[ot-caption title=”The Panama Papers expose the undercover activity of our world leaders. (via Gerd Altman, Pixabay)”]

The Panama Papers have become the most extensive leak of confidential data in history. The International Consortium of Investigative Journalists (ISIJ) published approximately 11.5 million documents from the Mossack Fonseca law firm in Panama. The Panama Papers were gathered by an anonymous source from the German newspaper, Süddeutshe Zeiting who then made the documents available to the ICIJ. The anonymous source “claimed to be concerned about what he or she saw in the documents.”  These records, which date back nearly four decades, expose the rampant corruption in the global financial system.  Mossack Fonseca’s purpose is to anonymously assist people in protecting their financial assets, and the world’s most affluent international politicians, business leaders, and celebrities have used offshore bank accounts and shell companies to hide their wealth and avoid paying their taxes through this Panamanian organization.

Among the rich who took advantage of the confidential offshore tax regime was Russian president, Vladimir Putin. Though he is not explicitly mentioned by name in any of the documents, the data indisputably suggests that the offshore deals and vast loans worth two billion dollars are connected to the Russian ruler and his family and close friends. Other powerful political people involved include Iceland’s Prime minister who resigned after the release of the Papers, Prime Minister David Cameron’s father, and Brazilian President Dilma Rousseff.

In response to the Panama Papers, Mossack Fonseca released a statement, part of which reveals, “The facts are these: while we may have been the victim of a data breach, nothing we’ve seen in this illegally obtained cache of documents suggests we’ve done anything illegal, and that’s very much in keeping with the global reputation we’ve built over the past 40 years of doing business the right way, right here in Panama.”

Gerard Ryle, the director of ICIJ says that “the biggest consequence of the leak is the massive blow to secrecy.” Without secrecy, offshore tax havens no longer seem as attractive.

The world is keen on reforming the way taxes are collected, reported and enforced to avoid instances such as those revealed in the Panama Papers. People throughout the globe are intent on getting rid of corruption and bringing those who cheat the system to justice.

Sources: CNN, Guardian, VOX Policy and Politics, New Economics

Photo Source: Gerd Altmann