It’s been a rough week for Mexican President Enrique Peña Nieto, first outed for illegal electoral campaign tactics through confessions of an elite hacker, and now implicated in the Panama Papers through his friend and financier who hid US$100 million in offshore tax havens with the help of Panama-based law firm Mossack Fonseca.
Juan Armando Hinojosa, Peña Nieto’s so-called “favorite contractor,” set up a complex network of trusts as a Mossack Fonseca client shortly after a corruption scandal implicating one of his construction companies blew up in Mexico. The case, known as Casa Blanca, concerned a US$7 million mansion built and registered by the firm and acquired by current first lady Angelica Rivera.
Looking to safeguard his fortune amid fraud allegations, Hinojosa established nine entities spread over New Zealand, the United Kingdom, and the Netherlands in the name of his elderly mother and mother-in-law beginning in 2015. He, his wife, and their children were named as beneficiaries in case of death.
Through the scheme, Hinojosa and his wife “donated” lumps of money to their mothers after hiding the savings in shell companies.
Last year, comptroller Virgilio Andrade, appointed by Peña Nieto and responsible for investigating the Casa Blanca real estate case, cleared all parties in the scandal of any wrongdoing.
The Panama Papers
Hinojosa’s Grupo Higa had also been granted the multimillion-dollar contract for Mexico’s first high-speed train, but he lost the tender without explanation after the mansion scandal broke. The businessman later won another multimillion-dollar contract for construction on Peña Nieto’s presidential hangar.
Hinojosa refused to respond to requests for comment from the International Consortium of Investigative Journalists, one of the main organizations involved in the Panama Papers leak. A representative told ICIJ Hinojosa was on vacation with limited phone access.
In what is being described as the largest leak in journalistic history, the Panama Papers are a set of over 11.5 million documents dating back to the late 1970s that reveal how the Panama-based law firm Mossack Fonseca helped world leaders, wealthy elites, and celebrities hide assets in shell companies and offshore tax havens.
The initial leak is set to be followed by further disclosures, including publication of a full list of more than 200,000 offshore companies.
WATCH: Mexico's Presidential Mansion Scandal