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What are the Mysterious Panama Papers? Who Was Left Out And Why? (Video)
WHAT ARE THE PANAMA PAPERS?
A GUIDE TO THE BIGGEST DATA LEAK IN HISTORY
No matter where you are in the world, there are three words you are absolutely certain to hear over, and over, and over again in the coming days, weeks, and months, and those words are: The Panama Papers. What do we know about them? The video below gives a basic breakdown, but to sum up the Panama Papers from a very high level, they are documents (in this case 2.6 terabytes of data worth) which are processed or held by Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world. The shell firms they sell enable their owners to cover up their business dealings, regardless of how shady the business dealings may be.
One can only surmise how long it will take to sort through that much data, but even at this early stage, a few things are worth noting. First, not all people who use offshore shell companies are crooks, bad people, or doing anything illegal. Second, many people using offshore shell companies ARE crooks, bad people, and ARE doing something illegal. Third, understand that whatever information the mainstream media provides is most likely highly tainted.
As you’ll see in the video below, the world’s media has been pointing at one person following a massive documents leak from a Panama law firm. But that person, President Vladimir Putin, wasn’t even mentioned in the data leak. Former British ambassador and human rights activist Craig Murray joins RT to discuss this issue.
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The information being covered-up by the Panama Papers is like a different universe than the rest of society. It’s a world that exists only through the use of middle men who work and transact business in the shadows, and among some of those already documented in the Panama Papers are members of the world’s rich and famous: from politicians, Fifa officials, fraudsters and drug smugglers, to celebrities and professional athletes. Also, the following 12 heads of state have been named:
Mauricio Macri, president or Argentina.
Bidzina Ivanishvill. ex PM of Georgia
Sigmundur Davío Gunnlaugsson, PM of Iceland. (The something-something was me being a lazy bum, sue me)
Ayad H. Allawi, ex PM of Iraq.
Ali Abu-Ragheb, ex PM of Jordan.
Hamad Jasim J.M. Al-Thani, ex PM of Qatar.
Sheik Al-Thani, Emir of Qatar.
HM King Salman, King of Saudi Arabia
Ahmad Al-Nirghani, ex-president of Sudan
Sultan Al-Nahyan, president of the UAE.
Pavlo Lazarenko, ex-PM of Ukraine.
Petro Poroshenko, president of Ukraine.
One thing that is noticeably absent from the Panama Papers so far is any references to U.S. politicians or stars. It’s probably a safe bet that it’s not because they’re all squeaky clean, but rather it probably just signifies that Mossack Fonseca was the fourth largest firm of it’s kind in the world, meaning there are plenty of other places for dirty U.S. citizens to be hiding. Interestingly, one name that has appeared with a lot of frequency is Vladimir Putin, so some have suggested that this might be the work of the CIA.
At the conclusion of this article, stay tuned for an additional piece on what the media is reporting to be Putin’s alleged role in the Panama Papers thus far. In the days and weeks that follow, I suggest keeping an eye on his response, and that may open some insight to whether this leak was really part of a larger operation by US intelligence.
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The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC.
WHAT DO THEY REVEAL?
The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.
A $2bn trail leads all the way to Vladimir Putin. The Russian president’s best friend – a cellist called Sergei Roldugin – is at the centre of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin’s daughter Katerina got married.
Among national leaders with offshore wealth are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the prime minister of Iceland, Sigmundur Davíð Gunnlaugsson.
An offshore investment fund run by the father of British prime minister David Cameron avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents to sign its paperwork. The fund has been registered with HM Revenue and Customs since its inception and has filed detailed tax returns every year.
A lengthier overview of the revelations can be found here.
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WHAT IS MOSSACK FONESCA?
It is a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. Other services include wealth management.
WHERE IS IT BASED?
The firm is Panamanian but runs a worldwide operation. Its website boasts of a global network with 600 people working in 42 countries. It has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.
