The 11.4 million files taken from the now-defunct law firm Mossack Fonseca—better known as the Panama Papers—likely constitute the largest leak in history. To better put a human face on the consequences of the firm’s billions of dollars in financial chicanery for his new Netflix film The Laundromat, director Steven Soderbergh created a fictional heroine in Meryl Streep’s Ellen Martin, a bereaved widow who decides to investigate the firm. But while Streep’s character may be fabricated, the story of the Panama Papers is very much real. Although the film doesn't drop on Netflix until Oct. 18, Soderberg and Netflix are already facing a lawsuit from Mossack Fonseca, claiming that the film is defamatory. Here’s what you need to know about what's real and what's fiction in The Laundromat.

What are the Panama Papers?

The Panama Papers shed light on secret assets held by the wealthy and powerful in offshore shell companies. Back in 2016, Reddit user DanGliesack (say the username fast to hear the middle-school pun) described the ways these tax havens work with an analogy so useful that it was covered by Vox and The Guardian. Here’s how Dan put it:

When you get a quarter you put it in the piggy bank. The piggy bank is on a shelf in your closet. Your mom knows this and she checks on it every once in a while, so she knows when you put more money in or spend it.



Now one day, you might decide "I don't want mom to look at my money." So you go over to Johnny's house with an extra piggy bank that you're going to keep in his room. You write your name on it and put it in his closet. Johnny's mom is always very busy, so she never has time to check on his piggy bank. So you can keep yours there and it will stay a secret.



Now all the kids in the neighborhood think this is a good idea, and everyone goes to Johnny's house with extra piggy banks. Now Johnny's closet is full of piggy banks from everyone in the neighborhood.



One day, Johnny's mom comes home and sees all the piggy banks. She gets very mad and calls everyone's parents to let them know.



Now not everyone did this for a bad reason. Eric's older brother always steals from his piggy bank, so he just wanted a better hiding spot. Timmy wanted to save up to buy his mom a birthday present without her knowing. Sammy just did it because he thought it was fun. But many kids did do it for a bad reason. Jacob was stealing people's lunch money and didn't want his parents to figure it out. Michael was stealing money from his mom's purse. Fat Bobby's parents put him on a diet, and didn't want them to figure out when he was buying candy.

In this case, "Johnny’s mom" was Panama. And it wasn’t that the country was too busy to check its shelf of piggy banks: It, like nations including Luxembourg, the Bahamas, and Switzerland, is a well-known tax haven, a country that charges foreign companies very low or no taxes and offers little financial oversight, thereby becoming a destination for global wealth that would otherwise attract scrutiny or be more heavily taxed in its home countries. And it’s money that, if taxed, could be used to improve the lives of millions—tax havens cost the U.S. around a fifth of its total corporate tax revenue, around $70 billion a year.

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The leaked files were documents from one of the world’s biggest offshore law firms, Panama-based Mossack Fonseca, which specialized in creating shell companies, making it harder for the asset holders’ governments to tax them or figure out any less-than-kosher goings on. Much of what the Panama Papers uncovered was technically perfectly legal. But some of these maneuvers were a bit like Hunter Biden’s Ukraine gig: Legal, but morally dubious and not exactly the sort of thing that leaves you smelling like a rose when it’s printed in the newspaper.

How were the documents made public?

In 2014, a source whose identity remains unknown got in touch with reporter Bastian Obermayer of German paper Suddeutsche Zeitung. The paper would eventually amass 2.6 terabytes of data, which it shared with the International Consortium of Investigative Journalists. Over the course of a year, hundreds of journalists in more than 80 countries pored over the documents, which spanned the 1970s through 2016. The public was first alerted to their reporting in April 2016, when the first articles about the leak ran.

Claudette Barius/Netflix

“I decided to expose Mossack Fonseca because I thought its founders, employees and clients should have to answer for their roles in these crimes, only some of which have come to light thus far,” wrote the anonymous leaker in a statement. “It will take years, possibly decades, for the full extent of the firm’s sordid acts to become known.”

What did the Panama Papers reveal?

As you’d expect from a leak that included more than ten million documents, the Panama Papers were full of revelations. Documents offered evidence suggesting that Vladimir Putin has helped enrich his family and associates to the tune of two billion dollars, that the Prime Minister of Iceland kept millions in an offshore account and secretly owned stakes in Icelandic banks he was tasked with regulating.

Twelve global leaders were found to be holding money offshore. U.K. Prime Minister David Cameron admitted that before his time as the head of government, he’d made a financial profit from his father’s offshore holdings. (After he subsequently made his tax records public in a show of transparency after the Panama Papers reports, Cameron’s mother was revealed to have potentially dodged estate taxes by giving her son $200,000.)

In The Laundromat, Meryl Streep plays an American woman whose husband drowned in a tour boat accident, but who cannot win financial damages against the tour company because it had purchased a sham insurance policy through what turned out to be a series of offshore shell companies created with the help of Mossack Fonseca. While her character is fictionalized, the story of the sinking of the Ethan Allen in 2005 and its connection to the Panama Papers is very real.

Taken together, the trove illustrated the lengths wealthy people around the world go to hide their wealth and dealings. There weren’t very many famous American names implicated in the leak, in part because Americans often prefer to pick other, often English-speaking countries to hide their money in, and because some of our very own states are a bit tax haven-like themselves. Among the celebrities named in the Panama Papers were Stanley Kubrick and Donald Trump.

Mossack Fonseca co-founder Ramon Fonseca in 2016. STR Getty Images

What was the fallout?

Iceland’s Prime Minister stepped down from his post amid demonstrations that found as much as 10 percent of the nation protesting in front of Parliament.

The leak also had huge implications for Pakistani politics, as Prime Minister Nawaz Sharif was dismissed by the nation’s Supreme Court when the leak revealed that his children had bought luxury London real estate using money held offshore. Justices found that the leader had been attempting to conceal assets. He was later sentenced to seven years in prison after being convicted on corruption charges.

In 2017, Maltese investigative reporter Daphne Caruana Galizia was murdered in a car bombing. While she had investigated many varieties of corruption in the small Mediterranean nation, including organized crime, she had also investigated the Panama Papers leak and discovered "offshore wealth tied to the Maltese prime minister's inner circle,” NPR reported.

In the wake of the leak, Mossack Fonseca defended its firms actions as being “legal and common.” In 2017, founders Jurgen Mossack (played in The Laundromat by Gary Oldman) and Ramon Fonseca (Antonio Banderas) were arrested and charged with money laundering. They’re still awaiting trial, but just this week they filed a lawsuit against Netflix over their depiction in The Laundromat.



Gabrielle Bruney Gabrielle Bruney is a writer and editor for Esquire, where she focuses on politics and culture.

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