John Doe and Mossack Fonseca

by William H. Benson

November 14, 2019

     Three weeks ago, I happened to watch an interesting movie, “The Laundromat,” starring Meryl Streep. The movie, I discovered, is not about washing and drying clothes, but rather it is about washing ill-gotten profits into clean money, and hiding assets in offshore companies to evade taxes.

     Based on actual events, the movie showcases two villains: Jüregen Mossack and Ramón Fonseca, founders of a Panamanian legal firm, Mossack Fonseca, with branches in thirty-five countries, that specialized in setting up offshore companies for wealthy individuals, politicians, and elected officials.

     Robert Palmer of Global Witness compared the baffling process of hiding assets in offshore companies to a Russian doll. “One company is hidden inside another, which is hidden in another, and so on, until it becomes impossible for a government to identify the actual person, and demand that he or she pay the taxes owed.”

     For example, a sports star can put his name’s rights into a series of offshore company to avoid taxes.

     The Panama Papers first came to light months after a Mossack Fonseca employee, code-named John Doe, sent an email in late 2015, to two reporters at a German newspaper, “Süddeutsche Zietung,” and asked, “Interested in data? I’m happy to share.”

     John Doe had somehow managed to copy every email, text document, image, and file, since 1977, from Mossack Fonseca’s clients, a total of 11.5 million documents, the largest cache of leaked documents ever in human history.

    John Doe sent this treasure trove to the two German reporters, who then decided to pass it on to a Washington D.C.-based organization, the International Consortium of Investigative Journalists.

     Gerard Ryle, an official at the ICIJ, spoke on Ted Talk in June 2016, and explained that his organization’s first decision was to share the information with other journalists, something investigative reporters are loathe to do.

     The ICIJ invited 367 journalists from nearly 100 media organizations in 25 language groups across the globe to participate in the massive research. They allowed “native eyes to look at native names.” For example, Nigerians would look at the documents that pertained to Nigeria.

     The ICIJ also asked all journalists to sit on their stories for months, also something that investigative reporters are loathe to do, but then they agreed to release their stories on the same day, April 3, 2016.

     The ICIJ built a virtual newsroom, housed it in a safe and secure site, and then made the documents searchable and readable for the journalists, who went to work conducting research in courthouses, quizzing people, and building their accounts of tax evasion.

     Then, on April 3, 2016, at 8:00 p.m., German time, in dozens of newspapers across the globe, the ICIJ’s reporters published their stories simultaneously. As a result, “The Panama Papers exposed the rich and powerful as people who can hide vast amounts of their assets in offshore accounts.”

     Gerard Ryle of ICIJ explained that “Iceland’s prime minister owned an interest in a secret offshore company, named Wintris, Inc., that in turn had ownership in Iceland’s banks, the very issue of corruption that Iceland’s voters had elected him to fight and stamp out.”

     Once that story broke, Iceland’s prime minister resigned, the first of numerous resignations, and every month since then, stories of bringing people to justice because of the Panama Papers have appeared in newspapers.

     As of this date, governments have clawed back a total of $1.2 billion in taxes owed but not paid.

     In December of 2018, prosecutors  in the United States announced criminal charges against four men: “Ramses Owens and Dirk Brauer, former senior employees of Mossack Fonseca; Richard Gaffey, a Boston-based accountant; and Harald Joachim Vonder Goltz, a former U. S. taxpayer. All were charged with tax evasion, wire fraud, and money laundering.” Trial is set for January 2020.

     John Doe, as far as I know, remains unknown, but his devastating leak sunk Mossack Fonseca. The legal firm closed its doors in 2017. Reporters have quizzed him about his motivation, and he says,

     “ I decided to expose Mossack Fonseca because I thought its founders, employees, and clients should answer for their roles in these crimes, only some of which have come to light thus far. It will take years, possible decades, for the full extent of the firm’s sordid acts to become know.”

     Because John Doe blew a whistle and leaked his company’s once-private client files to the public, he lost his job, but prosecutors have brought dozens, if not hundreds, of people to justice for evading taxes and laundering dirty money. The world needs more whistle-blowers, like John Doe.