From beautiful people to heads of states, the Panama Papers leaks have served as a great equaliser and have started bringing the high and mighty to their knees.
From the kings and queens of Bollywood to presidents and prime ministers, the Mossack Fonseca scandal has trapped the rich and the powerful into one gigantic dragnet.
The reaction has been varied depending on the locale and has ranged from outright denial to stony silence. The uproar has been deafening in some parts of the world, whereas in other parts, you could probably hear a pin drop.
The scandal involves the massive leak of data from the Panama-based law firm Mossack Fonseca. The data is in the form of 11.5 million confidential documents that have information pertaining to the formation and operation of offshore firms. Let us look at how the Panama Papers have affected the high and mighty in different countries. We also look at the wider impact of this scandal and how cryptocurrency could have lead to a different outcome.
The King of Bollywood loses presidential sheen
Perhaps the most well known Bollywood actor of all time, the undisputed King of Bollywood, Amitabh Bachchan, also known as Bachchan Sr. since his son ventured into the film industry, has become the face of the Mossack Fonseca scandal in India.
Mr. Bachchan’s entire family is in the movie business and his daughter-in-law Aishwarya Rai Bachchan, a former Miss World title winner, has also become embroiled in the Panama Paper leaks.
For Mr. Bachchan particularly, the Panama Papers could not have sprung out of the woodworks at a worst time, because just a day before the story broke in India, there were discussions in the Indian media about him being nominated as a presidential candidate by the ruling right wing Bharatiya Janata Party.
The Indian President is a nominal head of the executive branch, with the real powers resting with the Prime Minister. The Indian Express newspaper, which as a part of 107 media organisations that were provided access by the International Consortium of Investigative Journalists (ICIJ) and German newspaper Süddeutsche Zeitung investigated the story related to India. They sifted through 11.5 million documents and discovered that more than 500 Indians were mentioned in the papers.
The Indian Express also said that 234 Indian Passports were found among the Mossack Fonseca data. Mr. Bachchan issued a denial on April 5, saying, “I have paid all my taxes including on monies spent by me overseas. Monies that I have remitted overseas have been in compliance with law, including remittances through LRS, after paying Indian taxes. In any event, the news report in Indian Express does not even suggest any illegality on my part.” This denial was carried in the Indian Express and other newspapers in India.
Mum's the word but Chinese Whispers Persist
While the media in India is having a field day over the Panama Papers, the scene in neighboring China is completely different. After the release of the Mossack Fonseca papers, news arose out of China that Chinese President, Xi Jinping’s, older sister and Li Xiaolin, the daughter of the former premier, Li Peng, figured in the list of people who have offshore companies associated with them. The Chinese state apparatus went into overdrive to silence all news surrounding the event.
In a Chinese Foreign Ministry Press Conference held on April 5, the spokesman, Mr. Hong Lei, in response to a reporter’s questioning over the Panama Papers, said “For these groundless accusations, I have no comment,” as reported by the Atlantic.
Mysteriously though, all reference to these utterances have been removed from the official transcript posted by the Chinese Foreign Ministry on their website. China Digital Times, a website based in Berkeley, California, reports that instructions have been given by one province to the effect, “Find and delete reprinted reports on the Panama Papers. Do not follow up on related content, no exceptions. If material from foreign media attacking China is found on any website, it will be dealt with severely. This directive was delivered orally to on-duty editors. Please act immediately.”
The rise of the word Putinphobia
Vladimir Putin is a figure larger than life. When the Mossack Fonseca hit and Mr. Putin’s name figured in it, it came as no surprise that he was the most popular among all those whose names were revealed.
The papers reveal that Mr. Putin’s inner circle is among the people who stand accused of wrong-doings. The Russian paper Vedomosti reported that a company called Sandalwood was created by Bank Rossii, in which Yuri Kovalchuk has the role of main shareholder. Mr. Kovalchuk has gained a reputation as the ‘personal banker’ to the Russian President.
The good news for Mr. Putin is that he has not yet been named directly as linked to any offshore companies revealed in the papers. The Kremlin has of course seized the moment to offer vehement denials, including using the word “Putinphobia”.
Dmitry Peskov, the President’s spokesman said, “It’s clear that the level of Putinphobia has reached a level at which it is impossible to speak well of Russia, and it’s required to speak ill of Russia”. Unfortunately for Mr. Peskov, the Presidential spokesman, his wife Tatiana Navka, is also a registered beneficiary of an offshore firm called Carina Global Assets Ltd., so he might need to issue some denials on his own behalf as well.
Prime Minister and The First “Victim”
Meanwhile in Iceland, the Panama Papers have claimed their first casualty in the form of Prime Minister Sigmundur David Gunnlaugsson, who had to resign after his name figured in the Mossack Fonseca leak.
The Prime Minister’s and his rich partner, who is now his wife set up a company in 2007 through Mossack Fonseca, but Mr. Gunnlaugsson sold his shares in the firm to his wife for just $1. While the Prime Minister had denied any wrongdoing and wanted to stay in power, a mass protest seems to have been a contributing factor in changing his mind.
The World of the Rich and Famous is Clear as Mud
The rich and the famous may hog the limelight but they swim in murky waters. We don’t know clearly at this point if these leaks will have legal consequences in terms of jail terms or seizures of assets.
What we do know is that the political impact of these leaks is clearly being felt. As for the legal impact, Cointelegraph spoke to Patric Stiller, CEO/Legal and Financial Consultant at Baytrade, “We are currently in the very early days of the aftermath of this scandal. With that said the whole incident seems to be a perfect demonstration of the flaws of the current financial system and the immoral, corrupt and illegal behavior it allows for. Beyond criminal and civilian court proceedings I (unfortunately) do not believe there will be a massive outcry for legal measures to be taken in the long run. There is currently and there will be more civil unrest in various parts of the world. But quite frankly I think that most of us are already so fed up at this point and not easily chocked or even surprised when it comes to the level of corruption.”
Cryptocurrency has transparency built in because of the open nature of blockchain systems. This technology can help in the tracking of illegal funds across the globe. A report was released recently by UK’s Government Office for Science titled Distributor Ledger Technology: Beyond Blockchain, which is almost prophetic when it declares offshore domiciles and the concealing of wealth to be a factor in creating conditions for societal fracture, failed states, terrorism and human misery.
When a major world government sees the power of blockchain in tackling financial irregularity, we have clearly come to a point where in the future we can see Distributed Ledger Technologies of the present and future playing a major role in clearing the muddy waters we live in.