Chair Werner Langen kicked off Tuesday’s hearing with the investigative journalists behind the Panama Papers revelations by announcing that the inquiry committee will also look into the recent Bahama Leaks affair and the case of former Commissioner Neelie Kroes, who failed to declare a directorship in an offshore firm while she held the competition portfolio.
“Ms Kroes told us she had given up all her engagements. After her hearing for that post she passed the vote in the Economic and Monetary Affairs Committee with a narrow majority of 24 to 22. With the current knowledge, the outcome could well have been different. We want to hear Ms Kroes”, Mr Langen explained.
The investigative journalists, cooperating through the Washington based International Consortium for Investigative Journalism, were welcomed with applause. They explained their findings, which are based on 2.6 terabytes of leaked information compromising banks, heads of state, ministers, criminals and other clients of Mossack Fonseca, a company offering anonymity services and low tax solutions.
Tip of the iceberg
Journalist Bastian Obermayer said he hoped the inquiry committee would shed some light on the world where the super-rich are hiding their wealth, “even though the lobby of the financial industry will not love you”. “This is so wrong, it has to stop”, he said. His colleague from the Süddeutsche Zeitung, Frederik Obermaier, underlined that the Panama Papers represent only the tip of the iceberg, as Mossack Fonseca is just one of many offshore providers. He also pointed to the role that EU banks are playing by actively helping clients to evade taxes.
Low tax and anonymity
Belgian journalist Kristof Clerix, of Knack magazine, wrote about 732 Belgian residents who together own 1,144 offshore firms, mostly on the British Virgin Islands and in Panama and the Seychelles. They seek low tax and anonymity about their ownership of the firms, for example by hiding behind so-called ”nominated directors”, said Mr Clerix, adding that this is often done through Swiss banks or banks residing in Luxembourg.
“Fake” nominee directors
Oliver Zihlmann, from the Swiss Sonntagszeitung, outlined how control and transparency are being circumvented in a system comprising intermediaries such as Swiss lawyers who actually manage firms, Russian money and banks on Cyprus and offshore companies with fake directors in Panama “who just sign everything”.
Jan Strozyk and Julia Stein from the Norddeutscher Rundfunk also shed light on construction of intermediaries between Mossack Fonseca and their clients, aimed solely at “outsourcing liability and due diligence”. They were very critical of the role of banks. Six out of the seven of the biggest banks in Germany offered offshore services, as do 13 of the world’s 20 largest banks. They also pointed out that Switzerland and Luxembourg host 6 of the top ten intermediary banks.
Backdating documents: $US300
Minna Knus from the Finnish Broadcasting Company spoke about ”middle man” constructions but also gave an example of services offered: “Backdating of documents: 300 $US300”.
In the chair: Werner Langen (EPP, DE)