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On Sale: Tax Avoidance, Corruption and Secrecy

The long ignored use of secretive offshore companies ensures the indefinite rule of an oligarchy that writes our laws.

Public debate around the avalanche of corruption stories propagating from the recently publicized internal documents of the Panamanian law firm, Massack Fonseca is warranted in the current presidential elections.

Labeled the Panama Papers, this anonymously leaked trove of 11.5 million legal and financial records exchanged with the large German newspaper Sϋddeutsche Zeitung reflects the global practices of a rigged system crafted for world leaders and the wealthy to cover up their dealings and hide money. Importantly, the leaking source asked only for security measures and no compensation, specifically stating, “The choice of stories is up to you.”

Discussing revelations while analyzing the massive number of files, investigative reporter Frederik Obermaier told Democracy Now! that, “it was very important to realize that it’s not only governments of autocratic regime kleptocrats being in the data, but that at the same time it’s Western — or leaders of Western governments being in the data.”

Discovered while leading the data journalism effort, Obermaier realized, “It’s about criminals hiding their wrongdoings. It’s about sanctioned people trying to go on with their business although they are sanctioned.” Described as a completely parallel world, Obermaier explained that the Panama Papers data shows that “it’s not only about taxes.”

Relying Upon Willful Blindness

In a recent interview, Mossack Fonseca cofounder Ramon Fonseca explained that his firm legally creates companieson behalf of a wide variety of entities — banks, corporations, lawyers and other agents. On the heels of the Panama Papers release, Fonseca stated, “We are not responsible for the actions of the corporations that we form.”

Arguably, in the context of money laundering, the concept of willful blindness — relied upon by Ramon Fonseca — fails when the facts and circumstances could lead one to believe that the money being dealt with is illegal money; it’s the same as “knowing” that it is illegal money.

A proper legal examination considers whether there was a subjective belief that there is a high probability that illegal facts exist; and secondly, whether deliberate actions were taken to avoid learning of that fact. In short, the elaborate creation and use of shell companies to hide the beneficial owners and insulate the legal players facilitating these schemes demonstrates their subjective belief.

Protecting Offshore Cash Abuses

In practical terms, the long ignored use of secretive offshore companies that, in a society dominated by finance capital and the neoliberal ideology of globalized free trade, ensures the indefinite rule of an oligarchy that writes our laws.

Congress has long known about these types of offshore cash abuses. After decades of investigating and exposing global financial abuses, Senate investigator Jack Blum explained to Pulitzer awarded journalist David Cay Johnston, “lawyers in New York and London hand off the dirty work to this firm and others like it that operate in jurisdictions where there is no rule of law or no one worries about enforcement.”

In fact, the United States “deliberately protects this system,” according to Jack Blum, who, in support of this conclusion, cited the Treasury’s refusal to even endorse requiring disclosure of beneficial ownership information oncorporations formed in Delaware, Nevada or Wyoming.

Warnings Rich Will Hide Money Ignored

Both President Obama and then-Secretary of State Hillary Clinton pushed for passage of the free trade agreement with Panama, which was eventually signed in 2011.

Sen. Bernie Sanders on the other hand, took to the Senate floor in 2011, to denounce the Panama-United States Trade Promotion Agreement, saying, “Each and every year, the wealthiest people in this country and the largest corporations evade about $100 billion in taxes through abusive and illegal offshore tax havens in Panama and in other countries.”

Lamenting from the lectern, Sanders argued, “No one can legitimately make the claim that approving this free trade agreement will significantly increase American jobs.” Rhetorically, he asked, “Then, why would we be considering a standalone free trade agreement with Panama? … Well, it turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade US taxes.”

Watchdog groups opposing the Panama Free Trade Agreement, pushed for by both Obama and Clinton at the time, argued it effectively barred the United States from cracking down on questionable activities.

Journalist David Sirota recently tweeted: “Email shows Clinton State Dept pushing Panama pact amid warnings it would help the rich hide money.”

