The Panama Papers is a global investigation into the sprawling, secretive industry of offshore that the world’s rich and powerful use to hide assets and skirt rules by setting up front companies in far-flung jurisdictions.
Based on a trove of more than 11 million leaked files, the investigation exposes a cast of characters who use offshore companies to facilitate bribery, arms deals, tax evasion, financial fraud and drug trafficking.
Behind the email chains, invoices and documents that make up the Panama Papers are often unseen victims of wrongdoing enabled by this shadowy industry. This is their story.
Legal papers filed in U.S. District Court in Las Vegas claimed that the Panama-based law firm had created 123 companies in Nevada that had been used by a crony of Argentina’s former president to steal millions of dollars from government contracts. A subpoena demanded that Mossack Fonseca turn over details about any money that had flowed through the Nevada companies.
Mossack Fonesca didn’t want to provide this information. For a firm that specializes in setting up hard-to-trace offshore companies for clients around the world, confidentiality is a must.
The law firm tried to block the subpoena by denying that its Las Vegas operations, run by a company called M.F. Corporate Services (Nevada) Limited, were part of the Mossack Fonseca group.
The firm’s Panama-based co-founder, Jürgen Mossack, testified under oath that “MF Nevada and Mossack Fonseca do not have a parent-subsidiary relationship nor does Mossack Fonseca control the internal affairs or daily operations of MF Nevada’s business.”
The files show that as well as Deutsche Bank, the firm works with some of the world’s other biggest financial institutions, such as HSBC, Société Générale, Credit Suisse, UBS, and Commerzbank, in some cases to help the banks’ clients set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another.
The Panama Papers expose the internal operations of one of the world’s leading firms in incorporation of offshore entities, Panama-headquartered Mossack Fonseca. The 2.6 terabytes of data that make up the Panama Papers files were obtained by German newspaper Süddeutsche Zeitung and shared with ICIJ and more than 100 media partners.
The leak contains more than 11.5 million internal files of the company. It includes nearly 40 years of data, from 1977 through the end of 2015. The data contains a few incorporations before 1977, but they are sporadic and represent less than 1% of the companies. Although the data within the leak stretches back to 1977, Mossack Fonseca only came into being under its current name and structure in 1986, when Ramón Fonseca merged his small, one-secretary law firm in Panama with another local firm headed by Jürgen Mossack, a Panamanian of German origin.
The data shows that Mossack Fonseca worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers. ICIJ used the country categorization contained in the leaked internal client database to describe how many intermediaries were in each country.
Germany’s Süddeutsche Zeitung (SZ) has released the biggest leak in journalistic history, posting 11.5 million documents from a Panamanian law firm online and providing “rare insights into a world that can only exist in the shadows.”