Mossack Fonseca, at the Heart of ‘Panama Papers’ Leak, Owned by Nazi’s Son

Mossack Fonseca, at the Heart of ‘Panama Papers’ Leak, Owned by Nazi’s Son
Jurgen Mossack, co-founder of Panama law firm Mossack Fonseca that it is at the center of leaked documents revealing offshore accounts of politicians and celebrities around the world (Wikimedia Commons, Jandrade97, CC BY-SA 4.0)

Erhard Mossack, father of one of Mossack Fonseca founders, served as combat soldier in Waffen SS during World War II

April 4, 2016

Mossack Fonseca, the Panama-based law firm at the heart of the so-called “Panama Papers” scandal, is a discreet outfit with a roster of big-name clients and a quiet reputation for hiding money from the tax man.

But the company apparently also had another secret. One of its founders, Jurgen Mossack, is the son of a Nazi SS soldier who was a member of the “Totenkopf” (Death’s Head) fighting unit during World War II, the Daily Mail reported Monday.

Citing German media, the report said that Erhard served as a rottenfuehrer (senior corporal) in the SS’s combat branch, the Waffen.

The Waffen initially operated the concentration camps, and later recruited into its ranks many camp guards when it was formed into a combat division. However, Erhard likely only served in the fighting unit, which used the death’s head symbol as its insignia.

In 1948, Erhard moved his family from Germany to Panama, but returned with his wife in the 1970s. He died in the 1990s and his wife passed away five years later, the report said.

According to the International Consortium of Investigating Journalists (ICIJ), citing US Army records, “old intelligence files” showed the father had also offered to spy for the CIA during his time in Panama, apparently on nearby Cuba.

The cloak of secrecy that Mossack Fonseca wrapped around itself was ripped apart on Sunday, when media organizations around the world published information from a massive leak from the firm’s supposedly secure data center.

Politicians, sports stars and celebrities were named in the 11 million pages of documents, according to information starting to be released by the ICIJ, which is parsing the data.

So too were the techniques allegedly used by Mossack Fonseca to make money trails murky, including slavish use of offshore havens such as the British Virgin Islands and some Pacific Ocean nations.

The revelation detailing the offshore structures of many wealthy clients is a “crime” and an “attack” on Panama, the law firm maintains.

“This is a crime, a felony,” Ramon Fonseca, one of the founders of Mossack Fonseca, told AFP.

“This is an attack on Panama because certain countries don’t like it that we are so competitive in attracting companies,” he said.

View of a sign outside the building where Panama-based Mossack Fonseca law firm offices are placed in Panama City on April 3, 2016. (AFP PHOTO / RODRIGO ARANGUA)

View of a sign outside the building where Panama-based Mossack Fonseca law firm offices are placed in Panama City on April 3, 2016. (AFP PHOTO / RODRIGO ARANGUA)

Inside Mossack Fonseca

So who runs Mossack Fonseca, whose headquarters are housed in a fairly nondescript mirrored building in Panama’s business district?

One of the two lawyers who founded the firm more than three decades ago, Jurgen Mossack, was born in Germany in 1948 and moved to Panama with his family, where he obtained his law degree.

The other founder is Fonseca, born in 1952. He, too, got his law degree in Panama but also studied at the prestigious London School of Economics, and once said in an interview he had mulled becoming a priest.

Fonseca had a small business until he merged with Mossack and the two went after offshore business by opening offices in the British Virgin Islands.

The ICIJ said the leak shows that half of the companies the law firm incorporated — more than 113,000 — were done so in that fiscal paradise.

But Mossack Fonseca also branched out to the Pacific, to a tiny island nation called Niue.

According to the ICIJ, by 2001 the firm was earning so much from its offshore registrations on the island it was contributing 80 percent to Niue’s annual budget.

When the British Virgin Islands was forced to clamp down on some methods that had previously permitted anonymous ownership of companies, Mossack Fonseca moved business to Panama and to the Caribbean island of Anguilla.

Online scrubbing

The law firm spent money to try to remove online references linking it to money laundering and tax evasion.

But other countries took an increased interest in what it was doing. In Brazil, it was named as being one of the parties within a huge bribery scandal unfolding involving the state oil company Petrobras.

It also came under scrutiny in the US state of Nevada, where a judge determined that it had willfully tried to cover up its management role over its local branch there.

Last month, Fonseca — who had also been an adviser to Panamanian President Juan Carlos Varela since 2014 — declared he was taking a leave of absence.

The step was to “defend my honor,” he said, as the Brazilian allegations piled up.

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