The “Panama Papers,” a trove of documents taken from Panamanian law firm Mossack Fonseca, have triggered raids by the government of El Salvador against the local Mossack Fonseca office, while Peruvian authorities raided the home of an executive of the firm.
El Salvador’s Attorney General suggested the raid was triggered by signs Mossack Fonseca was getting ready to move out of its offices. “As the attorney general I have to investigate such incidents,” said Douglas Melendez in a statement. “That does not mean that all these companies are illegal or are corrupt.”
This was a reference to the shell companies Mossack Fonseca specializes in creating, in some cases allegedly for the purpose of helping wealthy individuals hide their money from tax agencies, their constituents (in the case of several politicians caught up in the scandal), and their ex-wives (in the case of billionaires going through divorce proceedings).
Among the political figures swept into the Panama Papers story thus far are Iceland’s Prime Minister, Sigmundur David Gunnlaugsson, who resigned under pressure; British Prime Minister David Cameron, whose late father was a Mossack Fonseca client; Ukraine President Petro Poroshenko, whose deposed predecessor Viktor Yanukovych was an extravagant kleptocrat; Pakistani Prime Minister Nawaz Sharif; and Russian President Vladimir Putin, whose close friends were avid creators of million-dollar offshore holding companies.
Peru sent a team of twenty tax investigators into the home of Monica Ycaza Clerc, Mossack Fonseca’s representative in Lima.
“Authorities said the seizure was part of an investigation into tax evasion and fraud involving the law firm and Peruvian taxpayers,” CNN reports. “Last week, the National Customs and Tax Administration created a team to verify whether any tax evasion cases it had been investigating in the past year, correlate with companies and individuals mentioned in the Panama Papers.”
Peru’s tax agency stated Clerc’s home was searched “in order to thoroughly investigate her and also to check for possible connections that she would have with the ‘Panama Papers’ case and with Peruvian taxpayers.”
Many observers have noted the relative scarcity of American names appearing in the 11 million pages of Panama Papers documents, a situation Mossack Fonseca’s co-founder waved aside by saying the firm did not work very hard to solicit American clients, because several U.S. states have relaxed laws about shell company setup.
However, CNBC highlights an alternative investigation from famed banking whistleblower Bradley Birkenfield, who “served more than two years in a U.S. federal prison, been awarded $104 million by the IRS for his information and shattered the foundations of more than a century of Swiss banking secrecy.”
“The CIA I’m sure is behind this, in my opinion,” Birkenfield said of the Pentagon Papers leak. “The very fact that we see all these names surface that are the direct quote-unquote enemies of the United States, Russia, China, Pakistan, Argentina and we don’t see one U.S. name. Why is that? Quite frankly, my feeling is that this is certainly an intelligence agency operation.”
Birkenfield also contended that Mossack Fonseca was known to the Swiss banking industry he once worked for, and was regarded as “a relatively small player in the overall offshore tax evasion business” — one of many Panamanian banks “operating as a conduit to the Swiss banks and the trust companies to set up these facilities for clients around the world.”