Remember the Panama Papers?

10848911_10152873750398300_37785525906529469_oHow 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.

Comments (10)

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  1. old battle says:

    When Dave’s Dad opened his off-shore tax feee “investment” fund Blairmore Holdings in Panama in the early 80s he selected one of the most corrupt off-shore regimes anywhere. Manuel Noreiga the convicted dictator of Panama came to power through a coup in 1983. Panama then developed rapidly as a dodgy centre for very dodgy money especially big cartel money from just across the border in Colombia. Panama was awash with drug money being laundered thro the 80s under Noreiga. How did Cameron Snr operate under that regime?

  2. john young says:

    Same with the paedophilia investigations,throw a few names from the entertainment world under a bus make a few loud noises then slowly let it slip away,they are once again shoving “Kitty” Cliff Richards down our throats,his name kept on cropping up previously around the same time as Saville.Veterans To-day a USA site gives a graphic/horrendous account of the world wide network of paedos from the top of the pile,who have/are continuing with their very perverted ways,really makes you wonder.

  3. Peter Burnett says:

    What’s curious about the Mossack Fonseca Papers (the Panamanian government strongly objects to the term ‘The Panama Papers’ and I agree with them that this is unfair) is that the leaks have not been made public, but are in the hands of selected journalists. Read on, to find out who pays these journalists.

    Also, and I am sure you have already heard this, that the leaks do not cover any significant US figures guilty of any of the fraud or tax evasion uncovered in this process. This state of affairs starts to make more sense when you consider that the biggest corporate tax havens in the world are in the USA, in Nevada, Wyoming and South Dakota.

    So, perhaps the Mossack Fonseca Papers leak was engineered to tacitly promote the United States as the world’s leading tax haven?

    According to the Tax Justice Network (reported on 20.04.2016) ‘the U.S. ranks third among countries in terms of financial secrecy, above even the Cayman Islands’ with ‘up to $32 trillion is stashed away in its tax havens.’

    Who funded the journalism that covered the leak and engineered the hack? We find that George Soros, David Rockefeller, the Carnegie Corporation, the Ford Foundation, Goldman-Sachs (to name a few) paid the the reporters at the International Consortium of Investigative Journalists (ICIJ) who hold these leaked documents.

    The website Off-Guardian (04.04.2016) sums up the Mossack Fonseca leak as ‘a list of geo-political nobodies, has-beens, easy targets and dead ancestors.’ To top this off it appears that the majority of the information in the Mossack Fonseca Papers will never be made public, leading an increasing number of independent reporters to suggest that investigative journalism has in this instance been subordinated to the publishing of billionaires’ enemy lists under the guise of a leak.

    Why otherwise would Goldman-Sachs, and George Soros etc. be funding this excercise?

    While tax avoidance and evasion should remain to the fore in public debate and in our general roster of politcial demands I think the Mossack Fonesca leak only amounts to some billionaires publishing their shit-lists, in order to drum up more offshore business for the incredible tax loopholes and secrecy laws which persist in a few American states.

    This was not a leak as we know it, and is no way comparable to WikiLeaks and Edward Snowden style of material – – all of which is public.

    1. Maria F says:

      Very interesting comment P. Burnett.

      If it is true what is suggested in your comment regarding who funded the leak and why, it really seems that journalism as we know it is dead and the press has been reduced to be an instrument that corporations and tax evaders are currently using to manipulate governments and exploit the common people.

      Tax dodgers siphoning millions while ‘austerity’ is enforced on those who are not to blame and cannot afford it. It makes you sick, doesn’t it?

  4. Maria F says:

    Thank you for this wonderfully thought provoking article Mr Morrison.

    Articles like this, which questions the outrageous complacency of a corrupt political class, should be covering all main newspapers and news outlets. The fact that they are not shows the unsavoury complicity of a extraordinarily biased press that is not longer acting as an informant but rather as a divisive, appeaser and manipulator of masses.

    Sadly for me though, this article brings up to surface the current reality of the Scottish people: while we can fight the ‘Scottish establishment’ at home, the maximum number of MPs that can be sent to act and speak on behalf of Scotland will never be enough to challenge the rampant corruption in Westminster: we have been set to fail.

    1. Alf Baird says:

      Maria, it is not just the ‘political class’ that should concern voters. The reality is that much of the ‘Scottish establishment’ (i.e. our unionist elite) are likewise into offshore in a big way. This includes the various owners of entire industries, e.g. newspapers/media, whisky, land/estates, ports, airports, energy, oil, aggregates, so really most things that matter – whilst the elite’s private schools and private/elite self-regulated universities have other publicly given ‘benefits’ to protect. Our unionist elites therefore have a vested interest in Scotland remaining in the union as their protected artificial financial world would surely crumble after independence; though they would seek to maintain what they have and do even after indy, aided no doubt by the unionist elite that is still running much of institutional/public sector Scotland, despite a decade of SNP government.

      1. Maria F says:

        Thank you Alf for your reply.

        I do admit that I am quite ignorant regarding the ‘doings’ of the Scottish establishment and I am sure that I am not the only one.

        What I do understand though is that there must be a very significant economical/social personal advantage for those within the establishment to continue pressing for a Union when it is becoming increasingly obvious to the common Scott that Westminster’s successive governments have been damaging for Scotland as a whole. In the meantime, of course, our unionist MPs have been doing nothing to act on behalf of Scotland and placate their parties at Westminster by stopping them damaging Scotland: what do we want them for then?

        It is rather unfortunate Alf that the bulk of the current press in Scotland is so outrageously biased towards unionism. Because I do think that the best and quickest way of stopping all those vested interests getting in the way of a government of Scotland for the good of the people living in Scotland would be to continuously pour name and shame all over the front pages of the newspapers. Information is power so I do believe that the main reason why these people are getting away with it is because most of the population doesn’t actually know the extent of those vested interests and the motives behind their political positon.

        Sadly in Scotland it is not only ‘the Scottish establishment’ what we need to fight and uncover, it is also their main protective shield which is the corrupt and biased UK-wide press and broadcasters.

        1. Broadbield says:

          Several authors tell us that the UK and particularly the City of London is the biggest tax evasion (and avoidance) and money laundering set-up in the world. Many of the prime suspects such as the Cayman Islands are British Overseas Territories and could be shut down by the UK government at a stroke. Of course they won’t.

          While it might make good headlines to expose tax avoiders (legal) and bring to justice tax evaders (illegal) the former is something of a distraction. We need to elect politicians (or change the political landscape by getting ordinary citizens more involved in the legislative process) who will enact legislation to close down the loopholes and stop the capture of the legislature and its agencies such as the tax collectors by financial interests as happens at moment. The big accountancy firms are invited in to help draft legislation and then go back to business as usual creating clever ways of circumventing the legislation they helped create.

          As Morrison suggests there are ways we can tackle this – avoidance is legal and is facilitated by bona fide lawyers and accountants so it can be made illegal – in an independent Scotland but it will require determination and better ways of holding politicians to account than we have at present: citizen democracy. (see Against Elections: the case for democracy)

          1. nick says:

            all the above seem to believe capital is reformable (if only corruption was not pervasive) – the planet burns people, it,s not reformable…the only value in shutting down the tax havens and getting the bastards to pay tax is its restriction on the expansion of the (global) market and the effect this restriction has on the underlying profitability of capital – i.e. sowing the conditions of the abolition of capital itself…

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