Panama Papers Reveals International Scandals For Putin’s Russia and the BVI
ROAD TOWN, Tortola, BVI — The latest on the publication by a coalition of media outlets of an investigation into offshore financial dealings by the rich and famous (all times local):
The Panamanian law firm at the center of a big document leak, Mossack Fonseca, served as an official intermediary for a company sanctioned by the U.S. government for its ties to Zimbabwean leader Robert Mugabe, according to U.S. Treasury Department records.
In 2008, the Treasury Department barred American citizens and companies from doing business with Billy Rautenbach, a Zimbabwean businessman, and one of his companies, Ridgepoint Overseas Developments Ltd. The U.S. also sought to freeze Rautenbach’s assets because of what it said were his ties to corrupt Mugabe officials on a large-scale mining project, according to a Treasury Department press release at the time.
According to the Treasury Department’s release, Ridgepoint listed Mossack Fonseca’s office in the British Virgin Islands as its official address. The sanctions meant the company and Rautenbach were barred from U.S. business until 2014.
Mossack Fonseca said in a statement Monday that it never knowingly worked with people with ties to Zimbabwe.
The law firm said, “If for some reason, unbeknownst to us, some company formed by us ended up in the hands of people having such relations for whatever criminal or unlawful purpose, we strongly condemned that situation and took and will continue taking any measures that are reasonably available to us,” the firm said.
Argentine President Mauricio Macri is defending the legality of an offshore company that he was named in that appeared in the leaked data from a Panama law firm.
Speaking to a local television station in Cordoba, Macri said Monday that the company was incorporated in 1998 with the intention of investing in Brazil. However, he says the investments in Brazil never happened and by 2008 he and his business partners dissolved the enterprise.
In Macri’s words, “There is nothing strange about the operation.”
In the so-called Panama Papers leak over the weekend, Macri’s name shows up in documents of Fleg Trading Ltd. in the Bahamas.
Macri, the former mayor of Buenos Aires who assumed power in December, is the son of tycoon Francisco Macri, an Italian-born businessman who is one of the richest people in Argentina. According to the leaked documents, Francisco, Mauricio and brother Mariano were directors of Fleg.
In the interview, Macri does not specify what Fleg invested in, nor does he address whether he received compensation. A statement put out by his office on Sunday said he was named as part of the family business and did not receive any income.
The editor in chief of the Sueddeutsche Zeitung newspaper says more than 1,000 Germans are named in the leaked Panama Papers on offshore accounts and they used all the major German banks.
Wolfgang Krach says the banks involved included Deutsche Bank, Commerzbank, the Hypo Vereinsbank and the Bayrische Landesbank.
The Munich-based paper was offered the leaked data from a Panama law firm more than a year ago through an encrypted channel by an anonymous source. Bastian Obermayer, a reporter for the paper, said the source sought unspecified security measures but no compensation.
The documents provided — amounting to about 2.6 terabytes of data — included emails, financial spreadsheets, passports and corporate records detailing how the rich and powerful used banks, law firms and offshore shell companies to hide their assets from 1977 through the end of 2015.
Krach told The Associated Press the paper and its partners verified the authenticity of the data by comparing it to public registers, witness testimony and court rulings.
The U.S. Justice Department says it’s reviewing a massive tax evasion leak for evidence of possible criminal wrongdoing that might have a link to the United States or to its financial system.
Spokesman Peter Carr said the department is aware of the Panama Papers data leak containing information on the offshore financial dealings of wealthy, famous and powerful people around the world. He says the department is reviewing the reports but can’t comment on specific documents.
He says “the U.S. Department of Justice takes very seriously all credible allegations of high level, foreign corruption that might have a link to the United States or the U.S. financial system.”
It’s not clear how many Americans have been named in the documents but thousands of Europeans have been named, according to local journalists.
Spanish tax authorities say they are investigating allegations of tax irregularities involving soccer player Lionel Messi after documents released by an international probe of offshore accounts.
Messi’s family released a statement Monday denying wrongdoing and threatened to sue media outlets that released the information linking the Argentine player to accounts in Panama.
The Barcelona star was among those named in reports by international media who received a vast trove of data and documents leaked from a law firm based in Panama.
Last year, Spanish authorities charged Messi and his father with three counts of tax fraud for allegedly defrauding Spain’s tax office of 4.1 million euros ($4.4 million) in unpaid taxes from 2007-09. They go on trial in late May and face nearly two years in prison if found guilty.
