German investigators pay €5 million for Panama Papers to hunt global tax criminals

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German investigators pay €5 million for Panama Papers to hunt global tax criminals
Law firm Mossack Fonseca is at the heart of the Panama Papers. Photo: DPA

The German Federal Criminal Police Office said on Tuesday that it has purchased the vast amount of leaked data known as the Panama Papers, which revealed the legally dubious offshore activities of celebrities, politicians and sports stars last year.


While the BKA would not disclose details about the purchase, government sources told DPA that the data had been bought from a “source” within the past year for €5 million.

The Panama Papers created a stir worldwide last year when German newspaper the Süddeutsche Zeitung (SZ), along with the International Consortium of Investigative Journalists (ICIJ), published details of the 11.5 million leaked documents from Panamanian law firm Mossack Fonseca.

The documents revealed financial information of people like the Saudi Arabian King, Argentine football star Lionel Messi, and the father of former UK Prime Minister David Cameron.

SEE ALSO: German newspaper unveils biggest leak in history

Though setting up offshore or shell companies is not itself illegal, the reporters found that some of these firms created by Mossack Fonseca were used for illegal purposes, such as fraud, tax evasion, money laundering, or evading international sanctions.

“Owning an offshore company isn't illegal,” the SZ wrote at the time. “There is a string of businesses for which it seems logical... but if you look around in the Panama Papers, you quickly realize that in the vast majority of cases it's about concealing the real owners of the companies.”

The BKA now plans to use the data to fight money laundering and tax fraud. The criminal investigations agency is sharing the data with Hesse state finance authorities for review, and they will then pursue criminal and fiscal findings based on this analysis. The evaluation is expected to last several months.

The agencies will also be working closely with relevant authorities in cases of potential violations involving other countries.

“We not only have the capability, but also the political will to decidedly lead the fight against tax crimes,” said Hesse finance minister Thomas Schäfer.

“We are therefore also ready to take on the costs of the data.”

The state purchasing such financial data has been contentious in the past. But a prior ruling by the Constitutional Court found that German government entities may use purchased data about tax fraudsters, even when this information was initially illegally obtained.

The top priority for investigators will be looking into organized crime, such as arms dealing. These kinds of revenues are generally not declared and therefore also fall into the category of tax fraud.

The Federal Finance Ministry said it welcomed the purchase of the data, explaining that with it, the relevant authorities could go after tax dodgers. The Finance Ministry itself has been involved in the purchase of so-called “tax cheat” CDs, which list bank account holders in foreign tax havens, like Switzerland.

Such purchases have upset Swiss authorities, and discovering which German tax investigators had bought CDs was reportedly the mission of a Swiss spy arrested earlier this year in Frankfurt.



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