The Panama Papers hit the public spotlight in 2016. It blew open Pandora’s box and was headline news around the world. In some countries riots broke out. Elected officials resigned. Bankers were put in the hot seat. Rich people from all over the world went under investigation for tax evasion. When the 11.5 million documents (“Panama Papers”) were leaked to the public, the world was handed an inside view into the shady side of political fraud, corruption, crime and dirty money.
The Panama Papers are
secret leaked legal documents that show information for more than 200,000 rogue offshore entities (corporations) that were setup by the now insolvent Panamanian law firm Mossack Fonseca for rich people around the world. Seemingly, everyone was involved. Governments around the world were put under pressure for answers. Democrats, republicans, the political left, the political right, rich countries, poor countries, criminal cartels and even some big celebrities were involved.
Now in 2020, the list of names found in the Panama Papers continues to grow.
A Big List – Political Leaders, Celebrities & More
More than 140 politicians in more than 50 countries were named in the Panama Papers for being connected to corporations in more than 21 tax havens worldwide. Even today, 4 years after the papers were leaked, journalists are still finding new names in the pages. Keep in mind, there are 11.5 million pages to search through – that’s a lot of manual work for people to do; it’s taking considerable effort to sort through all of the documents.
Here are some of the big-names found in the Panama Papers:
|Sigmundur Davíð Gunnlaugsson||Iceland’s Prime Minister||His family secretly sheltered money offshore.||Stepped down as Prime Minister|
|Mauricio Macri||President of Argentina||Listed as head of a trading company (Fleg Trading Ltd) based in the Bahamas, which was never disclosed.||Continued his presidency until voted out of office.|
|Malcolm Turnbull||Australia’s Prime Minister||Director of a company in the British Virgin Islands that was started in the 1990’s.||There was no suggestion of any wrongdoing.|
|Friends of Vladimir Putin||President of Russia||Many of the friends and family members are shown to have benefitted massively from their relationship with Putin.||Putin’s name wasn’t directly named in the files.|
|Petro Poroshenko||President of Ukraine||He failed to declare his ownership of his company twice, in his 2014 and 2015 mandatory income declarations. He used the foreign company to hide his stake while in office.||Due to his power and influence, several attempts to start an investigation of Poroshenko’s offshore case in parliament have failed.|
|David Cameron||Former UK Prime Minister||His father had an offshore investment fund which he immediately benefitted from.||After the Panama Papers were leaked, he resigned and Theresa May was voted into office.|
|Salman bin Abdulaziz Al Saud||King of Saudi Arabia||Used an offshore British Virgin Island company to take out mortgages on his luxury London homes.||No guilt found.|
|Ayad Allawi||Ex-Prime Minister of Iraq||He had more than one offshore company which he used to maintain privacy and security.||No guilt found.|
|Mohammad bin Naif bin Abdulaziz Al-Saud||Saudi Crown Prince||Swiss bank UBS bought the Panamanian companies Alyneth Limited and Havelock Capital Corporation from Mossack Fonseca. Two days later, power of attorney was transferred to him.||No guilt found.|
|Deng Jiagui||Brother In Law of China’s President, Xi Jinping||Acquired a company in the British Virgin Islands called Supreme Victory Enterprises Ltd and was the sole director and shareholder. Later aquired other companies.||He made a fortune in real estate development after marrying the daughter of China’s President, although no guilt has been found.|
|Ang Vong Vathana||Cambodia’s Minister of Justice||He became one of five shareholders of the British Virgin Islands company RCD International Limited. The company’s purpose was unknown.||No guilt found.|
|Pedro Miguel Delgado Campaña||Former Governor of Ecuador’s Central Bank||While governor, Austrobank Panama S.A., a subsidiary bank of Grupo Eljuri processed a mortgage for Delgado to purchase property in Miami.||Delgado now lives in the United States, from which Ecuadorian authorities continue to seek his extradition for charges related to the forged university degree.|
|Marllory Chacón Rossell||Guatemalan drug trafficker||She was president of the offshore company Brodway Commerce Inc. between 2009 and 2010 — a period during which US authorities estimate she laundered $4 million in drug proceeds in Panama.||Called the “Narco Queen”, she was recently known to be in a Florida prison.|
|Rafael Caro Quintero||Mexican drug trafficker||His holdings included a property owned by an offshore company. His property was later confiscated by the government of Costa Rica.||In 2013, Caro Quintero was released from prison on a technicality and immediately disappeared. He’s currently on the FBI’s most wanted list.|
|Gerardo González Valencia||Mexican drug trafficker – later moved to Uruguay and was arrested once the Panama Papers went public.||Gerardo González Valencia had used shell companies incorporated in Panama to buy real estate in Uruguay, including a chalet in Punta del Este.||Imprisoned in Uruguay. Currently awaiting extradition to the United States.|
|Gonzalo Delaveau||Head of global corruption watchdog Transparency International‘s Chile branch.||He was linked to at least 5 offshore corporations.||Resigned as President of Transparency Chile|
|Jackie Chan||Celebrity – Actor||It was discovered that he has at least 6 companies.||No guilt found.|
|Emma Watson||Celebrity – Actress||She set up an offshore company for the sole purpose of protecting her anonymity and safety.||No guilt found.|
|Simon Cowell||Celebrity – Investor Shark Tank||He is the sole shareholder of two British Virgin Islands, namely setup to purchase property in Barbados.||No guilt found.|
|Stanley Kubrick’s family||Celebrity – Movie Director||His country manor, purchased in 1978, which was transferred to offshore companies in the British Virgin Islands, which is now controlled by his family.||No guilt found.|
|Robert Louis-Dreyfus||Celebrity – French Businessman||Listed as an officer in the Panama Papers.||No guilt found.|
|Lionel Messi||Celebrity – Soccer Player||Messi and his father used offshore companies in Belize and Uruguay to avoid paying millions of dollars in taxes.||Both were convicted by a Spanish court of tax fraud. Lionel was given a 21-month suspended sentence and fined $2.2 million.|
Note: Not everybody named in the Panama Papers were guilty of a crime. Also, this list continues to grow as more information is found within the millions of documents. This list is just highlights some of the bigger names.
