Panama Leaks - The Tremor Of Tremors

Panama Leaks! On hearing these words most thought the $350 million US investment; Panama Canal had finally developed a leak big enough to enjoy major face time on every news network in the world. But once the initial fog of confusion lifted, it became clear that this Panama leak was worth much much more than what the US had invested in building the famous Panama Canal and would be catastrophic on an international level and not just regional. 

So why is an international financial scandal being related to Panama

Because at the base of it all is a Panamanian firm; Mossack Fonseca with worldwide operations in over 42 countries. Its services include incorporating companies in offshore jurisdictions and wealth management.

Mossack Fonseca specializes in knowing its way around tax havens like Switzerland, Cyprus and the British Virgin Islands. It is considered to be the world’s fourth biggest provider of offshore services with more than 300,000 companies and clients across the globe.

The amount of information leaked from Mossack Fonseca is being touted as the biggest digital leak to date. 11.5m documents and 2.6 terabytes of information was leaked from the company’s internal database. Considering the amount of information shared and the level of its impact across the world, experts believe it is bigger than both the US diplomatic cables leak or what’s more popularly known as WikiLeaks in 2010, and the secret intelligence documents leaked by Edward Snowden in 2013, put together.

Up until now Mossack Fonseca has refrained from discussing the finer points of the Panama Leaks. Since the beginning, Mossack Fonseca has insisted that “it complies with anti-money-laundering laws and carries out thorough checks on all its clients. It says it regrets any misuse of its services and tries actively to prevent it”, the firm further states that it cannot be blamed for failings by intermediaries, who include banks, law firms and accountants.

COUNTRIES AFFECTED BY THE PANAMA LEAKS

The first cover to be blown was of Vladimir Putin’s close friend – a cellist called Sergei Roldugin. Offshore companies worth millions of dollars were secretly registered in his name, while Roldugin maintains that he is not a businessman. The Panama Papers showed Russian state bank flushing out almost $2 Billion into several offshore companies. The money was then channeled back into Russia white washed and dry cleaned to perfection. The Outcome? Mainstream Russia (the Russian media as well as general public) has dismissed the entire story as a mudslinging episode against the Putin administration initiated by CIA and the American public.

The Aliyevs- Azerbaijan’s ruling first family’s foreign business empire is no state secret and it includes a number of holdings such as banking, telecoms, goldmines and numerous London mansions. The Panama Papers exposed Exaltation Ltd. A firm under the Mossack Fonseca umbrella of holdings to be owned by President Aliyev’s daughters, Leyla and Arzu. The Outcome? The entire Panama Leaks episode was overshadowed by a four-day war between Azerbaijan and Armenia in the Nagorno-Karabakh region- a war that smells of being a deliberate distraction. What little agitation remained was expertly shut down by jailing journalist, bloggers and free-speech advocates.

Iceland’s prime minister, Sigmundur Davíð Gunnlaugsson, and his wife, Anna Sigurlaug Pálsdóttir, were discovered to have had a British Virgin Islands firm named Wintris Inc. Although the firm was created while Gunnlaugsson was just an MP, he did not declare his offshore holdings even after becoming prime minister hoping to keep its existence concealed forever.

The Outcome? After wide spread protest throughout the country Gunnlaugsson was forced to quit. Making Gunnlaugsson one of the biggest causalities of the Panama leaks so far.

Blairmore Holdings Inc. based in the Bahamas was created by Ian Cameron, David Cameron’s late father. During its 30 years of managing millions of pounds for various clients, Blairmore did not pay any UK taxes on its profits. Not only this, the company tried every trick in the book to show that Blairmore was based in the Caribbean. The company also used bearer shares, which David Cameron had outlawed after becoming PM.

The Outcome? Initially the Cameron’s took the “Blairmore is a private matter” stance, the PM declared: “I have no shares, no offshore trusts, nothing like that.” Later on the ownership was shifted to Samantha Cameron as holding “small number of shares connected to her father’s land” on which she pays tax. The Cameron’s constantly tried to hide the fact that: his father’s offshore fund had helped the family financially. Cameron finally admitted in an ITV interview that he and Samantha did own shares in Blairmore, but they were sold of just prior to his becoming PM in 2010 for £31,500.

