Wednesday, April 13, 2016

Investigators pursuing Panama Papers leads (April 13, 2016)

Panamanian raided the offices of Mossack Fonseca, the law firm at the heart of leaked documents showing how wealthy international clients use shell firms to avoid taxes.

A half dozen police officers set up a perimeter around the offices while prosecutors searched inside for documents, reports the Associated Press. They were under the command of the prosecutor Javier Caravallo, who specializes in organized crime and money laundering, reports the Guardian.

The Panamanian government has promised to investigate illicit activities linked to the news reports dubbed "Panama Papers." (See April 5's post.)

The move comes as senior officials from the world's tax authorities meet today in Paris in order to develop a strategy to use the 11.5 leaked documents as part of new global strategy to crack down on offenders, reports the Guardian. The aggressive new approach is being led by the Joint International Tax Shelter Information and Collaboration (Jitsic) network.

In Venezuela, which is reportedly mentioned in 241,000 of the 11.5 million leaked documents, the chief prosecutor has ordered banks to freeze the accounts of people that the government is investigating in connection to the information, reports the Associated Press.

Last week there were several reports about how the leaks came just as Panama was trying to shed its reputation as an international haven for corrupt money. The Guardian has a piece on how Panama became a tax haven, at the behest of U.S. banking groups at the turn of the twentieth century.

And Ecuadoran president Rafael Correa took to Twitter Monday, challenging journalists involved in the massive leak to release all the related documents, implying political bias in the reporting of the information, reports TeleSur.

News Briefs
  • Venezuela's opposition National Assembly swept into power at the beginning of this year with a slew of promises for change, including freeing jailed politicians, giving property titles for public housing and ousting President Nicolás Maduro. But their efforts have been stymied by government loyal courts (see yesterday's briefs, for example) leading some to question whether the Congress will be able to do much of anything, report the New York Times and the Wall Street Journal. Even uncontroversial measures, like food subsidies for the elderly, have been blocked by the government, notes the WSJ. This week's clash over an amnesty bill freeing jailed opposition leaders is telling of an increasingly polarized conflict between the National Assembly and the government, according to the NYT. Should the Assembly continue to see its powers limited by court, it could strengthen the hand of opposition hardliners who seek to oust Maduro outside of the legal system, Michael Shifter of the Inter-American Dialogue told the NYT. The polarization leads many in Venezuela to question whether democratic change is possible, according to the WSJ.
  • Brazilian President Dilma Rousseff lashed out at Vice President Michel Temer and House Speaker Eduardo Cunha, who she accused of plotting to overthrow her, reports the Associated Press. (See yesterday's post.) In an interview yesterday Temer denied plotting against Rousseff and said he did not plan to resign if the lower house voted against impeachment, reports Reuters. Her political future is increasingly grim, celebrates El País.
  • Rousseff was hit against politically yesterday when her second coalition partner, the Progressive Party, voted to part ways with her, reports the Wall Street Journal. The parties 47 deputies will be allowed to vote as they see fit on impeachment proceedings against Rousseff. (See yesterday's post.)
  • Increasing gang attacks on police in El Salvador signal a conflict that is spiraling out of control and threatening to explode into open warfare, reports the Associated Press.
  • Salvadoran journalist Oscar Martínez's new book traces how a war-torn country became a gang-torn one, writes Sarah Maslin in The New Republic. "Martínez dives into the underworld of his subjects, navigating barrios that police won’t enter, spending days and nights with gang members. His methods resemble war reporting and his prose is cinematic."
  • The poor in El Salvador pay disproportionately more in taxes, reports El Faro. A new study by the Inter-American Development Bank and the Instituto Centroamericano de Estudios Fiscales found that poor Salvadorans pay 30 percent of their income in taxes, while the rich fork over only 11 percent.
  • Nicaragua's congress rejected a bill backed by 28,000 Nicaraguans seeking to block a mega interoceanic-canal project. The legislators say they don't have the authority to stop the project, reports the AFP. (The issue could of course be a moot point if rumors about its Chinese backer's financial ruin are true, see April 4's briefs.)
  • The Cuban government announced a loosening of some restrictions on restaurant cooperatives on the island, just a few days before a Communist Party congress is expected to review market-oriented reforms begun five years ago, reports Reuters.
  • Former Argentine President Cristina Fernández de Kirchner will be in court today to face questions over her alleged role in the authorization of the sale of US dollars futures contracts at below-market rates. But supporters turned the occasion into a party at the Buenos Aires airport on Monday. Uki Goñi at the Guardian reviews the somewhat complicated cases of corruption against Fernández as well as her successor, the current President Mauricio Macri.

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