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Millions of leaked documents reveal how dozens of politicians and public officials from countries across the world have been stashing cash in offshore havens.

The 11.5 million leaked records, dubbed the “Panama Papers,” show that some of the world’s most well-known heads of state, politicians and celebrities – including Pakistan’s prime minister Nawaz Sharif and the prime minister of Iceland, Sigmundur Davíð Gunnlaugsson – have millions of dollars squirreled away in offshore accounts.

The leaked documents, which were reviewed by journalists from more than a hundred international news organisations – such as The Guardian, the BBC and the International Consortium of Investigative Journalists (ICIJ) – reveal that major banks have been key in creating evasive companies in Panama and other locations.

According to the ICIJ, more than 200,000 offshore accounts are listed in the leaked documents, and banking giants, including UBS and HSBC, have set up thousands of shell corporations for international clients.

The records, ICIJ says, illustrate how international law firms and big banks are “selling financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars”.

The documents have been leaked from a Panamanian law firm, Mossack Fonseca.  With a “global presence,” Mossack Fonseca has branches dotted across the world in places such as The Bahamas, Jersey, Hong Kong and Liechtenstein.

The company is expert in creating shell companies, and according to The Guardian and the ICIJ, the leaked files contain information about some 214,000 offshore accounts which are connected to people in more than 200 countries and territories.

As the ICIJ states, with many of Mossack Fonseca’s clients there is no evidence to suggest that the shell companies are being used for illegal activities. The documents also show, however, that Mossack Fonseca’s client list includes drug traffickers, tax evaders and scam artists.

In one case, at least two South African businessmen involved in a $60 million investment scam, which included embezzling money from a benefit pool for the widows and orphans of deceased mine workers, used Mossack Fonseca to create offshore corporations.

Mossack Fonseca has denied any wrongdoing. The Panamanian law firm said in a “Fact Sheet,” which is available online, that “our firm, like many firms, provides worldwide registered agent services for our professional clients (e.g., lawyers, banks, and trusts) who are intermediaries. As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations and standards to which we and others are bound”.

In the wake of the massive document leak, international accountability and anti-corruption organisations are calling for greater transparency.

According to a press release from non-governmental organisation, Transparency International, José Ugaz, the organisation’s chair, said: “The Panama Papers investigation unmasks the dark side of the global financial system where banks, lawyers and financial professionals enable secret companies to hide illicit corrupt money. This must stop. World leaders must come together and ban the secret companies that fuel grand corruption and allow the corrupt to benefit from ill-gotten wealth.”

The ICIJ has said it will release a comprehensive list of companies and people linked to them in early May. For more information about the “Panama Papers,” Mossack Fonseca and corruption scandals, visit the ICIJwebsite.

More than 40,000 protesters swept through the streets of Guatemala City yesterday, Saturday 16 May 2015, to vent fury over the nation’s unfolding corruption scandal, which is set to become the country’s most severe political crisis since the end of the civil war in 1996.

Converging outside the National Palace, the protesters called for the resignation of President Otto Perez Molina, as well as jail time for his former Vice-President, Roxana Baldetti, who resigned last week after her former private secretary, Juan Carlos Monzón Rojas, whereabouts unknown, was implicated as a ring-leader in the infamous ‘La Linea’ crime syndicate.

The syndicate is thought to have defrauded the state of millions of dollars by accepting bribes in exchange for lowered import duties. Guatemala’s current and former tax chiefs are suspects in the scandal, which is believed to involve at least 50 private citizens and public servants.

The protests, which were staged simultaneously in several parts of the country, were not organised by any single group, but appeared to evolve organically through decentralised social media networks. It drew crowds from diverse quarters of civil society, most significantly, the middle classes.

“Given the history and on-going reality of repression and impunity in Guatemala, this is a very courageous display of citizen action,” said Grahame Russell, director of the human rights NGO Rights Action in a recent newsletter. “Repression is a very real reality in the coming days and weeks as a growing number of people overcome their fear and peacefully take to the streets to express their indignation at so many generations of corruption, exploitation, repression and impunity.”

The protest marks the end of a tumultuous week for the government, which many suspect of involvement in the scandal at the highest levels. On Monday, the Associated Press announced it had obtained recordings of wire-tapped telephone calls between businessman and fugitive Luis Mendizabal, various Guatemalan lawyers, and suspects, including some of the 27 currently in custody. Mendizabal’s boutique clothes shop, ‘Emilio’, is believed to have been a meeting place for the fraud ring.

The wiretaps mention ‘the No 2’, ‘the lady’ and ‘the R’, which prosecutors believe may be a reference to the former Vice President, who is currently not under arrest, but has been ordered not to leave the country. The Associated Press noted a conversation on April 16 where Mendizabal told detainee Javier Ortiz that he will soon be free.

“Blanca Stalling is behind it and they have very good communication,” he said.

Judge Blanca Stalling Davila, a Supreme Court justice, was quick to deny any involvement in the scandal, suggesting that perhaps Mendizabal had confused her with her sister, Judge Marta Sierra Stalling. According to prosecutors and a UN investigative commission, Judge Sierra Stalling accepted payment for the release of three suspects on bail, including Oritz. All the suspects have now been returned to custody along with the five lawyers alleged to have paid the bribe.

On Thursday 14 May, Guatemala’s congress selected a new Vice President, Alejandro Maldonado Aguirre, from three nominees submitted by President Otto Perez Molina. Maldonado was a constitutional judge, former Cabinet minister and ambassador, described by the President as an ‘exemplary Guatemalan’.

“I ask for the support from the entire country … all those who want to join the effort to bolster and deepen our democracy,” said Perez Molina.

In fact, Maldonado was one of the three judges on the country’s five-member Constitutional Court who ruled in favour of annulling the genocide conviction of dictator Efrain Rios Montt in 2013.

Against the backdrop of general elections later this year, the crisis continues…

Photo credits: Comité de Unidad Campesina
Photo credits: Comité de Unidad Campesina