A day before the prime minister of Iceland announced his resignation, the president of the Chilean chapter of Transparency International also vacated his office after he was named in the Panama Papers for his alleged involvement with secret companies. Although he is not accused of illegal activity, the leaks call into question his role as head of an organization monitoring government and corporate corruption.
“We are deeply troubled by what has happened with the Chair of our chapter in Chile,” José Ugaz, Chair of Transparency International, wrote in a statement on Tuesday. “At Transparency International we stand for transparency and integrity above all else and once we learned of Delaveau’s involvement with secret companies, our International Board began the process of suspending the chapter before possible dis-accreditation. With Delaveau’s resignation, our Board decided to halt its efforts to sanction the chapter.”
Founded in 1993, Transparency International is a German-based organization that monitors and publicizes political and corporate corruption on a multinational level. On Monday, Gonzalo Delaveau, the president of Transparency International in Chile, resigned after his name was discovered among tens of thousands of people named in the leaked Panama Papers. Documents from Mossack Fonseca linked Delaveau to at least five offshore companies.
“While Delaveau is not reportedly accused of illegal activity, and he may be able to explain his activities, for us that is not the point,” Ugaz wrote. “Not all secret companies are illegal, but many are used to hide money flows and to support acts of corruption. As we said yesterday in a press release about the Panama Papers investigation: Transparency International wants public registers of all companies’ beneficial owners to make it harder for the corrupt to hide their illicit wealth in secret companies and trusts that use nominees to register ownership.”
Delaveau resigned hours after Chile’s tax authority announced it would begin launching investigations into Chileans mentioned in the Panama Papers, including ex-soccer stars and newspaper magnates. Other prominent figures named in the Panama Papers include the father of U.K. Prime Minister David Cameron, several friends of Russian President Vladimir Putin, the family of Chinese President Xi Jinping, cousins of Syrian President Bashar al-Assad, the family of Pakistan Prime Minister Nawaz Sharif, the King of Saudi Arabia, Ukrainian President Petro Poroshenko, Argentine President Mauricio Macri, and Iceland Prime Minister Sigmundur David Gunnlaugsson.
According to the Panama Papers, Gunnlaugsson’s wife owned an offshore company with massive claims on Icelandic banks. As large street protests formed calling for his resignation, Gunnlaugsson decided to step down before a planned vote of no-confidence.
Last year, Fortune 500 companies held over $2.1 trillion in accumulated profits offshore to evade paying U.S. taxes. Earlier this year, Sen. Bernie Sanders announced his plan to crack down on corporate tax dodgers by closing loopholes allowing U.S. corporations to avoid paying federal income taxes by setting up a post office box in a tax-haven country, artificially inflating foreign tax credits, and using offshore subsidiaries to evade taxes.
“We’ve had another reminder in this big dump of data coming out of Panama that tax avoidance is a big, global problem,” President Barack Obama recently told reporters. “It’s not unique to other countries because frankly there are folks here in America that are taking advantage of this same stuff. A lot of it’s legal, but that’s exactly the problem.”
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