Since 2010 the world has started to become an enormously dangerous place for secret keepers. Come 2016, the Panama Papers heralded the beginning of mega leaks. This year’s victim is not a financial institution but a law firm which did everything illegal for the rich and the powerful.
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It all began with a phone call to German newspaper Süddeutsche Zeitung around the end of 2014. The source was cautious; he called the investigative newspaper only once and then preferred using encrypted chat. There were no meetings at all. Whistleblowing came of age in about four years after Wikileaks. There was no Bradley Edward Manning to be arrested here.
The German daily fact checked some documents. The information overload led the newspaper to reach out to US-based International Consortium of Investigative Journalists who employed dozens of reporters from around the world for fact checking. Nothing is said to have been disclosed by any of the team members. The source asked for no financial rewards for Panama Papers. The daily in a video about how it got the treasure trove of secret files quotes the source as saying, "I want to make these crimes public. They must be stopped. It's rotten business they are doing."
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Welcome to the age of mega leaks where dirty data comes in terabytes, but namelessly thanks to cryptographic software, such as Tor and Onionshare. The emails, PDF files, photo files and excerpts of an internal Mossack Fonseca database exposed dictators, politicians, Japanese mafia, Sicilian mafia, Russia mafia, weapons dealers, drug dealers, pedophiles, terrorists and sanction-busting clerics like Ahmadinejad. Amongst the 140 political elite are families of prime ministers of Iceland, UK, Pakistan, presidents of Argentina, Russia, China, Ukraine, Syria besides former Iraqi premier and son of former UN Secretary General Kofi Annan.
The leaked database covers a period over almost 40 years, from 1977 till December 2015. The law firm perfected the art of creating shell companies – an entity without active business that exists as a vehicle for another company’s operations – for its rich global clientele to help evade tax and turn black money into white. While companies that shield owners’ identities can be used legally, they can also be tools for hiding assets, laundering funds or evading taxes.
For the years to come, the Panama Leaks will be good news for lawyers and tax consultants and investigators. Their business is going to flourish by leaps and bounds.
Is it only the beginning of the trail? The answer is unknown. However, a good investigator or a probing journalist won’t spill all facts in their first expose. They usually wait for outright rebuttals to expose more facts, mostly more damaging than the previous ones. Thus, there is much more to worry about for the Sharifs and the Bhuttos of Pakistan, for that matter.
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The Panama Papers reveal that Former Pakistan prime minister, late Benazir Bhutto, her aide Abdul Rehman Malik and nephew Hassan Ali Jaffery Bhutto set up a company, Petroline International Inc, in the British Virgin Islands in 2001.
Pakistan’s information ministry won’t be able to execute effective damage control with its discretionary or ultra-secret funds in the face of an imminent whirlpool of further disclosures and interpretations of the Panama Papers. There is no forecast possible for what follows on the horizon. Even if the Pakistani political elite such as the Sharifs and the Bhuttos manage to escape legal and political fallout at home, they will remain in global headlines alongside other corrupt politicians.
The reaction of Khulubuse Zuma, nephew of South African leader who followed Nelson Mandela, is almost the same as the Sharif families: “There is nothing new as it has been on the public record for years.” Zuma’s spokesperson is quoted as saying the Panama Papers might be saying something new about others‚ but not about him. He too termed the level of ‘hype’ in media as ‘unusual’.
Mossack Fonseca, the so-called law firm itself said the leaks were ‘unlawful’.
Forbes is reviewing its list of richest people. It is emerging that 29 billionaires from Forbes list of top 500 Richest including movie star Jackie Chan and football icon Lionel Messi are also tainted with tax evasion through the Panama-based company.
While France, Germany and Italy are starting investigations to establish criminal cases against any of the institutions and citizens involved, the prime time TV shows dwelled deep into money laundering and its likely use by criminal mafias and terrorists. According to one estimate, two-thirds of tax haven money ($12.29 trillion) is in the European Union.
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In Pakistan, the Federal Investigations Agency is mandated to probe money laundering. The other institution for all-round high profile corruption investigation is the National Accountability Bureau. None is autonomous enough to conduct an inquiry without waiting for the chief executive’s orders. If the prime minister does not, the chief justice of Pakistan can take the matters in his own hands. He has been using the right of suo moto action quite sparingly so far.
Naveed Ahmad is a Pakistani investigative journalist and academic with extensive reporting experience in the Middle East and North Africa. He is based in Doha and Istanbul. He tweets @naveed360