Hillary Clinton Panama Papers
Hillary Clinton attends the Pennsylvania AFL-CIO's Convention in Philadelphia on Wednesday, April 6, 2016. During her speech, Clinton made her first reference to the Panama Papers, pledging to crack down on offshore tax haven abuse. In 2011 she supported the Panama Free Trade Agreement that critics say did nothing to improve tax transparency there. Jessica Kourkounis/Getty Images

Hillary Clinton said Wednesday at a campaign stop in Philadelphia that she would shut down the system that allows the wealthy and powerful to park their money abroad to dodge taxes. It was the first time the Democratic front-runner mentioned Panama as one locale where she would work to crack down on offshore tax-haven abuse.

“Some of you may have just heard about these disclosures about outrageous tax havens and loopholes and superrich people across the world are exploiting in Panama and elsewhere,” she said at the annual Pennsylvania AFL-CIO Constitutional Convention. “We are going after all these scams and make sure everyone pays their fair share here in America.”

But what Clinton left out of her speech was her support five years ago for the Panama Free Trade Agreement that critics say helped intensify tax secrecy in the Latin American nation.

Clinton’s rival for the While House, Sen. Bernie Sanders of Vermont, has seized on the issue since Sunday’s release of the Panama Papers, a massive trove of documents that exposed widespread use of tax shelters by rich and powerful people from all over the world.

Sanders has pledged to repeal the trade agreement with Panama if he’s elected president.

“I was opposed to the Panama Free Trade Agreement from day one,” he said on Tuesday. “I predicted that the passage of this disastrous trade deal would make it easier, not harder, for the wealthy and large corporations to evade taxes by sheltering billions of dollars offshore.”

Sanders opposed the deal as it was being debated in Congress in 2011 on the grounds it would worsen secrecy and tax evasion. But Clinton at the time explicitly touted Panama for its tax transparency initiatives and helped pass the deal through Congress as secretary of state.

"I am happy to report we are making great progress on both agreements,” Clinton said in May 2011, referring to favorable trade deals with Panama and Colombia touted by the business community but criticized by labor and environmental activists.

Amid warnings from watchdog groups who said the pact could help corporations and rich individuals use Panama to hide money, Clinton lauded the small country, saying it “passed important new laws on labor rights and tax transparency.”

Five years later, the Organization for Economic Cooperation and Development reported that Panama has been failing to meet some of the transparency pledges it made to get the deal passed.

One watchdog group, Public Citizen, pointed out in 2011 that a tax information agreement — cited as justification for the trade pact — included a loophole that would undermine the effort to improve transparency in Panama’s tax code.

Over the objections of Sanders and other lawmakers, then-Secretary Clinton and President Barack Obama backed the deal.