PANAMA PAPERS: A RESULT OF SELECTIVE GOVERNMENT SURVEILLANCE
Topic: Government Surveillance
By: Aluizio Porcaro Rausch (Panel 2)
Post: Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption
Link: https://panamapapers.icij.org/20160403-panama-papers-global-overview.html
The International Consortium of Investigative Journalists (ICIJ), a team of more than 370 journalists from 76 different countries, and other news organizations around the world recently exposed a large number of politicians, businessmen, celebrities and criminals of hiding funds in tax havens. Leaking around 11.5 million records of secret financial deals performed under the assistance of Mossak Fonseca, a Panama law firm, and several well-known banks, these journalists revealed to the public a globe network of money laundering and tax evasion from 1977 to 2015.
Among the many individuals and entities involved in this long-standing underworld industry are Russian President Vladmir Putin, prime ministers of Iceland and Pakistan, Chinese President Xi Jinping, British Prime Minister David Cameron, soccer player Lionel Messi, UBS and HSBC. Although not directly touching US jurisdiction, the leak also includes 33 people and companies blacklisted by the US government – such as drug lords and terrorists – and a US businessman that signed documents for a off-shore creation while serving prison sentence in New Jersey.
In a time of Base Erosion and Profit Shifting counter movements promoted by the
Organization for Economic Co-operation and Development (OECD) and by the most developed countries in the world, this leakage points out even more complex tax evasion schemes and ineffectiveness of governments’ fiscal information access. The involvement of several world leaders also raises doubts about the seriousness of formal commitments for more transparency of tax systems.
Specifically about the U.S., it is important to mention that the Foreign Account Tax Compliance Act (FATCA), enacted in 2010, set higher standards for fiscal data disclosure worldwide, as many countries followed American example. Nevertheless, this effort does not seem sufficient to eradicate abusive tax planning.
Selectivity of law enforcement and government surveillance is an old issue. In the US History, its roots are in the abusive procedures adopted by the colonizer British towards the colonies, as Justice Stewart summarizes in Standford v. Texas. Unsurprisingly, it is still a current issue in many other jurisdictions as well. Despite all governments’ resources, the wealthy and powerful are protected from official surveillance. If not for non-governmental entities such as ICIJ, the general public would remain in the dark.
Aluizio Porcaro Rausch