The Panama Papers even named the company of US President Donald Trump, in which a transaction by “Process Consultans”, a shell company, which involved the sale of a condo at Trump Palace. On Apr 11, 2020, Newsweek published an article referencing a journalist named Jake Bernstein whom discovered the deal.
Lastly, it was rather eye opening for the world to learn that criminal organizations (cartels, gangs, etc) were also utilizing secret companies to funnel money internationally. While money laundering is nothing new, it’s certainly raises eyebrows that cartels and gangs can rather easily create fraudulent corporations. Yikes.
Dozens of Journalists Killed After The Leak
The information within the Panama Papers couldn’t be contained from the public, although powerful people certainly tried to contain it – even resorting to murder. When journalists all over the world got access to the Panama papers, they started connecting important links and making their discoveries public. The delicate information they brought to light was essentially the catalyst that resulted in these journalists being targeted. It went to show that the powerful elite will often do anything to protect their public image.
Daphe Caruana Galizia was a journalist and anti-corruption activist in Malta. Her blog was called the Running Commentary (direct link). The Republic of Malta is a very small country in the Mediterranean Sea off the southern coast of Italy. In 2016 and 2017 Galizia revealed controversially sensitive information and allegations relating to a number of Maltese politicians, partially from information she gathered from the Panama Papers.
On October 16, 2017, Galizia died in a car-bomb explosion that went off inside of her car. The explosion killed her instantly and left pieces of the car scattered across a nearby field. While an investigation has been started and perpetrators have been found, nobody powerful went to jail. The Prime Minister of Malta, Joseph Muscat, later resigned. Other journalists started the Daphne Project after Galizia’s death to continue her work.
Galizia’s example is only one of many. In 2018 more than 30 journalists were killed.
Where Guilt Is Found With Offshore Companies
It’s not illegal to start a foreign corporation. In fact, there are many legitimate reasons to create new foreign corporations. However, most public officials are required by law to disclose their foreign and domestic financial holdings, and their positions at corporations. Many of those public officials that were listed in the Panama Papers never disclosed their position, which is not only illegal, but it essentially means that they intentionally kept information a secret from their citizens.
Many celebrities and private business owners were justified in owning offshore businesses. Offshore shell companies are especially beneficial when purchasing foreign real estate or investing in foreign businesses. The tax burdens are sometimes reduced for offshore companies, thereby permitting the investor to only pay local taxes and avoid taxes in the citizen’s home country. But it all must be done legally and tax paperwork must be transparent to tax authorities, foreign and domestic.
Where The Panama Papers Came From
The Panama Papers were leaked by an unknown person that went by the name “John Doe”. He had somehow received the papers from the archives of the Panamanian law firm Mossack Fonseca & Co. Mossack Fonseca had offices all over the world, and had created corporations in dozens of tax havens.
John Doe sent the 2.4 terabytes worth of electronic documents to the news organization German Daily Süddeutsche Zeitung, which went on to share the 11.5 million documents with other news organizations. They shared them with the Washington-based International Consortium of Investigative Journalists (ICIJ), the Guardian, BBC and other media organizations.
Mossack Fonseca was the 4th largest financial services company to provide offshore services at the time of the release of the Panama Papers. The company had originally opened doors in 1977 and eventually had 300,000 offshore companies setup for wealthy clients, which was estimated to be between 5% to 10% of the market total offshore shell corporations. However, due to the disastrous fallout from the Panama Papers, Mossack Fonseca announced that it was shutting down in 2018. They were also busted by Panamanian authorities for shredding documents.
Mossack Fonseca was never found to be doing anything illegal. They setup the offshore companies for their clients, which is completely legal to do. However, many of their clients failed to pay taxes or disclose their positions, which negatively affected their business when the Panama Papers hit the spotlight.
