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Don’t Forget: Trump’s Name Found in Panama Papers

Just a few days back, multiple Pulitzer Prize winning journalist Jake Bernstein released a report detailing the first appearance of President Trump in the financial scandal that is the Panama Papers. This is not the only time Trump’s name appears in the papers, the name Trump is in there nearly 3,500. But not all of these necessarily involve Trump himself and, frankly, just being in the papers at all isn’t always an issue by itself. It’s important to understand the context of Trump’s appearance and exactly what the Panama Papers–and the later Paradise Papers–are.

The Panama Papers, leaked back in 2015, are so named because they were taken from a Panama based law firm specializing in forming offshore corporate entities known as Mossack Fonseca. The leak was substantial, 11.5 million financial documents involving nearly 215,000 offshore corporate entities substantial. Offshore entities aren’t illegal in and of themselves–although they’re obviously illegal when used for tax fraud. However, these documents quickly became infamous both for the high profile individuals and companies whose names appeared therein or were connected to those who appeared and because an enormous number of entities turned out to be shell corporations involved in tax evasion, fraud, money laundering for criminal organizations, and evading international sanctions.

Obviously the sheer number of documents made parsing the information contained within a herculean task, thus the revelations still coming out years later. This situation was made even more overwhelming as the Paradise Papers were leaked in last few months.

Second only to the Panama Papers in sheer amount of the data leaked, they incorporated even more documents than their denser predecessor with 13.4 million documents on offshore investments. The documents came from a law firm known as Appleby. This leak dealt mostly dealt with situations that involved legal tax havens–although there were certainly several sketchy situations that caused embarrassment and drew greater scrutiny on companies such as Apple–already investigated by the U.S. Senate in 2013 over allegedly taking advantage of tax havens in Ireland and Bermuda.

It’s important to distinguish that the practice of using a tax haven–moving money to places where they have very little in the way of regulations on income–is at least legally distinguishable from illegal tax evasion. To be frank, a certain amount of efforts to minimize what you pay in taxes is just common sense. However, these are the sort of tax havens which have caused companies, and wealthy individuals, to draw criticism for gaming U.S. tax laws.

panama papersTrump is not alone among leaders with financial interests found amongst the leaked papers. For example, Iceland Prime Minister Sigmender Gunnlaugsson resigned his office after the papers showed he had not disclosed some relevant financial interests when he took office. Trump also isn’t the only person in his administration who has shown up in the papers. Let’s look at exactly what these recent revelations really show–and what they don’t show.

Trump in the Panama Papers

The recent reports on Trump’s appearances on involve a sale by Trump of a New York condo in Trump Palace to a shell company known as Process Consultans (that is not a typo, it is unclear if the corporation was made in haste or if the lack of a “t” made the company harder to find). “Consultans” was owned entirely via bearer shares–a common means of transferring property anonymously. Bearer shares usually see quite a bit of regulation due to how commonly they are involved in money laundering.

Let’s make it clear, this is mostly important now because it is first chronological occurrence of Trump himself being identified in the Panama Papers out of the nearly 3,500 times his name appears. The Panama Papers contain crucially important information on financial goings on and potential crimes across the world. However, the information here is incredibly thin. There is little on how much Trump actually knew, the sale took place in 1994, there are essentially no remaining documents on the apartment rental prior to 2005 (none of which involve “Consultans”), and “Consultans” itself is about as easy to find information on as you’d expect a shell company named “Consultans” to be. The primary criticism here has been Trump’s failure to ask questions about who was purchasing his real estate, especially when it was in such suspicious circumstances. These suspicious circumstances have been exacerbated by revelations in the papers regarding others in his administration.

Trump Administration in Paradise Papers

The Paradise Papers last month revealed financial ties which have drawn more heat on the Trump Administration–specifically U.S. Secretary of Commerce Wilbur Ross. The papers revealed Ross has a financial stake (to the tune of $68M) in a Russian energy company partially owned by Kirill Shamalov. Shamalov is Vladimir Putin’s son-in-law, his father Nikolai Shamalov is currently under U.S. sanctions. These revelations are mostly an issue due to the larger political situation, the lack of full disclosure by Ross in his confirmation hearings, and–most importantly–that these holdings were some of the few investments Ross chose to keep even after assuming his position.

Several politicians have called for inquiries into this from the Government Accountability Office or GAO. There is the potential for legal wrongdoing here, but honestly the smell of impropriety is likely greater than the any real potential for criminal misbehavior here. If nothing else the situation has given rise to a great deal of debate in regards to the exact outlines of the disclosure requirements before taking a position such as Secretary of Commerce and reflection on whether those requirements are sufficient.

The Importance of the Papers

Trump has been criticized for his financial connections before, and many these accusations are well founded. In his campaign he professed to owning 515 separate companies, however only 378 of them can be found registered in Delaware. It’s far from a stretch to imagine Trump has offshore holdings which may appear in the Panama Papers. However, offshore holdings aren’t illegal in and of themselves (again, barring tax fraud) and the information so far is a bit too thin to draw any substantial conclusions from. What is clear is that the Panama and Paradise Papers leaks have revealed financial goings on at a level hitherto unthought-of, tax money hidden or sheltered away from the U.S. government, fraud, and more.

Many politicians on both sides of the aisle and internationally have seen their financial goings on popping up in the Panama or Paradise Papers (or both). Queen Elizabeth, church leaders, Queen Noor of Jordan, one-time Democratic Presidential hopeful Wesley Clark, and even Madonna. The level of involvement of each person is sometimes hard to put together from the facts in the papers and sometimes clear.

However, they have for the most part published explanations for their holdings or involvement. Trump–the “America First” president–has had essentially no comment individually for the thousands of times his and his company’s name appears in the papers regarding offshore holdings–the type often used for money laundering or seeking tax havens from the U.S. government. There certainly needs to be more information before drawing conclusions on an individual level. However, the Panama and Paradise papers have revealed, and will continue to reveal, financial workings that are important even beyond what they imply from individual to individual.

The post Don’t Forget: Trump’s Name Found in Panama Papers appeared first on Law Blog.



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Don’t Forget: Trump’s Name Found in Panama Papers

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