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Panama Papers Affair Widens As Database Goes Online (bbc.com)
In late April, it was reported there would be a huge new 'Panama Papers' data dump on May 9th. The report did not disappoint as today the Panama Papers affair has widened, with a huge database of documents relating to more than 200,000 offshore accounts posted online. The database can be accessed at offshoreleaks.icij.org. The papers were leaked by a source known as "Jony Doe," and the papers belonged to the Panama-based law firm Mossack Fonseca. The International Consortium of Investigative Journalists (ICIJ) decided to make the database public despite a "cease and desist" order issued by the law firm.
Not much.
I haven't followed this leak closely, so it's very possible I've missed something, but as I understand it, the vast majority of the offshore accounts being publicized are completely legal. Embarrassing to their owners, perhaps, but not illegal in themselves.
Rather, the release of such private details is likely illegal, so any prosecution or criticism has to admit that it also benefited from illegal activities, effectively shooting itself in the foot.
You do not have a moral or legal right to do absolutely anything you want.
I had heard a panel of "journalists" was selectively editing out elements of the database to remove some records.
With the presidential race chock full of candidates who ALL may well be present in the data and thus possibly scrubbed by zealots, do we know if this is all of the data obtained?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Not really. The point of having an "offshore account" is to keep money somewhere financially better than one's own country, primarily to avoid taxes.
For instance, let's say I'm going to be making a large transaction, such as selling a luxury yacht and buying a bigger one, but I live in a country where such a transaction would be taxed heavily. It is financially beneficial for me to set up a shell company in a foreign country, sell that company my current yacht (for a small-but-legal price), then have that shell company sell the yacht and collect the income. Taxes on the income would be paid, but at the low rate of the foreign country. Then the shell company can borrow money from me to buy the new bigger yacht, and pay me a small amount in interest on that loan, which conveniently works out to be exactly the cost of renting the yacht to me, so it's a legitimate practicing business.
The foreign company can then also hire crew for the boat, under a contract with another company (possibly from a third country) to provide labor, so my crew doesn't have to be subject to my own country's labor laws.
The fun part is that not only is this legal, but in the United States, it's a First Amendment right. Courts have upheld that you have the right to decide (except for discrimination) who you will do business with as a matter of free expression, summarized in the common suggestion to "vote with your wallet". If I choose to sell my yacht to a foreign company at a huge loss, that's my choice. From then on, it's entirely a foreign business, and my home country's laws have virtually no effect.
Now, eventually if I want to sell my yacht and bring my money back home, that's another matter... then my country's laws can have an effect, and I can be taxed heavily, but if I don't need the money, then there's no reason to move it from its foreign tax haven.
You do not have a moral or legal right to do absolutely anything you want.
Not really. The point of having an "offshore account" is to keep money somewhere financially better than one's own country, primarily to avoid taxes.
Quite right, but they are also used as safe havens for folks with more than one pile of money needing a stash haven.
Let's say you are Head of State (or even a VIP) in a nation where it's possible you'll be deposed one day. Keeping all your wealth in a domestic account, or in accounts abroad that can be frozen, doesn't seem like the safest plan for your retirement. Welcome to the allegedly secret, offshore banking industry!
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
If I am not mistaken, the fact that these accounts are legal is a significant contributor to the public outrage (fabricated or otherwise) concerning this media event.
EG, if there were no laws against poisoning pigeons in the park, then a group of kids showing up with cans of bugspray and hosing down birds to watch them flop around until dead would not be illegal. That does not mean that the behavior is socially acceptable-- just not illegal in this contrived example. (Yes, I am well aware that it is indeed illegal to poison pigeons in most western countries. This is just an analogy; tortured and not ideal perhaps, but just an analogy.)
The real world example of the panama papers reveals a substantive effort by many power elite to obfuscate holdings, financial connections with industries they may be regulating as elite power brokers, and dealings with agencies or groups of less reputable character, as well as run of the mill tax avoidance, and sheltering of assets from unsteady local economies.
The practices are not "illegal", but they are socially unacceptable, which is why there is a scandal. The fact that "such things are actually legal" throws gasoline on the fire, not water.
Another tortured analogy might go something like this:
In many European countries, prostitution is perfectly legal. A conservative political figure publicly decries the practice of prostitution, but uses obfuscated holdings such as these to pay for such services on a very regular basis. No laws are violated-- the money was his to spend, and the service he obtained with it is legal. That does not make the circumstances stop being scandalous-- That of his blatant hipocracy, and abuse of client privilege to hide it to continue to snooker his electorate.
