Panama Papers Reveal Red Cross, World Wildlife Fund Names Falsely Used to Cover Up Funds

The law firm featured in what have become known as the Panama Papers allegedly used nonprofit names to obscure the origins of millions of dubious funds in offshore accounts, according to reports.

Citing European papers, The Associated Press and Reuters have revealed the International Committee of the Red Cross (ICRC) and World Wildlife Fund (WWF) as two nonprofits named in the leaked documents.

Mossack Fonseca, a Panamanian law firm at the center of the controversy, created fictitious foundations, like the Faith Foundation, to hold shares in 500 offshore companies and claim to benefit nonprofits, such as the ICRC. Doing so hid the foundations' real beneficiaries and put them in an "NGO aura," according to AP.

"Given that banks and financial institutions are today asked to obtain information about economic beneficiaries, it has become difficult for us not to divulge the identity of those of the Faith Foundation's," a leaked Mossack Fonseca email said, according to AP. "That's why we've implemented this structure designating the 'International Red Cross.' It's easier that way."

The law firm's email also implied the nonprofits were unaware their names were being used.

"According to Panama law, the beneficiaries of a foundation can be used without knowing it," the email said, according to AP. "That means the International Red Cross doesn't know about this arrangement."

Claire Kaplun, an ICRC spokeswoman, told AP that the use of the Red Cross' name was "a total surprise and something we find extremely shocking."

However, Kaplun said international law bans the use of the group's name or logo without permission. She added that using its name in that way also could endanger ICRC staff.

"We work in conflict zones. We work without weapons. Our protection is our name, our emblem, the faith that people have in our reputation," she told AP. "Let's say this money was linked to a warring party in a conflict. Imagine what consequences that could have."

Charities also fear the unauthorized uses of their names could affect their reputations in the eyes of their donors, Reuters reported.

While the ICRC relies on governments for more than 80 percent of its funding, it still seeks private donations. It has procedures to check donations of more than $100,000, but the organization cannot be absolutely sure that private donors are not linked to Mossack Fonseca, as it has "neither the means nor the expertise" to research all of them, Jenny Tobias, an ICRC spokeswomen, told Reuters.

"We strive to ensure the funds we receive will not contravene our principles of action and jeopardize our humanitarian operations for those most in need," she said.

As for WWF, the nonprofit told Reuters that it did not give "so-called Panamanian foundations" permission to use its name.

But the ICRC and WWF are not the only nonprofits that were pulled into the scandal. Experts believe other charities' names also may have been misused.

"Where funds are actually donated, charities should consider the risks posed by anonymous or opaque donors and take reasonable steps to identify them—especially if amounts are large or unusual," said Oliver May, an expert on fraud in humanitarian agencies and a former head of counter-fraud at Oxfam GB. "But there are limitations to what such organizations can reasonably do."