Now streaming on Netflix, “The Laundromat” is an entertaining and flamboyant  examination of the phenomenon and roots of international money laundering, brought to us by director Steven Soderbergh (“Erin Brockovich,” “Traffic”) using a screenplay by Scott Z. Burns. The often tongue in cheek film is narrated by actors Gary Oldman and Antonio Bandaras playing lawyers Jürgen Mossack and Ramón Fonseca , whose now defunct firm set up tax shelters and shell corporations for the rich, corrupt and criminal  all over the world. Their empire was shattered by the Panama Papers data dump in 2016.

The film’s tone veers from smug to blunt as it focuses on three adaptations of true stories involving  Mossack Fonseca clients, all narrated by the excuse- and rationalization-spouting lawyers, the real life versions of which tried to sue to halt the production.

“The Panama Papers” as they are now called consisted of 11.5 million leaked documents that detailed financial and attorney–client information for more than 214,488 offshore entities, many of which were legal, but that supported fraudulent schemes and other crimes.  The documents were the property of  Mossack Fonseca. Even now, the fall-out from the release of the documents is unclear, in large part because so many of them involve attorney-client privilege, and the rules and laws governing their legal handling are spread over many nations, laws and ethics rules. The leak itself was a crime, and the hacker responsible, who goes by the name of “John Doe,” has never been identified.

This is an international ethics train wreck, and one that is so complicated that I didn’t cover it in 2016. That was ethics commentary malpractice on my part, I think. It was the biggest ethics story of the year, even if it is still largely unresolved.

Whether the law firm itself broke any laws is still a matter of debate. As Oldman and Bandaras constantly remind us, Mossack Fonseca set up arguably legal structures, and, they claim, didn’t know or care how they would be used. This is still a gray area of legal ethics in the U.S., one that was highlighted when “60 Minutes” broadcast its Global Witness episode in 2016 . Partners in eleven large Manhattan  law firms were caught on hidden cameras  exploring possible ways to represent an individual posing as the agent of an “African despot” seeking ways to launder millions of dollars. The ethics rules say that a lawyer may not knowingly assist a client in a crime or fraud, but contrived ignorance can be an effective, if unethical, device for lawyers to avoid  accountability when representing  unsavory (but profitable) clients.  Remember, Enron’s law firm avoided any sanctions, while the company’s accounting firm, Arthur Anderson, was prosecuted and destroyed.

No, Ethics Alarms didn’t cover the Global Witness scandal either, though I have talked about it in legal ethics seminars ever since. Clearly, money laundering has not had proper priority here. Again, my fault. I’ll do better. Continue reading →