More than 100 media outlets around the world published the results of an investigation into offshore “shell” companies in April 2016 that detailed how politicians, celebrities, arms dealers, sports stars and drug runners used law firms, banks, and other businesses to hide their assets and avoid paying taxes.
The International Consortium of Investigative Journalists, was given 11.5 million digital documents from a Panamanian law firm called Mossack Fonseca that outlined financial dealings of some of the most famous and infamous people in the world. The law firm is the fifth largest in the world when it comes to setting up shell companies --- or companies incorporated without significant assets or operations.
Ramon Fonseca, Mossack Fonseca’s co-founder, said the documents were obtained illegally by hacking into the company’s computers. Fonseca did confirmed that many of the records are real, The Associated Press reported.
Here’s a quick look at what the Panama Papers are and what they mean.
What are they?
The 11.5 million documents were forwarded to the Munich-based newspaper Sueddeutsche Zeitung more than a year ago. They lists assets of politicians, businessmen, sports stars, celebrities and others.
What do they show?
The documents span a 40-year period and show a pattern of offshore tax shelters created by law firms and major banks. A major focus of the ICIJ report alleges a multi-billion-dollar money laundering ring run by a Russian bank with ties to friends of Russian President Vladimir Putin.
What is a “shell company”?
1. A shell company is an inactive company set up without significant assets or operations that is used as a vehicle for various financial reasons. They are known more for being used as a tax haven – a place to funnel money out of a country to avoid paying takes on it. It is not illegal to set up a shell company. Click here to see a video by McClatchy that explains shell companies. McClatchy was a partner in the ICIJ investigation.
What is Mossack Fonseca?
The firm is one of the world’s top five creators of shell companies. The information leaked included internal files on 214,488 offshore entities connected to people in more than 200 countries and territories. The company has more than 40 offices worldwide. It specializes in commercial law, trust services, investor advisory and international structures, according to The AP The company has an office in Las Vegas and a representative in Miami. Mossack Fonseca has denied any wrongdoing.
Who is on the list?
ICIJ will release the full list of companies and people linked to them in early May, according to the consortium. But here is what we know about who is on the list now:
- One hundred twenty-eight people on the list are politicians, 12 are current or former world leaders.
- More than 30 people whose assets were revealed are on list of companies and people banned from doing business in the United States because of ties to weapons trading, drugs, terror groups or rouge nations.
- Those named by the ICIJ in the leak include: Mauricio Macri, president of Argentina; Ayad Allawi, former Iraqi prime minister; Sigmundur David Gunnlaugsson, prime minister of Iceland; King Salman bin Abdulaziz bin Abdulrahman al Saud, king of Saudi Arabia; Petro Poroshenko, president of Ukraine; Rami and Hafez Makhlouf, cousins of Syrian leader Bashar al-assad; Kojo Annan, son of former U.N. Secretary General Kofi Annan; the family of Nawaz Sharif, prime minister of Pakistan; Arkady and Boris Rotenberg, and Sergey Roldugin, friends of Russian President Vladimir Putin; Ian Cameron, late father of British prime minister David Cameron; associates of Mexican President Enrique Peña Nieto.
- Also on the list are companies linked to the family of Chinese President Xi Jinping.
The Associated Press is maintaining a running list of named and unnamed people and companies included in the 11.5 million documents.
© 2019 Cox Media Group.