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Americans Named in Panama Papers Leak
Tim Johnson of McClatchy Newspapers refutes the accusation that the ICIJ has been targeting foreign adversaries of the United States in their reporting and examines how middlemen help funnel wealth offshorebiography
Tim Johnson is a national security reporter at McClatchy Newspapers' Washington Bureau. Prior to returning to Washington earlier this year, he served as a foreign correspondent in Beijing (2003-2009) and Mexico City (2010-2016).
transcript
Americans Named in Panama Papers Leak
JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to the Real News Network. I'm Jessica Desvarieux in Baltimore.
More and more names are coming out of the Panama Papers. Among the Americans found in the massive leak of documents from a Panama law firm are the likes of a Hollywood mogul, hotel heir and the former chairman of Citigroup.
Now joining us to tell us the story behind these names is our guest Tim Johnson. He's a national security reporter at McClatchy newspapers' Washington bureau, and he worked on a series naming Americans in the Panama Papers. Thanks so much for joining us, Tim.
TIM JOHNSON: Hi, Jessica.
DESVARIEUX: So Tim, there were some heavy hitters that were uncovered in these Panama Papers. Let's start off with the former chairman of Citigroup, Sanford Weill. How is he connected to Mossack Fonseca?
JOHNSON: Well, let me just introduce this by saying that some of these people probably had legitimate reasons to have an offshore corporation, because when you do international purchases or you maintain assets overseas there's nothing illegal about it. And that certainly, you know, could be the case for the people we'll talk about this segment. In the case of Sanford Weill, he is the beneficial owner of a British Virgin Islands company, or was, that took ownership of a 200-foot yacht called April Fool. So he turned up in the documents because this was a company that was registered by the Panamanian law firm Mossack Fonseca.
DESVARIEUX: Okay. There are some other folks connected to the Panama Papers, like the heir to the Hyatt hotels as well as the Campbell's soup fortune, right?
JOHNSON: Yes. Liesel Pritzker Simmons is a former child star in Hollywood, and she's also an heir to the Hyatt hotel fortune. She's related to the Commerce secretary Penny Pritzger now, and she set up a company that's called Blue Valley Agro Investment. This company has investments in palm oil plantations in Colombia, and she has said, she told us, she told my colleague here that that investment is a green investment for people who want to have, you know, invest money in companies that create jobs through agriculture.
DESVARIEUX: What about links to Hollywood? What did you guys find?
JOHNSON: Well, let me go on with the twist to that. And so another investor in that Blue Valley Agro Investment is precisely another prominent name. It's John Thompson Durant IV, and he's an heir to the Campbell's soup fortune, so the two of them went into this. Now, we don't know exactly motives, but Liesel Pritzker Simmons says it's because of this green investment strategy that they have. So you asked about Hollywood.
DESVARIEUX: Yes, Hollywood. What are the connections there?
JOHNSON: David Geffen, film and music industry mogul, very wealthy man, very prominent. He figures in the documents as well, and this is related to the purchase of a $214 million yacht, Pelorus, that's anchored in the Caribbean. It was a Cayman Islands company that has control of this yacht. The company was later sold to another company that was registered, managed by Mossack Fonseca in Panama, so that's why his name popped up in the documents.
DESVARIEUX: Now, Tim, one of the major criticisms over this leak is that there aren't enough American companies and politicians implicated, but plenty of ties to Vladimir Putin and Chinese businessmen. So some even expect, because USAID funded the investigation, there's been a deliberate attempt to suppress names. I want to point to a tweet that Wikileaks had. They essentially say that the organized crime and corruption reporting project which it says, quote, targets Russia and the former USSR and was funded by USAID and American hedge fund billionaire George Soros. So, as a journalist, what's your response?
JOHNSON: Baloney. You know, we went into this. We're not a large news organization, but we do, McClatchy owns 29 newspapers spread across the United States. The company's investment in this project has been, by our standards, significant. We've had three reporters spending the better part of five, six months full time on this, with editors leading and directing. And so we didn't get funded by anybody other than the company coffers here. Now, ICIJ, the International Consortium of Investigative Journalists, is a nonprofit, and my understanding is that yes, the parent company does receive funding from, you know, Soros and other funds.
But let me say, we went into this just as if you walked into the library of Congress and saw 20 thousand boxes there. We had no idea what we would find.
