Panama Papers leak exposes Xi family, Putin aides, Messi

AFP: PARIS: A massive leak of 11.5 million tax documents on Sunday (3April) exposed the secret offshore dealings of aides to Russian president Vladimir Putin, world leaders and celebrities including Barcelona forward Lionel Messi and movie star Jackie Chan.

An investigation into the documents by more than 100 media groups, described as one of the largest such probes in history, revealed the hidden offshore dealings in the assets of around 140 political figures, including 12 current or former heads of state.

Names figuring in the leak included Chinese President Xi Jinping’s brother-in-law Deng Jiagui, Malaysian Prime Minister Najib Razak’s son Mohd Nazifuddin, children of Pakistan’s Prime Minister Nawaz Sharif, Cambodian Justice Minister Ang Vong Vathana, the president of Ukraine, the king of Saudi Arabia and the prime minister of Iceland, the ICIJ said.

The vast stash of records was obtained from an anonymous source by German daily Sueddeutsche Zeitung and shared with media worldwide by the International Consortium of Investigative Journalists (ICIJ). The documents, from around 214,000 offshore entities, came from Mossack Fonseca, a Panama-based law firm with offices in more than 35 countries. Though most of the alleged dealings are said by the ICIJ to be legal, they are likely to have a serious political impact on many of those named. ICIJ director Gerard Ryle said the documents covered the day-to-day business at Mossack Fonseca over the past 40 years. “I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents,” he said.

This combination of pictures created on 4 April shows six world leaders (top from Left) Argentinian President Mauricio Macri (23 March 2016), Emirati President Sheikh Khalifa bin Zayed al-Nahayan (April 30, 2013 in London) and Saudi King Salman bin Abdulaziz (15 November  2015 in Antalya), (bottom from L) Ukraine President Petro Poroshenko (1 April 2016 in Washington DC) and Prime Minister of Iceland Sigmundur David Gunnlaugss ( 27 October 2014 in Stockholm) whose names are featured in a massive leak of documents, some of which reveal hidden offshore assets involving Panama-based law firm Mossack Fonseca (lower right picture)

AMONG THE MAIN CLAIMS OF ICIJ PROBES

Among the names figuring in the leak included Chinese President Xi Jinping’s brother-in-law Deng Jiagui. In September 2009, according to the ICIJ, Deng became the sole director and shareholder of two British Virgin Islands-based “shelf companies” in Mossack Fonseca’s inventory: Best Effect Enterprises Limited, and Wealth Ming International Limited.

“Mossack Fonseca helped Deng obtain a “chop” – a carved metal or stone seal often used by Chinese businesses to validate documents in lieu of signatures – for Best Effect Enterprises. It is unclear what the two companies were used for. At the time, Xi Jinping was one of nine men on the all-powerful Politburo Standing Committee, the body that rules China. By the time Xi was named general secretary of the Chinese Communist Party in 2012 and the country’s president in 2013, Deng’s two BVI companies were dormant,” the ICIJ said.

Former Chinese Premier Li Peng’s daughter, Li Xiaolin; a grandchild of high-ranking Chinese Communist official Jia Qinglin; and a business partner of former Chinese politician Bo Xilai’s wife, Patrick Henri Devillers were also been identified in the leak. Malaysian Prime Minister Najib Razak’s second son, Mohd Nazifuddin, was reportedly involved with two offshore companies registered by Mossack Fonseca in the British Virgin Islands, he ICIJ said.

The two companies include Jay Marriot International Ltd and PCJ International Venture Limited. According to the ICIJ, Nazifuddin said he used PCJ International Venture Limited “for international business”. However, “there were ‘no business transactions, and the company was shut down,” the ICIJ said.

Ch’ng Soon Sen, the other director of Jay Marriot International Ltd, confirmed he and Nazifuddin acquired the firm in 2009 but said there had been no business activity since formation, the ICIJ said, adding Ch’ng said Nazifuddin transferred his share to his sister in 2011 and resigned as director.

Close associates of Putin, who is not himself named in the documents, “secretly shuffled as much as US$2 billion through banks and shadow companies,” the ICIJadded.

In Iceland, the files show Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned millions of dollars of investment in his country’s banks during the financial crisis through an offshore company. The law firm of a member of FIFA’s ethics committee, Juan Pedro Damiani, had business ties with three men indicted in corruption scandal: former FIFA vice president Eugenio Figueredo, as well as Hugo Jinkis and his son Mariano, who were accused of paying bribes to win soccer broadcast rights in Latin America, the files revealed.

Argentine football great Messi and his father owned a Panama company, Mega Star Enterprises Inc, a shell company that had previously not come up in Spanish investigations into the father and son’s tax affairs, according to the ICIJ.

