The Panama Papers: Secrets of the Super Rich
An international team of experienced reporters worked together to untangle a huge network of companies that hide the financial affairs of corporations, politicians, oligarchs, and criminals.
What was discovered is only one example of a group of wealthy people who decide to play by their own rules in what seems to be a parallel universe. They go to these offshore tax havens to do what they probably wouldn’t be allowed to do at home. A tax haven is a low tax jurisdiction compared to other places. It’s a country that offers foreign individuals and companies little to no tax liability. Nonresidents take advantage of the fact that they’re not really taxed on their incomes, gains, or estates even though they have planted companies. The corporate use of this system also protects criminals. It allows them to hide the money and to make sure that they’re not caught and hence, are not held responsible for their crimes.
Recently The International Consortium of Investigative Journalists (ICIJ) got hold of a massive database of tax havens all around the world. Their findings included dumbfounding financial secrets from a Panamanian law firm called Mossack Fonseca, which now has 30 international offices. It has been called the biggest leak in history because of the sheer size of the documents obtained—11 million.
The documents reveal the details about how Mossack Fonseca set up over 200,000 companies, foundations, and trust funds largely in tax havens. Mossack Fonseca’s files reveal that they have clients from four continents that have been under investigation.
One way Mossack Fonseca helps its wealthy clients is by hiding their identities in what are called shell companies. These are companies that have front men as shareholders and directors so the real owner of the assets never appears on the register.
Given Panama’s history, it’s not surprising that a law firm there has become a leader in the tax haven business. At the height of the cocaine trade, Panama was a money laundry for Latin American drug lords. These days many local bankers and lawyers strike it rich by moving money into tax havens. It’s not a crime, but their businesses often moves billions in tax revenues out of the reach of governments.
Ironically, Mr. Fonseca of Mossack Fonseca is very involved in politics and is, in fact, the president of the governing political party. He has acted as advisor to the current president of Panama.
This documentary was produced by ABC Australia and it presents a deeper insight into a recent financial scandal with a global reach. This historic leak was named ‘The Panama Papers”. Watch this film now.