Panama cited as tax and laundering center

Members of Congress wouldn't vote to let AIG not pay its taxes, or to give Mexican drug lords a safe place to hide their proceeds from selling drugs to our kids, but that's in essence what some Obama administration officials are proposing right now, said the article. Just as President Obama announced a major new initiative to crack down on tax havens and tax-dodging US firms, his trade officials are pushing a leftover Bush-era Panama Free Trade Agreement. That agreement would expand NAFTA to one of the world's top tax-haven and money-laundering nations — giving the banking and insurance firms new powers to attack U.S. tax laws in international tribunals.

Some of the largest recipients of federal procurement contracts and money under the Troubled Asset Relief Program (the bank bailout) have subsidiaries in Panama — where no taxes are charged on foreign firms and extreme banking secrecy laws make hiding money easy. According to Securities and Exchange Commission filings, Citigroup Inc. has 17 Panamanian subsidiaries, while American International Group, Morgan Stanley and American Express each have one.

Additionally, Panama is consistently on the State Department's list of countries of primary concern for drug-related money laundering. According to a 2009 State Department report: "Major Colombian and Mexican drug cartels as well as Colombian illegal armed groups use Panama for drug trafficking and money laundering purposes."