Whatever happened to the Panama Papers?

The follow up to the explosive revelations of how the wealthy hide their fortunes ended up illustrating both the strengths and shortcomings of the global media.


Five months after the story broke, the so called Panama Papers the biggest leak of documents in history has inevitably dropped out of the mainstream news cycle. The revelations contained in the 11.5 million documents of Panama based law firm Mossack Fonseca blew the lid off how a portion of the world’s wealthy individuals and corporations, along with organized crime, have been hiding their money and evading taxes.

The investigation demonstrated the strengths of the global media at a time it is under threat like never before, but also highlighted some of its shortcomings. Most of the coverage focused on the big name individuals, many in Russia and China, who had used the firm, while the systemic issues, like the ability of global companies to employ methods such as trade mispricing to avoid billions in taxes received less attention.

The story began in late 2014 with an anonymous source who would eventually share 2.6 terabytes of data on nearly 215,000 shell companies contacting Bastian Obermayer, a journalist at Munich newspaper Süddeutsche Zeitung. The paper revealed in a Feb. 25, 2016 article that it was in possession of leaked data files from Mossack Fonseca.

Due to the overwhelming amount of data, Süddeutsche Zeitung decided to work with the Washington based International Consortium of Investigative Journalists (ICIJ), an international network founded by the Center for Public Integrity. A team of around 400 journalists at 107 media in more than 80 countries was assembled to collaborate closely on poring over the files.

THE ICIJ INITIALLY APPROACHED two Italian journalists, Scilla Alecci and Alessia Cerantola, to work the Japanese end of the operation. Alecci, who began her journalism career in Japan and had a three year stint at Bloomberg’s Tokyo office agreed to work on the project without knowing the details, in June 2015. The pair then spent seven months combing through the files until they “realized we needed help from Japanese journalists,” says Alecci. They secured the cooperation of Asahi Shimbun’s Toshihiro Okuyama and Yasuomi Sawa of Kyodo News, Alecci’s former lecturer on a Waseda University journalism post graduate course.

At 7:00 p.m. GMT on Sunday, April 3, the first batch of news stories was released by cooperating media organizations around the globe. With information on more than 140 senior figures from regimes around the world, along with numerous celebrities, it became one of the biggest news stories of the year, providing precise details on shadowy financial practices. Although it was widely known that the super rich and corporations had long been employing such methods to avoid and sometimes evade taxes, the size and scope of the revelations led some to hope that this could be a watershed moment which would result in real change.

“This wasn’t new. We had the Swiss Leaks, the Luxembourg Leaks [published by the ICIJ in February 2015 and November 2014, respectively], and GFI [Global Financial Integrity], which doesn’t get the coverage it deserves, that was providing this kind of information already,” says Virgil Hawkins, who teaches courses in media studies, international politics and African conflict studies at Osaka University. “The scale was new and the media attention was new.”

From the outset, articles focused on the famous, particularly the involvement of then British Prime Minister David Cameron, Icelandic Premier Sigmundur Davíð Gunn laugsson, who was forced to resign, and associates of both Russia’s Putin and Chinese leaders, including Xi Jinping. In some respects, the global media was following the lead of the ICIJ in its framing of the story with its Power Players articles.

But the relative lack of attention given to the underlying issues behind the big names was seen by some as a missed opportunity. “Putin made for a good punching bag, especially after Crimea/Ukraine. And as China and Russia are powerful, it’s understandable they got a lot of coverage,” says Hawkins.

“The news is the news, looking at events that happen, and by definition it is not very good at dealing with systemic and structural problems,” Hawkins says. “If Putin is on the list along with the name of some faceless corporation, Putin is the one you go for. If we have a Panama Papers report on trade misinvoicing [socalled transfer pricing], then people will be asleep before you’ve finished the segment. The amounts of money involved are staggering, but even that attracts less attention than Putin.”

The G20 has since come up with a blacklist for countries that don’t meet the criteria for transparency, though Hawkins notes, “People who do look at these things said it would be too easy to avoid being blacklisted.”