DESVARIEUX: And
JOHNSON: It turns out that we found, you know, or our colleagues, you know, 370 colleagues who took part in this, found some things that were pretty interesting on Putin, but to suggest that we targeted him is silly. I think, you know, it's looking very short sightedly at the kind of far ripple effects that this investigation is having. Just today you see the resignation of the CEO of an Austrian bank. You see protests at the Société Générale in Paris. The Malta legislature is considering a no confidence motion in the government there.
Look at smaller places. There will be news stories coming out in the future about what's happen in extractive industries in the Democratic People's Republic of Congo related to these operations.
DESVARIEUX: Also, for folks that don't really understand your process, can you just explain to us a bit about how this all works? how do you even come up with these names?
JOHNSON: It's been a long process. We simply, you know, this is 11.5 million documents. It's a massive amount of information. In digital terms it's 46 times bigger than the Wikileaks leak, back in 2010, of US diplomatic cables. So we've sat in front of the computer for months on end typing in names, searching for things. We find things, but that's not the story. We have to understand, you know, have to look into other records and do phone calls to follow up on why somebody may have an offshore corporation, or why there may be a nesting, or a series of offshore corporations. It's been very complex, and it's been a real collaborative effort.
For instance, I've spent a long time dealing with journalists in Holland about an accounting and law firm there that designs strategies that, in essence, are really tax avoidance strategies, really almost, I don't want to say it's money laundering but it certainly gives the appearance of designing strategies to set up, say, trusts in New Zealand and subordinate foundations in Holland funneling money, say, to Romania, that would be owned, actually, by a Mexican tycoon. Now, why on God's earth would one design this kind of strategy unless one really wanted to put great distance between oneself and this money? You really come out at the end with money that's [coined].
I have a colleague in Mexico who's done a marvelous story, this has really gotten traction only in Mexico, but of an attempt by the wife of an owner of a major pharmaceutical distributor to set up a series of offshore corporations to make a bid on a competitor of her husband's company, and this was really the sort of thing that would send up red flags for antitrust officials in most places. This succeeded, so they bought this competing company and then captured around 37 and a half percent of the pharmaceutical market in Mexico and got rid of competition. You know, this is the world, the shadowy world of offshore corporations. You disguise the real beneficial owners and you can do things like things that are anti-competitive, or laundering of money, all those sorts of things.
DESVARIEUX: All right, Tim Johnson. Let's pause the conversation here, and we'll be back to talk about the last McClatchy report about how middle men help funnel wealth offshore. We'll be right back. Thanks so much for being with us, Tim.
JOHNSON: You're welcome.
DESVARIEUX: We'll be right back.
Part 2
JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome back to the Real News Network. I'm Jessica Desvarieux in Baltimore. We're picking up our conversation with national security reporter at McClatchy newspapers' Washington bureau, Tim Johnson. He worked on the latest McClatchy piece, titled "Creating far-off companies, with few questions asked.
Thanks so much for being with us, Tim.
TIM JOHNSON: You're welcome, Jessica.
DESVARIEUX: So Tim, the piece really centers around these middlemen who you guys describe as being the link for the rich to offshore servicers like the Panamanian law firm Mossack Fonseca. You specifically identify one individual, Michael Alfred Del Vecchio. Tell us how he operated as a middleman.
JOHNSON: Michael Del Vecchio is a Mexican American grew, at least his early years were spent in Mexico City. He went to a university in Mexico. Then he joined the Air Force, enlisted in 1979, spent a good number of years in the Air Force and had rather delicate positions, handling remote satellite systems, including on remote islands like Diego Garcia in the Indian Ocean.
DESVARIEUX: Okay, so then how does he get caught up in this whole world of offshore companies?
JOHNSON: It's a very curious story, and I'm not certain that we know the full picture, but we found his history extraordinary. After leaving the Air Force he gets a job with Boeing, and so he moves to Europe and starts selling Boeing aircraft out of Madrid. And somehow he leaves Boeing in 2005 and very quickly gets into the offshore companies business, and very quickly becomes a rainmaker for Mossack Fonseca, this Panamanian law firm. As the way we can count it, there's at least 200 offshore corporations that were set up by him for various clients.
Now it gets interesting. Who are these clients and why is he doing this? I mean, this is a guy who, ostensibly, was protecting US secrets in the Air Force and also dealing with one of the blue chip American companies, Boeing. Well, he begins to set up offshore corporations in the online gaming industry, among other things, and with people who are convicted of organized crime. In one of these companies is BetCRIS out of Costa Rica. And exactly how Del Vecchio came in contact with these people is not really clear. He told my colleague Marisa Taylor, who reported this story over the course of, you know, several months.
