A Little Country with World-Wide Secrets: The Panama Papers Send Shock throughout Europe
Recently, a report, dubbed the Panama Papers, reveled a great deal of wealth hidden by powerful figures from all over the world in this esposé of millions of documents from a “boutique Panamanian law firm”, Mossack Fonesca, which exposed great fortunes hidden away in shell companies and offshore tax shelters. The International Consortium of Investigative Journalists states, (the main host and second recipient of the leaked documents – the first being the German newspaper Sueddeutsche Zeitung), “There are legitimate uses for offshore companies, foundations and trusts. We do not intend to suggest or imply that any persons, companies or other entities… have broken the law or otherwise acted improperly.” Though this may be true, many people are very upset that political and social leaders have been, at least in the minds of the people, underhanded and overly-secretive. While people from almost every continent were implicated in the Panama Papers, this article will attempt to highlight some of the biggest names from Europe who were named (or whose families, friends, or companies were named) in the leak.
Former government minister in France, Jérôme Cahuzac
Jérôme Cahuzac had already been in hot water when in 2013, Cahuzac had to admit that he lied to the president of France and former colleagues in Parliament when he said he did not own foreign bank accounts, when in fact, he had over three quarters of a million dollars in a Swiss bank account (moved to an account in Singapore in 2009. He is currently awaiting trial for tax fraud, where his lawyer says, “his client is reserving his explanation for his trial, which is scheduled for September 2016.”
Former Prime Minister of Georgia, Bidzina Ivanishvili
Bidzina Ivanishvili is a billionaire who made a majority of his fortune in the metals and banking industries in Russia, who moved back to Georgia and began taking a more political role in the government. Within the papers, Ivanishvili is cited as the owner of an offshore company. As a response to the Papers, a Swiss law firm which represents him stated that Ivanishvili is, “willing to be transparent about his use of offshore companies and that banks like Credit Suisse [a bank in which there is a trust of which he is a beneficiary of] “systematically propose offshore companies to their clients though it may not serve the client’s interest.”
Stavros Papastavrou, Advisor of former Greek Prime Minister, Antonis Samaras
Stavros Papstavrou served as the International Affairs Secretary of the Nea Demokratia political party (2004-2015) and as the Deputy Chief of Staff for European and International Affairs, for the Office of Greek Prime Minister Antonis Samaras (2012-2015). Papastavrous eventually became Samaras’ chief negotiator with the European Union, the International Monetary Fund, and the European Central Bank during Greece’s economic crisis and eventual bailout. The Papers show that he was involved in multiple offshore foundations as a member of their councils, and as deputy chairman. In response, Papastavrou has said that he had “no ownership interest in these entities of any kind”. Furthermore, a law firm for the Aisios foundation has stated that Papstavrou never had a “right to the foundation’s assets and never received any remuneration.”
Former member of Hungarian Assembly, Zsolt Horváth
Zsolt Horváth served as a member of Hungary’s National Asembly from 1998-2014 for the Fidesz party. He is mentioned in the Panama Papers because he acquired offshore firms before and after his time in the Hungary National Assmeblt. His most recent declaration of financial interests to the Hungarian parliament (2014) do not mention his involvement with them.
Iceland’s Prime Minister, Sigmundur Davíð Gunnlaugsson
Prime Minister Sigmundur Davíð Gunnlaugsson has had some of the biggest fall-out from the publication of the Panama Papers. One of the major issues with the information that came to light in the Panama Papers was that Gunnlaugsson and his wife owned an offshore company, which held millions of dollars worth of bond in several Iceland banks that failed and were at the center of the financial crisis of 2008 in Iceland. The ICIJ states that “It is unclear whether Gunnlauggson’s political positions benefited or hurt the value of the bonds held by Wintris [his company]. Gunnlaugsson failed to declare his ownership of Wintris when he entered parliament, and sold his 50% share to his wife for a dollar.
When asked about his ownership and association with an offshore company in a television interview, Gunnlaugsson said, “Myself? No. Well, the Icelandic companies I have worked with had connections with offshore companies, even the … The worker’s unions. So it would have been through such arrangements, but I have always given all of my assets and that of my family up for taxes.” Later, a spokesman for Gunnlaugsson issued a later statement saying, “The Prime Minister and his wife have adhered to Icelandic law, including declaring all assets, securities and income in Icelandic tax returns since 2008.”
