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The Panama Papers: Here’s What We Know

103 points by bilalasif1900 10y ago

msabalau 10y ago
Mostly a synthesis of what you'd find from other sources. The most interesting bit was adding the US context: "One reason there may be relatively few Americans named in the documents is that it is fairly easy to form shell companies in the United States. James Henry, an economist and senior adviser to the Tax Justice Network, told Fusion that Americans “really don’t need to go to Panama.”"
- gnodar 10y ago
  Here's an article that discusses it: http://fusion.net/story/287671/americans-panama-papers-trove/ http://fusion.net/story/287671/americans-panama-papers-trove... Turns out that in many cases, forming a company within the US can be more secretive that forming in British Virgin Islands, Panama or the Bahamas. > If you form a British Virgin Islands company you have to declare who you are to the person forming the company for you; if you form in Nevada, for example, you don’t… So Nevada is great because it’s much more secret than the British Virgin Islands.
- deleted 10y ago
  [deleted]
ommunist 10y ago
I do not think Mr Cameron will stop his political activity just because Panama Papers reveal that his father was one among those who designed the system.
- nsns 10y ago
  But what if the common folk in each nation finally realizes its national leaders have become, in essence, multinationals, just like Google and Amazon, with all that this entails regarding their actual agendas and worldview?
- vixen99 10y ago
  Agreed provided it's clear that he and his family have not profited from activities shown to be those of tax evasion as against tax avoidance. However he's attacked some folk engaged in the latter (though aren't we all in terms of following the rules to minimize our tax bill?) so he may find that difficult.
  - mseebach 10y ago
    There's plenty of hypocrisy to go around, so it may be difficult to find someone to cast the first stone.
  - TheOtherHobbes 10y ago
    Cameron can't do much, because if he did his party would tie him up in a sack and throw him in the Thames - politically, if not physically. The reality is that a large part of the UK's so-called service industry is based exactly on the creation and maintenance of offshore schemes of all kinds, and much of the wealth of Cameron's party backers would evaporate if the schemes were made public. Voters are mostly too uninformed to know much about this world. But public exposure plays very badly with them, because Cameron famously said "We're all in this together" while promoting austerity at the start of the first Coalition term. Now, even the most unaware British voters are beginning to wonder if perhaps he was being less than entirely honest. Conveniently, it would be the easiest thing in the world to throw Cameron overboard, leave Europe - so the scams can continue - and carry on with someone fresh, new, shiny, and untainted by association, who can guarantee business as usual behind the scenes. It's still surprising how limited the revelations have been in the UK. It's very hard to believe that more household names aren't involved - but so far we've had a hit list of minor Lords hardly anyone has heard of, some former MPs no one cares about, and Lord Ashcroft, who may not be Cameron's favourite person after he offered some unexpected insights into Cameron's hobbies as a student earlier in the year.
wslh 10y ago
I have a sincere question that may sound hyperbole but worth to discuss in HN: what are the ethical/legal limits of leaks when some of the leakers are the classical media? I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? I will clarify my question to not sound radically stupid: if the Panama Papers had been published anonymously or showing cases of attacks against social liberties or illegal government activities (e.g. Snowden) it is clear, but when the media is showing documents that are not illegal per se but the illegal activities are more connected to their clients [1] I think they can be hardly sued for it. All this was triggered by the following quote: "Using information/documentation unlawfully obtained is a crime, and we will not hesitate to pursue all available criminal and civil remedies”. [1] Mossack Fonseca was indeed engaged in illegal activities because they obstructed the US justice over companies suspected of connections to politicians. But this was not known in advance.
- Ensorceled 10y ago
  > I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? At it's most simple level: a movie leak is a social ill, breaking of the social copyright contract, and a political leak is a social good, revelation of corruptions and education. That's a simplification of course, copyright is abused, for instance to prevent all access to the copyrighted material in some places and fair use thwarted. Political leaks are sometimes simply scurrilous and provide more heat than light.
