The International Consortium of Investigative Journalists (ICIJ) leaked confidential documents earlier this week, known as the Panama Papers, which revealed the secret finances of world leaders, politicians, companies and public figures. In the latest string of developments, Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned on Tuesday as a result of the scandal.
News reports indicate that more than 11.5 million documents that date back four decades were leaked from a Panamanian-law firm, Mossack Fonseca, and according to ICIJ, the firm helped launch secret shell companies and offshore accounts for some of the world’s wealthiest people.
#China buries its head in the sand by limiting local access to news on #PanamaLeaks– Governments must act not hide https://t.co/BxpvLXW8iW
— Transparency International (@anticorruption) April 5, 2016
Dubbed as one of the biggest data leaks in history, Panama Papers exposes how some companies, politicians, and wealthy individuals engage in unethical business activities such as dodging sanctions, tax evasion and money laundering. A Wall Street Journal report pointed out that a few of the world’s biggest banks turned to offshore services to set up financial structures for clients. Financial institutions such as HSBC, UBS Group and Credit Suisse are among some of the banks that used Mossack Fonseca.
“The Panama Papers leak is not about the miscommunication of ideals–but is more an absolute failure of a company’s ethics,” said Jay Rosen, Vice President, Legal & Corporate Language Solutions, Merrill Corporation. In his role at Merrill, Rosen is responsible for assisting global companies with multi-lingual internal investigations, ethics and compliance matters. “Mossack Fonseca made a conscious, economic decision to participate in the gray area of setting up shell companies. Not all of the translations in the world can compensate for a C-Suite that knowingly and willfully created an enterprise to purposely shelter and evade international taxation authorities.”
In one case, documents published in 2015 show that HSBC’s chief executive, Stuart Gulliver, established an offshore account in a Panama-based bank. Allegedly, the chief executive opened the account–established by Mossack Fonseca–while he was based in Hong Kong and transferred bonus payments to a Swiss account, which was used to conceal the size of his bonus from colleagues.
HSBC has denied allegations of wrongdoing.
“Some may see the Panama Papers leak as a story where the rich can exploit secretive offshore tax regimes,” said Fay Feeney, CEO, Risk for Good, an advisory firm that supports members of the C-Suite. “I also see it as a story about transparency, the power of social media and the risks of cybersecurity. World leaders, politicians and companies need to accept that operating in the digital age shines a bright light on unethical decisions and company culture.”
Twitter’s reaction to #PanamaLeaks
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