Rules do not apply to elite
THOUSANDS of companies, millions of documents and terabytes of data. The sprawling trail of secrets nestled within stretches from Reykjavik to Kiev and on to Islamabad by way of Baghdad. It has taken journalists in 80 countries months to tease it all out from the record-breaking bulk of the Panama Papers.
Each of these disparate stories matters in itself. But what has also broken out of the vaults of offshore legal specialists Mossack Fonseca is one overriding sense. The sense that normal rules do not apply to the global elite. In a new gilded age, taxes would — once again — appear to be for the little people.
That impression would be poisonous at any time, but it could be especially dangerous in the politics of this particular hour. The response to the financial crisis has been a constant: with a continual demand for regular citizens to make sacrifices in the name of austerity. But the understanding of what had gone wrong in the first place has shifted steadily. Initially, there was almost no understanding at all: baffling news reports about credit default swaps suggested only sorcery going wrong.
Slowly but surely, however, the world has learned that the banks that busted the global economy were also consumed with oldfashioned skulduggery: rigging rates, ripping off customers, and laundering Mexican drug money. Courtesy of the Lux tax leaks on sweetheart corporate deals, and the HSBC files, documenting Swiss lockers stacked with bricks of cash, the world learned much more, too, about the tax-dodging lengths that private wealth will go to in order to keep public coffers empty.
The evidence in the Panama Papers about secretive shell companies is damning on both the tax-dodging and the skulduggery fronts. Mossack Fonseca’s dealings with loot from the infamous 1983 Brinks-Mat heist is an arresting, if indirect, link between the plutocratic service industry and naked criminality.
The truly dramatic twist added by the papers, however, concerns a shift in the sort of secretive interests that are involved.
No longer is this about faceless corporations and financiers, but about leading politicians and their circles, sometimes the same politicians who have been asking for all the sacrifices. London, April 4.