NATION/WORLD
Tuesday, April 5, 2016
East Oregonian
Page 9A
Leaked data exposes international tax evasion scheme
Associated Press
FRANKFURT,
Germany
(AP) — A leak of 11.5 million
documents from a Panama-based
laZ ¿rm offers a glimpse into tKe
sKadoZy Zorld ZKere tKe ricK and
poZerful Kide tKeir money, raising
sKarp Tuestions about tKe use of
sKell companies tKat obscure tKe
identities of tKeir true oZners.
/eaders of tKe Group of 20 —
representing about 0 percent of tKe
global economy — KaYe YoZed to
crack doZn on tKe practice, ZKicK is
blamed for Kelping conceal money
laundering, corruption and tax
eYasion.
%y tKemselYes, sKell companies
aren¶t illegal. &ountries KaYe tigKt-
ened rules on using tKem — but not
enougK to satisfy anti-corruption
actiYists.
News organizations working
witK tKe :asKington-based ,nterna-
tional &onsortium of ,nYestigatiYe
-ournalists KaYe been processing
tKe legal records from tKe 0ossack
Fonseca law ¿rm tKat were ¿rst
leaked to tKe Sueddeutsche Zeitung
newspaper based in 0unicK,
Germany.
,n reports tKat began 6unday,
tKey said tKe document dump tKat
tKey dubbed tKe ³Panama Papers´
sKows tKe Kidden offsKore assets of
politicians, businesses and celebri-
ties, including 12 current or former
Keads of state. Among tKe countries
witK past or present political ¿gures
named in tKe reports are ,celand,
Ukraine, Pakistan, 6audi Arabia,
Russia and Argentina.
TKe law ¿rm said in a statement
it obserYed all laws and interna-
tional standards coYering corporate
registrations.
Ramon Fonseca, a co-founder
of 0ossack Fonseca — one of tKe
world¶s largest creators of sKell
companies — con¿rmed to Pana-
ma¶s &Kannel 2 tKat documents
inYestigated by tKe ,&,- were
autKentic and Kad been obtained
illegally by Kackers.
%ut Ke said most people identi-
¿ed in tKe reports were not Kis ¿rm¶s
direct clients but were accounts set
up by intermediaries.
One of tKe most prominent
subMects of tKe report is Russian
President 9ladimir Putin, altKougK
Kis name does not appear in tKe
documents. ,&,- said on its website
tKat tKe documents sKow Kow
complex offsKore ¿nancial deals
cKanneled as mucK as 2 billion to
a network of people linked to Putin.
One focus was 6ergei Roldugin,
a professional cellist and cKildKood
friend of Putin. Roldugen was
listed as tKe owner of companies
tKat obtained payments from otKer
companies wortK tens of millions
of dollars, and of a stake in Bank
Rossiya, described by tKe U.6. Trea-
sury as ³designated for proYiding
material support to goYernment
of¿cials.´
³TKe eYidence in tKe ¿les
suggests Roldugin is acting as a
front man for a network of Putin
loyalists — and perKaps for Putin
Kimself,´ tKe consortium said.
AP Photo/Brynjar Gunnarsson
ABOVE: People gather to
demonstrate against Iceland’s
prime minister in Reykjavik on
Monday.
LEFT: Iceland’s Prime Minister
Sigmundur David Gunnlaugs-
son, speaks during a parlia-
mentary session in Reykjavik
on Monday. The prime minister
insisted he would not resign af-
ter leaked documents allegedly
link him to an offshore compa-
ny that could represent a seri-
ous conflict of interest, accord-
ing to information leaked from
a Panamanian law firm at the
center of an international tax
evasion scheme.
Roldugin was unaYailable for
comment 0onday. A receptionist at
tKe 6t. Petersburg +ouse of 0usic,
wKere Ke is artistic director, said Ke
was not in.
Kremlin spokesman Dmitry
PeskoY claimed Putin was tKe
³main target´ of tKe inYestigation,
wKicK Ke suggested was tKe result
of ³PutinopKobia´ and aimed at
smearing Russia in a parliamentary
election year.
+e suggested tKe ,&,- Kad ties
to tKe U.6. goYernment. TKe ,&,- is
part of tKe nonpro¿t, non-partisan
&enter for Public ,ntegrity, and
neitKer takes U.6. goYernment
funding, said Peter Bale, &P,¶s cKief
executiYe.
