It’s not a leak, it’s a tidal wave. The documents (illegally) obtained from the Panamanian law firm Mossack Fonseca by the grandiosely-named “International Consortium of Investigative Reporters” comprise about twelve million documents going back about forty years. It’s some 2.6 terabytes of information. (The entire Library of Congress consists of about fifteen terabytes of data.)
The size of the leak is less important than the content. Mossack Fonseca specializes in forming offshore corporations, trusts, foundations, and other legal entities. In many cases, they are entirely legal. They may be created legally to do business overseas and keep earnings and savings away from domestic taxation authorities. Mossack Fonseca insists it has vetted its clients to ensure their businesses are legal. But among the hundreds of governments, companies, and people involved is almost certainly a massive amount of corruption.
Many, if not all, of these business arrangements are created in the most complex manner possible to conceal the true owners and beneficiaries. Like Russian matryoshka dolls — any number of figures, one inside another, each one progressively larger — each layer has to be taken apart to get to the people who are profiting.
So far, Sigmundur Gunnlaugsson, prime minister of Iceland, has resigned over the Panama Papers revelations. UK Prime Minister David Cameron took the extraordinary step (for a Brit politician) of publishing his tax returns after it was revealed he’d benefitted from offshore deals his father had made.
Even those closet capitalists in Communist China are implicated. Relatives of Chinese President Xi Jinping — including his brother-in-law — were revealed to own, or have owned, secret offshore companies set up by the Panamanian lawyers. The Chinese government has written the whole matter off as another Western plot against them but took the trouble to make it impossible to search the term “brother in law” in the Internet.
The Russian government had the reaction you’d expect. Russia’s president, Vladimir Putin, said that because he wasn’t named in the documents, there was nothing to talk about. And, of course, he said that, “In this connection, attempts are made to weaken us from within, make us more acquiescent,” painting the whole Panama Papers leak as another American plot against him.