THE TRANSFER OF WEALTH
THE HIDING PLACES
Mossack Fonseca data seen by the Guardian relates to more than 200,000 companies for which the firm acted as registered agent. Often used lawfully to anonymously hold property and bank accounts, these companies were registered in a range of tax havens and this map shows the most popular locations among its clients. The British Virgin Islands held more than 100,000 companies.
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THE INTERMEDIARIES
Rather than dealing directly with company owners, Mossack Fonseca mostly acted on instructions from intermediaries, usually accountants, lawyers, banks and trust companies. In Europe, these offshore facilitators are concentrated in Switzerland, Jersey, Luxembourg and the United Kingdom.
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THE HIDDEN OWNERS
Where does the money flowing offshore come from? The information is hard to discover because real owners usually hide behind nominees, people with no real control and no assets in the company who simply lend their signature. A small sample of about 13,000 owners from all over the world, recently compiled by Mossack Fonseca, gives some indication. China and Russia top the list.
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HOW BIG IS IT?
Mossack Fonseca is the world’s fourth biggest provider of offshore services. It has acted for more than 300,000 companies. There is a strong UK connection. More than half of the companies are registered in British-administered tax havens, as well as in the UK itself.
HOW MUCH DATA HAS BEEN LEAKED?
A lot. The leak is one of the biggest ever – larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013. There are 11.5m documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database.
BIGGEST LEAK IN HISTORY
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ARE ALL PEOPLE WHO USE OFFSHORE STRUCTURES CROOKS?
No. Using offshore structures is entirely legal. There are many legitimate reasons for doing so. Business people in countries such as Russia and Ukraine typically put their assets offshore to defend them from “raids” by criminals, and to get around hard currency restrictions. Others use offshore for reasons of inheritance and estate planning.
ARE SOME PEOPLE WHO USE OFFSHORE STRUCTURES CROOKS?
Yes. In a speech last year in Singapore, David Cameron said “the corrupt, criminals and money launderers” take advantage of anonymous company structures. The government is trying to do something about this. It wants to set up a central register that will reveal the beneficial owners of offshore companies. From June, UK companies will have to reveal their “significant” owners for the first time.
WHAT DOES MOSSACK FONESCA SAY ABOUT THE LEAK?
The firm won’t discuss specific cases of alleged wrongdoing, citing client confidentiality. But it robustly defends its conduct. Mossack Fonseca says it complies with anti-money-laundering laws and carries out thorough due diligence on all its clients. It says it regrets any misuse of its services and tries actively to prevent it. The firm says it cannot be blamed for failings by intermediaries, who include banks, law firms and accountants.
Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick Hopki
SO FAR, IT HAS ALREADY BEEN REVEALED THAT A TRAIL WORTH UP TO $2 BILLION DOLLARS LEADS DIRECTLY TO VLADIMIR PUTIN!
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A massive leak of documents shines new light on the fabulous fortunes of the Russian president’s inner circle. The following is just scratching the surface:
Putin’s best friend: the cellist who holds the key to his fortune
Iceland’s PM faces snap election over revelations
Panama Papers: global reaction – live
A network of secret offshore deals and vast loans worth $2bn has laid a trail to Russia’s president, Vladimir Putin.
An unprecedented leak of documents shows how this money has made members of Putin’s close circle fabulously wealthy.
Though the president’s name does not appear in any of the records, the data reveals a pattern – his friends have earned millions from deals that seemingly could not have been secured without his patronage.
The documents suggest Putin’s family has benefited from this money – his friends’ fortunes appear his to spend.
The files are part of an unprecedented leak of millions of papers from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm. They show how the rich and powerful are able to exploit secret offshore tax regimes in myriad ways.
The offshore trail starts in Panama, darts through Russia, Switzerland and Cyprus – and includes a private ski resort where Putin’s younger daughter, Katerina, got married in 2013.
The Panama Papers shine a particular spotlight on Sergei Roldugin, who is Putin’s best friend. Roldugin introduced Putin to the woman he subsequently married, Lyudmila, and is godfather to Putin’s older daughter, Maria.
