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'Panama Papers' Leak
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Iceland's government turns deaf ear to calls to quit
AFP on April 7, 2016, 6:16 am
Iceland s Pirate Party gets wind in its sails from Panama Papers
Reykjavik (AFP) - Iceland's coalition government turned a deaf ear Wednesday to angry protesters calling for its resignation, a day after the prime minister stepped down over the Panama Papers scandal.
Hundreds of demonstrators massed on the square outside parliament in Reykjavik, urging the entire centre-right government to quit.
Inside, the two coalition partners met behind closed doors to discuss their path forward.
The coalition parties "have lost all their legitimacy, but I am sceptical they will leave of their own initiative. Time is on their side and it's crucial for them to stay in power," lamented Gyda Margret Petursdottir, a 42-year-old teacher who came out to protest despite rainy weather.
Valthor Asgrimsson, 36, agreed.
"We need a fresh start for Iceland. Preferably with an election."
But as they spoke, Agriculture Minister Sigurdur Ingi Johannsson, the deputy head of the centre-right Progressive Party led by outgoing Prime Minister Sigmundur David Gunnlaugsson, announced that his party and the right-wing Independence Party had agreed to stay on running the country's affairs.
"We have reached a conclusion" to maintain the coalition in power since 2013, he told reporters after a meeting with Gunnlaugsson.
The name of the new prime minister was to be announced later Wednesday, as well as the makeup of the reshuffled cabinet.
Two other cabinet ministers named in the Panama Papers, Finance Minister Bjarni Benediktsson and Interior Minister Olof Nordal, could be replaced.
The prime minister, who did not appear in public on Wednesday, stepped down from his post on Tuesday, becoming the first major political casualty to emerge from the massive leak of 11.5 million documents detailing hidden offshore accounts held by world leaders and celebrities.
The financial records, revealed by the International Consortium of Investigative Journalists (ICIJ), showed that Gunnlaugsson and his wife owned an offshore company in the British Virgin Islands and had placed millions of dollars of her inheritance there.
The prime minister sold his 50-percent share of the company to his wife for a symbolic sum of $1 at the end of 2009, but he had neglected to declare the stake as required when he was elected to parliament six months earlier.
Gunnlaugsson has said he regretted not having done so, but insisted he and his wife had followed Icelandic law and paid all their taxes in Iceland.
It has not been proven the couple stood to gain financially from the offshore holding, and the ICIJ noted only that Gunnlaugsson had "violated Iceland's ethics rules".
But the issue is particularly sensitive in Iceland, a country marked by the excesses of the 2000s when senior bankers used shell companies in tax havens to conceal their dealings in risky financial products and which ultimately led to the 2008 collapse of the nation's three main banks.
- 'They're the real pirates' -
The left-wing opposition, which presented a motion of no-confidence to parliament on Monday, wants early elections to be held ahead of the scheduled April 2017 vote.
The vote of no-confidence could be held on Thursday after a meeting of parties represented in parliament scheduled for 1030 GMT.
Riding high on Icelanders' anger over the affair, the nascent Pirate Party has seen its support soar in the wake of the scandal.
A libertarian movement founded in 2012 and campaigning for more transparency in politics, Internet freedoms and copyright reform, the Pirate Party garnered 43 percent of voter support in a Gallup poll conducted Monday and Tuesday and published by daily Frettabladid and Channel 2 television.
"We are the Pirate Party, but these people are the real pirates, taking it all for themselves and hiding it on exotic islands," Karl Hedinn, a 21-year-old member of the party's youth wing, told AFP.
In recent weeks, the party had been polling between 25 and 35 percent.
"I think they have good chances, especially now. And why not try something new? ... I wouldn't mind trying something new," said a graphic designer who gave her name only as Sindri.
The Gallup poll indicated the Independence Party would come in second place with 21.6 percent, and the opposition Left Green Movement in third with 11.2 percent.
Gunnlaugsson's Progressive Party garnered just 7.9 percent, behind the opposition Social Democrats' 10.2 percent.
Spanish king's aunt admits she had company in Panama
AFP on April 7, 2016, 4:43 am
Madrid (AFP) - An aunt of Spain's King Felipe VI on Wednesday acknowledged she headed an offshore company exposed in the so-called Panama Papers but stressed she has always complied with her country's tax laws.
Pilar de Borbon, the elder sister of former monarch King Juan Carlos, said in a statement sent to the Europa Press news agency that the company never had revenues "outside the control of tax authorities" and that it never failed to comply with "any obligation of Spanish tax law."