So, the fact that these accounts are not illegal does not remove the controversy, it is what causes it.
Can we move past that line of reasoning now?
There is no such thing as a cease and desist order, except when it comes from a competent court of appropriate jurisdiction. A C&D letter from a law firm is nothing more than a formal request to stop doing something -- granted, a sharply worded, hostile, threatening request, but a request nonetheless.
Editor, A1-AAA AmeriCaptions
Y'all are goin' down!
Only a few Americans (apparently 211, none particularly newsworthy).
Don't forget as an American, if you are trying to hide your money from the tax man, you have to be much better at it because of the FATCA rules... Probably all the people caught so far have been lulled into complacency by the ineptness (or corruptness) of their own governments to track and tax the wealth of their native illuminati...
As I understand it, Mossack Fonseca is a Panamanian law firm (why it was called the Panama Papers) and Americans generally don't create Panamanian shell companies because you can mostly create such shell companies right here in the good ole' U S of A. AFAIK, Delaware, Nevada, Wyoming don't require beneficial ownership declarations for LLCs and there may be others. Also given the current information sharing arrangement between the USA and Panama govt, it would be better to set up your shell company in some other country (like Belize or Isle of Man) and use a local law firm.
Which explains why the leaders of China and Russia, while apparently all but destitute, appear to have many wealthy relatives. It's pretty clear that a number of even larger nations are using offshore havens to squirrel away significant amounts of money.
Of course, there is more than one kind of haven as well. Vancouver and London are cities that are becoming notorious for the number of people from Russia and China buying up real estate. The amount of real estate being bought up in Vancouver by Chinese nationals, many of which who do not even live here, is becoming a significant political issue. London, of course, is home to many properties owned by Russian oligarchs, again looking for a way of protecting their wealth. The amount of financial activity going on with these property schemes is actually distorting real estate prices in these two markets.
A lot of this is happening now, I think, because the more traditional place for oligarchs, criminals and the more generically wealthy to hide their cash (ill gotten or otherwise), Switzerland, was forced, largely by the US, to end the practice of secret bank accounts. When that happened, it forced many people to look elsewhere, and that is how these other somewhat lesser known tax shelters have become so popular.
The world's burning. Moped Jesus spotted on I50. Details at 11.
In the US, this only applies to evidence illegally obtained by law enforcement. https://en.wikipedia.org/wiki/... Relevant quote: "Evidence unlawfully obtained from the defendant by a private person is admissible. The exclusionary rule is designed to protect privacy rights, with the Fourth Amendment applying specifically to government officials"
Unbeknownst to the majority of earners, there is a class of well-moneyed people who earn so much their biggest concern is in diversity of risk.
It turns out there were a number of nations willing to house secretive banking communities. Most of them are secretly happy about the Fonseca breach.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
It's nice to know when, say, a CEO lets his/her employees go because there's not enough money (and yet there's many millions in offshore accounts).
Companies employ people when the employees add value and contribute to profit. They don't employ people because they can afford the spend the money.
The practices are not "illegal", but they are socially unacceptable, which is why there is a scandal.
That's ridiculous. These practices are quite openly available and documented. I personally used to work for a company that advertised where we could help set up foreign accounts.
Another tortured analogy might go something like this... his blatant hipocracy, and abuse of client privilege to hide it to continue to snooker his electorate.
And that's fine for a scandal, but it's still not illegal. At that point, people are outraged that a politician might have lied! Of all the unspeakable horrors, that one should certainly go without saying.
That's pretty much exactly what happened in Iceland. A politician promised to fix up banks, and was found to have held a large interest in the very banks he was using government power to save. That's a conflict of interest, and a good reason to be upset, but he apparently made all of the required disclosures at the time. He might not be the person you want to have in charge, but whether that's enough reason to kick him out of office is a matter for local laws.
So, the fact that these accounts are not illegal does not remove the controversy, it is what causes it.
Can we move past that line of reasoning now?
Well, frankly, no. Moving "past this line of reasoning" is to beg the question of whether the outrage is justified. In effect, you're asking that we suspend rule of law, and vilify people for daring to disregard the morality of this particular angry mob.
I'm all in favor of bringing justice to those who have actually done something illegal, but we must be careful that we aren't just aiming our anger at a convenient scapegoat.
You do not have a moral or legal right to do absolutely anything you want.
