Panama Papers law firm partners get bail

The two partners of the law firm at the center of last year'sPanama Papers scandal were released from prison on bail of $500,000 (466,000 euros) each on Friday.

However, Jürgen Mossack and Ramon Fonseca will still face legal action over allegations they facilitated the laundering of assets tied to a wide-spread corruption affair in Brazil. The case is not directly tied to the Panama Papers leak.

Both men were arrested in February on suspicion of facilitating offshore accounts that allowed the Brazilian construction giant Odebrecht to channel bribes worth around $800 million across Latin America.

Odebrecht has admitted to bribing government officials and political parties across three continents to win public sector contracts.

Known as the "Car Wash" case, the scandal has implicated countless members of Brazil's political class, including former presidents Dilma Rouseff and Luiz Inacio Lula da Silva.

The construction firm's CEO Marcelo Odebrecht was last year sentenced to 19 years in prison after being convicted of paying out more than $30 million in bribes to executives from Brazil's state-run oil company Petrobas.

Panamanian prosecutors accused of political motivations

Panamanian authorities are also holding Maria Mercedes Riano, Mossack Fonseca's representative in Brazil, on suspicion that she helped create the offshore companies being investigated as part of the "Car Wash" case. Her attorneys meanwhile argue that she was merely following orders from Panama.

Ramon Fonseca last week accused Panamanian prosecutors of psychological torture in a bid to coerce him into making incriminating statements. He also said that Riano had been subjected to psychological pressure "so she testifies against us."

Panama's President Juan Carlos Varela was also implicated in the scandal this year, after Fonseca accused him of having admitted to receiving bribes from Odebrecht. "President Varela told me - may lightning strike me if I lie - that he had accepted donations from Odebrecht because he couldn't fight everyone," Fonseca said.

Germany rocked by Panama Papers leak

The Mossack Fonseca law firm was the center of the Panama Papers scandal set off by a leak of thousands of documents revealing secret offshore accounts used by the world's wealthy to stash assets. Many of the accounts were used to evade tax and launder money.

Twenty-eight German banks were implicated in the scandal, including Deutsche Bank and Commerzbank, both of which were rescued with taxpayers' money during the global financial crisis that peaked in 2009.

Jürgen Mossack is a German national who moved to Panama with his family as a child. 

dm/rc (AFP, AP)