Panorama of Perfidy in the Panama Papers
Apr 23 2016 (The Daily Star, Bangladesh) – Ever since the Panama Papers hit the fan, the leak has been working like a series of introductions at a high-profile gathering. It’s putting a bunch of names to a bunch of faces, men and women leading a double life because of their money. It also shows that these folks have something in common with the squirrels. The rodents hide their nuts, and they hide their assets.
Don’t forget that the squirrel hoarding has a purpose for it. The animals collect and store nuts so that they will have food to last through the winter. But their thriftiness has social benefits. The nuts they bury result in trees growing in many new places.
What’s the purpose of hiding money? The simple truth is that anything that can’t be revealed is concealed. And two things are simultaneously concealed when it comes to money. Money and its source are like fire and smoke. If one is visible, the other can’t vanish.
Thus the overriding purpose of creating the shadow network of shell companies and tax havens is to create a conduit for dirty money. Offshore banking, as it appears now, is a huge Mephistophelean enterprise to provide forward linkage to kleptocracy. Capitalism needs it to accommodate greed for the same reason nuclear plants look for disposal sites to dump radioactive waste.
But it’s shocking to see how the world has been shocked by the scandal. Politicians were stealing. Dealers were dealing. Wheelers were wheeling. Banks were billing. And all that time those who know knew already that all of those things were happening. Yet the reaction of the world has been as if it was expected that all these seismic waves shouldn’t have shaken the ground.
Whether capitalism invented hypocrisy or hypocrisy invented capitalism calls for a separate discussion. But these two wheels balance the bi-cycle of modern life relentlessly pedaling itself to create more wealth. And if the president of this country and the prime minister of that country have been caught with their hands in the cookie jar, it only confirms how a runaway system has been running.
It belies the basic principle of double entry bookkeeping. Take the example of the billions of taka that evaporated in this country after stock market manipulation, bank swindling and other forms of embezzlement. While we know how much has been debited, who knows where all that money has been credited? Who knows how much of that missing money has washed up on which shores?
Not to say the Panama Papers can track that missing money for us, but the scandal should shake us out of our pretentious slumber. Some of the stolen money exists around us, flaunted in the lifestyle of crooks and thieves hiding behind their fabulous masks. That flaunting has a hierarchy of its own starting with the baseline perps. Office clerks, police constables and linemen for various utility services like to have their palms greased in their quest for a solvent life.
Then it gradually goes up the totem pole of greed, climbing from necessity to luxury like mercury does in barometer. At the top of the pecking order are those who aren’t satisfied with extravagance alone. They want to steal enough to guarantee the same high life for their future generations.
Thus Panama, the Cayman Islands, the Virgin Islands and similar destinations are sanctuaries for sick money like leper colonies are for lepers. These are the places where capitalism hides its excesses outside national boundaries devoted to the care of dubious money like orphanages are to illegitimate children. These are the exotic places where toxic money takes vacation to get away from the monotony of scrutiny and suspicion at home.
In the ultimate analysis though, these tax havens are boutique shops compared to department stores for financial irregularities. How about those countries which, on the whole, are allowing foreign citizens to invest money in their economies and buy second homes? What about the Swiss banks which until recently refused to divulge the names of people who kept black money in their accounts? What about other places like Beirut, the Bahamas, Uruguay and Lichtenstein, which have taken the Swiss model to heart? Even in the United States, places like Delaware and Nevada have loose regulations and low taxes so that people can hide their activities and assets behind a corporate façade.
The Panama Papers are going to do no more than summer cleaning. It will prepare the ground for new names, new law firms and new destinations for newly stolen money, perhaps to precipitate another scandal umpteen years later. The wave of indignations triggered by the scandal is keeping us busy upstream, while nothing changes at source.
Capitalism and hypocrisy are intimately built on each other. That relationship persists because we’re hopelessly reluctant to tell the face from the façade.
The writer is the Editor of weekly First News and an opinion writer for The Daily Star.
This story was originally published by The Daily Star, Bangladesh