Panama Papers

The Panama Papers are 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities. The leaked documents were created by Panamanian law firm and corporate service provider Mossack Fonseca; some date back to the 1970s. The leaked documents illustrate how wealthy individuals and public officials are able to keep personal financial information private. While offshore business entities are often not illegal, reporters found that some of the Mossack Fonseca shell corporations were used for illegal purposes, including fraud, kleptocracy, tax evasion, and evading international sanctions. "John Doe", the whistleblower who leaked the documents to German newspaper Süddeutsche Zeitung (SZ), remains anonymous, even to the journalists on the investigation. "My life is in danger", he told them. In a May 6 statement, John Doe cited income inequality as the reason for his action, and said he leaked the documents "simply because I understood enough about their contents to realise the scale of the injustices they described". He added that he has never worked for any government or intelligence agency. He expressed willingness to help prosecutors if immune to prosecution. After SZ verified that the statement did come from the Panama Papers source, ICIJ posted the full document on its website. Because of the amount of data, SZ asked the International Consortium of Investigative Journalists (ICIJ) for help. Journalists from 107 media organizations in 80 countries analyzed documents detailing the operations of the law firm. After more than a year of analysis, the first news stories were published on April 3, 2016, along with 150 of the documents themselves. The project represents an important milestone in the use of data journalism software tools and mobile collaboration. The documents were quickly dubbed the Panama Papers. The Panamanian government strongly objects to the name; so do other entities in Panama and elsewhere. Some media outlets covering the story have used the name "Mossack Fonseca papers". Disclosures: In addition to the much-covered business dealings of British prime minister David Cameron and Icelandic prime minister Sigmundur Davíð Gunnlaugsson, the leaked documents also contain identity information about the shareholders and directors of 214,000 shell companies set up by Mossack Fonseca, as well as some of their financial transactions. Much of this information does not show anything more than prudent financial management. It is generally not against the law (in and of itself) to own an offshore shell company, although offshore shell companies may sometimes be used for illegalities. The journalists on the investigative team found business transactions by many important figures in world politics, sports and art, and many of these transactions are quite legal. Since the data is incomplete, questions remain in many other cases; still others seem to clearly indicate ethical if not legal impropriety. Some disclosures – tax avoidance in very poor countries by very wealthy entities and individuals for example – lead to questions on moral grounds. According to The Namibian for instance, a shell company registered to Beny Steinmetz, Octea, owes more than $700,000 US in property taxes to the city of Koidu in Sierra Leone, and is $150 million in the red, even though its exports were more than twice that in an average month 2012-2015. Steinmetz himself has personal worth of $6 billion. Other offshore shell company transactions described in the documents do seem to have broken exchange laws, violated trade sanctions or stemmed from political corruption, according to ICIJ reporters. For example: -Uruguay has arrested five people and charged them with money-laundering through Mossack Fonseca shell companies for a Mexican drug cartel. -Ouestaf, an ICIJ partner in the investigation, reported that it had discovered new evidence that Karim Wade received payments from DP World (DP). He and his long-time friend were convicted of this in a trial that the United Nations and Amnesty International said was unfair and violated the defendants' rights. The Ouestaf article does not address the conduct of the trial, but does say that Ouestaf journalists found Mossack Fonseca documents showing payments to Wade via a DP subsidiary and a shell company registered to the friend. Named in the leak were 12 current or former world leaders, 128 other public officials and politicians, and hundreds of other members of the elites of over 200 countries. Tax havens: Customers may open offshore accounts for any number of reasons, some entirely legal and ethically irreproachable. A Canadian lawyer based in Dubai noted, for example, that businesses might wish to avoid falling under Islamic inheritance jurisprudence if an owner dies. Businesses in some countries may wish to hold some of their funds in dollars also, said a Brazilian lawyer. Estate planning is another example of legal tax avoidance. American film-maker Stanley Kubrick had an estimated personal worth of $20 million when he died in 1999, much of it invested in the 18th-century English manor he bought in 