (US) president who is in power. He refers to other agencies rather than showing political leadership in giving some direction to US foreign policy.
RT: Specifically, what threat does the Pentagon think Russia poses to the US? Read more
RT: The US is fighting ISIS in Syria and Obama reiterated during the recent nuclear summit how dangerous the group is. Why is terrorism the last on the list of threats mentioned by the Pentagon?
GS: It’s instrumental. Terrorism comes in many forms and manifestations. It shows up here, it disappears there. But the long-term interest is global power. That’s at the top of the list. And whatever the reason maybe – whether it’s fighting ISIS, whether it is defending NATO’s interests here or there – in the long-term it is global interests and that’s the central feature of the American foreign policy agenda. So, it doesn’t surprise me that they would de-focus from time to time on ISIS, even though rhetorically terrorism is at the forefront of the rhetoric. To the extent that Russia actually plays a central role in defeating terrorism, as they did in their support for Syria and the recent defeat in Palmyra, this is really downplayed. This interferes with and interrupts the whole discourse about American superpower presence in the world. And that would not be tolerated. You would have to look at it structurally in terms of the role the mass media plays in this and the common interest that corporate media has with the state.
GS: It represents a threat to America’s global interests, to its hegemony around the world. This is the mindset of the elites in American foreign policy decision making: Anything that constitutes… a balance of power approach, which I think is generally what Russia is pursuing, this constitutes a threat to a hegemonic power that seeks global domination wherever and whenever it has interests and its interest are military, oil, political interest in general, the interest of the transnational community, and the defense of the Israeli state. There are multiple interests and anything that stands in the way of disrupting US hegemony in the pursuit of these interests constitutes a threat.
“Unprecedented Leak” Exposes Criminal Financial Dealings World’s Wealthiest