The Panama Papers are UK firms' Ashley Madison nightmare
05 April 2016 19:19
So I trust you've already searched your firm's email and matter databases for "Mossack Fonseca". If not, why not? You could be holding tomorrow's headlines in your hands, today. Or, if HR tracks those sorts of searches, standing in front of the office with a cardboard box waiting for your Uber, today.
The Panama Papers comprise 11.5 million files leaked from the world's fourth largest offshore firm to the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ shared them with numerous other media organisations, and stories of rich and powerful people hiding their cash are now being drip-fed to the public and dominating bulletins around the world. Most of the documents aren't yet available, but those underpinning the stories which have broken so far can be found on the ICIJ website beneath bad drawings of the key figures. It's a grubby play in which UK law firms are already being unmasked as lead actors.
||It goes all the way to the top; Ant McPartlin and Denis Norden
Under a weak sketch of David Cameron, you will find the 2006 prospectus of Blairmore Holdings, Inc, which lists Simmons & Simmons as legal advisors to the fund in England, just above Mossack Fonseca's details.
The fund on which Simmons advised has made headlines in the UK because it was set up by David Cameron's dad. According to the Guardian, Blairmore (surely that should have been Cameronmore?) avoided ever having to pay tax in Britain because it was incorporated in Panama and listed in the Bahamas, where it hired "a small army of Bahamas residents – including a part-time bishop" to sign its paperwork. All to disguise the fact, suggests the Guardian, that it was effectively controlled and managed from the UK, which would mean that it should have paid UK tax.
Last week RollOnFriday revealed that Simmons & Simmons had decided to screw over students, the legal press and honest firms by manipulating its trainee retention figures to make them look healthier than the actualité. It refused to 'fess up, and now karma has taken an almighty dump on it and revealed Simmons to have worked down the table from - not opposite, but alongside - The Dodgiest Firm In The World™. Simmons & Simmons is now inextricably linked with Mossack Fonseca in the biggest digital leak of all time and the biggest story of corruption of the year, if not the decade and therefore the century and therefore THE MILLENNIUM. A spokeswoman for the firm didn't seem that chuffed, telling me, "Unfortunately, this is something that we are unable to provide further information/comment on".
||Not a Simmons PR person, today
Presumably lawyers at Simmons & Simmons reacted with either disgust, annoyance, apathy, surprise or nihilistic enjoyment, depending on their state of mind and soul, when they saw that their firm had worked with Mossack Fonseca and that the association has been scooped up from the dusty vaults of long-forgotten, archived matters and dumped onto millions of laps around the globe. Simmons, of course, will no doubt have complied with all the proper procedures in the Blairmore case. Unlike Mossack Fonseca, which has got up to all sorts, including recruiting a British pensioner to pretend to be the owner of a fortune in order to hide the identity of the true beneficiary. Nonetheless, it's embarrassing for Simmons (and HFW, also named) to be labelled as a hollowed-out enabler of the amoral rich, rubbing along with a firm which has, amongst other alleged crimes, tarnished a great name for a Star Wars character.
"It appears that you have had
unauthorized access to proprietary documents and information taken from
our company and have presented and interpreted them out of context. We
trust that you are fully aware that using information/documentation
unlawfully obtained is a crime, and we will not hesitate to pursue all
available criminal and civil remedies."
Simmons only has itself to blame. Mossack Fonseca was an obvious wrong 'un. It was the Jimmy Saville of law firms, hiding in plain sight with a highly secretive website which features no lawyer profiles and well-known for its links to every unsavoury character going, from dodgy dictators to Brexit-funder Arron Banks. There was even a Louis Theroux we-should-have-known moment, when Vice ran an expose in 2014.
As firms hunker down, one, Eversheds, has popped up to comment that the mood is rightly fearful. Head of fraud and investigations Neill Blundell said, “This
is another example of someone blowing the whistle on the perceived use
of off-shore tax havens like Panama to commit crime such as evading
taxes and laundering monies".
"I imagine there may be many people who will be
concerned about receiving a knock on the door from international law
enforcement in the coming months”.
Only a tiny fraction of the leaked
documents has been released in order to give each scandal time to
breathe in the 24 hour news cycle. Mossack Fonseca has been a busy firm, and you can bet your bottom dollar in a
brown envelope stuffed with unmarked bills that right now, plenty of firms are
enjoying some squeaky bum time along with Mossack Fonseca's publicity-shy clients.
The Panama Papers are law's Ashley Madison
hack. It felt uncontroversial at the time, a discreet and uncomplicated fling. A brief and profitable no-strings-attached liaison. Except now the whole sordid affair is threatening to flop out across the Sunday papers, every fold and fumble exposed. Even if you aren't digging, your firm's compliance team is
scrambling to wordsearch their database. Did the firm work with MF, are the documents which prove it did explosive, and are they within the leaked cache? If the answer to the first two questions is yes, because once upon a time when it was drunk and vulnerable it advised on a deal to plop Mugabe's fortune in a Liberian-based fund
run out of Lebanon, it will have to sit and wait, impotent and sweaty-palmed,
to see if it features in tomorrow's scoop. Or the week after's. Cursing the day it ever allowed itself to be seduced by that exotic Panamanian femme fatale, Ms
Mossack Fonseca. And wondering whether it should, actually, thinking about it, get checked out at the clinic. Though it might be a bit late for that.