1978. He lived in that manor the rest of his life, filming scenes from The Shining, Full Metal Jacket and Eyes Wide Shut there as well. Three holding companies set up by Mossack Fonseca now own the property, and are in turn held by trusts set up for his children and grandchildren. Since Kubrick was an American living in Britain, his estate would otherwise have had to pay taxes to both governments and might have been forced to sell the property to have the liquid assets to do so. Kubrick is buried on the grounds along with one of his daughters and the rest of his family still lives there. Other uses are more ambiguous. Chinese companies may incorporate offshore in order to raise foreign capital, normally against the law in China. In some of the world's hereditary dictatorships, the law may be on the side of the elite who use offshore companies to award themselves oil contracts, or their children gold concessions, but such dealings are sometimes prosecuted under international law. No official definition exists, but a jurisdiction is typically considered an offshore financial center, less formally known as a tax haven, when its banking infrastructure: -Primarily provides services to people or businesses who are not its own residents. -Requires little or no disclosure of information when doing business. -Offers low taxes. "The most obvious use of offshore financial centers is to avoid taxes", however, The Economist remarked. Oxfam blamed tax havens in its 2016 annual report on income inequality for much of the widening gap between rich and poor. "Tax havens are at the core of a global system that allows large corporations and wealthy individuals to avoid paying their fair share," said Raymond C. Offenheiser, president of Oxfam America, "depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality." International Monetary Fund (IMF) researchers estimated in July 2015 that profit shifting by multinational companies costs developing countries around US$213 billion a year, almost two percent of their national income. Igor Angelini, head of Europol's Financial Intelligence Group, said that shell companies "play an important role in large-scale money laundering activities" and that they are often a means to "transfer bribe money". Tax Justice Network concluded in a 2012 report that "designing commercial tax abuse schemes and turning a blind eye upon suspicious transactions have become an inherent part of the work of bankers and accountants." Money-laundering affects the first world as well, since a favored shell company investment is real estate in Europe and North America. London, Miami, New York and Vancouver have all been affected. The practice of parking assets in luxury real estate has been frequently cited as fueling skyrocketing housing prices in Miami. "There is a huge amount of dirty money flowing into Miami that's disguised as investment," according to former congressional investigator Jack Blum. In Miami, 76% of condo owners pay cash, considered a red flag for money-laundering. Real estate in London, where housing prices have increased 50% since 2007, is also frequently purchased by overseas investors. Donald Toon, head of Britain's National Crime Agency, said in 2015 that "the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK". Three quarters of Londoners under 35 cannot afford to buy a home. A study by Andy Yan, an urban planning researcher and adjunct professor at the University of British Columbia, of real estate sales in Vancouver—also thought to be affected by foreign purchasers—found that 18% of the transactions in Vancouver's most expensive neighborhoods were cash purchases, and 66% of the owners appeared to be Chinese nationals or recent arrivals from China. Calls for more data on foreign investors have been rejected by the provincial government. Chinese nationals accounted for 70% of 2014 Vancouver home sales over $3 million Canadian. International banking: "This issue will surely be raised at the G20 summit," said Tomasz Kozlowski, Ambassador of the European Union (EU) in India. "We need to strengthen international cooperation for exchange of tax information between tax authorities". Panama, Vanuatu and Lebanon may find themselves on a list of uncooperative tax havens that the Organisation for Economic Co-operation and Development (OECD) will re-activate in July 2016 at the request of the G20 nations, warned Le Monde, a French newspaper that participated in the investigation. Those are the only three countries that follow none of the OECD's three broad guidelines for international banking cooperation, which are: -information exchange on request -a signed multilateral agreement on information standards -a commitment to implement automated information exchange in 2017 or 2018 The OECD, the G20, or the European Union could also institute another list for countries that are inadequate in more than one area. Countries meeting none of these criteria would go on the blacklist, such as Panama, Vanuatu and Lebanon. Countries that meet only one criterion would go on the greylist. As of April 2016 this greylist would include