The practices are not "illegal", but they are socially unacceptable
Don't be so quick to judge. Many people on the list are from Mexico, Venezuela, Colombia, and other Latin American countries where extortion and kidnapping for ransom are common. Some of them are hiding their wealth to protect their families.
If they are not breaking any laws, then why do you care where they park their money? Why is it any of your concern?
Companies employ people when the employees add value and contribute to profit. They don't employ people because they can afford the spend the money.
True, but it is also becoming more and more popular for companies in the US to tell their employees that the company simply cannot afford to give them a cost-of-living raise, even though the company is raking in record profits. Especially if those profits are hidden in "secret" off-shore tax dodge accounts. This is one reason why the gap between the highest and lowest paid people in a corporation is widening every year. Company boards of directors routinely vote themselves big fat pay raises for themselves and the shareholders, but won't pay their workers much of anything. You know, those same workers that are doing the work producing all those corporate profits.
So, what you are saying is:
It is perfectly legal for a wealthy person (Let's say a Greek politician) from Cyprus to have heard, through whatever means, that the banks were going to seize private deposits, and to have taken extraordinary measures to create offshore shell accounts and transfer their fortune there to protect it while everyone else that lacked the connections to create this labyrinth of obfuscation had their accounts siezed in the forced austerity plan.
Because it was perfectly legal, there is no controversy?
I fully expect that very situation to be there at least one time in this data dump.
That's the problem with conflict of interest-- you cannot prove that they did the transfer with knowledge of the impending crash that the public did not have, and further, there might not have even been laws like the US's insider trading rules concerning such action to begin with. That does not change the percieved injustice of a wealthy politicians continuing to be wealthy, after crashing the bank and loan infrastructure, and financially emperiling everyone else around them-- which is exactly what these kinds of services are essentially for.
There is a reason I used the poisoned pigeons analogy earlier. Something can be perfectly legal, and yet be very repugnant at the same time. Claiming "But it is not a crime to poison pigeons!" does not in any way reduce the repugnance of poisoning the pigeons for sadistic pleasure.
Privatizing gains and socializing losses is repugnant. Obfuscated foriegn accounts exist for this very purpose.
That kind of reasoning could be applied to literally any questionable behavior, including literally illegal ones.
But as to "why I care:"
Let us consider a moment, a wealthy politician who is involved in policy decisions that would affect the nation's credit rating with the IMF, and thus the comparative value of the native currency against that of other nations. In the US, this is literally every congressman and senator-- They are all involved in the anual fiscal budget process, and thus contribute to these decisions.
The very existence of a foriegn money shelter is a conflict of interest in this case-- Given sufficient holdings of exchanged currency, a devaluation of the domestic currency would result in a marked increase in capital power of the investment.
EG, let's say that when the exchange is first made, the currencies are at parity 1:1 exchange. The money is now no longer in dollars-- it is now in some foriegn currency. The US's credit rating is degraded, say because of insanity on capitol hill involving the budget deadline, and now the exchange is .75usd:1whatever. The effective fortune of the politician just increased by 25%, especially if they believe the US Dollar will rebound. After the devaluation, they exchange back to US dollars, wait for the recovery, then buy foriegn notes again. Possibly even repeat.
You cannot prove that they did this intentionally.
What they did is "perfectly legal."
Does that make it socially acceptable though? I say "No." The potential for rampant, flagrant abuse is astounding, and the people who can afford these shelters are the very people in positions capable of enacting these kinds of events.
I'll respond to your Cease and Desist Order with a Fuck Off and Die Order.
Some mornings it's hardly worth chewing through the restraints to get out of bed.
(shakes head)
The controversy *IS* "Why is this legal?!"
That is what people are outraged about-- that these kinds of things happen all the time, and are considered "normal" in the world of international high finance.
I thought I pointed that out? The people of the western world are collectively asking that question because of the disparity in how the system operates in this regard.
That is why the argument "But it is perfectly legal!!" is assinine. The fact that it is legal is what is being taken exception to. People want it to not be legal!
I can fully understand why they would want to make it illegal--
Not only does it allow the wealthy to shift the burden of maintaining an orderly society onto the more scrupulous (because, pshaw, they could set up offshore accounts too, if they werent so dumb and poor minded!-- or whatever) by allowing them to "avoid" taxes on their wealth, It allows their financial fortunes to rise with the tide of everyone else during the good times, but fail to sink like the others when that tide goes out.
Simply because you CAN do something, does not mean you should.
By your reasoning, if an online game has a technical issue that can be exploited to your advantage, it is "Totally not cheating" to use that exploit, because the game lets you do it--even if that exploit basically makes it so you cannot lose.