“Transparency” Is Just A Fancy Buzz Word
Politicians around the world claim that transparency is important. It’s a popular word during elections. Politicians claim they’ll create more transparency in government, but only while they’re campaigning for office. It’s something the world desperately lacks…and that’s intentional. As it turns out…a lot of powerful people hate transparency.
The EU Member States were recently asked to implement new measures designed to counter the corporate secrecy, but 22 of the 27 countries missed the deadline. It goes to show how important secrecy really is to the elite and how unimportant transparency is to them. A great article by ICIJ can be read here about it.
In truth, transparency is a very complicated subject. When someone wants to hide money, they’ll find a way. The only way to truly prevent money laundering and tax evasion is to create a one-world government. With multiple countries, the idea is that someone can just setup a foreign corporation in another country. And the world would need to be cashless too, otherwise people will just hide physical cash…inconvenient, but still effective.
If there was a global government, the government would have global reach to curtail illegal money laundering. However, we all know that a world government will never happen. Nor should it, for other very good reasons. Governments and politicians already abuse their positions, as proven in the Panama Papers, do we really want to give them global power, too? You see…it’s complicated.
The Panama Papers Are Publicly Accessible, Kinda
You can see some details of the Panama Papers on the ICIJ website. It’s a little confusing. It’s one of those things that’s a little dubious because the leaked documents contain a lot of people’s personal identification information, such as passports scans, banking information etc. Also, it’s more than 11.5 million PDF documents and more than 2 terabytes of information. Most people couldn’t download all of the files even if they wanted to. Most computers don’t even have two terabytes of hard-drive space.
Personally, I haven’t tried to see any of the Panama Papers. I haven’t downloaded anything. I’m a little mixed on my feelings to attempt to download other people’s private documents. Personally, I prefer to leave that job up to the professionals – the journalists. However, if you want to download some files, the database that journalists have built or see the web of foreign corporations, it’s all available online for everyone to see.
Tax Authorities Are Getting Money
To date, more than $1.3 Billion dollars have been recovered as a result of the Panama Papers. Realistically, that’s a drop in the bucket compared to the amount of money flowing through these corporations. Regardless, tax authorities around the world are collecting tax with the information they’re receiving. Many wealthy people are scared of their private information being disclosed publicly, and they should be. Tax authorities aren’t very friendly to tax dodgers. And once they’re caught, tax dodgers often have to pay hefty fees and interest.
It’s also considered that the $1.3 Billion estimate is understated, because tracking these types of cases is rather tricky. The number could easily be double or triple that.
The Panama Papers Documentary
If you want to see an awesome documentary, check out The Panama Papers (2018).
Another great show on Netflix is The Laundromat, which is based on a true story. In fact, Netflix is getting sued over it right now by the law firm Mossack Fonseca (the firm that had all their documents leaked). Antonio Banderes and Gary Oldman play the parts of the two lead lawyers.
A Quick Crash Course In Offshore Banking
When rich people want to hide money, they generally use “shell corporations”. A shell corporation is a legally documented corporation (usually a Limited Corporation) that’s registered, often in a foreign country. Foreign countries that permit this behavior are called “Tax Havens”, because they are safe/private places for rich people to store their money.
The process is relatively simple. And interestingly, anyone can create a shell corporation in a foreign country. After all, it’s the same as essentially starting a business:
- You choose a foreign country that has good privacy laws.
- You hire a “registered agent” in the foreign country, someone that will essentially receive the mail for your new company (since you don’t live there to receive the mail).
- You file the business’s legal documents with that foreign government (or hire a law firm to handle it for you).
- Then, you setup a bank account in the new business name.
- Poof! Your money stash goes off the radar from the world.
Offshore Banking is usually used by the rich for the follow cases:
- To evade taxes
- To evade sanctions
- Hide wealth from the public spotlight (especially common among politicians)
- Shift money from reputable companies/governments to private accounts for personal gain
- In rare cases…when business is actually being done in the foreign country
To make matters more complicated, sometimes rich people will get clever and intentionally put shell companies as owners of other shell companies. This is fairly common because it puts more distance between the true owner of the company. The rich are very keen on preventing unwanted eyes from discovering their secrets.
Lastly, shell companies can be bought and sold. And when they are sold, the bank account that’s connected to them is also transferred with the company itself. Shell companies are commodities now, like corn or pork bellies.
More Information On The Panama Papers
By far, the best resource is the ICIJ.org Panama Papers webpage, which has been mapping out the documents, sorting the information, creating visualizations and keeping tabs on news surrounding the subject.
Another good resource is the Panama Papers SubReddit, which has ~44,000 followers.
A fascinating article about how criminal organizations utilize corporations in their business.
A great article by Hannes Munzinger and Frederik Obermaier about the Panama Papers in the Middle East.
A Final Word
I don’t consider myself to be a journalist. I’m a casual writer that writes about traveling the world and world news. The information I provided above is from various credible sources that can be found online. I have not fact-checked all of the information provided by the other media companies and I assume that the journalists that provided this information did their due diligence.
If you find anything that is factually incorrect, please feel free to send me a message.
Similarly, if I missed anything important, please contact me.