nine countries: Antigua and Barbuda, Bahrain, Brunei, Dominica, Liberia, Nauru, Samoa, Trinidad and Tobago and the United Arab Emirates. Newsroom logistics: The International Consortium of Investigative Journalists helped organize the research and document review once Süddeutsche Zeitung realized the scale of the work required to validate the authenticity of 2.6 terabytes of leaked data. They enlisted reporters and resources from The Guardian, the BBC, Le Monde, SonntagsZeitung, Falter, La Nación, German broadcasters NDR and WDR, and Austrian broadcaster ORF, and eventually many others. Security factored into a number of project management considerations. Saying his life was in danger, John Doe insisted that reporters communicate over encrypted channels only and agree that they would never meet face-to-face. SZ also had concerns about security, not only for their source, the leaked documents, and their data, but also for the safety of some of their partners in the investigation living under corrupt regimes who might not want their money-handling practices made public. They stored the data in a room with limited access on computers that had never been on the Internet. The Guardian also limited access to the project work area. To make it even harder to sabotage the computers or steal their drives, SZ journalists made them more tamper-evident by painting their screws with glitter nail polish. Reporters sorted the documents into a huge file structure containing a folder for each shell company, which held the emails, contracts, transcripts, and scanned documents Mossack Fonseca had generated while doing business with the company or administering it on a client's behalf. Some 4.8 million leaked files were emails, 3 million were database entries, 2.2 million PDFs, 1.2 million images, 320,000 text files, and 2242 files in other formats. Journalists indexed the documents using open software packages Apache Solr and Apache Tika, and accessed them by means of a custom interface built on top of Blacklight. Süddeutsche Zeitung reporters also used Nuix for this, which is proprietary software donated by an Australian company also named Nuix. Using Nuix, Süddeutsche Zeitung reporters performed optical character recognition (OCR) processing on the millions of scanned documents, making the data they contained become both searchable and machine-readable. Most project reporters then used Neo4J and Linkurious to extract individual and corporate names from the documents for analysis, but some who had access to Nuix used it for this as well. Reporters then cross-referenced the compiled lists of people against the processed documents, then analyzed the information, trying to connect people, roles, monetary flow, and structure legality. U.S. banking and SEC expert David P. Weber assisted journalists in reviewing information from the Panama Papers. Additional stories based on this data are in the works, and the full list of companies is to be released in early May 2016. The ICIJ later announced the release on May 9, 2016 of a searchable database containing information on over 200,000 offshore entities implicated in the Panama Papers investigation and more than 100,000 additional companies implicated in the 2013 Offshore Leaks investigation. Mossack Fonseca asked the ICIJ not to publish the leaked documents from its database."We have sent a cease and desist letter to the ICIJ facing the announcement to release on May 9, the information from our database," the company said through a statement. The sheer quantity of leaked data greatly exceeds the WikiLeaks Cablegate leak in 2010 (1.7 GB), Offshore Leaks in 2013 (260 GB), the 2014 Lux Leaks (4 GB), and the 3.3 GB Swiss Leaks of 2015. For comparison, the 2.6 TB of the Panama Papers equals 2,600 GB. Data security: Mossack Fonseca notified its clients on April 1, 2016 that it had sustained an email hack. Mossack Fonseca also told news sources that the company always operated within the law and had been hacked. Data security experts noted, however, that the company had not been encrypting its emails[50] and furthermore seemed to have been running a three-year-old version of Drupal with several known vulnerabilities. According to Tech Republic, Drupal ran on the Apache 2.2.15 version from March 6, 2010, and worse, the Oracle fork of Apache, which by default allows users to view directory structure. The network architecture was also inherently insecure; the email and web servers were not segmented from the client database in any way. Some reports also suggest that some parts of the site may have been running WordPress with an out-of-date version of Revolution Slider, a plugin whose previously-announced vulnerabilities are well-documented. A grey hat hacker named 1×0123 announced April 12 that Mossack Fonseca's content management system had not been secured from SQL injection, a well-known database attack vector, and that he had been able to access the customer database because of this. The leak and leak journalism: Gerard Ryle, director of the International Consortium of Investigative Journalists, called the