As you’re reading the Panama Papers – and I think that you should – you’re likely going to be hit with an overwhelming sense that you need to do something. This will be particularly true if you work in a financial institution, especially in risk, compliance, ethics or management. While that feeling isn’t wrong, your sense of the scope of the issue is likely way off. I don’t want to frighten you, but it’s much, much worse than you think.
The reports resulting from the documents release that we’re seeing now are the tip of the proverbial iceberg. I fully expect this iceberg to flip over , revealing things that none of us expected. To understand how bad it’s likely to get, we need to put what we already know in context.
Mossack Fonseca
At the heart of the Panama Papers story is the notorious Panamanian law firm Mossack Fonseca , now known as the money laundering vehicle of the elite, which helped clients establish offshore shell companies.
But Mossack Fonseca is also just a law firm, and problems associated with offshore accounts extend beyond this one firm. The American Bar Association’s 2015 statistics indicate that in 2015 there were 1,300,705 active lawyers in the United States alone. While not all of these lawyers were active in creating shell companies, a recent study conducted by Global Witness , also reported on 60 Minutes , seems to indicate that a shockingly high proportion of lawyers may be willing to assist in such activity.
Taken in context, there are millions of lawyers, and it may be very difficult to separate those that are involved in shady dealings from those that aren’t. At the very least, we should be paying a bit more attention to those "gatekeeper roles" that our regulators and compliance officers have […]
