The billion-dollar trail that leads straight to Vladimir Putin


AUSTRALIAN companies and individuals are being investigated by the ATO after leaked documents revealed how the world’s super-rich hide their cash.

More than 800 Australian clients of the secretive Panama based law firm, Mossack Fonseca & Co, where the documents came from, are being investigated by the ATO.

An international coalition of media outlets published an extensive investigation into the offshore financial dealings of the rich and famous, based on a vast trove of documents —the so-called Panama Papers — provided by an anonymous source.

The International Consortium of Investigative Journalism, a non-profit organisation based in Washington, said the cache of 11.5 million records detailed the offshore holdings of a dozen current and former world leaders, as well as businessmen, criminals, celebrities and sports stars.

And now the Australian Taxation Office is targeting hundreds of Australians as a result of the leak.


The ATO is examining the dealings of 800 Australian high net worth individuals and has linked more than 120 of them to an associated offshore service provider situated in Hong Kong, The Australian Financial Review reported on Monday.

The ATO told Fairfax some cases may be referred to the Serious Financial Crime Taskforce.

Labor senator Sam Dastyari said the revelations show a broken tax system and a “cat and mouse game”.

“What is so concerning is that some of this activity may even fall within the law,” he told ABC Radio.

Senator Dastyari said tax avoidance was not a victimless act, because every dollar that was siphoned off, didn’t go into Australian schools or hospitals.
The tax office must be congratulated for taking a strong stance, he said.


The leaked records came from the Panamanian law firm, Mossack Fonseca & Co. The firm is one of the world’s top creators of shell companies, which can be legally used to hide the ownership of assets. The firm has offices in 35 cities around the world, including in Hong Kong, Miami and Zurich.

German newspaper Sueddeutsche Zeitung first received the data more than a year ago.

The Munich-based daily was offered the data through an encrypted channel by an anonymous source who requested no monetary compensation and asked only for unspecified security measures, said Bastian Obermayer, a reporter for the paper.

Obermayer said that over the course of several months Sueddeutsche Zeitung received about 2.6 terabytes of data — more than would fit on 600 DVDs. The newspaper said the amount of data it obtained is several times larger than a previous cache of offshore data published by WikiLeaks in 2013 that exposed the financial dealings of prominent individuals.

“To our knowledge this is the biggest leak that journalists have ever worked on,” Obermayer said.

The report is based on a data leak of 11.5 million records for 214,488 entities connected to people in more than 200 countries or territories. The leak includes emails, financial spreadsheets, passport information, corporate records and other sensitive information. It spans nearly 40 years, from 1977 through to the end of 2015.

“In the largest media collaboration ever undertaken, journalists working in more than 25 languages dug into Mossack Fonseca’s inner workings and traced the secret dealings of the law firm’s customers around the world,” the report said.

“They shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laundering experts and law-enforcement officials.”

The consortium said it will release the full list of companies and individuals identified in the data in early May.


The report into the documents revealed a network of secret offshore deals and vast loans worth $2.6 billion has laid a trail to Putin, reports The Guardian.

According to the report, an unprecedented leak of documents shows how this money has made members of Putin’s close circle rich.

The report revealed associates of Russian President Vladimir Putin have moved as much as $2.6 billion through offshore accounts.

The offshore trail reportedly starts in Panama, darts through Russia, Switzerland and Cyprus — and includes a private ski resort where Putin’s younger daughter, Katerina, was married in 2013.
In Russia, the Kremlin last week said it was anticipating what it called an upcoming “information attack.”

Putin’s spokesman, Dmitry Peskov, told reporters that the Kremlin had received “a series of questions in a rude manner” from an organisation that he said was trying to smear Putin.
“Journalists and members of other organisations have been actively trying to discredit Putin and this country’s leadership,” Peskov said.


But Putin isn’t the only one who has been exposed.

The leak has impacted more than 200,000 companies, foundations and trusts.

— Offshore companies have been linked to the family of Chinese President Xi Jinping.

— Icelandic Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned an offshore firm holding millions of dollars in Icelandic bank bonds during the country’s financial crisis.

— The law firm of a member of FIFA’s ethics committee, Juan Pedro Damiani, had business ties with three men indicted in the FIFA scandal: former FIFA vice president Eugenio Figueredo, as well as Hugo Jinkis and his son Mariano who were accused of paying bribes to win soccer broadcast rights in Latin America.

— Argentine football great Lionel Messi and his father owned a Panama company, Mega Star Enterprises Inc., a shell company that had previously not come up in Spanish investigations into the father and son’s tax affairs.

At least 33 people and companies in the documents were black-listed by the US government for wrongdoing, such as North Korea and Iran, as well as Lebanon’s Hezbollah, the ICIJ said.
Names also figuring in the leak included;

— The deceased father of British Prime Minister David Cameron.

— Former Egyptian President Hosni Mubarak.

— Syrian President Bashar al-Assad.

— The president of Ukraine Petro Poroshenko,

— The king of Saudi Arabia.

— Former Libyan leader Muammar Gaddafi.

— The prime minister of Pakistan Nawaz Sharif.

— Argentine President Mauricio Macri.

— Pilar de Borbon, the sister of former Spanish King Juan Carlos.

— Spanish film director Pedro Almodovar.

The leaked data provides what the ICIJ described as a “never-before-seen view inside the offshore world.”

“These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” said Gabriel Zucman, an economist at the US-based University of California, Berkeley, cited by the consortium.

Most of the services the offshore industry provides are legal if used correctly the ABC reported but as the leaked documents show some will go to extreme lengths to hide the true owners of companies which makes it hard for authorities to investigate money laundering.

Mossack Fonseca says it had never been charged for criminal wrongdoing in its efforts to help clients launder money, dodge tax and circumvent financial sanctions.
One of the law firm’s founders, Ramon Fonseca, told AFP the leaks were “a crime, a felony” and “an attack on Panama”.

“Certain countries don’t like it that we are so competitive in attracting companies,” he said.

Panama’s government said it had “zero tolerance” for any shady deals, and vowed to “vigorously cooperate” with any legal investigations.


The leaked documents also revealed that New Zealand is being used as a tax haven by foreign politicians.

Malta energy minister Konrad Mizzi and the prime minister’s chief of staff Keith Schembri set up two offshore trusts in New Zealand in 2015 through the firm.

The two trusts are linked to Panama-based companies.

The revelations triggered wide-scale protests in Malta last month, with thousands taking part in a rally demanding the resignations of the two political figures.

Mizzi admitted in February that he and his wife had set up a trust in New Zealand to manage their assets.

He said he would close down his company in Panama but retain his trust in New Zealand.

There are reportedly thousands of foreign trusts registered in New Zealand — which do not pay local tax on offshore earnings — with their beneficiaries not registered with any public body.

The New Zealand link forms part of a larger investigation into the document dump, dubbed the Panama Papers, which were obtained by German newspaper Sueddeutsche Zeitung.

Sueddeutsche said an employee at the law firm had leaked the data, telling the newspaper he risked his life in doing so. The employee was not identified in the report.

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