15/12/22

GLOBAL REGULATION: Former IMF Boss Strauss-Kahn Mired In French Investigation Sparked By The Pandora Papers.

As published on icij.org, Wednesday 14 December, 2022.

French financial authorities are investigating former International Monetary Fund chief and politician Dominique Strauss-Kahn over revelations in the Pandora Papers investigation about his Moroccan tax residency and business dealings.

Officials at the National Financial Prosecutor’s Office told Pandora Papers media partner Le Monde that Strauss-Kahn is suspected of laundering the proceeds of tax fraud. They didn’t elaborate on the allegations which were put to a hearing before the summer.

His lawyer, Jean Veil, told the French daily that the former finance minister is cooperating with authorities. “Documents were sent to the tax authorities, and I am convinced that they were satisfied with them, since nothing has happened at the judicial level”, Veil said.

Confidential records from 2016 and 2017, obtained by the International Consortium of Investigative Journalists, revealed that Strauss-Kahn used a Morocco-based company, Parnasse International Sarlau, to take in millions of dollars in consulting fees from such clients as Rosneft – an oil company partly owned by the Russian state – and the Chinese aviation conglomerate HNA Group. Much of his earnings were tax-free, according to the news site L’Obs.

After the tax exemptions for his Casablanca company expired, Strauss-Kahn set up another consulting firm in 2018, in the United Arab Emirates, called Parnasse Global Ltd. The firm’s focus was on “security technology for private companies” in the Persian Gulf region, according to incorporation records.

Strauss-Kahn’s representatives told ICIJ partners at Le Monde and Premieres Lignes, at the time, that the decision to incorporate the firm in Ras Al-Khaimah was not based on “tax reasons” but to comply with the requests of a client that needed to domicile his contracts in the region.

The records were part of the Pandora Papers, a trove of about 12 million files leaked from 14 offshore financial services companies, which revealed how more than 300 politicians and officials, as well as powerful business people and criminals used shell companies in secrecy jurisdiction to avoid taxes or shield their wealth from courts,authorities, and public scrutiny.

The French authorities’ investigation into Strauss-Kahn’s financial dealings is part of a broader ongoing inquiry targeting 200 people named in Pandora Papers, according to Le Monde.

Earlier this year, Le Monde and ICIJ revealed that the officials were investigating Czech Republic’s former Prime Minister Andrej Babis for suspected money laundering related to a $22 million property deal. The probe is ongoing.

In 2011, toward the end of his term at the IMF, Strauss-Kahn was arrested and charged with sexually assaulting a hotel housekeeper in New York City. The criminal charges were dropped, and he settled a civil suit with his accuser for an undisclosed sum. At the time of his arrest, he was hoping to represent the Socialist Party as a presidential candidate the following year. The scandal put an end to his political career.