What the Leak of the Panama Papers Means
There's a serious double standard for the powerful.
To truly understand an organization or root out corruption, follow the money, the adage goes. Over the weekend, the International Consortium of Investigative Journalists (ICIJ) unleashed the largest data leak in human history. Dubbed the Panama Papers, the leak details how the rich, famous and powerful hide wealth in offshore accounts. One can hope it will allow the public to truly understand hundreds of organizations and root out corruption.
The amount of data is huge. The diplomatic cables that were released by WikiLeaks in 2010 were 1.7 gigabytes of information. The Panama Papers, on the other hand, comprise 2.6 terabytes and it took more than 370 investigative journalists from around the world months to sift through.
To be clear: In most cases, it’s not a crime to set up a shell company in places like Panama or the Virgin Islands. But this is often just a form of tax evasion. As Investor’s Business Daily writes, “[I]t’s increasingly clear that the global elites in politics, business and sports have two sets of rules — one for them, and one for the rest of us.”
There are 143 politicians caught up in the data leak, including Russian President Vladimir Putin. Using people close to him, Putin has been able to stash $2 billion overseas. Another politician, Petro Poroshenko, who won Ukraine’s presidency, promised to divest himself from his assets in the television and chocolate industries. However, Poroshenko merely hid those assets offshore.
These are not just examples of the rich being rich. Thanks to money hidden offshore, people got hurt. People died. For example, according to a video produced by ICIJ, offshore money has been used to fuel Bashar al Assad’s campaign to bomb Syria’s civilian population. It has funded drug trafficking, bribery and sex trafficking of teenage girls.
As Quartz editor Bobby Ghosh tweeted, “Can we just remind ourselves that the #PanamaPapers are from just ONE law firm, in just ONE tax haven. Tip of the proverbial iceberg.” Part of the industry operating under the cover of darkness just had a huge spotlight lit upon it. Rats will scatter.
Update: Iceland Prime Minister Sigmundur Gunnlaugsson is the first resignation.