A Quick Rundown of the Panama Papers: Essential Facts

Have you heard about the Panama Papers leak and the scandal surrounding it? If not, here’s your guide to understanding why this is such an important issue.

What are the Panama Papers?

The Panama Papers are a data leak consisting of 11.5 million files from a mysterious offshore Panama law firm called Mossack Fonseca. It is the biggest data leak so far in recorded history.

A German newspaper, Suddeutsche Zeitung, received the leak from an anonymous source. Suddeutsche Zeitung then shared it with The International Consortium of Investigative Journalists (ICIJ). The ICIJ spread the word about the papers to news outlets like the Guardian and the BBC, and the story quickly caught fire.

On April 13, Panamanian police raided the Mossack Fonseca headquarters. So far, there are no reports on the results of the searches, but in the meantime, we can try to understand the rest of this monumental scandal.

What information did the Papers leak?

The papers reveal that many wealthy people from around the world are dodging tax collectors, regulators, and creditors by way of secret offshore companies.

Who is accused in the Panama Papers?

143 politicians in particular were found in the papers, twelve of which were or currently are national leaders. One of them was Iceland’s Prime Minister, Sigmundur Davíð Gunnlaugsson, who quickly resigned following the allegations his family faced over hiding money offshore.

Vladimir Putin, the president of Russia, is currently facing serious allegations as well. Many of his associates were found with ties to Mossack Fonseca, leaving a trail of $2 billion worth of dirty money. He has since denied these accusations, claiming that this was a planned attack on him by the United States. Britain’s Prime Minister David Cameron also appears to be in trouble, as his father is one of those revealed to be storing money in offshore tax havens.

A full list of those involved can be found here.

Are the actions of Mossack Fonseca illegal?

It’s not clear yet. Holding money in an offshore company is not illegal, but doing so to avoid taxes is breaking the law.

What are the consequences of the leak?

Those accused might be on their last legs, but that remains to be seen as more information flows in during the coming weeks. The elite and businesspeople of the world are on the defensive.

Meanwhile, this leak has sent a ripple through the issue of wealth inequality, spawning further distrust against the establishment. The government will have to reinvigorate its efforts to stop tax evasion and avoidance. And not only will the people confuse those two terms, they will view them as one in the same, remaining skeptical about these offshore tax havens.

Can I read them?

As of now, there is no way to read the papers. A huge amount is personal information, especially those who are innocent and have nothing to do with the scandal. You can, however, find a wealth of information available on the people involved and the implications of the scandal.

According to Quartz, the IRS is warning Americans to come clean before they finish reading the papers. They are advising that anyone who has an offshore account should disclose it before the government finds it.