An Issue Full of Leaks

Experts scramble to determine biggest potential legal consequences from Paradise Papers

With 13.4 million total records included, it’s probably more appropriate to call the Paradise Papers a “flood” rather than a “leak.” The trove of records, obtained by the German newspaper Süddeutsche Zeitung and released to other news outlets by the International Consortium of Investigative Journalists Nov. 5, includes information on trillions of dollars in wealth, including profits, investments and intellectual property rights, from entities such as Apple, Nike, Uber and even Queen Elizabeth II. The leak dwarfs the Panama Papers by nearly 2 million documents.

The data is largely from Bermuda-based legal services provider Appleby, a leading offshore finance firm that caters to businesses and extremely wealthy individuals. Although storing finances and investments offshore is not illegal by itself, the Paradise Papers leak, like the Panama Papers before it, potentially points to illegal activities by the companies, such as tax evasion. But as one white-collar criminal defense attorney explained, the ultimate question presented by the leak might be much less tangible than one of criminal activity.

“Is (the question) going to be, were there actual transgressions of various nation-states’ tax laws on a whole-scale level?” said a partner at a national law firm, who asked not to be named because of potential future client conflicts of interest as a result of the leak. “Or rather is the problem, if one thinks it’s a problem, that actually the vast majority of this was in fact perfectly legal?” He further explained the divide lies in whether the ultimate question is one of legality, or of a more philosophical and political nature about fairness and what activities should be tolerated.

Several other law firms declined to speak with Law Week for this story, which seems to reinforce the leak’s wide-reaching potential for consequences.

To read this story and other complete articles featured in the November 13, 2017 print edition of Law Week Colorado, copies are available for purchase online.