Questions arise over whether UK Prime Minister David Cameron benefited from offshore funds after the "Panama Papers" leak revealed his late father to have been a Mossack Fonseca client. Cal Flyn reports.
The enormous cache of confidential documents passed to German newspaper Süddeutsche Zeitung (and later shared with journalists in 76 countries through the International Consortium of Investigative Journalists) showed Cameron's father to have been a client of the law firm, and details how his investment fund Blairmore Holdings was administered from the Bahamas for tax reasons.
There, a 'small army' of locals were reportedly recruited to act as officers, including a lay bishop from the Pentecostal Church of God of Prophecy. The directors, which included Ian Cameron until his death in 2010, also held board meetings in Nassau or Switzerland.
As a prospectus for the fund, dated 2006, makes clear: "The directors intend[ed] that the affairs of the Fund should be managed and conducted so that it [did] not become resident in the United Kingdom for United Kingdom taxation purposes."
Until the previous year the fund had also used 'bearer shares,' wherein the person who physically holds the share certificate is considered the legal owner, a method which allows companies to disguise ownership and transfer assets without a paper trail.
Use of bearer shares is now banned in many countries - including the UK - because they can be used to facilitate money laundering and tax evasion. There is no suggestion that Blairmore Holdings used them for illegal purposes.
A hidden inheritance?
On Tuesday the prime minister initially declined to respond to the details that have emerged from the leak, a spokesman saying only that it was "a private matter." But sustained media and political pressure forced Cameron to clarify that he does not own any offshore shares, funds, trusts "or anything like that" - and nor do his wife or children.
He did not address the question of whether he or his family had benefited from Blairmore in the past, or whether they might benefit in the future.
According to Ian Cameron's will, a public document, he left an English estate worth £2.74 million (3.4 million euros, $3.8 million), of which the prime minister inherited a £300,000 share in cash. Such a document would not reflect overseas assets, however; as well as the directorship of Blairmore Holdings, Cameron senior is also known to have been chairman of a second, Jersey-based fund, and shareholder of Geneva-based Blairmore Asset Management.
The value of these interests - and their current ownership - is unknown, due to the opacity of company records in those jurisdictions. However, court documents filed in Jersey in 2011 indicate that Ian Cameron's personal assets there were worth in excess of £10,000 at the time of his death. Further details were never made public.
Underminding past efforts
The renewal of interest in his late father's financial affairs, and the division of his assets, are embarrassing for the prime minister, who has invested significant time and effort into tackling tax avoidance using secretive offshore companies in recent years.
At the 2013 G8 summit in Northern Ireland, Cameron asked fellow leaders to sign up to new measures that would help countries "fight the scourge of tax evasion" by requiring multinational companies to share information about what taxes are being paid in which countries. From June, British companies will also be required to name their ultimate owners in a public register.
"It's very awkward for Cameron to be taking a leading role in cracking down on tax havens when his own father made a living from tax havens," says Isabel Oakeshott, who co-authored the unauthorized biography of the PM "Call Me Dave."
"That said, he can't be held responsible for financial decisions made by his father. The danger is if - and this is a big if - he's hiding an ongoing financial interest. That would be very toxic. If he is, he's taking an extraordinary gamble," she told DW.
In 2012, Cameron indicated he would publish his own personal tax returns as a gesture of transparency. They have still to be released. Such returns would not include any offshore interests, Oakeshott continued, although "it's curious he's not followed through. It creates the impression, however unfair, that he may have something to hide."
Richard Murphy, economist and tax justice campaigner, told DW that though the prime minister has made much of his efforts to crackdown on international tax avoidance, "he has delivered remarkably little. Is that because he has family reasons for not doing so? Maybe he isn't personally benefiting [from offshore assets], but suppose his brother has shares? Or other relatives?... Is he compromised? We need to know."