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Who else is facing serious fallout from the ‘Panama Papers’?

Even if most people can’t exactly summon outrage over the revelations, might they still lead to change? After all the fuss, is anyone likely to get hurt?

People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik on Tuesday.
REUTERS/Stigtryggur Johannsson

The so-called ‘Panama Papers’ confirm what many have long suspected: The very rich and powerful play by a completely different set of rules. But even if most people can’t exactly summon outrage, might the revelations still lead to change? After all the fuss, is anyone likely to get hurt? 

Here’s an early guess: You’re most likely to get hurt if you’re already vulnerable. And vulnerability includes an expectation among your citizens that you will be basically honest.

There is a lot to chew on in these reports: More than 11 million documents leaked from a law firm in Panama to a German newspaper, which shared them with other new organizations, including a U.S. nonprofit. They revealed that the law firm had set up 214,000 offshore companies for 14,000 clients. They included 143 politicians, a dozen of them national leaders.

The news organizations were careful not to make blanket accusations of wrongdoing. There can be legitimate reasons to stash your money where no one else can find it, as many of those named in the documents pointed out. Even if your motives are less than pristine, your actions may be perfectly legal.

The list included people close to Russian President Vladimir Putin (but not Putin himself), as well as the president of Ukraine. The families of eight current and former members of the ruling Communist Party Politburo in China, which is in the midst of a tough anti-corruption campaign – pursued by President Xi Jinping (whose family member also is implicated). The prime minister of Pakistan. An Iraqi who was once his country’s interim prime minister. A son of former Egyptian leader Hosni Mubarak. The king of Saudi Arabia. 

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Oh, and the prime minister of Iceland, who resigned Tuesday in the midst of large protests – see above about citizens’ expectations of clean government.

The list didn’t include any prominent U.S. citizens, but Americans shouldn’t be congratulating themselves for their rectitude.

Here’s where the fallout from the revelations are most likely to be felt going forward. 

1. Russia

In the Internet age, you can slow down the spread of a story if you control the traditional media, but probably not stop it. The Kremlin didn’t wait for the report to be published on Sunday – it preempted the news a few days earlier by warning that something bad was coming, suggesting darkly that the journalists were in cahoots with the CIA, and complaining of “Putinophobia.” On Monday, state-controlled television stayed quiet about it. On Tuesday, Russian officials announced an investigation of those named – not that some of Putin’s oldest friends, who were identified, are likely to be in any trouble.

As the BBC reports here, there was plenty of chatter in Russian social media. But Russians are a pretty cynical lot, and overall many seemed underwhelmed. This will be one more bit of evidence for the anti-Putin crowd that the Kremlin will have to manage. Given Putin’s popularity, though, it shouldn’t cause huge problems.

2. Ukraine

Ukrainians probably aren’t any less cynical about their leaders, but President Petro Poroshenko has a slightly different problem. While some opposition politicians are muttering about impeachment, that’s unlikely. Corruption is one of the biggest issues keeping the West from embracing Ukraine more firmly in its dispute with Russia. This will do nothing to build the case that Ukraine has gotten its corruption problem behind it.

3. Saudi Arabia

The fallout could turn out to be a bit more dicey for China and Saudi Arabia – two countries  where the good times have been grinding to a halt.

King Salman has been on the Saudi throne for a little more than a year, and is already beset by problems. The kingdom is embroiled in a hot war in neighboring Yemen and a regional proxy war with Iran. Plus, the economy is suffering so much from the collapse of oil prices that the government is having to cut way back on generous benefits Salman’s subjects have come to expect.

Throw into that mix the revelation that while ordinary people are having to tighten their belts, the king has been stashing money outside the country. That won’t endear him to his subjects. The House of Saud won’t fall tomorrow, but it is entering a perilous time.

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4. China

In China, the news can cut in several different ways. So, for starters, censors along the Great Firewall went into action, trying to scrub the Internet of references to the reports.

Xi knows that corruption is dangerous for the Communist Party’s claim to continue leading China. This gives him an opportunity to go after more high-ranking officials. But he has to be careful. His own brother-in-law is among those named.

The party is also facing urgent questions about its ability to manage the economy. It’s slowing down after years of torrid growth, and the stock market has suffered serious hiccups. Officials have their hands full, in any case, with their effort to reorient the economy away from exports and investment, and toward domestic consumption.

This would be one more dent in the party’s reputation. Officials seem a little lost when it comes to ensuring growth for the millions who still seek to escape poverty. But they seem to have mastered the art of hiding money abroad. And lest you put your faith in the corruption-fighter-in-chief, it appears that he, too, is tainted.