A prestigious law firm in Panama has been named in the so-called «Pandora Papers» as being involved in setting up offshore shell companies designed to hide funds in the tax havens of more than 160 politicians and public figures.
Among them were «some accused of looting their country,» according to the International Consortium of Investigative Journalists (ICIJ), which obtained the leaked documents as part of the Pandora Papers, which were published yesterday.
Alemán, Cordero, Galindo, Lei or Alcojal were involved in creating dummy companies to transfer funds to Jordan’s King Abdullah II, Czech Prime Minister Andrej Babis, Montenegrin President Milo Djukanovic, and three former presidents from Panama, among others, according to the statement. .
Other participants in Alcogal, co-founded in the 1980s by the son of a former Panamanian ambassador to the United States who became his ambassador, include a presidential candidate in Honduras and a former president of Ecuador.
The company has also worked with figures in some of the most notorious financial scandals of the past decade, including a massive bribery conspiracy in Latin America involving Brazilian construction company Odebrecht and a football corruption case known as «Fifagate,» according to the ICIJ.
In a report, the International Consortium of Investigative Journalists numbered 14,000 offshore entities in Belize, the British Virgin Islands and Panama that were set up with Alcogal’s help in an effort to hide funds out of public scrutiny for about 15,000 clients since 1996.
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The law firm’s involvement abroad has been so prolific that nearly two million of the 11.9 million leaked documents linked to the Pandora Papers, which were reported by about 600 journalists, came from Alcogal.
According to the ICIJ, Alcogol has played a «leading role in the tax evasion and asset protection industry.»
«Over the past three decades, Alcogal has become a magnet for the rich and powerful from Latin America and beyond seeking to hide their wealth abroad,» the reporting group said, citing leaked corporate records.
«Companies like Alcogal drive this (mysterious) economy, helping wealthy clients find havens to hide their money, sometimes from tax collectors and criminal investigators. Ordinary people often pay the price,» the ICIJ report on the company said.
For example, the International Consortium of Investigative Journalists says that Alcojal set up more than 200 shell companies for the Bank of Prívada D’Andorra, some of which were then used to hide public corruption in Venezuela.
The United States later blacklisted the bank over money laundering concerns and Alcogal fired himself from the bank.
The company dismissed the accusations of suspicious dealing in a statement, saying it was considering legal action to defend its reputation «in a robust manner where necessary.»
The company said that «Alkojal rejects the guesswork, inaccuracies and lies in the newspapers,» and offered to work with authorities to investigate any wrongdoing.
He also dismissed several politicians whose names appeared in the press, including former Panamanian President Ricardo Martinelli, who denied his involvement in anything untoward.
The revelations of Pandora’s Papers could further damage Panama’s reputation, after the Central American country’s image was already damaged in an earlier round of financial scandal reports known as the «Panama Papers» five years ago.
The government was concerned about the fallout from the new version, according to a letter from officials published by local media.
«The damage may be insurmountable,» the Panamanian government said in the letter it sent through a law firm to the International Consortium of Investigative Journalists.
The letter warned that «any publication» that promotes a «misconception» of the country as a potential tax haven «will have severe consequences for Panama and its people.»
The Panamanian government’s rhetoric also refers to some of the reforms the Central American country has undertaken in recent years, although it is still on the European Union’s list of tax havens.
In its letter, the government said Panama of 2016 «is not like Panama today».