President Mauricio Macri is not the only Argentine politician to show up in the leaked documents about worldwide offshore accounts.
Daniel Munoz, private secretary to late President Nestor Kirchner and former President Cristina Fernandez, is also named.
Munoz and his wife were named in documents of Gold Black Limited, a company incorporated in the British Islands in 2010 to invest in U.S. real estate, according to the leaked documents. The origin of the company’s funds were listed as “personal savings.”
Munoz’s whereabouts Monday was not immediately clear.
During the Fernandez administrations between 2007 and 2015, Munoz was often dogged by corruption allegations. In 2009, he was charged with illicit enrichment, which was later dropped. In 2013, Argentine media reported that Munoz had helped transfer “bags of money” from Buenos Aires to Santa Cruz, the home of Kirchner and Fernandez. He faced charges for the incident, but they were also later dropped.
The speaker of Brazil’s parliament is denying reports that he has offshore financial accounts.
The Brazilian news portal UOL says Eduardo Cunha is one of hundreds around the world with accounts administered by the Panama-based law firm Mossack Fonseca, which specializes in offshore accounts.
Cunha on Twitter says he “never had any relationship whatsoever, be it direct or indirect” with such an offshore account.
Cunha is leading an attempt to impeach President Dilma Rousseff while also fighting money-laundering allegations in connection with a corruption investigation at the state-run oil company Petrobras. He’s also facing possible removal from office for allegedly lying to a congressional committee when he denied having foreign bank accounts.
Former Supreme Court Chief Justice Joaquim Barbosa has also taken to Twitter to confirm a Miami Herald report that he bought a Florida apartment, but denying he used a shell company to avoid taxes.
Argentine opposition leaders are demanding that President Mauricio Macri more fully explain his role in a Bahamas-based offshore company that lists him in documents leaked in Panama.
Macri has confirmed that a business group owned by his family had set up Fleg Trading Ltd. in the Bahamas to do business in Brazil. According to a statement, however, Macri himself had no shares in Fleg and never received income from it so he did not declare it in financial statements.
It wasn’t immediately clear what the business did. Calls to Macri’s office were not immediately returned.
Graciela Camano, president of the Renewal Front opposition bloc in the lower House of Deputies, says Macri should “use a national broadcast to explain to Argentines his situation.”
Macri, the former mayor of Buenos Aires who assumed power in December, is the son of tycoon Francisco Macri, an Italian-born businessman who is one of the richest people in Argentina.
A French prosecutor has launched an investigation into possible money laundering from aggravated tax fraud after the release of leaked documents from a Panamanian law firm about offshore accounts.
The French national financial prosecutor’s office said Monday the preliminary probe may target French taxpayers. Several hundred French citizens reportedly feature among the individuals mentioned.
The French Finance Ministry says Monday that France will ask for the Panama Papers file to be sent to its officials. French President Francois Hollande says the data will be probed separately by French tax authorities and French investigating judges.
Suspended UEFA president Michel Platini says all his accounts and assets are known by tax authorities after he was named in leaked documents about offshore accounts from the Panamanian law firm Mossack Fonseca.
According to the Le Monde newspaper, Platini has been managing an offshore company funded in Panama in 2007 and named Balney Enterprises Corp.
Platini’s advisers said in a statement Monday that the former France international soccer star “wants to inform that, as he stated it many times to the journalists in charge of the investigation, all of his accounts and assets are known to the tax authorities in Switzerland, where he has been a fiscal resident since 2007.”
Platini’s advisers declined to confirm whether he actually managed the company.
Platini was suspended from office in October by FIFA’s ethics committee and is now serving a six-year ban over a $2 million payment that former FIFA president Sepp Blatter approved from FIFA funds in 2011.
A FIFA judge who helped ban Sepp Blatter for financial misconduct is now under investigation by his ethics committee colleagues after being named in an international probe of offshore accounts.
The FIFA ethics prosecution chamber said Monday that it “opened a preliminary investigation to review the allegations” linked to lawyer Juan Pedro Damiani of Uruguay.
Damiani was identified in a vast trove of data and documents leaked from a law firm in Panama, Mossack Fonseca, which specializes in creating offshore accounts that can be used to avoid tax. He heads his family’s legal and accountancy practice in Montevideo founded by his late father, Jose Pedro Damiani.
The FIFA case against Damiani was opened in March after ethics judges learned of his “business relationship” with former FIFA vice president Eugenio Figueredo, a fellow Uruguayan arrested in Zurich.
