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After Panama papers leak: U.S., Britain are eager for names

People gather to demonstrate against Iceland's prime minister, in Reykjavik, Iceland, on Monday, April 4, 2016. Iceland's prime minister insisted Monday he would not resign after documents leaked in a media investigation allegedly link him to an offshore company that could represent a serious conflict of interest, according to information leaked from a Panamanian law firm at the center of an international tax evasion scheme.
People gather to demonstrate against Iceland's prime minister, in Reykjavik, Iceland, on Monday, April 4, 2016. Iceland's prime minister insisted Monday he would not resign after documents leaked in a media investigation allegedly link him to an offshore company that could represent a serious conflict of interest, according to information leaked from a Panamanian law firm at the center of an international tax evasion scheme. AP

The U.S. and British governments Monday vowed to examine more closely foreign politicians and tycoons who hide fortunes in secret offshore accounts even as governments across the globe felt a wave of public anger over leaders with hidden assets.

Thousands of protesters gathered in Iceland’s capital of Reykjavik to demand the ouster of that nation’s leader over revelations of his offshore holdings. Riot police stood nearby, but the protest remained peaceful.

Inside Iceland’s parliament, opposition legislators considered a no-confidence vote of Prime Minister Sigmundur David Gunnlaugsson, a move that would lead to fresh elections, over news that he did not properly disclose his ties to Wintris Inc., a British Virgin Islands company with money tied to the nation’s collapsed banks. Gunnlaugsson denied that his ownership was a conflict of interest, insisted he’d broken no laws and said he would not resign.

From the White House to the Kremlin, and on to Panama City, Vienna and London, governments reacted to the disclosure of the so-called Panama Papers, a law firm’s once-secret database that details the offshore interests of 12 current or former world leaders, as well as 128 other politicians and public officials.

No U.S. politicians of note were found in the archives of the Mossack Fonseca law firm, a global leader in setting up offshore corporations. The U.S. Justice Department signaled that it could focus its gaze more intently on political corruption even when it occurs outside of U.S. borders.

“While we cannot comment on the specifics of these alleged documents, the U.S. Department of Justice takes very seriously all credible allegations of high level, foreign corruption that might have a link to the United States or the U.S. financial system,” Justice Department spokesman Peter Carr said.

 
 

White House spokesman Josh Earnest called the Obama administration a leader “in working against illicit financial transactions and in fighting corruption” and added that it would push to promote more financial transparency.

But Earnest defended one key U.S. ally, Ukrainian President Petro Poroshenko, who is under fire after the so-called Panama Papers revealed a secret offshore company in the British Virgin Islands set up in his name. Known as the “chocolate king” because of his candy business, Poroshenko is one of Ukraine’s richest men.

Earnest said that Poroshenko has led “a whole bunch of anti-corruption reforms in Ukraine.”

“When you consider the record of President Poroshenko's predecessor, it is clear that they have made some important progress,” Earnest said.

The International Consortium of Investigative Journalists (ICIJ), the Washington-based nonprofit that oversaw the collaborative media project, is expected to make public the names of the thousands of clients, shareholders and owners of offshore companies in May.

A former IRS official said the agency will likely look into the findings.

"Once the IRS becomes aware of the identities of these people, I almost can guarantee you that they will do some kind of triaging of the data to see if there are U.S. people in there and based on the results of that, they may elect to go after people," said Daniel Reeves, who helped create the IRS offshore compliance unit before retiring in 2012.

The world’s largest document leak went public on April 3, quickly dubbed the “Panama Papers.” These documents detailed the offshore bank accounts of many of the world’s richest people. Steve “Buzz” Thomma and McClatchy D.C. reporter Kevin Hall exp

Britain wants the leaked trove so it can “act on it swiftly and appropriately,” said Jennie Granger, director general of enforcement and compliance at the United Kingdom’s Revenue & Custom office.

“Our message is clear: there are no safe havens for tax evaders, and no one should be in any doubt that the days of hiding money offshore are gone,” Granger said in a statement.

Spokespeople for world leaders linked directly or indirectly to offshore holdings administered by Mossack Fonseca challenged the revelations.

 
 

State-controlled media in Russia defended President Vladimir Putin. Some of his oldest friends manage offshore companies that have shuffled through as much as $2 billion, documents in the archives reveal.

“The degree of ‘Putinophobia’ has reached a point where to speak well about Russia … is impossible,” spokesman Dmitry Peskov said in Moscow, according to RT News, a government-backed outlet.

Peskov lashed out at ICIJ, the group that obtained the leaked archives from Germany’s Süddeutsche Zeitung newspaper and shared them with some 110 media organizations around the world, including McClatchy, the only U.S. newspaper company with access to the data trove.

“It is clear to us that a number of journalists who are part of it have hardly majored in journalism. There are many former representatives of the (U.S.) State Department and the CIA, along with other intelligence agencies,” Peskov said, according to RT News.

Media outlets in 76 countries took part in the collaborative investigation, and the fallout ricocheted around the globe. The same public anger bubbling in Iceland erupted in places like Austria, where two banks were mentioned in the investigation for helping wealthy individuals funnel money offshore to skirt taxes.

Offshore corporations have one main purpose - to create anonymity. Recently leaked documents reveal that some of these shell companies, cloaked in secrecy, provide cover for dictators, politicians and tax evaders.

Austrian Chancellor Werner Faymann issued a statement Monday calling for the European Union to monitor more rigorously money-laundering through offshore havens.

“We need sharper action against non-cooperative third countries,” Faymann said. “For countries whose business model evidently consists of disguising tax fraud through companies with a mail drop, there must be sanctions.”

In Buenos Aires, the presidential office said the father of President Mauricio Macri had declared a Bahamian offshore company, Fleg Trading Ltd, on his tax forms but that Macri had not because he was never a company shareholder. It was formed in 1998, long before Macri came to office.

Panama’s President, Juan Carlos Varela, said in a statement that his government would collaborate with any foreign government seeking information linked to the Mossack Fonseca law firm.

McClatchy White House correspondent Anita Kumar contributed.

This story is part of a larger series, involving McClatchy and other news organizations, working under the umbrella of the nonprofit International Consortium for Investigative Journalists.

Tim Johnson: 202-383-6026; @timjohnson4

An unprecedented look at offshores

A database leak at the Mossack Fonseca law firm in Panama exposes how it hides money for its clients.

THE LEAK: Munich’s Suddeutsche Zeitung newspaper was given the files, which were shared with the International Consortium of Investigative Journalists.

ITS SIZE: 11.5 million emails and client records. It would take 24 hours to download the 2.6 terabytes at normal internet speeds.

THE MEDIA PARTNERS: More than 350 journalists, including a U.S. McClatchy reporting team, in 77 countries examined the data.

WHO WAS FOUND: 12 current and former heads of state and government, 61 relatives and associates of leaders, and 128 other public officials.

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