Panama Papers: Latest Developments

The Panama Papers exposé hit the headlines in early April of this year, becoming the leading topic of discussion in business, government and politics around the world. Now, just two months later, what is the latest with this sensational story?

For one, the news team that helped bring the story to light is reportedly dealing with serious financial constraints. According to a New York Times article, the International Consortium of Investigative Journalists (ICIJ) has been in downsizing mode even as the Panama Papers exposé has raised the group’s profile around the world:

Its brief shining moment in the journalistic spotlight was being complicated by much more familiar issues. Like so many of its peers in nonprofit journalism, the consortium is subject to the financial headwinds buffeting the industry as a whole. In this case, it is feeling ripple effects from the financial struggles of its parent organization, the Center for Public Integrity, the venerable nonprofit investigative news organization that controls the consortium’s budget.

The financial pinch has created dual realities for the consortium, damping morale and escalating long-simmering tensions with its parent, even as the impact of the Panama Papers has dramatically increased its global profile. 

The news is troubling not only for those in the journalism industry – but also for anyone who values watchdogs and whistleblowers who can lift the veil of secrecy that shrouds so many business dealings. The offshore accounts and shell companies revealed by the Panama Papers are the perfect example. Without the diligent efforts of the ICIJ to research, vet, confirm and ultimately report the Panama Papers (in a way the public is able to understand, no less), with the scandal have ever been revealed at all?

European Investigation to Proceed
Another development comes from Europe, as government officials there have greenlit an investigation into the Panama Papers and “how wealthy individuals, politicians and multinational corporations were able to stash billions away in the Central American tax haven.” According to an article on AccountancyAge, the European Parliament approved setting up a year-long inquiry into the scandal:

Details of the mandate, which have been agreed by MEPs, stated: “In times when the European Union is still coping with the consequences of the crisis from the end 2000s, European institutions have a duty to ensure that the fight against tax fraud, avoidance and illegal activities is given priority and has the best legislative framework possible”

The mandate added that the Panama Papers has heightened the importance of the exchanging of tax information between tax authorities as well as the clampdown on nations which fail to agree to such legislation.

Without a doubt, the EP action is just one of many such investigations launched around the globe to explore the incendiary claims and connections revealed in the Panama Papers.

A Witch Hunt?
It is worth noting that there are some who believe that the reaction to the Panama Papers has gone beyond rational, and now represents a poisoned environment in which even those loosely connected to the affair are “guilty by suspicion.” A writer for Legal Week likens the furor around the Panama Papers to the Salem Witch Trials. In his article, he writes: 

The irony about the presentation of the Panama Papers in much of the press is that everyone is guilty by suspicion. Although much of the sifting still has yet to be done on the data, what jumps out so far is not how much dodgy dealing is revealed, but how little. The narrative relentlessly peddled by the press essentially runs: 'all of this is dodgy, because it is offshore, and because it is offshore, it is dodgy'. Of course, they are careful to put necessary grudging caveats that there are legitimate reasons for using offshore holding companies, but the narrative of the reporting then leaves those caveats behind in a cloud of dust.

Does he have a point? Or have we for too long turned a blind eye to such “dodgy” actions, and only now are scrutinizing apparent, widespread, unethical business practices? You be the judge.