Panama Papers

I just had to comment on this, the latest scandal to hit the web. The Panama Papers refers to 11.5 million confidential documents leaked to the Internet that reveal information on 214,000 offshore companies that use Mossack Fonseca, a Panamanian corporate service provider (law firm), which hides investments in shell companies that prominent world leaders and wealthy people use to avoid taxes.

What's important here is that this has been going on for quite some time (1970"s) and it is the method that people of wealth use to avoid paying income taxes in various countries throughout the world. What Mossack Fonseca does is provide accounts in shell companies that are kept secret so that they can be used as tax havens.

A shell company or corporation is only a vehicle for money transactions. It doesn't make anything or operate like a normal company, or even have any significant assets. In other words it's a shell of a company. These shell companies are known to have committed fraud or laundering money, and as you might have guessed, little is known about them. Many of them are located in the British Virgin Islands, Panama, and the Bahamas. That's why they are referred to as offshore. Well, unless you live in one of those locations.

This service is provided to world leaders, wealthy billionaires, Mafia, Drug lords and whoever has a lot of money they don't want anyone to know about. So who is taking advantage of this service?

The list includes: Mauricio Macci, President of Argentina; Salman, King of Saudi Arabia; Khalifa bin Azyed Al Nahyan, President of the United Arab Emirates; Petro Poroshenko, President of Ukraine, and Sigmundur Davio Gunnlaugsson, Prime Minister of Iceland, who has resigned over this. Relatives of Putin are also in the list.

The list goes on and on, and it involves officials from almost every country. The list includes sports and entertainment personalities, business people, and organized crime figures.

What's really scary about this is that there are 500 banks involved in this scandal. Supposedly there are 15,600 shell companies involved with Mossack Fosenca. This would suggest that some serious money laundering is occurring. It's been known for some time that shady dictators and monarchs of non-democratic countries have been stashing ill-gotten wealth in banks located out of their own countries in case they are deposed. What's really evil is the fact that even leaders of democratic countries are using this nefarious service. I can understand sports and entertainment personalities and organized crime leaders taking advantage of this service, but leaders of countries is another case. They're supposed to be serving their people, not themselves.

The main banks that have the most offshore clients include: Experta Luxembourg S.A.; Banque J. Safra Sarasin - Luxembourg S.A.; Credit Suisse Channel Islands Limited: HSBD Private Band (Monaco) S.A.; HSBC Private Band (Suisse) S.A. Most of the money involved with Mossack Fonseca is for tax haven purposes.

I am usually opposed to government secrets being revealed, as was the case with Snowden's NSA leaks, because it jeopardizes security. However, in this case, I think this is a good thing and I believe this is going to cause uproar throughout the world and perhaps stifle this practice. There have been some serious protests in Iceland over this. I seriously doubt that the practice will go away. The wealthy will always find a way to avoid taxes. In many cases they're greedy.

Thanks for reading.