‘INSIDE THE OFFSHORE WORLD’

Also in the world of football, Francetv Info named UEFA president Michel Platini as the beneficiary of a Panama-based tax company, adding however that no illegal activity was alleged.

Platini’s communications service said in a statement sent to AFP that “all of his accounts and assets are known to the tax authorities in Switzerland, where he has been a tax resident since 2007”. Iceland’s Gunnlaugsson is expected to face a no-confidence vote this week over allegations he used a secret offshore firm called Wintris Inc. to hide millions of dollars in the British Virgin Islands. Visibly irritated, the premier refused to answer reporters’ questions during an interview broadcast on Swedish television Sunday evening. “I have never hidden assets,” Gunnlaugsson told a journalist from the Swedish SVT channel before leaving the room. His spokesman insisted he and his wife have scrupulously followed the law. At least 33 people, companies and institutions listed in the documents were blacklisted by the US government for wrongdoing, such as North Korea and Iran, as well as Lebanon’s Islamist group Hezbollah, the ICIJ said. The leaked data, covering 1975 to the end of last year, provides what the ICIJ described as a “never-before-seen view inside the offshore world”.

The massive leak of documents recalls Wikileaks’ exploits of 2010, which included the release of 500,000 secret military files on the wars in Afghanistan and Iraq and 250,000 diplomatic cables, and infuriated the US.

This combination of pictures created on 4 April 2016 shows (Top from Left) Argentina's football player Lionel Messi (29 March  2016 in Cordoba) British golf legend Nick Faldo (5 April 2015 in Augusta), Chilean former footbal star Ivan Zamorano (24 November 2014 in Vina del Mar), Argentinian football player defender Gabriel Heinze (22 February 2011 in Marseille), UEFA President Michel Platini (28 May 2015 in Zurich) and then FIFA Secretary General Jerome Valcke (30 May 2015 in Zurich), whose names are featured in a massive leak of documents, some of which reveal hidden offshore assets involving Panama-based law firm Mossack Fonseca - AFP GETTY IMAGES 

‘BIGGEST LEAK IN HISTORY’

However, in terms of size, “the ‘Panama Papers’ is likely the biggest leak of inside information in history,” according to ICIJ. “It is equally likely to be one of the most explosive in the nature of its revelations,” the group added.

The documents show that “banks, law firms and other offshore players often fail to follow legal requirements to make sure clients are not involved in criminal enterprises, tax dodging or political corruption,” the ICIJ said on its website.

“The files show that these fixers and middlemen protect themselves and their clients by concealing suspect transactions. In some instances, they work to head off official investigations by backdating and destroying documents,” it added.

“These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” said Gabriel Zucman, an economist at the US-based University of California, Berkeley, cited by the consortium.

The leaked documents were reviewed by a team of more than 370 reporters from over 70 countries, according to the ICIJ.

The BBC cited Mossack Fonseca as saying it had operated “beyond reproach” for 40 years and had never been charged with any criminal wrongdoing.

It was not immediately clear who was the original source of the leaked documents.

REVELATION IS A “CRIME”

The revelation of the “Panama Papers” detailing the off-shore financial structures of many wealthy clients is a “crime” and an “attack” on Panama, the law firm at the heart of the scandal said Sunday.

“This is a crime, a felony,” Ramon Fonseca, one of the founders of the Panamanian firm Mossack Fonseca, told AFP. “Privacy is a fundamental human right that is being eroded more and more in the modern world. Each person has a right to privacy, whether they are a king or a beggar,” he said. Fonseca also said he saw the data leak behind the revelations as “an attack on Panama, because certain countries don’t like it that we are so competitive in attracting companies.” The leak from Mossack Fonseca’s supposedly secure data center resulted in media around the world publishing stories on how wealthy politicians, celebrities and others used it to allegedly hide assets to avoid taxes or launder money.

Fonseca, who was an advisor to Panama’s President Juan Carlos Varela until last month, described the exfiltration of the data as a “limited hack.” There was as yet no suspect in the leak, he added, and he declined to speculate on any until proof emerged. He stressed to AFP that Mossack Fonseca, which has been operating for nearly four decades and had created more than 240,000 companies, had never been “convicted or accused or any wrongdoing.” He also underlined that “we have no responsibility in how these companies were used,” because the firm’s role was as an intermediary.

“As we have so many companies, some have problems, that’s normal,” he said. “But we are not responsible for them.” Meanwhile, Panama’s government vowed on Sunday to “vigorously cooperate” with any legal probe that might be launched in the wake of the “Panama Papers” data leak. “The Panamanian government will vigorously cooperate with any request or assistance necessary in the event of any legal action occurring,” it said in a statement.