Brilio.net/en - After a year-long investigation, global journalists have revealed how a secret network of the worlds richest and powerful leaders use offshore tax havens to hide their vast wealth, launder money, dodge sanctions and evade taxes, despite the required legal documents were in place to prevent those things from happening.
A cache of 11 million internal documents from Panamanian law firm Mossack Fonseca, referred as Panama Papers, revealed secret offshore holdings from 128 politicians and public officials across the globe, including 12 current and former world leaders, Mashable reported.
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Being involved in offshore business is not illegal. For instance, its a strategy of some Eastern Europe's elite to protect their assets from company raiders. But the use of offshore tax havens in the manner and to the extent, of which it has happened as reported by the Panama Papers, it sparking serious controversy.
Nation leaders and influential people snared by the leaks
The 2.6 terabytes sized files expose how associates of Russian President Vladimir Putin secretly bootlegged as much as US$2 billion through banks and shadow companies at his personal decree. The documents also reveal how Ukrainian President Petro Poroshenko increased his wealth after being elected in 2014 while his soldiers were dying in eastern Ukraine.
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The Panama Paper also indicate secret offshore companies linked to the families and associates of the former president of Egypt, Hosni Mubarak, Libya's former leader Muammar Gaddafi and the president of Syria, Bashar al-Assad. They also reveal other companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the Azerbaijan's president.
The documents concluded that at least 33 influential peoples secrets and some companies blacklisted by the U.S. government due to evidence of involvement in Mexican drug cartels businesses, extremist organizations like Hezbollah or rogue countries like North Korea and Iran.
National Security Agency (NSA) whistleblower Edward Snowden called the Panama Papers the biggest leak in the history of journalism on Twitter. It surpassed the U.S. diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents revealed by Snowden himself in 2013.
The Mossack Fonseca documents were released on Monday (4/4) at 2:00 pm and within minutes, the hashtag #PanamaPapers was trending on the social network. They were first leaked to German newspaper Sddeutsche Zeitung more than a year ago. Investigative journalists in countries around the word have been going through them ever since.
"The source wanted neither financial compensation nor anything else in return, apart from a few security measures," Sddeutsche Zeitung said of its confidential source.
The newspaper shared the documents with the International Consortium of Investigative Journalists (ICIJ) and the Organized Crime and Corruption Reporting Project (OCCRP), which then launched a global reporting effort involving 107 media companies in 78 countries.
See how the investigation was carried out in this video:
Eastern European leaders, Putin and Poroshenko in particular, were explicitly featured in the documents. But the leaks also snare tie several other leaders, from Iceland's prime minister to secret offshore companies and questionable deals.
The revelation and fallout
As explained by ICIJ, the Panama Papers show failures in following legal requirements committed by banks, law firms and other offshore players that make sure that their clients are not involved in criminal enterprises, tax dodging or political corruption. The files show that offshore middlemen have securedthemselves and their clients by concealing suspect transactions or manipulating official records.
As reported by Mashable, some revelations include:
1. Cellist Sergei Roldugin, who happens to be Putins close friend and godfather to his child, agreed to be a front for the Russian president to launder US$2 billion to offshore accounts. The Panama Papers also reveal that Putin's friends and associates have made millions from their association with the president. The operation was run by Bank Rossiya, which is under American and European sanctions following Moscow's annexation of Crimea.
2. Poroshenko became the sole shareholder in an offshore British Virgin Islands company while his military force was surrounded and hundreds of troops were slaughtered by Russian forces in the eastern town of Ilovaisk in August 2014.
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3. Star footballer Lionel Messi and his father Jorge Messi were found to be owners of Panama company Mega Star Enterprises Inc. The discovery is an addition to a list of shell companies known to be linked to the Argentinian star.As he denied to news, his offshore dealings are currently the target of a tax evasion case in Spain.
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4. Iceland Prime Minister Sigmundur Dav Gunnlaugsson have been discovered to be using offshore tax havens, and about to face calls in parliament for a snap election this week, after the leaks emerged.
The files also contain details of offshore dealings conducted by British Prime Minister David Cameron's late father. Cameron has led the push in Britain for tax-haven reform.
.@poroshenko's office tells me no statement tonight. Unlikely we'll hear from the Ukrainian president on #panamapapers until Monday.
Christopher Miller (@ChristopherJM) April 3, 2016