The former leader of Mexico’s largest trade union confederation operated a trust and hid millions of dollars in offshore tax havens, according to documents contained in a massive leak of secret files released yesterday called the Paradise Papers.
Joaquín Gamboa Pascoe, who headed the Confederation of Mexican Workers (CTM) from 2005 until his death at age 93 in February 2016, left an inheritance to his wife and children of at least US $15.5 million.
During the two years preceding his death, millions of dollars were transferred to bank accounts he held in Germany, the United States, Canada and England.
Information in the Paradise Papers — 13.4 million documents obtained by German newspaper Südeutsche Zeitung and shared by the International Consortium of Investigative Journalists (ICIJ) — calls into question the legitimacy of that wealth. The files were mainly sourced from offshore law firm Appleby.
Gamboa, who also served as both a senator and deputy for the Institutional Revolutionary Party (PRI), set up a trust in the Cayman Islands in 1982 called Burma 2000, according to documents included in the huge data dump.
The trust allegedly acted as a front company to hide cash transactions made by an offshore Panamanian company called Karin Corporation. The newspaper Reforma said the operations of both were like layers of an onion, each one hiding the other.
The same year that Gamboa Pascoe set up the trust, he concluded his first term as a senator during the administration of president José López Portillo, one of Mexico’s most questionable governments in terms of corruption.
In November 2007, Appleby received a letter from the union leader’s son, Alejandro Gamboa, asking it to close the Cayman Islands trust. The Panamanian company remains open.
During his life, Gamboa had no qualms about showing off his wealth.
A year before his death, he organized an event to pay homage to his own lifetime achievements at which he unveiled a statue in his honor. When questioned about his ostentatious lifestyle, which included driving luxury cars, his usual response was:
“What? If the workers are screwed, I have to be as well?”
Gamboa Pascoe is not the only Mexican to make an appearance in the Paradise Papers.
Javier Miguel Afif, a businessman with links to the PRI, and Pedro Aspe, a former finance secretary who served during the administration of President Carlos Salinas de Gortari (1988-94), also appear.
However, not all of those named have connections to the PRI, the political party most often cited in relation to corruption and which ruled Mexico uninterrupted for more than seven decades until the year 2000.
Former secretary of public security Alejandro Gertz, who served during the administration of National Action Party (PAN) President Vicente Fox (2000-2006), and Marcial Maciel, founder of the Catholic religious institute the Legion of Christ are also named.
All had money invested in noted tax havens including Bermuda, the Cayman Islands, Barbados and Malta, according to the leaked documents.
Money recovered by the federal tax agency (SAT) related to questionable — or illegal — offshore investments is minimal in comparison to the amounts that have flowed out of the country, accounting for just under 7.5 billion pesos (about US $393 million) over the past 15 years, an amount similar to the economic spillover from tourists during this year’s Easter vacation period.
The poor tax recovery record can be at least partially attributed to the difficulty in some cases of accessing fiscal data from authorities in tax havens.
At least 100 Mexican companies, including four established by two prominent football players, are registered in Malta but Mexico doesn’t have any agreement with that country to share financial information.
The Paradise Papers come a year and a half after a similar raft of leaked documents called the Panama Papers was made public, triggering a tax probe of at least 33 Mexicans.
Source: Reforma (sp)