An investigation into how politicians use offshore companies to hide their assets has named a former Moldovan prime minister as having shares in two offshore companies in the British Virgin Islands.
Ion Sturza, prime minister of the eastern European nation from 1998 to 1999, was a top executive in Rompetrol, a Romanian oil company from 2002 to 2009. The company had branches in Moldova, Bulgaria, France, Ukraine and Georgia until it was sold outright to Kazakh state oil company KMG in 2009.
RISE Moldova said Sturza — who was named deputy chairman for developing Rompetrol’s interests in Russia and former Soviet republics — together with the CEO of Rompetrol, Dinu Patriciu and Constantin Lutsenko, director of Rompetrol’s Moscow office, became business associates in offshore firm Markside Holdings Ltd in 2005.
The company was liquidated at a secret shareholder’s meeting in 2012 with Sturza signing the decision.
Sturza on Monday denied any wrongd5 p.m.
The brother and business manager of Spanish movie director Pedro Almodovar is blaming his lack of experience for a decision to set up an offshore company aimed at expanding their international film business in the 1990s.
Spain’s El Confidencial digital publication reported as part of the release of leaked documents from a Panamanian law firm that the director and his brother Agustin Almodovar were listed as the agents of a British Virgin Islands company from 1991 to 1994.
Agustin Almodovar says he launched the company in 1991 but shut it down “because it did not fit with the way we worked.”
He also apologized for the “damage my brother’s public image is suffering, caused only by my lack of experience in the first few years of our family business.”
Agustin Almodovar says he and his brother have met all of their tax obligations.
A representative for the ruling party in the former Soviet republic of Georgia says former Prime Minister Bidzina Ivanishvili has nothing to hide after his name featured in documents released about offshore accounts.
Ivanishvili, a reclusive billionaire, stepped down as prime minister in 2013 but continues to wield much influence over the government even though he holds no formal office.
The International Consortium of Investigative Journalists says Ivanishvili owned a company based in the British Virgin Islands, though it’s not clear what the company was used for.
Gia Volski, a parliamentarian for the billionaire’s Georgian Dream party, tells state TV that Ivanishvili “has nothing to hide and has never hidden anything.” Volski says there is insufficient evidence to accuse Ivanishvili of wrongdoing.
British Prime Minister David Cameron is under pressure to crack down on offshore tax havens, after a leak of millions of documents disclosed details of the asset-hiding arrangements of wealthy people, including his late father.
The Guardian newspaper revealed in 2012 that Ian Cameron, who died in 2010, used a Panamanian fund and other offshore investments to help shield investments from UK taxes.
The prime minister’s office said the Cameron family’s investments were a “private matter.”
Opposition politicians accuse Cameron of failing to implement promises to reform British Crown dependencies — such as the Channel Islands — and overseas territories that act as tax havens.
Britain’s tax office, HM Revenue and Customs, said it had asked the International Consortium of Investigative Journalists for access to the leaked data and would “act on it swiftly and appropriately” if it saw any wrongdoing.
The Czech Center for Investigative Journalism says the release of leaked documents from a Panamanian law firm shows that 283 Czech citizens are associated with offshore companies.
The center says the most favorite offshore haven for Czechs are the Seychelles, where the Mossack Fonseca law firm established some 800 companies for them, followed by the British Virgin Islands, Bahamas and others.
It says it will gradually reveal all the names. So far, the center has named, among others, the Czech Republic’s richest businessman, Petr Kellner and convicted criminal Radovan Krejcir, who is serving a long prison term in South Africa.
Interior Minister Milan Chovanec says police will investigate the data.
Four Czech journalists participated in sorting the leaked documents.
The Norwegian bank DNB says it regrets having helped about 40 customers open offshore companies in the Seychelles with the help of Panamanian law firm Mossack Fonseca.
The bank says “that it was legal to set up this type of companies doesn’t mean that it was correct for us to do it for these customers.”
The bank was reacting to a report in Norwegian newspaper Aftenposten showing it had helped customers set up shell companies in the Seychelles to avoid taxes. The report was based on a massive leak of documents linked to the Panamanian law firm.
DNB said its subsidiary in Luxembourg helped set up the companies between 2006 and 2010. About 30 of them were owned by Norwegians. DNB said it has since amended its rules.
It says “this is a closed chapter for our operations in Luxembourg.”
The Norwegian Tax Administration said it is trying to gain access to the leaked documents.
French Finance Minister Michel Sapin says his country will investigate the Panama Papers documents in order to recover money from those who might have committed tax evasion. Several hundred French citizens reportedly feature among the individuals mentioned.
