The Panama Papers Claim Their First Head in Latin America — A Transparency Activist

A leading transparency activist in Chile has become the first Latin American to lose his job after being linked to at least five offshore companies in the Panama Papers.

Gonzalo Delaveau resigned as the head of the Chile Transparente, the Chilean chapter of the Berlin-based group Transparency International, after his name appeared in the massive leak that has highlighted how much money is moved around the world under the cover of secret firms.

Delaveau's resignation stands out among the dozens of high-level Latin American politicians, business figures, celebrities, and sports stars who appear in the documents from the now infamous Panamanian law firm Mossack Fonseca that specialized in setting up offshore businesses for the world's rich and powerful.

They include Argentina's President Mauricio Macri who is struggling to convince public opinion that he did nothing wrong after he was also named in the data stash. Macri's problems have only worsened in the wake of new revelations on Tuesday that he was also involved in another offshore company.

Aside from Delaveau, the Chileans named range from a former soccer star to the influential owner of a right-wing newspaper who allegedly received money from the US to help destabilize the democratically elected socialist government of Salvador Allende in the 1970s.

Delaveau's departure from Chile Transparente on Monday appeared inevitable after Transparency International made it clear there would be consequences for the group as a whole if he stayed. Though moving money around with the help of shell companies is mostly legal, it can provide cover for money laundering and tax evasion, and appears at odds with transparency advocacy by definition.

"We are deeply troubled by what has happened with the Chair of our chapter in Chile," José Ugaz, Transparency International's chair, said in a statement released on Tuesday. "With Delaveau's resignation our Board decided to halt its efforts to sanction the chapter."

Ugaz stressed that there is no indication that Deleveau, a lawyer, broke any law through his involvement in the five companies, all of them domiciled in the Bahamas. "But, for us, that is not the point," he said.

With the issue all over the world's front pages thanks to the Panama Papers, Transparency International has launched a campaign to require public registers of all companies in ways that make it much harder to hide either illicit wealth or keep ownership secret.

Argentina's President Macri is having trouble convincing public opinion that he did neither — following his inclusion in the leaked documents thanks to his directorship of an offshore company set up by Mossack Fonseca while he was serving as mayor of Buenos Aires.

An initial statement from his office on Monday insisted that Macri was under no obligation to declare anything about the company when he was mayor because he did not own shares in it, but the pressure for more information has continued to rise. This was fueled on Tuesday when local media revealed that Macri was also the director of another offshore firm that is not included in the Panama Papers. That firm is called Kagemusha, apparently inspired by the film of the same name directed by Akira Kurosawa and meaning The Shadow of the Warrior.

At a press conference on Tuesday, Macri's chief of staff reiterated that the president has nothing to hide in relation to either company. He said that both the firms were set up by Macri's father and that his role as director was purely honorary.

The refusal to provide documents to back this claim, however, is beginning to take a political toll on the leader who was elected late last year on a platform that included zero tolerance for corruption. Any issue that raises the possibility of tax evasion or avoidance is also particularly sensitive in Argentina in the context of the kind of belt-tightening economic reforms the new president wants to introduce.

So far Macri himself has given one interview on the subject, to a provincial paper called La Voz del Interior.

"The fact that we are advancing towards ever greater transparency is something positive about the world we live in," the president said of the Panama Papers, before repeating that he has nothing to worry about. "There are others who use tax havens to hide money that has a dubious origin. These are very different things. The problem here is not the instrument, it is the way it is used."

Political analyst Sergio Berensztein told VICE News that the government is not handling the situation well because it did not realize the impact the revelations would have. He also thinks Macri's team underestimated the difficulty of explaining the difference between being the director of a company and being a shareholder.

"Corruption, today, is symbolically at the heart of the Argentine agenda," he said. "This takes moral authority away from the president's ability to talk about corruption… It is not illegal but it's close."

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