Highlights of Pandora Papers Reports in Latin America

From street demonstrators to dramatic impeachment offers to criminal investigations, the past few months have been tumultuous for Latin America since the publication of the Pandora Papers. The region has also seen a series of historic political shifts in the last election, including some of the main candidates implicated in the offshore deal scandal revealed by the investigation.

Led by the International Consortium of Investigative Journalists, the Pandora Papers are based on a mine of nearly 12 million documents leaked by law firms and financial advisers that facilitate the creation of shell companies in tax havens around the world. whole. Latin American journalists exposed the largest contingent of officials linked to foreign transactions of any region in the global survey. Among them: the incumbent presidents of Chile, the Dominican Republic and Ecuador, 11 former heads of state and dozens of government and political officials.

The Pandora Papers are ICIJ’s largest ever collaboration, with more than 600 journalists from 117 participating countries. Across Latin America, nearly 100 journalists from over 30 media contributed dozens of articles. Analysts called the presentation a “political tsunami for the Latin American elite.”

Here are some highlights from Pandora Papers of ICIJ partners in the region.

Argentina

Of the more than 200 countries and territories featured in the Pandora Papers, Argentina has the third highest number of beneficial owners found in the data – that is, the real owners behind the offshore companies found in the documents but whose the information usually does not appear. in public archives.

Journalists from Diario La Nación, el Diario AR and Infobae have identified 2,521 Argentines linked to companies in secret, low-tax jurisdictions. Among them is Ernesto Clarens, a financier who is under investigation for his alleged role in laundering money from corruption in public works contracts under the Kirchner administration. The ICIJ partners discovered that Clarens had opened a shell company in the Bahamas in 2007 to manage a Swiss bank account. A spokesperson for Clarens said the company “was not doing any business.” Clarens, who allegedly confessed to the authorities his involvement in laundering the proceeds of corruption, has already appeared in the ICIJ’s Panama Papers investigation with a network of offshore shell companies.

Other Argentines on the Pandora Papers include: Mariano Macri, the younger brother of former president Mauricio Macri, who opened a shell company in Belize shortly after his brother took office, but said he did not had never used it; Zulema Menem, the daughter of former President Carlos Menem, who operated an offshore company while her father was in office; and football stars Ángel Di María and Javier Mascherano.

Brazil

Digital outlet Metropoles has found that 66 people, who are among Brazil’s top tax debtors and owe nearly $ 3 billion to combined collectors, own offshore companies with millions of dollars deposited in tax havens. Among them is Eike Batista, once considered the richest person in the country, who owes nearly $ 700 million in taxes. Batista did not respond to Metropoles’ requests for comment.

To compile the list, reporters searched a government database for the names of all individuals with tax debts greater than $ 3.4 million. Then they crossed the information against the list of beneficial owners found in the Pandora Papers database, the outlet explained in its article.

Metropoles and ICIJ partners in Brazil Agência Pública, Poder 360 and Revista Piauí, also revealed that the country’s Minister of Economy, Paulo Guedes, is holding millions of dollars offshore under a company registered in the Virgin Islands. British. After the revelations, Guedes was invited to appear before the country’s legislature to answer questions about his offshore ties.

Costa Rica

In Costa Rica, authorities have vowed to tighten tax controls after revelations from Pandora Papers that one of the country’s largest cooperatives, which had previously been fined for its misuse of an offshore company, had registered a new company in Panama in 2019.

Costa Rica Noticias and the Centro Latinoamericano de Investigación Periodística (CLIP) revealed that the Dos Pinos Milk Producers Cooperative has registered the offshore company along with two other companies from the British Virgin Islands and Barbados as shareholders. Journalists noted that the cooperative does not export to either country. Dos Pinos has stated that the purpose of its offshore structures is to operate commercially in the countries where they are registered.

The cooperative had already been in trouble because of its use of tax havens. In 2018, Dos Pinos paid a tax fine of $ 420,000 for using a shell company in Belize to pay its senior executives’ salaries and evade income taxes and social security. In 2020, the cooperative had to donate nearly $ 1 million to the social security fund.

El Salvador

In El Salvador, journalists from El Faro revealed that two former presidents who had been questioned or investigated for alleged corruption had created previously unknown offshore companies.

