Mossack Fonseca, Panamanian firm that opened Mizzi and Schembri offshore companies, to shut its doors

Offshore law firm at the heart of the Panama Papers investigation will close its doors under pressure of Panama investigation and reputational damage

Konrad Mizzi and Keith Schembri: their Panama offshore companies prompted a governmental crisis
Konrad Mizzi and Keith Schembri: their Panama offshore companies prompted a governmental crisis

Mossack Fonseca, the offshore law firm whose 11.5 million leaked files were at the heart of the Panama Papers investigation in 2016, will close.

The law firm will shutter its remaining offices by the end of the month, according to a statement obtained by the International Consortium of Investigative Journalists (ICIJ). “The reputational deterioration, the media campaign, the financial siege and the irregular actions of some Panamanian authorities have caused irreparable damage, whose obligatory consequence is the total cessation of operations to the public,” according to the law firm’s statement.

The firm said it would “continue to call for justice” and would cooperate with authorities to “demonstrate that no crime has been committed.”

The firm was responsible for the creation of thousands of offshore companies for foreign taxpayers, oligarchs and kleptocrats, aided by Panama’s secretive fiscal laws. Among these were the Maltese prime minister’s chief of staff Keith Schembri, and minister Konrad Mizzi. The revelations are now the subject of a magisterial inquiry kicked off by a complaint by former Opposition leader Simon Busuttil.

Panamagate was a seminal event in Maltese politics, damaging the Labour brand elected to power in 2013 on promises of accountability and transparency, and within 12 months’ time prompting early elections after the late journalist Daphne Caruana Galizia alleged one of the secretive Panama companies opened by Mossack Fonseca agents Nexia BT belonged to the prime minister’s wife. The allegation was vehemently denied and the claim was put under a magisterial inquiry on complaint of the Prime Minister himself.

Mossack Fonseca’s demise comes almost two years after the Panama Papers investigation revealed the offshore ties of some of the world’s most powerful and most corrupt people. The firm’s leaked internal files contained information on more than 214,000 offshore entities tied to 12 current or former heads of state, 140 politicians and others. The investigation also brought down the prime ministers of Iceland and Pakistan.

More than 400 journalists from 80 countries have published hundreds of stories since the first wave of revelations on April 3, 2016. “For 40 years Mossack Fonseca has operated beyond reproach in our home country and other jurisdictions where we have operations,” a statement by the firm said at the time. “Our firm has never been accused or charged in connection with criminal wrongdoing.”

That changed in February 2017, when police in Panama arrested Mossack Fonseca’s founders, Ramon Fonseca and Jurgen Mossack, on money laundering charges as part of investigations into Brazil’s largest-ever bribery scandal. The pair were released that April. Separately, prosecutors in Panama launched an investigation into the law firm and the Panama Papers.

Founded in 1986, the Panama law firm grew into an offshore empire with more than 40 offices around the world, from the British Virgin Islands to New Zealand.

In 2013, it employed more than 600 people and its billings exceeded $42 million. Governments in Europe, Africa, Asia and the Americas have recovered more than $500 million as a result of the disclosures.

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