Authorities press for more transparency in wake of Panama Papers

International watchdogs are forming their responses to the Panama Papers, which are revealing the elaborate – and secret – financial schemes the world's wealthy have employed.

Iceland's prime minister resigned last Tuesday, and protesters in Britain and Malta are calling on their own leaders to do the same in the wake of revelations from the Panama Papers. 

The public outrage represents a global call for increased transparency, as the Panama Papers scandal has highlighted the link between tax evasion and international politics and revealed how world leaders are using elaborate schemes to hide financial obligations.

The scandal, which began with a large-scale leak of account data from Panama's Mossack Fonseca firm, illustrated the vast networks of shell companies that soccer stars, Putin's inner circle, and political officials across Europe have built to avoid their tax burden. 

"Not all the transactions were illegal," The Christian Science Monitor wrote in an editorial. "But the extreme efforts made to maintain secrecy, through shell companies and other means, have raised sharp eyebrows in dozens of countries. And the disclosures have created what may be the first popular global demand for more transparency in the world financial system."

In Panama, which relies heavily on its international finance center, the Mossack Fonseca law firm insists it is the victim of a crime, not its perpetrator. The firm filed a complaint about the leak, which it attributes to an unnamed foreign computer hacker, even before its contents were published in international media. Investigators specializing in intellectual property visited the firm on Monday.

"Finally the real criminals are being investigated," Mr. Fonseca told the AP. 

Under pressure from the international community, the government of Panama has promised the international community it would take steps to improve transparency. On Tuesday, prosecutors with organized crime units raided the Mossack Fonseca's headquarters to search for documents linking its accounts to money laundering or terrorism. 

International watchdogs are now beginning to mobilize. Members of the Joint International Tax Shelter Information and Collaboration Network commenced a meeting in Paris on Wednesday. The tax officials intend to share data and establish "collaborative action" in the wake of the scandal.

Switzerland's financial watchdog FINMA also announced Wednesday that it is investigating its banks – several of which received mention in the Panama Papers for requesting offshore accounts – for money laundering.

"We want to know which banks have used the services of the Panamanian firm and whether Swiss laws were broken," FINMA President Thomas Bauer told Swiss newspaper NZZ am Sonntag.

He urged global officials to set an international standard to proactively disclose the shady finances that are currently being aired in the Panama Papers.

"Other states and organisations – such as the European Union or the OECD – need to make efforts to establish similar regulations everywhere," Mr. Bauer told NZZ am Sonntag.

The response has been somewhat muted in the United States, partly because the Americans implicated have not yet been as high-level as those from some countries, and partly because the scandal raises awareness of issues that already have American voters talking.

"The populist anger being fueled primarily by white working-class Americans didn't need any more fuel," said Joe Brettell, a Houston-based Republican strategist. "They've already lived through the financial meltdown. They've already lived through the lack of middle class wage increases even as the stock market boomed."

On the Democratic side, Sen. Bernie Sanders has used the Panama Papers in campaign speeches to illustrate his case against preferential financial treatment for the wealthy. 

"This is just the type of thing that is animating his base," said Charles Postel, a professor of history who studies at San Francisco State University.

This report contains material from the Associated Press and Reuters.