What Are The Panama Papers? The Biggest Leak In History Just Got Real
Süddeutsche Zeitung, a German newspaper based out of Munich, released on Tuesday the results of a year-long investigation into internal data from the Panamanian company Mossack Fonseca, leaked by a whistleblower. The 2.6 terabyte cache contains emails, databases, PDFs, text files, and more, but what exactly are the Panama Papers and why should you care? The biggest dump in data journalism history has just gotten interesting.
This isn't the first time that Mossack Fonseca has been in hot water. A much smaller leak two years ago resulted in a raid on German financial giant Commerzbank, among others, and the payment of 20 million euros in fines. That leak only had data from a few hundred companies. The one released Sunday contains the full accounting and incorporation information of 214,000 shell companies, which allegedly took advantage of the Central American republic's tax laws. According to the Citizen's Trade Campaign, an American coalition of unions and progressive action groups, there are about 350,000 companies currently incorporated in Panama. That would mean that this leaked data contains information from just over 60 percent of the total companies registered in the country — definitely a huge deal, but it gets juicier from there.
The data retained by Mossack Fonseca includes the directors, founders, and board members of each firm, as well as any person acting as a proxy (on behalf of another's business or legal interests). What this means is that contained deep within this data set is a pretty detailed portrait of the private finances of many world leaders. Some of the names in the Panama Papers leak so far are close associates of Russian Prime Minister Vladimir Putin, Ukrainian President Petro Poroshenko, as well as the names of wives, children, and grandchildren of leaders from all over the globe. Other names included in the leak are leaders themselves, like former Iraqi prime minister Ayad Allawi, the king of Saudi Arabia, the current prime minister of Iceland, as well as former prime ministers of Jordan, Georgia, Qatar, and Ukraine.
While it is important to note that establishing shell companies is usually a perfectly legal exercise (check out how to register a shell company for your cat here), it looks super shady when members of the ruling elite choose to set up offshore businesses in places with tax policies more lax than their own. This looks especially bad for Putin, as he made a much-publicized push in December 2014 to offer tax and legal amnesty for offshore capital coming back to Russia as a result of the ongoing budget shortfall triggered by falling oil prices. Iceland's Prime Minister Sigmundur Davíð Gunnlaugsson is also in hot water and may resign.
The Panama Papers leak comes on the heels of raids on Unaoil, a company headquartered in Monaco offering speciality business services to the oil and gas industry, which resulted from an exposé published by The Huffington Post revealing bribery and corruption in the energy industry. Whether this is it, or if this is just the tip of the iceberg, remains to be seen. What is clear is that data-driven journalism is starting to come into its own as a potent tool for the Fourth Estate — and the consequences are just starting to be felt.
Image: Süddeutsche Zeitung (1)