leak "probably the biggest blow the offshore world has ever taken because of the extent of the documents". Edward Snowden described the release in a Twitter message as the "biggest leak in the history of data journalism". The ICIJ also said that the leak was "likely to be one of the most explosive leaks of inside information in history in the nature of its revelations". "This is a unique opportunity to test the effectiveness of leaktivism", said Micah White, co-founder of Occupy, "... the Panama Papers are being dissected via an unprecedented collaboration between hundreds of highly credible international journalists who have been working secretly for a year. This is the global professionalization of leaktivism. The days of WikiLeaks amateurism are over." WikiLeaks spokesperson Kristinn Hrafnsson, an Icelandic investigative journalist who worked on Cablegate in 2010, said withholding some documents for a time does maximise the leak's impact, but called for full online publication of the Panama Papers eventually. A tweet from WikiLeaks criticized the decision of the ICIJ to not release everything for ethical reasons: "If you censor more than 99% of the documents you are engaged in 1% journalism by definition." While the use of offshore business entities is not illegal in the jurisdictions where they are registered, and often not illegal at all, reporters found that some Mossack Fonseca shell corporations seem to have been used for illegal purposes, including fraud, kleptocracy, tax evasion and evading international sanctions. Reports from April 3 note the law firm's many connections to high-ranking political figures and their relatives, as well as celebrities and business figures. Among other things, the leaked documents illustrate how wealthy individuals, including public officials, can keep personal financial information private. Other clients included less-senior government officials and their close relatives and associates, from over forty countries. Over £10 million of cash from the sale of the gold stolen in the 1983 Brink's-Mat robbery was laundered, first unwittingly and later with the complicity of Mossack Fonseca, through a Panamanian company, Feberion Inc. The company was set up on behalf of an unnamed client twelve months after the robbery. The Brinks money was put through Feberion, issued bearer shares only, and other front companies though banks in Switzerland, Liechtenstein, Jersey, and the Isle of Man. Two nominee directors from Sark were appointed to Feberion by Jersey-based offshore specialist, Centre Services.[81] The offshore firms recycled the funds through land and property transactions in the United Kingdom. Although Metropolitan Police raided the offices of Centre Services in late 1986 in cooperation with the Jersey authorities and seized papers and two Feberion bearer shares, it wasn't until 1995 that Brink's-Mat's solicitors were finally able to take control of Feberion and the assets. Actor Jackie Chan is mentioned in the leaked documents as a shareholder in six companies based in the British Virgin Islands. Client services: Law firms play a central role in offshore financial operations. Mossack Fonseca is one of the biggest in its field and the biggest financial institutions refer customers to it. Its services to its clients include incorporating and operating shell companies in friendly jurisdictions on their behalf. They can include creating "complex shell company structures" that, while legal, also allow the firm's clients "to operate behind an often impenetrable wall of secrecy". The leaked papers detail some of their intricate, multilevel, and multi-national corporate structures. Mossack Fonseca has acted with global consultancy partners like Emirates Asset Management Ltd, Ryan Mohanlal Ltd, Sun Hedge Invest and Blue Capital Ltd on behalf of more than 300,000 companies, most of them registered in the British Overseas Territories. Leaked documents also indicate that the firm would also backdate documents on request and, based on a 2007 exchange of emails in the leaked documents, it did so routinely enough to establish a price structure: $8.75 per month in the past. In 2008, Mossack Fonseca hired a 90-year-old British man to pretend to be the owner of the offshore company of Marianna Olszewski, a US businesswoman, "a blatant breach of anti-money laundering rules" according to the BBC. Sanctioned clients: he anonymity of offshore shell companies can also be used to circumvent international sanctions, and more than 30 Mossack Fonseca clients were at one time or another blacklisted by the US Treasury Department, including businesses linked to senior figures in Russia, Syria and North Korea. Three Mossack Fonseca companies started for clients of Helene Mathieu Legal Consultants were later sanctioned by the US Treasury's Office of Foreign Assets Control (OFAC). Pangates International Corporation was accused in July 2014 of supplying the government of Syria with "a large amount of specialty petroleum products" with "limited civilian application in Syria." The other two, Maxima Middle East Trading and Morgan