What leaked pa­pers mean for Kenya

Daily Nation (Kenya) - - OPINION - Dr Kanani is a Kenyan con­sul­tant in or­gan­i­sa­tional lead­er­ship and pub­lic pol­icy based in the United States. Lerol­uno@hot­mail.com

Aformer head of the pub­lic ser­vice, Dr Sally Kos­gei, has been men­tioned in a new wave of off­shore leaked doc­u­ments, The Par­adise Pa­pers. The pa­pers in­di­cate that Dr Kos­gei, the Taita-taveta Univer­sity chan­cel­lor, used a Mau­ri­tius-based com­pany to buy apart­ment build­ings worth more than Sh100 mil­lion in cen­tral Lon­don.

Last year, an­other set of doc­u­ments, pop­u­larly known as “the Panama Pa­pers”, im­pli­cated an­other 191 wealthy Kenyans in stash­ing away money on the is­land of Panama. Those named in­cluded for­mer Imperial Bank chair­man Al­nashir Popat, a for­mer man­ag­ing di­rec­tor of the Na­tional

Oil Cor­po­ra­tion Kenya, Mr Mwen­dia Nyaga, and for­mer Deputy Chief Jus­tice Kal­pana Rawal.

Jus­tice Rawal is be­lieved to have trans­acted more than Sh250 mil­lion worth of prop­erty across Europe in 2012. In April last year, some lead­ing news­pa­pers pub­lished in­for­ma­tion linked to doc­u­ments leaked from one of the largest off­shore law firms based in Panama. The con­fi­den­tial doc­u­ments de­tail­ing dirty busi­ness deals were traced back to the 1970s and were held by Mos­sack Fon­seca, a Pana­ma­nian law firm.

They in­cluded more than 11 mil­lion doc­u­ments, emails, names of di­rec­tors of for­eign com­pa­nies and con­tract ne­go­ti­a­tions. They were by far the largest data leak in his­tory and they be­came known as the “Panama Pa­pers.” His­tor­i­cally,

Panama has been known as the cor­ner­stone of world trade. The coun­try moves thou­sands of ships through the Canal, but the leaks also show that it is en­gaged in a web of cor­rup­tion and a lot of il­le­gal cash. Panama is not just a tax-free zone, but also one of the big­gest tax havens in the world. Oth­ers in­clude the Bri­tish Vir­gin Is­lands and the Ba­hamas.

So, how did the pa­pers leak? A stranger called into the of­fices of a Ger­man news­pa­per and said that he had en­crypted data to share but his life would be in dan­ger if his iden­tity was re­vealed. The stranger agreed to chat on en­crypted files with no face to face meet­ing. He asked for no com­pen­sa­tion, say­ing that his life would be ful­filled if the world found out that a Pana­ma­nian law firm was be­hind one of the world’s big­gest fi­nan­cial crimes.

The doc­u­ments were ob­tained from a law firm of Jür­gen Mos­sack and Ra­mon Fon­seca in Panama City. It would take one news­pa­per 25 years to read through all the doc­u­ments and make some sense. The data in­cluded more than 240,000 com­pa­nies, trusts and foun­da­tions with 14,000 clients world­wide. So, the Ger­man news­pa­per de­cided to share with other news or­gan­i­sa­tions across the world. The col­lab­o­ra­tion across 40 coun­tries and 400 in­ves­tiga­tive jour­nal­ists took about 12 months to read through the doc­u­ments and pub­lish co­or­di­nated sto­ries. The leaks were pub­lished on April 16 last year.

How­ever, Mr Fon­seca, co­founder of the law firm in an in­ter­view fol­low­ing the leak, de­fended the busi­ness, stat­ing that “we take care only of the le­gal part,” al­lud­ing to the fact that it is dif­fi­cult to sep­a­rate crim­i­nals from other in­di­vid­u­als who seek ser­vices.


The doc­u­ments re­vealed how the world’s pow­er­ful men and women use off­shore ac­counts to con­duct busi­ness, avoid­ing pay­ing taxes. It has been ar­gued that peo­ple open these kinds of busi­nesses for gen­uine rea­sons such as pro­tect­ing their iden­tity against kid­nap­pings, cur­rency fluc­tu­a­tions, com­pe­ti­tion and for pri­vacy. How­ever, crim­i­nals, bil­lion­aires, politi­cians and other cor­rupt in­di­vid­u­als use these priv­i­leges to con­ceal their earn­ings and en­gage in money laun­der­ing.

To an or­di­nary Kenyan, cor­rupt deals across bor­ders may not make sense. But it is worth men­tion­ing that the Kenyans named avoid pay­ing taxes at home. The leaks have be­come pub­licly em­bar­rass­ing to many for­eign lead­ers. Those men­tioned, in­cluded the lead­ers of Rus­sia, Ukraine, United King­dom, Ice­land and Ar­gentina and sports and movie stars. How­ever, the blame lies in the hands of pow­er­ful na­tions such as the United States that have re­fused to join the Com­mon Re­port­ing Stan­dard (CRS).

The law was for­mu­lated for trans­parency within the Or­gan­i­sa­tion of Eco­nomic Cor­po­ra­tion and Devel­op­ment (OECD) coun­tries to stream­line tax re­port­ing sys­tems across the mem­ber coun­tries. It was founded so that coun­tries share tax data to com­bat global tax eva­sion. Pres­sure is mount­ing on gov­ern­ments to al­low global tax re­form, with in­ves­ti­ga­tions into tax eva­sion go­ing on in sev­eral coun­tries.

JEFF KANANI Pres­sure is mount­ing on gov­ern­ments to al­low global tax re­form, with in­ves­ti­ga­tions into tax eva­sion go­ing on in sev­eral coun­tries.”

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