LONDON • The revelation of vast wealth hidden by politicians and powerful figures across the globe has set off criminal investigations on at least two continents, forced leaders from Europe to Asia to beat back calls for their removal and claimed its first political casualty: the prime minister of Iceland.
Public outrage over millions of documents leaked from a boutique Panamanian law firm - now known as the Panama Papers - wrenched attention away from wars and humanitarian crises as harsh new light was shed on the elaborate ways wealthy people hide money in secretive shell companies and offshore tax shelters.
The repercussions have come quickly. In Iceland, Prime Minister Sigmundur David Gunnlaugsson, confronted by demands for his resignation after documents revealing that he and his wealthy wife had set up a company in the British Virgin Islands led to accusations of a conflict of interest, asked his deputy to take over on Tuesday.
In Britain, Prime Minister David Cameron faced calls for a government inquiry and accusations of hypocrisy over his championing of financial transparency. The leaks showed that an investment fund co-founded by his late father avoided paying taxes in Britain for 30 years by basing itself in the Bahamas.
Mr Cameron's office first described the matter as private, before saying on Tuesday that the Premier and his family did not benefit from any such funds at present, and then, after British media splashed the story across their front pages, it said yesterday they would not benefit from any such funds in future.
In Pakistan, where roughly 20 per cent of the population live on less than US$1.25 (S$1.69) a day, Prime Minister Nawaz Sharif angrily rebuffed opposition calls to resign and defended his riches as legally acquired, even as he set up a commission on Tuesday to investigate allegations that offshore companies headed by his children were avoiding paying taxes or disguising assets and their origins.
His daughter said on Twitter to critics: "Prove or apologise."
Officials in France, Germany, Austria and South Korea said they were beginning investigations into possible malfeasance, from money laundering to tax evasion.
The leaked papers cover nearly 215,000 companies and 14,153 clients of the Panamanian law firm Mossack Fonseca. Obtained by German daily Sueddeutsche Zeitung and shared with reporters at 100 news media outlets working in 25 languages, the documents include politicians, celebrities, sports figures and close associates of some of the world's most powerful people, including Russian President Vladimir Putin and Chinese President Xi Jinping.
China's government and Russian officials have dismissed the leaked documents as groundless attacks.
In its latest batch of reports yesterday, Sueddeutsche said Mossack Fonseca's client list included "drug traffickers from Mexico, Guatemala and eastern Europe" as well as people and companies hit by US and European sanctions.
"A likely financier of Hezbollah, people backing the Iranian and North Korean nuclear programmes and two alleged supporters of Zimbabwean President Robert Mugabe" can also be found in the firm's files, the newspaper said without naming the presumed clients.
None of the published leaks necessarily show evidence of crimes. But anger and reproach about the revelations have started to swell nonetheless.
"Corruption, whether private or public, is enabled by secrecy," said Mr John Marti, a former federal prosecutor who is a partner at the international law firm Dorsey and Whitney, based in New York.
In Taiwan, political opponents of Ms Tsai Ing-wen called for a full explanation by the Taiwan President-elect, whose brother Tsai Ying-yang was named in the Panama Papers as setting up an offshore company in 2008. His lawyer Lien Yuan-lung said yesterday Mr Tsai had done nothing illegal.
"He lost 30 per cent of the investment in the first year, so he closed the contract with the bank immediately," Mr Lien said. "He was not involved in money laundering, hiding the Tsai family's wealth overseas, evading tax or anything illegal."
Even the Chilean head of Transparency International, a prominent anti-corruption advocacy group, was forced to step down after his name appeared in the leaked papers as an agent for offshore companies in the Bahamas.
NEW YORK TIMES, REUTERS, AGENCE FRANCE-PRESSE
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