The Flood From Panama | The American Spectator | USA News and Politics
The Flood From Panama
by

It’s not a leak, it’s a tidal wave. The documents (illegally) obtained from the Panamanian law firm Mossack Fonseca by the grandiosely-named “International Consortium of Investigative Reporters” comprise about twelve million documents going back about forty years. It’s some 2.6 terabytes of information. (The entire Library of Congress consists of about fifteen terabytes of data.)

The size of the leak is less important than the content. Mossack Fonseca specializes in forming offshore corporations, trusts, foundations, and other legal entities. In many cases, they are entirely legal. They may be created legally to do business overseas and keep earnings and savings away from domestic taxation authorities. Mossack Fonseca insists it has vetted its clients to ensure their businesses are legal. But among the hundreds of governments, companies, and people involved is almost certainly a massive amount of corruption.

Many, if not all, of these business arrangements are created in the most complex manner possible to conceal the true owners and beneficiaries. Like Russian matryoshka dolls — any number of figures, one inside another, each one progressively larger — each layer has to be taken apart to get to the people who are profiting.

So far, Sigmundur Gunnlaugsson, prime minister of Iceland, has resigned over the Panama Papers revelations. UK Prime Minister David Cameron took the extraordinary step (for a Brit politician) of publishing his tax returns after it was revealed he’d benefitted from offshore deals his father had made.

Even those closet capitalists in Communist China are implicated. Relatives of Chinese President Xi Jinping — including his brother-in-law — were revealed to own, or have owned, secret offshore companies set up by the Panamanian lawyers. The Chinese government has written the whole matter off as another Western plot against them but took the trouble to make it impossible to search the term “brother in law” in the Internet.

The Russian government had the reaction you’d expect. Russia’s president, Vladimir Putin, said that because he wasn’t named in the documents, there was nothing to talk about. And, of course, he said that, “In this connection, attempts are made to weaken us from within, make us more acquiescent,” painting the whole Panama Papers leak as another American plot against him.

Russia didn’t invent paranoia or conspiracies but, like the matryoshka doll, it has made an art of them. Consider Sergei Roldugin, one of Putin’s close pals. A cellist, Roldugin is probably the highest paid person in his profession. According to the Panama Papers, Roldugin has offshore companies registered in his name that are worth hundreds of millions of dollars. As the Guardian reports, most of the money from these corporations is recycled — i.e., laundered — and passed back to Russia.

At least $2 billion in such transactions through Roldugin and others evidently comes from money earned by Russian oil companies Lukoil and Rosneft. And they pass to and through Bank Rossiya, which American intelligence and banking authorities believe is Putin’s crony bank. It points to evidence that Putin — who called himself “your humble servant” in the statement claiming he wasn’t named in the Panama Papers — may have personal wealth approaching $200 billion. That would make him the wealthiest man in the world.

Masha Gessen’s indispensable book, The Man Without a Face, recites the little-known history of Putin’s rise from an obscure KGB officer to become deputy mayor of St. Petersburg and now Russia’s most powerful man. As she writes, he has done so with the assistance of his aristo-cronies and, certainly, the KGB/FSB which apparently picked him and developed his career to ensure its continued power.

Last December, BBC published an article entitled, “Who Runs Russia with Putin.” It reported that when Putin first came to power, he was asked which of his colleagues he trusted most. Putin named five men:

  • Nikolai Patrushev, director of the FSB (successor to the KGB) from 1999 until he was appointed Secretary of the Russian security council;
  • Sergei Ivanov, former Russian defense minister and deputy prime minister, now head of “presidential administration”;
  • Dmitry Medvedev, who stood in for Putin as Russian president from 2008-2012 and is now prime minister;
  • Alexei Kudrin, former economic minister and now private counselor to Putin on economic matters; and
  • Igor Sechin, former government official and now head of the Rosneft state oil company.

We don’t yet know, and may never know, how many billions of dollars these men have taken offshore through the Panamanian law firm and others around the world. They will have funneled it back to themselves in Russia or hidden it in bank accounts in nations such as Switzerland where secrecy is still possible. Perhaps the investigative reporters will find these five names in the Panama Papers, but probably not. The Russians are highly adept at hiding such transactions.

Putin and his cronies, using their crony-bank Bank Rossiya, have been looting Russia for more than a decade. That is of concern to us because they have empowered Putin, feeding his ego, filling his pockets, and consolidating his power. We can’t do anything about Putin’s wealth. The reporters investigating the Panama Papers are likely to turn their attention elsewhere.

They may find fertile ground in Donald Trump’s wealth and the media can be counted on to produce whatever evidence they find at the least opportune time for his candidacy, if he is the Republican nominee. An equally fertile ground, which the investigative reporters and media will work hard to ignore, is the Clinton family foundation. Its possible concealment of financial transactions in Panama and elsewhere are certain to be hidden as well as the Russians’.

Our government, and many others, will want access to the Panama Papers to find evidence of tax cheating. There will be scandals announced, whether or not the facts constitute illegal dealings, because the smell of offshore deals is anathema to voters. But there’s a great deal of difference between tax cheating and tax avoidance.

Remember the 2012 manufactured “scandal” of Mitt Romney’s offshore wealth? There was nothing illegal about Romney’s actions. He, like any sane person — even the possibly-sane Donald Trump — wants to avoid paying taxes unnecessarily. Nevertheless, the accusations and publicity surrounding offshore deals can damage candidates. We will have to wait for them to unfold. You can bet they will.

Sign Up to receive Our Latest Updates! Register

Notice to Readers: The American Spectator and Spectator World are marks used by independent publishing companies that are not affiliated in any way. If you are looking for The Spectator World please click on the following link: https://thespectator.com/world.

Be a Free Market Loving Patriot. Subscribe Today!