Sapin says Monday that France will ask countries which had access to the documents for more information. Interior Minister Bernard Cazeneuve told Le Monde newspaper that France wants assistance from Australia, Britain and the United States.
Sapin says France has the legal tools to recover unpaid taxes “and to apply penalties” on those who hold unregistered bank accounts or shell companies abroad. He says Panama has been under the surveillance of French authorities for several years.
France says it recovered 2.65 billion euros ($3 billion) of unpaid taxes in 2015. On the 7,800 cases that year, 515 were connected to a shell company in Panama.
Italian weekly L’Espresso says about 1,000 Italian clients turned up in a database of offshore accounts cited in a media investigation, including Alitalia chairman Luca Cordero di Montezemolo.
L’Espresso said documents showed a series of contracts set up in 2007 indicated Montezemolo as the head of a Panama-based company named Lenville. It said Montezemolo, who was Fiat chairman and Ferrari CEO at the time, declined comment when contacted.
The weekly said the names of UniCredit and Ubi Banca also appeared. Espresso said that UniCredit used Panama-based firm Mossack Fonseca to manage 80 offshore companies, but said that the bank distanced itself in 2010. UniCredit said in a statement that Mossack Fonseca “did not appear as a financial consultant of the group.”
L’Espresso said Ubi Banca appeared to be linked to some 40 offshore companies registered in Panama and the Seychelles. The bank responded that it has no subsidiaries or affiliates in either of those countries, adding “the group has always supported its clients in compliance with regulations currently in force.”
The German government says it hopes for further pressure on offshore tax havens to improve transparency following the release of leaked documents from a Panamanian law firm.
Finance Ministry spokesman Martin Jaeger said Monday Berlin hopes that “the current debate” will contribute to increasing the pressure. He said that more has been achieved over the past three years than in the previous 30 but “what we are lacking … is transparency. We must bring light into the darkness, we must illuminate this undergrowth.”
Chancellor Angela Merkel’s spokesman, Steffen Seibert, said: “For us it is clear that the international community’s pressure on such countries as, possibly, Panama must remain high so that they take further steps in the area of creating transparency.”
Slovenia’s Delo newspaper says that according to documents it analyzed so far, at least 78 Slovenian companies and 74 Slovenian individuals are reportedly associated with companies set up through Mossack Fonseca.
It said Monday Slovenian UPC Consulting Group is one of the key Slovenian clients of the Panama-based consulting firm for registration of companies in tax havens. UPC has helped Slovenians and some other nationals register at least 17 companies, Delo writes.
Delo says that according to the documents, among the companies UPC helped register, all but one were set up in Anguilla, a British overseas territory in the Caribbean, where there are virtually no taxes. Delo did not give names of the companies nor the individuals.
UPC denied that that tax laws were violated in either Slovenia or elsewhere.
A Ukrainian lawmaker has called for impeachment proceedings against President Petro Poroshenko over the leaked documents from a Panamanian firm.
Oleh Lyashko, the leader of the Radical Party, said Monday the trove of data on offshore financial dealings revealed by an international media consortium has implicated Poroshenko in alleged abuse of office and tax evasion.
Lyashko urged lawmakers to initiate impeachment proceedings against the president. Poroshenko, whose faction has 136 seats in the 450-seat parliament, appears well protected from the motion, which requires a three-quarter majority to pass.
Poroshenko promised voters that he would sell his candy business when he was elected in 2014. But documents of the Panamanian firm indicated that he set up an offshore holding company and may have saved millions of dollars in Ukrainian taxes.
India’s Finance Minister Arun Jaitley says that those who did not take advantage of a government compliance window last year to declare their illegal assets stashed abroad would find “such adventurism extremely costly.”
He says that a recent media investigation, which details wide-spread use of offshore accounts by world leaders, executives and others, were “a stern reminder to all of us.” Jaitley’s comments were reported by the Press Trust of India news agency.
According to the new reports, the names of Indian superstars Aishwarya Rai Bachchan and Amitabh Bachchan feature among the more than 500 Indian with connections to offshore financial firms in Panama.
India’s Prime Minister Narendra Modi has promised to prosecute those who evade taxes and to bring back money parked in tax havens but his government has made little progress on that front.
Having an offshore account or company is not necessarily illegal, but can be used to avoid or evade taxes.
The spokesman of Russian President Vladimir Putin says he is the “main target” of the media investigation into offshore accounts, but that he was not implicated in any wrongdoing.
