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The Panama Papers: Where Are the Americans?

If the Panama Papers are released on May 9 as expected, many of the names they contain may avoid the public spotlight.

April 2016 | Updated January 03, 2017 | More Articles

 

For a variety of professional reasons dealing with our international investigation business, including close contacts to some of the participants, we have been following very closely the news accounts of the “Panama Papers.”

In our recent conversations with clients and colleagues, several have asked why relatively few Americans have been exposed so far and when more findings will be published. The short answer is that no one knows which names of which nationals having done business with Mossack Fonseca, a Panamanian law firm and corporate service provider, will be published or when.

A brief explanation follows.

Background

The Panama Papers are a leaked set of 11.5 million confidential documents that provide detailed information about more than 214,000 offshore companies (including many companies’ shareholders and directors) in 21 offshore jurisdictions. The 2.6 terabytes of data included information about transactions from as far back as the 1970s.

The Panama Papers data was passed by an unknown (or unidentified) source to the Munich-based German newspaper Sueddeutsche Zeitung (“South German Newspaper”). Given the enormous scale of the leak, the newspaper enlisted the help of the International Consortium of Investigative Journalists (ICIJ), headquartered in Washington, D.C., which distributed the documents for investigation and analysis to some 400 journalists at 107 media organizations in 76 countries.

The first news reports based on the papers, and 149 of the documents themselves, were published on April 3, 2016.

Future Revelations

On April 26, 2016, the ICIJ announced the following:

“On May 9 ICIJ will publish what will likely be the largest-ever release of information about secret offshore companies and the people behind them, based on data from the Panama Papers investigation. The searchable database will include information about more than 200,000 companies, trusts, foundations and funds incorporated in 21 tax havens, from Hong Kong to Nevada in the United States.”

With respect to the ICIJ’s earlier assertion that it would not “disclose the whole database,” it is still unclear whether the “more than 200,000” entities in the database to be released on May 9 will include all 214,000 companies. We anticipate that an incomplete release would give rise to a cottage industry built around offers of vague traces of the “entire Panama Papers,” the provenance of which could not be confirmed.

Ryle has also stated that the ICIJ will not allow independent research on such important source material by allowing affiliated corporate media outlets to decide “what’s in the public interest” for their respective countries. The source material will not be made available for independent research even with WikiLeaks-style redactions, he stated, because to do so would put “innocent private individuals” at risk.

Americans

Regarding U.S. names in the Panama Papers, the ICIJ has stated that the collective review to date has revealed about 4,000 U.S. addresses listed in the document, but that many of the addresses appear to belong to U.S.-based lawyers who may have opened offshore companies for clients for any number of legitimate reasons, such as privacy, managing offshore properties, trusts, etc. (Each release of data notes that having an offshore company is neither illegal nor an indication of illegality.)

A few U.S. persons found guilty of fraud or having court financial judgments against them have been named, as well as one U.S. entertainment management icon and several persons who were past donors to Hilary Clinton’s political campaigns and/or the Clinton Foundation.

Without admitting to any concerns, the ICIJ seems justifiably wary of lawsuits stemming from possible charges of defamation of character, libel, etc. Particularly in the litigious U.S., owners of offshore companies could claim that their reputation had been damaged by the publication of their names with those of drug dealers, greedy politicians, etc. Therefore, the ICIJ will likely be very selective about which documents it publishes, and it is possible that the names of relatively few Americans will be published.

Practicalities

Even with over 400 journalists having worked on this project for a year, it is likely that they have only scratched the surface of the over 11.5 million documents to be reviewed. How many of the journalists have the necessary experience to make expert decisions or the capacity to pursue this project on a full-time basis? Who will then review these documents before they are released? How long will it take?

We suspect that, as a practical matter, documents and the names of companies and individuals will continue to trickle out over the coming year or two, and many will never see the light of day. But the findings that are released should make for interesting reading.

 

To discuss a corporate intelligence or financial investigation matter, or to learn more about Cachet International’s investigative resources in your jurisdiction, contact Michele Palmer by email or at 602-912-5730.

 

 
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Copyright © 2016 by Cachet International, Inc.

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