One Year After Panama, Some Progress, More Must Be Done to End Anonymous Companies

FACT Coalition Statement on the One Year Anniversary of the Panama Papers Leaks

WASHINGTON, D.C. – Monday, April 3rd marks the one year anniversary of the leak of the “Panama Papers” — more than 11 million documents from a Panamanian law firm obtained by the International Consortium of Investigative Journalists (ICIJ). The investigation exposed how anonymous shell companies and offshore tax havens are used in a variety of illegal and corrupt practices and enterprises.

Gary Kalman, executive director of the FACT Coalition, issued the following statement marking the anniversary:

“The release of the Panama Papers exposed the secrecy afforded corrupt public officials, criminal cartels, individual tax cheats, and others.  A year later, it is time to assess progress toward ending this ethically bankrupt policy.

Looking back, I’d grade worldwide progress as a C-.

Some positive developments include the almost immediate impact in Iceland, Spain, and elsewhere where elected officials were forced to resign.  Members of the European Union are moving forward on their commitment to adopt a registry of owners to combat illicit money flows.  A number of developing countries have also committed to transparency.  The U.S. Treasury finalized rules requiring banks to know their customers a little better.  And Treasury expanded a multi-city pilot program to learn more about sketchy individuals purchasing real estate. After a report found that 30% of the buyers identified were connected to Suspicious Activity Reports, the new administration continued the pilot.

Even the British Virgin Islands (BVI), a notorious secrecy hot spot, saw, at least temporarily, the number of new companies registering drop significantly following the release.

But the progress is more scattershot than comprehensive.  In the fall, the inter-governmental Financial Action Task Force came out with an evaluation of U.S. progress.  While they noted some progress, they called us out for not addressing the issue of anonymous shell companies.  Earlier this year, the Government Accountability Office issued a report in which they found that our own government does not always know from whom they are renting office space.  The FBI is apparently renting from foreign landlords that pose a potential risk to our security.

To improve the grade, we should pass bipartisan legislation to end anonymous shell companies.  And we should not take any steps backward. Specifically, we should not repeal transparency rules that that keep wealthy U.S. citizens from hiding money offshore.

For all the challenges we face, I am optimistic that we will improve our grade by the second anniversary of the Panama Papers.”

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Journalist Contact:

Clark Gascoigne
Deputy Director, The FACT Coalition
+1 202 827-6401
cgascoigne@nullthefactcoalition.org