Panama Papers Commission ‘Will Have No Credibility,’ Former Chair Joseph Stiglitz Says
By Paul Blake and Armando Garcia – August 9, 2016
Just days after resigning from a committee set up to study Panama’s finance system in the wake of the Panama Papers scandal, the largest leak of private financial data to the public in history, economist Joseph Stiglitz, a Nobel laureate, told ABC News the remaining panel “will have no credibility within the international community” — unless they make tough recommendations, which he believes is unlikely.
Stiglitz, who was co-chair of the committee and resigned in protest last week along with Swiss anti-corruption expert Mark Pieth, told ABC News that he could not proceed without a commitment from the Panamanian government that it would publish the panel’s final report publicly.
Questions over the credibility of the committee — which was established by the Panamanian government to “strengthen Panama as a global financial center with the best practices of transparency” — could heighten concerns over whether Panama will reform its finance industry to discourage tax havens and secret accounts.
Responding to Stiglitz, the Government of Panama told ABC News that they “are disappointed that two of the committee members preferred to alter the mandate of the committee,” but that they “have full confidence in the committee to continue its important work.” Some of the committee’s remaining members have denounced Stiglitz‘s view.
Biggest Financial Data Leak in History
In April, millions of documents leaked from Panamanian law firm Mossack Fonseca drew widespread concern after reports alleged rich and powerful individuals were using the firm to establish secretive tax havens so they could engage in money laundering, dodging sanctions or tax evasion.
Shortly after the leak, Mossack Fonseca issued a statement saying the reports “portrayed an inaccurate view” of the firm’s services and “misrepresented the nature of our work and its role in global financial markets.”
The firm also said that it is “regulated on multiple levels, often by overlapping agencies, and [has] a strong compliance record.”
It is important to note that creating offshore companies or tax havens is not inherently illegal and can have legitimate uses.
The news sent ripples around the world. In all, 12 current or former heads of state or government were in some way ensnared in controversy by the documents, according to the BBC, which was one of the organizations investigating the documents.
Iceland’s prime minister, Sigmundur Gunnlaugsson, stepped down after reports alleged he owned an offshore company that was undeclared when he entered parliament. He denied any wrongdoing. Russian president Vladimir Putin made a public denial of “any element of corruption,” after the papers reportedly revealed several offshore companies owned by his close associates may have been engaged in money laundering.