  - ewzimm 10y ago
    I understand that you're simplifying, but I don't think social ill is the right word. It's more like a social good which is ill for the copyright holder. The question in that case is balancing the benefit to society against the benefits to the company which claims copyright or intellectual property. It's a social good in the sense that public domain is a social good when society can benefit, but also a deeper social good for the society which inspired and produced the copyrighted work because it allows it to be distributed to people in countries that would otherwise not have access to it. For example, perhaps the greatest weapon against anti-Americanism is American culture spread through Hollywood and other media. This would normally not be sold in areas that are hostile to American values, but leaked material penetrates the culture and reverses hostility. This really comes down to the classic question of whether it's more important to benefit society in general or the rights of property holders. There are people who strongly believe in both extremes and lots of people in the middle. Some say that property is the foundation of freedom and we should sacrifice social good for the promotion of property and others say that the needs of the many outsweigh the needs of the few, even that property is theft of social value. Where any person might stand on these issues is complicated, to say the least.
petecooper 10y ago
>Here’s What We Know About the ‘Panama Papers’ by LIAM STACKAPRIL 4, 2016 Sorry to be That Guy, but this would be a tidier title and fix the errant copy & paste: Here’s What We Know About the ‘Panama Papers’
sickbeard 10y ago
I'm uncomfortable with trial by media instead of trial by court room. If they did something illegal get a prosecutor to sue them, we shouldn't be quick to bring out the pitch forks because of an accusation of wrongdoing.
- snassar 10y ago
  I am going to assume your comment is a serious one. This case isn't a "trial by media". What is happening is that several investigative journalism groups are getting together to examine data acquired through a leak. The examination may lead to lawsuits, criminal investigations, and legislative action, but is by no definition a trial. The questions asked as a result of the examination of the leaked information may lead to uncomfortable questions in private and in public. At this point, who is being accused of wrong-doing?
  - wastedhours 10y ago
    The "trial by media" point is a fairly common one, insofar as media can influence the public's perception of any activities before any legal wrongdoing is established. I.e. in the UK, Cameron is on the front pages for his father's activities, regardless of whether he had any part/they're genuine/benefited etc... "Trial by media" is less a witch hunt, and more influencing the zeitgeist.
    - snassar 10y ago
      I am not sure what you mean by "trial by media" being a common point. Common where and used by whom? I am also not sure what you mean. Are you taking the view that "influencing the zeitgeist" should only happen in the court system?
      - wastedhours 10y ago
        "Trial by media is a phrase popular in the late 20th century and early 21st century to describe the impact of television and newspaper coverage on a person's reputation by creating a widespread perception of guilt or innocence before, or after, a verdict in a court of law." https://en.wikipedia.org/wiki/Trial_by_media https://en.wikipedia.org/wiki/Trial_by_media Not saying that it should only happen in the court system, just saying that since the media has the widespread ability to do so, they need to hold themselves to a certain account and be satisfied that their definition of "in the public interest" is worthy enough.
pmorici 10y ago
Does anyone understand what benefit a wealthy person gets legal or illegal from using a so called "shell company"? Is it just that their name isn't easily associated with the activity of the company?
- rbcgerard 10y ago
  On the illegal end of things, typically the benefit is three fold, one is that the company obscures the identity of the beneficial owners (simply by not reporting the shareholders), tax evasion - often this being the entity holding the money in a tax free offshore jurisdiction (I.e. It's may be easier and you less likely to get caught evading taxes if a Panamanian trust opens a brokerage account in Hong Kong), and lastly as conduits of illegal gains - money laundering - company a takes illegal money in Mexico, makes a loan to company b in Panama which pays a dividend to company c in the United States (and paying tax on that dividend and deposing the rest in a u.s account to spend freely). On the legal side there are actually probably more reasons, anonymity being one (I.e. Hiding from your neighbors who just bought the house next door), numerous legal tax avoidance reasons (two common ones would be: 1. Because of the u.s. Tax code (unlike most other