And further, "If you have an issue with it, you should take it up with the game's developers."
Newsflash-- it is still cheating.
In this case, the cheaters have a hand in developing the game, and have a vested interest in keeping the exploits-- and other people dont really have a choice to not play against them.
The ethics of the action are indepedent of the legality of the action. A cheater seeks an unfair means of getting ahead of the competition. Most offshore account providers have prohibitive minimum deposit values to make use of them, making them effectively unusuable by nearly everyone but the already wealthy. This makes them unfair, even though, should some outrageous circumstance drop shitloads of cash on a random joe, he is technically "able" to open one himself, if he knows about them.
A technical exploit in an online game is likewise available to anyone who knows about it and has the tenacity to exploit it-- everyone has the same binary user application after all, and play on the same servers. the rules apply to everyone. Theoretically, anyone can do it!
But doing such an exploit will get you just as banned. :)
Why? because it is cheating.
Thinking that everyone should cheat, and that by not cheating you are just dumb or something, is so unethically minded I dont even know where to begin.
The same applies to global finance. The system lets you do it. That does not make it stop being an unfair and abusive practice against less powerful market actors, and thus unethical to even consider.
Do you really not see the ethical problem?
When everyone evades taxes, no taxes are collected. When no taxes are collected, no vital services that maintain the society can be provided. The society ceases to function, and everyone suffers.
When some evade taxes, (to maintain their wealth, naturally!), but others do not, the ones evading the taxes privatize their gain (an orderly society with working essential services), while socializing the loss (All those other people have to pay for it.)
Sickeningly, those best able to shift that burden onto others, ar the least liklely to have serious, like changing consequences of having to pay, and the ones forced into the situation, are the ones most harmed by being forced into it.
Sheltering your wealth is NOT victimless, because no action is without consequence, and the ideal you have stated (everyone evades paying) harms everyone the most.
That's just taxes. There are numerous other ethical problems with simply sheltering fortunes against sagging economies through exploiting the world monetary system.
Really, you cannot see these?
Romney (last election cycle) pretty much admitted to using tax havens. I'd be surprised if Clinton wasn't using offshore accounts, or a very similar tax dodge. Trump - hell yes!
Once again behaviour that is outrageous and totally unacceptable in most of the world is just expected "business-as-usual" in the US
Isn't that a little discriminatory? The tldr of your post is basically if you are not a good salesman of yourself you deserve your lower pay. This implying every human is supposed to be good at making contracts? I am not sure life is "the wolf of wall street "...
Nonsense, the voting record of people indicates that they do not give a damn.
I disagree. One can only vote for alternatives when alternatives are available. When all parties stand on the smae side on this topic, then there are no alterantives to vote for.
>We have plenty of perfectly legal domestic tax shelters.
It's more than that - what the Panama company mainly provided was truly anonymous shell corporations. Generally the ownership of a company is a matter of public record so hiding funds in one is difficult. Creating a shell company is also nothing bad in and off itself. When however that shell company's ownership is secret - that's a problem. You can't know whose money it's handling, who to tax - or how that money was made (lots of these leaked names belong to nefarious gun runners and drug cartels and the like - even politicians hiding bribe money).
The main reason there are so few American names on the list is because unlike most countries America lacks decent regulation to prevent forming shell companies anonymously - in general it's laws here are as lax as Panama's. It's criminals and elites from countries where such laws DO exist that used this company to cash in on Panama's lax regulation but US regulations are generally no better. Why would an American criminal who wants to launder his money go and pay a Panama legal firm to create his shell company when he can get one from Delaware or Las Vegas (the worst of a bad bunch) for a 25 dollar registration fee without submitting a single document ? No identification, not so much as a false social security number...
Unicode killed the ASCII-art *
The trouble is- most people can't - we get taxed BEFORE we earn. These avenues are available ONLY to those who have the kind of incomes that you earn BEFORE you are taxed - like corporations or stock investors and the like.
In other words - it's impossible to benefit from this unless you are *already* rich - if you earn a salary, your taxes are deducted before you get your paycheck.
The biggest regressive factor in modern taxation is this:
Poor people pay tax, get the leftovers and have to pay their expenses out of that.
Rich people get money, pay their expenses and only get taxes on the leftovers.
To then allow them to avoid even the little they are due in a way that is not POSSSIBLE unless you happen to be in the second category is flagrantly corrupt and should be illegal.
Unicode killed the ASCII-art *