The Panama Papers - Mossack Fonseca leak reveals Costa Rica's elite's tax havens
The Panama Papers – Mossack Fonseca leak reveals Costa Rica’s elite’s tax havens

QCOSTARICA – A huge leak of confidential documents, known as the “Panama Papers” has revealed how the rich and powerful use tax havens to hide their wealth.

In total, some eleven million documents were leaked from one of the world’s most secretive companies, the Panamanian law firm Mossack Fonseca, who helped clients launder money, dodge sanctions and avoid tax, operating beyond reproach for 40 years.

The trove of documents is likely the biggest leak of inside information in history.

The International Consortium of Investigative Journalists (ICIJ) shared data of Mossack Fonseca’s file allowed access to 74,958 documents related to Costa Rica, including 56,876 copies of emails, 9,858 PDF images, 3,851 TIFF images, 119 Excel spreadsheets and 511 Word documents.

These are copies of emails, registered shares and bearer checks, incorporation of companies, trusts funds and corporations, passports, legal reports, invoices, contracts and statements shared by Costa Rican entrepreneurs, their lawyers, secretaries and accountants with Mossack Fonseca officials.

One of the shared listed in the filtration of the Panama Papers
One of the shared listed in the filtration of the Panama Papers. From Semanario Universidad

These are copies of emails, registered shares and bearer checks, incorporation of companies, trusts fi and corporations, passports, legal reports, invoices, contracts and statements exchanged Costa Rican entrepreneurs, their lawyers, secretaries and accountants Mossack Fonseca officials.

During the last few months, a team of journalists of the SEMANARIO UNIVERSIDAD (University Weekly) conducted a perusal of the huge load of information, and focusing on a group of cases that of persons or companies mentioned in the report, deemed to be of public interest.

According to the SEMANARIO, it involved the exchange of emails and documents explicitly referring to maneuvers or strategies to conceal the transfer of funds or to avoir or evade paying taxes in Costa Rica.

They include names like Libertarian Movement Party legislator, Otto Guevara Guth; la ministra de Obras Públicas y Transportes durante la administración Arias Sánchez (2006-2010), Karla González Carvajal; Minister of Finance of the Calderón Fournier administration (1990-1994), Gonzalo Fajardo; the former director of Direct Taxation, Adrian Torrelba Navas; the former first lady Dorís Yankelewitz; ; the former legislator and former mayor of Alajuela, Joyce Zurcher; the former deputy and former Ombudsman, Rodrigo Alberto Carazo; journalist and former ambassador of Costa Rica to the United Nations, Eduardo Ulibarri and current Deputy Transport Minister Sebastian Urbina Canas.

An internal document shows services offered a Costa Rican company. From Semanario Universidad
An internal document shows services offered a Costa Rican company. From Semanario Universidad

The focus of the investigation includes: Health Minister in the Arias administration (2006-2010), María Luisa Ávila Agüero; Oscar Arias representative to the board of PLN, Alfredo Ortuño Víctory; the treasurer of the campaign Johnny Araya Monge, Orlando Guerrero Vargas; banker, finance minister in the Miguel Angel Rodriguez Echeverria (1998-2002) administration and chairman of the board of online news CRHoy, Leonel Baruch; former Minister of Production Alfredo Volio Escalante, and CEO of Florida Ice & Farm, Ramon Mendiola.

Other names included in the report are: the president of the Constructora Meco, Carlos Enrique Cerdas, the general manager of Productos de Concreto y Holcim Costa Rica, Sergio Egloff and the banker and former president of the UCCAEP, Emilio Bruce Jiménez; banker and minister of the Obras Públicas (MOPT) in the Pacheco de la Espriella (2002-2006), Javier Chaves Bolaños; the ex president of the Confederación Costarricense de Fútbol, Hermes Navarro.

The filtered documents also mention the participation in participation in corporations, trusts and companies in the British Virgin Islands, Bahamas and Panama of the presidents of the board of Grupo Nación, Manuel Francisco Jiménez Echeverría; former president of Florida Ice & Farm and major shareholder in the Grupo Nación, Rodolfo Jiménez Borbón and others.

The flow of documents is eloquent in revealing the threads of e-mail exchanges that show the evolution of the tasks that lawyers and officials of Mossack Fonseca performed for customers in Costa Rica.

The focus of these contacts between the final beneficiaries of these services and the Panamanian firm, were law firms in Costa Rica as Facio and Cañas, Gonzalo Fajardo y Asociados, Zurcher Odio & Raven, lawyer and Security Minister during the Jose Maria Figueres Olsen (1994- 1998) administration, Juan Diego Castro and the Arias and Muñoz law firm, among others.

The panorama that emerges when analyzing the documents is a very complex and opaque web of money that is moved through partnerships and corporations strategically based in different countries and tax jurisdictions and related to each other as a body of Chinese boxes, where each owns the following, but ultimately they are all under control of a final beneficiary in Costa Rica.

These chains of companies, corporate relations and financial flows in many cases start from renowned Costs Rica companies and business leaders that appear in the records of Mossack Fonseca buying control of companies already formed in Panama, the British Virgin Islands, Bahamas and Belize, where people who appear as representatives or officers are provided by Panamanian law firm.

Meanwhile, the current government is negotiating a loan with the Inter-American Development Bank (IDB) for US$500 million dollars to cover 3% of the 2016 regular budget; and, the executive branch and the legislature debate on the implementation of a package of laws to reduce the controversial fiscal deficit.

A recent study by the Ministry of Finance (Ministerio de Hacienda) revealed that the amount of tax evasion in the country is estimated at  8% of Gross Domestic Product (GDP) and prominent businessmen and legislators oppose the Finance Ministry to keeping a register of shareholders and beneficial owners of companies operating in the country.

 

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