The relevation that she had an offshore company comes as King Felipe tries to clean up the monarchy's image since he took the throne in 2014 after his father abdicated, due in part to corruption scandals that hit the royals.
Princess Cristina, Felipe's sister, is currently on trial accused of being an accessory to tax evasion in a case linked to her husband's dealings when he ran a foundation.
The Panama Papers scandal erupted Sunday when media groups made public an investigation into a trove of 11.5 million documents leaked from Mossack Fonseca, a law firm, on offshore accounts held by prominent individuals.
While offshore holdings can be legal, they can also be used to hide wealth.
Among those involved are friends of Russian President Vladimir Putin, the brother-in-law of Chinese leader Xi Jinping, Argentine football star Lionel Messi and Iceland's Prime Minister Sigmundur David Gunnlaugsson who has since resigned.
According to Spanish online daily El Confidencial, which had access to the leaked documents from Panama-based Mossack Fonseca, Pilar de Borbon "for years presided and headed a company based in Panama".
The 79-year-old became president of the firm, Delantera Financiera SA, in 1974, a year before her brother Juan Carlos acceded the throne, the newspaper said.
She left the presidency of the firm in 1993 but remained linked to the company, which was dissolved on June 24, 2014, five days after her nephew Felipe was proclaimed king.
Pilar de Borbon said the fact that she was listed as the head of the company, along with her late husband and later one of her sons "reveals that there never existed a desire on our part to hide its existence or our participation in it".
She said her family gained control of the company in 1974 when her husband Luis Gomez-Acebo, a financial advisor, decided to expand his professional activities outside of Spain.
But after her husband developed cancer in 1984 the company did not develop any new projects, she added. Gomez-Acebo died in 1991.
Pilar de Borbon said the company was dissolved in June 2014 because it did not have enough resources to justify its upkeep.
El Salvador launches probe after 'Panama Papers' leak
AFP on April 7, 2016, 6:25 am
San Salvador (AFP) - State prosecutors in El Salvador said Wednesday they have launched a probe to see if Salvadorans identified in the Panama Papers leak broke any laws.
"The investigation has begun and we will take the necessary steps," the chief state prosecutor, Douglas Melendez, told a news conference.
"At least 33 Salvadoran clients" did business with the Panamanian law firm Mossack Fonseca -- the source of the leaked documents -- between 2000 and 2015, the online national newspaper El Faro reported on Sunday.
The offshore companies created for them guaranteed the anonymity of the owners -- until the leak, which resulted in 11.5 million Mossack Fonseca documents being handed over to investigative journalists worldwide a year ago.
Their reports, which began on the weekend, have caught the attention of tax and law enforcement officials in many countries.
The law firm says it has been the victim of a hack.
According to El Faro, the offshore companies used by the Salvadoran clients were used for transactions of hundreds of thousands of dollars, including to buy property in El Salvador, "all under the radar of local authorities."
The people and companies involved, about which El Faro has promised to publish more information, "might have committed illicit activities," such as tax-dodging, money laundering or fraud, Melendez said.
The prosecutors said he was in contact with the country's financial regulatory chief and the finance ministry over the direction and scope of the investigation.
The head of the financial unit in the prosecutor's office, Jorge Cortez, said that a work plan had been established to make national and international inquiries, in contact with its counterpart in Panama.
RBC sets up team to scrutinize Panama data - CEO
Reuters on April 7, 2016, 2:58 am
By Matt Scuffham
MONTREAL (Reuters) - Royal Bank of Canada is reviewing its records after being named in leaked documents that appeared to show a Panamanian law firm's clients evaded taxes and laundered money, Chief Executive Officer Dave McKay said on Wednesday.
RBC, Canada's biggest bank, is one of several financial institutions named in data that emerged following an investigation by the International Consortium of Investigative Journalists. The bank and its subsidiaries were associated with 378 shell companies registered in the Mossack Fonseca law firm's data.
At the bank's annual meeting, McKay faced several questions from shareholders who were unhappy about the impact they felt the allegations had had on the bank's reputation. One investor described the effect as "catastrophic".
“I am equally unhappy RBC has been dragged into this," McKay told reporters after the meeting.
McKay said RBC had not been accused of any illegality or wrongdoing and reiterated that it had controls in place to prevent illegal activity. He also said the bank had so far not been able yet to verify the data, which goes back decades.
"We don't have access to this data, this data goes back 40 years, we don't have understanding of this information and we have teams now going through our businesses trying to determine where the relationships may exist," he told reporters.