Some of the biggest and most elite members from the ruling class of China turned out to be offshore enthusiasts. From the Jasmin Li, the granddaughter Jia Qinglin the fourth most powerful figure in the country to the brother-in-law of China’s president, Xi Jinping, and the son-in-law of Zhang Gaoli, a member of the politburo standing committee were named in the Panama papers. In fact, China and Hong Kong turned out to be Mossack Fonseca’s biggest clients with links to more than 40,000 offshore companies.

The Outcome? Predictable as ever, China’s censors blocked all access to the Panama Papers revelations and its business as usual.

ZIMBABWE 

Nothing very damaging was unearthed by the Panama papers in Zimbabwe. Two of Robert Mugabe’s close friends – an arms dealer and a mining tycoon – were named for their offshore companies. However, Mugabe himself was not found to be connected with any offshore firms. Detractors still claim that the president has vast assets overseas. 

Iran

Iran is still trying to prove that the leaked data implicating Iran’s former president, Mahmoud Ahmadinejad as an American conspiracy. Yet the fact of the matter remains that Mossack Fonseca was serving the interests of Petrocom and an Iranian state oil company, Petropars, blacklisted by the US and registered in the British Virgin Islands. Panama Leaks suggest that the ultimate owner of these companies was Iran’s former president. 

The Outcome? Just like China, news of the Panama Leaks and the corruption it uncovered never made it to the general public due to strict media controls in Iran.

AUSTRALIA 

Australia’s taxation department was already busy digging out tax evaders when the Panama Leaks gave them a shovel full of names to further pursue. Some of Mossack Fonseca’s leading Australian clients included Philip de Figueiredo and Philip Egglishaw. Figueiredo is already serving a jail sentence for running a tax evasion scheme. While Egglishaw is on the run from Interpol’s Red Notice for his arrest.

The Outcome? The Taxation Department is now investigating more than 800 Australian Mossack Fonseca clients, including 120 individuals linked to the companies Hong Kong based associate offshore provider.

The Panama Leaks did not just politically embarrass other countries around the world, but left its own namesake country shaken as well. Although it is common knowledge that Panama is a tax haven for most of the world’s illicit billions. But whats more shocking is that one of Mossack Fonseca founders, Ramón Fonseca is a Panamanian. Fonseca is not only a close friend of Panama’s president, Juan Carlos Varela, but Mossack Fonseca has been known to advise Panama’s foreign ministry on a number of occasions.

The Outcome? The embarrassed president has vowed to create an international panel to investigate the allegations and further improve the persona of Panamas’ offshore financial industry.

PAKISTAN 

Panama Leaks turned out to be one of the biggest financial embarrassments to make headlines in the country and cause much political upheaval for the current PM. One of his sons is the owner of four luxury flats in Park Lane, London. These high value properties are of course managed through offshore companies in the British Virgin Islands set up by Mossack Fonseca. How and from who’s income these properties were bought is under scrutiny along with the whereabouts of the 7 million pounds raised against these properties.

The Outcome? The jury is still out on these allegations and a Joint Investigative Team has been formed to further investigate the credibility of the Panama Papers and its allegations against the Sharif family.

Mauricio Macri, the country’s president is the one accused to offshore holdings in the Bahamas. He avoided disclosing their existence when he was elected Mayor of Buenos Aires in 2007 and then again in 2015 when he was elected President. All this while promising a much needed clean-up campaign in the political and financial realms of Argentina. The Outcome? While the people are demanding his resignation, a federal investigation has been started against the president’s financial dealings. Argentina’s tax authority and anti-corruption bureau have been called to give evidence. All this while Mauricio Macri still holds his stance: “I want to say one more time that I am very calm, I have complied with the law, I have told the truth and I have nothing to hide”

Syrian presidents’ cousin, Rami Makhlouf and his brother Hefez, both have been pointed out for having a string of offshore companies with Mossack Fonseca. According to the leaked data, in spite of Mossack advise to the brothers, offshore operations were carried out while Syria got engulfed in ISIS and its home grown war.

The Outcome? Nothing. Syria has no time to hold its leaders accountable for corruption while in a constant state of war.