Not very long ago, a law firm called Mossak Fonesca & Co. established in Panama, Central America came into unprecedented limelight. There was nothing conspicuous about this firm, in fact, as recent as last year only, nobody had even heard of it!
But every dog has its day (oops!) and in April 2016, it received world-wide attention due to the fact that its clients’ (who are no ordinary guys, by the way) monetary dealings were exposed by ICIJ – a Washington-based reporting collaboration.
Interestingly, as the website of ICIJ itself says, the origin of this entire series is still ‘anonymous’. The reporters of a German newspaper, Süeddeustche Zeitung – SZ – received some lead and with the aid of ICIJ, investigated into the Panama Papers; revealing many politicians and other top-notch members of the society to have questionable monetary dealings. And well, because it’s no joke to point your finger at someone of such power and pelf as the world leaders and politicians, nears 370 reporters in about 80 countries, rigorously searched the files for a year – and revealed, for example, that associates of the Russian president secretly shuffled about $2 billion through banks and shadow companies. And the reaction to the Panama news since it belted out on April 3 has been immediate, robust and viral – outraged citizens rallied and protested on streets in London, Malta and Reykjavik.
Panama Leaks – as it is reported on all news channels – informs how 220 Pakistanis, including eminent names like Prime Minister Mian Nawaz Shareef and most of his family, Javed Pasha (a friend of President Zardari’s), Malik Riaz’s son, Pizza Hut’s owner Aqeel Hussain and many other mills and textiles owners – have handled their private monetary issues without ever bringing it into public knowledge. While offshore business dealings and companies are not illegal but what reporters found was that many of Fonesca’s shell corporations were used for illegal purposes like fraud, tax evasions and other monetary cons.
Panama Leaks entailed a strong reaction from those involved in the scams and the public alike. While some resigned, as did a minister of Spain, others tried to explain the sources of their wealth – it took three days for UK’s Prime Minister Cameron to explain his people about an investment fund revealed in the papers. While ministers and politicians across the world are resigning or reasoning, the ones in Pakistan are trying to prove k mei tum se kam corrupt hun (I am less corrupt than you) – the dog-fight scenario prevails even in this case as any other!
Jim Yong Kim, the president of the World Bank, said that the impact of these tax evasions is to decelerate the endeavours to end poverty and boost prosperity. However, President Obama pointed out that, many of the schemes revealed by Panama Papers were legal. “It’s not that they’re breaking the laws, it’s that the laws are so poorly designed,” he said.
Panama Leaks has, no doubt, an egregious outcome – the plausible but false speeches of leaders have actually been proved erroneous. But the good news is that it has resulted in many changes in laws. For example, UK has made disclosure of beneficial owner data mandatory and public. The governments of Australia and Germany said that they too, intend to make registries of company owners public.
The governments and legislation cabinets and policy-makers across the globe are working on making the fiscal laws more transparent, open and accessible to public. All we have to do is to wait and watch the implications of these changes and wonder how the government of Pakistan is going to amend the monetary regulations, if ever.
