Panama Papers law firm raided as global fallout grows
PANAMA CITY, Panama — On Wednesday, Panamanian authorities conducted a 27-hour raid on the offices of Mossack Fonseca, the law firm at the centre of the “Panama Papers” leak of 11.5 million confidential documents, spanning four decades, which reveal how the rich and powerful hide money to avoid taxes.
Meanwhile, governments around the world are investigating possible wrongdoing by prominent figures, including money laundering and tax evasion.
Javier Caraballo, the prosecutor in charge of the raid, said officials now had access to 100 “virtual servers” and some physical servers that hold the company’s records, and were working on analysing them, Reuters reported.
Mossack Fonseca, which specializes in setting up offshore companies, has said the company broke no laws and all of its operations were legal.
In the aftermath of the Panama Papers leak, tax and law enforcement agencies in the UK, Germany, France, Italy and Spain have now agreed to share data.
Under the new agreement, the five nations will exchange information regarding beneficial ownership registers, which show who really owns assets. They will also create new registers of financial trusts.
The International Monetary Fund’s chief Christine Lagarde said it added to the momentum building against those who sought to hide income and assets.
The anti-corruption group Transparency International (TI) welcomed the move to open up trusts as well as companies but pointed out that none of group apart from the UK has committed to public registers of beneficial ownership.
“This announcement is significant because it recognises the big picture of trans-national corruption and illicit financial flows and shows real intent, but it is a very long way from being the end game. Although they have committed to getting more countries on board, the US is notably absent,” TI said.
However, one of the early causalities of the Panama Papers leak was the president of the Chilean branch of TI, Gonzalo Delaveau, who resigned after documents showed he was linked to at least five offshore companies domiciled in The Bahamas. While Delaveau is not accused of illegal activity, the leaks called into question his post at TI.
While members of the extreme right party, French National Front (NF), were among the vocal critics of Europe’s failure to tackle tax havens during the European Parliament’s debate on the Panama Papers revelations, the party’s founder, Jean-Marie Le Pen, , who at 87 is the oldest member of the European Parliament, is also personally implicated in the Panama Papers.
He allegedly concealed a portion of his personal wealth in an offshore company under the name of his former butler and right-hand man Gérald Gérin. In total, he is suspected of hiding up to €2.2 million from the French tax authorities since 2015, including €97,000 in banknotes, €854,000 in securities, 26 gold ingots and other pieces of gold.
As the global fallout from the leak continues, Jose Manuel Soria, Spain’s acting industry minister, resigned his position after his name was linked to offshore investments in the Panama Papers.
He has not been charged with any crimes, but the documents identified him as a director of an offshore investment company in The Bahamas, UK Lines. Further reports linked him to a company, Mechanical Trading Limited, in Jersey, a British Crown Dependency long regarded as a tax haven.
In Pakistan, opposition politicians have pressed Prime Minister Nawaz Sharif to resign after the Panama Papers document leak revealed that three of his children controlled shell companies through which they owned expensive residential properties in London.
Sharif has rejected any allegations of money laundering, claiming that his children have legitimate business abroad, and he has signaled his willingness to establish a commission of inquiry.
In China, a well-known civil rights lawyer has been taken into police custody after sharing information about the Panama Papers on social media.
Beijing has sought to suppress any discussion of the Panama Papers, which show that relatives of eight senior Communist party leaders had used secret offshore companies to hide their wealth.
Documents from the leaked Mossack Fonseca database revealed that relations of three of the seven members of the Communist party’s ruling council, the politburo standing committee, had links to the offshore law firm, including those of the Chinese president, Xi Jinping.
While names of US taxpayers have generally been conspicuous by their absence in the initial published analyses of the Panama Papers, a major US defence contractor Triple Canopy has just been implicated in the trove of leaked documents.
In 2010, Triple Canopy took over Edinburgh International, using a shell company Trifecta International Holdings to make the purchase. With this business structure, Triple Canopy had the ability to step around accountability measures that apply to US companies. Edinburgh International is based in Dubai and runs several of its operations through shell companies in the British Virgin Islands.
Mossack Fonseca registered those companies.
IMAGE: The offices of Mossack Fonseca, the law firm at the centre of the “Panama Papers” leak of 11.5 million confidential documents, were raided by Panamanian authorities on Wednesday
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