Julia Glum tries to understand why there are not more prominent Americans named in the Panama Papers.
Why aren’t there more Americans implicated in the Panama Papers? Well, there might be: An editor with Süddeutsche Zeitung, the German newspaper that has been leading the investigation of the records, tweeted Monday to “just wait” until more were released. But some tax experts suggest the reason is that U.S. executives simply don’t have to leave the country to find places to make sly-but-legal business deals. The practices detailed in the documents are simply standard in many parts of the country, including Nevada and Delaware.
“A very small number of states are notorious for allowing pretty much anybody to start a company in the state without requiring even the most basic information,” said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy with Citizens for Tax Justice, a progressive think tank and advocacy group in Washington. “There are a few states that effectively make the U.S. a privacy haven in exactly the same way that Panama is being described here.”
John Cassidy also asks the same question and tries to answer it. He dismisses the notion that Americans are less likely to indulge in this kind of activity.
A more convincing explanation is that the journalists who are researching the leaks are still pursuing American clients of Mossack Fonseca. In fact, we now know this to be the case. On Monday, a piece published by Fusion, one of the U.S. media organizations that has access to the leaked material, said, “So far, the International Consortium of Investigative Journalists (ICIJ) has only been able to identify 211 people with U.S. addresses who own companies in the data (not all of whom we’ve been able to investigate yet). We don’t know if those 211 people are necessarily U.S. citizens. And that figure covers only data from recent years available on a Mossack Fonseca internal database—not all 11.5 million files from the leak.”
There are several reasons why the United States might not have been a major source of clients for the Panamanian law firm, relatively speaking. Perhaps it deliberately avoided having a large presence in the United States, so as not to attract the attention of U.S. authorities. Or perhaps there was too much competition. An article published in The Economist in 2012 pointed out that the business of setting up shell companies in tax havens is competitive and includes a number of well-established firms, such as the Hong Kong-based Offshore Incorporations Ltd., the Isle of Man-based OCRA Worldwide, and Morgan & Morgan, of Panama. In other words, wealthy Americans have many options for structuring their offshore holdings.
Like with the Snowden documents, we will have to wait for some time all the leaked data to be analyzed and emerge in news reports. The latest leak of 11.5 million documents is supposedly the largest ever.