An investigation published today by the International Consortium of Investigative Journalists and its media partners reveals the hidden workings of a secretive industry that banks and lawyers use to hide the financial holdings and dealings of powerful clients, including prime ministers, parliamentarians, plutocrats and criminals, according to a trove of leaked documents.
The files, known as the Panama Papers, expose the offshore holdings of 12 current and former world leaders and reveals how associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies, according to the joint investigative project conducted by ICIJ, the German newspaper Süddeutsche Zeitung and more than 100 other news organizations around the globe. ICIJ is the international arm of the Center for Public Integrity.
The files — which total more than 11.5 million documents — contain new details about major scandals ranging from England’s most infamous gold heist in 1983, an unfolding political money laundering affair in Brazil and bribery allegations currently convulsing FIFA, the body that rules international soccer and is under investigation by the U.S. Justice Department.
Most of the services the offshore industry provides can be used for legal purposes and by law-abiding customers. But the documents reveal that banks, law firms and other offshore players often fail to follow legal requirements to assure that clients are not involved in criminal enterprises, tax dodging or political corruption. The files show that these fixers and middlemen protect themselves and their clients by concealing suspect transactions. In some instances, they work to head off official investigations by backdating and destroying documents.
The documents include nearly 40 years of data from inside Mossack Fonseca, a little known but powerful law firm based in Panama with branches in Hong Kong, Miami, Zurich and 35 other cities worldwide. In the first of six articles posted today, ICIJ and its partners detail the the inner workings of the Mossack Fonseca firm, which is one of the world’s top creators of shell companies — corporate structures that can be used to hide ownership of assets.
Another article reveals a clandestine money network with ties to Putin that has shuffled at least $2 billion through banks and offshore companies linked to some of Putin’s closest allies. A third article details how the law firm of a FIFA ethics watchdog had created offshore accounts for three men indicted in the world soccer association’s corruption scandal. One of the men, a former FIFA vice president, has been charged by U.S. authorities with wire fraud and money laundering for his role in the alleged bribery conspiracy.
The documents provide details of Mossack Fonseca’s role in the hidden financial dealings of 140 politicians and public officials worldwide and expose offshore companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan. They also include the names of 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.
The project — which included a team of more than 370 journalists from more than 70 countries — is believed to be the largest cross-border media collaboration ever undertaken. Journalists working in more than 25 languages dug into Mossack Fonseca’s inner affairs and traced the secret dealings of the law firm’s customers around the world. They shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laudering experts and law-enforcement officials.
The disclosures from the law firm’s leaked files dramatically expand on previous leaks of offshore records that ICIJ and its reporting partners have revealed in the past four years.
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“A lot of it is legal, but that’s exactly the problem,” President Barack Obama said Tuesday