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Evan Horowitz | Quick Study

Why are the Panama Papers important?

Protesters called for the resignation of Iceland Prime Minister Sigmundur David Gunnlaugson after the release of the so-called “Panama Papers.”EPA

A cache of newly leaked documents is shining light on a dark and corrupt corner of global capitalism, where high-profile world leaders conduct secret financial dealings.

The documents come from a Panamanian law firm called Mossack Fonseca, which allegedly helps the global elite hide their money in tax havens and shell companies.

Dubbed the “Panama Papers,” these 11.5 million documents expose close allies of Vladimir Putin along with the president of Ukraine, relatives of leaders in Pakistan and China, and Iceland’s prime minister.

While these revelations could bring down the government in Iceland, the total balance of the fallout remains unclear. Not only have the bulk of the leaked documents not yet been released, but tax havens are a lucrative global business, supported by a wealthy and influential clientele. And offshore accounts aren’t necessarily illegal.

What do the leaked documents reveal?

For now, the documents themselves are not publicly available, and the details remain relatively sparse. But here are some of the more tantalizing claims, reported by a consortium of news organizations.

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■  While Putin himself isn’t named, many of his close friends have arranged to hide money via Mossack Fonseca, to the tune of roughly $2 billion. Some of this money seems to have come in the form of cushy loans, some from extremely well-timed investments.

■  The prime minister of Iceland co-owned a shell company in the well-known tax haven of Tortola — until he transferred full ownership to his wife. He failed to disclose this information when running for office.

■  Leaders around the world seem to be ringed with Mossack Fonseca clients, including a “bagman” for President Assad of Syria and “enough Middle Eastern royalty to fill a palace,” in the words of the McClatchy news service.

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Why hide money?

There aren’t a lot of reasons to set up a shell company in a tax haven. Privacy — hedging into secrecy — is usually the goal. Sometimes, that helps people avoid unwanted publicity; other times, it’s about covering up corrupt dealings.

Most often, it’s about tax avoidance.

Tax evasion is a massive global industry. Of every $100 people put in bank accounts and investments, $8 is socked away in tax havens like Switzerland and Singapore, according to work by a University of California Berkeley economist, Gabriel Zucman.

And while most of this money comes from wealthy countries, offshore accounts seem to be an increasingly popular option among the economic elite in developing countries.

Zucman found that as much as 50 percent of the financial wealth in Russia and the Persian Gulf countries is held in overseas accounts.

Is it possible to crack down on tax havens?

Some efforts are underway. The United States and European nations are working toward a system in which asset information and bank transactions are automatically recorded and shared.

Zucman made some additional suggestions in his book on the topic. One is a tariff against countries that serve as tax havens; another is a global database to track investments by owner and nationality.

But if global leaders themselves enjoy the benefits of these tax havens — as the Panama papers suggest — widespread international cooperation on the issue may be too much to expect.

Have the leaks exposed corruption in the US?

Not yet, but apparently these leaks are only the beginning. When asked why there were so few prominent American figures among the implicated, one of the editors in control of the documents responded “Just wait for what is coming next.”

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Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the US. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz.