Sat | Apr 4, 2020

Panama lawyers at centre of offshore scandal make odd couple

Published:Monday | April 4, 2016 | 2:22 PMAP

The Panamanian lawyers at the centre of a scandal on the financial dealings of the world's rich and famous are an odd pairing of a German-born immigrant and a prize-winning novelist whose books sometimes mirror the seedy world of politics he's come across in his work.

The Panama-based Mossack-Fonseca law firm was created from the merger in the 1980s of practices belonging to Jurgen Mossack and Ramon Fonseca.

In a nation that for decades has been tainted by allegations of money laundering on behalf of drug-traffickers and corrupt oligarchs, the polyglot lawyers established themselves as among the most-efficient or shadiest, depending on your perspective, of a plethora of firms in Panama dedicated to creating shell companies to stash wealth overseas.

Much of their work is now under scrutiny as a result of the leak of 11.5 million records, now referred to as the ‘Panama Papers’, being pored over by an international coalition of more than 100 media outlets. The Associated Press has been unable to see the documents, but Fonseca in interviews with Panamanian news media acknowledged they were real. He said they were obtained through an illegal hack.

Fonseca, on Twitter, describes himself to his more than 19,000 followers as a "lawyer, writer and dreamer”. But the modest self-image contrasts with the oversized role he's played in Panamanian politics and business.

Until recently, he was president of the governing Panamenista party and served in Cabinet of President Juan Carlos Varela as a special adviser. He was forced to resign in February after the offices of the firm's affiliate in Brazil were raided, and several managers arrested, as part of a probe into massive bribes paid to politicians by companies doing business with state-run oil giant Petrobras.

"In Panama they're seen as too big to fail," said Miguel Antonio Bernal, a law professor at the University of Panama.

Fonseca's fiction, for which he's won Panama's top literary prize, would seem to come straight from the shady dealings of politics. In 2012, he published "Mister Politicus”, a novel he say is partly based on his life experience and which he describes on his website as "detailing the convoluted scheming of unscrupulous officials to gain power, and from there, satisfy their detestable ambitions."

But Fonseca also some strong pro-democracy credentials in a country whose 1968-1989 military dictatorship spurred the growth of Panama's offshore banking industry. He played a critical role denouncing the 1993 disappearance and murder of a Roman Catholic priest, a move that led to the creation of truth commission to investigate the dictatorship's crimes.

Far less is known about his partner, who has so far not spoken up and tends to shy away from the cameras.

Mossack's father was a member of the armed wing of the Nazi party, according to US Army intelligence files gathered by the International Consortium of Investigative Journalists, which has been coordinating investigation into the law firm. He came to Panama in the early 1960s with his family. The Associated Press has been unable to verify the reports.

Fonseca, for his part, said Mossack's father worked as an executive at Lufthansa airlines and described his partner as honourable but distant.

"I admire him but he's a reserved man, he's a German," Fonseca said in an interview Monday with local network Telemetro.

In other developments:

_ The US 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.

_ 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.

_ 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 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 centre says the most favourite 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.

_ 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.
_ Russian media are keeping mum about the US$2 billion found in offshore accounts linked to close friends of President Vladimir Putin.

_ The spokesman of the Russian President says Putin 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.

_ 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 whistle-blowers do a useful work for the international community; they're taking risks, so they must be protected."

_ 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.