Is this the break Bernie Sanders needs to usher him into the White House?
One of the biggest financial document leaks in history is currently unfolding, exposing how the world’s elite have been shuffling money offshore to avoid paying taxes. German newspaper Süddeutsche Zeitung first obtained the information – up to 11.5 million confidential files – and released it to media partners and journalists to comb through and decipher.
“It allows a never-before-seen view inside the offshore world — providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues,” says the International Consortium of Investigative Journalists.
The records come from a Panama-based law firm called Mossack Fonseca, one of the world’s top creators of shell companies — corporate structures that can be used to hide ownership of assets.
Some of the dots have already been connected and reveal how prime ministers, wealthy entrepreneurs and even sports stars are stashing up to $21 trillion of can’t-touch-this money around the world. The leak would be a shattering revelation if it weren’t merely confirming our suspicion – news, certainly, but not new.
(What, you thought Putin didn’t have an off-shore account?)
While the findings could be used to spur legal action against some of those implicated in the leak – including Barcelona FC star Lionel Messi, who’s currently embroiled in a tax evasion case in Spain, and Icelandic Prime Minister Sigmundur David Gunnlaugsson, who’s being pressured to resign for his entanglement with creditors of Iceland’s three failed banks in 2008 – they’re not necessarily incriminating. Most of the schemes don’t constitute criminal tax evasion, but perfectly fine tax avoidance.
You know, one of the keys to building wealth Donald Trump won’t tell you about in one of his many books.
“Don’t confuse money laundering and corruption with tax planning,” said Martin Kenney, a Canadian lawyer who specializes in tracking down dirty money through webs of offshore corporations.
“It’s tax efficient. It’s not unlawful. It’s not tax evasion. It’s lawful tax avoidance.”
While it’s not quite laundering on Walter White’s A1A Car Wash level, it’s still shady circumvention of structures that the general public doesn’t have the privilege to dodge.
“Just because it’s legal doesn’t make it right. Slavery was legal. Child labour was legal,” said James Henry, a former chief economist with the consulting firm McKinsey in an interview with the Toronto Star. “There’s no social purpose whatsoever. It’s just the most outrageous fraud on the treasury. Why the people involved in this don’t think it’s wrong is a wonder to me.”
Some of the most prominent figured tied to the documents include the aforementioned Messi and Gunnlaugsson, as well as Russian Prime Minister Vladimir Putin, movie star Jackie Chan, 70 other current or former heads of state, and 26 Forbes-listed billionaires.
There are, of course, Canadians involved too. A lot, actually. Reports by the Toronto Star and the CBC estimate that between 350 and 450 Canadians are named in the documents, whose offshore banking costs Canada billions of dollars a year.
Don’t forget: Income tax returns for 2015 are due on April 30, 2016. Probably best you file them properly.