Mossack Fonseca is a Panamanian law firm specializing in
setting up corporate structures within corporate structures to insure maximum
protection from snooping eyes, journalists and governments alike. German-born
Jurgen Mossack and Panamanian-born Ramon Fonseca Mora (pictured above) founded
the practice decades ago. The law firm has operated for almost four decades
without much scrutiny and, according to a spokesman from that law firm, never
accused of any impropriety. That situation has changed… dramatically. Somehow,
a data-dump of a download from that firm’s most private computer servers wound
up being provided to a German periodical, which spread the word from there.
“The 11.5m documents were obtained
by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ)… The ICIJ then
worked with journalists from 107 media organisations in 76 countries,
including UK newspaper the
Guardian, to analyse the documents over a year… The BBC does not
know the identity of the source.” BBC.com, April 4th.
Why does
it matter? The allegations tell us that this legal operation has been a
backbone of obfuscation and misdirection, allowing international miscreants to
avoid international sanctions directed personally at them, and criminals,
tax-avoiding billionaires and corrupt officials to launder money, hide assets
and avoid their local taxing authorities. The structures were a highly
effective path to circumvent treaties, statutes, and international enforcement
administrations, not to mention so many rather focused government regulations
and inquiries targeting Mossack Fonseca’s very clientele and their ilk.
“The International Consortium of
Investigative Journalists reports that the files
reveal that the offshore companies include ‘at least 33 people and companies
blacklisted by the U.S. government because of evidence that they'd been
involved in wrongdoing, such as doing business with Mexican drug lords, terrorist
organizations like Hezbollah or rogue nations like North Korea and Iran.’”
AOL.com, April 4th.
The list
of “legitimate” folks whose names surfaced includes senior players from the
rather disgraced soccer body, FIFA, and more than a few people in or around
some of the most powerful government leaders and business magnates on earth,
including more than a few here in the United States.
In one case, the company offered an American millionaire fake
ownership records to hide money from the authorities. This is in direct breach
of international regulations designed to stop money laundering and tax evasion…
There are
links to 12 current or former heads of state in the data, including dictators
accused of looting their own countries.
More than 60 relatives and associates of heads of state and
other politicians are also implicated.
The files
also reveal a suspected billion-dollar money laundering ring involving close
associates of Russia's
President, Vladimir Putin.
Also mentioned are the
brother-in-law of China's
President Xi Jinping; Ukraine President
Petro Poroshenko; Argentina President Mauricio Macri;
the late father of UK Prime
Minister David Cameron and three of the four children of Pakistan's Prime Minister Nawaz Sharif.
The documents show that Iceland's Prime Minister, Sigmundur Gunnlaugsson,
had an undeclared interest linked to his wife's wealth. He is now facing calls
for his resignation.
The
scandal also
touches football's world governing body, Fifa.
Part of the documents suggest
that a key member of Fifa's ethics committee, Uruguayan lawyer Juan Pedro
Damiani, and his firm provided legal assistance for at least seven offshore
companies linked to a former Fifa vice-president arrested last May as part of
the US inquiry into football corruption. BBC.com.
We’ve missed the level of international focus on this
rather astounding set of revelations, because of the press’ obvious obsession
with our election process. But the implications for standing governments,
important government leaders and millionaires all over the earth are
devastating, likely to result in myriad firings, resignations, prosecutions for
some time to come. The information is so vast that it will take over a year to digest
and analyze. The Prime Minister of Iceland has already announced his
resignation based what these Panama papers have disclosed. Investigative
authorities the world over have begun pouring over these documents, and you can
bet there will be lots of prosecutions, resignations and financial failures
based on these efforts.
“It is
the biggest leak in history, dwarfing the size of those released by the Wikileaks
organisation. In all, the details of 214,000 entities, including companies, trusts and foundations, were
leaked…The information in the documents dates back to 1977, and goes up to
December last year. Emails make up the largest type of document leaked, but
images of contracts and passports were also released.” BBC.com.
And when
it comes to the rich, those one-percenters, it seems that tax dodging is simply
a way of life: “Economist Gabriel Zucman at the University of California,
Berkeley, has estimated that ‘roughly 8% of the global
financial wealth of households is held in tax havens, about $7.6 trillion.’
Other credible studies put the number much higher — up to $32 trillion. Most of
Mossack Fonseca's shell companies involved providing that service to people….
In other words, the firm is just a cog in a global machine that's been designed
to ensure the global 1% that it can keep as much of its wealth as possible.”
AOL.com. Not that there aren’t enough loopholes in our own tax code for the
wealthy. The rest of us just pay taxes.
When the
dust settles, there may be some major changes in who will be the remaining
power brokers around the world. While populist dictators like Vladimir Putin
can scoff at the results, most criminal kingpins and tainted officials won’t
get off so lightly. This is a much bigger story than most Americans can
imagine. Stay tuned.
I’m Peter Dekom, and this is actually the biggest
corruption scandals ever to surface.
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