AMLO government investigating the Mexicans named in the Pandora Papers

The global journalistic investigation shows 41 Mexican characters who moved around 480 million dollars to offshore jurisdictions

The Financial Intelligence Unit (FIU) warned this Sunday that an investigation into the Mexican characters mentioned in the global investigation Pandora Papers, which consists of 12 million leaked documents, has already begun, which gave rise to the largest journalistic collaboration in history, in which this Sunday the International Consortium of Investigative Journalists (ICIJ) reveals the financial secrets of 35 heads and former heads of state, more than 330 public officials in more than 90 countries, as well as a wide range of celebrities, athletes, and businessmen.

The leaked documents come from 14 offshore service provider firms established in various countries. These firms incorporate shell companies and other hideouts in tax havens for their clients, who generally seek to keep their financial operations in the shadows.

Thousands of Mexicans appear in the Pandora Papers. Of these, 41 moved around $ 480 million to offshore jurisdictions.

After the publication of the journalistic investigation, the head of the UIF, Santiago Nieto warned: “ We have seen the journalistic investigation called Pandora papers. The #UIF has already started the investigation in Mexico, fulfilling the commitment of President @lopezobrador_ to fight corruption. For this reason, we insist that it is necessary to move forward in identifying final beneficiaries ”, was the message he issued through his Twitter account.(Twitter: @SNietoCastillo)

It should be noted that among the more than 3,000 Mexicans identified, names such as Germán Larrea (owner of the largest mining company in the country), María Asunción Aramburuzabala (heiress of the model brewery) and Olegario Vázquez Aldir (head of Grupo Empresarial Ángeles), whose fortunes together total more than 30,000 million dollars.

The leak opens the door to the secret vault of billionaires, in a country where tax collection is among the lowest in the world and tax evasion causes losses of 4% of GDP, according to international organizations.

And it is that having offshore investments is not a crime, but avoiding paying taxes does have an economic and social impact, associated with the concentration of wealth and inequality. “The biggest losers are the most vulnerable sectors of society who depend on there social security and quality public services, ” said research Chuck Collins, author of  accumulators of wealth: how billionaires pay millions to hide Billions, “This whole system suffers when the rich don’t pay their share.”

The taxes of the richest Mexicans have been in the eye of the hurricane in recent years. The Fundar organization announced that during the governments of Felipe Calderón and Enrique Peña Nieto, the treasury forgave the payment of 567.8 million pesos (about 28 million dollars) to six of the 10 wealthiest businessmen in the country. Among those named was María Asunción Aramburuzabala, one of the most influential women in Mexico and the recipient of 10 international business awards. “I’ve never seen myself in terms of money or power, I’m a normal woman,” said Aramburuzabala, heir to Grupo Modelo, the maker of Corona beer, in an interview with Forbes in 2016.

At least $ 11.3 trillion is hidden in the offshore world, according to a study published in 2020 by the Organization for Economic Cooperation and Development (OECD). Due to the complexity and level of secrecy, it is impossible to know how many of those resources are there for tax evasion or other crimes, and how many have been reported to the tax authorities.

Also, according to the OECD, Mexico collected 16.5% of GDP in taxes in 2019, below the average of 22.9% in Latin America and 33.8% registered in the world’s main economies. Last year, the Tax Administration Service calculated that income tax evasion was equivalent to a fifth of annual public spending, about 1.4 trillion pesos. More than half of the bloodletting came from the big taxpayers. “How do you give money from a looted country to a tax haven and nothing happens and it is normal?” Asked Andrés Manuel López Obrador. “It is immoral,” declared the president in his morning conference on August 20, 2020.

Two years earlier, López Obrador created the Business Advisory Council with eight businessmen who would advise him on the economic direction of the country. But, even among the businessmen who advise the president, there are those who have turned to offshore companies. Olegario Vázquez Aldir, executive director of Grupo Empresarial Ángeles (GEA), opened eight opaque companies in the British Virgin Islands between 2010 and 2011, directly associated with him or his closest relatives, according to the revelation.

The United Nations Development Program (UNDP) warns that the richest 1% of Mexicans account for 29% of the country’s income and the 50 largest companies represent around 40% of GDP.

“Large companies and business owners in Latin America are partly responsible for keeping effective taxation low and moving away from more progressive tax systems, through their proximity to political power,” asserts the UNDP in a published report. in June. The United Nations points out that great fortunes pressure governments to block tax reforms that harm them and demand forgiveness and subsidies in their favor, to the detriment of sectors that need these resources.

Mexico loses more than $ 8.25 billion in taxes each year due to abuse of offshore jurisdictions, according to the Tax Justice Project. It is the third country in Latin America that loses the most income, only behind Brazil and Colombia. As the secret vault of billionaires opens with each leak, on a line from the Panama Papers to the Pandora Papers, the business of the shadow economy continues to rise. “The number of super-rich is growing in the world, the number of high-income families continues to increase, so the ( offshore ) sector is also growing,” warns Collins. “And the amount of wealth that is being hidden is also growing,” he says.

Source: Elías Camhaji (El País), Andrea Cárdenas (Quinto Elemento), Mathieu Tourliere (Proceso), Peniley Ramírez y Claudia Ocaranza (Univisión)

Mexico Daily Post

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