The documents published by more than 100 media outlets alleged that Putin’s friends, including a leading cellist, were engaged in an offshore scheme.
Putin’s spokesman Dmitry Peskov says “it’s obvious that the main target of such attacks is our president,” and claimed that the publication was aimed at influencing Russia’s stability and parliamentary elections scheduled for September.
Peskov said international media had wrongly focused on Putin instead of other world politicians, even though he was not implicated in any wrongdoing, and suggested the Washington-based International Consortium of Investigative Journalists, a key player in the publication, had ties to the U.S. government.
The French president says the leaked documents from a Panamanian law firm are “good news” because it will help the state to recover money from people who have committed tax evasion.
Francois Hollande, speaking to reporters during the visit of a tech company in the Paris suburb of Boulogne-Billancourt, says “the whistleblowers do a useful work for the international community; they’re taking risks, so they must be protected.”
Last year, the French tax administration recovered 12 billion euros ($ 13.6 billion) from people who had committed tax evasion or tax avoidance, according to the French president.
Regarding the French clients of the Panamanian firm Mossack Fonseca, “all the investigations will be made” and potential trials “will be held”, Hollande says.
Nordea, the Nordic region’s biggest bank, says it doesn’t help wealthy customers evade taxes in response to reports linking it to the Panamanian law firm at the center of a media investigation into offshore accounts.
Swedish public broadcaster SVT, one of the hundreds of media with access to leaked documents detailing offshore accounts, says Nordea’s private banking unit in Luxembourg worked with Panamanian firm Mossack Fonseca to help wealthy customers set up shell companies.
Nordea said Monday it follows and “all rules and regulations” and doesn’t tolerate being used to evade taxes. It said its Luxembourg unit in 2009 started taking measures “in addition to those prescribed in laws and regulations or industry practices.” Since then the number of customers “with these structures” has decreased, Nordea said.
A group representing current and former lawmakers from Southeast Asian countries says the trove of leaked documents shows how the wealthy and politically powerful have abused rules governing offshore tax havens, often to the detriment of their own communities.
The group, ASEAN Parliamentarians for Human Rights, is calling for governments in the region to crack down on large scale corporate tax evasion and pursue more equitable tax regimes.
Malaysian lawmaker Charles Santiago, who chairs the group, says multinational corporations and individuals evading tax should be hauled up in their respective countries.
He says, “Intermediaries, especially financial institutions, must be investigated and charged as well.”
Russian media are keeping mum about the $2 billion found in offshore accounts linked to close friends of President Vladimir Putin.
An investigation published by an international coalition of more than 100 media outlets on Sunday details how politicians use banks, law firms and offshore shell companies to hide their assets. Putin’s close friends including a cellist from St. Petersburg were shown to be engaged in a complex offshore scheme.
Following a leak from a Panamanian law firm, authorities in other countries said they would investigate the individuals mentioned for possible tax evasion.
In Russia, where the investigation was published by independent Novaya Gazeta, the so-called Panama Papers scandal faced an effective coverage ban. Russian television on Monday morning made no mention of the Panama scandal.
Japan’s biggest security company, Secom Co., said Monday that it had disclosed to tax authorities all necessary information about the management of assets of its founders by a Panamanian law firm, Mossack Fonseca, at the center of an investigative report on offshore financial dealings.
Secom Co. said in a statement that it understood all services provided by Mossack Fonseca to Secom and to its director Makoto Iida and its late former director Juichi Toda were legal.
The Kyodo News Service is part of a media consortium that has published details of an investigation into offshore financial dealings by the rich and famous. It reported that Iida and Toda, who died in 2014, used offshore companies to manage their assets.
Separately, the National Tax Agency said it does not comment on individual cases.
The Australian Taxation Office says it is investigating more than 800 wealthy Australians for possible tax evasion linked to their dealings with a Panamanian law firm, Mossack Fonseca, which is one of the world’s biggest creators of shell companies.
The investigation comes a day after the release by the Washington-based International Consortium of Investigative Journalism of details of a cache of 11.5 million records detailing offshore holdings of a dozen current and former world leaders, as well as businessmen, criminals, celebrities and sports stars.
Ramon Fonseca, a co-founder of Mossack Fonseca, confirmed to Panama’s Channel 2 television network that the papers were authentic and had been illegally obtained through hacking.
The Australian Tax Office said in a statement that it had linked 120 out of 800 individual Australian taxpayers it found in the data to an unnamed associate offshore services provider in Hong Kong.