In a separate matter, McKay confirmed RBC was not the unnamed Canadian bank fined C$1.1 million by the country's financial intelligence agency on Wednesday for failing to report a suspicious transaction.
McKay also said he expected oil price gains since the beginning of the year to hold, addressing concerns about the effects of a longtime slump on the bank.
RBC is one of Canada's biggest lenders to oil and gas companies and has a sizeable consumer loan book in the oil-producing province of Alberta, which has been hit by thousands of job losses.
However, McKay played down the bank's exposure.
"Oil and gas represents about 1.6 percent of our total loan book, and our provision for credit loss remains in line with historic norms," McKay said. "We also believe the significant gains that oil markets have made since January will hold, given that the U.S. economy continues to grow."
RBC said in February that impaired loans to companies in the oil and gas sector had almost doubled from the previous quarter.
That warning, along with increased provisions by other lenders, raised concerns that the impact on Canadian banks could worsen this year.
(Editing by Matthew Lewis and Lisa Von Ahn)
Panama Papers law firm blames foreign hackers for leak, says ‘that is the only crime that has been committed’
PUBLISHED : Wednesday, 06 April, 2016, 12:22pm
UPDATED : Wednesday, 06 April, 2016, 12:23pm
Agence France-Presse
One of the founders of the law firm at the centre of the explosive “Panama Papers” revelations about the secret assets of the rich and powerful said on Tuesday that the leaks came about because his company had been hacked from abroad.
Ramon Fonseca said the firm Mossack Fonseca had lodged a criminal complaint with Panamanian prosecutors on Monday over the breach.
He added that in all the reporting so far “nobody is talking of the hack, and that is the only crime that has been committed.”
In a telephone message responding to questions, Fonseca said: “We have lodged a complaint. We have a technical report that we were hacked by servers abroad.”
He did not specify from which country the hack was carried out.
Fonseca also rued the fact that reporting on the 11.5 million documents taken from Mossack Fonseca’s computer system focused on the high-profile clients who had used the law firm to set up offshore companies to hold their wealth.
“We don’t understand. The world is already accepting that privacy is not a human right,” he said.
The hack has badly shaken Panama’s financial services sector, which relied on discretion to do its business.
With high-profile politicians, sports stars, celebrities and a few criminals revealed to have used Mossack Fonseca to set up offshore entities, scrutiny on the small Central American nation has suddenly ramped up.
But the law firm and the government have stressed that offshore companies are not, in themselves, illegal, and that Mossack Fonseca was not responsible for what its clients used them for.
The government, which has recently seen through reforms to get the country taken off an international list of states seen as money-laundering hubs, is mounting a fierce defence of the financial sector, which contributes seven per cent of gross domestic product.
Cameron won't benefit from offshore funds
AAP on April 6, 2016, 9:26 pm
Prime Minister David Cameron, his wife and their children do not stand to benefit in future from any offshore funds or trusts, Cameron's spokesman says as the British leader continued to face questions over family tax affairs.
Cameron's late father, Ian, was among the tens of thousands of people named in leaked documents from Panama-based law firm Mossack Fonseca which showed how the world's rich and powerful are able to stash their wealth and avoid taxes.
After having initially described it as a private matter, Cameron's office issued a statement on Tuesday saying that he and his family did not benefit from any such funds at present.
During a business visit in central England, Cameron also said he did not own any shares or have any offshore funds.
But his failure to say whether he or his family would benefit in future only intensified media speculation, with the story splashed across many newspaper front pages on Wednesday.
"There are no offshore funds or trusts which the prime minister, Mrs Cameron or their children will benefit from in future," a spokesman for the British leader said on Wednesday.
Cameron has cast himself as a champion in the fight against tax evasion in British-linked territories such as the British Virgin Islands and Cayman Islands, but the opposition Labour Party have said the "Panama Papers" show the government has failed to tackle the issue.
Labour MP Wes Streeting, a member of parliament's treasury select committee, said the latest statement from Cameron's office was welcome but there were still questions about whether he benefited from offshore funds in the past.
"From a public point of view, the question will be when our prime minister says he is serious about tackling it (tax evasion) ... are we absolutely certain he doesn't have a vested interest? And if he does have a vested interest, will he be up-front with us about it?" he told the BBC.
The Telegraph reported on Wednesday that Ian Cameron's fund, Blairmore Holdings, moved its operations to Ireland in 2010, the year Cameron became prime minister. It quoted a source close to the fund saying it had been moved because its directors believed it was about to "come under more scrutiny".
