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“A global investigation has revealed how the rich and powerful have [been] hiding their investments in mansions, exclusive beachfront property, yachts and other assets for the past quarter-century… The investigation, dubbed the Pandora Papers, was published late Sunday and involved 600 journalists from 150 media outlets in 117 countries.” AP News
“The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low- or no-tax jurisdictions.” ICIJ
The right cautions against conflating corruption with wealth, and calls for a simpler tax code.
“You may not find a memo saying so, but allowing corrupt capital from Russia, a key Pandora subject, to find safe haven in the West was once de facto U.S. and U.K. policy, a form of stability management aimed at the Russian regime. Testimony is the very fact that, after Vladimir Putin’s Crimea grab, the Western response consisted largely of sanctions aimed at Russian oligarchs and their enjoyment of Western assets, including blocking U.S. real-estate purchases by cash or wire transfer…
“In our fallen world, U.S. money-laundering laws and anti-foreign-corruption statutes serve as carrots and sticks in the arsenal of diplomacy (lately being applied to Chinese oligarchs too)… This larger geopolitical context would have made the otherwise tedious accounts of Pandora transactions less tedious. The evolved nature of our international (or ‘offshore’) asset markets is relevant to a lot more than just bad guys putting one over on good guys.”
Holman W. Jenkins, Jr., Wall Street Journal
“When a leader of a corrupt dictatorial regime loots his country’s central bank and seeks to hide the money overseas, investigative journalism has an ideal target. But that wasn’t juicy enough for these journalists. They went after former British prime minister Tony Blair, despite the fact that neither they nor anyone else has ever found a scintilla of evidence that his own wealth was not lawfully earned after leaving office…
“They went after the King of Jordan, as if it were shocking that the King has bought residential properties in the United States and United Kingdom — and again without presenting the slightest evidence that he had illegally taken public funds…
“They went after other public officials whose main offense is that they’re rich — such as Chilean president Sebastian Pinera, who was a billionaire when elected to office… The need to fight corruption is clear, but so is the need to define it… What these investigative journalists have done is to grab publicity for themselves at the cost of muddying what is corruption and what is not.”
Elliott Abrams, National Review
“Despite President Joe Biden’s strong words at the United Nations General Assembly last month, proclaiming that corruption ‘is nothing less than a national security threat in the 21st century’, America is not just complicit in the offshore economy, it’s facilitating it. The state of South Dakota, best known for its ranching and national parks, is also the favored tax shelter for billions of dollars linked to financial criminals…
“Baker McKenzie, the nation’s biggest law firm, is described as ‘a pioneer in corporate tax dodging’ now acting on behalf of ‘notorious tycoons, arms makers and authoritarian regimes acting in the shadow economy’…
“Even the Corporate Transparency Act, a bill signed into law earlier this year and heralded as landmark legislation in the fight against tax avoidance and money laundering, is riddled with loopholes. Populist movements all around the world have surged in the past few years. More and more people sense that the transnational elite class is out for itself, that the game is rigged and that opportunities for the average individual to advance are rapidly dwindling. The Pandora Papers seem to prove them right. The question now is: what comes next?”
Carlos Roa, Spectator World
“Radically simplifying the United States Tax Code would greatly reduce the incentive to use complicated schemes to avoid taxes, including offshore accounts. A flat tax, with a large personal deduction, very limited other deductions, and a flat tax rate, would go a long way to eliminating the corruption that permeates the tax code today. It would be much harder for members of Congress to quietly hand out goodies to their donors because it would be much more obvious. The best place to hide a book, after all, is in a library. The best place to hide a tax fiddle is in 70,000 pages of numbing legal prose.”
John Steele Gordon, Spectator World
The left calls for additional transparency and stricter financial regulations both in the US and worldwide.
The left calls for additional transparency and stricter financial regulations both in the US and worldwide.
“The [wealth management] professionals I studied helped their clients avoid all manner of obligations with such skillful uses of the offshore system. One wealth manager told me of a client who took a half-million dollar loan from an American bank, deposited it into a Cook Islands asset protection trust — a structure designed not to avoid tax, but to foil creditors — and never repaid a dime…
“The tiny South Pacific nation is known as ‘a paradise of untouchable assets’ for good reason. For those who can afford it, its special trust laws permit a kind of legalized theft. The same structure was used by the late American financier Marc Rich to cache the vast fortune he made from violating U.S. trade sanctions against Iran; all the might of the U.S. government could not seize those assets, and his ex-wife Denise still receives the income they produce, maintaining multiple luxury residences and a yacht…
“‘Tax havens’ aren’t primarily for tax avoidance. They offer something even more appealing and dangerous, which is law avoidance in general.”
Brooke Harrington, Washington Post
“There’s now a growing global demand for greater transparency and accountability, combined with calls to address the widening wealth inequity as well as demands from investors for the adoption of ESG (environmental, social and governance) principles…
“While those factors play a role in getting the attention of senior political leaders, the cynical reality is that the probable primary motivation of these leaders is the serious and alarming trend of a reduction in tax revenues. The endorsement of the concept of a 15 per cent minimum global tax rate by G7 leaders at their June 2021 summit is a clear indication that the winds of change are coming…
“The current model is not sustainable. Fiscal realities, along with political pressure and necessity, will force political leaders to act. They’ll soon have to do much more than pay lip service to wealth inequality and power imbalance, which allows the wealth defence industry and their clients to subvert the system and avoid paying their fair share. Greater transparency and accountability are needed to expose the enablers and to reduce the loopholes that enable wealthy individuals and criminals, along with corporate entities, to operate with impunity.”
Marc Tassé, The Conversation
"Those who oppose financial transparency will claim that there is no way to force tax haven countries to comply. But this is simply false: The U.S. and the European Union have enormous power that they constantly wield against other nations when they wish to. [Professor Gabriel] Zucman calculates that France, Italy, and Germany could compel even a rich country like Switzerland to agree to any needed transparency changes by placing a tariff of 30 percent on Swiss products…
"This would cost Switzerland more than it takes in as a tax haven. It would also be legal under World Trade Organization rules, because that level of tariff would allow the three countries to recover approximately the same amount in tax revenues that Switzerland is costing them.”
Jon Schwarz, The Intercept
"[In the US] Federal legislation could override weak state laws when it comes to corporate reporting and trust law… Trusts holding assets over a certain size should be recorded in a public registry and beneficiaries should be disclosed. We could pass a federal ‘rule against perpetuities’…
“The United States should move in tandem to participate in the global treaty-making process and trade agreements that could be used to raise corporate transparency options. If the United States and the UK got together with the purpose of raising standards (as opposed to a ‘race to the bottom’ status quo) — and enforced transparency as part of trade and other economic activity — that would have a huge impact.”
Chuck Collins, Jacobin Magazine
