News Release

#PanamaPapers: “Poor Are Biggest Victims”


McClatchy reports in “Massive leak exposes how the wealthy and powerful hide their money“: “A massive leak of documents has blown open a window on the vast, murky world of shell companies, providing an extraordinary look at how the wealthy and powerful conceal their money. …

“The data breach occurred at a little-known but powerful Panamanian law firm, Mossack Fonseca, which has an office in Las Vegas, a representative in Miami and a presence in more than 35 other places around the world.

“The firm is one of the world’s top five creators of shell companies, which can have legitimate business uses, but can also be used to dodge taxes and launder money.” McClatchy is the only U.S. newspaper company with access to the leaked database. It will reportedly continue to reveal information on this, including on noted individuals in the U.S., in the coming days.

ERIC LeCOMPTE, via Greg Williams, greg at, @JubileeUSA
LeCompte is executive director of the religious development group Jubilee USA. He said today: “The most vulnerable people in the world are harmed by financial secrecy. … Congress should pass legislation to make it more difficult to set up anonymous companies here in the U.S. These companies fuel corruption, poverty, human trafficking and armed conflict. Congress can pass the Incorporation Transparency and Law Enforcement Assistance Act and move meaningful legislation to stop corruption and tax evasion.” – See more at:  See full statement.

JAMES HENRY, jamesshelburnehenry at, @submergingmkt
Henry’s books include The Blood Bankers: Tales from the Global Underground Economy and the forthcoming The Pirate Bankers. He was featured in the just-released Australian Broadcasting Corporation’s documentary — see “Panama Papers and Mossack Fonseca explained,” and this video.

He said today: “I first seriously came across Mossack Fonseca while in Panama investigating the assassination of the health minister Hugo Spadafora by the Noriega government in the 1980s. It was known even back then as a place for shady business. The firm is actually a smaller player in this industry, but is known for its aggressiveness.

“As this story develops, it’s important to keep several key things in mind:

“First, it’s not a new story. The specifics this time are new, but there have been scores of exposes about such schemes for decades. These exposes are generally the result of whistleblowers and serious investigative journalistic work, both of which are either under attack or being scaled back. They are notably not the result of government action. The pattern to date is that people notice briefly, a few big names are noted — and the problem continues and no governmental action to stop it takes place.

“It’s also important to note that even though they’re sometimes called ‘tax havens’ — that’s often not the main function here. It’s like the bar in ‘Star Wars’ — every conceivable tool to facilitate kleptocrats is offered here. It’s about theft of public assets, concealing bribes, financial fraud, corruption, irresponsible finance.

“Also, there are staggering levels of hypocrisy at play. David Cameron has been talking about cleaning up offshore havens, but these documents show that his father was involved.” See from the British Independent: “David Cameron’s father ‘ran offshore fund that paid zero UK tax for 30 years.’

Added Henry: “Finally — and perhaps most importantly given the underlying issues — many people may hear ‘Panama Papers’ and think that all this money is in Panama or other developing countries as a result. Not true. Poorer countries are the biggest victims here. These havens took off in the 1970s and 80s because of drug money and big Western banks participating in dodgy Third World lending. The big banks lent to despots in poor countries knowing the money would end up going back to them — not helping the people in those countries. Panama is just a conduit here — part of a shell game — the money ends up in New York, Miami or London. This may explain why there has been no governmental action — the first point above.”

Henry is former chief economist at the international consultancy firm McKinsey & Co. He is now senior fellow at the Columbia University Center for Sustainable International Investment and senior adviser with the Tax Justice Network, which has estimated in their study, “The Price of Offshore Revisited,” that total wealth in tax havens was between $21 trillion and $32 trillion.

See also, USA Today: “Panama Papers: Who’s accused of what,” which breaks down allegations not just against Russian President Vladimir Putin and Syrian President Bashar Assad through their associates, as has been widely reported in the U.S. media, but also U.S. allies Ukrainian President Petro Poroshenko and Argentina’s president, Mauricio Macri — who President Obama just visited.

Further background: Ken Silverstein wrote an investigation about Mossack Fonseca: “The Law Firm That Works with Oligarchs, Money Launderers, and Dictators,” which was published by Vice in 2014.