A giant leak of documents from the internal database of a global law firm based in Panama, Mossack Fonseca, has revealed the offshore holdings of 140 politicians, public officials, and athletes around the world.
The leaks — a collaborate effort by the International Consortium of Investigative Journalists (ICIJ) — were obtained by the German newspaper Süddeutsche Zeitung, and are comprised of over 11 million records dating back 40 years. They amount to nearly 3 terabytes of data — roughly 100 times larger than the 1.7 GB of data dumped in 2010 by Wikileaks.
Around 400 journalists from 100 different media organisations in 80 countries spent a year reviewing the documents before they were released, according to the ICIJ’s website.
Anonymous company structures hidden in offshore holdings are not illegal. However, the leaks reveal the extent to which many high-level political figures have relied on shell companies to conceal their wealth.
To that end, offshore companies can be also be used for more nefarious purposes, such as to do business with blacklisted firms or individuals.
Among those implicated are Argentinian president Mauricio Macri — who was listed as a director of a Bahamas company that dissolved in 2009 known as Fleg Trading Ltd, which did business in Brazil — and the King of Saudi Arabia, who evidently used shell companies in the British Virgin islands to take out $34 million worth of mortgages for properties in London, Fusion found in a review of the documents.
— Amichai Stein (@AmichaiStein1) April 3, 2016
The President of Ukraine, Petro Poroshenko, as well as two cousins of Syrian President Bashar Assad, were also among the “power players” exposed in the leaks.
The ICIJ put together some of its key findings from the documents. Business Insider has not independently reviewed the files, but the ICIJ’s website asserts that they:
- Provide “details on more than 214,000 offshore entities connected to people in more than 200 countries and territories.”
“Reveal the offshore holdings 140 politicians and public officials around the world” — including the prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia.
“Document some $2 billion in transactions secretly shuffled through banks and shadow companies by associates of Russian President Vladimir Putin.”
Include the names of “at least 33 people and companies blacklisted by the US government” for their alleged links to Mexican drug lords and terror organisations.
Show how “more than 500 banks major banks, including HSBC, UBS and Société Générale,” have driven the creation of hard-to-trace companies — roughly 15,000 of them — in offshore havens.
Mossack Fonseca has defended its practices, telling The Guardian in a statement that “it is legal and common for companies to establish commercial entities in different jurisdictions for a variety of legitimate reasons, including conducting cross-border mergers and acquisitions, bankruptcies, estate planning, personal safety, restructuring and pooling of investment capital from different jurisdictions in neutral legal and tax regimes that does not benefit or disadvantage any one investor.”