African officials used shell firms: Panama Papers

Entrepreneurs and corrupt officials across Africa have used shell companies to hide profits from the sale of natural resources and the bribes paid to gain access to them, according to records leaked from a Panamanian law firm.

Owners of the hidden companies include, from Nigeria alone, three oil ministers, several senior employees of the national oil company and two former state governors who were convicted of laundering ill-gotten money from the oil industry, new reports about Africa based on the Panama Papers show. The owners of diamond mines in Sierra Leone and safari companies in Kenya and Zimbabwe also created shell companies.

Some of the assets cycled through the shell companies were used to buy yachts, private jets, Manhattan penthouses and luxury homes in Beverly Hills, California, the law firm documents show.

Articles posted on Monday by the International Consortium of Investigative Journalists, and reports being published this week by news media organisations in 17 African countries, underscore the critical role that secret shell companies can play in facilitating tax evasion, bribery and other crimes. In Africa, offshore finance often underlies the exploitation of mineral wealth, with the benefits bypassing the public and going largely to wealthy executives and the government officials they pay off.

The 11.5 million documents taken from the Panamanian law firm, Mossack Fonseca, by a source who has not been identified have been the subject of news coverage around the world since April, shedding new light on the murky world of offshore finance. The Panama Papers project, organised by the international journalists’ consortium, has involved more than 400 reporters around the world and has set off criminal investigations in many countries.

Mossack Fonseca has said it should not be blamed for wrongdoing by its customers. “We merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process,” the firm said in a statement. The statement noted that the firm had not been charged with criminal wrongdoing in nearly 40 years of operation.

But the journalists found that Mossack Fonseca had sometimes missed or ignored evidence of criminal investigations or charges against its clients. Though the records show that the law firm did scrutinise many of those who sought its services, its reviews were often belated or incomplete, according to the articles’ main author, Will Fitzgibbon, who works at the consortium’s office in Washington.

Several major figures examined in the new Panama Papers reports have previously been accused of wrongdoing, and some are under criminal investigation or have been charged. But the details of their use of shell companies had not previously been disclosed.

The owners of diamond mines in Sierra Leone and safari companies in Kenya and Zimbabwe also created shell companies