COUNTRIES ARE PLANNING TO increase the sharing of financial information, though measures had already been agreed on before the revelations. “It costs lot of money to maintain such a system, which poorer countries don’t have. Those people [tax evaders] have armies of lawyers, and poor countries don’t,” says Hawkins.

Kyodo’s Sawa is somewhat more positive, believing the attention has encouraged world leaders to close tax loopholes and put pressure on offshore financial centers to cooperate more. “In Japan, it has increased attention on offshore entities, tax havens and transparency, as many people learned about them for the first time. The phrase ‘tax haven’ has become known in Japan,” says Sawa.

“It’s frustrating that people were just interested in the superficial side, i.e. ‘this guy has an offshore company,’ rather than asking ‘what is the system or structure,’” says Sawa. “It’s inevitable for journalists to look for a hook and it’s inevitable that there’ll be some dumbing down.”

There were also concerns voiced that the domestic media didn’t really go after the Japanese names that appeared in the leak, although having companies or accounts registered through Mossack Fonseca was not proof of wrongdoing.

“I did feel the Japanese media had been very soft on Japanese corporations and individuals . . .but maybe they did dig into it and found it was legitimate, says Hawkins.”

Sawa refutes any suggestion that domestic entities were given an easy ride.

“The news is the news, looking at events that happen . . . by definition it is not very good at dealing with systemic problems”

“We did cover Japanese companies and individuals fairly, but there were actually very few Japanese names about 400 Japanese individuals and entities. In fact, compared to our counterparts in the West, I wonder if we actually went further,” he says.“

One issue was that criminal court records in Japan are effectively not open, even though according to the Constitution we should have open courts, so it wasn’t possible, for example, to check whether criminals were using offshore entities to hide stolen money,” says Sawa.

Meanwhile, Alecci suggests, “It’s wrong to think of the Panama Papers as representative of the offshore world. For example, Fonseca tried not to have much exposure to the U.S.: it was part of their business strategy. And more people in Japan use the Cayman Islands.”

INDEED, GIVEN THE NUMBER of entities registered in British overseas territories, including the Caymans, British Virgin Islands, Bermuda and the Channel Islands, along with a number of intermediary entities located in the U.K. itself, the government at Westminster appeared to get off lightly. The news that former PM Cameron’s father had a trust registered through Fonseca made headlines, and the opposition has called for a clampdown on offshore centers in British controlled territories. But for the time being at least, it seems to be business as usual.

And the media is not responsible for, or capable of, reforming the global financial system. “It spurred a debate about something that people took for granted,” says Alecci. “These 11.5 million files showed evidence of how this worked, step by step, and provided more understanding of a world that is secretive by nature. Changing laws is up to governments.”

Alecci sees the process of global cooperation on the project as good for journalism. “Journalists are used to scooping each other, keeping information to themselves. That can lead to issues being ignored or disappearing after a few days. The collaborative aspect had a big impact on me,” says Alecci.

That is a view echoed by Sawa, “Collaboration is especially important in these financially challenging times.” In this era of financial pressures and immediate digital feedback, the media is under unprecedented pressure to deliver what their readers want. Even the way in which the various well known people whose names appeared were treated by the media is perhaps an illustration of that.

Veteran Hong Kong actor Jackie Chan has publicly made much of his charitable activities and the fact that he plans to give all his money away before he dies, leaving none to his children. Though Chan is apparently equally reluctant to leave it to the tax authorities, with six companies registered in the British Virgin Islands, he attracted little criticism.

“Jackie Chan is a lovable kind of person,” says Hawkins, so we don’t want to believe he’s involved in something like this. If Mugabe [president of Zimbabwe] was on the list, you can bet it would have been different.”

“We want to be shocked, but in a way we expect,” adds Hawkins. “In some ways, the Panama Papers gave us the shock we wanted.”

Gavin Blair covers Japanese business, society and culture for publications in America, Asia, and Europe.