Meet the poetry-writing ‘Pirate’ who might become the next prime minister of Iceland
PUBLISHED : Thursday, 07 April, 2016, 10:15am
UPDATED : Thursday, 07 April, 2016, 10:15am
Reuters
A poet and former WikiLeaks supporter who says revolution is her favourite word, Birgitta Jonsdottir would probably become Iceland’s next prime minister if elections were held tomorrow.
She leads the Pirate Party, set up by a group of outsiders and activists in 2012 with the same name as protest parties in other countries, and it would get a record 43 per cent of the vote, according to an opinion poll released on Wednesday.
Consistently topping surveys in the past year, the Pirates’ popularity surged after the release this week of the Panama Papers forced Prime Minister Sigmundur David Gunnlaugsson to quit over the disclosure his wife owned an offshore company with claims on Icelandic banks.
This infuriated many Icelanders who said it was an undeclared conflict of interest. When he stepped aside on Tuesday, it provided another boost for the anti-establishment Pirate Party which campaigns for transparency.
Jonsdottir aims to turn those poll numbers into votes after the embattled government named Fisheries Minister Sigurdur Ingi Johannsson as new prime minister on Wednesday and announced it would call early elections for the autumn.
“The nation has decided that enough is enough. They have shown in great number they want something different. For some reason, that different thing seems to be my political party,” Jonsdottir, 48, said in a phone interview from Reykjavik hours before the government announcement.
It is a stunning rise for the Pirates who won 5.1 per cent of votes in the 2013 election giving them three seats in parliament including one for Jonsdottir. Its policies include granting citizenship to former US spy agency contractor Edward Snowden and looser copyright enforcement rules.
She said her party belonged to the same global movement for change that includes US Democratic presidential candidate Bernie Sanders, Greek Prime Minister Alexis Tsipras and his leftwing Syriza party, and others in Europe where mainstream political parties are fending off populists.
“We are living in a time where we are seeing real big transformative forces, where the general public are expressing in a very affirmative way that they want a different type of governance: they want more engagement,” she said.
“In particular, I have seen it very clearly with Podemos in Spain and the Five-Star Movement in Italy.”
The Pirate Party had been pushing for a vote of confidence in the government and a snap election. It was unclear if the autumn election would make them call off the confidence vote.
For voters, the Pirates’ appeal is as an alternative to the coalition which came to power in 2013. Fed up with the financial and political elite after a 2008 banking crisis wrecked the economy, thousands of protesters pelted parliament with yoghurt and eggs at protests this week.
“They [the Pirate Party] practise another kind of politics so I am quite keen on that,” said Oskar Arni Oskarsson, a 64-year-old librarian in Reykjavik, who said the latest events were “totally absurd”.
“I want the government to resign and that there will be [early] elections.”
However, now that there is a chance of the Pirates being in power, their perceived lack of political experience is facing scrutiny.
“People are saying now that they don’t have enough experience and can’t be trusted,” said Eva Heida Onnudottir, a political scientist at the University of Iceland.
Jonsdottir, who published her first book of poetry when she was 22, became a grassroots campaigner after Iceland’s financial collapse. She soon became involved with WikiLeaks and helped get a classified US military video showing a 2007 attack by Apache helicopters that killed a dozen people in Baghdad, including two Reuters news staff, released on the WikiLeaks site.
Jonsdottir, who has had rough patches in her life with both her husband and father committing suicide, sees herself as a lawmaker who puts pressure on the politicians who are doing “unacceptable things”.
Although she is the party’s longest-serving lawmaker, others may also be candidate for the top job. Helgi Hrafn Gunnarsson, another of the three Pirate Party members of parliament, is also a possibility, and the Pirate Party rotates its leadership.
Jonsdottir says she is not angling for the top job. “That is not something I fantasise. Actually I had a nightmare about that a long time ago that I wrote down into a poem,” she said.
Why shady people seek tax shelters in sunny places
‘Panama Papers’ data dump reveals never-ending demand for tax avoidance and financial secrecy
PUBLISHED : Thursday, 07 April, 2016, 9:19am
UPDATED : Thursday, 07 April, 2016, 9:19am
Peter Guy
“Don’t ask me questions so I don’t have to tell any lies,” says the client.
“We just dig the hole. We have no idea who puts which body in it,” replies the adviser.
So begins an introductory meeting in the business of illegitimately hiding assets in offshore tax havens.
