to tax evasion, money laundering, and bypassing sanctions. The “Panama Papers” are a collection

of 11 and a half million documents concerning offshore companies and tax havens spanning

from the 1970s to 2015. Implicated are heads of state around the world, in countries like Argentina, Iceland, Saudi Arabia,

the United Arab Emirates, and Ukraine, as well as other influential people in 40 other

governments. So, what exactly is in the Panama Papers?

Well, in August of 2015, an anonymous source provided German newspaper Suddeutsche Zeitung

with 2.6 terabytes worth of documents, the biggest data leak in history. In order to

research and report on the information, Suddeutsche Zeitung reached out to the International Consortium

of Investigative Journalists and roughly 400 journalists at more than 100 media organizations.

After a year of investigations, what they discovered was evidence that a Panamanian

law firm, known as Mossack Fonseca, had helped their clients hide taxable income from foreign

governments, avoid international sanctions, and even launder potentially illegal funds.

Mossack Fonseca was able to do this by creating “shell companies” for its clients in

tax-free havens, like Panama. These companies largely exist to hold customer money as an

“investment”, instead of declaring it as profit or income, and thus having to pay

taxes on it. These companies also muddy the connection between the source of the funds,

and where they end up.

One of the larger reveals in the “Panama Papers” was that the Prime Minister of Iceland

used a Panamanian shell company to invest money in three failing Icelandic banks. By

not declaring his financial involvement in the outcome of banking negotiations, there

was evidently a large conflict of interest. An estimated ten thousand Icelandic citizens

protested in the capital, forcing the resignation of the Prime Minister. Other documents

show that by way of these shell companies, Syria was able to circumvent international

sanctions in order to purchase fuel for its air force. And there are also instances where

close friends of Russian President Vladimir Putin made deals with a sanctioned Russian

bank through shell corporations.

The next few months of disclosures are expected to uncover a tangled web of behind-the-scenes

illegal banking among the world’s most powerful people. But whether those named in the documents

will ever be prosecuted, or if these revelations will spark revolutions, is yet to be seen.

As details continue to emerge, you probably won’t be surprised at some of the more corrupt

country leaders implicated in the scandal. Check out our playlist on corruption at the

top, starting with our video on some of the world’s most corrupt countries. You can

also click the video below to learn about why one of the most authoritarian and restrictive

leaders, Russian President Vladimir Putin, is still adored by his constituents. Thanks

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