places) the u.s. Charges corporate tax on foreign income but only when it is repatriated - so many companies will avoid tax by having offshore subsidiaries that hold IP to keep profits from coming back to the u.s. and being subject to tax (see every big software company with irish subsidiaries or swiss corporate inversions) 2. Hedge fund/private equity business makes extensive use of offshore companies so that non-u.s investors do not become subject to US tax and also so that US non-taxable investors (pensions and universities) do not create inadvetant tax liability for themselves (UBTI in particular)), also simple local compliance i.e. if you are a u.s. citizens and want to buy land in mexico i believe there are certain areas (typically near the coast) where the only way you can do this is to form a mexican entity)
- BillyParadise 10y ago
  The number one benefit: Privacy. Until, of course, someone steals your private information from your lawyer. I'm characterizing this "event" as closer to a theft of credit card information than a Snowdon-esque expose of governments. This is a private company who's data was ransacked. Hope the lawyers at that firm are getting ready to be sued by all their private clients.
justsaysmthng 10y ago
The way I understand it, the offshore companies exist for the purpose of funneling money out of "onshore" companies and out of the country. Extraction of dirty money (from bribery) is also very easy to do with offshore companies. The third reason is to add confusion about ownership of companies and real estate. More simply, offshore companies help rich people pay less taxes. Why do countries permit offshore companies to dominate and rob their economies ? Could anyone explain it to me ? Wouldn't banning trade with offshore companies have the effect of drastically reduced corruption and illegal "schemes" ? Edit: By "offshore" I mean companies registered in small island nations or "tax havens".
- kasey_junk 10y ago
  International trade requires operating companies in many jurisdictions. Even something as small as a single person consultancy that has clients in 2 countries (Canada/USA say) are frequently benefitted by having entities in each location. Those entities also need money, frequently in each location, so holding cash in banks in each location is also beneficial. Having offshore corporations is not evil, its just mechanics.
  - justsaysmthng 10y ago
    Your comment doesn't contain an answer to my question. Having entities in different countries for easier interface with local customers and authorities is very different from transferring ownership or large chunks of money to a company registered in the British Virgin Islands, population 28,054. Maybe "it's just mechanics" in some countries where corruption is low, but the world is very corrupt and offshore companies are tools which allow for this corruption to happen.
    - kasey_junk 10y ago
      Here is a more direct answer then. Banning trading with foreign companies would destroy international trade for the company doing the banning. Most jurisdictions view the benefits of that trade to be worth the costs. As for legislating how you can do transfers/ownership/taxation etc of foreign entities and cash, every jurisdiction in the world already legislates that. This article is about a law firm that exists solely as experts in that area for instance.
jcburns 10y ago
Liam Stackapril! He's one of my favorite writers.
dpflan 10y ago
The White House says it will issue a statement about tax inversions today at 12:15PM. http://www.cnbc.com/2016/04/05/reuters-america-white-house-says-obama-to-issue-statement-on-tax-inversions-at-1215-pm-et-at-white-house.html http://www.cnbc.com/2016/04/05/reuters-america-white-house-s...
karmelapple 10y ago
A question I find myself wondering if society will seriously consider as a result of this leak: Should shell corporations be outlawed everywhere? There are certainly legitimate reasons[1] for wanting a shell corporation, but is society more demanding of transparency and willing to reject the idea of shell corporations as a legitimate net good for society? [1] http://www.vox.com/2016/4/5/11361992/panama-papers-authoritarianism http://www.vox.com/2016/4/5/11361992/panama-papers-authorita...
- marcosdumay 10y ago
  What is a shell company? Because most of them are obviously shells, but if you want to outlaw something, you must define it first, and if you don't want your law being used to persecute whoever the police/government wants, you'd better have an objective and clear definition.
  - karmelapple 10y ago
    Fair question! Is there an accepted definition? I'd think something like a company that has, say, less than 3 employees, and/or has no discernible "customers." But I'm taking a wild guess.
pvaldes 10y ago
I bet that a lot of cases will be prescribted yet (after 4 or 10 years) and that this information is known since many years so, the most interesting question here is... why now?

