Different media outlets around the world published yesterday the conclusions of a journalistic investigation concerning a new leak of documents from the infamous – and now non-existent – Panamanian firm Mossack Fonseca, whose information revealed for the first time in April 2016 originated the scandal known as the “Panama Papers.”
The documents leaked this time span early 2016 and late 2017, meaning they include information regarding the activities and reactions of the firm and its clients following the publication of the first trove. The International Consortium of Investigative Journalists informed that, same as the first time, the information was obtained by German newspaper Süddeutsche Zeitung, which it then shared with the consortium and its members.
La Nación, Infobae, and Perfil – news sites that have in their roster journalists that are members of the ICIJ – published yesterday the most relevant stories concerning high-profile Argentine figures that could be found among the 1.2 million documents to which they had access.
They agreed on three main headlines: the admission of President Mauricio Macri’s brother, Gianfranco, of having entered the fiscal amnesty implemented by the government at the end of 2016; the frantic operations conducted by members of Mossack Fonseca and advisers of the Macri family to prove the President had nothing to do with an offshore company called Fleg Trading, despite showing up as its director; and the issuing of a “Report of Suspicious Activity” regarding the activities of a company run by the Messi family.
Let’s take a look at them one by one.
Gianfranco Macri Admitted to Whitewashing AR $63.5 Million During the Tax Amnesty
In late 2016, Gianfranco Macri declared before the AFIP tax collecting agency that he owned an offshore company called BF corporation, and revealed the existence of previously undeclared assets amounting to the mentioned sum, in order to enter the tax amnesty implemented by the government.
However, the timing does not seem to have been casual. This is the timeline of events that led to this situation: six days before the 2015 Presidential elections, BF, through a Uruguayan firm that acted as an intermediary, ordered German bank UBS to transfer all funds the company had there and transfer them to an account in Swiss bank Safra. Moreover, it authorized the destruction of all documentation regarding the existence and operations of the account in Germany.
This prompted German authorities tasked with preventing money laundering to contact their Argentine counterparts, which then proceeded to inform the Argentine criminal system.
The Bubble was not able to verify whether a formal case regarding the matter was initiated by the Argentine judiciary, but the journalistic investigation informs that in late 2016, Gianfranco Macri came clean before the tax collecting agency. This would mean that Argentine judicial officials did not start an investigation during the year in which they had the information, considering that once Macri’s brother entered the amnesty, the state lost its ability to prosecute him for any illegal activities he could have committed.
Let’s recall that tensions ensued between government and opposition during the period previous to the tax amnesty, as a result of the Macri administration’s intention to allow family members of Cabinet officials to access the benefit. In fact, there were even rifts within the Cambiemos coalition itself, as the Coalición Civica, led by Elisa “Lilita” Carrió criticized the inclusion back then.
Nonetheless, the investigation highlights that since its conception in 2009, BF corporation deposited at least US $16.5 million in its UBS account. But AR $63.5 million, taking into account that in late 2016 the exchange rate was of almost AR $16, amount to “only” little over US $4 million. Therefore, the destiny of the other funds is uncertain.
Mossack Fonseca finished its business relationship with BF corporation in mid 2016 when, after requesting the Uruguayan intermediary firm reveal the identity of the corporation’s final beneficiaries and not getting an answer. When notified of Mossack Fonseca’s decision, the firm, called Lussich Torrel, indicated they would send the requested information once they got it, but never replied. BF corporation was probably shut down in late 2016, after Macri used the tax amnesty option.
The Frantic Operations Aimed at Proving President Macri wasn’t Involved in Offshore Activities
President Macri saw himself embroiled in controversy only four months after taking office, when the Panama Papers revealed him to be director of two offshore companies: Kagemusha and Fleg Trading.
A judge ultimately determined in September 2017 that Macri was not involved with the companies, after concluding he was “neither partner nor shareholder” and had not profited from the activities of any of the two. Macri argued back then that his name was there only because his father, Franco, asked him for a favor.
However, before Judge Andrés Fraca issued this ruling, advisors of the Macri family – the same Uruguayan firm – and members of Mossack Fonseca scrambled to get hold of enough information to prove this. According to the report of a meeting, the Uruguayan firm was willing to travel to “Panama or the Bahamas to solve the matter as quickly as possible,” reads the article by La Nación.
Moreover, members of Mossack Fonseca emphasized the need to make it clear that Franco Macri was the final beneficiary of Fleg Trading, but explained they did not have much relevant information – such as formal documents with the names of beneficiaries or shareholders – because the Uruguayan firm had never sent it. Given their need to answer the Argentine judge’s request for this information, the Panamanian company exhorted its Uruguayan counterpart to get the names of the beneficiaries indicating that otherwise, they would say the directores were – meaning President Macri.
In fact, Mossack Fonseca even suggested the possibility of crafting a pre-dated document with the names of the beneficiaries, but the Uruguayan firm thought it was too risky. “It would easily be disproved by an expert,” one of the emails reads. “The client does not know the reach this could have and does not want to risk anything, since the President of Argentina and his family are involved. That’s why they are uncomfortable with the document, understand?” the email adds.
In the end, both parties decided the Panamanian firm would send the judge a letter confirming that Franco Macri was the only beneficiary. Eight days later, the firm effectively did so: “According to the file, there is no evidence that Mauricio Macri was a shareholder or final beneficiary of Fleg Trading,” reads the answer that was sent to the judge.
The Issuing of a “Suspicious Activity Report” Concerning a Company Run by the Messi Family
The silence of intermediaries seems to have been a general problem after the surfacing of the Panama Papers, as Mossack Fonseca decided to send Panamanian authorities a “Suspicious Activity Report” – meaning potential commission of financial crimes – regarding Mega Star Enterprises Inc, an offshore company run by the Messi family, after a Uruguayan intermediary firm failed to send information that had been requested of them.
Moreover, the investigation revealed that even though the Messi family had assured that the company was never operational nor had account – much less funds in them – that was not the case.
Consulted by a Spanish outlet, a lawyer working for the Messi family rejected any fiscal irregularity concerning Mega Star Enterprises and assured they were never notified about the report issued in Panama. The business relationship between Mossack Fonseca and the Messi family ended shortly after the first Panama Papers stories broke: shortly after these events, members of Mossack Fonseca requested specific documentation regarding the company, but since the information never arrived, they decided to cut all ties and report them to the authorities.
This company is not part of the web for which Lionel Messi and his father were found guilty of tax evasion by Spanish authorities, which issued prison sentences – which they did not have to actually serve – and millions of euros in fines. The lawyer representing the Messi family clarified to the Spanish news site that the football player “is scrupulously fulfilling its obligations with the tax collecting agency.”