On Tuesday, April 5, amid mass protests, Gunnlaugsson resigned from his position as Prime Minister – though at first it looked to be temporary, Iceland is now scheduling emergency elections.
Iceland’s Minister of finance, Bjarni Benediktsson
Bjarni Benediktsson has served as Chariman of the Independence Party (2009-present), a Member of Iceland’s Parliament (2003-present), and as Iceland’s Minister of Finance and Economic Affairs (2013-present). Benediktsson and his partners owned a Seychelles shell company (Falson & Co). He and his partners owned a shell company during Iceland’s banking crisis, and this has caused unrest among those living in Iceland. According to a Reuters report, Benediktsson has said that he has absolutely no plans to resign from his position as Iceland’s minister of finance, though a poll last week showed that 69% of respondents wanted him to resign. When speaking about Falson & Co, Benediktsson said that “I had no intention or need to hide ownership… I declared my ownership of the company to the tax authorities in Iceland.”
Iceland’s Interior Minister, Ólōf Nordal
Ólōf Nordal, another member of the Independence Party mentioned in the Panama Papers, is a member of parliament (2007-present) and serves as the Interior Minister of Iceland (2014-present). In the past, Nordal has worked as an attorney for the Iceland Stock Exchange (1999-2001), and taught law and chaired the business Law Department at Bifrōst University.Shares of the company Dooley Securities SA, were held in the name of a unit of Landsbanki, one of the big banks at the center of Iceland’s financial crisis in 2008. Nordal’s husband, Tómas Már Sigurdsson has said that, “the company [Dooley Securities SA] was created to hold proceeds from his Alcoa stock options, but they were never exercised and no funds were transferred to the company. He said that neither he nor his wife were shareholders in Dooley Securities. “We do not own and have never owned any offshore companies.”
Giuseppe Donaldo Nicosia , the man charged in fraud along with Italian senator (Marcello Dell’Utri)
Guiseppe Donaldo Nicosia, has been on the run from authorities after being accused of being involved with a $50 million tax fraud scheme. One of his partners in the alleged advertising scheme and tax fraud was Marcello Dell’Utri, who is a former senator, and an ally of former Italian President Silvio Berlusconi. Nicosia is related to the Panama Papers because he is the sole shareholder of offshore companies which traded ownership of two apartments across from Carnegie Hall for over $3.2 million.
Malta’s minister of energy and health, Konrad Mizzi
Konrad Mizzi is the Maltese Minister for Energy and Health (2014-present) and the Deputy Leader for Party Affairs for the Labour Party of Malta. After being elected, Mizzi announced that he would close an offshore company of his in Panama and clarified that he closed it in the interest of transparency, but had already declared the company. A law firm representing Mizzi said that the current company that he holds, Hearnvill Inc. was owned by a family trust, and was used to “hold a London property”. They said that it was declared on New Zealand tax forms, whose information was shared with the Maltese government. Once again, it was emphasized that Mizzi “declared his interest in the company and the trust in his 2015 Ministerial Declaration of Assets at the first available opportunity.” Furthermore, Mizzi has asked tax authorities to audit him to show that he is not breaking any laws.
Former Warsaw mayor and former member of the EU parliament, Paweł Piskorski
Paweł Piskorski was the mayor of Warsaw from 199-2002, and then served as a member of the European Parliament from 2004-2009. He was pressured to leave his party when, in 2005 it came to light that he had potentially not declared all of his assets as a member of the European Parliament. He has other financial bumps and legal matters in the past, most of which have either not really been pursued, or have been acquitted. He is associated with the Panama Papers because he acquired a Panamanian company in 2012, which then tried to open several bank accounts (apparently unsuccessfully).
Arkady and Boris Rotenberg, Childhood friends of Russian President, Vladimir Putin
These billionaire brothers, while maintaining that they get no special treatment, from their childhood friend, Vladimir Putin, have earned millions of dollars through contracts with state and state-owned companies. They are also associated with offshore companies’ investments. They owned at least seven companies in the British Virgin Islands. The firms participated in everything: from investing in a pipeline construction company, to buying equipment for the construction of Arkady Rotenberg’s son’s Italian villa.