103 points by bilalasif1900 10y ago

Mostly a synthesis of what you'd find from other sources. The most interesting bit was adding the US context: "One reason there may be relatively few Americans named in the documents is that it is fairly easy to form shell companies in the United States. James Henry, an economist and senior adviser to the Tax Justice Network, told Fusion that Americans “really don’t need to go to Panama.”"

gnodar 10y ago
Here's an article that discusses it: http://fusion.net/story/287671/americans-panama-papers-trove/ http://fusion.net/story/287671/americans-panama-papers-trove... Turns out that in many cases, forming a company within the US can be more secretive that forming in British Virgin Islands, Panama or the Bahamas. > If you form a British Virgin Islands company you have to declare who you are to the person forming the company for you; if you form in Nevada, for example, you don’t… So Nevada is great because it’s much more secret than the British Virgin Islands.
deleted 10y ago
[deleted]

ommunist 10y ago

I do not think Mr Cameron will stop his political activity just because Panama Papers reveal that his father was one among those who designed the system.

nsns 10y ago
But what if the common folk in each nation finally realizes its national leaders have become, in essence, multinationals, just like Google and Amazon, with all that this entails regarding their actual agendas and worldview?
vixen99 10y ago
Agreed provided it's clear that he and his family have not profited from activities shown to be those of tax evasion as against tax avoidance. However he's attacked some folk engaged in the latter (though aren't we all in terms of following the rules to minimize our tax bill?) so he may find that difficult.
- mseebach 10y ago
  There's plenty of hypocrisy to go around, so it may be difficult to find someone to cast the first stone.
- TheOtherHobbes 10y ago
  Cameron can't do much, because if he did his party would tie him up in a sack and throw him in the Thames - politically, if not physically. The reality is that a large part of the UK's so-called service industry is based exactly on the creation and maintenance of offshore schemes of all kinds, and much of the wealth of Cameron's party backers would evaporate if the schemes were made public. Voters are mostly too uninformed to know much about this world. But public exposure plays very badly with them, because Cameron famously said "We're all in this together" while promoting austerity at the start of the first Coalition term. Now, even the most unaware British voters are beginning to wonder if perhaps he was being less than entirely honest. Conveniently, it would be the easiest thing in the world to throw Cameron overboard, leave Europe - so the scams can continue - and carry on with someone fresh, new, shiny, and untainted by association, who can guarantee business as usual behind the scenes. It's still surprising how limited the revelations have been in the UK. It's very hard to believe that more household names aren't involved - but so far we've had a hit list of minor Lords hardly anyone has heard of, some former MPs no one cares about, and Lord Ashcroft, who may not be Cameron's favourite person after he offered some unexpected insights into Cameron's hobbies as a student earlier in the year.

wslh 10y ago

I have a sincere question that may sound hyperbole but worth to discuss in HN: what are the ethical/legal limits of leaks when some of the leakers are the classical media? I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? I will clarify my question to not sound radically stupid: if the Panama Papers had been published anonymously or showing cases of attacks against social liberties or illegal government activities (e.g. Snowden) it is clear, but when the media is showing documents that are not illegal per se but the illegal activities are more connected to their clients [1] I think they can be hardly sued for it. All this was triggered by the following quote: "Using information/documentation unlawfully obtained is a crime, and we will not hesitate to pursue all available criminal and civil remedies”. [1] Mossack Fonseca was indeed engaged in illegal activities because they obstructed the US justice over companies suspected of connections to politicians. But this was not known in advance.

