A group of investigative journalists said the Mossack Fonseca law firm has helped people from more than 200 countries and territories hide their money.
Those named include 12 current and former world leaders. Among them are the prime ministers of Iceland and Pakistan, the president of Ukraine and the King of Saudi Arabia.
Others are family members of Chinese leaders, associates of the Russian president, Mexican drug gang leaders, people linked to terrorist groups and Iran and North Korea, and FIFA officials.
The Mossack Fonseca law firm was created in Panama in 1986 when Jurgen Mossack -- who was born in Germany in 1948 -- and Ramon Fonseca -- who was born in Panama in 1952 -- combined their two law firms.
Mossack Fonseca is a global company that provides legal services and helps rich people and companies manage their money. It creates and operates companies in Switzerland, Britain, Hong Kong, the British Virgin Islands and Malta.
It also operates in the American states of Nevada and Wyoming.
The International Consortium of Investigative Journalists, or ICIJ, said the firm is one of the largest providers of these services. The journalists group reported that the firm “has more than 500 employees and collaborators in more than 40 offices around the world, including three in Switzerland and eight in China.”
The ICIJ said the firm earned more than $42 million in 2013.
After the release of the leaked documents known as the “Panama Papers,” Mossack Fonseca said it acted responsibly and obeyed international laws.
In a statement, the firm said “the companies we incorporate are not being used for tax evasion, money-laundering, terrorist financing or other illicit purposes.” But the firm said “we regret any misuse of our services and actively take steps to prevent it.”
The firm told The Washington Post newspaper that it follows “both the letter and spirit” of financial laws, which it notes are different throughout the world. It said that in almost 40 years of operation it has never been charged with criminal acts.
Ramon Fonseca told the French news agency AFP that the leaking of the information is “a crime, a felony. Privacy is a fundamental human right that is being eroded more and more in the modern world. Each person has a right to privacy, whether they are a king or a beggar.”
In an hour-long interview on the WhatsApp messaging service, Mr. Fonseca said “at the end of this storm the sky will be blue again and people will find that the only crime is the hacking” of the firm’s documents, The New York Times newspaper reported.
The newspaper also reported that in an email to Mr. Fonseca and others in the firm, Mr. Mossack blamed the firm’s employees in London for not investigating the backgrounds of people the firm helped. He said they were “not doing their due diligence thoroughly, (or maybe none at all).”
The ICIJ is a non-profit group based in Washington, DC. More than a year ago, the ICIJ was given 11.5 million documents taken from the law firm. The group did not tell who gave it the documents or why.
It worked with the German newspaper Sueddeutsche Zeitung and more than 100 other news organizations -- including VOA Zimbabwe -- to create the reports.
Putting money in banks in other countries is not always illegal. But the ICIJ says “the documents show that banks, law firms and other(s)…have often failed to follow legal requirements that they make sure their clients are not involved in criminal” acts, illegal tax avoidance or political corruption.
Michael Hudson is a senior editor at ICIJ. He told VOA “this is really the shadow side of our global economy -- the money that flows around mostly unchecked, undetected. You can’t say in every single case that someone is doing something wrong, or that they’re hiding improper practices. But it certainly raises lots of questions about transparency when you have politicians, and especially top leaders of countries, moving their holdings offshore and using offshore entities to obscure what they’re doing.”
Words in This Story
money-laundering – v. to put (money that you got by doing something illegal) into a business or bank account in order to hide where it really came from
illicit – adj. not allowed by law; unlawful or illegal
erode – v. to gradually destroy (something) or to be gradually destroyed by natural forces (such as water, wind or ice); often used figuratively, as in this article
due diligence – n. research and analysis of a company or organization done in preparation for a business transaction (as a corporate merger or purchase of securities)
firm - n. a business organization or office
gang - n. a group of criminals; a group of young people whose members do illegal things together
manage - v. to direct; to supervise
collaborator - n. a person who works jointly on an activity or project
incorporate - v. to include something as part of something else; to set up a business
beggar - n. someone who asks others for money or help
interview - n. a meeting at which information is gathered
background - n. information required to fully understand a problem or situation
unchecked - v. unstopped
transparency - n. the quality of state of being open or honest