The Promise Of The #PanamaPapers - What Happens Next?

Tuesday, 5 April 2016, 9:29 am
Opinion: Alastair Thompson

#PanamaPapers is at least the fourth shot at revealing the dirty underbelly of a system of capital ownership in which secrecy and privacy exist by design. Earlier attempts have certainly produced results in the form of column inches printed and broadcast minutes - but nothing substantial has changed - at least nothing that is likely to seriously impact on the ability of either the super wealthy or mega trans-national companies to avoid paying tax.

Will this be different?

Maybe. This time round there are certainly a lot of different features to the context and nature of the story being told.

This time the issue of inequality and the erosion of the tax bases of developed nations have become cause celebres. And the political revolutions taking place in both Europe (Podemos, Syrizia, Diem25, Corbyn, Iceland's Pirate Party) and America (Sanders and Trump) have placed the irresponsibility of the exercise of financial power at the very center of political discourse.

Also this time round the story is also being told infinitely more effectively than it has been in the past. Tax evasion is a hard story to make sexy - but this time it is.

The media appear to have learned from several years experience reporting on tax haven document dumps, as well as from the experience of Greenwald with the Snowden Files and Wikileaks with several major stories. The reporting is punchy and human (bank robberies, the Iceland connection, David Cameron's dad, Putin's friend the cellist). And seemingly the release is very well timed in is delivery and clinical in its simultaneous global delivery.

And if the media have learned anything from Snowden, Poitras and Greenwald it will doubtless be that it is not just the big Scoop, but the follow through which delivers action, and credibility for the truth tellers.

Moreover this time round global policy on corporate transparency vs secrecy is also on the move.

The USA's new money laundering rules - imposed by treaty on the rest of the planet in 2013 - have changed reporting rules for just about everybody opening a business bank account, anytime, anywhere in the world. The UK is about to follow suit, only going further this time and requiring the register of beneficial ownership of companies to be public. It would appear that the Government's do now have sufficient data to make a dent in illegal activity by the super rich if they wish to do so.

All of which might be quite encouraging.

But then there is the other side to the insanity of corporate secrecy. The side which sees new tax havens sprout up seemingly like mushrooms at the will of law firms like Mossack Fonseca (which even though this leak makes them seem like a major player spectacular are really the bit players in money laundering and tax evasion. Giant transnational banks and corporations do the lions' share of that work in London, Hong Kong, Singapore and most of all New York.

And what was up with Her Majesty's Revenue and Customs sweetheart settlement deal with Google?

Or Europe's bold public commitments to tackle tax evasion which have been coupled with a conspicuous absence of any actual action? The OECD, France's diligent think tank for the developed world, apparently is doing the heavy lifting on tax evasion policy coordination. Why not the ECB? The Federal Reserve? The Bank of England?

There are clues in the Russian and Chinese President's role in the latest leaks, Valdimir Putin and Xi Jinping are both famous for cracking down on tax evaders and corrupt politicians, and yet people very close to both of them are implicated in the latest leaks. This part of this story can be expected to unfold slowly.

So what is likely to happen next?

As Glen Greenwald ( https://theintercept.com/2016/04/04/a-key-similarity-between-snowden-leak-and-panamapapers-scandal-is-whats-been-legalized/ ) and Matthew Iglesias ( http://www.vox.com/2016/4/3/11356326/panama-papers ) have pointed out today the way things are is not a surprise to anyone. The laws of the financial world are designed to hide ownership and protect extremely powerful extremely wealthy elites. And we know from countless reports (thanks to the Occupy movement) that the 1% have the global economy by the balls and that since the Global Financial Crisis in 2008 have only become more and more wealthy.

As for criminal financing. Why is it that ISIS has high quality expensive US manufactured weapon systems, notwithstanding the fact that - as Edward Snowden rather elegantly pointed out in his tweet today ( https://twitter.com/Snowden/status/717063116828360704 ) that all the information and surveillance capacity that could possibly be necessary to deal with financial crime has existed for decades.

The reality is of course that it hasn't been used for that purpose. Instead as John Le Carre has been telling us for even longer, the enormous powers of the world's developed states secret security apparatuses have been used pretty much ever since the end of WWII to assist the economic aspirations of the global elites whose interests - perhaps at some point in time - were aligned with those of nation states.

However as COP21 made so clear. This is no longer the case.

We can of course hope that maybe now it will be different. Maybe our leaders will take on the responsibilities of their office and confront the lies and secrets which hold us back.

Students of real politics will retort however that economic power (and political power too) are now so concentrated that the chances that real change will come out of the latest attempt to shine light into dark places will require a miracle.

And it is clear that the financial systems which humanity has created are now out of any single nation's control. Global coordinated action to address the iniquity in money flows is unquestionably required, not just to address tax avoidance but also to manage the coming second round of the Global Financial Crisis.

First however we need to see some rational economic decision making by the Eurogroup to avoid another meltdown in Greece.

The truth is that in aggregate far more of the power than anyone would remotely like to admit is exercised in the secret world that we are now beginning to get a tiny glimpse of in the #PanamaPapers.

What happens next is therefore any ones guess. But we are in for an exciting ride. The financial elites will believe this will die out. After all they also own most of the world's media.

But this - like the revelations which were so beautifully revealed in Citizen Four - is only act one.

A pandora's box is in the process of being opened. If humanity is lucky then nation states and national leaders will not shy away from their responsibility to take the challenges that these revelations pose for them seriously.

But far more likely - based on past experience - they will say brave and reassuring things publicly and surrender behind the curtain to the continued faceless use of capital that is killing both humanity and our planet.

On the other hand some very strange things have been happening in politics and geo-politics over the past few months.

- Alastair Thompson, 500 Words, Monday, 4 April 2016

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Alastair Thompson

Scoop Publisher

Alastair Thompson is the co-founder of Scoop. He is of Scottish and Irish extraction and from Wellington, New Zealand. Alastair has 24 years experience in the media, at the Dominion, National Business Review, North & South magazine, Straight Furrow newspaper and online since 1997. He is the winner of several journalism awards for business and investigative work.

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