The strange story behind the Panama Papers
The story of the Panama Papers starts with the International Consortium for Investigative Journalists (ICIJ), which "using a collaboration of more than 300 reporters on six continents exposed the hidden infrastructure and global scale of offshore tax havens." The ICIJ and its media partners began publishing the Panama Papers investigation on April 3, 2016, after which almost no country was untouched by its revelations.
(The ICIJ is an initiative of the Center for Public Integrity (CPI), an American non-profit organisation for investigative journalism. The CPI was set up by Charles Lewis, a leading US investigative reporter for the past 30 years. Both the CPI and ICIJ are financed by donations, one of the leading donors being the famous and influential George Soros.)
Panama-based law firm Mossack Fonseca has been charged with alleged money-laundering. During the ICIJ's investigation, documents revealed that the well-known law firm had "a separate department for illegal funds” and that Mossack Fonseca “offers solutions” for withholding tax on payments of interest in Europe. Within some months, the ICIJ found out that the founder of the law firm was Jurgen Mossack, a German.
Mossack, his brother Peter and father Erhard Mossack left Germany in the early 1960s. The father returned to Germany and died near Munich, in 1993.
Yet Jurgen Mossack, whose profile says, “born in Furth, Bavaria, Germany”, is a completely unknown entity in Germany, where not a single article has appeared in the German press, even though he is the head of a company linked to some very shady characters. His brother Peter Mossack, in an interview to a German newspaper, Frankfurter Rundshau, stated that he goes back to visit his brother “every couple of years or so". His brother has a law firm in Panama and is "well-connected".
The Mossack brothers are also politically well-connected. When the dictator, Manuel Noriega, came to power in 1983, (he who later turned out to be in the pay rolls of drug dealers), Panama became the preferred banking centre of the legendary Colombian Medellin cartel led by drug baron Pablo Escobar.
The Mexican drug lord Caro Quintero, who ordered the execution of US United States Drug Enforcement Administration agent “Kiki” Camarena Salazar in February 1985, was arrested in Costa Rica in April 1985. Just a few days earlier, a middleman had used Jurgen Mossack’s law firm to set up a company into which Caro Quintero’s assets could flow unchecked. This was followed by a second company which owns a villa in Costa Rica.
When a few years ago, Costa Rico’s National Olympic Committee (NOC) officially requested Mossack Fonseca to hand over the villa, Jurgen Mossack refused. He wrote back to the NOC that even the feared drug baron Pablo Escobar is “a baby” compared to Caro Quintero and he did not under any circumstances want "to be among those Quintero visits after he is released". So the Mossack brothers have substantial contacts with the drug lords. The fact that extreme wealthy industrialists, drug barons, actors, politicians invested in Mossack Fonseca is extremely serious. It is also important to note that Mossack Fonseca is only one of the several banks laundering tax evaded money in Panama.
The Panama Papers also exposes the alleged role of Sergei Roldugin in Russia. Roldugin, a virtuoso cellist and businessman, is part of President Vladimir Putin’s circle of friends from St Petersburg since the 1970s. Roldugin states in one document that he is the sole owner of a company named "International Media Overseas S.A" that is based in Panama. He declares in an answer to a questionnaire that the company’s assets run into billions of rubles, and he expects a long-term income of over 1 million Swiss francs every year.
The Panama Papers, compiled and written by two investigative journalists: Bastian Obermayer and Frederik Obermaier, has nothing on Indian capital. But it is unlikely that no Indian capitalist is involved going by earlier reports on the alleged holdings of KP Singh of DLF, Gautam Adani's older brother, Vinod Shantilal Shah Adani, Bollywood actors Amitabh Bachchan, Aishwarya Rai, etc.
According to the investigation conducted by a chain of media outlets, including The Indian Express, more than 500 Indians figure on the Panama Papers’s list of offshore companies. After all, there are several banks in Panama that launder illegal money, not just Mossack Fonseca. The fact that this legal firm was involved with drug barons and that a prominent Russian citizen who is a musician controls a company expected to generate an annual income of over 1 million francs every year, is also a warning for India.
Incidentally, a famous actor with massive assets like Bachchan could also be a capitalist. Although there are relatively fewer Indian names, a similar situation in Pakistan didn't stop its Supreme Court from removing Nawaz Sharif from the post of PM.
There is a lesson for India. It has been rumoured for more than a year that 500 investors from India have invested tax-evaded income in Panama. But there are several banks in Panama investing illicit funds. There are also other banks in other parts of Central and South America, not to speak of Europe.
On November 8, 2016, Prime Minister Narendra Modi experimented with demonetisation to extract black money from the system. But the actual amount of black money is stashed abroad. Hardly any significant amount of black money has been exposed. After the Panama Papers expose, many expected a substantial amount of black money to be repatriated.
That has not happened. Who has suppressed the truth. And why?
It is ironic that while The Panama Papers have been played down in India, Edward Snowden, a "whistle blower par excellence", has praised this disclosure as "the biggest leak in the history of data journalism".