Why Are The Panama Papers So Important?

Why Are The Panama Papers So Important?

Data leaks are no stranger to main stream media these days. It is never a shock to find that another company, organization or healthcare facility is now grappling with the regret that they did not take proper precautions to ensure their clients’ information is not vulnerable. From our banks, to retail shops and even online websites, we all give our information out without thinking about the ramifications of a poor data security system on the other end.

For the clients of Mossack Fonseca, a Panamanian law firm, they are just beginning to see the horrors of what can happen when information, that you thought would forever be private, is made public knowledge.

Before I get into why the Panama Papers are important to the security industry, I want to answer some popular questions about what the Panama Papers are.

What are the Panama Papers?

The Panama Papers are a collective group of 11.5 million documents – that equals a little bit more than 2 terabytes of information – that were obtained from Mossack Fonseca law firm. The documents date back to nearly 40 years ago and create a comprehensive list of clients and their business with the firm. The documents expose a widespread system of global tax evasion implicating some of the world’s leaders and top businessmen.

How were the documents leaked?

The actual database of over 11.5 million documents has not been made public in an effort to protect the innocent named in the 4.8 million emails, 3 million database files, and 2.1 million PDFs from the law firm. However, in 2014 an anonymous source contacted Bastian Obermayer, a reported for German newspaper Suddeutsche Zeitung, by encrypted chat.

The anonymous source believed he or she had reason to fear for their life, so Obermayer and the anonymous source talked exclusively through encrypted channels of communication while they discussed the documents. The source wanted the information to become public, but did not want to become implicated in the information’s leak.

Once the staff at Suddeutsche Zeutung realized exactly how much information was involved, they got the International Consortium of Investigative Journalists involved. The ICIJ helped to give 400 investigative journalists access to the mass amount of information. The database was protected by a two- step authentication system and included a search function as well as a way to chat with other journalists currently working. ICIJ encouraged reporters to talk to each other and exchange ideas, sources and stories.

On Sunday, April 3, after nearly a year of journalist working secretly on the project, more than a hundred media outlets around the world, coordinated by the ICIJ, released stories on the Panama Papers, exposing those implicated in the global scheme to avoid taxes and high mass amounts of wealth.

Who is implicated in the documents?

The documents reference 12 current or former world leaders, as well as 128 other politicians and public officials. In addition to allegations involving associates of Putin, (The Russian leader isn’t mentioned by name in the papers, but his family and friends are.)  and FIFA officials, the papers also accuse the prime minister of Iceland, Sigmundur David Gunnlaugsson, of having ties, through his wife, to an offshore company that were not properly disclosed. Argentina’s President Mauricio Macri is alleged to have failed to disclose links to a company in his asset declarations.

Is it clear that anything illegal has happened?

The documents do not necessarily indicate illegal activity, but shell companies and offshore accounts (like those created by Mossack Fonseca for client purposes) can be used to mask the origin of financial transactions and ownership. The files also include people and companies that the U.S. has blacklisted due to drug trafficking and terrorism links, according to the ICIJ.

So what does this mean for the security industry?

The thing about data leaks is that they are rapidly growing. Just five years ago, we saw what we believed to be the “biggest data leak in history” with the WikiLeaks (a leaked database of over 1.73 gigabytes of classified State Department communications) and within a short amount of time, the Panama Papers have blown WikiLeaks away, a thousand fold larger than the previous data leak.

While this leak exposes the wrong-doings of politicians, world leaders and businessmen, the next leak may have more cruel intentions. Hackers are already becoming more comfortable with the idea of stealing classified information from innocent people, and now that the Panama Papers have set the precedent for large leaks, what is going to stop copy cats from trying to do the same to our financial, healthcare and personal information?

Now that you know all about the Panama Papers, if you have any thoughts on what this leak could mean for the security industry, please let me know below in the comments or tweet at me using the handle @SecProdsSydny. I would love to hear the opinions of professionals in the industry.

Posted by Sydny Shepard on Apr 05, 2016

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