Additives Manufacturing Co, and their owners Wael Abdulkarim and Ahmad Barqawi, were said to have "engaged in deceptive measures" to supply oil products to Syria. Mossack Fonseca also ran six businesses for Rami Makhlouf, cousin of Syrian president Bashar al-Assad, despite US sanctions against him. Internal Mossack Fonseca documents show that in 2011 Mossack Fonseca rejected a recommendation by their own compliance team to sever ties to Mr. Makhlouf. They agreed to do so only months later. The firm has said it never knowingly allowed anyone connected with rogue regimes to use its companies. Frederik Obermaier, co-author of the Panama Papers story and an investigative reporter at the German newspaper Süddeutsche Zeitung, told Democracy Now: "Mossack Fonseca realised that Makhlouf was the cousin, and they realised that he was sanctioned, and they realised that he's allegedly one of the financiers of the Syrian regime. And they said, 'Oh, there is this bank who still does business with him, so we should still keep with him, as well'." HSBC also appeared to reassure Mossack Fonseca not only that it was "comfortable" with Makhlouf as a client but suggested there could be a rapprochement with the Assad family by the US. Makhlouf has already been revealed to be a long-standing client of HSBC's Swiss private bank, holding at least $15 million with it in multiple accounts in 2006. The Panamanian files also show HSBC provided financial services to a Makhlouf company called Drex Technologies, which HSBC said was a company of "good standing". DCB Finance, a Virgin Islands-based shell company founded by a North Korean banker Kim Chol-sam and British banker Nigel Cowie also ignored international sanctions and continued to do business with North Korea with the help of the Panamanian firm. The US Department of the Treasury in 2013 called DCB Finance a front company for Daedong Credit Bank and announced sanctions against both companies for providing banking services to North Korean arms dealer Korea Mining and Development Trading Corporation, attempting to evade sanctions against that country, and helping to sell arms and expand North Korea's nuclear weapons programme. Cowie said the holding company was used for legitimate business and he was not aware of illicit transactions. Mossack Fonseca, required by international banking standards to avoid money-laundering or fraudster clients, is like all banks supposed to be particularly alert for signs of corruption with politically exposed persons (PEP), in other words clients who either are or have close ties to government officials. However they somehow failed to turn up any red flags concerning Tareq Abbas even though he shares a family name with the president of Palestine, and sat on the board of directors of a company with four fellow directors the firm did deem PEP because of their ties to Palestinian politics. Yet Mossack Fonseca actually did and documented due diligence research, including a Google search. Clients of Mossack Fonseca: Mossack Fonseca has managed more than 300,000 companies over the years, with the number of active companies peaking at over 80,000 in 2009. Over 210,000 companies in twenty-one jurisdictions figure in the leaks. More than half were incorporated in the British Virgin Islands, others in Panama, the Bahamas, the Seychelles, Niue, and Samoa. Mossack Fonseca's clients have come from more than 100 countries. Most of the corporate clients were from Hong Kong, Switzerland, the United Kingdom, Luxembourg, Panama, and Cyprus. Mossack Fonseca worked with more than 14,000 banks, law firms, incorporators, and others to set up companies, foundations, and trusts for their clients. Some 3,100 companies listed in the database appear to have ties to US offshore specialists, and 3,500 shareholders of offshore companies list US addresses. Mossack Fonseca has offices in Nevada and Wyoming. The leaked documents indicate that about US$2 trillion has passed through the firm's hands.[99] Several of the holding companies that appear in the documents did business with sanctioned entities, such as arms merchants and relatives of dictators, while the sanctions were in place. The firm provided services to a Seychelles company named Pangates International, which the US government believes supplied aviation fuel to the Syrian government during the current civil war, and continued to handle its paperwork and certify it as a company in good standing, despite sanctions, until August 2015. More than 500 banks registered nearly 15,600 shell companies with Mossack Fonseca, with HSBC and its affiliates accounting for more than 2,300 of the total. Dexia and J. Safra Sarasin of Luxembourg, Credit Suisse from the Channel Islands and the Swiss UBS each requested at least 500 offshore companies for their clients. An HSBC spokesman said, "The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicized reforms implemented over the last few years." Responses by Mossack Fonseca: In response to queries from the Miami Herald and ICIJ, Mossack Fonseca issued a 2,900-word statement listing legal requirements that