MUNICH â€" What would become far and away the largest leak of information in newspaper history began more than a year ago, when an anonymous source contacted Munich-based daily Süddeutsche Zeitung. The leak consisted of encrypted internal documents from Panama law firm Mossack Fonseca, which sells offshore shell companies to clients around the world who want to shield their identity. The quantity of documents eventually grew to a mammoth 2.6 terabytes of data.
Süddeutsche Zeitung writes that the source "sought neither financial compensation nor anything else in return, apart from a few security measures. The data provides rare insights into a world that can only exist in the shadows. It proves how a global industry led by major banks, legal firms, and asset management companies secretly manages the estates of the worldâ€™s rich and famous: from politicians, FIFA officials, fraudsters and drug smugglers, to celebrities and professional athletes."
Quickly, editors at the German daily understood that they would need help in tackling the unprecedented mountain of data, and turned to the International Consortium of Investigative Journalists (ICIJ). Panama Papers became the biggest-ever international cooperation of its kind, with 400 journalists from more than 100 media organizations taking part.
Here are some of the initial revelations:
In its editorial, Franceâ€™s newspaper of record describes "the dizziness, the vertigo and the nausea" the massive leak provoked, revealing what it says is "the most complete and the most up-to-date disclosure of an entire part of global finance that was until now acting away from prying eyes." Slamming a "tiny part of the humanity that secretly exonerates itself from common duties and general interest," editor-in-chief Jérôme Fenoglio writes that globalizationâ€™s "underground rifts" exposed in the Panama Papers could "sooner or later, if nothingâ€™s done, lead to its collapse."
Le Monde dedicates a comprehensive piece to Rami Makhlouf, a maternal first-cousin to Syrian President Bashar al-Assad and one of the countryâ€™s most powerful oligarchs. Makhlouf is said to have benefited greatly from his cousin becoming president in 2000, taking "Syriaâ€™s plundering to the next level," the newspaper writes. An employee at Mossack Fonseca protected him until September 2011, despite U.S. sanctions against him and the regime, which is also said to have used offshore accounts to circumvent international sanctions after the beginning of the Syrian War, five years ago.
The newspaper also focuses on King Mohammed VI of Morocco, who, it provocatively writes, "loves the Virgin Islands." Via companies installed there and officially controlled by his personal secretary Mounir Majidi, the monarch was able to discreetly acquire a luxury 1930s schooner in 2006. Majidi is also the administrator of a Luxembourg-based company that, thanks to a no-interest $42 million loan from another Mossack Fonseca company based in the Virgin Islands, purchased a private mansion in central Paris. Le Monde writes that the scheme suggests that the company that loaned the money was also ultimately controlled by Mohammed VI.
The names of several FIFA officials also feature prominently in the leaked documents, including those of some who have already been charged in the FIFA corruption scandal. More surprisingly (or perhaps not), Juan Pedro Damiani, the FIFAâ€™s Independent Ethics Committee who handed down suspensions and bans to many officials, including to former FIFA chief Sepp Blatter, is also part of the database. Though his activity doesnâ€™t appear to have been illegal, his law firm is said to have worked for more than 400 offshore companies, including at least seven linked to former FIFA Vice-President Eugenio Figueredo, who was also charged by the U.S. for his alleged role in the bribery scandal. Read more in English from the ICIJ.
Finally, suspended UEFA Chief Michel Platini reportedly relied on Mossack Fonseca to help him administer an offshore company created in Panama in 2007, 11 months after he was named president of the Union of European Football Associations. Platini is currently serving a six-year ban from football over a $2 million payment from FIFA President Sepp Blatter. Platini, readers may recall, famously said in an interview last year, "Iâ€™m not a money man."
The German daily posted a special English-language edition for Panama Papers, first laying out the pure scale of the leak: 11.5 million documents â€" emails, pdf files, photo files, and excerpts of an internal Mossack Fonseca database. The cache of encrypted documents is more than the combined total of the WikiLeaks Cablegate, Offshore Leaks, Lux Leaks, and Swiss Leaks.
Süddeutsche Zeitung reports on the revelations linked to the small but wealthy nation of Iceland. Prime Minister Sigmundur David Gunnlaugsson, Finance Minister Bjarni Benediktsson, and the Minister of the Interior, Olöf Nordal appear in the records of Mossack Fonseca, the Panamanian offshore provider. The documents link all three politicians to anonymous offshore companies, which they had never disclosed. The Panama Papers also include several of Icelandâ€™s wealthiest men and former top bankers, with the overall number of suspects "shockingly high for a country of just 330,000 inhabitants."
