The Panama Papers

The first days of April, the International Consortium of Investigative Journalists (ICIJ), working with media partners and journalists from all over the world, unveiled one of the biggest leaks of information in history, denominated the “Panama Papers.” The investigation reveals offshore links and investments in tax havens of several individuals and organizations, created by a Panamanian Law Firm called Mossack Fonseca.

What it is unique about this leak, in the first place, is the geographical extension of the business. According to the ICIJ, “[the] analysis of the leaked records revealed information on more than 214,000 offshore companies connected to people in more than 200 countries and territories.” The investigation revealed information of the wealth of national leaders, state officials, celebrities and others. Among the involved figures, so far, is the President of Argentina, Mauricio Macri; the President of Ukraine, Petro Poroshenko; professional soccer player Lionel Messi; and the former President of Georgia, Bidzina Ivanishvili. Family members and associates of other world leaders, like Vladimir Putin, Bashar Assad and David Cameron, are involved in the leak too.*

One of the first victims of this revelations was the Prime Minister of Iceland. Sigmundur Davíð Gunnlaugsson stepped down from office only a couple of days after the leak, when massive public demonstrations in the country requested his resignation due to the ownership of an investment company in British Virgin Islands.

According to the The Economist, the top ten tax havens where these companies are located include the British Virgin Islands, Panama, Nevada (US), Hong Kong and Britain. As shown by the following graph, most of the offshore investments are located in the Caribbean, lead by the British Virgin Islands (110,000 approx.), Panama (45,000 approx.) and Bahamas (18,000 approx.).

The second element that makes this leak so monumental is the impressive amount of documentation that the ICIJ managed to expose. The total data collected and analyzed comprised 2.6 terabytes of information, a significant amount compared to similar investigations like Wikileaks (1.7 GB) or the HSBC files (3.3 GB). The investigation includes emails, financial spreadsheets, identification documents and corporate records of bank accounts and companies, amounting to almost 11.5 million documents.

The main reason is because Mossack Fonseca firm has spent more than 40 years creating and regulating this offshore structure and working with intermediaries from all over the world. Since the creation of the company in 1977, the establishment of offshore companies grew exponentially, reaching its peak between 2005-2010 with more 12,000 firms.  According to the researchers, the decrease may be due to the increase regulations after the global financial crisis.

As the days pass and the millions of documents are analyzed, more and more individuals are being exposed and new stories are developing. In the next weeks or months we should expect newer stories and developments as countries have initiated investigations and citizens from all around the world are demanding answers from their leaders and other public figures.**

*Complete interactive list of public leaders and figures involved in the leak
**Additional Panama Papers Key Figures

Daniela Oliva

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