Following the Money: Lessons from the Panama Papers, Part 1: Tip of the Iceberg

67 Pages Posted: 26 May 2016 Last revised: 24 Dec 2017

Lawrence J. Trautman

Western Carolina University - College of Business

Date Written: May 12, 2017

Abstract

Widely known as the “Panama Papers,” the world’s largest whistleblower case to date consists of 11.5 million documents and involves a year-long effort by the International Consortium of Investigative Journalists to expose a global pattern of crime and corruption where millions of documents capture heads of state, criminals and celebrities using secret hideaways in tax havens. Involving the scrutiny by over 400 journalists worldwide, these documents reveal the offshore holdings of at least several hundred politicians and public officials, including the prime ministers of Iceland and Pakistan, the president of Ukraine, and the King of Saudi Arabia. More than 214,000 offshore entities appear in the leak, connected to people in more than 200 countries and territories.

Since these disclosures became public, national security implications already include abrupt regime change, and probable future political instability. It appears likely that important revelations obtained from these data will continue to be forthcoming for years to come. Presented here is Part 1 of what may ultimately constitute numerous-installment coverage of this important inquiry into the illicit wealth derived from bribery, corruption, and tax evasion. This article proceeds as follows. First, disclosures regarding the treasure trove of documents from the Panama-based law firm, Mossack Fonseca are reviewed. Second, is a discussion of the impact and cost of bribery and corruption to the global community. Third, I define and briefly explore issues surrounding “tax evasion.” Fourth, the impact of social media and technological change on transparency is discussed. Next, a few thoughts about implications for future research are offered.

Keywords: Bribery, Capital Flows, Corruption, Criminal Enforcement, Developing Countries, Ethics, FCPA, FIFA, Journalism, Money Laundering, Mossack Fonseca, National Security, Offshore Accounts, Panama Papers, Privacy, Scandals, social Media, Tax Compliance, Tax Evasion, Terrorist Financing, Transparency

JEL Classification: D63, E62, G18, G28, G38, H24, H25, H26, H56, J18, K14, K34, K42, L84

Suggested Citation

Trautman, Lawrence J., Following the Money: Lessons from the Panama Papers, Part 1: Tip of the Iceberg (May 12, 2017). 121 Penn St. L. Rev. 807 (2017). Available at SSRN: https://ssrn.com/abstract=2783503 or http://dx.doi.org/10.2139/ssrn.2783503

Lawrence J. Trautman (Contact Author)

Western Carolina University - College of Business ( email )

204 Forsyth
Cullowhee, NC 28723
United States
828-227-2642 (Phone)

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