Published: April 14, 2016
The Panama Papers have been the topic of all major news sources over the past week. they are a massive list of companies involved with the law firm Mosackk Fonseca, based out of Panama.
While on the surface this may seem like a simple invasion of privacy, the people involved include many high ranking political figures in a number of countries, not including the United States however, who had investments in offshore shell companies. A shell company is a company that is inactive and has no cash or assets but is legal and has legitimate purposes. The issue lies in the fact that this money was “invested” into these inactive companies strictly for purposes of tax evasion, or hiding laundered money.
Investments are not taxed and are a legitimate financial decision, but when done so in this manner it raises a myriad of ethical and legal issues. Panama was also the perfect site, due to its classification as a tax haven, meaning it has strict financial privacy laws and no taxation on offshore investments.
The leaker, simply wanting to be referred to as ‘John Doe’ gave the information to a German newspaper and did not ask for compensation, saying he leaked the information going back to the 1970s on an ethical basis. Matthew Nardo, Sophomore, has heard of the leaks and is simply happy that the U.S. would not be receiving more bad press, similarly to the Edward Snowden leaks, which also unveiled unethical government practices. The leak is so massive that even though many journalists have had access for months, there is still more information to be found, and the links to the company do not automatically imply that it was procured by illegal means. Some names mentioned include the prime minister of Iceland, Sigmundur Gunnlaugsson, who has since resigned, Vladimir Putin’s inner circle, U.K. Prime Minister David Cameron, who has released his tax documents in an attempt to clear his name, and even Jackie Chan, the actor. While Putin is not directly mentioned in the papers, he is claiming that the U.S. was partially funding the leak. The only thing known for sure is that more information will be exposed as journalists comb through the immense documents.
Besides the backlash against government, the leak will serve to deepen public lack of trust for the government, proven by the success of Donald Trump. It also will lead to stricter laws against tax evasion, and maybe even greater oversight on legal means of tax avoidance on the wealthy.
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