By Scotti Morris
What are the Panama Papers? They are the more than 11.5 million doucuments that an anonymous leaker sent to the International Consortium of Investigative Journalists (ICIJ) on April 3. These documents implicated several global leaders and personalities who obscured undisclosed amounts of cash in tax-free overseas “offshore accounts” provided by the Panamanian law firm Mossack Fonseca. While many of the individuals involved with Mossack Fonseca used their offshore accounts for tax-evasion purposes, others have eve less tasteful uses for hoarding their money.
The documents have revealed a level of international and economic corruption unseen in any other scandal. Billionaires, celebrities, politicians, presidents, and athletes – a collection of the world’s elite – have used Mossack Fonseca’s accounts to perpetrate and prolong illegal and inhumane business practices. While offshore accounts are not illegal per se, President Barack Obama said that “global tax avoidance generally is a huge problem.”
Vox uses an analogy to explain the meaning of the Panama Papers and offshore accounts.
“When you get a quarter you put it in the piggy bank. The piggy bank is on a shelf in your closet. Your mom knows this and she checks on it every once in a while, so she knows when you put more money in or spend it.
Now one day, you might decide “I don’t want mom to look at my money.” So you go over to Johnny’s house with an extra piggy bank that you’re going to keep in his room. You write your name on it and put it in his closet. Johnny’s mom is always very busy, so she never has time to check on his piggy bank. So you can keep yours there and it will stay a secret.
Now all the kids in the neighborhood think this is a good idea, and everyone goes to Johnny’s house with extra piggy banks. Now Johnny’s closet is full of piggy banks from everyone in the neighborhood.
Now in real life, many very important people were just caught hiding their piggy banks at Johnny’s house in Panama.
One day, Johnny’s mom comes home and sees all the piggy banks. She gets very mad and calls everyone’s parents to let them know.
Now not everyone did this for a bad reason. Eric’s older brother always steals from his piggy bank, so he just wanted a better hiding spot. Timmy wanted to save up to buy his mom a birthday present without her knowing. Sammy just did it because he thought it was fun. But many kids did do it for a bad reason. Jacob was stealing people’s lunch money and didn’t want his parents to figure it out. Michael was stealing money from his mom’s purse. Fat Bobby’s parents put him on a diet, and didn’t want them to figure out when he was buying candy.
Now in real life, many very important people were just caught hiding their piggy banks at Johnny’s house in Panama. Today their moms all found out. Pretty soon, we’ll know more about which of these important people were doing it for bad reasons and which were doing it for good reasons. But almost everyone is in trouble regardless, because it’s against the rules to keep secrets no matter what.”
The political backlash against implicated authority figures has been massive.
Thousands of protesters occupied Downing Street demanding the resignation of Prime Minister Cameron who admitted on April 8 that he did benefit financially from an offshore company created by his father, “a fund that was sold for £31,500 just before he became prime minister in 2010.” Speculation also deduces that the source of Cameron’s £300,000 inheritance from his father may have been from another offshore tax haven.
Currently, (April 11), Cameron defends his investments and tax practices in the House of Commons.
Iceland has elected a new Prime Minister after the leaked documents revealed former Prime Minister Sigmundur David Gunnlaugsson had connections to an offshore company through his wife.
Though not directly linked to offshore accounts, Russian Prime Minister Vladmir Putin has been suspected to have benefitted since the Panama Papers revealed that several of his close friends have billions of dollars in assets in offshore accounts. The Papers also disclosed that the children of Pakistani Prime Minister Nawaz Sharif have raised close to $10 million from loans connected to offshore accounts.
While no American politicians have been mentioned in the Panama Papers, over 200 citizens were mentioned in the leaked documents, including billionaires and CEOs of oil companies.
The documents also exposed connections to some internationally known personalities.
Willian, a soccer player for the English club Chelsea, was shown to have owned a portion of an offshore company called Saxon Sponsoring Limited. His spokesperson confirmed that Willian dissolved his connection to the company before signing onto play with Chelsea.
The Papers also implicated Hollywood personalities. Late filmmaker Stanley Kubrik’s daughters were shown to have managed offshore companies, the profits of which funded Kuvrik’s purchase of his Hertfordshire mansion. Jackie Chan has provided no comment since it was revealed he owned at least six offshore companies.
Yet, one has to consider the fact that this is only one company that has been exposed, and one can only wonder how many similar organizations – and public figures connected to them – exist.
Link to an explanatory video published by the ICIJ: https://www.youtube.com/watch?v=F6XnH_OnpO0es