This Week in Markets and Democracy: New Panama Papers, 1MDB Scandal Developments, Turkey Targets Press

New Panama Papers Expose Africa’s Offshore Dealings

The International Consortium of Investigative Journalists (ICIJ) released a second round of Panama Papers. The documents reveal how private firms, business executives, and corrupt officials in fifty-two of Africa’s fifty-four nations hired Panamanian law firm Mossack Fonseca to set up shell companies—many to avoid taxes and hide bribes. Some 1,400 anonymous companies had links to African oil, gas, and mining businesses, facilitating the more than $50 billion in illicit financial outflows from the continent each year. The new releases should give authorities evidence to go after assets at home and abroad—where billions in corruption proceeds are stashed.

Ongoing Developments in 1MDB Scandal

Last week, the United States, Singapore, and Switzerland went after $1 billion in assets linked to Malaysian state investment fund 1MDB. The U.S. Justice Department’s part represents the largest seizure ever attempted under the Kleptocracy Asset Recovery Initiative. Many of the bank accounts, properties, paintings, and other assets are widely believed to be controlled by Malaysian Prime Minister Najib Razak and his cronies. Still none face criminal charges at home, and as my colleague Joshua Kurlantzick notes, Najib will likely remain in power. More vulnerable are 1MDB’s banks. U.S. law enforcement officials are investigating anti-money laundering lapses at Goldman Sachs, and Singapore has vowed to take action against four other banks for processing the funds’ transactions.

Turkish Government Targets the Press

After purging the military, police, courts, and schools, Turkish President Recep Tayyip Erdogan is going after the media. Turkey is already a tough place to report—Reporters Without Borders ranks it 151 of 180 nations due to internet censorship, press office raids, and harassment of journalists for “insulting the president.” Now, citing links to alleged coup plot leader Fethullah Gülen, Erdogan shut down over 130 media outlets and issued arrest warrants for nearly ninety journalists, as Turkey descends further into authoritarianism.