Ensorceled 10y ago
> I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? At it's most simple level: a movie leak is a social ill, breaking of the social copyright contract, and a political leak is a social good, revelation of corruptions and education. That's a simplification of course, copyright is abused, for instance to prevent all access to the copyrighted material in some places and fair use thwarted. Political leaks are sometimes simply scurrilous and provide more heat than light.
- ewzimm 10y ago
  I understand that you're simplifying, but I don't think social ill is the right word. It's more like a social good which is ill for the copyright holder. The question in that case is balancing the benefit to society against the benefits to the company which claims copyright or intellectual property. It's a social good in the sense that public domain is a social good when society can benefit, but also a deeper social good for the society which inspired and produced the copyrighted work because it allows it to be distributed to people in countries that would otherwise not have access to it. For example, perhaps the greatest weapon against anti-Americanism is American culture spread through Hollywood and other media. This would normally not be sold in areas that are hostile to American values, but leaked material penetrates the culture and reverses hostility. This really comes down to the classic question of whether it's more important to benefit society in general or the rights of property holders. There are people who strongly believe in both extremes and lots of people in the middle. Some say that property is the foundation of freedom and we should sacrifice social good for the promotion of property and others say that the needs of the many outsweigh the needs of the few, even that property is theft of social value. Where any person might stand on these issues is complicated, to say the least.

petecooper 10y ago

>Here’s What We Know About the ‘Panama Papers’ by LIAM STACKAPRIL 4, 2016 Sorry to be That Guy, but this would be a tidier title and fix the errant copy & paste: Here’s What We Know About the ‘Panama Papers’

sickbeard 10y ago

I'm uncomfortable with trial by media instead of trial by court room. If they did something illegal get a prosecutor to sue them, we shouldn't be quick to bring out the pitch forks because of an accusation of wrongdoing.

snassar 10y ago
I am going to assume your comment is a serious one. This case isn't a "trial by media". What is happening is that several investigative journalism groups are getting together to examine data acquired through a leak. The examination may lead to lawsuits, criminal investigations, and legislative action, but is by no definition a trial. The questions asked as a result of the examination of the leaked information may lead to uncomfortable questions in private and in public. At this point, who is being accused of wrong-doing?
- wastedhours 10y ago
  The "trial by media" point is a fairly common one, insofar as media can influence the public's perception of any activities before any legal wrongdoing is established. I.e. in the UK, Cameron is on the front pages for his father's activities, regardless of whether he had any part/they're genuine/benefited etc... "Trial by media" is less a witch hunt, and more influencing the zeitgeist.
  - snassar 10y ago
    I am not sure what you mean by "trial by media" being a common point. Common where and used by whom? I am also not sure what you mean. Are you taking the view that "influencing the zeitgeist" should only happen in the court system?
    - wastedhours 10y ago
      "Trial by media is a phrase popular in the late 20th century and early 21st century to describe the impact of television and newspaper coverage on a person's reputation by creating a widespread perception of guilt or innocence before, or after, a verdict in a court of law." https://en.wikipedia.org/wiki/Trial_by_media https://en.wikipedia.org/wiki/Trial_by_media Not saying that it should only happen in the court system, just saying that since the media has the widespread ability to do so, they need to hold themselves to a certain account and be satisfied that their definition of "in the public interest" is worthy enough.

pmorici 10y ago

Does anyone understand what benefit a wealthy person gets legal or illegal from using a so called "shell company"? Is it just that their name isn't easily associated with the activity of the company?

rbcgerard 10y ago
On the illegal end of things, typically the benefit is three fold, one is that the company obscures the identity of the beneficial owners (simply by not reporting the shareholders), tax evasion - often this being the entity holding the money in a tax free offshore jurisdiction (I.e. It's may be easier and you less likely to get caught evading taxes if a Panamanian trust opens a brokerage account in Hong Kong), and lastly as conduits of illegal gains - money laundering - company a takes illegal money in Mexico, makes a loan to company b in Panama which pays a dividend to company c in the United States (and paying tax on that dividend and deposing the rest in a u.s account to spend freely). On the legal side there are actually probably more reasons, anonymity being one (I.e. Hiding from your neighbors who just bought the house next door), numerous legal tax avoidance reasons (two common ones would be: 1. Because of the u.s. Tax code (unlike most other places) the u.s. Charges corporate tax on foreign income but only when it is repatriated - so many companies will avoid tax by having offshore subsidiaries that hold IP to keep profits from coming back to the u.s. and being subject to tax (see every big software company with irish subsidiaries or swiss corporate inversions) 2. Hedge fund/private equity business makes extensive use of offshore companies so that non-u.s investors do not become subject to US tax and also so that US non-taxable investors (pensions and universities) do not create inadvetant tax liability for themselves (UBTI in particular)), also simple local compliance i.e. if you are a u.s. citizens and want to buy land in mexico i believe there are certain areas (typically near the coast) where the only way you can do this is to form a mexican entity)
BillyParadise 10y ago
The number one benefit: Privacy. Until, of course, someone steals your private information from your lawyer. I'm characterizing this "event" as closer to a theft of credit card information than a Snowdon-esque expose of governments. This is a private company who's data was ransacked. Hope the lawyers at that firm are getting ready to be sued by all their private clients.

