Justice Minister Ang Vong Vathana is among the many world leaders, government officials and celebrities named in the so-called “Panama Papers,” a massive trove of leaked documents released by the International Consortium of Investigative Journalists (ICIJ) yesterday detailing offshore holdings and international accounts that passed through the powerful Panamanian law firm Mossack Fonseca.
The documents have been compared to the 2010 release of classified documents from the US State Department, referred to as WikiLeaks. The difference, according to the ICIJ, is that the Panama Papers expose the often corrupt methods wealthy individuals and corporations go through to avoid taxes and oversight in offshore financial transactions.
The firm Mossack Fonseca specializes in setting up and often selling shell companies for its clients, allowing them to hide, transfer and loan money worldwide to evade taxes and oversight, the report said.
The ICIJ report acknowledges that not everyone named in the leaked documents was necessarily involved in illicit financial transactions, saying there are legitimate uses for offshore companies.
However, Mr. Vong Vathana was not identified as a “politically exposed person” despite being listed in a document from the law firm as Cambodia’s “Minister of Justice.” Had Mr. Vong Vathana been properly designated, the firm would have been required to conduct background checks on him and the source of his funds, according to the ICIJ report.
The leaked document – a hand-written note – says Mr. Vong Vathana became one of five shareholders of RCD International Limited in May 2007, paying $5,000 for 5,000 shares of the company based in the British Virgin Islands, according to the ICIJ report.
ICIJ said it was unable to determine what kind of business the company operated.
Mr. Vong Vathana yesterday denied any link to the company, telling an online media outlet: “I do not know anything about this company, so how can I be a shareholder?”
He said he wanted more information about the company from ICIJ, and threatened to file a defamation suit against the group if the document linking him to Mossack Fonseca and RCD International was false.
“I’m not a superstar like Messi,” he added, referring to football star Lionel Messi, who is among the many high-profile people named in the leaked documents.
The Ministry of Justice also released a statement yesterday saying it “knows nothing about this company or the shareholders.”
“Therefore, the information released [by the ICIJ] was false. This is misinforming the public and it will impact the honor of the minister,” the statement said, adding: “Please verify this information before publishing anything about it.”
The ICIJ, however, has already published the information online, including a photograph of Mr. Vong Vathana and a brief biography of him.
Opposition lawmaker Son Chhay yesterday said the issue should be investigated by the Anti-Corruption Unit. “The ACU should investigate this…They should not keep silent about this,” the senior member of the Cambodia National Rescue Party said.
Speaking to Reuters yesterday, Ramon Fonseca, director of Mossack Fonseca, denied that the firm had any involvement in illegal activities or money laundering, claiming that it is “dedicated to making legal structures which we sell to intermediaries such as banks, lawyers, accountants and trusts, and they have their end-customers that we don’t know.”
Information from the leaks is still trickling out as more news organizations make their way through the massive stockpile of documents, but ICIJ director Gerald Ryle told CNBC that the leak was evidence of a larger worldwide issue.
“We’re looking at a system that’s actually broken. You’ve got a system that sells, as a primary product, secrecy...If you go to the offshore world, you can do things that you wouldn’t be able to do at home,” he said.
The 11.5 million documents spanning more than 40 years were leaked to the team of journalists, who set up a detailed website linking accounts to some of the world’s most powerful and famous people, including 12 current and former heads of state, 200 politicians, associates of numerous mafia organizations, 350 major banks, celebrities and thousands of regular citizens.
The ICIJ said the leak “allows a never-before-seen view inside the offshore world – providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues.”
“The documents show that banks, law firms and other offshore players have often failed to follow legal requirements that they make sure their clients are not involved in criminal enterprises, tax dodging or political corruption. In some instances, the files show, offshore middlemen have protected themselves and their clients by concealing suspect transactions or manipulating official records,” it added.