The prime minister of Iceland resigned Tuesday as the weekend exposé of off-shore tax haven shenanigans from the Panama Papers claimed its first major casualty.
The year-long investigation carried out by 370 journalists of the International Consortium of Investigative Journalists (a project of the Center for Public Integrity) was sparked by a massive document leak from the files of the Mossack Fonseca law firm. Their work with the leaked information has revealed secret dealings across the planet by politicians, plutocrats and assorted other palm-greasers.
Panama-based Mossack Fonseca is heavily engaged in setting up shell companies in tax havens around the world, places where these one-percenters can stash their wealth without fear of discovery. Or so they thought.
The exposé generated the greatest uproar in Iceland since the Bárðarbunga volcano erupted in 2014. In the case of Prime Minister Sigmundur Davíð Gunnlaugsson, the protests arose over revelations in the papers that he and his wife owned a secretive British Virgin Islands-based investment company—Wintris Inc.—that held millions of dollars in claims against the nation’s failed banks.
The bank collapse eight years ago resulted in several executives being sentenced to prison terms. Gunnlaugsson sold his 50 percent share in Wintris to his wife in 2009 eight months after he was elected to parliament. But he failed to disclose interest in the firm then or in 2013 when he became prime minister. In that role, he was party to negotiations with three of the banks that failed in the worldwide financial crisis of 2008. Although no evidence of criminal behavior has been alleged—the former prime minister claimed the failure to disclose was a simple accounting mistake—protesters say that Gunnlaugsson’s holdings created serious conflicts of interest.
The leftwing parliamentary opposition to Gunnlaugsson’s center-right coalition government had presented a motion of no-confidence Monday. Sigurður Ingi Jóhannsson, Iceland’s agriculture and fisheries minister, is replacing Gunnlaugsson.
Meanwhile, like The Guardian and Süddeutsche Zeitung—which was the German paper an anonymous source leaked the documents to more than a year ago—the U.S.-based McClatchy Company has published several articles on the Panama Papers, with more certain to come. One of those stories notes that more than 200 passports of Americans are included in the massive leak.
When The Guardian and Süddeutsche Zeitung published their array of stories over the weekend, no Americans were included, something that spurred considerable speculation, including allegations of cover-ups by the media involved in the exposé. Although 107 media operations are involved in the project that is bringing what’s in the Panama Papers to light, McClatchy is the only U.S. newspaper company among them.
Kevin G. Hall and Marisa Taylor report at McClatchy:
In four separate cases, the law firm Mossack Fonseca helped register offshore companies for Americans who are now either accused or convicted by federal prosecutors of serious financial crimes, including securities fraud and running a Ponzi scheme.
In some cases, the shell companies created through the Panamanian law firm were part of fraudulent activities. In others, it’s not clear. That’s the purpose of shell companies, after all, to shelter money or assets.
“You don’t know the unknowable,” said Daniel Reeves, a former high-level official with the Internal Revenue Service who helped establish its programs to monitor offshore shell companies. “If a company out of Malta is investing in U.S. securities and generating gains and it turns out it’s owned by a wealthy family in New York, no one is going to know except the incorporator.” […]
Determining a precise number of Americans in the data is difficult. There are at least 200 scanned individual U.S. passports. Some appear to be American retirees purchasing real estate in places like Costa Rica and Panama. Also in the database, about 3,500 shareholders of offshore companies who list U.S. addresses. And almost 3,100 companies are tied to offshore professionals based in Miami, New York, and other parts of the United States.
Among the Americans McClatchy found?
- Robert Miracle was indicted for a $65-million Seattle-area Ponzi scheme involving investment.
- Benjamin Wey was indicted along with his Swiss banker on securities fraud charges. Florida billionaire
- Igor Olenicoff was sentenced to two years of probation for tax evasion and fined $52 million for not declaring more than $200 million in offshore shell companies.
While the major media are giving and getting the most attention in the Panama Papers affair, bloggers are also on the case. One of those, Marcy Wheeler, who writes online as emptywheel, is engaged as she always is in digging well beyond what most others do and asking questions others seem fearful of raising. She writes:
Nowhere I’ve seen explains where this source got the documents.
For almost three years, we have openly debated what I consider a fair question: what was Edward Snowden’s motivation for stealing the NSA’s crown jewels and was any foreign country involved? People have also asked questions about how he accessed so much: Did he steal colleagues’ passwords? Did he join Booz Allen solely to be able to steal documents? I think the evidence supports an understanding that his motives were good and his current domicile an unfortunate outcome. And we know some details about how he managed to get what he did — but the key detail is that he was a Sysadmin in a location where insider detection systems were not yet implemented and credentials to have unaudited access to many of the documents he obtained. Those details are a key part of understanding some of the story behind his leaks (and how NSA and GCHQ are organized).
Somehow, journalists aren’t asking such questions when it comes to this leak, the Unaoil leak that broke last week, or the leak of files on British Virgin Isles have activity a few years back (which, like this project, ICIJ also had a central role in).