The Panama Papers are a drop in the ocean of offshore tax havens. In total, between $7 trillion and $32 trillion is stashed across the world in around 80 locations. The Panama law firm Mossack Fonseca is said to be the fourth largest provider of offshore legal services, assisting elites to create shell companies where they can hide their money. Mossack Fonseca’s director said the breach was a “successful but limited hack,” in an interview with Reuters.
So the global establishment is hiding far more than has been revealed.
But this leak is not any drop in any ocean. Scrutinizing it has opened the world’s eyes to global tax dodging, which is not necessarily illegal, but certainly facilitates tax evasion and criminal activity. As butterflies in Panama can create hurricanes in Europe, this leak has already whipped up possibly the political storm of the year – even decade – with revelations about many world leaders.
In response to the leaks, Iceland is already undergoing a democratic revolution, while China has increased censorship to dampen public outcry. In Britain, meanwhile, escalating protests are calling for Prime Minister Cameron to resign after he falsely claimed he had not profited from offshore funds. Under pressure, Cameron recently released a summary of his tax accounts, though questions still remain over whether this is the whole story.