One of the most discussed topics in the news and overall world of politics currently is the Panama Papers. These leaked documents revealed how some of the world’s most powerful people may have used offshore bank accounts and shell companies to conceal their wealth and or avoid paying taxes.
The papers were a collection of millions of leaked confidential documents from the Mossack Fonseca law firm in Panama, since 1977 to 2015. These documents identify business leaders, celebrities, and various international politicians.
All of the individuals mentioned were noted to be in multiple traces of suspicious financial transactions. Overall, this groundbreaking story has sparked concerns about security and corruption in the global financial system.
Some of the most well-known names that were mentioned in the leaked documents were associates of President Vladimir V. Putin of Russia, the father of Prime Minister David Cameron of Britain and relatives of President Xi Jinping of China. Along with King Salman of Saudi Arabia, and Sigmundur David Gunnlaugsson who resigned as prime minister of Iceland. And lastly soccer superstar Lionel Messi who happens to be one of the world’s wealthiest athletes.
Those famous names were among the hundreds of people that the papers link to thousands of offshore shell companies. Offshore shell companies can be used to hide extreme wealth from tax collectors, regulators and creditors.
Multiple people who were named in the papers have strongly denied that they have broken any laws. Putin said allegations that his friends moved around $2 billion among a handful of shell companies were an American plot to undermine Russian unity.
The documents included cash transations, incorporation dates, links between companis and indiduals.
When looking at American involvement, it is not known how many United States citizens potentially may have been involved. So far, the documents have not connected any major American politicians or other influential Americans to Mossack Fonseca. One reason for this could be the fact that it is pretty easy to form shell companies in the U.S.
University students shared their opinions on the news reports regarding the Panama Papers. Daniel Panaro, a senior Health Studies major said, “I find the entire story to be extremely interesting and very noteworthy due to the fact that so many people from all across the globe were involved, it’s going to be shocking to see how this entire scandal unfolds and what other elements to the story will be released next!”
Junior marketing student, Michael Morse, said, “Until learning about this story I personally had no knowledge regarding how these various types of shell companies worked, I find it to be fascinating that so many well-known figures are potential involved in this scandal.”
Instructor of history and anthropology, Walter Greason, said, “Digital hackers have emerged as the twenty-first century versions of the muckrakers who pushed for political reforms a century ago. In a global society where neither workers nor consumers have an organized voice outside of major media outlets, renegade networks like Wikileaks and people like Edward Snowden inspire a new generation to challenge prevailing authorities in both government and industry.”
It is still not clear whether the leaked papers showcase any lawbreaking behavior. Holding money using an offshore company is generally not illegal, however it may be done to hide criminal activity from others, for example, by facilitating money laundering or tax evasion.
However, there can be legitimate uses for foreign shell companies and valid reasons for multinational corporations, joint ventures or for wealthy individuals to use such companies.
For example, many countries allow land to be owned only by citizens or locally registered companies. So a foreigner looking for vacation property would set up a shell company to purchase the home.
A corporation creating a joint venture in a country with a weak legal system may want to do so using an offshore company based in a place that has access to stronger courts along with operating under more sophisticated financial laws. Overall, this scandal will be developing more and more throughout the following weeks, and it will be extremely exciting to see how it concludes once more of the information and various factors play out in the near future.
According to the Washington Free Beacon, the release of the Panama Papers could affect Presidental Candidate Hillary Clinton’s campaign. Both Bill and Hillary, along with thei non profit Clinton foundation, have established at least five shell companies in Delaware. All five of the companies are filed under an address shared with other companies such as Google, Apple, Coca-Cola, and 280,000 others that use the facility to take advatage of the state’s tax laws.
Presidental candidate Bernie Sanders, as an outspoken advocate, told Wyoming voters last tuesday, “we’ve recently heard the startling revelations about the tax doge that is taking place in Panama. In a time of massice income and welath inequality, how does it happen that you have large, profitable multinational corporations who in a given year pay zero, not a penny, in federal income taxes?”
PHOTO TAKEN from The International Consortium of Investigative Journalism
