In this week's Power Vertical Podcast, Brian Whitmore and guests discuss what the Panama Papers scandal tells us about Russia under Vladimir Putin:
They've given us a glimpse of how Vladimir Putin's regime plunders and launders state assets. They've highlighted the difference between corruption in the West, where it is a bug in the software, and in Russia, where it isn't a bug, where it isn't even a feature.
No, in Russia corruption is the software -- it's the country's operating system. LISTEN
Good morning. We'll start the live blog today with this item from the AFP news agency on a potential development in El Salvador:
Police on Friday raided the El Salvador offices of the Panama-based law firm at the heart of the "Panama Papers" scandal that has revealed how the wealthy in many countries stashed their riches offshore.
The swoop on the San Salvador offices of Mossack Fonseca netted "a good amount of computer equipment," El Salvador's state prosecutor's office said on its Twitter account.
No arrests were made.
The authorities in El Salvador on Wednesday had announced a probe into whether the Salvadorans identified in the Panama Papers reports had broken any laws. Reports said some 33 Salvadorans were named.
The state prosecutor, Douglas Melendez, visited the law firm's premises on Friday.
He told reporters that around 20 computers and a quantity of documents were confiscated, and seven employees questioned but not detained.
The authorities decided to conduct the raid when they observed staff removing the law firm's sign from outside the building, he said.
"We are going to carry out a complete investigation in compliance with the law," Melendez added.
He called on Salvadoran law firms that did business with Mossack Fonseca to come forward to speak with prosecutors.
The offshore companies of Mossack Fonseca's Salvadoran clients were used for transactions of hundreds of thousands of dollars, including to buy property in El Salvador "all under the radar of local authorities," El Faro, an online newspaper, reported.
And here's Ben Fox and Kenneth Silva from the Associated Press taking a look at the Panama Papers scandal from another angle:
Tiny British Virgin Islands Has Big Role In Leaked Documents
TORTOLA, British Virgin Islands (AP) — A thriving financial services industry that evolved over the last 30 years in the British Virgin Islands made it one of the most popular places in the world to form a corporation, turning a sleepy cluster of Caribbean islands into a global hub of finance.
Now the British Virgin Islands has come under scrutiny like never before thanks to the leak of confidential documents from a Panama-based law firm that specializes in offshore finance.
More than half the 200,000 offshore companies set up by the Mossack Fonseca law firm, including ones owned by the father of British Prime Minister David Cameron and relatives of Chinese leader Xi Jinping, were registered in the BVI, according to reports coordinated by the International Consortium of Investigative Journalists.
BVI officials have sought in recent days to address the reports while defending financial oversight in a territory where incorporated entities outnumber residents by a ratio of more than 10-to-1 and blue-suited lawyers and bankers on the streets of Tortola often outnumber tourists.
"If you see articles that say jurisdictions like the BVI are facilitators of illegitimate activity, that is incorrect," Financial Secretary Neil Smith said Friday. "Yes, it occurs, but it also occurs in jurisdictions that are not seen as offshore financial centers."
The British Virgin Islands, an overseas British territory of about 30,000 people near Puerto Rico, is the world's leading center for company incorporation, according to the Tax Justice Network. More than 1 million enterprises have been incorporated since 1984. There were 450,000 active ones at the end of last year, according to the Financial Services Commission.
The problem, as critics of offshore financial secrecy see it, is that the BVI and other jurisdictions enable the hiding of the true owners of companies in ways that allow corruption and criminality to flourish. "We're not saying that shell companies or tax shelters need to be done away with, we're saying that more of this needs to be out in the open," said Mark Hays, a senior adviser with Global Witness.
The Tax Justice Network says the BVI has a "lax, flexible, ask-no-questions, see-no-evil company incorporation," system. "The BVI has long been linked to wave after wave of scandals," the organization said in a report that ranked the BVI at number 21 on its financial secrecy index. The U.S. was No. 3 and Switzerland No. 1.
But the Tax Justice Network also notes that the British Virgin Islands has made significant improvements.
Read the entire article here