PeskoY said Ke would not go into
tKe details of allegations tKat Putin¶s
friends ran an offsKore scKeme,
³mainly because tKere is notKing
concrete and notKing new about
Putin, and a lack of details.´
PeskoY, wKo Kad warned last
week of an upcoming ³information
attack´ on Putin, said Ke expected
more reports to follow.
,n Russia, wKere tKe inYestiga-
tion was publisKed by tKe indepen-
dent newspaper Novaya Gazeta, tKe
scandal initially faced an effectiYe
coYerage ban. Following Kours of
silence, state-owned &Kannel One
reported tKe story, leading witK
PeskoY¶s denial and mentioning
dealings inYolYing Ukrainian Pres-
ident Petro PorosKenko. TKe T9
report said tKe leak may KaYe been a
U.6.-orcKestrated attempt to remoYe
Panama as a tax KaYen since it is
competing for tax reYenue.
TKe U.6. -ustice Department
was reYiewing tKe leak for eYidence
of possible criminal wrongdoing
tKat migKt KaYe a link to tKe United
6tates or to its ¿nancial system
but could not comment on speci¿c
documents, said spokesman Peter
&arr. ,t¶s not clear Kow many Amer-
icans KaYe been identi¿ed in tKe
documents, but tKousands of Euro-
peans KaYe been named, according
to local journalists.
Australia¶s Tax Of¿ce said
0onday it was inYestigating more
tKan 00 wealtKy people for possible
tax eYasion linked to tKeir alleged
dealings witK 0ossack Fonseca. TKe
agency said it Kad linked more tKan
120 of tKose people to an offsKore
serYices proYider in +ong Kong, but
did not identify tKe company.
Anti-corruption adYocates say
legal standards on sKell companies
KaYe improYed in some countries
but are not tougK enougK. TKe
G-20 leaders adopted 14 principles
in NoYember 2014 at a summit in
Brisbane, Australia. TKe essence
was tKat companies sKould be able
to identify to autKorities wKo tKeir
real owners are. OtKerwise, tKat
opens tKe way for money laundering
— obscuring tKe origins of money
made from illegal actiYity — and
tax eYasion.
Yet in a follow-up report in
6eptember, tKe anti-corruption
group Transparency ,nternational
said tKat actual implementation of
tKe recommendations into national
law Kad lagged. 0ost member
countries Kad at least adopted a clear
de¿nition of wKat real ownersKip
means, but lagged on reTuiring law
¿rms and banks serYicing tKe ricK
to reTuire — and independently
con¿rm — tKe identity of tKe real
owner.
&asey Kelso, adYocacy director
at tKe anti-corruption organization
Transparency ,nternational in
Berlin, said tKe reports ³sKould ligKt
a ¿re under goYernments to take
action.´
³:e Kope tKat it will galYanize
political leadersKip to actually walk
tKe talk... You can now see tKe
names of tKe people,´ Ke said.
DeYelopment adYocates say
sKell companies Kelp drain tax and
natural-resources reYenue from
poor countries tKat desperately need
tKe money.
TKe ,&,- said tKe documents
inYolYe 214,4 companies and
14,15 clients of 0ossack Fonseca.
TKe nonpro¿t group said it would
release tKe full list of companies and
people linked to tKem next montK.
Sueddeutsche Zeitung said it was
offered tKe data more tKan a year
ago tKrougK an encrypted cKannel
by an anonymous source. TKe
source sougKt unspeci¿ed security
measures but no compensation, said
Bastian Obermayer, a reporter for
tKe paper.
TKe data was from 1 tKrougK
2015, tKe paper said. TKe newspaper
and its partners Yeri¿ed tKe data¶s
autKenticity by comparing it to
public registers, witness testimony
and court rulings, Obermayer added.
³,t allows a neYer-before-seen
Yiew inside tKe offsKore world
— proYiding a day-to-day, decade-
by-decade look at Kow dark money
Àows tKrougK tKe global ¿nancial
system, breeding crime and
stripping national treasuries of tax
reYenues,´ tKe ,&,- said.
Panama ³is tKe last major
Koldout tKat continues to allow
funds to be Kidden offsKore from tax
and law enforcement autKorities,´
said Angel Gurria, secretary-general
of tKe Organization for Economic
&ooperation and DeYelopment, an
organization representing mostly
ricK countries. ,t Kas been working
witK tKe G-20 to restrict tKe use of
sKell companies.