However, taxes are really only paid by poor people. It took an army of journalists and media outlets to figure that out and generate enough collective outrage to highlight one of finance’s oldest vocations.
Setting up an offshore corporation and bank account is not illegal and does not necessarily suggest someone is committing a crime. However, legal firms like Mossack Fonseca can be hired to help individuals and corporations hide money from governments that might otherwise possess a right to claim taxes on it.
Dubbed the “Panama Papers”, the massive leak consisted of 2.6 terabytes of information contained in 11.5 million documents. The hacker exposed 38 years of banking files to a German newspaper and the International Consortium of Investigative Journalists. About 12 current or former heads of state and 26 Forbes-listed billionaires appear on the list.
Database hacks and giant online dumps are a hazard of the internet’s evolution. The ability to publicly transmit, parse and disseminate vast sums of data from the internet cloud has created a wild west frontier of information where guilt is indiscriminately implied or established through raw data. “Outing” a database is the modern-day equivalent of the medieval practice of humiliating people by putting them in the town square in stocks.
Nevertheless, tax evasion is usually a predicate offence for other illegal activities. Most people evading taxes are trying to hide their source of income or assets, especially if it is illicit or criminal. Today, there is a clear difference between tax planning and tax evasion.
What the data dump revealed is the never-ending demand for tax avoidance and financial secrecy. Panama is especially attractive. It is one of the few jurisdictions offering bearer share certificates. These documents represent the ultimate in secrecy as no shareholder name is registered. They’re great for hiding the ownership of a company and its assets. They’re bad if your ex-wife or ex-mistress gets their hands on them.
In the history of the wealth of nations, prosperous and powerful countries and their elite business classes have always tolerated and demanded the existence of offshore shelters. Just think of where all the money from the British Empire, slavery, colonialism and the 19th century industrial revolution fled to when Britain was the workshop of the world and the majority of British citizens lived in poverty. Britain’s far flung fortunes spawned financial centres in the British Virgin Islands, Cayman Islands, Jersey, Guernsey and the Isle of Man.
So as China ascends and achieves that same kind of status, it is only natural that Macau and Hong Kong play similar roles. It is an inevitable part of national wealth-creation process. The rich and powerful will always require offshore tax havens because they can’t hide their cash or gold under mattresses. And governments will allow some of them to continue operating as a way to watch the flow of money from the rich and powerful. The lucre simply must disappear to foreign shores.
Banks in Cyprus were once a favourite place for Russians who needed a nearby and well-regulated euro zone member to hide deposits. However, the 2012-2013 Cypriot financial crisis resulted in failed banks and a punishing deposit levy, effectively ending the country’s role as a reliable haven.
The demise of Switzerland as an offshore money laundering and tax evasion enabler – especially for Americans – coincided with its decline as a financial centre despite its perceived political neutrality. The shift of financial power after London’s “Big Bang” in 1986 signalled the end of Zurich’s market importance. Then, the investigation of UBS in 2008 marked the end of vaunted Swiss secrecy as US authorities uncovered massive tax evasion in thousands of American accounts.
Rogues or leaders of rogue nations need offshore financial services in legitimate domiciles even if they are barely stable. Over the past 30 years, Panama’s financial centre has featured players like Manuel Noriega and Pablo Escobar. But no matter. The spotlight on Panama only sends the clients scurrying for temporary shelter in another sunny place for shady people.
Peter Guy is a financial writer and former international banker
‘Interested in data?’ The quiet tip that unleashed the Panama Papers - and spilled 40 years of secrets
PUBLISHED : Thursday, 07 April, 2016, 2:10pm
UPDATED : Thursday, 07 April, 2016, 2:10pm
Washington Post
It began with a message - anonymous, of course: “Hello. This is John Doe. Interested in data?”
The recipient, German reporter Bastian Obermayer at the Suddeutsche Zeitung newspaper, promptly responded that he was. What followed was almost unimaginable: “Doe” began forwarding files that ultimately contained 11.5 million documents, four decades’ worth of digitised records from a Panamanian law firm that specialises in setting up offshore companies for wealthy clients.
The Doe data dump to Obermayer and his colleague Frederik Obermaier in 2014 eventually triggered a unique co-operative project among journalists around the world. The effort culminated on Sunday when, in a co-ordinated release, dozens of news organisations began publishing stories about the Panama Papers. The vast cache outlines how world leaders, celebrities and individuals have used offshore companies to shield their wealth from public disclosure, and in some cases possibly to avoid taxes or mask illegal activity.
