Excerpts from "Secrecy World Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite by Jake Bernstein"

http://americanempireproject.com/blog/secrecy-world-jake-bernstein/

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In those early days, Ramón Fonseca, a recent law graduate himself, stopped by to wish him luck.

Born in 1952, Ramón Enrique Fonseca Mora, known to childhood friends as “Yike” (pronounced YEE-kay, short for Enrique), is the grandson of Costa Rica’s first ambassador to Panama on his father’s side and a dentist-turned-insurrectionist on his mother’s.

In 1931, Mora, revolver in hand, was among a small group of young men who staged a successful coup against the Panamanian government of Florencio Arosemena. To keep the peace, the United States made minor concessions. Mora became agricultural and public works secretary. He lasted nine months before Community Action’s pick for the presidency, Harmodio Arias Madrid, removed him. The dentist watched from the sidelines as Arias, and then his brother Arnulfo, both of whom had participated in the coup, assumed control. They pursued a populist agenda: Women received the vote, a social security system was created, antiforeigner rhetoric escalated. In 1940, Arnulfo Arias, who openly sympathized with the Nazis and Mussolini, won the presidency. A year after his election, the National Police (under the approving eye of the United States) deposed him.

At the time of the coup, the sixteen-year-old Fonseca was a budding activist who later entertained thoughts of becoming a priest and “saving the world.” There had been a priest in almost every generation of the Mora family going back centuries. Fonseca dropped out of university after a year, attracted by the reformist zeal of the Jesuits. The priests were secretly running workshops where university students could connect with other members of civil society interested in social reform. Through the Jesuits, Fonseca met Father Héctor Gallego, a charismatic thirty-year-old Catholic cleric from Colombia. Gallego practiced liberation theology, which taught that the Church’s responsibility to the poor included helping them to improve their economic and political situation.

...For years, Fonseca kept a box of mixed human remains under his office desk at Mossack Fonseca, the suspected bones of his former mentor resting by his feet. In 2015, the public ministry took them back. They still await a proper examination and burial.

pon completion of his law degree in 1976, Fonseca left Panama to attend classes at the London School of Economics. The United Nations recruited him before he could complete his studies. They needed Central American lawyers to fill their quota system. In the UN, Fonseca envisioned an opportunity to save the world on a good salary. He accepted a position with the United Nations Conference on Trade and Development in Geneva, but within a few years he had soured on his employer.

“I lost my idealism inside the UN bureaucracy,” he says.

... The Geneva attorney was Fonseca’s doorway into the secrecy world, acting as his sponsor and making introductions. She called the companies “chickens.” The business was simple—hatch the chickens in Panama and collect the annual fee as the registered agent. Fonseca says that while employed by the UN, he referred the work to a cousin in Panama, who agreed to give the companies back to Fonseca if he returned home.

In 1982, after six years at the UN, he quit and moved back to Panama to open his own law practice, retrieving from his cousin the companies created during his UN years. Fonseca created a Panamanian holding company, Michiana International, to handle the registration business. His new clientele included one of the richest men in the world: Adnan Khashoggi, the Saudi billionaire arms dealer.

Named after Khashoggi’s daughter, the Nabila cost around $85 million (roughly $250 million in today’s dollars) to build and outfit. The 292-foot yacht could travel eighty-five hundred miles without refueling and store three months of food for one hundred people. It had a hair salon, a surgery, and a patisserie on board. Tucked away among the five levels and one hundred rooms were quarters for a crew of fifty-two. Movie stars, musicians, and the megawealthy danced in its disco. Bathrooms were hewn from single pieces of onyx. Khashoggi’s personal suite had a tortoiseshell ceiling and featured a ten-foot-wide bed, behind which lay a secret passageway for paramours. Portly, short, and balding, Khashoggi kept a bevy of high-end prostitutes on call. The yacht was a self-contained mobile world, ideal for a hyper-controlling, reality-bending, glam-loving billionaire. When creditors repossessed the Nabila in 1988, Donald Trump bought it.

All that sizzle was in service of the sale. Khashoggi acted as a middleman for arms deals and commodities trades, taking a healthy commission on each transaction. Inside the Nabila’s staterooms, Middle Eastern royalty, Fortune 500 company executives, Swiss bankers, and government functionaries wheeled and dealed. When necessary, the yacht motored into international waters to complete contracts free of government constraint such as tax obligations.

Khashoggi had an unsavory reputation, but neither Panamanian lawyer appeared to show any hesitation in working with him. In the mid-1970s, U.S. congressional hearings had exposed Khashoggi’s involvement in a massive multicountry corporate bribery scheme orchestrated by the defense contractor Northrop, which had poured tens of millions of dollars into the bank accounts of foreign officials to win contracts. Northrop had paid Khashoggi $106 million as a consultant between 1970 and 1975. The hearings showed that at least $450,000 of that found its way into bribes for two Saudi generals.