PANAMA CITY.- Mossack Fonseca scandal and the so called “Panama Papers” beat the reputation of the country in April 2006 when 11 million documents of the Panamanian law firm were revealed by the International Consortium for Investigative Journalists who found that hundreds of renowned people opened offshore accounts with different purposes.
This leak, the biggest in history, had a negative impact on the financial system of Panama and the moral of its citizens. The world perceived that Panama allowed tax evasion and money laundering through law firms, such as Mossack Fonseca. The fact that the case was so called “Panama Papers” allowed the globalization of this concept.
Mossack Fonseca offices were searched, but no responsible person was arrested in Panama.
Uncouth and delayed answer
The answer of the government was the creation of a mix commission, consisting of renowned people in Panama, such as former president Nicolás Arditto Barleta, Nobel Laureate in Economics Joseph Stiglitz, and Swiss anti-corruption expert Mark Pieth to assess the practices of the financial system in the country.
The commission was involved in a scandal when Stiglitz and Pieth resigned from the commission when Panamanian president Juan Carlos Varela announced that he would not make known the result of the investigation once he is handed it, but after reading and analyzing it.
The group of experts took seven months to issue the report. Varela did not have the analysis until November 18, 2016 and he made it known in Panama and the world on November 21.
The committee provided several suggestions to the government addressed to improve “urgently the high levels of opacity in Panama”.
It urged authorities to develop and implement an anti-corruption legislation including the actions that took place in the Panamanian territory directly or indirectly engaged in illegal activities in third countries.
It recommended the design of a strategy to exclude Panama of all discriminatory list related to issues of taxes, transparency and effective exchange of information.
As a result of this leak, France included Panama in the list of tax havens stating that the Central American country has not revealed all the necessary information to implement the legislation in terms of taxation. However, Varela’s government says that they have presented the information required and if France does not remove Panama from the list, it will take diplomatic actions against it.
“Mossack Fonseca Papers”
One of the things that most discouraged Panamanians is that the leak will be called “Panama Papers”, a term that expressed that the country gave carte blanche for tax evasion or money laundering in the territory when it was really a law firm established in the country the author of this crime.
Several social groups and the government requested the public opinion and media to change the name of this case to “Mossack Fonseca Papers” to not affect the reputation of the country.
“First of all, it is about the customers of a law firm; second, it is about the possible use of such customers for the companies registered through this,” said the ambassador of Panama to Madrid, María Mercedes de la Guardia de Corró.
The diplomat told EFE that she regretted that her country “took the brunt" in terms of reputation despite only 20 % of more of the 200,000 companies investigated were registered in Panama.
The minister of Economy and Finance, Dulcidio de la Guardia, said that the Government has worked “very hard” to mitigate the damage caused to the reputation of the Central American country by this scandal and has taken the necessary measures.
Among these measures there is a $370,000 investment to restore the country’s reputation under the responsibility of the company ‘Bellwether Strategies’.
“Not only Panama’s arguments have been successfully heard, but also the confidence of markets in our financial systems has been protected,” said the Government.
Also, in a visit of the State made to Germany in October last year, Varela confirmed the commitment of his country to financial transparency and said that Panama cannot allow that its financial and logistic system “to be used for any illegal purpose”.
Civil associations such as Todos Somos Panamá have sent letters requesting several media to stop using the term “Panama Papers” and have highlighted that although it should have been a global discussion, it was focused only on Panama at the point that the country has so far adjusted its tax laws.
This group says that “the goal is and is still Panama, ending the corporate and banking finance system in Panama with the following loss of thousands of jobs”.
Through two letters addressed to Roberto Eisenmann Jr., Founder of the newspaper La Prensa, they request to stop using the term Panama Papers.
It is already nine months since the publication of documents and many media still call it “Panama Papers”.
The second prosecutor’s office of organized crime, headed by Javier Caraballo, continues to carry out the investigation of this case to charge the law firm Mossack Fonseca and its customers for the crime of money laundering.
“The instruction agency that I hold will take all the necessary steps (…) to end showing the punishable fact and link the people and demand criminal responsibility for them,” said the prosecutor to the newspaper La Estrella de Panamá.
The prosecutor told this newspaper that the investigation has generated four searches, 16 ocular inspections, more than 500 banking, financial, and legal information requirements and 16 international legal assistance requests.
However, no responsible person has been charged for this case.
In an interview made by Panama Today to former ambassador of Panama to the OAS Guillermo Cochez, he considered it unusual that there is still no further investigation in this case, which proves the irregularities of the Panamanian judicial system.
Cochez uses as an example one of the associates of that law firm, Ramón Fonseca, who at the moment of the scandal was a minister counselor of Panama’s presidency and president of the party Panameñista.
“It was not but three days before Panama Papers exploded in April last year when he resigned from the positions he had. And he is still in public arena as nothing was happening. Here there has not had any investigation about what he did in other countries and that has damaged us a lot and is still doing it,” he said.