British PM under spotlight over Panama leaks

British Prime Minister David Cameron declines to comment on whether his father ran offshore investment funds in Panama

Photo by: Reuters
Photo by: Reuters

British Prime Minister David Cameron speaks during a question and answer session in Birmingham, central England, on April 5, 2016.

Updated Apr 7, 2016

British Prime Minister David Cameron, whose spokesman had declined to comment on whether his father ran a network of offshore investment funds in Panama, said on Tuesday that he did not own any shares or have any offshore funds.

Under pressure over the revelations during a visit to a business in central England, he did not answer questions on whether he or his family had benefitted from offshore investment funds set up by his father. His spokeswoman on Monday said it was a "private matter."

Governments across the world began investigating possible financial wrongdoing by the rich and powerful on Monday after a leak of four decades of documents from a Panamanian law firm that specialised in setting up offshore companies.

The leaks allege that some companies domiciled in tax havens were being used for suspected money laundering, arms and drug deals and tax evasion.

Cameron has allowed "the super rich elite" to dodge their taxes, said leader of Britain’s main opposition party Jeremy Corbyn, calling on the government to tackle tax havens.

After worldwide claims of the world’s rich and powerful using secretive offshore company structures to stash their wealth, Cameron was urged to clamp down on tax evasion in British-linked territories.

Along with David Cameron’s father Ian, some members of Cameron’s Conservative Party were also listed amongst clients who used the law firm Mossack Fonseca.

Although the government promised to investigate the leaked data, Labour leader Corbyn demanded the setting up of an independent investigation.

"There cannot be one set of tax rules for the wealthy elite and another for the rest of us," Corbyn said.

"The unfairness and abuse must stop ... no more lip service, the richest must pay their way."

Corbyn said Britain has a huge responsibility since many tax havens are British overseas territories, like the British Virgin Islands and Cayman Islands, or Crown Dependencies such as Jersey or the Isle of Man.

More than half of the 200,000 companies set up by the firm were registered in the British Virgin Islands, where details of ownership do not have to be filed with the authorities.

The British Virgin Islands are ranked 21st out of 92 countries according to the secrecy and scale of offshore financial activities, according to the Financial Secrecy Index.

A former employee from Britain's Intelligence and Security Committee argued, however, that criminality would be pushed elsewhere if overseas territories were prevented from running their own financial services.

Icelandic Prime Minister Sigmundur David Gunnlaugsson was the most notable casualty of the leak so far, which led to his resignation.

Law firm claims ‘hack’

One of the founders of Mossack Fonseca, Ramon Fonseca, said the law firm had lodged a criminal complaint with Panamanian prosecutors on Monday over the breach.

He alleged that the only crime that has been committed is the hack itself. There have been no details forthcoming so far regarding which country the hack was carried out from.

Fonseca said that high-profile clients who set up offshore companies to hide their wealth will no longer rely on Panama’s discretion to do its business, suggesting that privacy is a human right.

With politicians, sports stars, and celebrities revealed to have set up offshore tax-evasive entities, scrutiny on the small Central American nation has suddenly ramped up.

Mossack Fonseca and the government have alleged that the offshore companies are not illegal because it didn’t know exactly what their clients used the accounts for.

TRTWorld and agencies