
The Panama Papers: Here’s What We Know - bilalasif1900
http://www.nytimes.com/2016/04/05/world/panama-papers-leak-offshore-tax-havens.html?_r=0
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wslh
I have a sincere question that may sound hyperbole but worth to discuss in HN:
what are the ethical/legal limits of leaks when some of the leakers are the
classical media? I mean what is the difference of a movie leak (e.g torrent
share) with a political leak on media? I will clarify my question to not sound
radically stupid: if the Panama Papers had been published anonymously or
showing cases of attacks against social liberties or illegal government
activities (e.g. Snowden) it is clear, but when the media is showing documents
that are not illegal per se but the illegal activities are more connected to
their clients [1] I think they can be hardly sued for it.

All this was triggered by the following quote: "Using
information/documentation unlawfully obtained is a crime, and we will not
hesitate to pursue all available criminal and civil remedies”.

[1] Mossack Fonseca was indeed engaged in illegal activities because they
obstructed the US justice over companies suspected of connections to
politicians. But this was not known in advance.

~~~
Ensorceled
> I mean what is the difference of a movie leak (e.g torrent share) with a
> political leak on media?

At it's most simple level: a movie leak is a social ill, breaking of the
social copyright contract, and a political leak is a social good, revelation
of corruptions and education.

That's a simplification of course, copyright is abused, for instance to
prevent all access to the copyrighted material in some places and fair use
thwarted. Political leaks are sometimes simply scurrilous and provide more
heat than light.

~~~
ewzimm
I understand that you're simplifying, but I don't think social ill is the
right word. It's more like a social good which is ill for the copyright
holder. The question in that case is balancing the benefit to society against
the benefits to the company which claims copyright or intellectual property.
It's a social good in the sense that public domain is a social good when
society can benefit, but also a deeper social good for the society which
inspired and produced the copyrighted work because it allows it to be
distributed to people in countries that would otherwise not have access to it.
For example, perhaps the greatest weapon against anti-Americanism is American
culture spread through Hollywood and other media. This would normally not be
sold in areas that are hostile to American values, but leaked material
penetrates the culture and reverses hostility.

This really comes down to the classic question of whether it's more important
to benefit society in general or the rights of property holders. There are
people who strongly believe in both extremes and lots of people in the middle.
Some say that property is the foundation of freedom and we should sacrifice
social good for the promotion of property and others say that the needs of the
many outsweigh the needs of the few, even that property is theft of social
value. Where any person might stand on these issues is complicated, to say the
least.

~~~
netrus
You do not mention that the existence of property is meant to benefit the
society as a whole. Copyright provides us with blockbusters. We can discuss
about fair use, expiration, fines etc, but let's not pretend that STAR WARS
would have happend without copyright law.

~~~
iamcurious
Plenty of works of art were created without copyright law. Would we have STAR
WARS? No idea. Would we have awesome films? Definitely.

~~~
talmand
But, would those plenty of works of art were created before copying such
things became incredibly easy? It seems to me that the concept of copyright
became stronger over time as the ability to make money off the work of someone
else became easier over time.

~~~
iamcurious
Sure, see all the graffiti everywhere? Laws aren't protecting that art, au
contraire.

The concept of copyright became stronger as lobbying and surveillance state
became stronger.

Creative people will create regardless. Creative people who have ample free
time and who don't have to think about bills much, will create more and, more
importantly, more accessible works. The sophisticated thing to do is to allow
copying anybody's ideas¹ and give people a guaranteed income².

¹ I think plagiarism, ie not giving credit where its due, should be punished.
I'm not sure if it should fall in the realm of the law though, maybe it could
be kept check under social pressure.

² If it can't be universal, then make it scholarship based, subject to
renewal, or something.

~~~
talmand
I would say that copyright does indeed cover graffiti, it just not likely for
the original artist to sue you for selling copies of their artwork because
they also possibly illegally damaged private property. Some of the Banksy
stuff brings up interesting discussions around that idea.

The lobbying part I can understand, and agree, but I'm lost on your
surveillance state thing.

All those creative people with all their creativity is covered by copyright as
soon as they get done being creative. In the US at least. But whether they
make money from their copyrighted creativity, that's a different problem.
Copyright doesn't help me make money but it helps me prevent you from making
money off my work.

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msabalau
Mostly a synthesis of what you'd find from other sources. The most interesting
bit was adding the US context:

"One reason there may be relatively few Americans named in the documents is
that it is fairly easy to form shell companies in the United States. James
Henry, an economist and senior adviser to the Tax Justice Network, told Fusion
that Americans “really don’t need to go to Panama.”"

