How quickly we forget. It was just four months ago we learned of the role of Panama in helping so many rich and famous folk to dodge their fair share of the tax burden. It was even more disgusting to see so many politicians in the rogues gallery.
The first response from the Panamanian law firm was indignation at the breach of privacy and to raise an action against the hacker. Most of us thought he should get a knighthood or at least a medal for his guts and public spirit however, as we know from the experience of the Snowdens and Assanges of this world, political asylum is not for the likes of them.
Indeed, how many of us remember Hervé Falciani who just last year was sentenced to five years in prison for leaking the names of 130,000 suspected tax evaders holding accounts with UBS Private Bank in Switzerland? That information went to several governments and the IMF before being discreetly buried.
Such hypocrisy from people who we have voted into parliament to protect our interest is a breach of trust which should carry serious consequences. The threat of resignation or public disgrace is simply not enough. Yet the public memory is short and fickle and if the dust does not settle within a few days we get an official Inquiry which will last as long as it takes until the next scandal hits the headlines and wipes the memory.
It is the legal loopholes which render tax evasion and avoidance possible, and a lack of enforcement which has made it a rich feeding ground not only for the beneficiaries but also for the so called respectable accountants and lawyers who set up all these complex schemes.
The consistent failure of politicians to address this is, let’s not mince words, corruption by omission and it starts at the top. When President Obama first took office he promised to reform the banks and prosecute the ringleaders who caused the current financial crisis. Now he is standing down and nothing meaningful has happened.
So what’s new? Wikipedia tells us that Panama, which is a client state of corporate America and haven to tax-dodgers, uses the US dollar as its currency, although a few local coins called Balboas also circulate. In 1941, President Arnulfo Arias urged the government to enact Article 156 to the constitution, authorizing official and private banks to issue paper money. As a result, on 30 September 1941, El Banco Central de Emisión de la República de Panamá was established.
The bank was authorized to issue up to 6,000,000 balboas worth of paper notes, but only 2,700,000 balboas were issued on 2 October 1941. A week later, Ricardo Arango replaced Arias as president in a coup supported by the United States.. The new government immediately closed the bank, withdrew the issued notes, and burned the remainder. Very few of these so-called “Arias Seven Day” notes escaped incineration.
Today, back in the City of London, does anyone really expect Westminster to lead a genuine campaign to close these loopholes or indeed do anything which might curb the excesses of the 1%? I don’t think so. Both Britain and America are quick to impose sanctions on countries whose behaviour they condemn for whatever reason, and if they really wanted to shut down these tax havens it could be done overnight and with minimal fuss.
There is a simple explanation why politicians get away with this, it is because the people who elected them allow them to do so. Holding them to account once every four years is clearly not doing the business.
In Scandinavia the tax paid by every citizen and corporation is open to public scrutiny by law because paying a fair share is regarded as a moral obligation. However it does not cure the problem of evasion or avoidance, because such people are not going to tell the taxman what they are up to. In fact the publication of tax returns simply diverts attention from the real issue which is the lack of political will to put a stop to it.
Back in Scotland the usual suspects agonize over the latest GERS numbers which tell us Scotland cannot afford independence – well, they would say that, wouldn’t they? Today we probably have one of the most powerful movements of political activists in the world and our parliament’s members are certainly for the most part untainted by corruption. We also have a very realistic prospect of commissioning a second referendum in the foreseeable future.
All that presents the perfect opportunity to draft a manifesto which sets out a comprehensive programme of tax and banking reform with a clear path of accountability back to the electorate. That has already been worked out in some detail – www.scottishmonetaryreform.org.uk
and if such proposals were added to the independence manifesto then we might see support reaching critical mass.
Of course it will be difficult. The tax dodgers and the bankers of the standard bearers of the 1% and with all that money you can buy an awful lot of political influence, protection and media coverage.
There is a simple choice, we do nothing and the 99% remain the vassals of the feudal one per cent or we mount a well thought out and peaceful rebellion.
Scotland has its own Establishment which will fight any proposal to plug the leaks and retain these frauds upon the public purse; they have good cause to believe the public memory is short so it is up to the activists to keep the politicians’ feet to the fire.