Panama needs to decide
The details are funny for those with the properly perverse sense of humor, horrifying for those with gored oxen, an apparent victory for anti-corruption activists and a sad defeat for Panama’s reputation in the world. The big fuss is about “The Panama Papers,” some 11.5 million documents hacked out of the Mossack Fonseca law firm’s data trove, which will be dribbling out for months, leading to further investigations and much commentary. If some pundit comes on your video screen and tells you how she or he is shocked, turn that mind rot off. That a leak of this magnitude happened was unexpected. The firm’s activities for the sorts of clients it has should surprise nobody who knows anything about Panama and its “offshore asset protection” rackets.
Dozens of public figures, including a number of heads of states and many other lesser or former government officials, have either been directly named or implicated through revelations about close relatives that suggest that these family members were being used as money laundering fronts. Some of the clients’ activities were legal but unseemly, but mostly these people were concealing money for the purpose of tax evasion or hiding the proceeds of public corruption.
This leak comes on the heels of revelations from Brazil about the roles that Mossack Fonseca and Panamanian shell companies have played in that country’s widespread public corruption. At the center of one more scandal that might lead to a Brazilian president’s impeachment, once again we see the Odebrecht group of companies. Were convicted and imprisoned former CEO Marcelo Odebrecht’s emails kept on a server in Panama? Those are “unavailable.” Did Odebrecht bribe money make its way through Panama on a circuitous route to corrupt officials of the Brazilian state-owned oil company Petrobras? The Panamanian lawyers who designed those dodges plead that everything that they did was legal under Panamanian law. Are several recent or current Odebrecht contracts with Panamanian government entities questionable? We haven’t had an investigation, just tortured logic to conclude that nothing is amiss.
Yes, President Varela proclaims “zero tolerance” for anything that Panamanian law doesn’t tolerate. Yes, he presented legislation to bar public contracts with companies convicted of corrupt acts — but only if that corruption is condemned by a Panamanian court. Meanwhile he gave Mossack Fonseca partner Ramón Fonseca Mora a leave of absence from his government post as minister without portfolio in the Varela cabinet in order to “fight for his name.” So far it’s a matter of a politically clumsy president doing the funky ostrich. Nobody will believe the denials. Nobody will be fooled by the distractions.
It is not, however, the Panamanian government’s misdirections that should be of greatest public concern. It’s countries like Russia, China, the United Kingdom, the United States, Saudi Arabia, Israel, Pakistan, Peru, Argentina and Spain (etc.) who will have an interest in diverting attention from their own corruption by pointing the finger at Panama. We saw how bad sanctions can be in the years leading up to the 1989 US invasion. Battering Panama again would be the easiest way out for some of the many countries whose leaders’ corrupt behavior has been exposed or suggested.
At long last, Panama has to decide whether it wants a paper economy based on the pathologies of the industrialized world. Relatively few Panamanians benefit from this kind of economic activity, but the prices we may and sometimes already do pay — inablity to get justice when we are harmed by anonymously held companies, international blacklists and graylists that slow or block financial transactions with Panama, difficulties for Panamanians seeking visas from other countries and the disappearance of foreign investment — are high.
We should end banking secrecy, corporate secrecy, “mirror companies” with names that are misleadingly similar to those of established firms in other countries, the unaccountability of lawyers and law firms and the general perception that we are a nation of accomplices to the world’s financial crimes. Mr. Fonseca should definitively go from the cabinet, but that would only be meanigful if a way of life leaves Panama at the same time. We just can’t afford that stuff.
Bear in mind…
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