Photo Credit: Democracy Now
In what is being called the largest single data leak in the history of online data storage, 2.6 terabytes of data (11.5 million individual documents) were released after the Panamanian law firm Mossack Fonesca was hacked over the weekend. The source of the hack is still unconfirmed but the information was first handed off to the German newspaper Suddeutsche Zeitung who gave them to the International Consortium of Investigative Journalists (ICIJ), per CNN.
According to The Guardian, Mossack Fonesca is a law firm “whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands.” It operates out of Panama but has employees in 42 countries and has worked on behalf of more than 300,000 companies. Critics charge that Mossack Fonesca helps the rich and powerful hide their money in offshore accounts to avoid taxes or criminal prosecution.
Mossack insists that they do everything within the confines of the law and that they “cannot be blamed for failings by intermediaries” in relation to the legality of businesses they represent. As CNN points out, the law-firm has not officially broken any laws but also states that many clients of the firm have been blacklisted by the and Pakistan. Protestors United States government due to connections with drug trafficking and terrorism. The ICIJ released a report that “a 2015 audit found that Mossack Fonesca knew the real owners of just 204 of the 14,086 companies it had incorporated in Seychelles.” Seychelles is a tax haven island off of the coast of India.
The details of the leak are not well known and thus far no one has come forth and claimed to be the architect of the hack. There are 11.5 million documents and 2.6 terabytes of data. As The Guardian pointed out, that is 2,000 times the amount of data leaked by Wikileaks in 2010. Included in the documents are what BBC says are the “day to day” operations of Mossack Fonesca over the past forty years. The British News giant says that the documents reveal that the law firm did in fact break international law by providing clients with options to hide their money from their own governments. The firm rejected these allegations as baseless.
The greatest consequence of the leak is the implication of 12 world leaders and “more than 140 politicians and public officials around the world,” per the report released by the ICIJ. Those leaders include the king of Saudi Arabia, the President of Ukraine and the Prime Ministers of Iceland have been calling for the resignation of Prime Minister Sigmundur Gunnlaugsson who, among others in the Icelandic government, was identified as owners of offshore companies that were not disclosed to the public, per Vice News. However, the most attention- grabbing name on the list is Russian President Vladimir Putin, who the documents link to a two billion dollar money laundering operation run in part by a close friend, cellist Sergei Roldguin. According to The Guardian, it centers money from Russian state banks hiding their cash offshore through Mossack Fonesca.
The Guardian said, “Some of it (the money) ends up in a ski resort where in 2013 Putin’s daughter got married.” President Putin’s office flatly denied the allegations, saying they were created to defame and deface Putin’s name.
The next few months will be telling as some foreign leaders have already said they will use the recent revelations to expose and possibly prosecute those who avoid paying taxes or disclosing their income.
Although at this point Mossack Fonesca has not been charged with any criminal activity, the document leak will have ramifications for everyone, especially those involved in governments across the world.