A new cache of leaked corporate documents has revealed that the families of current Argentine President Mauricio Macri and former Chilean dictator Augusto Pinochet have links to companies registered in the infamous tax haven of the Bahamas.
The Macri family’s Grupo Socma holding invested in ViajeYa.com, a company registered in the Bahamas which focuses on online tourism services, according to a report in La Nación daily. It had around US$10 million in capital when it was first founded in April 2000.
The Real Target of the Panama Papers
The leak of roughly 1.3 million documents, known as the “Bahamas Leaks," was published by the International Consortium of Investigative Journalists (ICIJ) and its media partners. It covers the period between 1990 and 2016 and follows the Panama Papers, a trove of 11.5 million documents heralded as the largest data leak in history.
That trove identified Macri as one of 12 heads of state implicated in the effort to shield wealth in secret through offshore tax shelters, naming the Argentine president as the director of the Fleg Trading company.
According to the Bahamas leaks, Fleg Trading lists Macri, his father Francisco and brother Mariano as directors of the offshore firm. Before he was elected president in December of 2015, Macri was mayor of Buenos Aires.
Grupo Socma reportedly had a small stake in the company of about 10 percent, and the investment was said to have been channelled through the Cayman Islands. At the time of the investment Mauricio Macri was no longer a Socma director but had shares in the holding.
La Nación indicated that the Macri family has previously declared the investment to Argentine tax authorities. Participating in offshore firms is not illegal in and of itself if it is duly reported. Nonetheless, it raises questions about possible tax evasion.
Socma reportedly exited ViajeYa.com in 2001, and the tourism business was eventually deactivated in early 2004.
According to the so-called “Panama Papers,” in which more than 11 million documents were leaked by an anonymous whistleblower, Macri was the “director” and “vice president” of a company based in the Bahamas managed by Panama-registered law firm Mossack Fonseca, when the president was a businessman and served as the mayor of Buenos Aires.
Macri came under fire following the Panama Papers and faced an investigation questioning whether or not he “maliciously” failed to report his connection to the company. The probe linked Macri’s Fleg Trading to other companies that investigators charged were part of a scheme designed to disguise shareholders in a complex web.
The president, however, downplayed the leak, and his government has since proposed a tax amnesty bill that would shield tax dodgers willing to bring their money kept in offshore accounts back to the country. Critics argue Macri is looking to protect and benefit himself with the controversial bill.
Also embroiled in the Bahamas Leaks is former Chilean dictator General Augusto Pinochet, who died in 2006, and his son, Marco Antonio. According to the International Consortium of Investigative Journalists, Marco Antonio used a Bahamas-registered account called Meritor Investments Limited to transfer US$1.3 million to his father. Pinochet was also directly tied to another account in the Bahamas called Ashburton Company Limited, which was opened in 1996, six years after the fall of his dictatorship.
Aside from his notorious human rights record under his brutal military regime, Pinochet was also exposed as a thief through investigations into his financial practices, which included illicit activities of money laundering, massive tax evasion, embezzlement, and use of hundreds of secret bank accounts.
The Bahamas Leaks, received by German newspaper Süddeutsche Zeitung and shared with ICIJ, also reveal that former European Commissioner Neelie Kroes hid assets in offshore accounts at the same time she was tasked with enforcing European Union rules on wealthy corporations. Kroes was director of an offshore company in the Bahamas from 2000 to 2009, according to ICIJ.
ICIJ has lumped the data of the Bahamas Leaks into a searchable database with the Panama Papers.
The Panama Papers, boosted by the Bahamas Leaks, has revealed only the tip of the iceberg of the world of tax avoidance and hidden wealth. Mossack Fonseca, the organization behind the companies revealed in the Panama Papers, is only one such law firm among many and doesn’t even top the list of the heaviest hitters in the business of setting up offshore activities.
The leak comes as Ecuador, together with Oxfam and leading economists, has ramped up its campaign to push the United Nations to adopt rules to clamp down on tax havens and hold wealthy and corrupt elites accountable to their tax obligations, which could give an annual multi-billion dollar boost to the global fight against poverty.