Panama Papers leaker says shell companies hide more than tax evasion

Offshore corporations - The secret shell game

Offshore corporations have one main purpose - to create anonymity. Recently leaked documents reveal that some of these shell companies, cloaked in secrecy, provide cover for dictators, politicians and tax evaders.
Up Next
Offshore corporations have one main purpose - to create anonymity. Recently leaked documents reveal that some of these shell companies, cloaked in secrecy, provide cover for dictators, politicians and tax evaders.

The person who gave the Panama Papers to reporters offered the first detailed explanation of the motive behind the largest leak of financial data ever.

In an 1,800-word statement, the leaker, identified by journalists as “John Doe,” assailed the world of offshore companies as fueled by “massive, pervasive corruption.”

“Shell companies are often associated with the crime of tax evasion, but the Panama Papers show beyond a shadow of a doubt that although shell companies are not illegal by definition, they are used to carry out a wide array of serious crimes,” the leaker wrote.

The person – whose identity has been kept under wraps since the leak was made public April 3 – called on authorities worldwide to investigate the Panamanian law firm of Mossack Fonseca and offered to help in the effort.

The source accused authorities, including those in the United States, of being “spineless,” said they were too conflicted by political interests to take action in the past, and said offshore activity has contributed to income disparity.

“For 50 years, executive, legislative, and judicial branches around the globe have utterly failed to address the metastasizing tax havens spotting Earth’s surface,” the statement said. “Banks, financial regulators and tax authorities have failed. Decisions have been made that have spared the wealthy while focusing instead on reining in middle- and low-income citizens.”

Thursday night, the Obama administration unveiled steps it said would address weaknesses that allow secretive shell companies to be misused domestically, and make it easier to prosecute illicit activity conducted through the companies.

This is the person who contacted me.

Bastian Obermayer, Süddeutsche Zeitung

The source has not been identified by Süddeutsche Zeitung, the Munich, Germany, newspaper that first received the data, because the person expressed fear of retaliation. Süddeutsche Zeitung shared the data with the Washington-based International Consortium of Investigative Journalists, which in turn cobbled together a team of more than 350 journalists in 78 countries, including several from McClatchy, to examine the 11.5 million documents. It was the largest media collaboration ever undertaken.

Süddeutsche Zeitung verified the authenticity of the statement and shared it with its partners for release Friday.

“I am very sure this was handed over from the same person,” wrote Bastian Obermayer, the Süddeutsche Zeitung reporter who received the leak. “We have certain mechanisms to verify who is on the other end . . . This is the person who contacted me.”

The statement shed little light on the leaker’s identity, but denied any connections between the leaker and any government. The website WikiLeaks has speculated that the source is connected to the U.S. government, but in Friday’s statement, the source indicated that he or she had attempted to contact WikiLeaks with the information.

“Even Wikileaks didn’t answer its tip line repeatedly,” the statement said.

“For the record, I do not work for any government or intelligence agency, directly or as a contractor, and I never have,” the source wrote. “My viewpoint is entirely my own, as was my decision to share the documents with Süddeutsche Zeitung and the International Consortium of Investigative Journalists (ICIJ), not for any specific political purpose, but simply because I understood enough about their contents to realize the scale of the injustices they described.”

The source also called for better protections for whistleblowers worldwide and expressed sympathy for former NSA employee Edward Snowden, who leaked classified data that revealed the extent of National Security Agency spying on Americans and others.

Even Wikileaks didn’t answer its tip line repeatedly.

‘John Doe’

“Legitimate whistleblowers who expose unquestionable wrongdoing, whether insiders or outsiders, deserve immunity from government retribution,” the source wrote. “Until governments codify legal protections for whistleblowers into law, enforcement agencies will simply have to depend on their own resources or ongoing global media coverage for documents.”

Mossack Fonseca is headquartered in Panama, but has an office in Las Vegas, a representative in Miami and a presence in more than 35 other places around the world.

The firm is one of the world’s top creators of shell companies, which can have legitimate business purposes but can also be used to dodge taxes, launder money and commit other crimes.

The leak included emails, financial spreadsheets, client records, passports and corporate registries. The document archive contains 2.6 terabytes of data.

The resulting stories revealed that 12 current and former world leaders maintained offshore companies. They also examined the use of shell companies to purchase millions of dollars in property in Miami.

Mossack Fonseca has denied any illegal activity. “We have not once in nearly 40 years of operation been charged with criminal wrongdoing. We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it,” spokesman Carlos Sousa said.

The U.S. Attorney’s Office for the Southern District of Manhattan has confirmed that it has opened an investigation into the Panama Papers revelations.

Marisa Taylor: 202-383-6164, @marisaataylor