• Hi Guest: Welcome to TRIBE, Toronto's largest and longest running online community. If you'd like to post here, or reply to existing posts on TRIBE, you first have to register on the forum. You can register with your facebook ID or with an email address. Join us!

Panama Papers Mossack Fonseca Leak


TRIBE Member
Ya i dont really have a frame of reference though for what % of overall activity is actually illicit, which in turn is a subset of "tax avoidance" (not all of which is illegal) and which would be distinct from more mundane concerns which have nothing to do with tax avoidance or "minimization" strategies.

And all I know is the real world is most often more boring than the headlines...
Describe "more mundane concerns". I admit I don't know much about this stuff but I'm curious what reasons other than Tax avoidance offshore accounts there are.
Ya i need more expert help on this, Sellycat (who doesnt post any more here) was saying most of this would be "legal", but really we have three categories:

A) legal and ethical B) legal but not ethical and C) illegal and unethical

And there is room to disagree on what is "ethical" or not, but note that I'm assuming here obvious stuff: if your intent is to conceal/hide/escape taxation and/or regulation, thats unethical.

The NYT article I linked had this passage:

In an article published on Monday evening, McClatchy, another news organization working with the I.C.I.J., identified more American citizens for whom Mossack Fonseca registered offshore companies. The people named didn’t include any politicians or other well-known figures. “Some appear to be American retirees purchasing real estate in places like Costa Rica and Panama,”​
Which sounds like something from A)

But what % is that category overall? 10%? 30%? 50%?

I have no clue, need someone with more relevant experience to chime in - I imagine quantitative analysis on these lines is being developed as we speak... Look forward to anything you or anyone else might find on the topic to share!


TRIBE Member
Tax avoidance: using the legal structures available in states tax codes to minimise the amount due. This is legal.

Tax evasion: subverting those legal structures to minimise or eliminate payment of tax. This is illegal.

Separating legal and ethical is difficult. People who run companies generally are subject to duties (in the UK, directors are typically under a duty "to promote the success of the company" - Section 172 of the Companies Act 2006) to the company they run. If they act in contravention of that duty, they can be sued by the company for losses that result.

The duty is often viewed as one to maximise profits. Strictly speaking that is not the *only* interpretation of 'promoting the success of a company', but is probably accurate in most cases. If you aren't maximising profits then you probably need to be able to have good reasons why that is so.

Now if you are one of those directors, and you are under that duty: If your accountants come forward with a *legal* scheme to save the company loads of tax, will you feel comfortable declining to use it?
Some other things to consider:
- If you decline, how will you justify the extra tax burden to the board/shareholders? In particular if this is not the sort of company that is worried about bad press.
- What degree of avoidance is acceptable? Will you also instruct your accountants to capitalise entries on your balance sheet in favour of maximum tax? If not, isn't that unethical?
- Is it unethical to direct a company given that this duty will bind you should you take the job?
- If you spend, say 50%+ of your time abroad, is it right that you pay all your tax to your home nation (NB: what defines a 'home' nation anyway?) instead of wherever it is you spend most of your time?

Questions of ethics should precede the law. That is, the problem here is that this stuff is legal to begin with. Questions should really concern what can be done about that, but they also need to consider the technical and economic problems that also weigh on these issues.

Many countries intentionally allow and even facilitate this sort of tax avoidance to occur. The US tax authorities actually approve all the Irish/Dutch sandwich stuff before companies implement it. For many countries, it is a way for them to ensure that wealth stays within their jurisdiction. The idea being that even attenuated taxes and incidental benefits on wealth in the country are better than no taxes or incidental benefits if the assets are moved away.


TRIBE Member
Useful contribution Bass-Invader - important to remember the "hate the game not the player" aspect to the way corporations act.

I think this is where the best criticism could be leveraged - potentially the stakeholder map felt by many CEOs is too small and there is no valuing of the broader public, the corporations "public duty" to give back to the country that enabled its success.

And while some might think this angle absolves the corporations of much blame and we should look to politicians instead, we shouldn't forget the extent to which business of lobbying has been used by corporations to make it harder to close loopholes, to open new ones or to prevent much more than a rap of the knuckles on violations.

Other lobbying ensures the SEC stays toothless and that campaign finance reform remains stalled. We should never really separate the politicians from the corporations when, under the principles of regulatory capture, they are often fighting for the same things.

If we think about this firm from which the leak originated - would you have any insight into what breakdown of their overall activity might fall into the A, B, C buckets I outlined?

Even just a guess is cool!


TRIBE Member
I think A and B are the same thing.

For C:
I would wager that almost all of Mossack Fonseca's activity is technically lawful, at times bordering on the limits of that. First, there's too much money to be lawfully made here for them to risk their business.

Second, several incidents have already been reported where MF was made aware in some way that an operation involved illegal assets. The newspapers insinuated that MF may have stayed involved for a bit longer than they should have, but MF eventually resigned from those accounts. Therefore they clearly show a willingness to wash their hands when things are unequivocally dirty, and likely have the best minds in the business advising precisely when they can equivocate no longer.

Like any disclosure this large, I assume they will eventually find something illegal. However, it will likely be small relative to the size of their business, perhaps a regulatory oversight somewhere.

In terms of the legality of the assets that MF has been employed to work with. Well that's the literal equivalent of asking 'how much super secret business in the world is actually super secretly illegal?' There's no possible way anyone could give a useful answer to that until the entire file has been scoured.


TRIBE Member
Anyone noticing that the strongest pushback on this and the stronger the allegation that these are politically motivated leaks, the more likely the outlet you are reading is connected to RT?

Been thinking in last few years that Russia's been doing well to propagate it's lines on things through alternative channels - a lot of people online seem to carry their water on issues like Ukraine and this one.

Just saw an RT-Wikileaks piece on this last night and was wondering why wikileaks would essentially team up with RT on anything??

ANyway, there's probably kernels of truth in some of these claims Im just getting to be a bit skeptical of anything RT is putting out there lately.


TRIBE Member
RT, as propaganda arm of the Russian state, has shedloads of money to throw around. Why Wikileaks would team up with them is something I can't understand, but perhaps they were one of the few outlets that were willing to publish/perhaps they were willing to throw the highest amount of cash to WL to do it.


TRIBE Member
I wonder if they got into Anonymous too somehow... With less "natural propaganda" at their disposal (the US benefits from so many already being "on side") Russia's gotta force it a bit.


TRIBE Member
Still I mean aren't we bored talking about the rich? Isn't there a video of a welfare recipient buying something too expensive for their income somewhere, or someone getting benefits who isn't supposed to??

It's a hand up not a hand out!!


TRIBE Member
‪#‎PanamaPapers‬ Putin attack was produced by OCCRP which targets Russia & former USSR and was funded by USAID & Soros.


TRIBE Member
YEs I see RT eager to make the Soros connection, I guess its a strategy designed to defuse impact of the leaks by making it seem politically motivated.

Maybe there's kernels of truth whoknows - but I see RT next to most stories that hype up George Soros, who I bet had very little if not less than nothing to do with the leaks.

Funding does not mean control, or even awareness. Guys got money in pots everywhere!


TRIBE Member
What do you make of the potential for intelligence agency machinations in this Lojack?

While there may be a CIA connected hand it seems there's some really successful Kremlin penetration of the discourse here too...