Before Monday, I like most of the human beings on the planet, had not heard of Mossack Fonseca, a law firm based out of Panama, that makes the Firm in John Grisham’s novel, seem like a cuddly toy. Mossack Fonseca was very discerning when it came to clients, they had to be rich. Everyone from sports stars, to film stars, Heads of States to drug dealers; from money launderers to arms dealers – was on their client list. The Firm essentially helped the rich, the richer and the richest to create dummy companies, hide paper trails, and evade taxes.
Someone with a conscience, and with access to the firm’s data, turned whistle blower and handed over 2.6 TB of data made up of 11.5 million files – includes more than 4.8 million emails, 3 million database files, and 2.1 million PDFs- to a journalist with the German paper Süddeutsche Zeitung. Süddeutsche Zeitung worked with the International Consortium of Investigative Journalists (ICIJ) to sift through the mountain of paperwork. Journalists from across the world, collaborated on following through and verifying what was in the paperwork.
Around 400 journalists from more than 100 media organizations in over 80 countries have taken part in researching the documents.
And, remarkably, in an operation with so many journalists working across so many countries, and with so much at stake, there wasn’t a single leak. Had one journalist in this group had leaked information, it is likely that the accounts and companies would have miraculously shut down, and all incriminating data erased.
On Monday, the #PanamaPapers investigation broke on select media outlets across the world. It seems that the corporations, and High Net-worth Individuals (HNI’s) have been scamming their government’s of billions of dollars in tax revenue, ably aided by lawyers, bankers, accountants and others in position of power. The system that is supposed to be the check and the balance, hopelessly subverted by greed.
One of the things that strikes one, as you go through the various investigative articles from various sources, is the level of complexity in this entire operation. This is data that goes back 40 years, and a fairly established way of hiding ill gotten gains. This kind of massive evasion could not be possible without a certain kind of nod nod wink wink, by those who make and implement laws. In many countries those who make the laws, are the one’s who have been named. The biggest amongst those names Vladamir Putin, 2 billion dollars . David Cameron’s father was the client of the Firm, The Icelandic PM (who has since resigned) had set up a company in the British Virgin Islands, that was transacting in Icelandic Debt, while he was negotiating with the banks on the debt, in his capacity as head of government; Nawaz Sharif has been named, as has the King of Saudi Arabia. Mossack Fonseca has helped all of them, and many more, in setting up companies in 22 jurisdictions across the world. This is the opening of the proverbial Pandora’s box.
One of the most telling comments i read on this
that a whole massive amount of the world’s financial and political corruption got dumped onto the Intertoobz, certainly enough to give more weight to the possibility that every political system in the world—even the nakedly authoritarian ones—is hopelessly rigged, and that the marvelous new world of the miraculous global economy is an even bigger thieves’ paradise than you, me, or even Jamie Dimon thought it was.
Most people, in most parts of the world, do not trust their Government. That is also because they don’t trust the politicians who run their governments. And, they most likely, trust corporations even less. In a world, where the elite are already facing a massive trust deficit with the remaining 99%, this could not have come at a worse time. Anger at the ‘fat cats’ living off the hard work and taxes of the average citizen, is already on the rise. We have been seeing manifestations of this across the world in the last 6-7 years. This is going to make it worse.
Finally, Two points.
- Not too many Indian names on that list so far. But, a) it is early days; b) Mauritius is nearer
- Mossack Fonseca is the 4th largest firm in this space. Which means there are 3 more with even more data (and clients)
I hope the whistleblower is safe, secure and remains completely anonymous, forever
Image source – here.
Follow my flipboard magazine Panama Papers, where I curate some of the more interesting reads on the topic.