Leak of Mossack Fonseca emails is massive but repercussions remain unclear
The King of Saudi Arabia and the former director general of then-Israeli Prime Minister Ariel’s Sharon’s office both appear on the lengthy list of figures exposed by the leak from Mossack Fonseca, the Panamanian law firm hitherto known for the efficient creation of shell companies that often serve to conceal ownership of assets.
Among the notable Middle Easterners mentioned in the massive leak that dwarfs the Wikileaks release and contains more than 11.5 million files dating back to 1977, are Mohammad Moustafa, a confidante of Palestinian Authority President Mahmoud Abbas; Ayad Allawi, the former prime minister of Iraq; Ali Abu al-Ragab, the former prime minister of Jordan; Hamad bin Jassim bin Jaber Al-Thani, the former prime minister of Qatar; Sheikh Hamad bin Khalifa Al Thani, the former emir of Qatar; Sheikh Khalifa bin Zayed bin Sultan Al Nahyan, the president of United Arab Emirates; and Alaa Mubarak, the son of Egypt’s former president, Hosni Mubarak.
The International Consortium of Investigative Journalism, a nonprofit organization based in Washington, DC, to which over a hundred newspapers belong, including the Israeli daily Haaretz, announced that an anonymous source provided it with internal documents that were analyzed over the past several weeks by several hundred journalists.
Some 600 Israeli companies and 850 Israeli shareholders are listed in the leaked documents, among them Israel’s Bank Hapoalim, that managed some of its trusts through the law firm and Bank Leumi, whose activity in Jersey in the Channel Islands has been exposed.
For Israeli banks and individuals, one caveat exists: if company holdings and revenues are reported as required under Israeli tax law, owning an offshore company is not itself against the law. But if not, a scandal of tremendous proportion is in the making.
At least 33 persons and firms on the United States government blacklist for connections with Mexican drug lords, terror organizations like Hizbullah and rogue states like North Korea and Iran are also listed in the documents. One of the exposed companies supplied fuel that Syrian air force jets used to bomb and kill thousands of its citizens.
In Israel and the Palestinian Authority, however, the big revelation was noted but elicited no Icelandic-level of outrage. (There, Prime Minister Sigmundur Gunnlaugsson and his wife stand accused of concealing millions of dollars of investments behind a secretive offshore company.)
Michael Partem, a private attorney and the vice chairman of the Movement for Quality Government in Israel, told The Media Line that the lack of great local scandal may in part be due to a voluntary disclosure scheme that was established by Israeli tax authorities in recent years. “It’s a cat and mouse game,” he said.
“Israel’s amnesty program has been successful and many Israelis are coming in from the cold. We are,” he added, “in a long transition period worldwide, in which there is no privacy any more, especially when it comes to assets and income. The age of privacy is ending. This is a good thing from point of view of transparency, certainly when it comes to politicians.”
One catalyst behind the global move making tax havens a more hazardous proposition, Partem said, was the spate of aggressive post-9/11 initiatives pursuing the money trails of terror organizations. “Many governments simply want to tax these moneys now. They went looking for terror financing, but they also found they can uncover a lot of taxable offshore money.”
Attorney Amir Maor heads Mossack Fonseca’s Israel branch. The automated answering greeting informs callers that they have reached the “The Company for Establishing Companies.”
Reached by the daily newspaper Haaretz, Maor said that last week Mossack Fonseca headquarters informed him that files had been stolen after a major computer hack. “Any information you use [from these files] is like using stolen data,” he said, refusing to give further comment.
The final repercussions of the exposure of such a mass of data is difficult to calculate.
The leak is akin to mediatic atom bomb: today the story blew up; it remains unclear who the principal victims will be. Another unknown: how long it will take the thousands of people now combing through the obscure financial documents and lists of shell names concealed within greater shells to uncover the pearls that may topple governments or public figures.
For example, the name of Sapir Holdings, a company registered in 2002 in the Virgin Islands, appears in the stash. The owner and its only director was Jacob Weinroth, a leading Israeli lawyer. In 2009, Weinroth was indicted for money laundering but was acquitted on appeal. During the trial, it emerged that the company had received $7.95 million for services rendered by the Uzbek-Israeli entrepreneur Michael Cherney and Russian-Israeli businessman Arcady Gaydamak.
On the streets of Jerusalem, no one seemed to remember or care much. New scandals have overtaken the public imagination. Moshe Birman, a middle-aged man eating his late lunch outside a well-known falafel kiosk, shrugged when asked about the revelations. “Is Dery on the list?” he asked, in reference to Israel’s minister of interior, who was jailed in a corruption scandal about fifteen years ago and is now once again under criminal investigation. Mohammad Elayan, who was sharing a falafel with his wife and young son, said, “Everyone steals money. Everyone who can. Wouldn’t you hide it?”
But Dov Weissglass, who served as Prime Minister Sharon’s closest confidante and director general; or such local tycoons and magnates as Idan Ofer, Udi Angel, and Teddy Sagi, who are listed onetime or current owners of tax haven enterprises, may yet provide Israelis with a bracing shock.