The Panama Papers Scandal: Who Was Exposed & Consequences

What Are the Panama Papers?

The Panama Papers refer to the 11.5 million leaked encrypted confidential documents that were the property of Panama-based law firm Mossack Fonseca. The documents were released on April 3, 2016, by the German newspaper Süddeutsche Zeitung (SZ), dubbing them the “Panama Papers.”

The document exposed the network of more than 214,000 tax havens involving people and entities from 200 different nations. A yearlong team effort by SZ and the International Consortium of Investigative Journalists (ICIJ) went into deciphering the encrypted files before the revelations were made public.

Key Takeaways

  • The Panama Papers were a massive leak of financial files from the database of Mossack Fonseca, the fourth-biggest offshore law firm in the world.
  • The documents were leaked anonymously to the German newspaper Süddeutsche Zeitung (SZ).
  • The files exposed a network of 214,000 tax havens involving wealthy people, public officials, and entities from 200 nations.
  • The anonymous source who leaked the papers did so from Panama, hence the name Panama Papers.
  • Most of the documents showed no illegal actions, but some of the shell corporations set up by Mossack Fonseca had been used for fraud, tax evasion, or avoiding international sanctions.

Understanding the Panama Papers

The Panama Papers are documents that contain personal financial information about many wealthy individuals and public officials that had previously been kept private. Among those named in the leak were a dozen current or former world leaders, 128 public officials, politicians, hundreds of celebrities, business people, and other wealthy individuals.

Offshore business entities are legal, in general, and most of the documents showed no inappropriate or illegal behavior. But some of the shell corporations set up by Mossack Fonseca were revealed by reporters to have been used for illegal purposes, including fraud, tax evasion, and the avoidance of international sanctions.

Documents Leaked by Anonymous Source 

In 2015, Süddeutsche Zeitung (SZ) was contacted by an anonymous source calling themselves "John Doe," who offered to leak the documents. Doe did not demand any financial compensation in return, according to the SZ. The total volume of data comes to about 2.6 terabytes, making it the biggest data leak in history, and it pertains to the period spanning from the 1970s to the spring of 2016.

Initially, only select names of politicians, public officials, businessmen, and others involved were revealed. One of the immediate consequences of the revelations was the April 4, 2016, resignation of Iceland's Prime Minister Sigmundur David Gunnlaugsson.

On May 9, all of the 214,488 offshore entities named in the Panama Papers became searchable via a database on the website of the International Consortium of Investigative Journalists (ICIJ).

The database of offshore law firm Mossack Fonseca reportedly leaked 11.5 million confidential documents.

The Source of the Name "Panama Papers"

The group of documents was referred to as the "Panama Papers" because the leak originated from Panama. However, the Panamanian government has registered strong objections to the name as it appears to put some blame or negative association on the country.

Panama attests that it has had no involvement in the actions of Mossack Fonseca. Nonetheless, the nickname has persisted, although some media outlets that have covered the story have referred to it as the "Mossack Fonseca Papers."

Larger than both the Panama and Paradise Papers, the Pandora Papers are a release of more than 12 million leaked documents that reveal the hidden and sometimes unethical or corrupt dealings of the global wealthy and elite—including prominent world leaders, politicians, corporate executives, celebrities, and billionaires. 

What Is the Panama Papers Scandal?

The Panama Papers scandal involved a leak of 11.5 million confidential documents from Panamanian law firm Mossack Fonseca. German newspaper Süddeutsche Zeitung (SZ) reported the leak, which exposed more than 214,000 tax havens involving high-profile people, government officials, and entities from 200 different nations.

Who Leaked the Panama Papers?

An anonymous source, coined John Doe, from Panama leaked the documents to German newspaper Süddeutsche Zeitung (SZ) for no cosideration.

What Happened to Mossack Fonseca?

In March 2018, Mossack Fonseca terminated operations but agreed to continue working with authorities in any ongoing investigations into the Panama Papers scandal.

Did Anyone Go to Jail for the Panama Papers?

Germany has issued an arrest warrant for Mossack Fonseca lawyers Juergen Mossack and Ramón Fonseca for tax evasion and operating a criminal organization. However, because of Panama's extradition laws, they will not be handed over to German officials. In Panama, they face charges connected to the Panama Papers scandal and bribery with a Brazillian company, of which they spent two months in jail before bonding out.

U.S. taxpayer Harald Joachim von der Goltz was convicted of wire and tax fraud, money laundering, and a host of other crimes relating to the Panama Papers scandal. He was sentenced to four years in a U.S. federal prison.

Time will tell who else will be charged in connection with this scandal.

Article Sources
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  1. Süddeutsche Zeitung. "About the Panama Papers."

  2. International Consortium of Investigative Journalists. "Iceland Prime Minister Tenders Resignation Following Panama Papers Revelations."

  3. International Consortium of Investigative Journalists. "Offshore Leaks Database-Data from Panama Papers."

  4. AP News. "German Arrest Order for Panama Papers Lawyers Faces Hurdle."

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