What Are the Panama Papers?

More than a year ago, journalists at Süddeutsche Zeitung, a German newspaper, received an unusual offer. An anonymous source, known only as "John Doe," claimed to have vital, damaging information on the illegal financial transactions of the global elite — celebrities, athletes, Mafioso, royalty, heads of state and more. Even Jackie Chan was implicated in these files. Shortly after the revelations hit, the Prime Minister of Iceland went on leave. David Cameron was excoriated in the British press. China censored any reporting of the papers. And that's just the beginning. 

The information revealed became the largest single leak in human history. Over 11.5 million files, 2.6 terabytes of documents from the 1970s to 2015, all from the same place: a Panamanian law firm known as Mossack Fonseca. Collectively, these documents are known as the Panama Papers.

Before this month, it's safe to say the average person probably hadn't heard of this firm. Founded in 1977, Mossack Fonseca specializes in the construction of offshore business structures, often called shell companies. In the worst cases, these businesses would be facades — fake as the storefronts in a stage play, based in a tax haven and used solely as a way to hide money from the authorities.

While it's important to note that these business structures are not inherently illegal, in many cases the documents indicate criminal activity. Tax evasion may be a common thread, but the money hidden in some of these offshore entities is also connected to bribery, corruption, organized crime and bank heists.

Mossack Fonseca, for their part, argues they've done nothing wrong

As the story continues to unfold, people around the world are getting a deeper glimpse into the murky world of private wealth and international finance. Expect more stories from the Panama Papers to hit the presses in the coming days and weeks.

And check out the embedded podcast we just released, wherein we explore the circumstances and consequences of the leak, as well as the structure of these enigmatic offshore entities.