prevent using offshore companies for tax avoidance and total anonymity, such as FATF protocols which require identifying ultimate beneficial owners of all companies (including offshore companies) before opening any account or transacting any business. The Miami Herald printed the statement with an editor's note that said the statement "did not address any of the specific due diligence failings uncovered by reporters". On Monday, April 4, Mossack Fonseca released another statement: "Our industry is not particularly well understood by the public, and unfortunately this series of articles will only serve to deepen that confusion. The facts are these: while we may have been the victim of a data breach, nothing we've seen in this illegally obtained cache of documents suggests we've done anything illegal, and that's very much in keeping with the global reputation we've built over the past 40 years of doing business the right way." Firm co-founder Ramón Fonseca Mora told CNN that the information published is false and full of inaccuracies and that parties "in many of the circumstances" cited by the ICIJ "are not and have never been clients of Mossack Fonseca." The firm provided longer statements to ICIJ. In its official statement April 6 Mossack Fonseca suggested that responsibility for potential legal violations may lie with other institutions given that: approximately 90% of our clientele is comprised of professional clients... who act as intermediaries and are regulated in the jurisdiction of their business. These clients are obliged to perform due diligence on their clients in accordance with the KYC and AML regulations to which they are subject. In an interview that Jürgen Mossack and Ramón Fonseca gave to Bloomberg, Mossack said: "The cat's out of the bag, so now we have to deal with the aftermath." Ramón Fonseca said the leak was not an "inside job"—the company had been hacked by servers based abroad. It filed a complaint with the Panamanian attorney general's office. On April 7, 2016 Jürgen Mossack resigned from Panama's Council on Foreign Relations (Conarex), even though he was not officially serving at the time. His brother Peter Mossack still serves as honorary Consul of Panama as he has since 2010. On May 5, 2016, Mossack Fonseca sent a cease and desist letter to the ICIJ in an attempt to stop the ICIJ from releasing the leaked documents from the Panama Papers scandal. Despite this, the ICIJ released the leaked documents, on May 9, 2016. Responses in Panama: At 5:00 am on April 3, after the news first broke, Ramón Fonseca Mora (co-founder of Mossack Fonseca) appeared on local television channel TVN. He said he "was not responsible nor he had been accused in any tribunal tried in any court". Furthermore, he said, the firm was the victim of a hack and he had no responsibility for what clients did with the offshore companies that they purchased from Mossack Fonseca, and that those companies were legal under Panamanian law.Later that day, a representative of the Independent Movement (MOVIN) called for calm, and expressed hope that the Panamanian justice system would not allow the culprits to go with impunity. Public officials: By April 8, the government understood media reports were addressing tax evasion not attacking the country of Panama. The president met on Wednesday April 7, with CANDIF, a committee of representatives from different sectors of the economy which includes the Chamber of Commerce, Chamber of Industry and Agriculture, the National Lawyers Association, the International Lawyers Association, the Banking Association and the Stock Exchange, and entered full crisis management mode. He announced the creation of a new judiciary tribunal and a high level commission led by Nobel Prize Laureate Joseph Stiglitz. Isabel Saint Malo de Alvarado, Vice President of Panama, said in an op-ed piece published April 21 in The Guardian that President Juan Carlos Varela and his administration have strengthened Panama's controls over money-laundering in the twenty months they have been in power, and that "Panama is setting up an independent commission, co-chaired by the Nobel laureate Joseph Stiglitz, to evaluate our financial system, determine best practices, and recommend measures to strengthen global financial and legal transparency. We expect its findings within the next six months, and will share the results with the international community." On April 8, President of Panama Juan Carlos Varela denounced France's proposal to return Panama to a list of countries that did not cooperate with information exchange. Minister of the Presidency Alvaro Alemán categorically denied that Panama is a tax haven, and said the country would not be a scapegoat. Alemán said that talks with the French ambassador to Panama have begun. On April 25, a meeting of the Panamanian and French finance ministers resulted in an agreement under which Panama will provide information to France about French nationals with taxable assets in the country. Dulcidio de la Guardia, currently Minister of Economy and Finance and formerly an offshore specialist at Mossack