Current Formula One championship leader Nico Rosberg has shown up in the Panama Papers leak—a massive breach of data related to offshore financial holdings. It just had to be the guy who lives in the tax haven, huh?
Rosberg’s not doing anything shady, his attorney stressed, and he insisted that Rosberg’s only in the leak because the company that does his contract has ties to the Panamanian law firm that contained all the information to begin with.
The Panama Papers are a 2.6-terabyte leak of data from Panamanian law firm Mossack Fonseca, which is the fourth largest law firm in the world for offshore services to the world’s wealthy. Firms like Mossack Fonseca establish shell companies in tax haven states around the world, which also serve to grant their owners relative anonymity in their dealings. (Deadspin has a good primer in case you’re totally lost.)
German broadcaster ARD broke the news (via Yahoo) that Rosberg’s contract with the Mercedes F1 team was made with Ambitious Group Limited, a company based in the British Virgin Islands. Ambitious Group’s address is shared by many other Mossack Fonseca-administered companies, and the company itself belongs to two other companies based in Jersey.
But Ambitious Group Ltd. was merely created for liability reasons to allow Rosberg to operate internationally, Rosberg attorney Christian Schertz told the Associated Press. Which is definitely a valid excuse! International tax laws are a nightmare, and setting up a shell company so that it all goes through one pipe is a legitimate reason to set one up.
Rosberg, however, is a longtime Monaco resident. Monaco isn’t just a place the rich and famous like to chill—it also levies no personal income tax on many of its residents. As the son of F1 driver Keke Rosberg, Nico basically grew up in Monaco despite the fact that he has both German and Finnish citizenship, and is identified with a German flag in Formula One.
Schertz emphasized to the AP that Ambitious Group was not used for tax avoidance, and Rosberg is registered in Monaco for tax purposes. Schertz maintains that Rosberg’s earnings are received in Monaco.
“Tax-wise, Mr. Rosberg acted correctly in every way,” Schertz told the AP.
Nonetheless, being surprised about a Monaco resident wanting to find the most favorable tax situation possible is like being shocked to hear that water is wet. One gets the impression that My First Offshore Account is read alongside Where the Wild Things Are and Everyone Poops in grade school there.
Having an offshore account isn’t illegal in itself, and doesn’t necessarily mean that the holders of the account are engaged in any wrongdoing. Keeping money and other assets in a location where the tax situation is more favorable is one way to pay less in taxes.
However, the International Consortium of Investigative Journalists says that some accounts served by Mossack Fonseca have engaged in “bribery, arms deals, tax evasions, financial fraud, and drug trafficking.” To say that everyone involved in the Panama Papers leak is under extreme scrutiny right now is a bit of an understatement.
Who else from the motorsports world has shown up in the Panama Papers? None other than former Formula One and current Formula E driver Jarno Trulli and ex-Ferrari president Luca di Montezemolo. (And those are just the ones we know about right now.)
Trulli told La Gazzetta dello Sport (as translated by Grand Prix 247), “I have several companies in the world and all are run in a transparent manner.”
Montezemelo, for what it’s worth, is just completely denying knowledge of anything involving the Panama Papers at all.
Given the number of F1 drivers who reside in tax havens like Monaco, we’re eager to find out who else might be in the papers and what their offshore dealings may entail.
If you find any persons of interest to the automotive or motorsports world in the Panama Papers leak, please don’t hesitate to drop us a line.