How do the ultra-wealthy hide their money? A massive document leak reveals a lot of the process, even exposing Vladimir Putin’s friends use of shell companies. But Putin is just one of the many, many public figures that have been caught using the shadowy “offshore world.”
The massive data leak, known as the Panama Papers, contains about 2.6 terabytes of data, roughly 11 million documents from the Panamanian law firm Mossack Fonseca & Co. showing how some of the world’s wealthiest people dodge taxes and launder money. Over 370 journalists sifted through the papers and some of the first results have been published through the International Consortium of Investigative Journalists.
According to the Seattle Times, the developing list of implicated people ranges from Kings to drug-dealers. Namely, the list includes the Kings of Morocco and Saudi Arabia, the Prime Ministers of Iceland and Pakistan, close associates to Bashar Al Assad and Mexican President Enrique Pena Nieto. Even the families of British Prime Minister David Cameron and Chinese President Xi Jinping have been implicated.
The papers show information on webs of shell companies, offshore bank accounts and phony transactions that can be used to launder money or simply hide it from taxation. For example, Ian Cameron, the British PM’s father, “helped create and develop Blairmore Holdings Inc. in Panama in 1982” according to the documents, which became a $20 million entity by 1998. Cameron was then able to advertise Blairmore as a company “not liable to taxation” to potential investors.
Fusion put together a few profiles on the more famous names in the documents, but the media is focusing largely on one man — Vladimir Putin.
The Russian president doesn’t have shell companies of his own, but his close friends had plenty. The Guardian created a map to simplify the complicated relationship between Putin and the roughly $2 billion dollars that was funneled in and out of Russia.
Sergey Roldugin, known as a world-class cellist and close friend of Putin since the 1970s, owns three shell companies — two of them funded through what the U.S. calls “Russia’s personal bank for senior officials.” He’s a major player in a number of real businesses too, owning 12.5 percent of Russia’s biggest TV advertising agency, Video International, and 15 percent of a major truck company called Raytar.
Arkady and Boris Rotenberg, billionaire brothers and also close friends with Putin, own seven British Island shell companies. They’re sanctioned by the U.S. and have been accused of corruption and of profiting from contracts in the Sochi Olympics.
Although the journalists uncovered connections to people accused of various crimes, the massive data leak might lead to a surprisingly low amount of criminal charges. There’s nothing inherently illegal about maneuvers in the “offshore world.”
As for the Mossack Fonseca & Co., their spokesman Carlos Sousa vehemently denied criminal allegations.
“We have not once in nearly 40 years of operation been charged with criminal wrongdoing. We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it.”
The law firm insists that implicating them is like blaming an automaker “for an accident or if the car was used in a robbery.”
Still, the massive leak of documents made the secretive offshore world a lot less secretive, and that by itself is a major blow, according to ICIJ director Gerard Ryle speaking to the BBC.
“I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents.”
The more important question might be if the massive document leak will lead to any lasting change in the global financial system.
[Photo by Alexey Kudenko/Host Photo Agency via Getty Images]