Domestic Actors Ignored

Over this past week, media outlets in the US and around the world have given considerable play to what is being characterized as the “largest ever leak of secret data,” with almost no mention of involvement by any American.

Clearly, there is a journalistic imperative at work here that’s focused the initial stories flowing from the Panama Papers toward narrow legal questions of criminality and tax evasion, while demonizing particular world leaders that rival the West’s monopoly and control of the global financial system.

That same journalistic imperative should dictate an equal, if not greater, interest in domestic lawbreakers, conflicted US politicians and wealthy special interests betting through payment of speaking fees and political support, onpoliticians like Hillary Clinton, Ted Cruz and others.

Policies Encourage Movement of Secret Money

Illustratively, coverage by the mainstream corporate media focused on the Democratic primary campaign between Hillary Clinton and Bernie Sanders should’ve already generated pointed questioning about the information andspecific examples of abuses we’ve been told will be revealed in the Panama Papers. More than 300 journalists have been analyzing this data for over a year.

In fact, senior editor at the International Consortium of Investigative Journalists Michael Hudson, who is helping to publish these collaborative stories, told Amy Goodman, “we do have fraudsters based in America who have been doing business with this law firm, and we will be reporting on down the road.” Moreover, Hudson made of point of saying that there are many “examples of the United States either having policies which encourage money being moved around secretly or where we’re turning a blind eye.”

As an example, Hillary Clinton, who has been singled out for her somewhat enthusiastic support of regime change while secretary of state, could justifiably be viewed as a member of the Mossack Fonseca-level social stratum. In fact, in lobbying for the Panama-United States Trade Promotion Agreement, Clinton paved the way for major banks and corporation to skirt regulations and national laws.

In short, Clinton’s candidacy has been inextricably linked to disastrous military interventions and corrupted Wall Street collusion, which included Deutsche Bank paying her $485,000 for a speech after she resigned as Secretary of State.

Influencing a Cynical Public

So, how is it that the journalistic imperative surrounding this huge trove of documents has failed to even tangentially illuminate the secrecy surrounding our domestic banks, political actors, corporations and public interests?

Conspicuously, the identity of individual Americans are profoundly absent from mention in any of the Panamanian Papers’ initial story disclosures, which have centered around a secretive industry used by the world’s rich and powerful to hide assets through front companies in widely dispersed jurisdictions.

These initial stories might be viewed as journalistic “stereograms,” which are 3D images hidden within another picture. In other words, something more is driving the targeting and timing of the corruption stories thus far revealed in the terabytes of information anonymously shared with the German newspaper Sϋddeutsche Zeitung.

According to Robert Parry, the US government has refined the art of information warfare with a robust strategy for deploying direct and indirect agents of influence to present propaganda to a cynical public that would otherwise reject much of what they hear from the government, but may find trustworthy from another source.

Viewing Images Within the Other Pictures

Simply staring at the stereogram images journalistically taking shape around the targeted villains in these first stories suggests something other than focused objectivity in these initial disclosures.

“We are now seeing what looks like a new preparatory phase for the next round of ‘regime changes’ with corruption allegations aimed at former Brazilian President Luiz Ignacio Lula da Silva and Russian President Vladimir Putin,”wrote Robert Parry, who is known for his help in exposing the Iran-Contra scandal in the mid-1980s for The Associated Press.

The legacy of George Creel, who, as chairman of the Committee on Public Information during World War I, sought to influence public opinion and gain support at home and abroad for the war effort, seems highly relevant in the present and should not be forgotten.

The loudly expressed outrage about corruption by the Western media signals that we should look into the mirror of our own political and business leaders. There is little doubt that in the future, we will see many stories from the nearly 40 years of records contained in the leaked Panama Papers.

How the Panama Papers gets vetted by the International Consortium of Investigative Journalists (ICIJ) and when those stories are released demands that we stare into the journalistic stereograms created to see the images within the other pictures.