Summary: On Sunday, a group of journalists published information that tied the wealthy and powerful to possible tax evasion. The information all stemmed from a data breach from the law firm, Mossack Fenseca.
Before the Panama Papers were made public on Sunday, very few had heard of the global law firm, Mossack Fenseca. However, because the firm’s data breach implicated numerous billionaires, businesspeople, and celebrities of money laundering in offshore accounts, the public interest in the firm has increased.
So who are the people of Mossack Fenseca? What do we know about the firm so far?
1. Authorities were already investigating Mossack Fenseca’s role in what would later be called the Panama Papers.
Forbes reports that the Brazilian police had been investigating Mossack Fenseca for corruption months before the leak. In January, Brazil’s Federal Police accused the firm of helping clients create offshore entities to hide corrupt money. Authorities said that the firm used a real estate company called OAS Empreendimentos Imobiliários S/A to help cover criminal money from a state-owned oil mega corporation called Petrobras.
2. While previously under the radar, Mossack Fenseca has been around for a while.
According to CNN, “Mossack Fonseca was created 30 years ago through a merger between two Panamanian law firms, one headed by Ramon Fonseca, the other by German immigrant Jurgen Mossack.” The firm has hundreds of employees and branches in over 40 cities. It specializes in helping corporate clients incorporate firms in offshore jurisdictions. While creating shell companies is legal, authorities say the companies are often used to launder money obtained through illegal means.
CNN reports that The International Consortium of Investigative Journalists, which coordinated the investigation into the leaked documents, said Mossack Fonseca was “one of the world’s five biggest wholesalers of offshore secrecy.” That’s a pretty big title for a previously low-key firm.
3. Mossack Fenseca had a reputation of being “tight-lipped.”
But staying low-key was apparently a part of the plan. The Atlantic reports that in 2012 The Economist called the firm “tight-lipped,” and that it wanted to remain as opaque as the companies it created for its clients.
4. Panama has weak anti-money laundering laws.
After the leak, people wondered why elites chose Mossack Fonseca and Panama? According to CNN, Mossack Fonseca’s specialization mixed with their location made them an ideal firm for any clients who wanted help with offshore accounts.
“Panama is the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities,” Angel Gurría, secretary general of the OECD, said in a statement published on CNN.
Mossack Fonseca has maintained that is has not conducted any wrong-doing.
Sources: Forbes, CNN, The Atlantic
Logo courtesy of Mossack Fonseca.