Fonseca competitor Morgan & Morgan, said the legal but often "murky" niche of establishing offshore accounts, firms and trusts makes up "less than half a percentage point" of Panama's GDP. He appeared to suggest that publication of the papers was an attack on Panama because of the high level of economic growth that the country had shown. Eduardo Morgan of the Panamanian firm Morgan & Morgan accused the OECD of starting the scandal to avoid competition from Panama with the interests of other countries. The Panama Papers affect the image of Panama in an unfair manner and have come to light not as the result of an investigation, but of a hack, said Adolfo Linares, president of the Chamber of Commerce, Industries and Agriculture of Panama (Cciap). The Colegio Nacional de Abogados de Panama (CNA) urged the government to sue. Political analyst Mario Rognoni said that Panama is most affected by the scandal, and the world perceives it as a tax haven. The government of President Juan Carlos Varela might become implicated if he tries to cover up for those involved, Rognoni said. Economist Rolando Gordon said the affair hurts Panama, which has just emerged from the greylist of the FATF, and added that each country, especially Panama, must conduct investigations and determine whether in fact illegal or improper acts were committed. Panama's Lawyers Movement called the Panama Papers leak "cyber bullying" and called a press conference to condemn the attack on the 'Panama' brand. Fraguela Alfonso, its president, said it was a direct attack on the country's financial system. I invite all organized forces of the country to create a great crusade for the rescue of the country's image. Offshore companies are legal, said Panamanian lawyer and former controller of the republic Alvin Weeden; illegality arises when they are used for money laundering, arms smuggling, terrorism, or tax evasion. Law enforcement: The Procuraduría de la Nación announced that it would investigate Mossack Fonseca and the Panama papers. On April 12, an operation of the newly formed Second Specialized Prosecutor against Organized Crime, supported by the Panamanian police, raided Mossack Fonseca and searched their Bella Vista offices. Official sources from the Procuraduría de la Nación confirmed the search was part of the investigation initiated by the Panama Papers. The Attorney General's office issued a press release following the raid, which lasted 27 hours, stating that the purpose was "to obtain documents relevant to the information published in news articles that establishes the possible use of the law firm in illegal activities." The search ended without precautionary measures, frozen accounts, or restriction of the law firm, confirmed prosecutor Javier Caraballo of the Second Prosecutor Against Organized Crime. On April 22 the same unit raided another Panama location and "secured a large amount of evidence." The Municipality of Regulation and Supervision of Financial Subjects not the Ministry of Economy and Finance (MEF) initiated a special review of the law firm Mossack Fonseca, to determine whether or not tax law stipulations were fulfilled. Carlamara Sanchez, in charge of this proceeding, reported at a press conference that the quartermaster came to verify whether the firm complied since April 8 with due diligence, customer knowledge, the final beneficiary and sending reports of suspicious transactions to the Financial Analysis Unit (UAF) operations. She said that Law 23 of 2015 empowers the regulation and supervision of non-financial activities review. He said various firms were monitored since late last year with a special supervision after the news events that have come to light, with the scandal called the Panama Papers. She explained that the breach of this law carries fines ranging from $5,000 to $1 million or even suspension of the firm. The action of the International Consortium of Investigative Journalists (ICIJ by its acronym) to appoint the investigation against the firm Mossack Fonseca for the 'Panama Papers' was reported in the Public Ministry. Samid Dan Sandoval, former candidate for mayor of Santiago de Veraguas (2014), was the one who filed the legal action against journalists and all those who have had direct, indirect or involved participation. Sandoval says the name of research causes damage to the integrity, dignity and sovereignty of the country. According to the former candidate, the consortium will have to assume the legal responsibility of all damage caused to the Panamanian nation. A petition published in Change.org requests the International Consortium of Investigative Journalists (ICIJ) to stop using the name of Panama within the Panama Papers Scandal. The request has already more than 350 signatures, it supports that the accepted name for the investigation "damages the image" of Panama. The petition adds that, "gives the wrong idea" of all Panamanians who work with decency and legality. Some of the comments in this petition revealed annoyance and indignation of some people who consider it a "shame" that name Panama appears in the scandal.