Ukrainian President Petro Poroshenko was elected in 2014, after the Maidan revolution, on the promise to clean up Ukrainian politics, but according to the German newspaper the "Chocolate King," who does business with Mossack Fonseca, is still costing the crippled Ukrainian economy millions in evaded tax. Poroshenko had vowed to sell his confectionery company, Roshen, in order to fully dedicate his time to politics. But Süddeutsche Zeitung reports that instead of that, while hundreds of Ukrainian soldiers died during one of the deadliest battles against pro-Russian rebels in August 2014, Poroshenko registered a letterbox company in the Virgin Islands where his assets were transferred.
The German daily also reports on records that Argentine soccer superstar Lionel Messi may hold a 50% share of a shell company, the existence of which was unknown until now. This could add to Messiâ€™s legal woes, after the revelation of several other offshore companies that Spanish investigators had already uncovered.
British newspaper The Guardian reports that Prime Minister David Cameronâ€™s late father ran an investment fund using residents of the Bahamas, including a Catholic bishop, to handle paperwork, thereby managing to avoid any UK taxes. As director of Blairmore Holdings Inc., Ian Cameron managed millions of pounds on behalf of a number of wealthy clients and institutions, including the private bank used by the Rolling Stones.
"The fund was founded in the early 1980s with help from the prime ministerâ€™s late father and still exists today," the newspaper reports. "The Guardian has confirmed that in 30 years Blairmore has never paid a penny of tax in the UK on its profits. The prime ministerâ€™s spokeswoman said that Downing Street had responded to allegations about Ian Cameron in the past. Asked if there was still any family money invested in the fund, she said: â€˜That is a private matter.â€™"
Among its other major revelations, The Guardian traces a $2 billion money trail to Russian President Vladimir Putin. "Though the presidentâ€™s name does not appear in any of the records, the data reveals a pattern â€" his friends have earned millions from deals that seemingly could not have been secured without his patronage," the paper reports. "The documents suggest Putinâ€™s family has benefited from this money â€" his friendsâ€™ fortunes appear his to spend."
The Guardian also reports that the law firm at the center of the global investigation, Mossack Fonseca, also helped hide laundered money from a notorious gold theft at the Brinkâ€™s-Mat depot near Heathrow more than 30 years ago.
Panama skyline â€" Photo: F Delventhal
Argentine daily La Nacion reports that newly elected President Mauricio Macri was part of a family offshore company during his time as Buenos Airesâ€™ mayor. The leaked documents show that Macri was director and vice president of a company managed by Mossack Fonseca. The Macri administration issued a statement yesterday saying that Macri was never a stakeholder in the ghost company but that he did play an occasional role as CEO.
Spanish TV station La Sexta reports that Spanish filmmaker Pedro Almodovar and his brother Agustín were listed as the agents of a British Virgin Islands company from 1991 to 1994. Agustín Almodovar blames his lack of experience for a decision to set up an offshore company aimed at expanding their international film business.
Some major names in Italian business, politics and sports turn up in the Panama Papers documents analyzed by the Rome-based weekly Lâ€™Espresso. According to the leaked documents, Luca di Montezemolo, the former Ferrari chief and current top executive at Italian airline Alitalia, had formed a Panama-based offshore company dubbed Lenville. The names of top Italian banks Unicredit and Ubi also show up repeatedly in the leaked documents. There are also traces of offshore accounts of longtime Silvio Berlusconi confidante Marcello Dell'Utri, who is currently serving a seven-year sentence for mafia association charges, as well as former Formula One driver Jarno Trulli.
Danish daily Politiken reports that the major financial service group Nordea has cooperated with Mossack Fonseca to provide their wealthiest clients with shell companies in tax havens. Nordea claims that these activities stopped in 2009 when the bank established new regulations, but the Panama Papers show that Nordea still administers more than 100 other active shell companies. Email correspondence reveals that Nordea asked Mossack Fonseca to set up a new shell company for a client as late as 2015. The documents also demonstrate that Nordea has frequently made use of so called "dummy names" â€" registered business owners who has no real responsibility for the company, including names of deceased individuals.
The Australian Taxation Office is investigating more than 800 high-net-wealth Australian clients of Mossack Fonseca, the Panama law firm from which the leaks originate, reports the Australian Financial Review daily.
The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.
LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.
Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.
Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.
The role of the nuclear pact
Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.
It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.
He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."
The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.
Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.
Iranian Supreme Leader Ali Khamenei in 2020commons.wikimedia.org
Riyadh's warming relations with Israel
Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."
The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."
Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."
Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.
If nuclear talks break down, Iran's regime may become more aggressive.
Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.
Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.
For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.
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