Former President Alfredo Cristiani, who oversaw the 1992 peace accords to end the country’s civil war, established 16 offshore companies in the British Virgin Islands and Panama, a year after leaving office. He also opened at least one business in 1992 while still president. In three years, five of the companies transferred more than $ 1.4 million and another was valued at $ 10 million in 2008. Cristiani told El Faro that its offshore activities are in compliance with the law. El Faro previously revealed in 2018 that Cristiani secretly spent more than $ 5 million from a discretionary fund five months before stepping down. He was questioned by lawmakers and denied any wrongdoing.

The Pandora Papers also revealed that the former President of El Salvador, Francisco Flores, was the beneficial owner of two companies, one in Panama and the other in the British Virgin Islands. The companies were created a year after his departure. Prior to her death in 2016, Flores was under investigation for her involvement in the alleged embezzlement of millions of dollars donated by Taiwan to aid victims of a devastating earthquake. In 2018, a Salvadoran court cleared him of his civil liability.

Mexico

In Mexico, ICIJ partners Quinto Elemento Lab, Proceso, El País and Univision have connected more than 3,000 people to offshore structures. Among them are members of the country’s richest families, elected officials and political allies of President Andrés Manuel López Obrador and former President Enrique Peña Nieto. The list includes people accused of money laundering and corruption.

With the information from the leaked documents, the outlets have mapped the areas that concentrate the greatest number of people linked to offshore companies. Unsurprisingly, the data revealed that most of them live in the wealthier neighborhoods of Mexico City, highlighting the chasm between the poor and those rich enough to access the offshore system. The investigation also found that 25 people alone had moved $ 1.2 billion overseas through secret financial structures.

Paraguay

ABC Color has revealed that former president Horacio Cartes operated an offshore company incorporated in 2011 in Panama, but did not disclose it in three asset returns filed during his years as president. Cartes changed his statements to include the company only after receiving questions from reporters in September, three years after leaving office.

After the publication of the Pandora Papers, the president of the Liberal Party of Paraguay filed a complaint against Cartes for having omitted the company from its declaration of assets. However, Cartes is unlikely to face criminal prosecution because he voluntarily changed his statement and before an investigation was opened, reports ABC Color.

Peru

Twenty-one years ago, two journalists from the Peruvian newspaper Liberación reported being kicked out of the Panamanian offices of the Alcogal law firm by founder Jaime Alemán, who they said shouted insults and ordered them to be broken. camera. The journalists were there to seek answers on a group of offshore companies linked to Vladimiro Montesinos, the infamous former intelligence chief of Peru under the Fujimori regime. Montesinos fled the country for Panama in 2000 after a corruption scandal that also led to the resignation of President Alberto Fujimori. The day after the journalists visited his offices, Alcogal issued a press release denying having had any relationship with Montesinos, professional or otherwise.

Two decades later, ICIJ partners Convoca.pe and IDL-reporteros.pe have answered some of the remaining questions. Media found in the Pandora Papers disclose dozens of offshore companies linked to people identified by authorities as leaders of the Montecinos corruption network. The offshore structures were put in place by Alcogal, according to the report. Many companies are not known to the Peruvian authorities, who have been investigating corruption cases under the Fujimori government for years.

Porto Rico

In 2012, with the aim of becoming an international financial center, the government of Puerto Rico offered tax exemptions of up to 45 years to anyone who opened a bank, insurance company, subsidiary or specialist business. in financial services on the island. The flexibility offered has attracted smaller banks interested in opening accounts with the Federal Reserve, a direct ticket to the US market and the dollar, reported Centro de Periodismo Investigativo, partner of the ICIJ. The owners of these banks are mostly foreigners and are prohibited by law from offering their services to Puerto Rican residents.

CPI found documents in the Pandora Papers leak that show how these banks have become facilitators of offshore transactions for foreigners, including some accused of wrongdoing in the international bribery case involving Brazilian construction giant Odebrecht. .

Uruguay

Semanario Búsqueda reported that Diego Godín, the captain of the Uruguayan national football team, transferred his image rights to a company in the British Virgin Islands in 2007, two months before making his Spanish league debut. Godín was not listed as the beneficial owner of the company which was instead registered under the names of his sister and cousin. Godín told Búsqueda that he declared the company offshore in Spain and paid taxes on its income.

The use of offshore structures in low tax jurisdictions to receive payment for image rights was common practice among soccer players playing in Europe. Once detected, the practice led to sanctions.

See more Pandora Papers reports from Latin America and stories from your country here. You can also hear several Latin American partners on “Un Poco de Contexto,” an original Spotify podcast that produced an eight-part series in Spanish on Pandora Papers reporting in the region.

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