‘Panama Papers:” Doomed to Oblivion? A History


A Rake's Progress

Public memory is short, so is media editorial attention. With the release of the “Panama Papers,” Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned.  In a world of impunity for the powerful, he will possibly remain the sole sacrificial lamb.  Britain’s conservative Prime Minister David Cameron finally admitted to a beneficial interest in his father’s offshore investment trust. Figures implicated in the Mossack Fonseca leak include a Spanish Infanta (another princess is being tried for corruption and hiding assets). The list of the notorious includes Vladimir Putin, Ukrainian President Petro Proshenko, the Qatari, Moroccan and the Saudi royal families, the Chinese Communist Party leadership and Venezuelan Chavista apparatchiks.

The revelations should come as no surprise. Italian journalist Roberto Saviano has recently published ZeroZeroZero detailing the operations and political tentacles of drug cartels and the Russian mafia. Money laundering through offshore accounts is their vehicle to power, political connections and luxury.

Hervé Falciani with the International Consortium of Investigative Journalists made public extensive information about HSBC Geneva . The bank held over 181 billion € for close to 100, 000 individual depositors and 20, 000 offshore companies. Clients included Wellington Florida resident and former Chavista Alejandro Andrade, billionaire Alfred Taubman, Argentine socialite collector Amalita de Fortabat*, actor Christian Slater, designer Diane von Fürstenberg, among others. Socialist Venezuela ranked third among countries with the largest dollar amounts, the United States fourth with $13.4 billion (USD).

In a story that has gone cold, senior management of Banca Privada d’Andorra was arrested, the bank taken over after the US Treasury revealed that it was a “primary money laundering concern” for the Russian mafia, Chinese shady operators and Venezuelan corrupt officials. Matters became complicated when it was revealed that BPA had acquired Banco Madrid, a private bank in the Spanish capital. The country’s central bank took control of the entity. The United States had expressed concern over suspect operations and correspondent relationships with HSBC, Citigroup, Bank of America and Deutsche Bank. The results of the investigations were never released to the press. The identities of those involved remain a secret.

In 2012, Assistant Attorney General (a Clinton family friend, “FOB”) Lanny Breuer offered HSBC a sweet settlement deal after the British bank admitted to violating financial regulations, criminal law and federal statutes when laundering billions of dollars for Mexican and Colombian drug cartels. According to a Rolling Stone story, none of the bank officials were criminally prosecuted, their punishment: “deferred compensation bonus.” HSBC was recently sued by American victims of violent crime from drug cartel activity.

A “60 Minutes” segment aired on January 31, 2016 showed American lawyers’ inclination (including top-notch New York legal firms) to set up staggered corporate structures shell companies with offshore origins. They would be designed to invest funds in Manhattan real estate, yachts, airplanes and items of conspicuous consumption.

McClatchy Miami Herald investigators reveal that Mossack Fonseca retained the services of a Miami representative. Not without irony, Olga Santini worked out of a “Miami Vice”-featured Brickell apartment. The city’s luxury real estate market is awash with stories of corrupt Brazilians, Italian gangsters, Venezuelans and other colorful Latin Americans buying multi-million-dollar properties.  Interestingly, the paper has not revealed any Russian name from the resident Sunny Isles and Aventura plutocracy. Area politicians have objected to a FinCEN geographic investigation of high-value real estate transactions. Waterfront apartments on Brickell, downtown Miami, Miami Beach, Surfside, Aventura, Bal Harbour and Sunny Isles are all in the seven figure range.

With Espirito Santo Bank, Miami was the setting for another international banking and money laundering scandal. The parent company in Lisbon was taken over by the government, investigated, its CEO detained on suspicion of fraud, mismanagement and irregularities. The conglomerate was audited for evidence of money laundering. The empire included a diamond mine in Angola, Miami luxury condos and a Kohn Pedersen Fox (KPF) office and hotel (Conrad) skyscraper on Brickell Avenue. The tower was quietly sold for $142 million. The sale took place after Santo Espirito Bank had been sued for fraud and aiding and abetting money laundering. In February 2014, SSB agreed to a consent order with the FDIC regarding bank secrecy and anti-money laundering requirements. According to The Wall Street Journal, as recently as December 2014, New York prosecutors and a federal grand jury sought to ascertain if the Miami subsidiary had been used by a Venezuelan businessman to launder money and transfer large sums to the Cayman Islands and Switzerland. In July, 2015, Ricardo Espirito Santo Salgado, head of the empire, was placed under house arrest in Lisbon. In a surprise move announced in May of last year, a Venezuelan group headed by Salomón Benacerraf (owner of newspaper Diario Las Américas)  and the Cohen family of the Sambil Group (shopping centers in Curaçao, Dominican Republic and Spain) purchased Espirito Santo Bank Miami for $10 million. It is has been rebranded as Brickell Bank.

Miami banking authorities and regulators are now looking at increased activity in bearer bonds from non-citizens and account-holders from non-resident corporate entities. It is often that offshores seek the anonymity of Delaware corporations to allow them entry into the United States.

Only The Guardian has reported on a common practice by offshore companies for portfolio diversification: art purchases. The British paper tells the story of currency trader, John Lewis, a former George Soros partner, who purchased the Ganz collection and using Christie’s changed the course of art world economics, the history of the auction house and the investment in visual arts as a high-value high-return asset for offshore agents. The ease with which art sales can take place, relatively unsupervised, to international companies – especially at the gallery level or within the context of international art fairs – makes this an ideal venture instrument, easy to transport, easy to hide and with a fast turnaround possibility as long as the provenance is legitimate and the piece is certified by a recognized expert. The very galleries or auction houses that sell the pieces to an offshore corporation have no problems encouraging museums to showcase the works in special exhibits (further enhancing the value of the asset) if in the collection of a corporate owner. This affords anonymity and legitimacy.

The “Panama papers” are evidence of a sense of entitlement and assured impunity. Socioeconomic status confers privileges on a ruling oligarchy. Politicians, sports figures, hedge fund billionaires, royalty, entertainers, powerful investors and bankers are actors in a global economy and a transnational financial system. It assures them profit and permanence. Laws and financial regulations are flexible and accommodating to hegemony. The major players in the system, multinational corporations and international financial institutions have evolved into a “transnational historic bloc” that exercises global power by controlling even the information released to the public through the media they control and the way justice is administered. Economic and financial structures respond to political patronage. With financial and power concentration in fewer hands, instances like the “Panama Papers” will provide short-term  entertainment but no real pressure for transparency and accountability.

The world financial system’s fragility was tested by fraudulently rated mixed mortgage-backed instruments. No systematic investigation and prosecution of culprits ensued from our Justice Department. Is one to expect any difference this time?


  • Pictures of the author with the late Amalita de Fortabat, Dolores Smithies and Mrs. Javier Pérez de Cuéllar were published in the New York media. No more than a social acquaintance brought the author together with Mrs. Lacroze de Fortabat, introduced by his friend Cuban-American socialite, collector and Sotheby’s employee Dolores Smithies.
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Painting looted by Nazis hidden offshore

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