Info leak sends leaders scurrying
‘Panama Papers’ name government leaders, politicians, businesses
WASHINGTON — From Vladimir Putin’s best friend to the prime minister of Iceland, many of the world’s rich and powerful were scurrying for cover Monday following the release of the so-called Panama Papers, possibly one of the largest leaks of secret intelligence ever and one that apparently reveals a vast network of financial shenanigans.
The documents from a Panamanian law firm were obtained by several international media outlets and published over the weekend. They appear to show how a who’s who in the global political and business elite — and maybe drug traffickers — have mounted complex systems to hide money in offshore accounts.
By itself, it is not illegal to hold money overseas. But the implication is that many of those mentioned evaded taxes or that money illicitly obtained was laundered through such clandestine networks.
As the scandal widened, country after country, as well as many of the prominent figures mentioned, issued denials and statements of indignation. Activist groups, meanwhile, demanded investigations into the tax havens provided by countries such as Panama and the Seychelles.
The ability to move and stash money secretly is the key weapon in any prosperous illicit business. It allows tyrants to loot nations, tycoons to rob consumers. Laundered money is the fuel that keeps organized crime, smugglers and drug cartels running smoothly and profitably.
The Panama Papers could provide investigative leads to authorities, as well as journalists, for months, if not years.
The International Consortium of Investigative Journalists, which took the lead in examining and publishing more than 11 million documents dating to 1977, said the information appears to show that the law firm Mossack Fonseca established shell companies and offshore accounts to help hundreds of people move their money.
Twelve current or former top government leaders, 61 of their associates, other politicians and thousands of businesses are named in the documents, the group said. An anonymous source first leaked the papers to the Sueddeutsche Zeitung newspaper in Munich, Germany, last year, and it in turn shared them with a number of outlets. The revelations were explosive.
There was no official reaction in China to allegations that relatives of President Xi Jinping were squirreling away money; it appeared the reports were being censored on the Chinese mainland.
Iceland’s prime minister, Sigmundur Gunnlaugsson, rejected opposition calls to resign after his wife’s name surfaced in the documents.
Two of Mexico’s leading television executives were among those named, along with a major construction tycoon, Juan Armando Hinojosa Cantu, whose work for President Enrique Peña Nieto already sparked local allegations of corruption. There was no immediate response from Hinojosa.
France and Australia immediately opened investigations into possible money laundering and tax evasion.
As for Putin, associates were reportedly tied to more than $2 billion in secret loans, among them Sergei Roldugin, an unassuming cellist described as Putin’s best friend.
“The evidence in the files suggests Roldugin is acting as a front man for a network of Putin loyalists — and perhaps for Putin himself,” the ICIJ said.
Transparency International, a nonprofit organization that studies corruption, whistleblowing and secret financial practices globally, praised the document dump for “shedding light into the murky world of secret offshore companies.” Companies can incorporate in the U.S. without revealing sources of money.