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An anonymous source recently leaked 11.5 million documents – that’s 2.6 terabytes worth of data – from Mossack Fonseca, a law firm in Panama. The firm had been creating hundreds of thousands of fake or shell companies, to essentially allow world leaders such as British prime minister David Cameron’s father, the Icelandic prime minister, as well as over a hundred international companies, to avoid taxes. German paper The Süddeutsche Zeitung (SZ) revealed the leak on Sunday, April 3rd, and the leak has been titled The Panama Papers.
Firms like Mossack Fonseca essentially create fake businesses as a business; well established names and companies invest in these fake businesses to avoid various taxes, and then are able to take the majority of the money back, with the firm taking a cut. According to an article in The New York Times, the leak was connected to 143 politicians, their families, and close associates — including 12 highly placed political leaders — to the use of tax havens to shield vast wealth.
Some connections linked back to Russian president Vladimir Putin, who denied any association with the leak. He said that the Panama Papers leak was “part of a U.S.-led plot to weaken Russia,” the Associated Press reported. “They are trying to destabilize us from within in order to make us more compliant,” Putin said. (USA Today)
One politician who has stepped down from office amid the leak was former Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson, who reportedly stepped down on April 5th. According to the leak, Gunnlaugsson and his wife set up a company in British Virgin Islands to shield their income from taxes.
British Prime Minister David Cameron has also been placed underneath the microscope – the leaks revealed that he had profited from a trust his father, the late Ian Donald Cameron, had set up during his stockbroking career. Labour leader Jeremy Corbyn said the PM had “misled the public” and “lost the trust of the British people”.
“After years of calling for tax transparency and attacking complex offshore tax arrangements as ‘morally wrong’, the prime minister has been shown to have personally benefited from exactly such a secretive offshore investment,” said Labour leader Jeremy Corbyn. Corbyn demanded the PM should release a “full account of all his private financial dealings and make a statement to Parliament next week”.
Although The Süddeutsche Zeitung received the link back in 2015, the 11.5 million documents have not completely been filtered through; this is only the beginning to who or what leaks will allude to, not to mention that Mossack Fonseca is only one of the many offshore law firms in Panama, and other countries alike. Caption: People gather in Reykjavik to protest against the PM’s corruption in response to the Panama Papers leak.(AP/Brynjar Gunnarsson)Caption: The scale of the leak (The Süddeutsche Zeitung)
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