~~~
gnodar
Here's an article that discusses it:
[http://fusion.net/story/287671/americans-panama-papers-
trove...](http://fusion.net/story/287671/americans-panama-papers-trove/)

Turns out that in many cases, forming a company within the US can be more
secretive that forming in British Virgin Islands, Panama or the Bahamas.

> If you form a British Virgin Islands company you have to declare who you are
> to the person forming the company for you; if you form in Nevada, for
> example, you don’t… So Nevada is great because it’s much more secret than
> the British Virgin Islands.

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justsaysmthng
The way I understand it, the offshore companies exist for the purpose of
funneling money out of "onshore" companies and out of the country.

Extraction of dirty money (from bribery) is also very easy to do with offshore
companies.

The third reason is to add confusion about ownership of companies and real
estate.

More simply, offshore companies help rich people pay less taxes.

Why do countries permit offshore companies to dominate and rob their economies
? Could anyone explain it to me ?

Wouldn't banning trade with offshore companies have the effect of drastically
reduced corruption and illegal "schemes" ?

Edit: By "offshore" I mean companies registered in small island nations or
"tax havens".

~~~
kasey_junk
International trade requires operating companies in many jurisdictions.

Even something as small as a single person consultancy that has clients in 2
countries (Canada/USA say) are frequently benefitted by having entities in
each location.

Those entities also need money, frequently in each location, so holding cash
in banks in each location is also beneficial.

Having offshore corporations is not evil, its just mechanics.

~~~
justsaysmthng
Your comment doesn't contain an answer to my question.

Having entities in different countries for easier interface with local
customers and authorities is very different from transferring ownership or
large chunks of money to a company registered in the British Virgin Islands,
population 28,054.

Maybe "it's just mechanics" in some countries where corruption is low, but the
world is very corrupt and offshore companies are tools which allow for this
corruption to happen.

~~~
kasey_junk
Here is a more direct answer then. Banning trading with foreign companies
would destroy international trade for the company doing the banning. Most
jurisdictions view the benefits of that trade to be worth the costs.

As for legislating how you can do transfers/ownership/taxation etc of foreign
entities and cash, every jurisdiction in the world already legislates that.
This article is about a law firm that exists solely as experts in that area
for instance.

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sickbeard
I'm uncomfortable with trial by media instead of trial by court room. If they
did something illegal get a prosecutor to sue them, we shouldn't be quick to
bring out the pitch forks because of an accusation of wrongdoing.

~~~
snassar
I am going to assume your comment is a serious one.

This case isn't a "trial by media". What is happening is that several
investigative journalism groups are getting together to examine data acquired
through a leak.

The examination may lead to lawsuits, criminal investigations, and legislative
action, but is by no definition a trial.

The questions asked as a result of the examination of the leaked information
may lead to uncomfortable questions in private and in public.

At this point, who is being accused of wrong-doing?

~~~
wastedhours
The "trial by media" point is a fairly common one, insofar as media can
influence the public's perception of any activities before any legal
wrongdoing is established.

I.e. in the UK, Cameron is on the front pages for his father's activities,
regardless of whether he had any part/they're genuine/benefited etc...

"Trial by media" is less a witch hunt, and more influencing the zeitgeist.

~~~
snassar
I am not sure what you mean by "trial by media" being a common point. Common
where and used by whom?

