Saturday April 3, 2021’s Smile of the Day: The Panama Papers
On this Day:
In 2016, the Panama Papers were first published – 11.5 million confidential documents from offshore law firm Mossack Fonseca expose widespread illegal activities including fraud, kleptocracy, tax evasion and the violation of international sanctions by the world’s elite in the world’s largest ever data leak.
The Panama Papers (Spanish: Papeles de Panamá) are 2.6TB of data or 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities leaked beginning on 3 April 2016. The documents, some dating back to the 1970s, were created by, and taken from, former Panamanian law firm and corporate service provider Mossack Fonseca.
The documents contain personal financial information about wealthy individuals and public officials that had previously been kept private. While offshore business entities are legal (see Offshore Magic Circle), reporters found that some of the Mossack Fonseca shell corporations were used for illegal purposes, including fraud, tax evasion, and evading international sanctions.
“John Doe”, the whistleblower who leaked the documents to German journalist Bastian Obermayer from the newspaper Süddeutsche Zeitung (SZ), remains anonymous, even to the journalists who worked on the investigation. “My life is in danger”, the whistleblower told them. In a May 6, 2016 statement, John Doe cited income inequality as the reason for the action and said they leaked the documents “simply because I understood enough about their contents to realize the scale of the injustices they described”. Doe added that they had never worked for any government or intelligence agency and expressed willingness to help prosecutors if granted immunity from prosecution. After SZ verified that the statement did in fact come from the source for the Panama Papers, the International Consortium of Investigative Journalists (ICIJ) posted the full document on its website.
SZ asked the ICIJ for help because of the amount of data involved. Journalists from 107 media organizations in 80 countries analyzed documents detailing the operations of the law firm. After more than a year of analysis, the first news stories were published on April 3, 2016, along with 150 of the documents themselves. The project represents an important milestone in the use of data journalism software tools and mobile collaboration.
The documents were dubbed the Panama Papers because of the country they were leaked from, but the Panamanian government expressed strong objections to the name over concerns that it would tarnish the government’s and country’s image worldwide, as did other entities in Panama and elsewhere. Some media outlets covering the story have used the name “Mossack Fonseca papers”.
In October 2020, German authorities issued an international arrest warrant for the two founders of the law firm at the core of the tax evasion scandal exposed by the Panama Papers. Cologne prosecutors are seeking German-born Jürgen Mossack and Panamanian Ramón Fonseca on charges of accessory to tax evasion and forming a criminal organization.
Mossack Fonseca notified its clients on April 1, 2016 that it had sustained an email hack. Mossack Fonseca also told news sources that the company had been hacked and always operated within the law.
Data security experts noted, however, that the company had not been encrypting its emails and furthermore seemed to have been running a three-year-old version of Drupal with several known vulnerabilities. According to James Sanders of TechRepublic, Drupal ran on the Apache 2.2.15 version from March 6, 2010, and worse, the Oracle fork of Apache, which by default allows users to view directory structure.
The network architecture was also inherently insecure; the email and web servers were not segmented from the client database in any way.
Some reports also suggest that some parts of the site may have been running WordPress with an out-of-date version of Revolution Slider, a plugin whose previously-announced vulnerabilities are well-documented.
A grey hat hacker named 1×0123 announced April 12 that Mossack Fonseca’s content management system had not been secured from SQL injection, a well-known database attack vector, and that he had been able to access the customer database because of this.
Computer security expert Chris Kubecka announced May 24, 2016 that the Mossack Fonseca client login portal was running four different government grade remote access trojans (RATs). Kubecka confirmed there were still numerous critical vulnerabilities, too many open ports into their infrastructure and internet access to their archive server due to weak security. Kubecka explained how each data security issue was discovered in detail in a full-length book titled Down the Rabbit Hole: An OSINT Journey.
Reports from April 3 note the law firm’s many connections to high-ranking political figures and their relatives, as well as celebrities and business figures. Among other things, the leaked documents illustrate how wealthy individuals, including public officials, can keep personal financial information private.
Initial reports identified five then-heads of state or government leaders from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates as well as government officials, close relatives, and close associates of various heads of government of more than forty other countries. Names of then-current national leaders in the documents include President Khalifa bin Zayed Al Nahyan of the United Arab Emirates, Petro Poroshenko of Ukraine, King Salman of Saudi Arabia, and the Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson.
Former heads of state mentioned in the papers include:
Argentinian president Mauricio Macri who was president from December 2015–December 2019. Moreover, the moral problem, the oppositers reclaimed illegality because he never put this in his patrimonial declarations. For one of the official sources of Panama papers: “Macri’s official spokesman Ivan Pavlovsky said that the Argentine president didn’t list Fleg Trading Ltd. as an asset because he had no capital participation in the company. The company, used to participate in interests in Brazil, was related to the family business group. “This is why Maricio Macri was occasionally its director,” he said, reiterating that Macri was not a shareholder.”
Sudanese president Ahmed al-Mirghani, who was president from 1986–1989 and died in 2008.
