Watergate was a major political scandal that occurred in the United States in the 1970s but it pales in the face of the latest global financial outrage.
The ‘Panama Papers’ are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca over a period of four decades. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ) and then with a large network of international partners. The papers revealed financial arrangements of politicians and public figures including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine.
Mossack Fonseca, which says it has set up more than 240,000 offshore companies for clients around the globe, denied any wrongdoing and is calling itself the victim of a campaign against privacy.
Many Ways to Exploitation
The documents show the countless ways in which wealthy individuals can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens. Governments across the world are now investigating possible financial wrongdoing by many of these the rich and powerful people.
In the U.S., the Department of Justice will determine whether there was evidence of corruption and other violations of U.S. law. According to one White House spokesman, "in spite of the lack of transparency that exists in many of these transactions, there were U.S. experts who could find out whether they violated sanctions and laws.”