Are the Russians actually behind the Panama Papers?


We break it down, you get the facts.

Clifford G. Gaddy, a Senior Fellow with the Brookings Institution, has been investigating the release of the infamous Panama Papers. “In early 2015, ‘John Doe’ sends (out of the blue) an email to the German newspaper Süddeutsche Zeitung, offering 11.5 million documents from a Panamanian law firm relating to offshore shell companies.” The International Consortium of Investigative Journalists (ICIJ) has spent the past year researching these documents, attempting to glean their secrets.

In a recent press release, the ICIJ has begun to identify individuals involved in the scandal, many of whom are international leaders. In the spotlight is Russia’s own Vladimir Putin; yet, interestingly, Putin does not appear to be directly connected to the case. In fact, Putin  is only connected to the Panama Papers by a few friends who moved around up to two billion dollars illegally. So, why is Putin in the spotlight? In his own investigation, Gaddy presents a more sinister alternative explanation for the situation.

The WAC Take

Gaddy essentially believes that the Russians originally gave the files to Süddeutsche Zeitung—but why would the Russians do that? Gaddy points out that Putin suffered little, if at all, from this scandal, but others suffered greatly. The release of the Panama Papers incriminates leaders throughout the world, potentially destabilizing Western governments in particular. This sort of domino effect could be highly beneficial to the Russians in two ways: for one, the Russians would see benefits in the destabilization of western society. Primarily, however, this scandal deflects attention to Russia’s own corruption problems.

Gaddy also notes that Russia is one of the few countries that could actually have obtained these documents. With some of the best hackers in the world, the Russians had the means to get the files, while few others did. Once they obtained the documents, it would be possible for the Russians to anonymously pass those files to the ICIJ for publication. Since the papers incriminate some Russians, it’s possible that no one would suspect their involvement in the hack-and-release.

Gaddy has established the “who, why and how,” but he fears the Russians’ motivation for this operation may have been more extensive than he initially thought.  Of all the names released in the Panama Papers, none were American.  It seems highly unlikely that Americans were completely innocent of involvement in a scandal that spans the world.  Instead, Gaddy thinks it more likely that the Russians released only a selection from the Panama Papers. If that is the case, the Russians could censor information about Putin and gain the power to blackmail any powerful American individuals who were involved in the scandal. Essentially, the initial release of the Panama Papers could have been a threat to any Americans on the list, giving Russia leverage for future negotiations. If this is indeed the case, then the entire Panama Papers scandal could have been a part of Putin’s campaign to chip away at Western dominance.

–Matthew Favaro, WAC Intern