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A professional musician, he has apparently accumulated a fortune – having been placed in ostensible control of a series of assets worth at least $100m, possibly more.
Roldugin appears to have been picked for this role because of his lesser profile. He has denied in documents to bank officials in Switzerland and Luxembourg that he is close to any Russian public figures. He has also said he is not a businessman.
Yet the files reveal Putin’s longstanding intimate has a 12.5% stake in Russia’s biggest TV advertising agency, Video International, which has annual revenues of more than £800m. Previously, its ownership was a closely guarded secret.
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Roldugin was also secretly given an option to buy a minority stake in the Russian truck manufacturer Kamaz, which makes army vehicles, and has 15% of a Cyprus-registered company called Raytar.
He also owns 3.2% of Bank Rossiya. The St Petersburg private bank has been described as Putin’s “crony bank”. The US imposed sanctions on it after Russia’s 2014 invasion of Ukraine.
Sergei Roldugin.
These assets are only part of a series of linked financial schemes revealed in the documents that revolve round Bank Rossiya.
The bank is headed by Yuri Kovalchuk. The US alleges he is the “personal banker” for many senior Russian government officials including Putin. The Panama Papers disclose that Kovalchuk and Bank Rossiya achieved the transfer of at least $1bn to a specially created offshore entity called Sandalwood Continental.
These funds came from a series of enormous unsecured loans from the state-controlled Russian Commercial Bank (RCB) located in Cyprus and other state banks. There is no explanation in the files of why the banks agreed to extend such unorthodox credit lines.
Some of the cash obtained from RCB was also lent back onshore in Russia at extremely high interest rates, with the resulting profits siphoned off to secret Swiss accounts.
A $6m yacht was purchased by Sandalwood and shipped to a port near St Petersburg.
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Cash was also handed over directly to the Putin circle, this time in the form of very cheap loans, made with no security and with interest rates as low as 1%. It is not clear whether any loans have been repaid.
In 2010 and 2011, Sandalwood made three loans worth $11.3m to an offshore company called Ozon, which owns the upmarket Igora ski resort in the Leningrad region. Ozon belongs to Kovalchuk and a Cypriot company. Putin is the resort’s star patron and a reputed resident.
Eighteen months after the loans, the president used Igora as the venue for the wedding of Katerina. Her groom was Kirill Shamalov, the son of another of Putin’s old St Petersburg friends. News of the ceremony, from which cameras were banished, only emerged in 2015.
The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Guardian and the BBC.
Sergei Roldugin, Vladimir Putin and Dmitry Medvedev, then Russian president, tour the House of Music in St Petersburg in 2009. Photograph: Dmitry Astakhov/Sputnik/Kremlin Pool/EPA
They reveal a number of other manoeuvres by the Putin circle to move cash offshore. There is nothing inherently illegal in using offshore companies.
The transactions, however, include apparently fake share deals, with shares “traded” retrospectively; multimillion-dollar charges for vague “consultancy” services; and repeated payments of large sums in “compensation” for allegedly cancelled share deals. In 2011 a Roldugin company buys the rights to a $200m loan for $1. “This is not business, this is creating the appearance of business in order to continually move and hide assets,” Andrew Mitchell QC, a leading authority on money-laundering, told BBC Panorama.
Such layers of secrecy surrounded the offshore deals that Bank Rossiya staff in St Petersburg sent all their instructions to a confidential intermediary – a firm of Swiss lawyers in Zurich.
The Swiss lawyers in turn arranged for Mossack Fonseca to set up shell companies, typically registering them in the secretive British Virgin Islands, with sham nominee directors from Panama to sign approvals for the deals. Even Mossack’s confidential records of true owners have frequently turned out to be further fronts.
Speculation over the size of Putin’s personal fortune has gone on for almost a decade, following reports in 2007 that he was worth at least $40bn, based on leaks from inside his own presidential administration.