I am also not sure what you mean. Are you taking the view that "influencing
the zeitgeist" should only happen in the court system?

~~~
wastedhours
"Trial by media is a phrase popular in the late 20th century and early 21st
century to describe the impact of television and newspaper coverage on a
person's reputation by creating a widespread perception of guilt or innocence
before, or after, a verdict in a court of law."
[https://en.wikipedia.org/wiki/Trial_by_media](https://en.wikipedia.org/wiki/Trial_by_media)

Not saying that it should only happen in the court system, just saying that
since the media has the widespread ability to do so, they need to hold
themselves to a certain account and be satisfied that their definition of "in
the public interest" is worthy enough.

------
pmorici
Does anyone understand what benefit a wealthy person gets legal or illegal
from using a so called "shell company"? Is it just that their name isn't
easily associated with the activity of the company?

~~~
funkyy
Paying taxes. In most countries company will pay taxes on income rather than
revenue. They can use shell company to create an invoice that your real
company will pay. This way you will channel all your profits out to the
country with no taxes.

Hiding true ownership. You can give % of shares to a politician in exchange
for a law that will directly benefit you. Politician will be able to monetize
on this once he is out of office.

Anti-monopoly regulations. You can own two companies that on paper are
competition but in reality are same entity blocking any other company from
entering the market.

------
karmelapple
A question I find myself wondering if society will seriously consider as a
result of this leak:

Should shell corporations be outlawed everywhere?

There are certainly legitimate reasons[1] for wanting a shell corporation, but
is society more demanding of transparency and willing to reject the idea of
shell corporations as a legitimate net good for society?

[1] [http://www.vox.com/2016/4/5/11361992/panama-papers-
authorita...](http://www.vox.com/2016/4/5/11361992/panama-papers-
authoritarianism)

~~~
marcosdumay
What is a shell company?

Because most of them are obviously shells, but if you want to outlaw
something, you must define it first, and if you don't want your law being used
to persecute whoever the police/government wants, you'd better have an
objective and clear definition.

~~~
karmelapple
Fair question! Is there an accepted definition?

I'd think something like a company that has, say, less than 3 employees,
and/or has no discernible "customers." But I'm taking a wild guess.

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petecooper
>Here’s What We Know About the ‘Panama Papers’ by LIAM STACKAPRIL 4, 2016

Sorry to be That Guy, but this would be a tidier title and fix the errant copy
& paste:

Here’s What We Know About the ‘Panama Papers’

------
ommunist
I do not think Mr Cameron will stop his political activity just because Panama
Papers reveal that his father was one among those who designed the system.

~~~
vixen99
Agreed provided it's clear that he and his family have not profited from
activities shown to be those of tax evasion as against tax avoidance. However
he's attacked some folk engaged in the latter (though aren't we all in terms
of following the rules to minimize our tax bill?) so he may find that
difficult.

~~~
TheOtherHobbes
Cameron can't do much, because if he did his party would tie him up in a sack
and throw him in the Thames - politically, if not physically.

The reality is that a large part of the UK's so-called service industry is
based exactly on the creation and maintenance of offshore schemes of all
kinds, and much of the wealth of Cameron's party backers would evaporate if
the schemes were made public.

Voters are mostly too uninformed to know much about this world. But public
exposure plays very badly with them, because Cameron famously said "We're all
in this together" while promoting austerity at the start of the first
Coalition term.

Now, even the most unaware British voters are beginning to wonder if perhaps
he was being less than entirely honest.

Conveniently, it would be the easiest thing in the world to throw Cameron
overboard, leave Europe - so the scams can continue - and carry on with
someone fresh, new, shiny, and untainted by association, who can guarantee
business as usual behind the scenes.

It's still surprising how limited the revelations have been in the UK. It's
very hard to believe that more household names aren't involved - but so far
we've had a hit list of minor Lords hardly anyone has heard of, some former
MPs no one cares about, and Lord Ashcroft, who may not be Cameron's favourite
person after he offered some unexpected insights into Cameron's hobbies as a
student earlier in the year.

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dpflan
The White House says it will issue a statement about tax inversions today at
12:15PM.

[http://www.cnbc.com/2016/04/05/reuters-america-white-
house-s...](http://www.cnbc.com/2016/04/05/reuters-america-white-house-says-
obama-to-issue-statement-on-tax-inversions-at-1215-pm-et-at-white-house.html)

------
pvaldes
I bet that a lot of cases will be prescribted yet (after 4 or 10 years) and
that this information is known since many years so, the most interesting
question here is... why now?