At first he kind of denied that he knew these people. He didn't want to call them clients, but in the emails in the Mossack Fonseca archives he personally refers to them as his clients and himself as a financial adviser. So he played a critical role in bringing these people into the law firm and getting their offshore corporations, companies, trusts, foundations up and running.
DESVARIEUX: Could he be in some legal trouble, Tim?
JOHNSON: THat's a good question. Generally, for instance, in the Swiss Leaks investigation the US Treasury department and Department of Justice went after the banks. They went out after the clients and the banks, but so far the use of American law for extraterritorial purposes in foreign law firms or foreign intermediaries hasn't really happened, and this has been a big loophole that we've seen in these papers, is that these guys are setting up and selling these offshore companies without doing the due diligence. Everybody seems to shirk responsibility for who's supposed to do the due diligence about who the end users of these offshore corporations are.
In fact, there's nothing really illegal about much of what they do. There's no international convention or anything else that requires either the law firms or the accountants or the intermediaries to do this, other than fear that they could be subjected to criminal prosecution, generally by US, the Department of Justice.
DESVARIEUX: So Tim, just so I'm clear, these advisers and service providers, they sort of take on the role of helping to shield the identity of the real owners of these offshore accounts. So doesn't that show us that the public really doesn't know that much about who is actually evading taxes, even if we have these millions of documents coming out the Panama Papers?
JOHNSON: Not only does the public not know about who's evading taxes, they don't know the provenance of the cash, the money that's flowing these offshore corporations. It's a very different kettle of fish to have, you know, someone who's wealthy who sets up one offshore corporation, say, in the Caribbean, the British Virgin Islands or in Panama to do some sort of business deal, to a person who sets up a daisy chain of offshore corporations and foundations and trusts which have no other intent but to distance the beneficial owner, the real owner of the money from what assets are being held or what's being spent. It's clearly a technique to distance the real owner from that money.
DESVARIEUX: All right. Tim Johnson joining us from Washington, DC Thank you so much for being with us.
JOHNSON: You're welcome, Jessica.
DESVARIEUX: And thank you for joining us on the Real News Network.
End
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=16077
14 replies
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Yeah...right!
JOHNSON: Yes. Liesel Pritzker Simmons is a former child star in Hollywood, and she's also an heir to the Hyatt hotel fortune. She's related to the Commerce secretary Penny Pritzger now, and she set up a company that's called Blue Valley Agro Investment. This company has investments in palm oil plantations in Colombia, and she has said, she told us, she told my colleague here that that investment is a green investment for people who want to have, you know, invest money in companies that create jobs through agriculture.
It was mocking the "Green Investment."
http://www.usatoday.com/story/news/2016/04/05/panama-papers-firm-linked-1000-plus-us-companies/82670334/
http://www.theguardian.com/commentisfree/2016/apr/07/panama-papers-taxes-universal-basic-income-public-services
and not just Nevada but Wyoming too:
So sleazy, greedy and cold. The size of the entire scheme just blows my mind. I think of all the poor people, starving children, people dying from disease and filthy water, living in streets, shanty towns. The one's who stole resources from their country's belong in hell.
http://www.vice.com/read/evil-llc-0000524-v21n12
These people suck the life out of the 99% worldwide. The damn sure suck the life out of us here. Now I wonder just how many in the U.S. Government/Congress knew about this and turned a blind eye or dove right into the blood pool and hid their filthy fortunes?
Just blowing off steam after going out on a Google search. Thought I'd just dump this stuff here for no good reason than to vent.
WASHINGTON -- The law firm at the hub of a global financial scandal has links to more than 1,000 U.S. companies, formed mostly in Nevada and Wyoming since 2001, but appears to have largely escaped the scrutiny of U.S. financial regulators — at least in public.
The leak this week of more than 11 million records from the Panamanian firm, Mossack Fonseca, has led to a global uproar that prompted Iceland’s prime minister to step aside Tuesday. An international consortium of journalists has reported the documents tie the firm, which specializes in shell companies that can be used to conceal assets, to Russian oligarchs, former heads of state and world soccer’s scandal-plagued governing body.