Close friend of Vladimir Putin, Sergey Roldugin
Sergey Roldugin is a world-famous classical cellist and the current Artistic Director of the St. Petersburg House of Music. Unfortunately for him, he is also the owner of three offshore companies handled by Mossack Fonesca. These companies received advantageous loans. Bank Rossiya, Russia’s “personal bank for senior officials” assigned International Media Overseas (on of Roldugin’s offshore companies) the rights to a $200 million load for $1.
Between these the reports on these three close friends of Putin, Putin has responded that he has felt attacked by the media and that there must be some sort of international effort to sully his name.
Pilar de Borbón, the sister of Juan Carlos, the former King of Spain
As well as being the Infanta of Spain and Duchess of Badajoz, Pilar de Borbón has spent most of her life raising money for charity, pursuing her love of horses, served as president of Europa Nostra for two years, and managed her family’s business investments.
The issue that Panama Papers found with her family’s business investments is that they were associated with an offshore company since the 1970s. In August 1974, Pilar de Borbón became president and directory of Delantera Financiera SA, originally registered in 1969. After March 1993, neither she nor her husband (who had served as secretary-treasurer) appeared as the directors. However, in 1993, it was indicated that Pilar de Borbón was the owner of the company, and her son, Bruno Alejandro Gómez-Acebo Borbón was director and treasurer of the company from July 2006 until June 2014, when it was dissolved.
On April 6, 2016, Pilar de Borbón made a public statement, saying that the firm that she and her husband owned had no revenues “outside the control of local tax authorities,” and that it had complied with “any obligation requested by Spanish tax legislation.”
Micaela Domecq Solís-Beaumont, Wife of Spain’s agriculture minister, Miguel Arias Cañete
Micaela Domecq Solís-Beaumont and her husband, Miguel Arias Cañete are no strangers to somewhat shady overlaps between money and power. While serving on the European Parliament’s agriculture committee, he urged expansion of agriculture subsidies to cover bull breeding – which just happens to be the family trade of Solís-Beaumont. During his time as minister, Jandilla bull operations, Solís-Beaumont’s company, received over a $1 million in farm subsidies.
The main problem an analysis of the Panama Papers presents for Solís Beaumont is that, while her husband held political posts, she was empowered to approve transactions of Rinconada Investments Group SA, thus presenting a potential conflict of interest.
A representative for Arias Cañete has responded, saying that he and his wife manage their accounts separately, and that he has always kept his declarations in full compliance with the Code of Conduct for members of the European Parliament and European Commission. A lawyer representing Solís-Beaumont said that she declared all of her income and assets to Spanish tax authorities, that Rinconada is not active, and that Domecq is not “an authorized signatory for the company.”
Barcelona FC footballer, Lionel Messi
While both Lionel Messi and his father, Jorge Horacio, are already on trial for tax evasion, they were named in the papers because they own Mega Star Enterprises, which is registered with Mossack Fonesca.
Convicted former Ukraine Prime Minister, Pavlo Lazarenko
Pavlo Lazarenko was the Prime Minister of Ukraine from 1996-1997. He was named as one of the world’s 10 most corrupt politicians by Transparency International. From 2004-2012, he was under house arrest and in prison in the United States due to a conviction in money laundering and conspiracy.
The offshore companies of Lazarenko were the focus of multiple corruption investigations, beginning in 1998, with U.S. authorities still seeking $250 million from some of these accounts. He has been tied to Metalrussia Corp Ltd., Southeast Asia Metal Limited, Bainfield Company Ltd., and Bassington Ltd. He has been convicted of money laundering in both Switzerland and the United States.
President of Ukraine, Petro Poroshenko
President Petro Poroshenko, estimated in May as being worth $720 million, was elected in 2014, after serving as the Economic Development and Trade Minister in 2012. He made his money through automotive plants, a shipyard, a TV channel, and most notably, Ukraine’s largest candy company, which landed him the nickname, the “chocolate king.” He was a supporter of the 2004 pro-Europe, pro-democracy Orange Revolution, and has slowly tried to extricate any of his affiliations with the corrupt leaders and oligarchs that are found scattered in Ukraine’s political history.
Prime Asset Partners Limited holds many of Poroshenko’s assets, including his European candy manufacturer. In 2015, after pledging to sell his assets while campaigning, Poroshenko transferred his assets to Prime Assets Capital.
