Files which have been leaked from Panama law firm, Mossack Fonseca which specialises in offshore company formation has highlighted politicians, criminals and celebrities across the world which have used banks and shadow companies to hide their finances.
Within hours of the story being released by the International Consortium of Investigative Journalists the news urged a parliamentary vote of confidence in Iceland, denial from Argentina and angered a close confidant of Russian President Vladimir Putin.
The leak came from an anonymous source who got in touch with the German newspaper Süddeutsche Zeitung, which then shared the data with the International Consortium of Investigative Journalists (ICIJ).
The consortium said that it had been given a cache of 11.5 million records which held information on more than 200,000 offshore shell companies. The leak includes offshore companies linked to 12 current and previous world leaders, whilst more than 128 politicians have been implicated amongst celebrities and other officials.
Offshore company’s which are technically legal have been used by many to hide wealth and avoid paying tax and since the financial crisis governments have been attempting to crack down on them. Some documents which were cited by the ICIJ showed that some banks and law firms have failed to follow the required checks to ensure funds were not from criminal activity.
José Ugaz, the chairman of Transparency International, said in a statement:
“The Panama Papers investigation unmasks the dark side of the global financial system where banks, lawyers and financial professionals enable secret companies to hide illicit corrupt money.”
It has been alleged that $2 billion in transactions had ties to Vladimir Putin and some of which was used to gain indirect influence over shareholders in Russian companies.
Dmitry Peskov, a spokesman for the Kremlin said:
“The main target of this disinformation is our president, especially in the context of the upcoming parliamentary elections and in the context of a longer-term perspective – I mean presidential elections in two years.
“This Putinophobia abroad has reached such a point that it is in fact taboo to say something good about Russia, or about any actions by Russia or any Russian achievements.”
Iceland has been one of the most affected country’s in the west due to allegations that the Icelandic Prime Minister’s wife had an investment account in the British Virgin Islands to manage inheritance and avoid tax. The PM now faces a confidence vote in parliament on Monday.
According to the ICIJ’s report there are also current and former leaders from Argentina, Georgia, Iraq, Jordan, Qatar, Saudi Arabia, Sudan, United Arab Emirates, and Ukraine which all had accounts.
In a written response to the consortium, Mossack Fonseca said it the company “does not foster or promote illegal acts” and that allegations of providing business structures “designed to hide the identity of the real owners are completely unsupported and false.”
The government of Panama said it will cooperate with any legal probe resulting from the data leak.