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The Panama Papers: Rising Pressure and Lots of Denials, but Little Shock in Latin America

Argentina’s President Macri, a businessman linked to a previous scandal that involved Mexico’s President Peña Nieto, and a slew of Brazilian politicians, stand out among the Latin Americans named in the massive leak.

by Jo Tuckman and Alan Hernández
Apr 4 2016, 9:15pm

Imagen por Andre Penner/AP Images

The pressure on Latin Americans named in the massive leak of information about offshore companies owned by the world's elite is gathering steam, prompting a rash of curt denials of wrongdoing and some promises of official investigations, but not much shock.

The highest profile revelation within the so-called Panama Papers, that came from within the Panama-based law firm Mossack Fonseca, involves Argentina's president, Mauricio Macri.

They also name a construction tycoon who was at the center of a previous property scandal involving Mexican President Enrique Peña Nieto, as well as a whole range of politicians from Brazil, the son of a former vice president in Honduras currently indicted for money laundering in the United States, and the attorney general of Ecuador.

Related: The Panama Papers: Massive Leak Reveals the Global Elite's Secret Cash Havens

Argentina immediately buzzed with the news that its right-wing president is among the so-called "dirty dozen" of sitting leaders named in the 11.5 million documents from Mossack Fonseca.

Macri is mentioned as the director of a company called Fleg Trading founded in 1998 in the Bahamas and dissolved in 2009. This raises the question of why he did not include the company within the formal declarations of his assets he made when he was mayor of Buenos Aires in 2007 and 2008.

The presidential office released a statement on Monday stating that Macri was not obliged to declare anything about Fleg Trading because he had no shares in it.

"It was linked to the family business group," the statement said of the company. "Señor Macri happened to be designated the director, without any shares."

The brush-off incensed Argentines who already saw Macri's avowed pro-business ethos as a cover for unpatriotic and elitist self interest, and demands on the president to hold a press conference are growing.

The loudest criticism has come from the political opposition that has tended to ignore the fact that the documents also name Daniel Muñoz — private secretary to both President Néstor Kirchner and his wife, successor, and Macri's predecessor Cristina Fernández de Kirchner — as the main shareholder of a Cayman Islands company set up in 2010.

Muñoz has not said anything himself, but the Kirchner family released a statement in which they insisted that their name was dragged into the mire by unscrupulous journalists.

"The Kirchner family does not possess a single bank account, or company, or any kind of asset abroad," the statement said, adding that Fernández de Kirchner had long been a leading world critic of tax havens for the rich. "The person who is mentioned [in the Papers] and who is the central protagonist of the revelations today is, unfortunately for our country, no other than the President of the Republic Mauricio Macri."

For all the furor over politics, the most famous Argentine figure in the Panama Papers is Lionel Messi. His family´s involvement in one of the offshore companies is the second time in two days the soccer star has made headlines outside of the sports pages. In the first he was featured autographing national team shirts to send to the daughters of President Barack Obama who visited Argentina last month.

Mexicans, meanwhile, woke up to banner headlines highlighting the inclusion of businessman Juan Armando Hinojosa Cantú whose companies have obtained many highly profitable contracts from the government.

Hinojosa, a personal friend of President Enrique Peña Nieto, was catapulted into the spotlight at the end of 2014 when an investigation by the website Aristegui Noticias revealed his company had built a multi-million dollar mansion for the presidential family. Later investigations revealed that another company owned by Hinojosa had sold finance minister Luis Videgaray a luxury holiday home via a credit deal with a notably low level of interest.

Related: Mexico's President and First Lady Face Scandal Over Lavish 'White House' Mansion

In August last year the government comptroller general, who was appointed by Peña Nieto, cleared both the president and the finance minister of any conflict of interest. Now the Panama Papers reveal that Cantú moved at least $100 million via a complex network of companies and trusts to New Zealand in 2015, when the scandal was high.

An email marked "urgent" and dated July 2015 describes Hinojosa as "one of the most prominent" businessmen in Mexico and states that the $100 million is "only a small part" of the client's portfolio.

"Unfortunately, due to his success and high profile, he has quite a number of people who greatly dislike him," the email says. "And unfortunately there is a great deal of negative publicity surrounding the client."

Hinojosa Cantú has never said anything publicly about the property scandals involving the president's family, and he has said nothing so far about the motives behind his intense activity via Mossack Fonseca a year ago.

Others Mexicans named include the head of the TV Azteca network, a vice president of the Televisa TV network, and the recently deposed head of the state-owned oil company Pemex. All have denied any wrongdoing in short statements.

The Mexican government has responded with a promise to investigate all those named in the Panama Papers for possible tax evasion.

"This is valuable information but it is not a surprise," Aristóteles Núñez, the head of the tax authority, told Radio Fórmula. "We will have to see if the people cited in the papers have paid all their taxes and if they haven't they will be audited."

Núñez, however, clarified that the results of the investigations would not be made public.

"So far the reaction of the authorities has been tepid and weak, given the magnitude of the problem," said Eduardo Bohórquez of the Mexican chapter of Transparency International. "They have to be clear what the state can and cannot do. They should talk about individual cases."

Related: The Panama Papers: Global Investigations Begin Following Damning Tax Haven Revelations

In Brazil, meanwhile, the Panama Papers have added fuel to the already raging anti-corruption probe largely focused on the state-run oil company Petrobras.

Among those named in the documents was speaker of Congress, Eduardo Cunha, who is already under investigation for alleged corruption. Federal police have also already raided the Brazilian office of Mossack Fonseca.

The archives show links to several political parties including former governing coalition partner, the Brazilian Democratic Movement Party (PMDB), and the opposition, the Brazilian Social Democracy Party (PSDB).

But with the probe in full swing, some in Brazil took the new revelations in their stride.

"Compared to the Russians, Arabs, Chinese and Icelandic, Brazilians don't have a chance of winning the World Cup of corruption, they can't compete for a podium place in money laundering, not even the bronze for concealing assets," said Jose Roberto Toledo, a columnist with the Estado de Sao Paulo newspaper that participated in the investigations. "In the Panama Papers, we lost to rivals Argentina in the citation of presidents, ex-presidents, and even the country's top footballer."

Not all countries have given much attention to their own national stars in the Panama Papers.

The naming of César Rosenthal, who belongs to a high-profile political and business family with three members including his father currently indicted for drug money laundering in the United States, hardly got a mention within the coverage of the revelations in the Honduran media.

Rosenthal is named as the main shareholder of a company formed in 2014 that purchased an aircraft that was confiscated by the Guatemalan authorities last October, though nothing illegal was found.

Related: The Panama Papers: Huge Protests in Iceland After Prime Minister Refuses to Resign

The Ecuadorian media paid similarly scant attention to the inclusion of the attorney general, Galo Chiriboga, in the list. He is said to be the primary shareholder in an offshore company founded in 1999 via Mossack Fonseca that he has allegedly never declared.

President Rafael Correa did, however, respond to a tweet on Monday. "'Great things' are going to come out of this," he wrote. "We will see who is who."

Photo via twitter

Gastón Cavanagh and Donna Bowater contributed to this report.

Follow Jo Tuckman and Alan Hernández on Twitter: @jotuckman and @alanpasten