While the Ukrainian prosecutor’s office said that his actions were not against the law, people are beginning to strongly question Poroshenko’s commitment to fighting corruption. Another strong blow to his character is that, supposedly an offshore company was registered by Poroshenko on the day of the deadly battle of Ilovaysk in August 2014. There have been calls in parliament for his resignation, especially since he was cheating the system at a time when the Ukrainian government (under Poroshenko) was suffering from an estimated loss of $12 billion in tax revenue due to offshore companies. In a Facebook post responding to criticism, Poroshenko said that he is “the first top office official in Ukraine who treats declaring of assets, paying taxes and conflict of interest issues profoundly and seriously.”
The problems stemming from the reports of Poroshenko in the Panama Papers aren’t just limited to him, his office, or his party, but to Ukraine as a whole. Daragh McDowell, Principal Europe and Central Asia Analyst at risk consultancy Verisk Maplecroft said, “The revelations of Poroshenko’s offshore accounts will further destabilize the Ukrainian government, which has been in a state of crisis for over a month.” And that “Corruption scandals have been particularly corrosive to the government’s credibility and public support. The release of the Panama Papers significantly increases the risk of early elections. Additionally, this sign of corruption puts into jeopardy Ukraine’s relationships with its Western allies (and the funds that come with that.)
Ian Cameron, Father of British Prime Minister, David Cameron
Ian Cameron who died in 2010, is the father of British PM, David Cameron. He made his fortune as a stockbroker and investor, and earned a role of senior partner in the brokerage Panmure Gordon, following in the steps of his father and grandfather.
Sources say that it is understood that Ian Cameron used Mossack Fonesca in order to protect Blairmore Holdings – his investment fund – from UK taxes. According to the ICIJ, this offshore investment firm was “highlighted to investors that it was managed to avoid taxes.” Though there is no evidence that he was director before 1989, a prospectus states that he was “instrumental in the formation of Blairmore Holdings Inc. in the early 1980s.” Promotional literature noted that the fund was “not liable to taxation on its income or capital gains” and that it “will not be subject to United Kingdom corporation tax or income tax on its profits.” In 1998, Blairmore Holdings was valued at nearly $20 million.
Part of the legacy of Ian Cameron, including money from this fund, was inherited by David Camron. David Cameron has admitted in an ITV interview that he sold his stake in the Blairmore fund for more than $50,000 in January 2010, just before he became Prime Minister. The hypocrisy of this situation has been noted, since “Cameron promised and has failed to end tax secrecy and crack down on ‘morally unacceptable offshore schemes” by shadow chancellor John McDonell.
Baroness and lifetime member of the U.K. Parliament, Pamela Sharples
Baroness Pamela Sharples was given a life peerage in the House of Lords in 1973, after the murder of her husband while walking the grounds of the Government House. She is a member of the Conservative Party. After the death of her husband, she told the Daily Mail that she had to sell the family home to pay death duties, since it was ruled that her husband “was not killed in the line of duty.”
Baroness Pamela Sharples was named because it is said she has links to Mossack Fonesca through Nunswell Investements Limited, a company used for investments, which she became the sole shareholder of in 1995. Allegedly she asked in 2013 if it “made sense to defer a distribution from her Nunswell account, if she didn’t need the funds, to postpone paying taxes on it,” but her current law firm says she had “no renumeration…nor any income or capital from that company”. According to reports, Baroness Sharples did not deal directly with Mossack Fonesca, but worked through an employee of a British law firm.
Former Member of the UK House of Lords, Michael Ashcroft
This Tory Lord was named because a subsidiary of his company worked with Mossack Fonesca in Belize. A spokesman, Alan Kilkenny said, “These allegations are completely untrue and the events as described never happened the records upon which you claim to rely for those allegations either do not exist or have been falsified.”
Member of British Parliament, Michael Mates
The former Tory MP – a member of the British Parliament from 1974-2010 – is linked since he is chairman of Haylandale Limited, which invested in property development in the Caribbean. His parliamentary disclosures listed him as the chairman of Haylandale Limited until (at least) April 2010, when he stepped down from his parliamentary seat. Haylandale Limited was primarily used for real estate development in Antigua and Barbuda.
Mates contends that he did nothing wrong, and that he wouldn’t receive any funds, “unless and until the development took place” and that the company “never really had any value”.
For more information about the Panama Papers, check out where they are being hosted on the International Consortium of investigative Journalists’ webpage: https://panamapapers.icij.org/the_power_players/
And to view the various press coverage about the fall-out from the Panama Papers, please see the following articles:
Information presented by Erin Arnold