The so-called Panama Papers came to light in 2015 - documents full of nefarious activities involving some of the most powerful individuals around the world. As leaked materials from the Mossack Fonseca law firm, the Panama Papers implicated world leaders, sports officials, celebrities, and the like in money-laundering schemes and shady business dealings dating back to the 1970s.
The upcoming, aptly named movie The Laundromat - starring Meryl Streep, Gary Oldman, and Antonio Banderas, and directed by Steven Soderbergh - tells the story of the investigation into the Panama Papers and their ongoing implications. Streep represents the collective efforts of hundreds of journalists, while Oldman and Banderas play Mossack Fonseca co-founders Jürgen Mossack and Ramón Fonseca.
Before you watch the film, here's a breakdown of what happened, why it matters, and what continues to come out of the millions of documents that constitute the Panama Papers.
Findings From The Panama Papers Were First Published In April 2016
The International Consortium of Investigative Journalists (ICIJ) published its first article on the Panama Papers in April 2016 via SZ. The article named the documents the Panama Papers, broke down the process used to assess the information, and set off steady streams of investigation and scandal alike.
Mossack Fonseca was aware of the impending article, something that necessitated their campaign to discredit the media. In addition to trying to shift the focus from their own activities, the firm issued two statements in March 2016, indicating pride in "the work we do, notwithstanding recent and willful attempts by some to mischaracterize it."
Mossack Fonseca would not address the questions put forth to them by the media, claiming it was against their policies, and seemed to belittle such requests:
We can confirm that the parties in many of the circumstances you cite are not and have never been clients of Mossack Fonseca. We encourage you to verify your sources, comprehend the essence of the industry dedicated to company formation, and understand how this business has functioned historically versus the changes that have taken place recently to ensure transparency into the identity of ultimate beneficial owners and to improve safeguards within the international financial system in which Mossack Fonseca operates.
- Photo: The Laundromat/Netflix
Two Months After Their Data Was Breached, Mossack Fonseca Didn't Know Who Owned About 70% Of The Shell Companies They Had On Record
Mossack Fonseca became aware that millions of documents had been leaked from within their confines on March 9, 2016. As panic set in, Mossack Fonseca tasked its employees, subsidiaries, and intermediaries with figuring out who all of their clients were - something that should have been clear but wasn't due to lax verification processes by the firm.
According to documents later released, the requests of clients to remain anonymous had resulted in inadequate recordkeeping. As the firm reached out to intermediaries, they received panicked responses. Nicole Didi, a wealth management advisor in Switzerland, wrote, "THE CLIENT DISAPPEARED! I CAN NOT FIND HIM ANYMORE!!!!!!!" Eliezer Panell, a lawyer in Florida, told the firm, "This has been ridiculous...WE CAN’T GO BACK a day after asking for papers to ask for something else.” He added, “WE LOOK LIKE F*CKING AMATEURS. A Mickey Mouse operation."
Efforts to identify clients fell short. After two months of frantic searching, roughly 70% of Mossack Fonseca's clients in the British Virgin Islands remained unidentified. In Panama, 75% of the owners of roughly 10,500 shell companies were unknown.
- Photo: The Laundromat/Netflix
Mossack Fonseca Tried To Shirk Their Responsibility In The Face Of Scandal
Just like Mossack Fonseca had done in 2014 (when they intentionally obscured facts from investigators), the law firm denied responsibility after the Panama Papers were published in 2016.
Mossack Fonseca first tried to deflect, telling the Miami Herald they were one of many firms that set up offshore companies, that most of their clients were large institutions and not individuals, and that the media, itself, was risking legal action:
It appears that you have had unauthorized access to proprietary documents and information taken from our company and have presented and interpreted them out of context. We trust that you are fully aware that using information/documentation unlawfully obtained is a crime, and we will not hesitate to pursue all available criminal and civil remedies.
A subsequent press release issued in response to media coverage similarly tried to put the blame elsewhere, implying that fault fell on their clients:
To begin with, approximately 90% of our clientele is comprised of professional clients, such as international financial institutions as well as trust companies and prominent law and accounting firms, who act as intermediaries and are regulated in the jurisdiction of their business.
Mossack Fonseca Attempted To Stall Investigations By Destroying Evidence And Blocking Subpoenas
As the investigation into Mossack Fonseca and its activities continues, further unlawful activities have been found. Both Ramón Fonseca and Jürgen Mossack have been charged with money laundering; however, Brazilian authorities claim the pair was complicit in instructing "the person in charge in the southern country (Brazil) to hide documents [and] eliminate evidence of those involved in the previous illegal activity."
As a result, five employees of Mossack Fonseca in Brazil have been charged with criminal offenses, including the general manager of the Brazilian office, Maria Mercedes Riaño.
Mossack Fonseca has also been accused of blocking subpoenas and eliminating data related to federal court proceedings in the United States involving money laundering activities in Nevada. Emails also indicate Mossack Fonseca instructed the manager of the Nevada branch of the firm, Patricia Amunategui, to lie and say she was an independent provider rather than an employee of the larger legal entity. They were concerned she couldn't do so effectively, however:
[Amunategui] does not have the skills to pass a basic audit without allowing ourselves to be in evidence - Look out!!!… I’m deeply worried about Mrs. Patricia forgetting things and getting very nervous. I think that in this situation it could easily become clear that we are hiding something.