It was just two weeks ago when I first heard about the release of the Panama Papers, millions of secret files identifying financial transactions from a law firm from, you guessed it, Panama. With the investigation initiated by an international coalition of media outlets, significant portions of the data have been analyzed and released to the public, only to respond with shock and outrage.
I guess you could coin the leak to be “Wiki Leak 2.0”, but with over 11.5 million records collected, enough data to fit 30+ DVDs, the 2010 WikiLeaks investigation is only breadcrumbs in comparison. The documents, some even dating back to four decades before, are allegedly connected to a law firm that helps facilitate well-off individuals ranging from politicians, business leaders and celebrities in offshore accounts and companies, or if you’re like me, financial yabadoo. Individuals involved with these “shady financial transactions” include but are not limited to: 10+ current/former world leaders, 120+ politicians and public officials, FIFA (apologies Messi fans). Of course, it couldn’t be considered an international scandal if Russia wasn’t involved.
Adding fuel to the fire, it is quite pathetic in my opinion, how the firm is able to recognize less than 2% of the companies that it helped incorporate.
But why out of all the countries in the world, did this investigation take place in Panama? Located below Costa Rica, Panama is a tax-haven for the rich, offering low taxes and minimal financial jurisdictions. It also offers quiet beaches, warm breezes, and an abundance of fresh fruit – the perfect tropical escape. But, that’s not why you’re reading this, or else you would been reading about Panama from a travel agency agent. Of course, Panama is not the only safe-place to stash hidden money; on the grander scale, countries like Switzerland and China excel at being the primary financial facilitators for domestic and international clients. It is almost as if 007’s “Casino Royale” has popped off the big screen and into the real world, seizing us by the moment and placing us in the center of the poker table. The table has grown since we’ve last seen, now with thousands of players and not just billions of dollars at stake, but countless companies and resources. Perhaps the organization Spectre can learn a thing or two from these recent revelations…
While much of the documents might contain nothing law-breaking, it doesn’t help with the fact that it is can often be perceived as an attempt of tax evasion or even money laundering. I must make this clear that there are still valid reasons, however, for having corporations or individuals set up international companies; some of these financial purchases are for legitimate purposes and by no means of an actual attempt to deceive government authorities. So if you accidentally happen to find your boss’s name on the list, don’t start a tantrum in your cubicle; please, you’re not five years old. But with weak jurisdictions, and so much secrecy clouding international deals from public and government watch, companies may become susceptible and perhaps tempted to stray away and pursue various means of protecting their assets. It would almost be like playing Monopoly, and painting the hotel tokens green to evade paying hefty fines when one receives a community chest card.
This only confirms what we have all believed deep down; it is a difficult truth for many to swallow, but it is the reality that we all share. If we choose to ignore it, then we are equally to be blamed for allowing such corruption to run rampant. We tantalized ourselves with a false understanding of the world, and only now have we realized that we’ve become accustomed to these crises.
The better question to ask of ourselves is: did we really need these documents to be to convince us of something that we perhaps have pondered? If so, why are we unable to take the initiative and prevent these issues from arising in the first place. So does the release of the documents signal the end of capitalism? Not by a long shot. People have the tendency to believe that once a system appears broken, one must resort to proposing extreme alternatives. Instead, perhaps it would be more effective to propose methods of improving our current system instead of starting one anew.
Photo Courtesy of: www.nytimes.com