Panama Papers firm under scrutiny once again – USA TODAY

7 months ago Comments Off on Panama Papers firm under scrutiny once again – USA TODAY

MIAMI — The release of the Panama Papers may introduce most people to the secretive law firm that created offshore corporations that helped world leaders hide assets, but Mossack Fonseca was already well known to investigators and prosecutors around the world.

The Panama City firm, created in the 1980s through a merger of the law practices of German-born Jurgen Mossack and Panamanian lawyer Ramon Fonseca, has long been in the middle of investigations into money-laundering, corruption and government graft.

In January, one of the lead prosecutors in Brazil’s ever-growing corruption scandal publicly called Mossack Fonseca “a big money launderer” involved in the wide-ranging probe. Last year, the firm became a central part of a lawsuit that alleged Argentina’s former president created 123 shell companies in Las Vegas to hide stolen assets. And as far back as 2001, the U.S. State Department said the firm entered into an “awkward sharing agreement” with the tiny Pacific island of Niue to control foreign companies’ ability to establish themselves there.

Despite so many question marks over the years, the firm responds with a simple point.

“We have never been found guilty of absolutely anything,” Ramon Fonseca said Sunday in an interview with Panamanian news channel TVN.

Fonseca said his firm legally creates companies on behalf of a wide variety of entities  — banks, corporations, lawyers and other agents. He also said his firm has some responsibility to ensure that those entities are legal and not engaged in criminal activity. Once a corporation is created and handed over to those entities, Fonseca said his firm’s involvement, and culpability, is over.

“We are not responsible for the actions of the corporations that we form,” he told TVN after reports of the Panama Papers were released. “Ninety-nine percent of the corporations we sell are legitimate, they don’t get into trouble. But because of the enormous numbers of corporations we sell, some of them are going to get into trouble. That’s normal.”

Ana Owens, a tax and budget advocate at U.S. Public Interest Research Group, a collection of liberal consumer advocacy organizations, said Fonseca appears to be absolutely right. Owens said U.S. and international law have combined to create legal protections for firms like Mossack Fonseca to form corporations, hand them over and be clear of any blame for what that corporation does.

She said there are thousands of similar “corporation mills” in the United States alone, meaning the disclosures in the Panama Papers is just one slice of a broader global scheme to hide assets.

“This is extremely common,” Owens said. “Everything that the Panama firm has done, as far as I know, is perfectly legal. As long as they can claim that they didn’t know about anything these corporations were doing, then everything is fine.”

The international focus on Mossack Fonseca is new for the reclusive firm, which has long operated in the shadows of the global financial system.

Not much is known about  Mossack, who has made no statements since the documents were released. Mossack’s father was a member of the Waffen-SS, the armed wing of Germany’s Nazi party during World War II, according to U.S. Army intelligence files gathered by the International Consortium of Investigative Journalists. Those files indicate that Mossack moved to Panama in the early 1960s with his family and started his law practice years later.

Fonseca has been far more visible. He is the author of several books, including Mister Politicusa 2012 novel “detailing the convoluted scheming of unscrupulous officials to gain power, and from there, satisfy their detestable ambitions.”

He was also active politically, serving as a special adviser to Panamanian President Juan Carlos Varela and as president of the Panamenista political party. The two men have grown their business to 500 employees in more than 40 countries, including operations in the United States.

But 2016 has already been difficult for the firm. Fonseca resigned from his political positions after Brazilian authorities raided the firm’s offices there as part of the country’s corruption probe. The firm also came under scrutiny in Germany in a probe of one of the country’s largest banks.

And now, publication of the Panama Papers will prompt governments around the world to lookeven closer at Mossack Fonseca’s work, including in Panama.

On Monday, President Varela issued a statement saying his government would “vigorously cooperate” with any requests for information to assist criminal investigations. And Panama’s attorney general’s office said it would open an investigation, according to TVN.

Panama Papers firm under scrutiny once again – USA TODAY

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