What was the “Panama Papers” scandal?

The scandal of the “Panama Papers” shook the world in 2016: it shook governments, exposed distinguished figures, unleashed judicial investigations and hit the image of Panama as an international financial center.

Lawyer Ramón Fonseca, one of the heads of the law firm involved in this plot, died at the age of 71 due to health problems while awaiting sentencing for this case in Panama City, his lawyers reported this Thursday.

What were the Panama Papers?

The scandal broke out following a leak of 11.5 million digital files from the Panamanian legal firm Mossack Fonseca that revealed how wealthy people around the world created offshore companies to hide properties, companies, assets and profits in order to evade taxes or launder money.

The data was obtained by the German newspaper Süddeutsche Zeitung, which shared it with the International Consortium of Investigative Journalists (ICIJ), and was disseminated starting in April 2016 by various media.

The investigation revealed that these personalities created opaque companies through the Panamanian law firm in order to open bank accounts and create front foundations in multiple countries to hide money, in some cases coming from illicit activities, according to the investigation.

Who was mentioned and what was the impact?

The president of Russia, Vladimir Putin, and the former rulers of Iceland, Sigmundur Davíð Gunnlaugsson; from Pakistan, Nawaz Sharif; from Great Britain, David Cameron; and from Argentina, Mauricio Macri; In addition to the Argentine soccer star, Lionel Messi were some of the names mentioned.

At least 150 investigations were opened in 79 countries to examine possible cases of tax evasion or money laundering. After years of delay, a trial was held in Panama whose hearings ended on April 19 and the sentence is expected in the coming weeks.

Due to the scandal, the Mossack Fonseca firm closed, and the international image of Panama, a country accused of being a tax haven, was seriously affected.

Since then, the country introduced reforms and greater requirements for the formation of companies or companies, which allowed it to leave the “gray list” of the Financial Action Task Force (FATF) in 2023. However, Panama remains on the list of territories considered as “tax havens” by the European Union.

What role did Fonseca and his partner Mossack play?

Fonseca and his colleague Jürgen Mossack, born in Germany but resident in Panama for decades, created the Panamanian law firm Mossack Fonseca in 1977.

According to the prosecution, they were responsible for facilitating the creation of opaque companies in which directors of the German multinational Siemens deposited millions of euros outside the company’s real accounting.

That “box B” It would have been used to hide money from the payment of commissions. The Panamanian law firm was also used to store money from a massive scam in Argentina, according to prosecutors.

Prosecutors requested 12 years in prison for Mossack and Fonseca, the maximum penalty for money laundering. “Truly, there has been a great injustice (…) I reiterate that both my partner and all the people who have worked with me have been serious, honest and correct people,” Mossack declared in his closing argument on April 19.

Fonseca did not attend the trial because he was hospitalized, according to his defense.

“The truth is that after more than 500 volumes (of files) we find that we (only) have the case of Siemens (in Germany) and a case in Argentina, of the thousands and thousands of people who were supposedly involved,” lawyer Daika Indira Levy, Fonseca’s defender, had said during the trial.

The scandal inspired a film directed by Steven Soderbergh, The Lavandería (2019), in which Fonseca was played by Antonio Banderas, who co-starred in the film alongside Meryl Streep and Gary Oldman.

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