Among the international figures named in the “Panama Papers,” the trove of more than 11 million leaked financial and legal documents made public over the weekend, is the richest man in Syria, Rami Makhlouf.
Makhlouf, 46, is a cousin and close friend of Syrian President Bashar Assad. He’s also one of the most hated men in the country. His flagrant corruption helped spark Syria’s 2011 uprising, when protesters attacked his businesses and chanted “Rami Makhlouf is robbing us.”
He sure was. Makhlouf exploited his close connections to the Assad regime to amass a fortune of some $5 billion and control some 60 percent of the Syrian economy. In 2011, Reuters reported that Makhlouf had total or partial monopolies in Syria’s telecommunications, real estate, oil, airline, duty free, construction and import sectors. Any foreigner who wanted to do business in Syria had to go through Makhlouf, analysts say.
The 11.5 million leaked documents from the Panamanian law firm Mossack Fonseca, obtained by the International Consortium of Investigative Journalists and the German newspaper Süddeutsche Zeitung and published on Sunday, together make up the largest-ever data leak about offshore companies. They shed more light on how Makhlouf stashed his cash overseas with the help of foreign business partners.
Mossack Fonseca set up and ran several companies owned by Makhlouf that were registered in the British Virgin Islands, where it’s relatively easy to hide cash from tax, regulatory and criminal authorities. Makhlouf’s businesses appear to be classic “shell” companies — financial entities that don’t really do anything in their own right, instead mainly serving as places through which to move money.
The U.S. has been chasing Makhlouf’s wealth since at least 2008, when it banned American companies from dealing with him or his businesses because of his role fueling corruption in Syria. Analysts believe that Makhlouf serves as Assad’s “bagman,” managing the president’s own ill-gotten gains
The Panama Papers reveal that international banks and law firms kept working with Makhlouf and other regime allies in spite of U.S. sanctions and as war broke out in Syria.
Mossack Fonseca rejected the advice of its own compliance department to cut off the Syrian tycoon in 2011, as protesters took to the streets to decry the regime. Despite years of U.S. sanctions, one partner in the firm dismissed the claims against Makhlouf as “rumors.” He defended the decision based on the advice of U.K.-headquartered bank HSBC, whose role as Makhlouf’s banker was revealed inprevious leaks and prompted a U.S. Senate investigation.
After the Syrian regime responded to the protests with deadly force, and the European Union imposed sanctions on Makhlouf and other members of regime in mid-2011, HSBC and Mossack Fonseca finally cut ties with him