Observations of an Expat: Hypocrisy

April 8, 2016 OPINION/NEWS


Tom Arms

Hypocrisy. That is the most damning charge that can be laid at the feet of the world leaders implicated in the Panama tax haven scandal.

So far 143 politicians around the world have been named. So have a fistful of business tycoons and stars from the worlds of film, sport, music and television. But I am not so concerned about them. They haven’t been salting away billions while preaching about belt-tightening and squeezing every possible tax dollar out of those who put them in power.

And the scandal has only just begun. More than 11 million documents were sent to the German newspaper Suddeutsche Zeitung, many times the number leaked by CIA whistleblower Edward Snowden. The documents stretch over 40 years and involve 210,000 trusts, companies, foundations and individuals. Suddeutsche Zeitung has circulated the papers to 107 investigative journalists in 36 countries. These journalists will be spending months looking for every reference to every local personality.

Of course, in several countries nothing will be reported. The Chinese leadership—which is purported to be cracking down on corruption—quickly extended the Great Chinese Firewall to encircle the Panama scandal. It is not surprising, President Xi Jinping’s brother-in-law has been implicated as have relatives of Mao Zedong, the great anti-capitalist helmsman himself.

The Arab press is also silent even though a raft of Arab royalty have been linked to the Panamanian law firm Mossack Fonseca as well as Syria’s President Assad and relatives of ousted Arab leaders Gadaffi and Mubarak.

As usual, Russian President Vladimir Putin has so far avoided being directly named as one of the tax avoidance/evasion beneficiaries, but several of his close friends have, and so has Banco Rossiya which is commonly referred to in Moscow circles as “Putin’s wallet.” Very little has been said in the Russian media other than to refer to yet another Western-inspired Putin smear.

But in today’s interconnected information-rich world these so-called statesmen can’t hide the truth forever. Both the iron and bamboo curtains are things of the past. People travel. They text. They email. They talk. And the more the leaders try to hold down the lid the more damaging the explosion when it finally comes. And it will come.  If you don’t believe me, just ask former Icelandic Prime Minister Sigmundur David Gunnlaugsson.

In recent months Putin has called on Russians to tighten their belts in the face of Western economic sanctions and a shrinking Russian economy. Arab leaders have hinted that plummeting oil prices will mean the introduction of income tax for the first time ever.  Ukrainian leader Petro Poroshenko—another alleged tax avoider—is appealing to the West to prop up his failed economy. They are all open to the charge of hypocrisy.

Conspicuous by their absence from this latest scandal are any prominent American names. Does this mean that Americans are more honest than the rest of the world? No. It just means that they don’t have to move their cash offshore to protect it from the long arm of the taxman. They have perfectly good tax havens in Delaware, Nevada and Wyoming. And you may rest assured that at this moment law offices in Wilmington, Reno and Cheyenne are busily constructing new firewalls to avoid the fate of Mossack Fonseca.

So how much money is involved? It is impossible to say with any certainty, but Christine Lagarde, Manging Director of the International Monetary Fund has spoken about hundreds of billions of tax dollars a year that should be paid into the world’s exchequers.

Possibly the most extensive research on the subject has been done by Gabriel Zucman, a University of California economist, who wrote “The Hidden Wealth of Nations.” He estimated that something like $7.6 trillion of the world’s wealth is salted away in tax havens.

The late, disgraced New York hotelier Leona Helmsley is reported to have famously said before being sentenced for tax evasion: “Only the little people pay taxes.”

They also vote. And if they can’t vote, they riot.







Tom Arms broadcasts on world affairs for a number of US radio stations including WTKF at http://www.wtkf107.com/. His Weekly Viewpoints discussion programme can be heard at 1830 EST on Wednesdays and his LookAhead at the next week’s main events on Fridays at 1800.



LookAhead Radio World Report for week commencing 11th April:








Tom Arms

I am a journalist, entrepreneur and historian with extensive experience in print, web and broadcast journalism. I started as a diplomatic correspondent, wrote several books (The Falklands Crisis, World Elections On File and the Encyclopedia of the Cold War), and then in 1987 started my own business (Future Events News Service, www.fensinformation.com) which over 25 years established itself as the world and UK media’s diary. Our strapline was: “We set the world’s news agenda.” I sold FENS in December 2012 but retained the exclusive broadcast rights to all of FENS data. To exploit these rights I set up LookAhead TV which produces unique programmes which “Broadcasts Tomorrow Today” so that viewers can “Plan to Participate.” LookAhead has appeared regularly on Vox Africa, Radio Tatras International, The Conversation and Voice of Africa Radio.

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