Sunday, April 17, 2016

John Doe, "My life is in danger"

He leaked 11.5 million documents to the press, the Panama Papers.  He unveiled tax evasion, illegal shell corporations, fraud, and avoidance of international sanctions.  More, there are records of hidden wealth from monied players around the world.  (This is all from just one 'corporate service company' in Panama.  There are thousands more in various countries.)
This is all from just one 'corporate service company' in Panama.

"John Doe", the whistleblower who leaked the documents to the German newspaper Süddeutsche Zeitung, remains anonymous, even to journalists on the investigation. "My life is in danger", he explained.  He cited income inequality as the reason for his action, and said he leaked the documents "simply because I understood enough about their contents to realise the scale of the injustices they described". 

Extreme inequality is spreading across the
world via the international marketplace.
Documented: heads of state, former heads of state, former prime ministers, dozens of family members, and of course hundreds of lower level government officials. Corporate players appear as well. The client list includes numerous donors to former US President Bill Clinton and former Secretary of State Hillary Clinton, as well as to the Clinton Foundation and its associated charities. There are mentions of Donald Trump, although none appear to refer to the person but rather to businesses using the name.  According to the documents, 28 German financial institutions emerge in the Panama Papers along with 500 banks from around the world.

The reasons for such offshore holdings are (1) to shelter funds obtained under questionable circumstances, and (2) to insulate transactions from regulatory oversight. Why would someone, an elected official perhaps, need to move wealth offshore?  Or corporate players?  How might someone come up with enough money to need an offshore shelter?

Around US$2 trillion has passed through this one firm's hands, some legally, some not. Thirty clients were at one time or another blacklisted by the US Treasury Department, including businesses linked to senior figures in Russia, Syria and North Korea. Documents revealed £10 million in cash from the sale of gold stolen in the 1983 Brink's-Mat robbery and how it was laundered. Four Americans with offshore shell companies are named in the documents; all had previously been either indicted for or convicted of financial crimes such as fraud or tax evasion.  Most American offshore activity is conducted through the Cayman Islands, not Panama.

On extreme inequality:  Global wealth is increasingly being concentrated in the hands of a small wealthy elite, and the scale is difficult to understand.  (Today, 62 of the world's wealthiest people own more than the poorer half of the world.)  These wealthy individuals have generated and sustained their vast riches through their interests and activities in a few important international economic sectors (finance, pharmaceuticals, etc.). Companies from these sectors spend millions of dollars every year on lobbying to create a policy environment that protects and enhances their interests further. The most prolific lobbying activities in the US and EU are on national budget and tax issues; public resources that should be directed to benefit the whole population, rather than reflect the interests of powerful lobbyists.


The biggest and most successful companies from both the finance and insurance sectors and the pharmaceutical and healthcare sectors achieve extremely high profits and therefore command substantial resources which they use to compensate their owners and investors, helping to accumulate their personal wealth. But these resources are also used for economic and political influence. Companies use their resources for influence through lobbying governments on issues and policies which affect their business interests. During 2013, the finance sector spent more than $400 million, and the pharmaceutical and healthcare sectors spent more than $487 million on lobbying in the USA alone. In addition, during the election cycle of 2012, $571 million was spent by companies from these sectors on campaign contributions. The financial sector is the largest source of campaign contributions to federal candidates and parties.  Why might that be?

Industries and individuals hide their wealth offshore for various reasons.  At least 2,400 US-based clients were found in the Panama Papers, and while many of their transactions were 'legal', the service company offered advice to its clients on how to evade US tax and financial disclosure laws.

A starting salary in the finance industry is perhaps $400/day for a newbie.
It moves quickly to five or ten times that amount for the successful players.

Monied interests shape the developed economies by purchasing regulatory favor.  Wealth flows to the elite, and the bottom 90%+ see little or no benefit from their own increased productivity and contribution. Wages for them have been stagnant for more than forty years.  Poverty persists as the GAP widens between the elite and the rest.  In the developing world, resources and money flow into the coffers of the wealthy elite and to the developed economies.

The laws governing the finance industry are poorly written and the international marketplace is no more civilized than the drug trafficking industry.  The good of the citizenry isn't part of the business model of multi-national corporations.  Not anywhere, as best I've been able to determine, and the GAP widens explosively like never before in history.  What might that suggest?

    At the other end of the kleptocratic spectrum -- poverty is created. Poverty is neither inherent in nor a product of nature since by its nature, poverty is an unnatural state imposed upon the powerless. Humans have created engines for extracting vast amounts of wealth from nature, using the economic power of that largesse to exploit, subjugate and marginalize the majority of the world’s population in effect keeping them in a chronic state of poverty.  

    True?  Why might John Doe risk his life?  Or Snowden?