Money laundering, corruption, and South Florida, sadly, seem to go hand in hand. The Panama Papers would make an excellent title for a Dave Barry novel. Yet the potentially unlawful theft of confidential documents from a Panamanian law firm is no laughing matter. While tracking down lawbreakers is a good thing, breaking the law to make it so does not necessarily make it right.
The law firm at the center of the political firestorm, Mossack Fonseca, for now, is standing by its work product. One of the firm’s co-founders also said they plan to fight the illegal theft of client data in court. If it does turn out the International Consortium of Investigative Journalists targeted the firm, they are no better than some of the alleged criminals that the data heist, or leak, has exposed.
If the Panama Papers uncover illegal acts, actions that with evidence can be connected to alleged lawbreakers, then the lawbreakers should be held to account. However, reporters and talking heads keep making a series of assumptions about a variety of legal issues that skew the impartiality of what could be hard news.
Moreover, the process being used to release this information is somewhat disturbing and somewhat akin to the British High Court of Star Chamber that was abolished in mid-17th century; the difference is the Panama Papers is being played out in the court of public opinion with no law or due process. To what end? I have no doubt that there are some well meaning people out there that want to bring lawbreakers to justice, but some of this appears ideologically motivated, designed to erode faith in free markets and, whether the leakers know it or not, the rule of law.
As U.S. regulators and political leaders pore over the Panama Papers stories, remember the ICIJ has reportedly said it will not release the raw data, let’s hope the regulators and leaders do so with an eye to holding lawbreakers accountable and not, as I fear may be the case already, engaging in politicking. On this latter point, less then a day into the reporting and the political Left in the U.S. and in Europe is demanding tax reform. The Left is using an old saw, the rich versus the poor yarn.
For example and by some sheer coincidence, the very day the stories hit the web, President Obama held a White House press briefing stressing the need to “eliminate some of the injustices in our tax system.” Again, as if by policy magic, the Treasury Department also issued new regulations to ease the burden on families created by companies that seek, legally, to decrease how much tax they pay.
The Left wants to teach the 1% a lesson. They want to shut down a system run by the ugly people – capitalists – who lord over you, who steal your jobs, and your pensions. The Left wants to expose the corruption fueled by evil corporations, entities run by greedy people who steal from the American taxpayer to fund dirty wars, pollute the environment, engage in the sex trade, hurt indigenous peoples, and spread diseases via vaccines.
If they want companies to locate in the United States, work with the Congress to cut corporate tax rates, rather than engaging in what are at times lawless regulatory rule-making, focused on massive regulation. But the international left, that in the United States makes its home in the Democratic Party, will never do that because it believes governments know best. They never let a crisis, or potential crisis, go to waste.
The Panama Papers could be an opportunity to highlight and hold lawbreakers accountable, especially when it comes to enforcing economic sanctions and anti-money laundering laws, among others. However if the biased reporting trend continues, the end product will be nothing more than one more volley lobbed by the Left in the war against free market capitalism. Put it up there with Occupy Wall Street or the wag the dog shenanigans of the 1990s, as well as other movements. How do the Panama Papers contribute to this narrative?
Consciously or not, the majority of the stories I’ve read leave readers with the impression that the international transactions, if done legally, are morally bad. The stories gloss over the fact that there a wide-range of fact patterns that could give rise to legal international transactions involving multiple jurisdictions, corporations, and other entities.
The stories have a strong “rob Peter to pay Paul” tinge that is counterproductive and completely unnecessary to drive what should be the main point, breaking the law is a bad thing. And what about innocent parties? The ICIJ claims it will never release the documents because, in part, they need to protect the innocent. Really? Who made them the un-elected and unaccountable judge, jury, and executioner?
The digital flogging will bring down not just the dirty, but many innocent people whose only crime is guilt by public association. Civilized democracies have systems in place to deal with lawbreakers. There are courts with rules and procedures. If tax laws need to change, we go to our elected leaders in Congress and press for change. Yes, it may be boring and slow, but it is what keeps us all from a Lord of the Flies existence.
Just like in the guns do not kill people – people kill people argument, corporations are tool, an important tool, that have lifted billions from abject poverty. Corporations are not the problem, it is a very small number of people who work in them that can be. To the extent genuine reporting exposes corrupt activities that use legal tools to hide illegal activities, the lawbreakers — not the tools they used — should be held accountable.