Panama. The leak of more than 11 million documents from Mossack Fonseca, a Panama-based law firm specialising in the creation of offshore shell companies, is providing an unprecedented look at how money and assets belonging to the super-rich, and to their embarrassment some politicians, are moved secretly around the world.
At the time of going to press, the revelations published by the International Consortium of Investigative Journalists (ICIJ) and its media partners have led to the resignation of the prime minster of Iceland and Spain’s minister of industry. The financial arrangements of several major art collectors and dealers, hidden by offshore companies, have also been exposed.
Here we summarise some of the revelations of the so-called Panama Papers.
The Nahmads A Modigliani painting claimed by the grandson of Oscar Stettiner, a Jewish gallery owner whose art was seized by the Nazis, has been sequestered in Geneva after the Panama documents showed that it is owned by a company controlled by the Nahmad family of art dealers who have previously denied the work was in their possession. Swiss judicial authorities told the BBC they had initiated a “criminal procedure” over the painting after the revelations in the Panama papers.
The work in question, Seated Man with a Cane, 1918, was found by the Geneva prosecutor’s office in the city’s freeport. The leaked documents revealed that the painting, which was bought by the Nahmads at Christie’s in London in 1996 for just over £2m, effectively still belonged to them in 2011 when Philippe Maestracci, Oscar Stettiner’s grandson, sued the Nahmads in US federal court for the return of the work; the suit was withdrawn after the Nahmads said the painting was owned by a company called International Art Center (IAC) and not by them. In 2014, the administrator of the Stettiner estate sued the Nahmads again, arguing that the IAC was a Panamanian shell company set up for the Nahmads by Mossack Fonseca and whose sole owner since January 2014 has been David Nahmad.
Speaking to the Wall Street Journal, David Nahmad said the IAC was set up “for discretion purposes” when making large purchases at auction. He said the issue was not relevant to the Modigliani case, which will hinge on whether the plaintiffs can prove in court the painting was originally owned by Stettiner. If so, “I am ready to return it,” Nahmad said.
Dmitry Rybolovlev The Russian billionaire Dmitry Rybolovlev used a company registered in the British Virgin Islands, Xitrans Finance Ltd, which was set up by Mossack Fonseca, as a holding agent for his collection of paintings by Picasso, Modigliani, Van Gogh, Monet, Degas and Rothko. ICIJ suggests that Rybolovlev transferred his art to an offshore company so that he could hide it from his wife Elena during their divorce proceedings. In a statement to the press, the Rybolovlev family's lawyer denied this. “[The offshore company] as a holding entity to constitute a remarkable art collection…is perfectly legitimate,” he said.
The Ganz auction The ICIJ has also shed new light on a November 1997 auction of Modern art at Christie’s New York—the sale of works collected by Victor and Sally Ganz. It made a then record $206m. The Mossack Fonseca papers show that many of the key works in the Ganz collection were sold six months before the Christie’s auction to a company called Simsbury set up in Niue, an island in the South Pacific, and administered by Mossack Fonseca.
The works were sold to Simsbury for $168m by Spink & Son, the London auction house then owned by Christie’s. Simsbury was controlled by British billionaire Joseph Lewis, the largest shareholder at Christie’s. The terms of the deal stipulated that the Simsbury-owned works would still be offered for sale as part of the Ganz collection at Christie’s: if they made more than Simsbury had paid for them, Lewis and Spink & Son would share the difference, the ICIJ reports. The Ganz family and Lewis declined to speak to the ICIJ about the revelations.
Louise Blouin The Canadian publisher who owns artinfo.com and the magazines Art + Auction and Modern Painters sold her exhibition space at 3 Olaf Street, west London last October. The building opened in 2006, but in its nine-year run hosted just a handful of shows. According to a report in the Toronto Star, the Panama documents reveal that in 2013 the British government started insolvency proceedings against 3 Olaf Street Ltd, a company incorporated in the British Virgin Islands by Mossack Fonseca and owned by Blouin. Her lawyer Dawn Fasano told the Canadian newspaper that the matter related to a construction issue and “was ruled in our favour”.
Yves Bouvier The leaked documents show that Dmitry Rybolovlev’s former art advisor Yves Bouvier, the Swiss freeport magnate who is currently involved in a legal battle with the Russian billionaire, is connected to at least five offshore companies. A representative for Bouvier said his client used these companies for well-established legal purposes.