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A trove of documents from a Panamanian law firm is rattling politics around the world. After being leaked to a German newspaper, an international consortium of over 100 newspapers spent a year analyzing the data and the results provide some troubling— though not unexpected — insights into international money flows. High dudgeon over tax cheats and conflicts of interest have already claimed prominent scalps, but those concerns must be leavened by the acknowledgement that not all secrets are illegal and shell companies can play a valuable role.

Some 11.5 million documents, the equivalent of 2.6 terabytes of data, were taken from the files of Mossack Fonseca, a Panama-based law firm that specializes in providing international corporate services worldwide. The Suddeutsche Zeitung shared them with the International Consortium of Investigative Journalists, a nonprofit organization and they, along with dozens of journalists around the world, explored the data.

The information provided insight into nearly 215,000 offshore shell companies and more than 14,000 clients. That list included 143 politicians and their families and close associates and 12 world leaders such as the presidents of Argentina and Ukraine, the prime ministers of Iceland, the United Kingdom and Pakistan, along with the king of Saudi Arabia.

The most prominent victim of the revelations thus far has been Iceland Prime Minister Sigmundur David Gunnlaugsson, who resigned after it was revealed that he had set up a company in the British Virgin Islands with a partner, whom he later married. That company held about $4 million in bonds from three major Icelandic banks, which posed a potential conflict of interest since he had, as prime minister, negotiated the deal to settle their bankruptcy. Gunnlaugsson denied any conflict, noting that he had sold his interest to his wife (for $1) and paid taxes on any income from the holding.

British Prime Minister David Cameron admitted that he had profited from his father’s investments in overseas shell companies but said the dealings were done before he became prime minister and that neither he nor his family would have any future income from them.

Close associates of Russian President Vladmir Putin were named in the documents, as were individuals close to Syrian President Bashar Assad, along with eight current and former members of China’s Politburo and the families of top Chinese officials. Relatives of the current and former prime ministers of Malaysia were also identified.

A Russian spokesman noted that Putin was not involved and called the leak a Western-orchestrated propaganda campaign to smear Russia and a plot to destabilize the country. China has not officially responded to the charges but coverage of “the Panama Papers” has been restricted in the Chinese media. Given the scale of the anti-corruption campaign that is being waged in China, the revelations — and the restrictions on their reporting — are no surprise. The Chinese authorities are likely to be using the information, however, in their crackdown against illegal behavior and attempts to hide ill-gotten gains.

Ironically, the president of the Chilean branch of Transparency International, an international nongovernmental organization that is devoted to exposing shadowy practices and fighting corruption, was linked to five offshore organizations. While denying any wrongdoing, he too stepped down. There were about 400 individuals and companies with addresses in Japan among the clients of Mossack Fonseca, but thus far none of the names are public officials.

While the lawyers at Mossack and Fonseca deny any wrongdoing — and establishing shell companies is perfectly legal — it is hard to miss the intent behind many of those companies. For some, they are designed to shield income from taxes. In other cases, they are intended to hide not only tax liabilities but ownership and control. The most obvious case is that of Rami Makhlouf, a first cousin of Syria’s president who is on the U.S. and U.K. sanctions list. His offshore companies allowed him to circumvent those sanctions and continue to do business even in London.

A similar cloud hangs over the dealings of Sergei Roldugin, a cellist who is a close personal friend of Putin. While his primary employment has been as a musician and conductor at St. Petersburg’s Mariinsky theater, he nevertheless moved an estimated$2 billion through offshore companies he controlled and managed to amass a fortune reckoned to be worth $350 million. There is widespread speculation that Roldugin is acting on behalf of others; the Kremlin believes that the attacks aimed at him are in reality aimed at Putin.

It is tempting to dismiss all shell companies as vehicles for tax avoidance, money laundering or drug trafficking. But those businesses can also be used to shield assets from corrupt governments, where the rule of law is not enshrined and private property is not protected. Shell companies not only protect against extortion, but also against attempts by authoritarian governments to strip their opponents of assets through the court system. Those governments claim such behavior is no less illegal than attempts to hide income from tax scrutiny.

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