Preet Bharara gets his teeth into Panama leaks

WASHINGTON: Preet Bharara has pounced on the Panama Papers. The feared US attorney who featured on Time magazine cover as the Man who is "'Busting Wall Street," has written to the International Consortium of Investigative Journalists (ICIJ), telling them he is opening a criminal investigation into some aspects exposed in the leaks the organization oversaw through the media, some of which pointed to worldwide offshore tax avoidance schemes through a Panamanian firm.
"The (US attorney's) office would appreciate the opportunity to speak with any ICIJ employee or representative involved in the Panama Papers project in order to discuss this matter further," Bharara wrote, referring to the documents obtained from the Panamanian firm Mossack Fonseca.
Although the Panama leaks did not throw up any big names in American public life, more than 200 US citizens are said to feature in the list of offshore account holders. Some of them are already being probed by Bharara on other charges, and his decision to launch an investigation into the Panama case will strike fear in the hearts of those indulging in financial shenanigans.
Bharara appears to have the backing of the White House even as speculation has already begun if he will retain his job in the next administration. "There is no doubt that tax avoidance is a huge problem," President Obama had said earlier. "The problem is that a lot of this stuff is legal, not illegal." But, he added, "We shouldn't make it legal to engage in transactions just to avoid taxes."
Similar warnings were expressed last week by Indian finance minister Arun Jaitley during his visit to Washington, particularly in the context of US initiatives such as FATCA (Foreign Account Tax Compliance Act), which enjoins countries to exchange financial information on offshore accounts.
Although financial mavens are arguing their actions are within legal ambit, both Washington and New Delhi are starting to scrutinise the "tax adventurism" aimed at skirting compliance.
The matter also featured in the Spring meeting of the World Bank and IMF last week with WB president Jim Yong Kim saying, "When taxes are evaded, when state assets are taken and put into these havens, all of these things can have a negative effect on our mission to end poverty and boost prosperity," Kim said.
Since becoming the US attorney in 2009, Bharara has charged scores of Wall Street executives, many on insider trading charges, to earn a reputation as the scourge of the financial district in Manhattan. Among them was Indian-American businessman Rajat Gupta, former director of McKinsey consulting.