Yet despite those apparent dealings and its operations in the United States, the firm has appeared in only a scattering of court cases and regulatory filings. Most involve government attempts to track money the authorities believed had been concealed behind overseas shell companies the firm helped establish.
The Justice Department is “reviewing the reports” published by international journalists, the head of its Criminal Division, Leslie Caldwell, said Tuesday, but declined to elaborate.
The leak this week of more than 11 million records from the Panamanian firm, Mossack Fonseca, has led to a global uproar that prompted Iceland’s prime minister to step aside Tuesday. An international consortium of journalists has reported the documents tie the firm, which specializes in shell companies that can be used to conceal assets, to Russian oligarchs, former heads of state and world soccer’s scandal-plagued governing body.
Yet despite those apparent dealings and its operations in the United States, the firm has appeared in only a scattering of court cases and regulatory filings. Most involve government attempts to track money the authorities believed had been concealed behind overseas shell companies the firm helped establish.
The Justice Department is “reviewing the reports” published by international journalists, the head of its Criminal Division, Leslie Caldwell, said Tuesday, but declined to elaborate.
http://www.theguardian.com/commentisfree/2016/apr/07/panama-papers-taxes-universal-basic-income-public-services
We should all be able to agree: no one should be poor in a nation as wealthy as the US. Yet nearly 15% of Americans live below the poverty line. Perhaps one of the best solutions is also one of the oldest and simplest ideas: everyone should be guaranteed a small income, free from conditions.
Called a universal basic income by supporters, the idea has has attracted support throughout American history, from Thomas Paine to Martin Luther King Jr. But it has also faced unending criticism for one particular reason: the advocates of “austerity” say we simply can’t afford it – or any other dramatic spending on social security.
If you're rich, you can avoid paying taxes. That's got to change
Jan Schakowsky
The Panama Papers show how vital it is to close tax loopholes so the system’s fair for everyone. It’s a shame some of my colleagues in Congress don’t agree
Read more
That argument dissolved this week with the release of the Panama Papers, which reveal the elaborate methods used by the wealthy to avoid paying back the societies that helped them to gain their wealth in the first place.
Roads and transportation infrastructure. Educated workforces. Courts and legal systems. Innovations sparked by government funding, such as the internet. No one – no matter how smart or hard working – joins the American or global elite without making use of these shared resources.
Called a universal basic income by supporters, the idea has has attracted support throughout American history, from Thomas Paine to Martin Luther King Jr. But it has also faced unending criticism for one particular reason: the advocates of “austerity” say we simply can’t afford it – or any other dramatic spending on social security.
If you're rich, you can avoid paying taxes. That's got to change
Jan Schakowsky
The Panama Papers show how vital it is to close tax loopholes so the system’s fair for everyone. It’s a shame some of my colleagues in Congress don’t agree
Read more
That argument dissolved this week with the release of the Panama Papers, which reveal the elaborate methods used by the wealthy to avoid paying back the societies that helped them to gain their wealth in the first place.
Roads and transportation infrastructure. Educated workforces. Courts and legal systems. Innovations sparked by government funding, such as the internet. No one – no matter how smart or hard working – joins the American or global elite without making use of these shared resources.
and not just Nevada but Wyoming too:
WASHINGTON
The Wyoming arm of the law firm at the heart of the Panama Papers global scandal is under investigation by Wyoming state officials for failing to maintain required statutory information about companies registering there, Secretary of State Ed Murray said Wednesday.
Upon learning of the Panama Papers, a massive leak of secret offshore company data reported on by McClatchy and more than 100 other media partners around the globe, Wyoming initiated an audit of 24 companies registered in the state by the law firm Mossack Fonseca and its partners, he said.
“The audit concluded around noon on Monday, April 4th, and determined that M.F. Corporate Services Wyoming LLC failed to maintain the required statutory information for performing the duties of a registered agent under Wyoming law,” Murray said in a statement.
The state followed immediately with administrative action, demanding that required information be provided.
The Wyoming arm of the law firm at the heart of the Panama Papers global scandal is under investigation by Wyoming state officials for failing to maintain required statutory information about companies registering there, Secretary of State Ed Murray said Wednesday.
Upon learning of the Panama Papers, a massive leak of secret offshore company data reported on by McClatchy and more than 100 other media partners around the globe, Wyoming initiated an audit of 24 companies registered in the state by the law firm Mossack Fonseca and its partners, he said.
