Vol. 22, No. 5,514 - The American Reporter - September 7, 2016

by Randolph T. Holhut
American Reporter Correspondent
Dummerston, Vt.
April 7, 2016
On Native Ground

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DUMMERSTON, Vt. -- That the world's super-wealthy people have ways of getting even more wealthy and powerful is not a shock.

But knowing this still doesn't prepare one for the breathtaking amount of corruption lurking within the 11.5 million documents leaked from a Panama-based global law firm, Mossack Fonseca, that specializes in creating offshore tax havens for the rich to park their money.

The papers, obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, were shared by the International Consortium of Investigative Journalists. A team of 370 reporters representing 107 media organizations from more than 80 countries is busy reviewing the Panama Papers, as they have come to be known.

The initial accounts give the rest of us a glimpse into the new global reality - the rich and powerful who control governments around the world can shield their financial assets from taxation, and can get away with it because the politicians that they control allow them to do so without penalty.

As The Guardian reported:

  • "Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.

  • "A $2 billion trail leads all the way to Vladimir Putin. The Russian president's best friend - a cellist called Sergei Roldugin - is at the center of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin's daughter Katerina got married.

  • "Among national leaders with offshore wealth are Nawaz Sharif, Pakistan's prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt's former president; and the prime minister of Iceland, Sigmundur Davíğ Gunnlaugsson.

  • "In the UK, six members of the House of Lords, three former Conservative MPs and dozens of donors to British political parties have had offshore assets.

  • "The families of at least eight current and former members of China's supreme ruling body, the Politburo, have been found to have hidden wealth offshore.

  • "Twenty-three individuals who have had sanctions imposed on them for supporting the regimes in North Korea, Zimbabwe, Russia, Iran and Syria have been clients of Mossack Fonseca. Their companies were harbored by the Seychelles, the British Virgin Islands, Panama and other jurisdictions."

All that goes a long way toward explaining why the 62 richest individuals in the world have the same total wealth of 3.7 billion of Earth's inhabitants.

It may be technically "legal" for the wealthy to do this. Is it ethical? Is it just? Hardly.

As Glenn Greenwald at The Intercept wrote this week, "Corrupted political systems, by definition, often protect and legalize exactly the behavior that is more unjust. … The key revelation is not the illegality of the specific behavior in question but rather the light shined on how our political systems function and for whose benefit they work. That was true of the [Edward] Snowden leak, and it's true of the Panama Papers as well."

As Snowden showed the world the extent of how much the surveillance state has grown into an unstoppable, unaccountable force, the Panama Papers have lifted the curtain hiding a rigged economic system built by the wealthy and powerful for the benefit of the wealthy and powerful.

And remember, this is just one law firm, albeit one of the largest of its kind in the world. There are many others out there doing similar things for their clients.

In the coming weeks, you can bet there will be hell to pay for the people whose names turned up in the initial reports.

On April 5, Gunnlaugsson resigned as Iceland's prime minister after more than 20,000 protestors threw eggs at the Parliament building the day before. In the UK, PM David Cameron is now under fire for his father's use of offshore accounts. In Ukraine, Poroshenko faces possible impeachment proceedings.

So far, few Americans have been named in the Panama Papers.That's a reflection of the United States' current status as among the top locales for creating shell companies.

Mossack Fonseca has offices in Nevada and Wyoming to take advantage of lax laws in those states. And Delaware remains one of the leading places in the United States for incorporating anonymous shell corporations.

According to The Guardian, the United States was the No. 3 leading tax haven in the world in 2015, surpassing the Caymans and Singapore. Panama was No. 13.

The 1 percenters of the world can move their money around at will. The rest of us don't have that option, which means the working- and middle-class taxpayers have to pay more to make up for the tax evaders.

And that's why there will be more protests and more pressure on governments around the world to change their laws and make the wealthy pay their fair share of taxes as we learn more about what's in the Panama Papers. This will be a game-changer for global capitalism.

AR's Chief of Correspondents, Randolph T. Holhut, holds an M.P.A. from the Kennedy School of Government at Harvard University and has been an award-winning journalist in New England for more than 35 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at randyholhut@yahoo.com.

Copyright 2016 Joe Shea The American Reporter. All Rights Reserved.

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