If you thought the Panama Papers saga has petered out, think again. The ramifications of these documents continue to reverberate across the globe—and even in its own backyard.
Panama's attorney general raided the offices of the Mossack Fonseca law firm late on Tuesday in search evidence of illegal activities. The Panama-based law firm is at the center of the "Panama Papers" leaks scandal that has brought the devious world of offshore companies to the forefront of financial intrigue while severely embarrassing professionals, politicians and world leaders alike.
The national police were searching for documentation that "would establish the possible use of the firm for illicit activities." The firm has been accused of tax evasion and fraud but denies any wrong doing and founding partner Ramon Fonseca said the company had broken no laws, destroyed no documents, and declared that all its operations were legal.
Since its release, the Panama Papers have unleashed a global search for illegal activities predominantly in areas considered ‘safe havens’ for companies and individuals. Governments across the world have begun investigating possible financial wrongdoing by the rich and powerful after the leak of more than 11.5 million documents from the Mossack Fonseca law firm that span four decades.
The papers have revealed financial arrangements of prominent figures, including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain and Pakistan and of China's President Xi Jinping, and the president of Ukraine.
According to one source, Mossack Fonseca's clients also included some of those involved in the so-called Iran-Contra affair, in which several Reagan administration officials secretly facilitated arms sales to Iran in the 1980s in order to secure the release of US hostages and fund Nicaragua's Contra rebels.
What has added significantly to the fascination with the documents is the question of the source of the information and why the list of the accused individuals and corporations is devoid of American names. After all, it’s a well-known fact that money laundering and other illegal activities have been rampant in the United States for decades.
In answer to these related queries, well-known whistleblower, Bradley Birkenfeld, is certain that the information could only have come from a U.S. intelligence agency and he points his finger directly at the CIA.
An American citizen, Birkenfeld was a banker at UBS in Switzerland when he approached the U.S. government with information on massive amounts of tax evasion by Americans with secret accounts in Switzerland. Birkenfeld was imprisoned years in a U.S. federal prison for two while at the same time he was awarded $104 million by the IRS in gratitude for his information. His revelations brought to an end a century of Swiss banking secrecy.
Birkenfeld questions how the political tumult created by the disclosures has impacted primarily countries with tense relationships with the United States such as Russia, China, Pakistan and Argentina and why there isn’t even one U.S. name on the list. In addition, he claims the documents selectively bring to the public domain only information that doesn't hurt the U.S. in any shape or form. He concludes that clearly the CIA, perhaps with the assistance of the one or two other major global intelligence agencies, is the source of the leaks.
Mossack Fonseca maintains offices in various parts of the world including Switzerland, known for its strong attraction as a safe haven for all types of illegal monies. Birkenfeld said that during his time as a Swiss banker, Switzerland was known as part of the widespread offshore maze used by bankers and lawyers to hide money from tax authorities. According to him, Mossack Fonseca was just one of a number of firms in Panama offering such services.
In response to the accusations made in the Panama Papers, the U.S. Treasury Department announced its intensions of issuing a long-delayed rule forcing banks to seek the identities of people behind shell-company account holders. This is a decision long overdue.