Nicaragua in the Panama Papers

Many business people and companies were involved in the creation of offshore companies and foundations. Nicaraguans residing in other countries also registered companies through Mossack Fonseca in tax havens.

Many businesspeople and companies were involved in the creation of offshore companies and foundations. Nicaraguans residing in other countries also registered companies through Mossack Fonseca in tax havens.

By Arlen Cerda  (Confidencial)

HAVANA TIMES — The leak of 11.4 million documents kept by the Panamanian firm Mossack Fonseca, popularly known as the Panama Papers, has afforded the public access to thousands of Nicaragua-related files that were reviewed by a Confidencial journalistic team over the course of four months.

In conjunction with more than 80 media outlets around the world and under the leadership of the International Consortium of Investigative Journalists (ICIJ), Confidencial has taken part in an undergoing investigation which, in Nicaragua’s case, has already yielded a number of preliminary findings.

Nicaragua is directly mentioned in at least 8,717 of Mossack Fonseca’s files, including 6,524 emails, 1,518 PDF files and 245 scanned documents, in addition to other files of different format.

Nicaragua is one of the least mentioned countries in the leaked documents and second to last in comparison to all other Central American countries. Panama, the epicenter of the scandal, is mentioned in 4.4 million files, followed by Guatemala (mentioned 370,293 times), El Salvador (96,607), Costa Rica (75,888) and, lastly, Nicaragua and Honduras (8,503).

The first findings of the investigation into the Panama Papers specifically lead to 10 Nicaraguan clients and 12 companies, chiefly made up of businesspeople and companies that have conducted business or made investments abroad.

The creation of offshore companies is a legal practice and the registration of these companies in Panama and other countries through Mossack Fonseca does not necessarily imply the individuals mentioned have been involved in illegal activities, such as tax evasion or money laundering. It means only that, at some point, they registered a company or foundation through the Panamanian firm.

Mossack Fonseca has been operating in Panama for over 40 years and has secured an international reputation as one of the five top global providers of portfolio or offshore companies (more than 320,000), keeping these secret with over 40 offices around the world. The Panama Papers reveal an abundance of cases in which offshore companies have been utilized to conceal ill-gotten funds and evade taxes.

In Nicaragua, the name of this firm is well-known in business and political circles. Mossack Fonseca was implicated in the scandal involving former President Anroldo Aleman, accused of corruption by the Enrique Bolaños administration in 2002, and identified as the firm that registered the companies used to transfer millions of dollars. Panama accused the firm of money laundering in 2009, but the case was later dismissed.

Aleman’s relationship to companies and foundations registered in Panama was covered up by Mossack Fonseca employees who were registered as directors and administrators of these entities. This was the case with the Panamanian company Nicstate Development S.A., incorporated in Panama in July of 1999, with a board of directors chaired by Leticia Montoya, an office worker at the firm which, according to the leaked documents, appears in the board of directors of 10,967 companies registered by the firm, the second most widely used name in the firm’s instruments.

Some Offshore Companies

The following is a partial list of the offshore companies linked to Nicaragua in the Panama Papers.

In May of 1992, in the jurisdiction of the British Virgin Islands, the company Jadehouse Consultants Ltd. was registered by intermediarias Alvaro Baltodana (current presidential commissioner for investments) and Carlos Aguilar. The company was deactivated in November of 1993.

In June of 1998, through another Nicaraguan intermediary, the company Ingenieria Creativa S.A. was registered in the country. Mossack Fonseca kept it as a registered agent until the end of December, 2003, when it requested a change of agent to another firm also based in Panama. The company representative is businessman and investor Manuel Ignacio Lacayo Gil. According to the documents analyzed the company was used for real estate activities. In addition to the contact, Lacayo was its representative and manager.

In December of 1998, the firm registered the offshore company Laurel Properties Inc. The company granted Lebanese-born Mohamed Lashtar a general power of attorney. Lashtar has served as official at the Department of International Relations of Nicaragua’s FSLN and is a member of the Central American Parliament also for the FSLN. Lashtar was mentioned in the diplomatic cables published by Wikileaks as the liaison between Daniel Ortega and the late Gadhafi. The company was dissolved in March of 2001.

Mossack Fonseca’s documents also register the creation of offshore companies and foundations by Nicaraguan entrepreneurs residing in other countries in the region.  In June of 2002, Mossack Fonseca registered Fogel Group Corporation in the British Virgin Islands, at the request of Fogel Guatemala, where the other company beneficiaries (all relatives of the Edmundo Tefel Pasos) reside. In 2000, from Costa Rica, the offshore company Mesoamerica Media Ltd and other associated companies were registered through Mossack Fonseca. Nicaraguan entrepreneur Jaime Montealegre Lacayo initially figures as member and executive.  Montealagre also figured as the representative of the offshore firms Lochfield Trading and Broackboard Business, real estate companies registered in the Dominican Republic, and has been linked to the creation of several private foundations, such as the Atwood Foundation, operated by Mossack Fonseca.