Earlier this month, the International Consortium of Investigative Journalists (ICIJ) released what is now infamously known as the Panama Papers. The organization, a massive network of nearly 200 investigative journalists in over 65 countries, originally got the news from German newspaper Süddeutsche Zeitung, who shared it with the consortium to allow the news to receive more coverage. This leak revealed an underground money network linked with several world leaders, with Russian President Vladimir Putin topping the list.
…BUT WHAT ARE THE PANAMA PAPERS?
Consider the Panama Papers the 21st century’s Watergate or Iran-Contra Affair. A political scandal for the new age (undoubtedly the first of many to come), this unparalleled leak of 11.5 million files reveals how the world’s richest have abused offshore accounts for tax evasion and money laundering. The two billion dollar trail leads back to Vladimir Putin and Russian banks. These encrypted files have been affectionately named the Panama Papers because they were found in Mossack Fonseca’s database, the world’s fourth-largest offshore law firm based in Panama. The company, which has dozens of international offices, says it was servers were hacked by an unknown source from abroad.
PANAMA PAPERS’ PREMIERE PLAYERS
Putin is only one of several world leaders to have connections to the Panama Papers. So far, 140 leaders and politicians from over 50 countries have been officially linked to the files. Some major leaders include Pakistani Prime Minister Nawaz Sharif, Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson, former Iraqi Vice President Ayad Allawi, and current Ukrainian President Petro Poroshenko. Since the release, Gunnlaugsson has stepped down from office. Interestingly enough, there was no indication of American involvement with the Panama Papers outside of Marianna Olszewski, a Chicago-based author and (you guessed it) financial coach. Others involved include various international corporate executives with previous histories of corruption and racketeering conspiracy, and a board member of FIFA’s ethics committee (oh the irony).
WHY IS THIS NEWS?
Relocating money to offshore bank accounts is nothing new, but the Panama Papers serve as a “read receipt” of sorts proving that several major leaders have laundered money, dodged sanctions, and evaded taxes. But the bigger repercussions of their actions are revealed in its effect on their country’s people. Yes, it’s true that American political leaders weren’t linked to the papers, but the uproar from the American people that would result in response to such a link would be unstoppable.
This is not the case for every country. Right now, current Argentine President Mauricio Macri and his team of lawyers are fighting to have a writ that denies Macri’s laundering to an offshore company. This is in the midst of an ongoing case against former Argentine President Cristina Fernández de Kirchner for embezzlement. Meanwhile, Iceland’s now former Prime Minister stepped down after public outrage lead to a demand for his resignation. Vladimir Putin states that he “see[s] no corruption in the revelations of the Panama Papers.” Beyond obvious demonstrations of abuse of power in various nations, whats sad is these leaders’ failure to govern their people with fairness and honesty. The media may soon move on from these scandals, but this exposure is likely to have repercussions far beyond a few weeks.