Case spotlight: Mossack Fonseca: Panama Papers

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This case was featured in the September 2022 issue of Connect.

Who - the protagonist

Carlos Sousa, Mossack Fonseca’s Public Relations Head.

What?

Mossack Fonseca was a Panama-based law firm founded in 1977 by German lawyer Jurgen Mossack - in 1986 it merged with another law firm headed by Panamanian lawyer Ramón Fonseca.

Specialising in corporate law, fiduciary services investment advice and international business, the firm had over 300,000 companies as clients, with 80,000 of them still active in 2009.

Mossack Fonseca’s client portfolio hailed from more than 100 countries, with businesses ranging from small local companies to multinational banks and globally renowned public figures.

Mossack

Why?

In April 2016, multiple newspapers and media around the world reported having possession of the so-called Panama Papers, a set of 11.5 million confidential documents from Mossack Fonseca.

According to the news, these documents provided detailed information on 214,000 offshore companies created by Mossack Fonseca, including their shareholders’ and board members’ identities.

The news had extremely negative connotations.

The documents showed how wealthy individuals, including public officials, used these companies to hide their assets from public scrutiny. Several reporters had even informed that many of these companies were fictitious corporations used for illegal purposes, including drug trafficking, and tax evasion.

Where?

Panama, a country linking Central America with South America, earns vast revenues from canal tolls, but banking also plays its part in the country’s GDP, contributing 9.3%.

Mossack Fonseca’s customers largely resided in Hong Kong, the UK, Luxembourg, and Panama.

When?

It was on 4 April 2016 when Carlos was preparing a news release about the IT issues associated with the recent Panama Papers scandal.

Key quote

“Our industry is not fully understood by the general public, and, unfortunately, these news articles will add to the confusion. The facts are the following: despite suffering a data breach, we have not seen anything in this bulk of documents - illegally obtained - that suggest any wrongdoing on our part. This fits with the global reputation that we have built over the past 40 years by doing business the right way.”
Ramón Fonseca, co-founder of Mossack Fonseca.

What next?

Carlos started writing a press release, knowing the firm’s information security and online platform vulnerabilities could unnerve their clients. Carlos also knew that he needed to communicate the steps taken to remedy the issue to the press, hoping to preserve the firm’s clients’ trust.

AUTHOR PERSPECTIVE 

Topical issue

Carlos said: “We started writing this case when we were working at INCAE Business School. At the time, INCAE was about to launch a new programme for lawyers, which included a few sessions on information technology (IT) management. The news about the Panama Papers had first appeared just a few weeks before, so the professor in charge of the programme asked us if we could put something together to discuss as part of the IT sessions. We looked for information online and were amazed at the level of detail we found.

“The news discussed all sorts of things, including the software that Mossack Fonseca was using at the time, details about the data breach, and the technology that journalists used to securely share the documents between them.

“It's not every day that you find exactly the information you need to write a case about an event as high-profile as the Panama Papers, so we decided to seize the opportunity.”

laptop work

Challenge of producing a published sources case

Carlos continued: “One major challenge was that we had to write the case using only information that was publicly available. We never contacted Mossack Fonseca or any of the journalists that were involved with the Panama Papers. So, writing this case was quite different from our past experiences with other cases, where we worked together with a company to better understand the problem and the context. Gathering information from multiple sources to create a compelling case was challenging.”

Shining a light on IT management

He added: “This case is a lot of fun to teach because people are naturally curious about scandals. So, it is easy to get the class discussions going.

“Another great thing about the case is that it presents an excellent example of what can go wrong when non-IT companies don't take IT management seriously. We find that the case can be a great wake-up call for those students who think that IT management is something only IT people should worry about.

“Furthermore, the case presents the opportunity to discuss other highly relevant topics that are seldom discussed in IT management, such as the cybersecurity implications of engaging on questionable business practices or dealing with the aftermath of a data breach.”

Case writing tip

Carlos concluded: “Write a case that lends itself to multiple interpretations or perspectives. Those are the cases that tend to encourage discussion and critical thinking.”

