What are the Panama Papers?

  • By David Lukic
  • Jan 20, 2021

 Exposing delicate secrets and leaking private information has become a top story in the news for the past few years. Everyone remembers Wikileaks and Edward Snowden, he was the one who leaked the Panama Papers. The Panama Papers is another example of data breach which made private information public.

What was the Panama Papers Leak?

The Panama Papers refer to 11.5 million encrypted documents containing confidential, legal, and financial information. This paperwork was created by and held within the Panama-based law firm Mossack Fonseca (the fourth largest offshore legal firm in the world). On April 3, 2016, a man who dubbed himself “John Doe” leaked the information to a German newspaper called Süddeutsche Zeitung (SZ). He stated his reasons for doing so was income inequality. He added that he leaked the documents “simply because I understood enough about their contents to realize the scale of the injustices they described.”

It took the German newspapers a year to decrypt the files before they went public with them. 

panama papers

What are the Panama Papers and What Did it Expose?

The Panama Papers contained financial and legal documents for wealthy individuals and some prominent public officials. They are said to have included 214,000 tax shelters for people in 200 different countries. Some of the documents related to government leaders (12), celebrities, politicians (143), and business professionals, all of them very rich. Vladimir Putin was named in some of them, along with his best friend, Sergei Roldugin (a well-known cellist).

The majority of the documents did not contain any illegal or inappropriate activity. However, in many cases, the paperwork illustrated a trail of shell corporations designed to perpetrate fraud, tax evasion, and the avoidance of international sanctions.

The Panama Papers leak was the largest ever in history, totaling 2.76 terabytes of data. The information spanned from the 1970s until 2016.

As a result of the expose’, Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigns amidst the scuttlebutt surrounding the exposure of his dealing with the law firm. 

According to an article in The Guardian, other notables named were were “Nawaz Sharif, Pakistan’s prime minister, Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president.”

Another embarrassing mention was, “An offshore investment fund run by the father of British prime minister David Cameron avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents to sign its paperwork. The fund has been registered with HM Revenue and Customs since its inception and has filed detailed tax returns every year.”

On May 9, 2016, the entire database of information was posted online in a searchable database by the International Consortium of Investigative Journalists (ICIJ).

panama papers scandal

Famous People Named in the Panama Papers

The enormous list of rich and famous contained in the Panama Papers included some names you will recognize below along those listed here and on Fusion TV:

  • Saudi Arabia Salman of Saudi Arabia, King of Saudi Arabia.
  • Mauricio Macri, former President of Argentina.
  • Silvio Berlusconi, former Prime Minister of Italy.
  • Sergei Roldugin, Arkady Rotenberg and Boris Rotenberg, friends of President Vladimir Putin.
  • Jackie Chan (and his son Jaycee).
  • Simon Cowell of American Idol.
  • David Geffen, Dreamworks co-founder and the founder of Asylum and Geffen records.
  • Stanley Kubrick’s (late director) family.
  • Pedro Almodóvar, the Spanish writer and director.
  • Sarah Ferguson (Fergie).

The Name “Panama Papers”

The name coined for exposure of the Panama Papers scandal, was used because the documents originated in that country. However, Panama officials take issue with it as it implies, they sanctioned or had knowledge of the nefarious goings taking place on Panama soil. Therefore, in some cases, the Panama Papers are instead referred to as the “Mossack Fonseca Papers.”

what are the panama papers

Mossack Fonseca and the Panama Papers

Mossack Fonseca is the fourth-largest offshore legal company in the world. They staff more than 600 people in 42 countries. They specialize in offshore incorporations along with wealth management.  Mossack Fonseca also has dozens of franchises around the world, allowing independent owners to use their brand. They focus in tax havens including Cyprus, the British Virgin Islands, Switzerland, and the British crown dependencies Guernsey, Jersey and the Isle of Man.

As illustrated throughout the documents, Mossack Fonseca worked with dozens of intermediaries such as lawyers, accountants, banks, and trust companies. Often, they would take direction from these third parties rather than deal directly with the owners. However, the paper trail does indicate that a large number of clients reside in China, Russia, and Hong Kong.

In response to the leak, Mossack Fonseca denied commenting but did insist that they comply with all anti-money-laundering laws and carries out thorough due diligence on all its clients.

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