In 2010, US diplomatic cables suggested Putin held his wealth via proxies. The president formally owned nothing, they added, but was able to draw on the wealth of his friends, who now control practically all of Russia’s oil and gas production and industrial resources.
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Guys, to be honest I am not ready to give comments now
In 2014, after Russia seized Crimea, the White House imposed sanctions on leading members of Putin’s circle, including Kovalchuk, citing their close ties to “a senior official of the Russian Federation” – a euphemism for Putin himself. The Panama Papers reveal that the Putin group appeared to have become nervous for unclear reasons after October 2012. Sandalwood was closed down and its operations switched to another offshore entity registered in the BVI, called Ove Financial Corp.
One of the companies linked to Ove Financial Corp belonged to Mikhail Lesin, Putin’s media tsar and former press minister. Lesin founded the Kremlin’s propaganda TV channel Russia Today but later fell out of favour. He was mysteriously found dead last November in a Washington hotel room with blunt force injuries to the head.
Asked about the offshore companies linked to him last week, Rodulgin said: “Guys, to be honest I am not ready to give comments now … These are delicate issues. I was connected to this business a long time ago. Before ‘perestroika’. It happened … And then it started growing and such things happened. The House of Music [in St Petersburg] is subsidised from this money.”
Roldugin declined to answer further written questions.
Roldugin presents a diploma to Sir Paul McCartney, in front of St Petersburg’s then governor, Valentina Matviyenko, in 2003. Photograph: PhotoXPress
The Putin circle’s use of offshore companies contrasts with the president’s call for “deoffshoreisation”, urging Russians to bring cash hidden abroad home. Others who make use of offshore companies include oil trader Gennady Timchenko, Putin’s friend of 30 years. The US imposed sanctions on him in 2014. Others in the data are Arkady and Boris Rotenberg, Putin’s childhood friends and former judo partners. They are now billionaire construction tycoons. The Arsenal FC shareholder Alisher Usmanov also appears. He has at least six companies registered in the Isle of Man. There is no suggestion this is illegal.
Dmitry Peskov, Putin’s official spokesman, declined to comment on specific allegations against the president. Speaking last week, Peskov said western spy agencies were behind an all-out “information attack” against him to destabilise Russia before elections. Peskov dismissed the investigation by the Guardian and others as an “undisguised, paid-for hack job”. He said Russia had “legal means” to defend Putin’s dignity and honour.
RCB Cyprus said it could not disclose information about its clients. It said that in October 2013 it had “refined its strategy”. It had opened a branch in Luxembourg, received a new investor, and was now under direct European Central Bank supervision. Given this, it was “utterly unfounded” to suggest the bank was a “pocket” for top Russian officials. The bank said it had voluntarily submitted the allegations to Cyprus’s money-laundering authority. The auditor PwC Cyprus said it had audited RCB’s accounts but that it did not provide services to Sandalwood.
Lawyers for Kovalchuk said information about Bank Rossiya was publicly available. “We do not understand why you address these questions to Mr Kovalchuk.”
US political scientist Karen Dawisha said it was inconceivable that Putin’s friends had become rich without his patronage. “He takes what he wants. When you are president of Russia, you don’t need a written contract. You are the law.”
Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick Hopkins
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How about American politicians, criminals and rogue industry? I believe this is a much more interesting subject.
how do i get rid of flash…very annoying!!! shows up every time i try to read stories here!!
pretty simple really..just stop reading them
clearing the history file works for a few minutes
this is obviously rigged..there are no american names on the list
you cannot convince me that the most corrupt nation on earth does not have a very large number of culprits
not too many european countries either richest being germany where the story originates.
another false flag which in the end is going to blow up in their faces
another Putin bashing article..no proven link just circumstantial evidence. No real insight to what the money actualy is or was used for. another smear campaign by the west trying to discredit Russia..Soon will be the reply as to why no americans or germans have been mentioned. could they possibly be squeaky clean ?? I doubt it…. I think we are going to get some quite dirty laundry aired via the internet very soon. The we will see the other side squirm.