OOPS! Who Done That! Prosecutors Around the World…Looking at Panama!

Governments across the world began investigating possible financial wrongdoing by the rich and powerful on Monday after a leak of four decades of documents from a Panamanian law firm that specialized in setting up offshore companies.

The “Panama Papers” revealed financial arrangements of politicians and public figures including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine.

While holding money in offshore companies is not illegal, journalists who received the leaked documents said they could provide evidence of wealth hidden for tax evasion, money laundering, sanctions busting, drug deals or other crimes.

The law firm, Mossack Fonseca, which says it has set up more than 240,000 offshore companies for clients around the globe, denied any wrongdoing and called itself the victim of a campaign against privacy. Mossack Fonseca, in a statement posted on its website on Monday, said media reports had “misrepresented the nature of our work.”

“We routinely resign from client engagements when ongoing due diligence and updates to sanctions lists reveal that a beneficial owner of a company for which we provide services is compromised,” it said.

The law firm added that “excluding the professional fees we earn, we do not take possession or custody of clients’ money, or have anything to do with any of the direct financial aspects” of their business operations.

Leading figures responded to the leaks with denials as prosecutors and regulators began a review of the reports from the investigation by the U.S.-based International Consortium of Investigative Journalists (ICIJ).

The U.S. Department of Justice would determine whether there was evidence of corruption and other violations of U.S. law, a spokesman said. A White House spokesman said that “in spite of the lack of transparency that exists in many of these transactions,” there were U.S. experts who could find out whether they violated sanctions and laws.

Financial prosecutors in France announced the opening of a preliminary investigation for aggravated tax fraud.

Germany would also “pick up the ball” in the case, a Finance Ministry spokesman said on Monday. Financial market watchdog Bafin is looking into the matter, said a source close to the regulator, which reports to the ministry.

Australia, Austria, Sweden and the Netherlands were among other countries that said they had begun investigating the allegations based on more than 11.5 million documents. Banks came under the spotlight over allegations they helped clients hide their wealth offshore.

In Argentina, political opposition parties demanded an explanation from center-right President Mauricio Macri because he served as a director of an offshore company in the Bahamas related to his wealthy father’s business in the past.

 

More to Come, Right Hillary?

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