Wednesday, 6 April 2016

Panama (c)anal

Making a prediction is a great way to be wrong about something, but what the heck; the Panama Papers will produce widespread revulsion, but limited, widespread reform because the ruling class doesn’t want there to be any*.

Remember, we’ve already been here with the leak of HSBC Swiss bank account details. HM Revenue and Customs (HMRC) got the data in 2010, identified 1,100 dodgy people out of the c. 7,000 listed who hadn’t paid their taxes and yet 5 years later, only one tax evader had been prosecuted. EVentually, MPs huffed and they puffed, as they do, did some grandstanding and then ...... no much really, which was as unsurprising as it was disgraceful.

HSBC’s name, it being the money launderer’s bank of choice, looms large in the Panama Papers. But, then so do those of other banks including the majority state owned RBS (via it’s Coutts business). This is not a surprise. As HSBC’s own post-Swiss leak statement made clear -  "We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today," - tax evasion was (is?) an industry-wide problem conducted on an industrial scale.

The Panama Papers provide detailed evidence of this if anyone wants to investigate further or even demand other banks release the details of thousands of other tax dodgers with the threat of losing their UK, French, German and/or US banking licences as an incentive.

Similarly,  Mossack Fonseca is (soon to be was) only the world's fourth-biggest provide of offshore services, so what about numbers 1, 2 and 3 or even 5? If Mossack Fonseca was at it, then what were/are they up to?

Except, we know this won’t happen. Rather than demand banks identified as being dodgy in the Panama Papers release any account details, here it’s already getting boiled down to a politicised debate about the Prime Minister’s father. Similarly, it’s hard to imagine the US going internationally hardcore after any other offshore service provider the way it went after FIFA (??) or say Gary MacKinnon because too many rich and powerful people simply don’t want them to.

The lesson is simple and backed up by the biggest leak in history, there is one set of laws and institutions for them, the rich and the powerful, and another for the rest of us. And they are not the same. 

One more wee thing, if the rich don’t pay their fair share of taxes, then how does trickle-down economics, that great justification of rampant inequality, work? We appear to live in an era of wealth hoarders, wealth hiders and tax dodgers, not wealth creators.

* Would be lovely to be wrong, but I doubt it