The first wave of stories - the disclosures could go on for years - has already led Iceland’s prime minister to tender his resignation over revelations of his offshore holdings. Among the thousands of people named in the documents are Ukrainian President Petro Poroshenko, King Salman of Saudi Arabia, Chinese President Xi Jinping’s family members, close associates of Russian President Vladimir Putin, British Prime Minister David Cameron’s late father, Ian, and soccer superstar Lionel Messi. The news reports prompted US President Barack Obama, among others, to call for international tax reform.
More than a year after Doe first contacted them at their Munich-based newspaper, Obermayer, 38, and Obermaier, 32, still have no idea who their source is or why he or she (or possibly they) came to them.
To protect Doe’s identity and safety, however, they remain purposely guarded about what they do know. “We can’t disclose any numbers or times [of contact], of course, or if we are still in contact,” Obermayer said in an exchange of emails Wednesday. “But we have communicated a lot, through different ways, all encrypted. On some days, I chatted more with the source than with my wife. We had a lot to talk about.”
The little background they gleaned involves the source’s motivation, which Obermayer quotes this way: “I want you to report on the material and to make these crimes public.” The source never asked for financial compensation, they said.
The extent of the material from the law firm, Mossack Fonseca & Co, proved so daunting - it would take more than 38,000 average-sized books to contain 11.5 million pages - that the German reporters turned to the Washington-based International Consortium of Investigative Journalists (ICIJ) for help.
ICIJ, an 11-person unit of the nonprofit Centre for Public Integrity, had worked with the German newspaper and other news organisations on cross-border investigations before. The organisation co-ordinated reporters in 45 countries last year to investigate leaked files from a Swiss private-banking firm that hid hundreds of millions of dollars from tax authorities. The “Swiss Leaks” project followed one a few months earlier involving the revelation of secret tax deals between hundreds of global companies and officials in Luxembourg.
But the sheer sprawl of the Panama Papers, covering thousands of names and entities around the world, presented a much larger challenge.
Working gradually, region by region, ICIJ assembled a team of 370 journalists from about 100 media organisations spread over 70 countries, according to Michael Hudson and Marina Walker, the ICIJ’s senior editor and project manager, respectively.
The goal was to find local journalists who knew the territory. “Instead of us parachuting in to do reporting, we let the folks on ground do it,” Hudson said. “So many of the most important stories today are so complex and so global that the old-style lone-wolf reporter or Woodward and Bernstein just can’t do it.”
The effort, known internally as Project Prometheus, required an unusual degree of co-operation among typically competitive news organisations. The “partners” had to agree to share newsworthy nuggets with the entire group, and not to publish anything ahead of the mass release on Sunday.
All of the particulars were spelled out in a series of meetings held in Washington, Munich and Johannesburg last year.
The potential for security breaches also required the journalists to remain tight-lipped about the project for months on end. Digital protections are one thing, but “sometimes the weakest link is the human link,” Walker said. “We told people, ‘Don’t leave your computer open. Don’t open (WiFi) in a cafeteria. And if you ever lose your phone, tell us.”
The precautions seemed to have worked; the first public inklings of the project came only last week when Russian officials, contacted by reporters for comment, denounced the questions and falsely accused ICIJ of being an arm of the US government.
The upshot may be that there is strength in numbers. Said Obermaier: “We are always better in a huge group of journalists than doing it alone.”
Canada’s RBC will set up team to scour bank records for links to Panama Papers law firm
PUBLISHED : Thursday, 07 April, 2016, 2:33pm
UPDATED : Thursday, 07 April, 2016, 2:33pm
Bloomberg
Royal Bank of Canada set up a team to scour four decades of internal records to see what ties the lender has to the Panamanian law firm at the centre of a leak of millions of documents about offshore accounts, Chief Executive Officer David McKay said.
The weekend leak of 11.5 million records from Panama law firm Mossack Fonseca suggested politicians and business leaders channeled billions through offshore accounts using some of the world’s biggest banks. Royal Bank is one of several lenders named in the documents, along with HSBC Holdings Plc and UBS Group AG.
“I’m going to have to go through a very methodical, time-consuming effort to search through 40 years of files to try to find our own connection to that, and we’re on it right now,” McKay, 52, told reporters after facing several questions from shareholders on the topic during the bank’s annual meeting Wednesday in Montreal.
Investors pressed McKay about the involvement of Canada’s largest lender by assets on the leak and its role in setting up offshore accounts and shell companies in tax havens. McKay reiterated that the bank abides by the laws and regulations in every country, and that Royal Bank hasn’t been accused of doing anything illegal.
