IRD poised to pounce as Panama Papers go public

A public, searchable database of the Panama Papers was made live overnight on the International Consortium of Investigative Journalists website.

“This is the biggest orchestrated political smear in history," political commentator Matthew Hooton says.

"Around a quarter of a million people have had their names and addresses made public by the International Consortium of Investigative Journalists (ICIJ) for no reason other than they have had some commercial association with the world’s fourth largest trust-law firm.

"Some, especially those living in despotic regimes, are now at serious risk of losing their lives. It would be interesting for [ICIJ member] Nicky Hager to give an account of why he thinks this is OK," says Mr Hooton (whose company Exceltium, has clients who work in the area of domestic and offshore trusts).

Although its mission has been to embarrass and expose individuals and companies in the foreign trust industry, and the people who use it, the ICIJ database begins with a qualifying message, that has to be ticked before anyone can proceed. It reads.

There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly. Many people and entities have the same or similar names. We suggest you confirm the identities of any individuals or entities located in the database based on addresses or other identifiable information

The database includes a search-by-country option. It asks you to type a name as well but the help file includes the tip that if you leave the name field blank, your search results will include all mentions of New Zealand. Such a search reveals 85 mentions of "Offshore Entities", 487 of "Officers" (including the names of many individuals), 87 "Intermediaries" and 460 "addresses".

Searches include agents who have set up offshore trusts for New Zealanders and those involved with setting up New Zealand-domiciled trusts for foreigners, including controversial Mexican construction magnate Juan Armando Hinojosa Cantu.

Over the weekend, Panama Papers leaker "John Doe" recently put John Key in the spotlight by accusing him of remaining silent about tax avoidance in the Cook Islands. Today, at first blush, there seems to be no more personal pressure on the PM. Neither his name nor that of his lawyer Ken Whitney, or variations on their names, appear in search results. The database does confirm that Mr Whitney's company, Antipodes Trust Group, did business with Mossack Fonseca, as previously reported, as did Auckland law firm Cone Marshall.

All up, the database holds details of around 214,000 offshore accounts and names around a quarter of a million people over 11 million documents.

As well as the online browsing option, it has also been made available for download.

Mr Key has taken a dual tack on foreign trusts, saying there is no evidence of wrongdoing but also pointing out that Inland Revenue is on standby to comb through the documents released by the ICIJ this morning.

Since rules were tightened in 1988 following the winebox royal commission, New Zealanders have been taxed on their worldwide income, including a 33% rate for money held a trust.

The IRD will presumably now cross-match information on New Zealanders name-checked in the Panama Papers with their tax returns.

The searchable nature of the database will aid the IRD but its mission will be complicated by the fact the leaked documents run back to 1976. The past four decades have seen a number of law changes. The ICIJ also cautions that misspellings or otherwise inaccurate names mean its search engine will not necessarily yield all references to a person or entity, indicating the IRD will also have months of manual plodding.

Battlelines drawn
Today will see new names published but the battlelines are already familiar.

Mr Key argues New Zealand is not a tax haven, and that there is no evidence of illegal activity so far – although, perhaps wary of possible political fallout, his government also moved late yesterday to tweak some of the rules on transparency, and has also drafted John Shewan to review disclosure rules around foreign trusts (the former PwC chairman will report next month).

Labour leader Andrew Little says there is no reason for foreign trusts to operate in New Zealand, and that he would ban them.

Former Revenue Minister Peter Dunne says the perception New Zealand is a tax haven could damage New Zealand's reputation across the board. The UnitedFuture leader says the IRD failed to brief him on a fourfold increase in foreign trust activity while he was revenue minister.

Mossack Fonseca, the Panama-based law firm from which the files were "leaked," denies any wrongdoing.

So does its local agent, Roger Thompson.

Follow NBR on Facebook, Twitter, LinkedIn and Instagram for the latest news and free on-demand audio from NBR Radio.