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'Panama Papers' leak of 11m documents reveals how the super rich hide their money Panama Papers: Millions of leaked documents reveal how world’s rich and powerful hid money
(about 4 hours later)
The largest ever leak of documents has revealed how an offshore law firm has helped its clients to hide their money in tax havens.  Millions of confidential documents have been leaked from one of the world’s most secretive law firms, exposing how the rich and powerful have hidden their money.
Dubbed the “Panama Papers”, the 11 million confidential documents from Mossack Fonseca show how the Panama-based firm has used shell companies to benefit the world’s rich and powerful. Some clients have laundered money, dodged sanctions and evaded tax.  Dictators and other heads of state have been accused of laundering money, avoiding sanctions and evading tax, according to the unprecedented cache of papers that show the inner workings of the law firm Mossack Fonseca, which is based in Panama.
The files show links to 72 current or former heads of state, including secret offshore companies linked to family and associates of Egypt’s former president, Hosni Mubarak, Syria’s president Bashar al-Assad, and Libya’s ex-leader Muammar Gaddafi. The documents, dubbed "The Panama Papers", reveal links to 72 current or former heads of state and accuse some of them of having vested interests in their own banks and looting their own countries.
Two close allies of the Russian President, Vladimir Putin, are linked to an alleged money-laundering ring. The data shows links to families and associates of some of the most powerful people in the world, including the former president of Egypt, Hosni Mubarak, the former Libyan leader, Muammar Gaddafi and the current president of Syria, Bashar al-Assad.
At least $1bn (£700m) is thought to have been channelled from Bank Rossiya to an offshore company called Sandlewood, created by Mossack Fonseca. Bank Rossiya is a St Petersburg bank headed by Yuri Kovalchuk, a close ally of Mr Putin, and is subject to US sanctions after Russia’s invasion of Crimea in 2014.   In the UK, several elected officials are involved with the law firm, including Baroness Pamela Sharples, the MP Michael Mates and the former deputy chairman of the Conservative Party Michael Ashcroft. All three provided responses to the International Consortium of Investigative Journalists (ICIJ) and have either denied any financial benefit to the offshore companies or have completely denied the allegations of working with the law firm.
The “Panama Papers” were leaked via German newspaper Süddeutsche Zeitung to the International Consortium of Investigative Journalists, which passed them to media outlets around the world. They will be the subject of a BBC Panorama documentary broadcast on Monday night. Two close allies of the Russian President, Vladimir Putin, are linked to an alleged money-laundering ring thought to be worth $1billion, run by a bank based in St Petersburg, Bank Rossiya. One of those is the concert cellist Sergei Roldugin, who has known Mr Putin for many years, is godfather to Mr Putin’s daughter Maria, and introduced him to his now ex-wife Lyudmila. The bank in question has already faced sanctions from the European Union and the US after Russia's invasion of Crimea in 2014.
The papers also implicate another Putin ally, concert cellist Sergei Roldugin, who is godfather to the Russian President’s daughter Maria and introduced him to his now ex-wife Lyudmila. Mr Roldugin owns 3.2 per cent of Ban Rossiya and has a long-standing 12.5 per cent stake in Russia’s biggest TV advertising agency, Video International, the leaks reveal. The papers were initially leaked via the German newspaperSüddeutsche Zeitung to the ICIJ. Gerard Ryle, director of the ICIJ, who has been analysing the documents along with 107 media outlets across more than 70 countries, told the BBC: “I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents.” The leak will be the subject of a Panoramadocumentary tonight. The source of the leak remains unidentified.
They show how he has made a fortune of hundreds of millions of dollars, but attempts were made to keep his assets secret. Another accusation in the files is that the prime minister of Iceland, Sigmundur Gunnlaugsson, had an undeclared interest in the bailed-out banks in the country, hiding millions of dollars in Iceland’s banks via an opaque offshore company.
The files also reveal how Icelandic prime minister Sigmundur Gunnlaugsson failed to declare an interest in his country’s bailed-out banks when he entered parliament in 2009, after buying offshore company Wintris with his wife in 2007. Mr Gunnlaugsson is now facing calls for his resignation, but claims he has not broken any rules and his wife did not benefit financially from his actions. Iceland was one of the few countries following the 2008 financial crisis to jail several of its bankers, who were accused of taking excessive risk which led to the collapse of their economy.
Mossack Fonseca, responding to the leaks, said: “For 40 years Mossack Fonseca has operated beyond reproach in our home country and in other jurisdictions where we have operations. Our firm has never been accused or charged in connection with criminal wrongdoing.” Yet Mr Gunnlaugsson and his wife bought Wintris, an offshore company, in 2007 but did not declare an interest in the company when they entered parliament. The company was used to invest millions of inherited money. He then sold his 50 per cent stake in Wintris to his wife for 70 pence ($1) eight months later.
Gerard Ryle, director of the ICIJ, said the documents covered the day-to-day business at Mossack Fonseca over the past 40 years. “I think the leak will prove to be probably the biggest blow the offshore world has ever taken,” he said. Mr Gunnlaugsson has faced calls for his resignation but has reportedly said he has done nothing illegal and his wife has not benefitted financially from the arrangement.
Offshore companies are often located in countries such as Panama and are subject to their own tax rules, often functioning as tax loopholes or requiring much lower taxes than in an investor’s home country.
The law firm documents additionally show how individuals could take out large amounts of cash without revealing who they are to the public. In one case, the firm acted on behalf of a man who pretended to be the owner of $1.8m so that the real owner could take out the money without revealing their identity.
The ICIJ has listed 140 politicians from more than 50 countries who are linked to offshore companies in 21 tax havens, including countries such as Argentina, Georgia, Iraq, Jordan, Qatar and Ukraine.
Mossack Fonseca said it has operated “beyond reproach” for 40 years and has never been acused or charged with criminal wrong-doing.
“If we detect suspicious activity or misconduct, we are quick to report it to the authorities,” it said in a statement. “Similarly, when authorities approach us with evidence of possible misconduct, we always cooperate fully with them.”