“There is no allegation of any wrongdoing, we just happen to have a couple of hundred files going back 40 years that are attached to this legal firm, that’s all that’s been reported, with our brand everywhere,” McKay told reporters, adding that he doesn’t know what the documents say since he hasn’t seen them. “I’m equally concerned our name has been dragged into this with no allegations whatsoever of any wrongdoing.“
“We have to go back to our own documents, our own files back to 1977, if they exist,“ McKay said. “And try to determine if there’s a connection to that specific legal firm.”
Rich and powerful caught up in the ‘Panama Papers’ scandal must explain themselves
There are valid reasons for having offshore accounts, but transparency is needed on where the money came from
PUBLISHED : Friday, 08 April, 2016, 1:08am
UPDATED : Friday, 08 April, 2016, 1:08am
SCMP Editorial
Tax havens, money laundering, corruption – these are the words that come to mind at the mention of the “Panama Papers”, the 11.5 million encrypted documents anonymously spirited from the world’s fourth-largest offshore law firm that a global network of journalists has been sifting through for the past year in a quest to unravel secret money trails. The names of the rich and powerful have predictably come up, representing fields from business to sport to entertainment. Dozens of countries are involved, the scope and scale being breathtaking. But most astounding of all is that so many politicians and world leaders or their family members have found a need to hide their wealth from public scrutiny.
At least 143 members of the political class have so far been revealed, among them 12 national leaders. One, Icelandic Prime Minister Sigmundur David Gunnlaugsson, was a quick casualty, resigning amid claims he had failed to properly declare his assets. Investigations have been ordered or are under way into a number of the more than 14,000 individuals and 214,000 offshore entities associated with the Panama-based firm Mossack Fonseca. Being named does not equate to wrongdoing, though; there is nothing illegal about setting up companies, shell or otherwise, in places of low taxation. Offshore accounts can be used to manage inheritance and estate funds, avoid currency restrictions and keep finances out of the hands of corrupt officials and criminals. But they are perhaps better known for their role in money laundering, corruption and other proceeds of crime; intricate webs of companies and accounts are ideal for salting away illegally gotten gains and keeping them from prying eyes. Insight has been given into global financial flows that will also be useful for officials trying to close gaps to fight tax cheats.
Recent years of economic downturn and hardship have brought a perception that offshore accounts are chiefly the domain of wealthy companies and individuals eager to avoid paying tax. For the same politicians who have been calling for fiscal belt-tightening to then be listed in the leaked documents is for ordinary, tax-paying citizens, shocking. But questions have also been raised about how those who serve the public have amassed so much wealth. It is why the Kremlin has so harshly rejected suggestions that Russian President Vladimir Putin is linked to secret accounts, China has clamped down on Weibo postings and politicians in Britain, Germany, Malaysia, Pakistan and Ukraine, among others, have rushed to explain themselves. Those that cannot deserve to face outrage, inquiries and penalties.
Cameron held stake in father's offshore trust
Reuters on April 8, 2016, 5:33 am
(Reuters) - British Prime Minister David Cameron acknowledged on Thursday he once had a stake in his late father's offshore trust, in an interview with ITV News.
Cameron said he had owned shares in the Panamanian trust, Blairmore, but had sold them in 2010, before becoming prime minister.
"We owned 5,000 units in Blairmore Investment Trust, which we sold in January 2010. That was worth something like £30,000", he told the television channel.
"I paid income tax on the dividends. There was a profit on it but it was less than the capital gains tax allowance so I didn't pay capital gains tax," he added.
Cameron's late father, Ian, was among tens of thousands of people named in leaked documents from Panama law firm Mossack Fonseca which showed how the world's rich and powerful are able to conceal wealth and avoid taxes..
In a statement on Tuesday, a spokesman for Cameron told Reuters that the prime minister, his wife and their children did not benefit from any offshore funds at present.
On Wednesday a spokesman for Cameron said: "There are no offshore funds or trusts which the prime minister, Mrs Cameron or their children will benefit from in future."
(Reporting by Vishal Sridhar in Bengaluru and James William in London; Editing by Jonathan Oatis and Andrew Roche)
Argentina president faces Panama Papers probe
AFP on April 8, 2016, 4:04 am
Putin denies Panama Papers claims of corruption in inner circle
Panama City (AFP) - Argentine President Mauricio Macri became the latest world leader caught in the storm of the so-called Panama Papers Thursday as prosecutors opened an investigation into his offshore financial dealings.
