Panama Papers: Law firm regularly used name of Red Cross to hide money

A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm in Panama City, Thursday, April 7, 2016. AP Photo/Arnulfo Franco

PARIS — The law firm at the center of the Panama offshore accounts scandal routinely usurped the name of the Red Cross and other charities to help obscure the origin of millions of dollars in questionable funds, two newspapers involved in the investigation reported Sunday.

There’s no suggestion that the charitable groups had any idea their name was being used in this way. International Committee of the Red Cross spokeswoman Claire Kaplun told The Associated Press on Sunday that the revelation was “a total surprise and something we find extremely shocking.”

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France’s Le Monde and Switzerland’s Le Matin Dimanche said Mossack Fonseca created dummy foundations with high-minded names such as the “Faith Foundation” to hold shares in around 500 offshore companies. The foundation’s beneficiary was routinely listed as “the Red Cross,” a designation which served the dual purposes of hiding the firms’ real beneficiaries and of draping them in an “NGO aura,” the papers wrote.

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Mossack Fonseca didn’t immediately return an email seeking comment, but a leaked email cited by the publications appeared to lay out the firm’s reasoning.

“Given that banks and financial institutions are today asked to obtain information about economic beneficiaries, it has become difficult for us not to divulge the identity of those of the Faith Foundation’s,” the email said, according to the papers. “That’s why we’ve implemented this structure designating the ‘International Red Cross.’ It’s easier that way.”

Another email cited by the papers suggests Mossack Fonseca deliberately kept the Red Cross in the dark about the maneuver.

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“According to Panama law, the beneficiaries of a foundation can be used without knowing it,” the email said, according to the papers. “That means the International Red Cross doesn’t know about this arrangement.”

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Kaplun, the Red Cross spokeswoman, said that using the group’s name or logo without its permission is barred by international law — and could put the group’s staff in jeopardy.

“We work in conflict zones. We work without weapons. Our protection is our name, our emblem, the faith that people have in our reputation,” she said in a telephone interview.

“Let’s say this money was linked to a warring party in a conflict. Imagine what consequences that could have.”

The newspapers’ examination of the Faith Foundation turned up a host of questionable connections.

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Both said that the Faith Foundation was a relay in the money trail leading back to former Argentine President Nestor Kirchner and his wife, Cristina Fernandez de Kirchner, who succeeded him in 2007. The foundation also played a role in a complex London real estate transaction involving Emirati leader Sheikh Khalifa bin Zayed Al Nahyan, the papers said, adding that another Panama-based foundation played a similar role in obscuring the finances of Elena Baturina, the wife of Moscow’s ex-mayor and repeatedly listed as Russia’s wealthiest woman.

Meanwhile, the offshore scandal made for awkward exchanges at a meeting between French Prime Minister Manuel Valls and his Algerian counterpart, Abdelmalek Sellal.

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Coverage of the meeting has been overshadowed by a partial French press boycott which kicked in after Algerian authorities refused to issue visas for journalists from Le Monde and Canal+. The former had used the Panama files to explore the finances of several high-profile Algerians, one of whom was pictured embracing Algerian President Abdelaziz Bouteflika.

Valls had previously condemned the visa refusal.

Quizzed during a joint news conference Sunday, Sellal complained that Le Monde had “dared to attack” the “honor and prestige” of the presidency.

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