Misuse of Charity Names in Panama Papers Leaves Aid Agencies Worried

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April 11, 2016; Reuters

International aid agencies expressed concern about the potential risk to charities in the wake of reports that the names of the International Committee of the Red Cross (erroneously referred to as the “International Red Cross” in Mossack Fonseca documents) and the World Wildlife Fund were both falsely used in transactions documented in the Panama Papers.

It should come as no surprise that among the shell companies in use by Mossack Fonseca are dummy foundations, making liberal use of the names of real charities to obscure the real money transactions that were occurring.

Reports suggest that the ICRC was simply used as a foil to mislead any who might have examined the transactions of dummy foundations established by Mossack Fonseca. Proper records of the sourcing of funds are critically important for the IRC because of its need for neutrality in conflict zones.

“We strive to ensure the funds we receive will not contravene our principles of action and jeopardize our humanitarian operations for those most is need,” Tobias told the Thomson Reuters Foundation. “Trust by all actors is essential to protect its staff and enable its humanitarian action for those most in need.”

Likewise, the World Wildlife Fund (WWF) has appeared in Mossack Fonseca paperwork despite the fact that it had never given consent to the use of its name by “so-called Panamanian foundations.”

Experts are suggesting that this is unlikely to be the full extent of the misuse of charities by Mossack Fonseca. “Where funds are actually donated, charities should consider the risks posed by anonymous or opaque donors and take reasonable steps to identify them—especially if amounts are large or unusual,” said Oliver May, former head of counter-fraud at Oxfam GB. “But there are limitations to what such organizations can reasonably do.”—Ruth McCambridge