The reason why the Panama Papers are more than just a news story is because of their tie to history. Financial scandals may not be as sexy as those relating to war, but the fact of the matter is the Panama Papers are much larger in size and scope than the Pentagon Papers ever were.
Let’s start off with the basic facts: Eleven-point-five million documents were leaked from the law firm Mossack Fonseca, the world’s fourth largest offshore law firm, incriminating 143 politicians and 12 world leaders both former and current in the hiding of personal assets in offshore tax havens.
I admit the numerical details can be incredibly dry. Simply put, finance isn’t sexy. But its implications are. Vladimir Putin himself was implicated in the hiding of two billion dollars in offshore funds, and the Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson resigned his post within hours of the story breaking. Gunnlaugsson stepped down due to his failure to disclose companies controlled by he and his wife that were being overseen by the Icelandic government.
Here’s where the story goes from numbers to consequences. When we start to see high-level change in the world of politics, you can be sure that there is something more going on besides some accounting tom-foolery. And this is a story that is sure to be breaking not only this week, but over the next few months and possibly years.
I know it may be easy for many people to ask “Why should I care?” but it’s important to remember that wrongdoing, no matter how benign it may seem, is still wrong. And the committers of those wrongdoings need to be held accountable, especially if they’re elected officials.
Forty years of records were leaked, more than two terabytes of data, all vetted by a coalition of approximately 100 professional journalistic organizations. This massive professional partnership has led some to speculate whether the days of “amateur” leaks, such as the Wikileaks scandal, are behind us.
What’s truly amazing however, is the sheer number of people implicated in the documents. In addition to Putin and Gunnlaugsson, the papers contain information on Pakistan’s prime minister, the President of Ukraine, Argentina’s president, the King of Saudi Arabia, six members of the UK’s House of Lords, eight families associated with the supreme ruling body in China and dozens of Brazilians, according to The Guardian.
Digging deeper into this story revealed another layer of information. According to the International Consortium of Investigative Journalists, the documents also name at least 33 people and companies “blacklisted by the U.S. government.” Among the list of names are people that do business with terrorist organizations and Mexican drug lords. And it isn’t just people that were identified in the documents. Countries such as North Korea and Iran were also implicated.
We know the names and positions of some of the key players in this story, but what exactly did they do? Let’s break down the involvement of four people named in the list earlier in the article.
Pakistan’s prime minister, Nawaz Sharif:
According to the Wall Street Journal, three of Sharif’s children were linked to offshore companies. They were either owners of the companies or had the right to authorize transactions for them. The records indicated the family owned London real estate in prime locations and that the companies used the properties as collateral to secure a loan worth millions of pounds.
President of Ukraine, Petro Poroshenko:
RT.com reports that Poroshenko set up a secret offshore company, Prime Asset Partners Ltd., in the British Virgin Islands. To make matters worse, these dealings took place during the period of conflict between Ukraine and Russia that left many Ukrainian solders dead. According to the documents, Poroshenko was listed as the only shareholder of Prime Asset Partners Ltd.
Argentina’s president, Mauricio Macri:
Reports from the BBC show Mr. Macri was listed as director of an offshore company in the Bahamas. Fleg Trading, the company in question, was under his control from 1998 until 2009. Macri kept the company off his books as Mayor of Buenos Aires in 2007, and then again as president in 2015. His office released word Tuesday saying Mr. Macri’s family did in fact own a offshore business group, the acquisition of which was facilitated by the Panamanian law firm Mossack Fonseca.
King Salman of Saudi Arabia:
An article on telesurtv.net reported that King Salman used an offshore British Virgin Island company to take out mortgages on London-based luxury homes. In total, the mortgages for those homes totaled $34 million. Now to be clear, the papers do not mention King Salman’s specific role in the scandal, but the mortgages are mentioned to be “in relation to” him and his assets.
This crisis is truly global, with over 200 countries and territories being identified in the leak. According to the ICIJ’s website, Mossack Fonseca is involved in Africa’s diamond trade, provides services to Middle Eastern royalty, and has dealings in the international art market along with other businesses that thrive on secrecy. While most of their clients and transactions are law abiding, it’s clearly worth highlighting the few that are not.
The second episode of The Bully Pulpit podcast featuring discussions on the US/Mexican border, the video game industry and alternative fuels at the pump.
Be sure to watch the debut episode of my new podcast right here on TheBullyPulpit! In this episode, my colleagues and I discuss Gay Marriage, ISIS and Jared Leto.
A truly insightful post with very solid advice. As someone who doesn’t fit well into the mold of traditional schooling, it’s inspiring to hear from someone who has been through similar struggles.
In 2005, Steve Jobs delivered his now-famous Stanford Commencement Speech, wherein he explained that attempting to attend a four-year university had been a poor choice. The school was astronomically expensive and “[he] had no idea what [he] wanted to do with [his] life and no idea how college was going to help [him] figure it out.”
Jobs’ statement seems to resonate with today’s youth; more and more students are dropping out in search of startup stardom. In fact, in January 2014, the National Center for Analysis of Longitudinal Data in Education Research (CALDER) reported that more than 40 percent of full-time college students fail to earn a bachelor’s degree within six years. Granted, not all drop-outs leave their university in the pursuit of entrepreneurship. However, I know first-hand that many do.
I am an entrepreneur. I founded my own startup and we are currently developing a mobile application that…
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