The Panama Papers

So another massive data leak has rocked the world today, this time a record breaking 2.6 terabytes of data describing the role that a Panamanian law firm played (plays) in helping the financial elite cover their monetary tracks (tracks associating them with arms deals, slavery, fraud, drug trafficking, etc.) and avoid taxation.

The dump of 11.5 million documents reportedly comes from a law firm called Mossack Fonseca, which has offices in Panama and 35 other countries and specializes in the creation of shell companies in tax havens around the world for the rich and powerful. The data are said to include e-mails and other documents dating back 40 years, detailing more than 200,000 shell companies.

The Globe and Mail

According to the ICIJ:


The largest cross-border journalism collaboration ever has uncovered a giant leak of documents from Mossack Fonseca, a global law firm based in Panama.

The secret files:

  • Include 11.5 million records, dating back nearly 40 years – making it the largest leak in offshore history. Contains details on more than 214,000 offshore entities connected to people in more than 200 countries and territories. Company owners in billionaires, sports stars, drug smugglers and fraudsters.
  • Reveal the offshore holdings 140 politicians and public officials around the world – including 12 current and former world leaders. Among them: the prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia.
  • Document some $2 billion in transactions secretly shuffled through banks and shadow companies by associates of Russian President Vladimir Putin.
  • Include the names of at least 33 people and companies blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran.
  • Show how major banks have driven the creation of hard-to-trace companies in offshore havens. More than 500 banks their subsidiaries and their branches – including HSBC, UBS and Société Générale – created more than 15,000 offshore companies for their customers through Mossack Fonseca.

Explore the data for more of the key numbers from the Panama Papers files, or read more about this project.

If you’re asking yourself how anyone can get away with stashing all this cash, The Guardian has a useful video outlining the steps Putin would have taken in securing his $2 billion of secret money.

Other than Putin, the prime minister of Iceland (Sigmundur Davíð Gunnlaugssonin) is probably one of the people most affected by the release of these documents. Thousands of people gathered on Monday to demand his resignation, as his name was found in connection to a company set up in 2007 that was found within the Panama Papers. He made a brief attempt to discuss the matter with journalists, only to back out at the end, calling the whole thing made-up and inappropriate.

Not convinced he’s in the wrong? This breakdown by the Reykjavik Grapevine might help.

I understand the outrage. He’s a hypocrite. I could see that without any context. I want to understand exactly what’s happening, so I compiled a simple guide for those of us who need a little recap on the situation.

Here’s a simple guide to the whole thing:

  1. Sigmundur Davið and his wife started an offshore company in 2007 which had bonds in three Icelandic Banks: Kaupthing, Landsbanki and Glitnir. *Owning bonds means you are lending money to the bank, which makes the Prime Minister and his wife “creditors” or lenders to the bank.
  2. In 2008, the economic crash happened. Those three banks go into insolvency–meaning they collapsed and had to start paying off their debts as best they could–starting with people’s savings and then bonds.
  3. In 2009, Sigmundur Davið became the chairman for the Progressive Party and was elected into parliament in April of 2009. New transparency laws stated that Members of Parliament had to reveal any shareholding in a company that was over 25%. At that time Sigmundur Davið was still 50% owner of Wintris inc. with his wife owning the other 50%.
  4. On December 31, 2009, Sigmundur Davið sold his wife his half of the company for $1 USD.

The big issue here and the reason behind Icelanders’ anger, frustration and embarrassment is how Sigmundur Davið gained popularity and trust in the first place. He was part of a grassroots political movement called “In Defence Of Iceland” or “InDefence” for short. His Iceland-comes-first narrative seemed to be in line with many Icelanders in the wake of the financial crash and he was elected Prime Minister in 2013. He was one of the people, supposedly, who was fighting to protect Iceland from the “Vulture” creditors. He also stressed the importance of keeping money in Iceland and staying with the Króna, Iceland’s currency.

He never disclosed his involvement with being a creditor in the past or having money in an offshore account in a different currency. As Prime Minister, he was making decisions which directly affected creditors or, more bluntly, his wife’s company–clearly a conflict of interest. Here is where it gets interesting:

  1. After the crash in 2008, creditors who took their money out of Iceland were charged a 39% “stability tax.”
  1. Last year, in 2015, Sigmundur Davið’s government removed the 39% “stability tax” in favour of a deal which only asked for a “stability contribution,”effectively removing 2 billion Euros that would have gone to the state, but now goes to creditors: Wintris inc., his wife’s company, Wintris inc., being one of those creditors.

Sigmundur Davið has betrayed the trust of the Icelandic people by not disclosing this information in the first place and embarrassed the nation by lying on camera to a Swedish journalist.

The long story short seems to be that the rich get richer, politicians are always scumbags and we need a lot more whistle blowers and journalists to tear down the walls that are protecting these assholes. I’d love to comment more on this but the facts are taking up too much room

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