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Panama Papers could spawn US cases with global reach

Chris Hamblin, Editor, London, 13 May 2016

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In view of the American penchant for opening prosecutions for crimes committed abroad against people based abroad, with very little actual connection to the United States, the recent revelation that the mystery leaker wants to help prosecutors is important.

In a statement of 2,000 words or so, verified by Süddeutsche Zeitung (which simply means 'South German Newspaper'), the very American-sounding 'John Doe' speaks up for people who publicise malfeasance, adding: "Legitimate whistleblowers who expose unquestionable wrongdoing, whether insiders or outsiders, deserve immunity from government retribution, full stop.

"Thousands of prosecutions could stem from the Panama Papers, if only law enforcement could access and evaluate the actual documents. ICIJ [the International Consortium of Investigative Journalists] and its partner publications have rightly stated that they will not provide them to law enforcement agencies. I, however, would be willing to co-operate..."

Compliance officers should make a mental note of this possibility because cases that begin in the United States, with the full panoply of prosecutorial skills that the federal budget can provide behind them, often travel all over the world, ensnaring hapless compliance officers at financial firms in faraway countries. This is what happened with the Libor and FX cases and it represents the future for many cases. No phenomenon could be described as 'global' better than the Panama Papers.

On a more amusing note, further down the page, John Doe bewails the failures of the media and attributes them to their purchase by the rich: "Many news networks are cartoonish parodies of their former selves, billionaires appear to have taken up newspaper ownership as a hobby, limiting coverage of serious matters concerning the wealthy, and serious investigative journalists lack funding...several major did have editors review [sic] documents from the Panama Papers. They chose not to cover them. The sad truth is that among the most prominent and capable media organisations in the world there was not a single one interested in reporting on the story. Even Wikileaks didn't answer its tip line repeatedly."

With constant illegal government snooping on calls and emails now accepted as an established fact in Western countries, it is impossible for anyone to go to the press with a damaging story without the surveillance people of some state or other - and especially the US - knowing about it. The US Government therefore knew that John Doe was hawking his wares around the news agencies. Add this to the fact that politicians are by far the most referred-to type of people in the papers (perhaps one-third of them, far ahead of actors, lawyers, entrepreneurs, film producers, businessmen and people involved in football) but American politicians hardly receive a mention, and an interesting possibility arises: is the leak the work of the US Central Intelligence Agency?

When the story first hit the headlines Ramon Fonseca, a founder of the Panamanian law firm, said that he believed the leak to come from an attack by external hackers, adding bitterly: "The world is already accepting that privacy is not a human right." His co-founder, Jürgen Mossack, is the son of a Nazi SS officer.

The worth of the Panama Papers to the US is evident: with so many offshore tax havens - especially the British Virgin Islands and Panama - being discredited, America's own onshore-offshore centres such as Delaware and Las Vegas are attracting a tidal wave of money from high-net-worth individuals from overseas. The papers' worth to governments the world over, embarrassed as they may be today, is also evident: revelations such as these could be used to justify more surveillance, more government involvement in financial firms, and ultimately more compliance activity.

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