The legal engineering of Pandora Papers

There is a theory of the eternal return in Nietzsche or of circular time in Borges. History seems to always return us to the same place. To facts or characters that are repeated. Christine Lagarde, the former managing director of the IMF and current president of the European Central Bank (ECB) worked between 1981 and 2005 at Baker & McKenzie, perhaps the largest law firm in the world featured in some 7,500 Pandora Papers documents. The study that has a presence in 46 countries and 4,700 lawyers helps billionaires and large companies to avoid or evade taxes with legal and financial engineering tailored to the client. This is explained by the International Consortium of Investigative Journalists (ICIJ), which published the latest large-scale leak of papers.

The woman Mauricio Macri celebrated when he was president, not only advised elusive companies that operated from tax havens when he worked in the private sphere. She also chaired the executive and strategic committees of Baker & McKenzie and was even a director of its subsidiary Law in Context based in the Bermuda Islands, an offshore territory dominated by fiscal opacity.

Lagarde was not an occasional executive at the firm she commanded from Europe. His CV shows that he was on the staff for almost a quarter of a century and occupying hierarchical positions. Your business relationship with tax havens It is an evidence that was known in November 2019 as soon as he assumed in the ECB. But now it takes more force with the leak of the Pandora Papers. La bisagra que la banca offshore es Baker & McKenzie whose income this year broke a record. Its own official page says it: it ended on June 30, 2021 with 3.1 billion. “The first time the firm has crossed the $ 3 billion mark. Revenues were up 7.8% compared to the prior year, and coupled with carefully managed costs, this translated into 36.7% year-on-year earnings growth, ”he says.

Pillar of the offshore economy

The International Consortium of Journalists defines the transnational study as “an architect and a pillar of the underground economy, often called offshore, which benefits the rich at the expense of the coffers of the countries and the pocket of the ordinary citizen.” This firm cares little about the increasingly pronounced asymmetries between rich and poor. Your Global President Milton Cheng said in late September, “In such a challenging environment, achieving record revenue is a huge vote of confidence from our customers and a testament to the hard work and resilience of our people around the world.”

Created in 1949, the studio opened its first offshore office in Caracas, Venezuela. It was 1955, Perón was overthrown in Argentina and Baker & McKenzie began its stage of international expansion in that decade. The ICIJ work recalls that in an article published in the Wisconsin Law Review two years later, Russell Baker – one of the firm’s founders – recommended “incorporating companies in Venezuela and other countries that would allow owners to remain anonymous by using of what is known as bearer shares. Bearer shares are share certificates that do not need to be registered in the name of a specific person or company ”. Baker and his partner John McKenzie did it because of the difficulties that existed in the United States to form such companies.

Today, with the Pandora Papers feeding the world’s media, the Consortium of Journalists denounces on its official website that the law firm and all its delegations “have benefited from the work carried out for people linked to fraud and corruption.” And he gives some examples: “the company has worked for Ukrainian oligarch Igor Koloimosky, of whom the American authorities allege that it laundered 5.500 million dollars through a tangle of shell companies, that buy factories and commercial properties in all the heart of the United States ”.

Baker & McKenzie also advised Jho Low, a fugitive Malaysian financier who is accused of international fraud. for more than $ 4.5 billion, known as 1MDB. The law firm presents itself on its corporate page far removed from this type of counsel: “We are citizens of the world and we recognize that the rule of law is an essential basis for economic growth and development. Where the rule of law is strong, business leaders can feel optimistic about investing in the future. ”

The ICIJ was unable to get a word from Cheng, the Hong Kong chairman of the powerful firm, but in its reports it quoted a spokesperson as responding to how Baker McKenzie strives to “ensure that our clients comply with both the law and best practices.” The company’s website explains that its policy “is based on principles of integrity, transparency, professionalism and adherence to the highest ethical standards.”

“We are truthful and transparent,” declares the firm in its code of business conduct. “We do not do business with disreputable characters,” they defend themselves. The International Consortium of Journalists does not think the same: “When billionaires, multinationals and people with political connections try to hide their wealth or evade taxes, they frequently turn to Baker McKenzie, the Chicago-based giant,” they published citing ICIJ , from The country from Spain to the Public Agency in Brazil.

The influence of the Chicago-based firm is notable on the Pandora Papers. The world’s media were in charge of highlighting it: “Among the sea of ​​bankers, accountants, lawyers and agents for the creation of instrumental companies, Baker & McKenzie stands out. The ICIJ discovered that it played a role in the affairs of more than 440 companies registered in tax havens ”. Nor is it surprising, as the Consortium maintains, that “more than 220 Baker & McKenzie employees in 35 countries have held positions in government bodies such as ministries of Justice, tax offices, the EU Commission or offices of heads of state” .

Instrumental societies

For the ICIJ, the evidence of illegitimate practices, bordering on illegality, in this multinational legal services company is devastating: “The leaked documents reveal that the law firm helped create instrumental partnerships in Cyprus for the food and tobacco giant RJR Nabisco. For Nike, collaborated in creating a Dutch tax shelter. According to U.S. court documents, his attorneys helped Facebook to redirect billions of dollars of profits to Ireland, a low tax country ”.

Mentioned in more than 7,500 Pandora Papers documents, far more than any other competing law firm in the United States, Baker & McKenzie insisted that the companies or individuals who hire it do not deviate from good practice. But he clarified – according to the ICIJ – that “sometimes we find that clients subsequently carry out activities that do not agree with our initial due check, or new facts or events come to light that lead us to stop representing them.”

A good listener few words.

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