In April 2016, the Panama-based law firm Mossack Fonseca made headlines the world over after a leak of 11.5 million documents, dubbed the Panama Papers, shed light on its work creating shell companies and secretive foundations for a vast network of companies and individual clients. Worse — for Panama at least — the firm’s two founders held high positions in the country’s government.

In an interview with International Business Times Thursday on how his country has been working to strengthen the regulatory environment that facilitated Mossack Fonseca’s services, Panamanian Finance Minister Dulcidio De La Guardia defended his president, Juan Carlos Varela, despite the latter’s ties to the firm.

“I don’t think there is a conflict of interest if you are clear [about] what your objectives are,” said De La Guardia during an interview at the Lotte Palace Hotel in New York, where he and dozens of other diplomats were meeting for the United Nations General Assembly this week. “Besides, if that is the case, then there won’t be people to run the government in Panama. It is a very small country and we all come from either an engineer background, a law background or a business background. So, in that case — and most people, usually, like in the U.S., they go back to the private sector to continue their private life.”

Jurgen Mossack, one of the two founders of the firm at the center of the Panama Papers, served on Panama’s foreign relations council between 2009 and 2014, while Ramon Fonseca, the other founder, had been President Varela’s top adviser, before taking a leave of absence a month ahead of the publishing of his firm’s leaked documents.

Varela’s attorney general suspended an early investigation of the firm in January of this year, only to resume it weeks later, reportedly at the request of Brazilian authorities. They were probing Mossack Fonseca as part of an investigation into their own extensive corruption scandal, known as Lava Jato. When Panamanian officials raided the firm, arresting both founders, they described the action as part of the Lava Jato scandal, according to the International Consortium of Investigative Journalists, which initially published the Panama Papers leak in conjunction with dozens of other media outlets in 2016. But, at the time, Mossack Fonseca tweeted an image of the search warrant used in the raid, contradicting that narrative.

“The Lava Jato case?” the firm wrote. “Here’s a search warrant that indicates it is for the Panama Papers.”

As Fonseca was being arrested, he accused President Varelo of taking bribes from another scandalized firm, the Brazilian construction company Odebrecht, which was tied up in Peru’s Lava Jato investigation, was fined by the U.S. government after pleading guilty to bribery late last year and was fined by Panama’s government over bribery charges as recently as August.

Asked whether the timing of the suspension of the investigation, the raid and the accusation ought to raise suspicion of Varelo and his connections, De La Guardia once again defended the president, emphasizing the steep penalty recently imposed on Odebrecht by Varelo's Department of Justice.

“The president has been very clear” in his denial of the accusations that he’s taken campaign money from Odebrecht, and “has said it publicly many times,” De La Guardia said. He later added that the president has made a point of appointing “eight people, independent people, that were not related to his political party, or to his campaign” for high executive branch positions, naming the attorney general, Kenia Porcell, as an example.

“What we need is people who are independent, who are appointed to positions that will make sure the law is obeyed,” De La Guardia said. “All these people are responsible for making sure the financial system and the government and its laws are not related to the government party or to the campaign of President Varela, because he believes that it is important to have strong, independent institutions to make sure that the government is properly run.”

Mossack and Fonseca aren’t the only officials in Varela’s administration with an employer that's faced official scrutiny.

Álvaro Alemán, Varela’s chief of staff, worked at a law firm caught up in a money-laundering investigation by Argentinian authorities. Luis Miguel Hincapié, Panama’s deputy foreign minister, held positions at two Panama-based companies that were part of a ponzi scheme investigated by U.S. authorities. Mossack, Fonseca, Alemán and Hincapié were members of Panama’s Association of International Lawyers, which, the Panama Papers revealed, was dedicated to working around tax evasion laws, and Alemán was once its president.

Questioned about the administration’s independence, De La Guardia pointed to the indictment of Mossack Fonseca by the Panamanian government, and the two founders’ arrests.

“No, I don’t think it’s an issue,” he said. “I think it’s a matter of ‘What do you believe?’ and whether you want to make it — it’s true that there is a rule of law .”

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