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Live Blog: The Panama Papers

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"Putin. Offshore, Impeachment." -- A lone protester holds up a sign in Moscow protesting over the fact that Russian President Vladimir Putin is seen to have been implicated in murky financial dealings revealed in the Panama Papers

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Final Summary for April 13

-- The Russian cellist linked by the Panama Papers to murky offshore finances says the money came from donations.

-- German Finance Minister Wolfgang Schaeuble has outlined details of a plan to combat tax havens in the wake of the Panama leaks.

-- British Prime Minister David Cameron is set to announce that new legislation making companies criminally liable if employees aid tax evasion will be introduced this year

-- -- Cameron had earlier published his tax records in an attempt to draw a line under questions about his personal finances raised by the mention of his late father in the Panama Papers for setting up an offshore fund.

-- The unauthorized use of the International Red Cross's name by entities listed in the Panama Papers poses "enormous" risks for its operations and staff, the head of the humanitarian body said.

-- Several thousand people filled a big square in Malta's capital on April 10 and demanded the resignation of Prime Minister Joseph Muscat after the leaked Panama Papers said two of his political allies had offshore accounts.

-- Police have raided the El Salvador offices of the Panama-based law firm at the heart of the "Panama Papers" scandal that has revealed how the wealthy in many countries stashed their riches offshore.

12:23 12.4.2016

With all the hoopla about the Panama Papers in recent days, you may have overlooked this April 7 report by Citizens for Tax Justice, a U.S. nongovernmental organization, on how U.S. countries have stashed hundreds of billions of dollars in tax havens in order to avoid paying U.S. taxes.

The U.S. allows its corporations to defer paying U.S. corporate income taxes on profits of their offshore subsidiaries until those profits are officially “repatriated” (officially brought to the U.S.). This creates an incentive for American corporations to engage in accounting gimmicks to make their U.S. profits appear to be earned in countries where they will not be taxed. These data demonstrate that this is happening on a large scale. In fact, American corporations reported that more than half a trillion dollars of their profits were earned, for tax purposes, in the 10 tax haven countries shown in the table.

Amazingly, some lawmakers have, in recent years, called for even greater tax breaks for the offshore profits of American corporations. Some proposals would largely exempt previously accumulated offshore profits from U.S. taxes on an (allegedly) one-time basis (often called a “repatriation holiday”). Others would provide a permanent exemption (often called a “territorial tax system”). Perhaps these lawmakers do not realize that over half of the profits that American corporations claim their subsidiaries earn offshore — over half of the profits that could benefit from such new tax breaks — are reported by the companies to have been earned in 10 obvious tax havens.

12:08 12.4.2016

This New York Times stories focuses on the lawyers and asks the question: "Has the legal profession lost its moral compass?"

The answer is that the ethical rules governing lawyers do not put much of a barrier in the way of helping clients engage in transactions that would appear questionable but do not violate any specific laws, so it is not clear whether lawyers pushing to the edge of the law are acting improperly.

Model Rule of Professional Conduct 1.2(d), issued by the American Bar Association, says that a lawyer should “not counsel a client to engage, or assist a client in conduct that the lawyer knows is criminal or fraudulent.”

Note how the rule is premised on the lawyer’s knowledge, and many lawyers are expert at keeping themselves ignorant about exactly what is taking place to maintain plausible deniability. Moreover, that same rule says that “a lawyer may discuss the legal consequences of any proposed course of conduct,” so exploring the limits of the law can be permissible.

11:50 12.4.2016
Geoffrey Robertson
Geoffrey Robertson

U.K. human rights lawyer Geoffrey Robertson spoke with RFE/RL after the Panama Papers scandal broke. Among the things he said:

"[The] message of the Panama Papers is that governments have been slow and they are being defeated by clever lawyers and accountants and they need to act to have more forceful and onerous laws against tax avoidance."

11:06 12.4.2016

Drew Sullivan of the Organized Crime and Corruption Reporting Project (OCCRP), which is one of the lead organizations on the Panama Papers stories, writes for Foreign Policy magazine that despite great successes, organizations like his "face an existential threat."

But many organizations like ours face an existential threat — a toxic brew of stagnant economies, politically oriented advertising dollars, hostile governments and laws, and other problems. And that’s before getting to the fundamental problem: investigative reporting has never been a profitable business and has always relied on some big brother media to support it.

In many developing countries, media outlets that do investigative journalism survive only with the help of Western governments, the Open Society Foundations, a few other non-profit foundations, and little else. Even then, of all the development money spent abroad, journalism accounts for just 1 percent. And of that, investigative reporting receives only 2 to 3 percent, according to numbers from the Center for Independent Media Assistance.

10:55 12.4.2016
Protest in front of the Icelandic Parliament in Reykjavik on April 4
Protest in front of the Icelandic Parliament in Reykjavik on April 4

Iceland Finance Minister Bjarni Benediktsson says he will not resign over Panama Papers revelations that he had a stake in an offshore firm between 2005 and 2010. Last week, Prime Minister David Gunnlaugsson resigned over revelations about him.

Iceland's Finance Minister Bjarni Benediktsson said on Tuesday he would not resign over the Panama Papers leaks, which showed he was once had a stake in an offshore investment firm in the Seychelles.

Asked by reporters in London whether he would quit, Benediktsson answered: "No".

10:50 12.4.2016

It turns out that for a plurality of respondents in this poll, the Panama Papers has not harmed their image of politicians:

10:45 12.4.2016

Politico has doubts that the Panama Papers revelations will lead to concerted international action on tax evasion.

Supporters of tax reforms, including the European Commission and the U.S. government, hope the biggest offshore data leak in history will give new impetus to long-running efforts to bring order to the messy, secretive and competitive world of tax.

Others are not so sure. The reason is simple: Although any politician who promises to fight against tax evasion is on to a sure-fire vote-winner, national governments have shown a stubborn reluctance to share information, co-ordinate their moves and, least of all, harmonize tax regimes.

As if to underline those problems, Panama — the home of Mossack Fonseca, the law firm whose files were leaked — was never a signatory to voluntary tax agreements mandating transparency and due diligence. Those rules are set by the Financial Action Task Force (FATF), which has been trying to foster co-operation among governments ever since its founding in 1989.

10:31 12.4.2016

10:30 12.4.2016

Spain's acting industry minister says he does not know why his name appears in the Panama Papers and denies being an owner of a Panama-based shell company.

At a press conference Monday in Lanzarote, Soria said he never had any relationship with any companies in Panama, and refused to appear in Congress, citing the acting government’s position that it is not beholden to congressional oversight.

Soria said he has no idea why his name shows up on the list of directors of a company incorporated in the Bahamas in 1995.

This piece of information is part of a trove of 11.5 million documents from a Panama-based law firm that were leaked to the media. Other Spaniards whose names have cropped up in the Panama Papers include the filmmaker brothers Pedro and Agustín Almodóvarand an aunt of King Felipe VI’s.

10:24 12.4.2016

The European Union on April 12 is expected to announce new rules under which large corporations will have to disclose how much tax they pay in which EU countries and any activities in listed tax havens.

Lord Hill, the EU's financial services commissioner, said: "This is a carefully thought through but ambitious proposal for more transparency on tax.

"While our proposal on [country-by-country reporting] is not of course focused principally on the response to the Panama Papers, there is an important connection between our continuing work on tax transparency and tax havens that we are building into the proposal."

Country-by-country reporting rules already apply to banks, mining and forestry companies, according to an EU spokesperson.

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