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It's the biggest legal data breach ever. With over 11 million previously confidential files released to the public, the so-called "Panama Papers" have led to accusations of corruption, cronyism, and tax evasion, implicating everyone from Vladimir Putin and Jackie Chan, to the (now former) Prime Minister of Iceland.
At the center of the scandal is one law firm, Mossack Fonseca, whose "limited" data breach exposed how the rich and powerful hide their cash. Here's what you should know about the firm.
Before this week, most people had never head of Mossack Fonseca before, unless perhaps you were one of the many billionaires who use it to set up off-shore tax havens. The firm's main business is, as its direct Ramon Fonseca explained to Reuters, to create "legal structures which we sell to intermediaries such as banks, lawyers, accountants and trusts."
But the once-unknown firm isn't just some small operation out of Panama City. Mossack Fonseca has more than 500 employees, and claims to have more than 30 offices around the world, from the London to Hong Kong. According to the International Consortium of Investigative Journalists, which helped distribute the Panama Papers, the firm has "worked closely with big banks and big law firms in places like The Netherlands, Mexico, the United States and Switzerland, helping clients move money or slash their tax bills."
The men behind the firm are almost as interesting as the papers stolen from them. Jurgen Mossack was born in Bavaria in 1949 and came to Panama with his family shortly after. His father served in Hitler's Waffen-SS, though it doesn't appear he fled to Latin America to re-establish the Nazi homeland. The elder Mossack volunteered to spy on "Communists or unconverted Nazis cloaking themselves as Communists," according to the ICIJ. Meanwhile, Jurgen Mossack attended law school in Panama, at Santa Maria La Antigua University, before going on to found his own firm.
Mossack's partner, Ramon Fonseca Mora is a native Panamanian. Fonseca studied law at the University of Panama and worked at the United Nation's headquarters in Switzerland, before starting his own firm, which he eventually merged with Mossack's. In addition to being a lawyer, Fonseca is also a writer and a politician. He's twice won Panama's national literary award and was recently a high-level advisor to the Panamanian government. That is, until he resigned after being connected to money laundering and corruption in Brazil.
Given the nature of the firm's work and clients, it makes sense that Mossack Fonseca would want to create an air of tight security. Their website still declares that their offices are "supported by secure, state-of-the-art technology that is upgraded continually" -- despite being victims of the highest profile law firm data breach ever.
Still, Mossack Fonseca is trying to downplay the extent of the controversy yet. In an interview with Reuters, Fonseca claimed the data breach was "limited" in scope and attempted to characterize the hack as an "an international campaign against privacy."
Of course, the firm might already know that the jig is up. Speaking to Bloomberg days before the Panama Papers were released, the partners already seemed to concede defeat. According to Bloomberg:
during a four-hour interview last week, Mossack and Fonseca sounded like two men in retreat: the go-go days of cranking out shell companies en masse for clients was over; the firm's been considering scaling back its international franchising; and Mossack was expressing frustration about how Fonseca's political ambitions were earning them unwelcome scrutiny from regulators and the media.
"The cat's out of the bag," Mossack declared.
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