WASHINGTON: Shell companies created by the law firm behind the "Panama Papers" played a central role in alleged Italian bribes paid to Algerian officials for energy contracts, an investigative journalism group said Monday.
In new revelations from the leak of millions of internal records on offshore shell companies, the International Consortium of Investigative Journalists reported that the law firm Mossack Fonseca had created 12 of 17 companies through which the Milan oil services company Saipem SpA allegedly paid $275 million to win $10 billion in oil and gas deals.
According to ICIJ, a non-profit newsroom, prosecutors in Milan believe the Franco-Algerian businessman Farid Bedjaoui used the offshore entities to funnel the bribes to Algerian officials.
He allegedly used one Mossack Fonseca-created shell company to pass up to $15 million to family members of an Algerian energy minister.
Mossack Fonseca, the Panama City firm which specializes in the creation of offshore companies, told ICIJ that its actions were both legal and several steps removed from the actions of its clients or their associates.
Transparency campaigners have long denounced offshore secrecy and banking as an industry which enables corruption and illegal plundering of resources.
Governments have also now joined the campaign against tax havens and offshore companies to fight tax evasion, money laundering and terror finance.
An Italian judge in October ordered Saipem and several officials to stand trial over the company's business in Algeria. The company told ICIJ it was fully cooperating with Italian investigators.
Bedjaoui, 46, lives in Dubai and did not respond to requests for comment from ICIJ, but his lawyers have previously denied wrongdoing, the group said.
Interpol has issued an international alert to law enforcement that Bedjaoui is wanted by Italian police on suspicion of conspiracy to commit to corruption.
Snamprogetti Netherlands, a subsidiary of Saipem, agreed to pay $240 million to US authorities in 2010 to resolve massive bribery allegations in Nigeria's oil sector. Saipem acquired Snamprogetti in 2006 after the period in which the Dutch firm was accused of wrongdoing.
A court in Algiers in February of this year ordered four companies, including Saipem, to pay fines of between 4 million and 5 million dinars ($35,500 to $44,300) over their dealings with the state oil company Sonatrach.
Saipem was found guilty of "inflating prices on contracts awarded by a public company engaged in industrial and commercial activities, taking advantage of the authority or influence of representatives of said company," it said in a release.
The court also handed down sentences ranging from probation to 6 years in prison to eight people, including former Sonatrach CEO Mohamed Meziane.
Saipem Contracting Algerie has filed an appeal in the case.