THE CASE 

The case

Who - the protagonist

Carlos Sousa, Mossack Fonseca’s Public Relations Head.

What?

Mossack Fonseca was a Panama-based law firm founded in 1977 by German lawyer Jurgen Mossack - in 1986 it merged with another law firm headed by Panamanian lawyer Ramón Fonseca.

Specialising in corporate law, fiduciary services investment advice and international business, the firm had over 300,000 companies as clients, with 80,000 of them still active in 2009.

Mossack Fonseca’s client portfolio hailed from more than 100 countries, with businesses ranging from small local companies to multinational banks and globally renowned public figures.

Mossack

Why?

In April 2016, multiple newspapers and media around the world reported having possession of the so-called Panama Papers, a set of 11.5 million confidential documents from Mossack Fonseca.

According to the news, these documents provided detailed information on 214,000 offshore companies created by Mossack Fonseca, including their shareholders’ and board members’ identities.

The news had extremely negative connotations.

The documents showed how wealthy individuals, including public officials, used these companies to hide their assets from public scrutiny. Several reporters had even informed that many of these companies were fictitious corporations used for illegal purposes, including drug trafficking, and tax evasion.

Where?

Panama, a country linking Central America with South America, earns vast revenues from canal tolls, but banking also plays its part in the country’s GDP, contributing 9.3%.

Mossack Fonseca’s customers largely resided in Hong Kong, the UK, Luxembourg, and Panama.

When?

It was on 4 April 2016 when Carlos was preparing a news release about the IT issues associated with the recent Panama Papers scandal.

Key quote

“Our industry is not fully understood by the general public, and, unfortunately, these news articles will add to the confusion. The facts are the following: despite suffering a data breach, we have not seen anything in this bulk of documents - illegally obtained - that suggest any wrongdoing on our part. This fits with the global reputation that we have built over the past 40 years by doing business the right way.”
Ramón Fonseca, co-founder of Mossack Fonseca.

What next?

Carlos started writing a press release, knowing the firm’s information security and online platform vulnerabilities could unnerve their clients. Carlos also knew that he needed to communicate the steps taken to remedy the issue to the press, hoping to preserve the firm’s clients’ trust.

AUTHOR PERSPECTIVE 

Author perspective

Topical issue

Carlos said: “We started writing this case when we were working at INCAE Business School. At the time, INCAE was about to launch a new programme for lawyers, which included a few sessions on information technology (IT) management. The news about the Panama Papers had first appeared just a few weeks before, so the professor in charge of the programme asked us if we could put something together to discuss as part of the IT sessions. We looked for information online and were amazed at the level of detail we found.

“The news discussed all sorts of things, including the software that Mossack Fonseca was using at the time, details about the data breach, and the technology that journalists used to securely share the documents between them.

“It's not every day that you find exactly the information you need to write a case about an event as high-profile as the Panama Papers, so we decided to seize the opportunity.”

laptop work

Challenge of producing a published sources case

Carlos continued: “One major challenge was that we had to write the case using only information that was publicly available. We never contacted Mossack Fonseca or any of the journalists that were involved with the Panama Papers. So, writing this case was quite different from our past experiences with other cases, where we worked together with a company to better understand the problem and the context. Gathering information from multiple sources to create a compelling case was challenging.”

Shining a light on IT management

He added: “This case is a lot of fun to teach because people are naturally curious about scandals. So, it is easy to get the class discussions going.

“Another great thing about the case is that it presents an excellent example of what can go wrong when non-IT companies don't take IT management seriously. We find that the case can be a great wake-up call for those students who think that IT management is something only IT people should worry about.

“Furthermore, the case presents the opportunity to discuss other highly relevant topics that are seldom discussed in IT management, such as the cybersecurity implications of engaging on questionable business practices or dealing with the aftermath of a data breach.”

Case writing tip

Carlos concluded: “Write a case that lends itself to multiple interpretations or perspectives. Those are the cases that tend to encourage discussion and critical thinking.”

THE CASE 

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