European Parliament Extends Probe Into Panama Papers to Include Bahama Leaks

MEPs opened their investigation into the Panama Papers, September 27, in which 11.5 million leaked documents from Panama law firm Mossack Fonseca provide detailed information on more than 214,000 offshore companies used by politicians, business leaders, criminals and public figures to hide their wealth from public scrutiny.

Following those leaks, revealed by German newspaper Suddeutsche Zeitung, with the help of the International Consortium for Investigative Journalism (ICIJ), the parliament decided to set up an inquiry committee to assess how the European Commission and member states are fighting money laundering and tax evasion, which met for the first time on September 27.

However, since the announcement of that probe on 21 September, the ICIJ published information about offshore companies registered in the Bahamas. The list contains a cache of 1.3 million documents and shareholder lists from the Bahamian government's registry of offshore companies, which includes the name of former EU competition commissioner Neelie Kroes, who was listed as a director of a Bahamian company from 2000 to 2009.

The company was set up to be the vehicle for a proposed deal to acquire some of energy company Enron's assets. The directorship was not declared in the register of interests she completed when joining the European Commission in 2004, which is in breach of the Commission's rules that require commissioners to declare all professional activities in the ten-year period before becoming a commissioner.

​As a result, the European Parliament Panama Papers inquiry committee has said it will also look into the Bahama Leaks affair and the case of former Commissioner Kroes.

Committee chairman Chair Werner Langen said:

"Ms. Kroes told us she had given up all her engagements. After her hearing for that post she passed the vote in the Economic and Monetary Affairs Committee with a narrow majority of 24 to 22. With the current knowledge, the outcome could well have been different. We want to hear Ms Kroes."

Dodgy Blacklist

A previous parliamentary committee probe into the LuxLeaks scandal in which the ICIJ released some 28,000 pages of confidential documents setting out more than 500 private tax arrangements between the Luxembourg tax administration and more than 300 multinational corporations.

The scandal has brought calls for the EU to crack down on companies "using sweetheart deals" — such as those in Luxembourg, but also in Ireland and the Netherlands, which are all under investigation by the Commission — and offshore tax havens to aggressively reduce their tax liabilities in EU member states. Critics say — despite lawmakers' efforts — the leaks so far,do not show the massive extent of aggressive tax schemes in use.

​The Commission drew anger from transparency campaigners after releasing list of "third countries" which will be investigated to identify which are tax havens after it was discovered that it does not include Ireland or Luxembourg, both of which are embroiled in battles with Brussels over sweetheart tax deals.