The recent disclosure by the International Consortium of Investigative Journalists (ICIJ) of 11.5 million documents “obtained” from Panamanian based legal firm Mossack Fonseca into the manner in which rich, famous and notorious people sheltered their funds from tax have certainly opened a debate on tax avoidance and tax evasion. They led to embarrassment on the part of UK PM David Cameron when it became clear his late father had established an off-shore fund via the firm and to the fall of the Icelandic PM when it transpired that he and his wife had used their services to mask the provenance of their monies at the heart of the Icelandic financial crisis. The Spanish industry minister has also resigned in the wake of the Panama papers.
Judicial authorities in a number of countries have expressed interest in access to the trove of information concerning their nationals. The information, it seems, was obtained by an illegal hack on Mossack Fonseca’s computers and the firm, which maintains that it has not done anything unlawful (others would disagree) argues that it is the victim of a computer crime.
The US Justice Department has approached ICIJ for help into a tax avoidance investigation in the States: “The U.S. Attorney's Office for the Southern District of New York has opened a criminal investigation regarding matters to which the Panama Papers are relevant. The Office would greatly appreciate to opportunity to speak as soon as possible with any ICIJ employee or representative involved in the Panama Papers project in order to discuss this matter further.”
There is a much-loved conceit in US legal TV dramas where damning evidence against a criminal must be thrown out because it was obtained following an illegal act – so-called “fruit of the poisonous tree”. Since the information obtained in the ICIJ materials was obtained by an illegal hack (as opposed to anything that the US National Security Agency may do, of course) it remains to be seen if information obtained in this way can be used in (US, at least) legal proceedings. Certainly, the Mossack Fonseca documents have put the issues of tax evasion, shell companies, sanctions avoidance and a wealth of other nefarious activities under the public spotlight and will boost the impetus towards a stricter, internationally co-ordinated approach to taxation of corporations and the legitimate measures to which individuals can turn to shelter their cash from the taxman.