A Panamanian law firm is facing unprecedented scrutiny today after a data leak exposed the firm’s communications and dealings with high-net-worth clients from around the world. Mossack Fonseca & Co. is recognized as a leading provider of legal, trust, and wealth management services.
The leak of some 11 million documents from the Panama-based firm to a German newspaper and dozens of other media outlets around the world are said to detail how the firm and its clients conspired to launder money, dodge sanctions, and avoid taxes.
The documents purport to include data on at least 12 current or former heads of state. Among them are the Icelandic Prime Minister, Sigmundur Gunnlaugson, who is now facing calls for his resignation and a snap election, along with close associates of Russian President Vladimir Putin.
The data also contains secret offshore companies linked to the families and friends of Egypt’s former president Hosni Mubarak, Libya’s former leader Muammar Gaddafi and Syria’s President Bashar al-Assad. Officials from the international football federation, FIFA, are also named in the documents.
In addition to its headline-grabbing clients, Mossack Fonseca counts among its customers thousands of lesser-known individuals and companies that may also be dragged into the fray and face increased government scrutiny of their accounts and holdings because of the leak.
The director of the International Consortium of Investigative Journalists (ICIJ) that is leading the investigation into the data dump, Gerard Ryle, said the documents detail the day-to-day business at Mossack Fonseca for more than 40 years. “I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents,” he said.
Mossack Fonseca was established in 1986 by Jürgen Mossack, an immigrant from Germany, and Panamanian native Ramón Fonseca. The firm incorporates and administers companies in offshore jurisdictions such as Switzerland, the United Kingdom, Hong Kong, the British Virgin Islands and Malta, as well as in the U.S. states of Nevada and Wyoming.
Ramón Fonseca called the data breach a “crime” and an “attack” on Panama.
“This is a crime, a felony,” Fonseca told the AFP. “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.”
Fonseca said as yet there is no suspect in what he described as a “limited hack.”
Tax authorities in the United Kingdom and Australia have already said they will be closely examining the documents in an effort to uncover any potential wrongdoing. An official with Britain’s tax authority, HM Revenue and Customs, confirmed to the Press Association that the agency has “already received a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation.”