By Tess Owen
If you suspect that your colleague or neighbor has luxurious properties, race cars, and millions of dollars hidden in some island paradise, then today could be your lucky day. On Monday, a huge portion of leaked Panama Papers data became entirely public. That means anyone can now trawl through the names of more than 200,000 offshore companies, all of which were incorporated with the help of shady legal firm Mossack Fonseca in far-flung tax havens like the Seychelles and the British Virgin Islands.
All 11.5 million confidential documents were originally leaked to German newspaper Suddeutsche Zeitung (SZ) and shared with the International Consortium of Investigative Journalists. A coordinated effort by media outlets around the world sifted through those documents, connecting the dots inside the murky world of offshore shell companies and revealed elaborate tax evasion schemes, many linked to the world's rich and powerful.
The documents, which were first reported on last month, linked offshore accounts to 72 former and current heads of state.
While there are plenty of legitimate reasons for why a person would want to create a shell company, the arrangement is also popular among those who want to skirt economic sanctions, launder money, and evade taxes. The documents showed that Mossack Fonseca has worked with Ponzi schemers, diamond traders, members of FIFA, property tycoons, Saudi kings, wealthy art collectors, drug kingpins, and Ukrainian oligarchs alike.
In a manifesto published last week and titled "The Revolution Will be Digitized," the anonymous source responsible for leaking the enormous trove of documents said she or he would be "willing to cooperate with law enforcement" on the condition that governments "codify legal protections for whistleblowers into law."
"Income inequality is one of the defining issues of our time," the leaker wrote under the pseudonym John Doe, adding that politicians, activists, and academics alike have tried to understand the reason behind the "sudden acceleration" of global inequality.
"The Panama Papers provide a compelling answer to these questions: massive, pervasive corruption," John Doe wrote. "More than just a cog in the machine of "wealth management," Mossack Fonseca used its influence to write and bend laws worldwide to favor the interests of criminals over a decade."
In response to the leaks, Mossack Fonseca denied allegations that it was actively enabling criminal activity, writing in a statement that it has operated for 40 years "beyond reproach in our home country and in other jurisdictions where we have operations."
"Our firm has never been accused or charged in connection with criminal wrongdoing," the statement said.
The days immediately following the papers' release was chaotic. Iceland's Prime Minister Sigmundur Davîo Gunnlaugsson resigned just two days after documents revealed he had about $4 million of undisclosed assets tied up in an account in the British Virgin Islands. In Spain, José Manuel Soria, minister of industry, energy, and tourism, was also forced to resign after the Panama Papers exposed his family's hidden wealth. UK Prime Minister David Cameron was forced to admit he owned shares in his late father's offshore account, prompting calls for his resignation.
But the dust has settled since. Investigations into some of the individuals and organizations named by the papers are ongoing. For example, Australia's tax office says it is investigating the 800 individuals implicated in the leaks. France has launched a preliminary investigation into tax fraud and money laundering. Most recently, a close analysis of the data found that many wealthy Latin Americans look to New Zealand to hide their money — a country whose legal framework, tax-free status, and strict privacy laws make it the perfect choice to do so. New Zealand's Prime Minister John key is increasingly under pressure to take action, and his government has promised to review foreign trust laws.
The Panama Papers also stoked a new global awareness and anger, and many governments in addition to New Zealand have pledged to find ways to close the loopholes which enable such tax evasion arrangements. Oxfam America's recent report "Broken at the Top" found that 50 of the United States' largest companies' have $1.4 trillion hidden in tax havens. Oxfam determined that the tax practices of these corporate behemoths were costing Americans an estimated $111 billion per year, and costing developing countries another $100 billion a year.
"In this system — our system — the slaves are unaware both of their status and of their masters, who exist in a world apart where the intangible shackles are carefully hidden amongst reams of unreachable legalese," John Doe wrote in their manifesto. "When it takes a whistleblower to sound the alarm, it is cause for even greater concern. It signals that democracy's checks and balances have all failed, that the breakdown is systemic, and that severe instability could be just around the corner.