What Are the Panama Papers? What Are the Paradise Papers?

It’s no secret that many people, organizations, and corporations do not enjoy paying taxes. Many will do all they can through certain accounting practices and other methods to legally make use of loopholes or altogether circumvent aspects of the tax system in an effort to pay as few taxes as possible. 

Though the idea of any entity wanting to retain more of their profits is hardly a surprise, it can still be a bit of a shock when some very creative accounting practices (that sometimes walk the tightrope of legality) are revealed to the public. This typically happens when the IRS, for instance, takes note of suspicious activity and conducts an audit. 

And then sometimes, like in the cases of the Panama Papers and the Paradise Papers, massive amounts of private financial information about some of the world’s most visible, powerful, and influential people and companies comes to light, giving journalists, the public, and in many cases, law enforcement, the opportunity to assess the situations for themselves. 

So, what exactly are the Panama Papers?

In a nutshell, the Panama Papers represent nearly 12 million hacked and leaked documents that included private financial (and attorney-client protected) information representing nearly a quarter of a million offshore financial centers (OFCs) that were shared with the public in 2016. 

These financial documents, some of which date back to the 1970s, were taken from a Panamanian law firm, and connected a great deal of private information to government officials, including the King of Saudi Arabia, the former presidents of Sudan, Ecuador, Ukraine, Russian President Vladimir Putin, and many others. 

There were seemingly countless names of government officials and members of royalty named in the papers, which also included non-governmental individuals, such as FIFA executives, football coaches, team owners, and players, media personalities like record mogul David Geffen and actor Jackie Chan, as well as people associated with organized crime. 

The speculation of corruption had severe consequences for some, and very little for others named in the leak. For instance, Sigmundur Davíð Gunnlaugsson, who at the time was the Prime Minister of Iceland, resigned from office after his name was revealed in the papers. 

The country, like many others, was severely affected by the 2008 financial crisis, and public opinion cited his and his wife’s failure to fully disclose their financial assets as a sign of corruption. Neither he or his wife were ever accused of or charged with a crime. After his resignation, the former prime minister claimed he was a victim of conspiracy.

Are the Paradise Papers different from the Panama Papers?

Though both sets of documents reveal details about hundreds of thousands of offshore accounts, the 13.4 million documents released in the Paradise Papers were different in that they contained more detailed information about offshore dealings world leaders, including Queen Elizabeth, and members of and donors and advisors to the Trump administration, including former U.S Secretary of Commerce, Wilbur Ross.

Celebrities cited in this new set of documents included Madonna, Bono, and Shakira.

The Paradise Papers also included speculation as to how over 100 global corporations, including giants like Nike, Facebook, Apple, Disney, and many others may use the tax system to their advantage or possibly use other countries as tax havens by moving assets to places with more generous tax codes. 

The Paradise Papers, released in November of 2017, share information of about 120,000 different people and companies, and, like the Panama Papers, received a great deal of media attention. 

It also caused instances of litigation, not necessarily for those named in its pages, but certain media agencies who chose to publish the contents of its pages. The BBC and The Guardian were just a few of the media outlets that were sued by the legal firm, Appleby, which was one of the sources for the documents. 

Why does the release of these papers matter?

The release of these papers is significant for multiple reasons.

One, it confirmed what many have long suspected, if not quite confidently known: that the tax system across multiple countries is filled with loopholes that those with the right resources, connections, and influence are able to take advantage of.

Secondarily, they matter because they show that our private information, no matter who we are or how wealthy we might be, is vulnerable and can be exposed. 

The release of these papers also matters because it shows how readily the court of public opinion’s perception of corruption can equal guilt in the public sphere, but not necessarily in courts of law. 

Since both the Panama and Paradise Papers have been released, many governments across the world have conducted audits and made attempts at reforming their tax codes, but very few have actually been accused or convicted of crimes. 

It’s for exactly these sorts of reasons that we at The Law Offices of Robert J. DeGroot believes that it is vital for anyone who is suspected of committing a crime or has been accused or charged with a crime to have the legal defense team that they deserve in order to protect their constitutional rights. 

If you or someone you love has found themselves accused of tax-related crimes, then we want you to contact us. Your consultation is confidential, your information is protected by client privilege, and your rights are always passionately defended. Call us today!