Panama Papers panel rues `damage` done by Joseph Stiglitz exit

Panama City: Panama`s image has been hurt by the sudden exit of US Nobel-winning economist Joseph Stiglitz as head of a government-appointed financial reform panel set up in the wake of the Panama Papers, one of its remaining members said Monday.

He "is doing damage at an international level to our country and its reputation," said Alberto Aleman, a former administrator of the Panama Canal who sits on the committee.

Stiglitz and Swiss anti-corruption expert Mark Pieth resigned from the seven-member panel on Friday, accusing the government of reneging on a guarantee to publicly release the body`s final report and other acts that were together "tantamount to censorship."

"We were just shocked. How could you have a committee on transparency that itself was not going to be transparent?" Stiglitz told AFP.

Aleman, speaking to a news conference on Monday, said Stiglitz`s comments "certainly affect the credibility" of Panama, which established the committee on April 29 to repair its tarnished image.

The Panama Papers scandal burst into the media earlier in April, based on a leak of millions of secret client documents from a Panama law firm`s servers.

They detailed how wealthy foreigners used a Panama law firm to create or manage offshore entities to store assets. Some of the entities were linked to tax evasion, money laundering and organized crime.

Panama`s government is fighting to avoid being put back on international black lists as a tax haven as a result. But it has thus far declined to sign up to automatic tax information exchanges urged by the Organization for Economic Cooperation and Development.

France has already slapped the country with a tax haven designation following the Panama Papers revelations.

Aleman said the remaining members of the panel -- comprising four Panamanians and a Costa Rican -- had wanted the final report, due early September, to go first to the Panamanian government for evaluation, but Stiglitz had insisted on it being made public at the same time.

One of the Panamanians, Gisela Alvarez, a former minister, stressed that this was the first time Panama had undertaken a serious analysis of its financial system.

The departure of Stiglitz and Pieth "might close an opportunity for big changes," she said.

Panama`s government, for its part, issued a statement after Stiglitz and Pieth`s exit reaffirming its "firm and real commitment to transparency and international cooperation."