Hiding money in offshore accounts to keep it from the publicans is an old trick—but it is now so prevalent that, far from being “a minor part of our economic system,” it is the system.
The saga of the so-called Panama Papers, so much in the recent news, begins with the anonymous leaking of secret documents to Süddeutsche Zeitung journalist Obermayer. The leak became a flood that, writes Luke Harding, of Edward Snowden fame, in his foreword, “eventually amounted to 11.5 million documents, delivered in real-time installments,” a trove far larger than the Snowden files. These records pertained to 214,000 offshore shell companies whose businesses were filtered through a Panamanian law firm, but that the flood came pouring down on German journalists spoke to the fact that the principal was a German émigré who may now be on the hook for violations of European Union regulations as a German citizen. (The legal case has only begun to unfold.) Yet Mossack Fonseca’s clients, the beneficiaries of various schemes to keep taxable income under wraps, are breathtakingly international: they include the father of Britain’s prime minister, much of Iceland’s government, Nicaragua’s president, and even the “best footballer in the world,” to say nothing of “trails leading to FIFA and its president…various mafia organizations, Hezbollah, Al-Qaeda…and to Vladimir Putin.” Throw in numerous multinational corporations “like Amazon, Starbucks, and Apple,” and you have splendid testimony to Karl Marx’s observation that capital has no country and that capitalists are loyal only unto themselves and their shareholders. In surveying these many trails, the authors expose a shockingly corrupt system but not without offering twofold remedies, one of which is to mandate “an effective system for the automatic global exchange of information about bank accounts.”
A maddening, important indictment of the shadow economy that flourishes even as the legitimate economy suffers and just the thing to tip a person debating whether to join the Occupy movement or vote for Bernie Sanders over the edge.