“The audit concluded around noon on Monday, April 4th, and determined that M.F. Corporate Services Wyoming LLC failed to maintain the required statutory information for performing the duties of a registered agent under Wyoming law,” Murray said in a statement.
The state followed immediately with administrative action, demanding that required information be provided.
So sleazy, greedy and cold. The size of the entire scheme just blows my mind. I think of all the poor people, starving children, people dying from disease and filthy water, living in streets, shanty towns. The one's who stole resources from their country's belong in hell.
http://www.vice.com/read/evil-llc-0000524-v21n12
MF Corporate Services is situated in the Parc Place Professional Complex, home to several identical, single-story buildings with red-tile roofs. There were only a few cars in the parking lot, and I didn't see anyone outside. A red-and-white metal MF Corporate Services sign, planted into a patch of rocks and cactuses, blew forlornly in the warm breeze.
As far as I could tell from public records and court documents, MF Corporate Services doesn't do any drop-in work—its only purpose seems to be setting up Nevada shells for Mossack Fonseca clients—and the remote setting did nothing to dispel that impression. Amunategui runs day-to-day operations, though internal company documents I found in court records show she works closely with Mossack Fonseca employees in Panama, such as Leticia Montoya, the custodian of record for dozens of shell firms linked to Lázaro Báez.
Montoya has quite a checkered career, having previously registered or served as a nominee director for at least six anonymous companies that were involved in major international corruption scandals. Among those is a Panamanian shell firm called Nicstate, whose beneficial owners turned out to include former Nicaraguan president Arnoldo "Fat Man" Alemán. He used Nicstate and other offshore vehicles to divert nearly $100 million of state funds into his own pockets. Montoya also helped set up Mirror Development Inc., which Siemens of Germany employed to funnel bribes to Argentine government officials who helped it win a $1 billion contract to produce national identity cards. This was just one component of a global scheme by Siemens, which also used corporate cutouts to pay off government officials in Bangladesh, Venezuela, and Iraq, where the recipients included Saddam Hussein.
I figured that my best chance to speak to Amunategui would be if I dropped in unexpectedly, so I hadn't called ahead. When I knocked on the glass door of MF Corporate Services, a man holding a clipboard, sitting in a randomly placed blue chair in the office's lobby, waved me in. A white plastic trash bag filled with shredded documents sat just inside the door, and a framed map of the world hung on a wall. There were four clocks above it, showing the time in Las Vegas, Hong Kong, Switzerland, and Panama.
As far as I could tell from public records and court documents, MF Corporate Services doesn't do any drop-in work—its only purpose seems to be setting up Nevada shells for Mossack Fonseca clients—and the remote setting did nothing to dispel that impression. Amunategui runs day-to-day operations, though internal company documents I found in court records show she works closely with Mossack Fonseca employees in Panama, such as Leticia Montoya, the custodian of record for dozens of shell firms linked to Lázaro Báez.
Montoya has quite a checkered career, having previously registered or served as a nominee director for at least six anonymous companies that were involved in major international corruption scandals. Among those is a Panamanian shell firm called Nicstate, whose beneficial owners turned out to include former Nicaraguan president Arnoldo "Fat Man" Alemán. He used Nicstate and other offshore vehicles to divert nearly $100 million of state funds into his own pockets. Montoya also helped set up Mirror Development Inc., which Siemens of Germany employed to funnel bribes to Argentine government officials who helped it win a $1 billion contract to produce national identity cards. This was just one component of a global scheme by Siemens, which also used corporate cutouts to pay off government officials in Bangladesh, Venezuela, and Iraq, where the recipients included Saddam Hussein.
I figured that my best chance to speak to Amunategui would be if I dropped in unexpectedly, so I hadn't called ahead. When I knocked on the glass door of MF Corporate Services, a man holding a clipboard, sitting in a randomly placed blue chair in the office's lobby, waved me in. A white plastic trash bag filled with shredded documents sat just inside the door, and a framed map of the world hung on a wall. There were four clocks above it, showing the time in Las Vegas, Hong Kong, Switzerland, and Panama.
These people suck the life out of the 99% worldwide. The damn sure suck the life out of us here. Now I wonder just how many in the U.S. Government/Congress knew about this and turned a blind eye or dove right into the blood pool and hid their filthy fortunes?
Just blowing off steam after going out on a Google search. Thought I'd just dump this stuff here for no good reason than to vent.
