Panama has been using the U.S. crisis communications firm Bellwether Strategies since April, according to newly filed foreign lobbying disclosures — the same month leaked documents revealed the use of anonymous offshore shell companies in the country.
The millions of documents, collectively referred to as the Panama Papers, provide a window into how wealthy and powerful individuals around the world can keep their finances a secret.
Much of the accounts, which in some cases allow individuals to avoid paying taxes, are legal; however, some of the shell corporations were being used for money laundering, political corruption or to facilitate business with Mexican drug cartels, terrorist organizations or oppressive regimes sanctioned by the U.S. government, such as Iran and North Korea, reports found.
Two executives in Israel were recently arrested because they had allegedly not declared the six-figure sums held in an offshore account, the first arrests following the Panama Papers’ release.
Panama's PR contract with Bellwether Strategies is worth $50,000 per month, according to disclosures filed to the Justice Department.
Bellwether Strategies “will provide to the Government of Panama crisis communication services related to the so-called 'Panama Papers' and will act as planner of central strategies for all communication activities taken on by the Government of Panama in relation to the 'Panama Papers,' reporting directly to the Office of the President of the Republic of Panama in coordination with the Ministry of Foreign Affairs and the Embassy of Panama in the United States,” reads the contract, in Spanish.
Panama has pushed back on the image that the country acts as a tax haven. After the Panama Papers revealed 214,000 offshore entities in the country, Panama President Juan Carlos Varela said his government had "zero tolerance" for illicit activities in Panama's financial sector.He said his government would cooperate "vigorously" with any judicial investigation that stemmed from the leak.
As part of the original Panama Papers-related project, Bellwether Strategies said in the contract that it would “support the creation of an independent international panel to review Panama's financial reports and its transparency and regulations.”
The relationship was set to last for five months, documents say, but firm president Michael Holzman told The Hill in an email that it has been extended to the end of the year.
Documents outlining the contract were filed to the Justice Department this month, but the law requires foreign lobbyists to register their work within 10 days of signing any agreement. The Foreign Agents Registration Act (FARA), which regulates lobbying for foreign clients, operates on a compliance-based system, however, and simply filing paperwork can keep a person out of trouble — even if it comes in seven months late.
The PR project related to the Panama Papers ended, Holzman said, but now the firm is doing “general utility PR for the Ministry of Foreign Affairs.”
In the contract, the firm touted services available in offices located in Washington, New York, London, Paris and Geneva. “Direct support can be provided directly from Panama and from the Embassy in case it is necessary,” it added.
Holzman is a former State Department official with a history of working for foreign clients, including Syria and Libya during Moammar Gadhafi’s rein. He has also managed PR for China’s victorious bid to host the 2008 Olympics there and Qatar’s successful offer to host the 2022 World Cup.
He and his team were called upon to help Panama develop a communication strategy with a “broad message and specific talking points,” in addition to providing media training for government representatives in the United States, Panama, U.K., France, Switzerland “and other countries if necessary.”
The firm was also to edit speeches, op-eds, statements and press releases from Panama’s government and “put together strategies for media inquiries, media hits, panels,” media monitoring and other PR services.
It is the second U.S. firm to be retained by Panama.
The country also has law and lobby firm Greenberg Traurig on retainer, according to an agreement inked last July.
It paid the firm $109,000 from November 2015 to April 2016 to work on issues related to the Paris-based Organization for Economic Cooperation and Development (OECD) and the push for the country to participate in the sharing of financial account information with other countries.
The month after the Panama Papers leak earlier this year, the country agreed to automatically exchange tax information, even if it has to name individuals who own businesses and trusts to do so.
It was one of the five remaining countries that had held out from signing the agreement. The United States is not involved in the OECD-developed sharing program, and has its own regulations that have been criticized for having loopholes.
States including Delaware, Nevada and South Dakota offer similar financial trusts or accounts to serve as tax havens that keep the finances of wealthy individuals a secret.
In May, the Treasury Department sent a letter to Capitol Hill, urging Congress to act on an Obama administration proposal that would bring the United States in line with other countries as it relates to financial transparency.
— Rafael Bernal contributed to this report.