justsaysmthng 10y ago

The way I understand it, the offshore companies exist for the purpose of funneling money out of "onshore" companies and out of the country. Extraction of dirty money (from bribery) is also very easy to do with offshore companies. The third reason is to add confusion about ownership of companies and real estate. More simply, offshore companies help rich people pay less taxes. Why do countries permit offshore companies to dominate and rob their economies ? Could anyone explain it to me ? Wouldn't banning trade with offshore companies have the effect of drastically reduced corruption and illegal "schemes" ? Edit: By "offshore" I mean companies registered in small island nations or "tax havens".

kasey_junk 10y ago
International trade requires operating companies in many jurisdictions. Even something as small as a single person consultancy that has clients in 2 countries (Canada/USA say) are frequently benefitted by having entities in each location. Those entities also need money, frequently in each location, so holding cash in banks in each location is also beneficial. Having offshore corporations is not evil, its just mechanics.
- justsaysmthng 10y ago
  Your comment doesn't contain an answer to my question. Having entities in different countries for easier interface with local customers and authorities is very different from transferring ownership or large chunks of money to a company registered in the British Virgin Islands, population 28,054. Maybe "it's just mechanics" in some countries where corruption is low, but the world is very corrupt and offshore companies are tools which allow for this corruption to happen.
  - kasey_junk 10y ago
    Here is a more direct answer then. Banning trading with foreign companies would destroy international trade for the company doing the banning. Most jurisdictions view the benefits of that trade to be worth the costs. As for legislating how you can do transfers/ownership/taxation etc of foreign entities and cash, every jurisdiction in the world already legislates that. This article is about a law firm that exists solely as experts in that area for instance.

jcburns 10y ago

Liam Stackapril! He's one of my favorite writers.

dpflan 10y ago

The White House says it will issue a statement about tax inversions today at 12:15PM. http://www.cnbc.com/2016/04/05/reuters-america-white-house-says-obama-to-issue-statement-on-tax-inversions-at-1215-pm-et-at-white-house.html http://www.cnbc.com/2016/04/05/reuters-america-white-house-s...

karmelapple 10y ago

A question I find myself wondering if society will seriously consider as a result of this leak: Should shell corporations be outlawed everywhere? There are certainly legitimate reasons[1] for wanting a shell corporation, but is society more demanding of transparency and willing to reject the idea of shell corporations as a legitimate net good for society? [1] http://www.vox.com/2016/4/5/11361992/panama-papers-authoritarianism http://www.vox.com/2016/4/5/11361992/panama-papers-authorita...

marcosdumay 10y ago
What is a shell company? Because most of them are obviously shells, but if you want to outlaw something, you must define it first, and if you don't want your law being used to persecute whoever the police/government wants, you'd better have an objective and clear definition.
- karmelapple 10y ago
  Fair question! Is there an accepted definition? I'd think something like a company that has, say, less than 3 employees, and/or has no discernible "customers." But I'm taking a wild guess.

pvaldes 10y ago

I bet that a lot of cases will be prescribted yet (after 4 or 10 years) and that this information is known since many years so, the most interesting question here is... why now?