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What are the Panama Papers?

On Sunday, Süddeutsche Zeitung (SZ), the largest national newspaper in Germany cooperated with the International Consortium of Investigative Journalists (ICIJ) to publish a massive leak of documents, dubbed the Panama Papers. ICIJ and an international coalition of media outlets investigated the trove of papers which allegedly reveal a clandestine network of tax evasion involving a number of high profile world leaders, corporations, celebrities and sports stars. Associates of Russian President Vladimir Putin, and business ties between a member of FIFA’s ethics committee and men whom the United States has indicted for corruption are among those implicated.

Why are they called the Panama Papers?

The more than 11 million documents, which date back four decades, are allegedly connected to Panama law firm called Mossack Fonseca. ICIJ reports that the firm helped establish secret shell companies and offshore accounts for global power players. ICIJ reports that a 2015 audit found that Mossack Fonseca knew the identities of the real owners of just 204 of 14,086 companies it had incorporated in Seychelles, an Indian Ocean archipelago often described as a tax haven.

SZ reported in the article that broke the story:

“Over a year ago, an anonymous source contacted the Süddeutsche Zeitung and submitted encrypted internal documents from Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world. These shell firms enable their owners to cover up their business dealings, no matter how shady.”

What is Mossack Fonseca accused of doing?

While the international laws are complicated and at times contradict each other in overlapping jurisdictions, essentially what investigators claim Mossack Fonseca has been doing is setting up shell companies and offshore accounts to mask the origin of financial transactions and ownership. An individual or organization can “invest” large sums of money in these fake companies, which makes that money non-taxable. The files include people and companies that the U.S. has blacklisted due to drug trafficking and terrorism links, according to the ICIJ.

While the existence of offshore tax havens is widely known to the public, the leak reveals just how vast the network is and the high profile of those involved.

ICIJ released a video explaining how Mossack Fonseca allowed offshore “dark” money to fund the Syrian Civil War, along with links to bribery, arms deals, and drug trafficking.

Who is implicated in the documents?

The documents reference 12 current or former world leaders, as well as 128 other politicians and public officials.

The Guardian reported a $2 billion offshore trail that leads to Vladimir Putin.

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In addition to allegations involving Putin and FIFA, the papers also accuse Iceland’s prime minister of having ties, through his wife, to an offshore company that were not properly disclosed. Investigators have also said a number of celebrities and sports stars are implicated.

How have the accused responded to the Panama Papers?

The Kremlin has dismissed the allegations as “a series of fibs” aimed at discrediting Putin ahead of elections. FIFA, the international soccer governing body, called them “ridiculous.” But the United Kingdom, France, Australia and Mexico have vowed investigations for possible tax evasion.

The president of Iceland walked out of an interview when a Guardian reporter asked him about a company he is involved in that is implicated in the leak.

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What is Mossack Fonseca saying?

Firm co-founder Ramon Fonseca Mora told CNN earlier that the information published is false and full of inaccuracies and that parties “in many of the circumstances” cited by the ICIJ “are not and have never been clients of Mossack Fonseca.” The firm provided longer statements to ICIJ.

How did ICIJ get the documents?

An anonymous source gave the documents to Germany’s Suddeutsche Zeitung and the newspaper shared them with ICIJ. Other media organizations that reported on the documents include the BBC, The Guardian and McClatchy.