Former Emir of Qatar Hamad bin Khalifa Al Thani owned Afrodille S.A., which had a bank account in Luxembourg and shares in two South African companies. Al Thani also held a majority of the shares in Rienne S.A. and Yalis S.A., holding a term deposit with the Bank of China in Luxembourg. A relative owned 25 percent of these: Sheikh Hamad bin Jassim Al Thani, Qatar’s former prime minister and foreign minister.
Former prime ministers:
- Prime Minister Bidzina Ivanishvili of Georgia
- Pavlo Lazarenko of Ukraine
- Prime Minister Ayad Allawi, a former vice president of Iraq, owned property through Mossack Fonseca shell companies registered in Panama and the British Virgin Islands, for security reasons following an assassination attempt, according to his spokesperson, who added that any income from the properties was reported and taxes paid “promptly and on time.”
- Ion Sturza of Moldova.
- Ali Abu al-Ragheb of Jordan.
The leaked files identified 61 family members and associates of prime ministers, presidents and kings, including:
- the brother-in-law of China’s paramount leader Xi Jinping
- the son of former Malaysian prime minister Najib Razak
- children of former prime minister of Pakistan Nawaz Sharif
- children of Azerbaijani president Ilham Aliyev
- Clive Khulubuse Zuma, the nephew of former South African president Jacob Zuma
- Nurali Aliyev, the grandson of Kazakh president Nursultan Nazarbayev
- Mounir Majidi, the personal secretary of Moroccan king Mohammed VI
- Kojo Annan, the son of former United Nations Secretary-General Kofi Annan
- Mark Thatcher, the son of former British prime minister Margaret Thatcher
- Juan Armando Hinojosa, the “favourite contractor” of Mexican president Enrique Peña Nieto.
- Spanish Royal Family: Infanta Pilar, Duchess of Badajoz and her son Bruno Gómez-Acebes, Iñaki Urdangarín, Amalio de Marichalar, and people close to the family like the mistress of former King Juan Carlos I, Corinna Larsen.
Other clients included less-senior government officials and their close relatives and associates, from over forty countries.
Over £10 million of cash from the sale of the gold stolen in the 1983 Brink’s-Mat robbery was laundered, first unwittingly and later with the complicity of Mossack Fonseca, through a Panamanian company, Feberion Inc. The company was set up on behalf of an unnamed client twelve months after the robbery. The Brinks money was put through Feberion and other front companies, through banks in Switzerland, Liechtenstein, Jersey, and the Isle of Man. It issued bearer shares only. Two nominee directors from Sark were appointed to Feberion by Jersey-based offshore specialist Centre Services. The offshore firms recycled the funds through land and property transactions in the United Kingdom. Although the Metropolitan Police Service raided the offices of Centre Services in late 1986 in cooperation with Jersey authorities, and seized papers and two Feberion bearer shares, it wasn’t until 1995 that Brink’s-Mat’s solicitors were finally able to take control of Feberion and the assets.
Actor Jackie Chan is mentioned in the leaked documents as a shareholder in six companies based in the British Virgin Islands (all per Wikipedia).
First, a Story:
My neighbour used to sell Ukranian eggs.
If you don’t know what those are, it’s where you draw on eggs with wax and then soak the eggs in coloured dyes to create intricate special designs. It’s an art form called Pysanky.
My neighbour used to sell these coloured eggs out of a little stall in his front garden. I never really saw many people buy them, but I figured it was just a hobby and didn’t think too much about it. I once asked him what he did for a living.
“Eggs,” he said. “I sell Ukranian eggs.”
He drove a fancy car, always took long holidays to exotic places, and generally seemed to be quite well off, so I was pretty surprised to hear he said he made all his money off of selling little dyed eggs out of his garden. They must have fetched pretty high prices…
One day I got home and there were police all around my neighbour’s house. They’d arrested him. Turns out he’d been money laundering.
That egg stand? It was a shell corporation.
Second, a Song:
In 1995, this group was founded as Five in Love with Betty. They released their initial album in 1997 “That’s Jive Live“. They recorded their second album in 2000: “Dressed To Swing“. In 2002, Betty left the band – the new name is “5 in Love“. In 2004, they were signed by EMI-Austria. In 2005 came their third album: “Brothers In Jive“. 2010 saw the release of their 4th album “Swing What You Got”.
When these guys come on stage you can tell that they’re not brothers in blood, but after you hear their swingin´ rockin´ jive and see their joyful hi-jinks you can tell that they are definitely brothers in jive.
Since the band got together almost ten years ago they have knocked out audiences all over Europe and have thousands of devoted fans on the Internet
The band members are pros in many musical styles:classical, folk, rock, funk, jazz and R&B. So, whatever they’re puttin´down, from a shoutin´ jump blues, to an uptown 3 a.m, ballad, you can bet it’s for real (from http://5inlove.com).
Here is 5 In Love performing The Panama Papers Song. I hope you enjoy this!
Thought for the Day:
“If more of us valued food and cheer and song above hoarded gold, it would be a merrier world.” – J. R. R. Tolkien
Dave & Colleen
© 2021 David J. Bilinsky and Colleen E. Bilinsky