Porcell’s Belated Reaction in Mossack Fonseca Case

Ten days after the eruption of the Panama Papers scandal, the Public Ministry (PM) has belatedly moved to confiscate documents at the telecoms company responsible for providing IT services to law firm Mossack Fonseca. The PM’s latest action notably trails the more assertive and swift response seen in many other countries, where authorities acted promptly to apprehend documentary evidence linked to alleged illicit activities. The PM is believed to have had its hand forced into action by the increasingly strong allegations, voiced across Panama, of a shameless judicial cover-up of the case.

The investigation, headed by Javier Caraballo, prosecutor for organized crime, has sought to compile the information divulged by the International Consortium of Investigative Journalists (ICIJ), consisting of over 11 million documents belonging to law firm Mossack Fonseca. It has also aimed to collect all physical and digital evidence relating to the possible use of the law firm by wealthy individuals seeking to hide illicit funds in tax havens; as well as to corroborate if the law firm was responsible for incorporating offshore companies used in criminal activities such as the money laundering and the financing of terrorist activities. According to witnesses on the scene, personnel working at the firm initially refused to cooperate with the prosecutor’s inspection, which started at 3pm yesterday.  

Nevertheless, experts fear that, at this stage, it is possible that those implicated in the investigation may have carried out the wholesale destruction of damning evidence, which would make the case impossible to solve. Until yesterday, the prosecutor’s office had only sought to corroborate whether the law firm’s database had indeed been the subject of a hacking attack.

Overdue

The Panama investigation is significantly trailing actions taken by judicial authorities across Europe and the Americas, where the firm’s executives have seen their accounts frozen and assets seized.

In El Salvador, the General Prosecutor of the Republic raided the local Mossack Fonseca offices.  The raid went on well into the early hours of the morning, as the authorities sought to remove all relevant documentary evidence.

Last Monday, the Peruvian Public Ministry not only raided the local Mossack Fonseca offices, but also ordered the search of the private home of the firm’s local legal representative, Mónica de Ycaza Clerc. Similarly, Venezuela’s General Prosecutor ordered the immediate freezing of accounts and the seizure of assets linked to the scandal.

Across the Atlantic, the French judicial police raided the offices of Société Générale, one of the country’s main banks, once it emerged that it had purchased over 1000 offshore companies from Mossack Fonseca. Meanwhile, Switzerland launched an investigation into the sale at auction of a painting by Italian artist Amedeo Modigliani that was allegedly stolen from a holocaust survivor during WWII. The buyer was an offshore company created by Mossack Fonseca.

Panama America has sought to learn from the Panamanian Banking Supervisor if it had launched an official investigation relating to the Panama Papers scandal, considering that law firm Mossack Fonseca owns a Trust Company, Mossfon Trust Corporation (its legal name is Fiduciaria Mossfon, S.A.), which falls under its regulatory responsibility. However, a spokesperson for the Supervisor stated that the regulator had “nothing to declare at this stage”.

Protecting private interests

According to constitutional lawyer Miguel Antonio Bernal, it is plain for all to see that the Panamanian authorities have been more concerned with protecting the private interests of Jürgen Mossack and Ramon Fonseca Mora, than in investigating the facts: “they have barely asked Messrs. Mossack and Fonseca what time it is. ” he remarked ironically. He went on to ask rhetorically: “Where did Fonseca Mora work until three weeks ago? In the Presidency of the Republic, where he was ministerial advisor to President Varela himself, that’s where. And that’s the reason why they don’t want people to know the actual truth. The Panamanian people are being duped, this is indefensible. The name of our country has been tarnished across the world by the actions that some insist on defending as being legal, but which are in reality unethical, immoral and detrimental, however one may choose to look at them.” Mr. Bernal went on to argue that information in Panama is being censured: “if you want to know what is truly going on, you have to go onto the internet because most of the local media over here are not reporting the true extent of the case. “They [the government] have dreamt up a media campaign that is an insult to the intelligence of the Panamanian people.”

For his part, Ernesto Cedeño, a local lawyer, considered that the Public Ministry needs to get its act together and act fast, in order to determine whether anti-money laundering regulations were in fact violated. He went on to point out that Article 257 of the Penal Code stipulates prison sentences of up to 8 years for those found guilty of failing to apply anti-money laundering rules. The Public Ministry has to established if the people involved acted willfully, adding that “for that to happen, the Public Ministry first and foremost has to investigate these allegations and not just those pertaining to intellectual property theft.”

According to political veteran Jorge Gamboa Arosemena, the lack of action on the part of the Public Ministry beggars belief: “what the PM has done so far, has been to look into a hacking complain made by Mossack Fonseca, and not to investigate law firm Mossack Fonseca itself”.