(Bloomberg) The anonymous whistle-blower who leaked millions of Panamanian legal documents related to secret shell companies offered to help authorities investigate and prosecute criminal cases that might arise from them in exchange for immunity.
The whistle-blower, who is identified only as “John Doe,” made the offer in a sweeping manifesto entitled “The Revolution Will Be Digitized,” which was published Friday in Suddeutsche Zeitung, the German newspaper that received the 12 million or so documents last year.
In the 1,800-word essay, the writer denied published reports that tied the leak to an intelligence agency or government. The motivation for releasing the documents from the law firm Mossack Fonseca was exasperation about the “systemic corruption” that has allowed the problem of income inequality to worsen, according to the essay.
“Shell companies are often associated with the crime of tax evasion, but the Panama Papers show beyond a shadow of a doubt that although shell companies are not illegal by definition, they are used to carry out a wide array of serious crimes that go beyond evading taxes,” the writer said. “I decided to expose Mossack Fonseca because I thought its founders, employees and clients should have to answer for their roles in these crimes, only some of which have come to light thus far. It will take years, possibly decades, for the full extent of the firm’s sordid acts to become known.”
A spokeswoman at Mossack Fonseca declined to comment Friday. After an initial round of articles based on the documents, the law firm posted a statement on its website saying its work was being misrepresented; that it conducts due diligence on its clients on an ongoing basis; that it denies services to clients who don’t comply with information requests or have been sanctioned by authorities; and that it cooperates with authorities in investigations.
The manifesto was also published on the website of the International Consortium of Investigative Journalists, the Washington-based nonprofit that worked with the German newspaper to publish stories about the alleged abuses revealed by the leaked documents. Stories focused on how the structures allowed the wealthy and powerful to conceal assets and, in some cases, hide criminal activity like money laundering and tax evasion or hide artistic works of disputed ownership.
The journalism group has said on its website that it plans to release on Monday a searchable database on “more than 200,000 offshore entities” that are part of its investigation. Mossack Fonseca on Friday said it sent the group a cease-and-desist letter urging it to not publish any more confidential information from the leak.
Release of the records created political upheaval in Iceland, where the Prime Minister was forced to resign after it was revealed that he and his wife held hidden assets offshore and also caused political embarrassment for heads of state in Russia and the U.K.
The whistle-blower said that the information contained in the documents could lead to “thousands of prosecutions” and offered to work with law enforcement officials to build cases. The essay cited the cases of National Security Agency whistle-blower Edward Snowden, who lives in exile in Russia, and Bradley Birkenfeld, who shared information about UBS Group AG, but then served a prison sentence before being released and given a monetary award from the IRS for providing information.
“Legitimate whistle-blowers who expose unquestionable wrongdoing, whether insiders or outsiders, deserve immunity from government retribution, full stop,” wrote “John Doe.” “Until governments codify legal protections for whistle-blowers into law, enforcement agencies will simply have to depend on their own resources or on-going global media coverage for documents.”
Using language that was by turns legalistic and revolutionary, the whistle-blower said that various institutions had failed in their duty to prevent the wealthy from hiding their riches and evading taxes—including banks, legal systems, elected officials, financial regulators, tax authorities and the news media.
“The collective impact of these failures has been a complete erosion of ethical standards, ultimately leading to a novel system we still call Capitalism, but which is tantamount to economic slavery,” the essay said. “In this system—our system—the slaves are unaware both of their status and of their masters, who exist in a world apart where the intangible shackles are carefully hidden amongst reams of unreachable legalese.”
As a result, the whistle-blower released the documents hoping that they would incite enough public uproar to spur changes in banking regulations and international law, according to the essay. While the debate ignited by the documents is heartening, the whistle-blower said, much more is needed.
The European Commission, British Parliament and U.S. Congress should move swiftly to end lax disclosure requirements that make it easy for the wealthy to hide their riches in shell companies, the essay said. While the opposition to change would no doubt be fierce, the whistle-blower wrote, the danger of leaving the issue unaddressed was greater.
“Historians can easily recount how issues involving taxation and imbalances of power have led to revolutions in ages past,” the essay said. “Then, military might was necessary to subjugate peoples, whereas now, curtailing information access is just as effective or more so, since the act is often invisible. Yet we live in a time of inexpensive, limitless digital storage and fast internet connections that transcend national boundaries. It doesn’t take much to connect the dots: from start to finish, inception to global media distribution, the next revolution will be digitized."
“Or perhaps,” the essay said, “it has already begun."
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access