Macri, the leading symbol of a budding right-wing resurgence in Latin America, joins Russian President Vladimir Putin and China's Xi Jinping in the tempest unleashed by the leak of millions of offshore financial documents from Panamanian law firm Mossack Fonseca.
But unlike Putin and Xi, who are only connected to the revelations via their inner circles, Macri is listed on the board of directors of two offshore firms -- one registered in the Bahamas and the other in Panama.
Argentine federal prosecutor Federico Delgado said he had asked a judge to request information from the national tax authority and anti-corruption office to determine whether Macri "omitted, with malicious intent, to complete his sworn declaration" of assets, a requirement for Argentine public officials.
Macri did not list either company in his financial declarations when he became Buenos Aires mayor in 2007 or president last December.
The conservative leader, who vowed to fight corruption during his presidential campaign, denies wrongdoing and says the firms were legitimate operations set up by his father, a wealthy business magnate.
Putin for his part ridiculed the international media probe behind the revelations, deriding it as US-orchestrated and boasting that a year-long investigation had failed to find any mention of his name.
"They combed through these offshore accounts. Your humble servant is not there. What is there to talk about?" Putin said, referring to himself, at a televised forum held in Saint Petersburg.
He denied any "element of corruption" and warmly defended his friend, cellist Sergei Roldugin, whom the International Consortium of Investigative Journalists (ICIJ) found had "secretly shuffled as much as $2 billion through banks and shadow companies."
The ICIJ coordinated the investigation with more than 100 media groups around the world after the 11.5 million documents were obtained from an anonymous source by German daily Sueddeutsche Zeitung.
Putin lambasted the probe as a Washington conspiracy, pointing to a Twitter post by whistleblowing group WikiLeaks that said "US govt funded #PanamaPapers attack story on Putin via USAID."
- 'Dismayed' -
The leaks have put a host of world leaders, celebrities and sports stars in the hot seat and left Panama fighting to salvage its reputation.
Already, they have toppled Iceland's prime minister and led to a Swiss police raid on the headquarters of European football body UEFA.
Panamanian President Juan Carlos Varela fended off accusations that his country has allowed the rich and powerful to hide their funds from international tax authorities and the law, vowing to "confront whoever comes to put down Panama's image."
He called on the Organisation for Economic Cooperation and Development (OECD) to "return to the table for dialogue," after the group sharply criticized lawlessness in the Panamanian finance sector, which accounts for seven percent of the Central American country's economy.
There was no immediate reaction to Varela's comment from the Paris-based, 34-nation OECD, which helps to coordinate the global fight against tax evasion.
The Panama Papers put the embattled world of football back in the spotlight, too.
On Wednesday, Swiss police searched UEFA's Geneva offices as part of a probe into a Champions League television rights deal signed by Gianni Infantino before he became the president of world football's governing body.
The Panama Papers purportedly showed that Infantino had signed TV rights contracts for Champions League tournaments in 2006 and 2007 with a company headed by two defendants later caught up in a corruption scandal.
Infantino, who was UEFA's legal director at the time he did the deals with Argentinian TV rights specialists Hugo and Mariano Jinkis, told AFP he was "dismayed" by the claims and denied any wrongdoing.
- Banks suffer -
The Panama Papers, which come from around 214,000 offshore entities and cover almost 40 years, claimed another scalp Wednesday when Uruguayan Juan Pedro Damiani resigned as a FIFA ethics judge after he was also named in the leaks.
FIFA, which is already reeling from a vast corruption scandal, thanked Damiani for stepping aside and "standing watch for the protection of FIFA and its ethics committee," in a letter signed by his former boss, Hans-Joachim Eckert, and seen by AFP.
In Iceland, former agriculture minister Sigurdur Ingi Johannsson was sworn in as premier after his predecessor, Sigmundur David Gunnlaugsson, was forced out over allegations he hid millions of dollars of investments in the country's banks.
Though not illegal in themselves, offshore financial transactions may be used to hide assets from tax authorities, launder the proceeds of criminal activities or conceal misappropriated or politically inconvenient wealth.
Investigators around the world, including in Australia, the Netherlands, El Salvador and Costa Rica, have all announced probes following the leak. A judicial source said Spain had opened a money-laundering probe into the law firm.
Many of the world's top banks have also been named in the leaks, including HSBC, UBS, Credit Suisse and Societe Generale, as creating thousands of offshore companies.
European banking shares took a pounding Thursday after British and French regulators ordered lenders to come clean on any links to the scandal.
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