MEDIA WATCH: Panama Papers and cozy government links

Critica, Panama,   April  16

Panama is today the epicenter of the scandal surrounding “offshore” companies  but probably also the place where it’s hardest to clarify the facts.

The connection between the current government and the main partners of Mossack Fonseca, involved in the creation of  events  leading to the so-called “Panama Papers Panama’ is part of  a widespread culture of lax taxation and an environment in which political and business elites are the same people, as  highlighted by  the Spanish daily Vozpopuli.

“Here tax  evasion is not a crime”. The statement is not from  a Panamanian businessman with  reprehensible ethics and  few scruples, determined to turn his bad practices into  a commonly accepted standard. The phrase was uttered by Kenia Porcell, Panama’s Attorney General.

The statement perfectly illustrates why the  scandal of “offshore” companies used by many personalities from the political, business and entertainment, world has its epicenter in the Central American country. And also, why it is the place where the international community has to work to clarify the facts.

It took 10 days for the Panamanian Attorney General to order the search of the offices of what has become the most famous law firm in the world.

MossackFonseca, is headquartered in Panama. However, its offices were almost the last to be raided.  Many of the more than 30 offices the firm has worldwide were investigated by authorities of the countries concerned for evidence that will help clarify the situation.

But Panama is different. It took 10 days for the  Attorney General to raid the offices of what have become the world’s most famous lawyers. And the operation resulted in a poor fund of documentation, which is currently being analyzed.

Many have linked  this passive attitude to the close relationship between Ramon Fonseca, one of the founders of the firm, and Panama President Juan Carlos Varela.

Until just over a month ago, Fonseca was Minister Counselor of the Panamanian Executive, non-voting but with enormous influence. Previously, Fonseca also held the same position with the government of Ricardo Martinelli.

In Panama the business and political elites are mingled . It is not a question of influence or pressure but that he who holds public office does not abandon his professional activity.

A paradigm example is Roberto Roy, Minister for Canal Affairs of Panama and President of the company that manages the metro in the capital. Roy founded R-M 40 years ago, one of the most habitual state  contractors. Roy, Aleman, Martinelli, Ford, names that never disappear from the first line in ministries, law firms, business organizations. Their tentacles extend to all levers of power.

This would explain the lack of enthusiasm of the authorities to establish responsibilities and clarify whether the country is nuclear in matters of money laundering. With these elements on the table, the Attorney General’s phrase makes sense: “Here tax evasion is not a  crime.”

So much so that Panama had to improvise a special unit against money laundering, which did not exist until now although it has traditionally been a tax haven.

Javier Caraballo, at the head of this new division, with no   effective experience in the field  will have to work with the few  documents left  ten days after the scandal broke.

Investigating “offshore” companies in Panama involves delving  into the more than complicit relationship between politics and business and  the power of the elites in a lax tax system that almost encourages search opacity.

It means putting the knife into a culture and a way of life for many firms. Nothing is easy to shed light on the Panama Papers.