The Americans are after Rami Machluf, and he senses it. You cannot become the richest man in all of Syria and not be noticed. Especially not when your close cousin is called Bashar al-Assad and is ruling the country.
Before Syria fell into a civil war, Mr. Machluf, head of the Syrian telecommunications giant Syriatel, accumulated a fortune worth an estimated $5 billion. It was accrued with the energetic support of the Assad clan.
Staff at the U.S. Embassy in Damascus described his methods.
“Machluf used government institutions to get rid of competitors, to win contracts and to milk the cows,” they reported in a January 2008 dispatch to Washington. The diplomats advised imposing sanctions on Mr. Machluf.
What they did not know was the Mr. Machluf had long since prepared for this moment.
He owns an offshore company, and he used it to bring a portion of his fortune to safety. It is called Drex Technologies and it is listed in the Register of Companies in the British Virgin Islands. The “registered agent,” the official representative of Drex Technologies, is recorded as Mossack Fonseca, a law firm in Panama.
Mossack Fonseca sets up offshore companies quickly and discreetly. But its discretion is a problem, and not just because of Mr. Machluf.
The British newspaper The Guardian first reported that the head of the scandal-plagued bank HSBC counted among Mossack Fonseca’s clients. Stuart Gulliver, the HSBC chief executive, reportedly invested bonus payments at a firm registered through Mossack in Panama.
Mr. Gulliver said British tax authorities were aware of the income.
A wave of indignation then starting rolling in after the Guardian article, and the German daily Süddeutsche Zeitung reported that Commerzbank, Germany’s second-largest bank, had advised customers to park their money in offshore firms with the assistance of Mossack Fonseca.
German prosecutors are investigating. Commerzbank said the story involved old cases, and pledged to cooperate with investigators.
Journalists belonging to an international research network accessed Mossack’s internal data records, and made other revelations.
The anger against Mossack Fonseca is just starting.
And smack in the middle is a German, the company’s founder and co-CEO, Jürgen Mossack, 66.
Like his business dealings, little is known about Mr. Mossack. He was born in Fürth, in Bavaria, but grew up in Panama.
In 1977, he got together with the attorney Ramon Fonseca and built a global group of 600 employees and 46 subsidiaries. Whether it is in Samoa, Cyprus or the British Virgin Islands – those who want to establish a company can be helped by Mossack’s office.
But did they also help Rami Machluf and other alleged clients, such as the confidants of the late Libyan dictator, Muammar Gaddafi?
These people “never were, are not and never will be clients of Mossack Fonseca,” said the law firm. At issue are “false accusations that lack any basis and are based on self-interest.”
Mossack hired the U.S. public relations agency Burson Marsteller to handle its press inquiries. The firm is known for taking on especially difficult cases, such as Union Carbide after its industrial catastrophe in Bhopal, India.
Other former Burson Marseller clients include Argentina’s military junta.
Mossack Fonseca answered questions posed by Handelsblatt.
The firm said they offer corporate registrations but have nothing to do with the companies themselves, adding their business is an “absolutely lawful activity.”
The clients are responsible for tax questions themselves, according to Mossack Fonseca. They do not offer any kind of tax advice, and cannot prescribe to the clients how they use their companies.