Panama Papers stories ebb, but a tide’s coming in

PP Spain
A nation’s media running special series with banner headlines like this would generally be toxic to any political party. Spain’s Partido Popular will face a June 26 vote after recent elections produced a parliament too fragmented to form a coalition government. The Partido Popular — former Christian Democrats — had already been battered by scandals and a bad economy, which is why they were not re-elected as the ruling party in the last elections. But for lack of anyone mustering a majority to replace them they remained as a caretaker government. Appearing amidst that tenuous predicament, the Panama Papers leaks revealed that Industry Minister José Manuel Soria has a shell company set up by Mossack Fonseca. He denied any wrongdoing and refused to answer questions, including in the normal legislative question period. His party leader Mariano Rajoy backed him in this stand, arguing that ministers in a caretaker government don’t have to answer questions. That did not go over well with Spaniards and Soria had to resign. But if the revelations hurt the right-hand side of the old two-party paradigm, the naming of the wife of former Socialist prime minister Felipe González as a Mossack Fonseca client may have balanced the damage. Moreover, it’s the Spanish Socialist Workers Party (PSOE) that has been most intransigent in coalition talks, which is usually a recipe for defeat if back-to-back elections become necessary. And might the king have finessed the situation? The problem is, members of the royal family have also been named. Look for the next wave of document releases to further damage both the Populares and the Socialists, and maybe some of the smaller parties as well.

The Panama Papers: ebb tide, busy shredders and the next wave

by Eric Jackson

The International Consortium of Investigative Journnalists says that on the afternoon of May 9 our time it will release most of the information in the 11.5 million documents from the Mossack Fonseca law firm that were given to them about one year ago. The data will be available at this online address. Such personal data as residential addresses, telephone numbers, email addresses and photographs will be withheld, and it’s not entirely clear what sort of search feature will accompany the released documents. So far the documents have only been available to selected reporters from 107 mostly corporate mainstream media in 78 countries, but the release will put the data at the disposal of activists and the small alternative media, who are likely to search for and publish things according to different criteria. Look for another major wave of revelations in the middle of May.

The initial high tide of revelations destroyed several political careers and perhaps compromised others. Iceland’s prime minister was forced to resign. Spain’s industry minister and lesser officials in several countries were also among the early casualties. British Prime Minister David Cameron was caught in evasions about the nature of his inherited fortune. About a dozen other heads of state, most from repressive regimes, were either personally named or implicated by involvements of people close to them.

Not all of the spins applied by news media with access to the documents added up to convincing cases. If Vladimir Putin was the first big name highlighted, clear proof was not shown of the Russian strongman’s personal misconduct. US funding for the stories naming him made the still rather damning suggestions less sticky than they might have been. A clearly hypocritical Icelandic prime minister having been replaced but Iceland’s long-serving president is probably in less jeopardy from revelations that his wife’s parents once owned a shell company set up by Mossack Fonseca.

Then there is the document by which the Panamanian law firm alerted its Guayaquil office that in 2012 then attorney general José Ayú Prado had directed his anti-corruption prosecutors to investigate suspected embezzlement of public funds by Ecuador’s president, Rafael Correa. Had something damaging to Correa been found we surely would have heard about it. Might the fact that such an investigation was undertaken by a character beholden to the disreputable Martinelli administration explain at least in part why the United States is now harboring the fugitive Ricardo Martinelli?

In the former Soviet Union and what was its sphere of influence, opaque regimes, controlled media and jaded electorates are the norm so the leaders outed for their Mossack Fonseca ties apparently don’t outwardly appear to be much affected. The same applies in Saudi Arabia and most of the Arab world.

Authoritarian China, however, is going well out of its way to ban the story, which touches the families of a number of Politburo members. A Hong Kong editor lost his job for a story mentioning several local politicians with Mossack Fonseca dealings, and perhaps worse, such business leaders as Li Ka-shing, whose Hutchison Whampoa ports company runs the ports of Cristobal and Balboa here in Panama. The Chinese Internet is being carefully filtered to exclude any mention of the whole Panama Papers affair. Kevin Harrington, a frequent contributor to The Panama News and once upon a time Panama’s consul in London, perceives a Chinese tie to the UK response as well: “In mainland China one pays for corruption at the wall. The problem is that the British Virgin Islands is where the families of the Beijing Politburo nest their money, which they can’t justify. London doesn’t want to be on the bad side of the Politburo, so it is ensuring that the BVI doesn’t release anything about THESE Chinese.” So Mr. Cameron has rushed to put exceptions into his much publicized offensive against money laundering that would for the most part shield the UK’s overseas possessions. The question is whether London or Beijing will be able to hold the line when the bulk of the Panama Papers database becomes available for public perusal and further agitation.

As the stories dwindled down to the indirect, inconsequential or successfully resisted a few significant smaller waves did break. Based on Panama Papers data, on April 22 police in Montevideo rounded up 11 people thought to be related to the Jalisco New Generation Cartel’s laundering of their Mexcian drug profits in Uruguayan real estate. Five of these individuals are to be charged with money laundering and if the allegations stick then the established line about not touching money or people related to the drug trade has been overstepped by Mossack Fonseca. On the same day at a Mossack Fonseca office in Parque Lefevre, Panamanian prosecutors swooped down on a store room that had its windows blocked with cardboard to secure and seize a huge cache of documents, including 10 jumbo plastic garbage bags of shredded papers. It will take some time and funding to reassemble, read and scan the mutilated papers but if that is done and, for example, the shredded items include documents about dealings with drug cartels, then there could be far-reaching legal consequences both in Panama and abroad. One might expect that the law firm’s offices in Miami and Las Vegas would be shut down by US authorities if those sorts of proofs emerge.

It seems that US political castes and economic plutocrats preferred other Panamanian law firms to set up their money laundering shell games. Law firms featuring partners who has served as diplomats in Washington would have the inside track with American politicians and those firms sporting Anglo surnames would perhaps have been more reassuring to the many unilingual American tax cheats possessed of much more money than brains. Mossack Fonseca is far from the only place in Panama from which money laundering shell corporations and the organizational paraphernalia that go with them can be bought.

However, it is promised that on May 9 a major trove of documents related to Nevada corporations organized by Mossack Fonseca will come into public view. It may thus become an election year political issue, either as a matter of appeals like “We have to cut US ties with sordid foreign kleptocrats,” or accusatory questions like “Where did my opponent get the money to play these Mossack Fonseca shell games?” or the more likely “See the sleazy people who donate to THAT campaign.” There has already been a bit of commentary about the Mossack Fonseca dealings of some of the people distantly tied to the Clintons, but no documents that have come to light so far indicate wrongdoing by members of that family or those in their political inner circle. Still, look for the further releases to generate more bad publicity for the very rich and powerful of US society, stuff that may not topple leading candidates but will further discredit the social circles in which they run.


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