Panamanian President Juan
&arlos 9arela said Kis goYernment
Kad ³zero tolerance´ for illicit ¿nan-
cial actiYities and would cooperate
³Yigorously´ witK any inYestigation.
Reports based on tKe leak
said ,celand¶s Prime 0inister
6igmundur DaYid Gunnlaugsson set
up a company called :intris ,nc., in
tKe BritisK 9irgin ,slands in 200
witK Kis partner at tKe time, Anna
6igurlaug Palsdottir, wKo is now Kis
wife.
+e reportedly sold Kis Kalf of
tKe company to Palsdottir for 1 on
Dec. 1, 200, tKe day before a new
,celandic law took effect tKat would
KaYe reTuired Kim to declare tKe
ownersKip of :intris as a conÀict of
interest.
:intris lost money as a result
of tKe 200 ¿nancial crasK tKat
crippled ,celand, and is claiming a
total of 515 million ,celandic kronur
(4.2 million) from tKe tKree failed
,celandic banks.
Gunnlaugsson stands accused
by opposition leaders of a serious
conÀict of interest because as prime
minister Ke was inYolYed in reacKing
a deal for tKe banks¶ claimants.
But Ke told parliament 0onday
³, KaYe not considered Tuitting
because of tKis matter nor am ,
going to Tuit because of tKis matter.´
An estimated 8,000 angry protesters
gatKered outside in ReykjaYik,
demanding Ke step down and call
new elections.
Sueddeutsche Zeitung said its
Tuesday edition would report tKat
28 German banks Kad used 0ossack
Fonseca¶s serYices to set up 1,200
sKell companies.
Alaska Air buys Virgin America to
H[SDQG:HVW&RDVWÀLJKWRIIHULQJV
NE: YORK (AP) —
Alaska Air Group ,nc. is
buying Virgin America in
a deal wortK 2.6 billion,
making Alaska tKe biggest
carrier on tKe :est &oast
and reigniting tKe debate
oYer airline consolidation.
TKe proposed merger
also would giYe 6eattle-
based Alaska a footKold in
key airports in New York
and :asKington, D.&.,
increasing tKe airline¶s
appeal to business traYelers.
³Our goal is to be tKe
premier airline for people
along tKe :est &oast,´
Alaska CEO Brad Tilden
told inYestors on a call
0onday morning.
,n Virgin¶s Kometown
of 6an Francisco, for
instance, Alaska currently
only Àies to 6eattle.
Following tKe merger, it
also would Ày from 6an
Francisco to seYeral key
markets including New
York, Los Angeles, Las
Vegas, CKicago, Boston,
6an Diego and :asKington,
D.C.
TKe merger pusKes
Alaska aKead of JetBlue
Airways — wKicK Kad
also bid for Virgin — to
become tKe ¿ftK largest
carrier in tKe U.6. based on
passengers. TKe combined
airline would control
5.5 percent of domestic
passengers, compared to
New York-based JetBlue’s
4.2 percent. By comparison,
tKe four largest U.6. airlines
— American Airlines,
Delta Air Lines, 6outKwest
Airlines and United Airlines
— controlled a combined
83 percent of domestic seats
in tKe past year, according
to an AP analysis of data
from Diio, an airline-
scKedule tracking serYice.
Alaska said tKe deal
will add Virgin’s 200 daily
departures to its existing
1,000 daily ÀigKts. TKe
airline currently serYes 112
destinations in tKe U.6.,
Canada and 0exico.
BotK airlines KaYe Yery
loyal followings in tKeir
respectiYe Kometowns.
Virgin Tuickly won oYer
passengers witK its new jets,
friendly crews, trendy mood
ligKting, extensiYe seatback
entertainment systems,
power outlets and meals
on-demand. All of tKat
could go away if Alaska
cKoses to Ày a uniform
Àeet, a decision company
executiYes say tKey are
debating.
Alaska Àiers are just as
loyal, loYing tKe airline’s
compassion. Like otKer
carriers, it cKarges for bag
fees but was tKe ¿rst to add
a serYice guarantee if a bag
doesn’t make it to tKe claim
area witKin 20 minutes,
Àiers get 25 off a future
trip or 2,500 bonus miles.
Virgin America went
public in NoYember
2014 witK an initial stock
offering priced at 23 per
sKare. Virgin, wKicK turned
pro¿table — barely — in
2013, earned a record
340.5 million last year.
TKe airline slowed down its
rapid growtK and got Kelp
from low fuel prices.
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