Law firm’s files include dozens of companies and people blacklisted by U.S. authorities

Introduction

One morning in mid-2014, before the summer sun had reached its peak, two elderly men in Aleppo, Syria, sat on plastic chairs, chatting quietly and drinking black coffee. From his perch outside his food stall, Sabri Wahid Asfur and his friend Abu Yassin watched their neighbors go about their day.

Suddenly, bombs hit the ground, scattering bricks and debris. Seconds later, they exploded, sending thousands of pieces of shrapnel — nails, rebar — in all directions. The crudely made barrel bombs had been designed for maximum human damage.

As the smoke lifted, Asfur reached for Abu Yassin.

“I looked at my friend when I recovered my vision and saw his body in shreds,” Asfur remembers. “He was exhaling his last breath.”

The attack was one of hundreds of aerial bombings that Syrian President Bashar al-Assad’s regime has carried out during the country’s six-year civil war, killing thousands of its own people. The deadly air campaign would not have been possible, U.S. authorities have charged, without a network of companies that dodged international embargoes by supplying the oil and gas that kept the military aircraft in sky.

Three of the companies that the U.S. alleges helped supply the fuel were customers of a global law firm, Mossack Fonseca & Co., which helped the companies incorporate and maintain offshore branches in Seychelles, a tax haven in the Indian Ocean.

The law firm continued doing work for at least one of these closely-linked companies after the three of them were blacklisted by the American government for supporting Syria’s war machine – joining dozens of other Mossack Fonseca customers sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control.

Mossack Fonseca, which is based in Panama but has offices around the world, has worked with at least 33 individuals or companies that have landed on the Treasury Department’s OFAC list, according to an analysis of the firm’s internal files by the International Consortium of Investigative Journalists, the German newspaper Süddeutsche Zeitung and other media partners.

In some cases, individuals and companies had ceased to work with Mossack Fonseca before being sanctioned. In other cases, the entities were active customers when the sanctions were put in place.

The reporting partners reviewed more than 11 million documents — emails, client accounts and financial records — that show the inner workings of Mossack Fonseca from 1977 to December 2015.

For years, the records show, Mossack Fonseca has earned money creating shell companies that have been used by suspected financiers of terrorists and war criminals in the Middle East; drug kings and queens from Mexico, Guatemala and Eastern Europe; nuclear weapons proliferators in Iran and North Korea, and arms dealers in southern Africa.

“It sounds almost like a corporate death wish taking on that many horrible people,” said Jason Sharman, a political scientist at Australia’s Griffith University and co-author of a groundbreaking study of anonymous companies. “You’d think that, even if they were cynical, they’d be reluctant dealing with U.S. sanctioned entities and taking on the United States.”

Mossack Fonseca denies wrongdoing.

A spokesman told ICIJ that the firm relies on intermediaries such as banks and other law firms to review the backgrounds of the customers that they refer to Mossack Fonseca. These middlemen are supposed to notify the firm “as soon as they have knowledge of a client of theirs having been either convicted or listed by a sanctioning body,” the spokesman said. “Likewise, we have our own procedures in place to identify such individuals, to the extent it is reasonably possible.”

The time it takes to resign varies by jurisdiction, the spokesman said, and some authorities require the agent to remain in place to prevent interference with an investigation.

The spokesman added that Mossack Fonseca has “never knowingly allowed the use of our companies by individuals having any relationship with North Korea, Zimbabwe, Syria and other countries” that have been listed as sanctioned. If it did discover it had unknowingly represented a company that was being used for unlawful purposes, he said, the law firm would take “any measures that are reasonably available to us” to deal with the issue.

In 2010, the firm did resign from the Iranian oil company Petropars after it was sanctioned by OFAC. (The sanction has recently been lifted as a result of the United States-Iranian nuclear deal.) , Petropars was incorporated by Mossack Fonseca incorporated in 1998 and had been publicly linked to the Iranian government as early as 2001.”It is a decision that may be 12 years too late,” an employee who recommended dropping representation of Petropars emailed at the time, “but one that must be taken in light of the circumstances.”

And there were others.

Read more at the International Consortium of Investigative Journalists.