I share this blog from the Tax Justice Network, with permission:
As Britain prepares to host a global Corruption Summit in London next week, the Panama Papers have raised awkward questions about the country's role as an enabler of transnational organised crime. Meanwhile evidence is emerging that ordinary people in Britain no longer accept the elites' version of what constitutes corruption.
The latest edition of Tax Justice Focus — available here — points the spotlight on the British brand of corruption. While elites still talk about corruption as something that happens in another country (typically in the Global South), survey results from YouGov tell an entirely different story about how public sentiment in Britain is strongly in favour of prohibiting practices that have become normal in the past two decades. For example:
- 72 percent of respondents to the YouGov survey said that the practice of government ministers accepting corporate boardroom appointments on leaving office should be banned;
- 75 percent said the practice of senior civil servants accepting corporate consultancies should be banned;
- 62 percent said that inviting private corporations into government to help shape the regulation of business should be banned;
- 68 percent said that Britain's Public Finance Initiative arrangements for public projects should be banned.
In other words a huge majority of the British public want to ban many of the practices now established as the routine way in which Britain does business and politics. Public opinion on tax avoidance is even stronger, with 85 percent of British adults calling it morally wrong even when ‘legal' (which is not necessarily the case).
As Guest Editor David Whyte (How Corrupt is Britain?) comments in his editorial:
“We are overwhelmed by the scale, frequency and variety of corruption cases in Britain, from police manipulation of evidence, to over-charging in out-sourced public contracts, by way of cash-for-access scandals involving prominent politicians and price fixing, market manipulation and fraud in key sectors of the economy.”
TJN has long held the view that Britain is at the forefront of the global supply side of corruption. Ten years ago TJN's director John Christensen slammed the Transparency International Corruption Perceptions Index for corrupting perceptions of corruption, arguing that:
“The elephant in the living room of the corruption debate is the role played by the global infrastructure of banks, legal and accounting businesses, tax havens and related financial intermediaries in providing an offshore interface between the illicit and licit economies.”
Britain and its offshore satellites — including Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, Gibraltar, the Turks & Caicos Islands, and others — is the world's largest tax haven empire. As journalist and author Nicholas Shaxson (Treasure Islands: Tax Havens and the Men Who Stole the World) argues in his contribution to this edition of Tax Justice Focus:
“Prime Minister David Cameron . . . has the authority to require Britain's Overseas Territories and Crown Dependencies to create public registries of beneficial ownership, for starters. and he should not hesitate to exert that power if they resist. Anything less would be hypocrisy.”
Also in this edition:
Allyson Pollock examines how the Private Finance Initiative has been embraced by successive governments and enthusiastically promoted abroad, generating windfall profits for banks and others and driving the marketisation of health and education;
Vickie Cooper looks at how the London and the UK property market has become a laundry for tyrants, mobsters and tax cheats.
Steve Tombs considers how endemic corruption in the UK's financial sector, which relies on the active connivance of the state and leading political parties, has repeatedly defrauded countless millions of people in Britain and the rest of the world.
And in his review of Linda Ambrosie's book ‘Sun & Sea Tourism: Fantasy and Finance of the All-Inclusive Industry' Mark Hampton concludes that:
“The book . . makes a real contribution to our understanding of modern tourism multinationals, and how tax and tourism are, in fact, increasingly intertwined in the global economy with growing negative impacts for host destinations and local communities.”
You can download the full edition as a PDF document here.
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This was David Malone’s response to the Panama papers
http://www.golemxiv.co.uk/2016/04/panama-partners-in-crime/
““We have broken no laws and cooperated with the government at all times.”
And so I have been thinking about this phrase we keep hearing, about not breaking laws and cooperating with governments. Now obviously the first part is rubbish for the likes of HSBC, but perhaps not for the origin of the Panama papers themselves the Panamanian Law firm, Mossak Fonseca. I think they probably have been operating within the law. Doing so by having laws with more holes in than a sieve and governments who leave critical areas of compliance in the semi dark of self regulation or even connive with skirting round the rules. And this connivance is why I am so interested in the second part of the phrase we keep hearing, the cooperating with governments.
You see I think when we hear the whole phrase, in one variation or another, we are meant to think the two halves of the statement are linked. The bank, law firm or individual has never, at least not ‘knowingly’, broken the law and is now cooperating with the government. The cooperating is seen as the antidote and response to the embarrassing lapse in obeying the law.
But let’s tease the two halves apart. The ‘knowingly’ is precisely how HSBC, Wachovia, Citi or Standard Chartered all admit laundering was done at the bank, but are never guilty of having laundered it…not knowingly. It is always a huge surprise. A discovery which saddens and angers them. Which they then move on from…. with the blessing of their government.
This is how they are fined but never guilty, how dirty money can have engorged their balance sheet but they never lose their banking license.
I think we could be forgiven for getting the sneaking suspicion that governments cover for their banks.
So I look again at the phrase I started with and hear it differently now. Instead of hearing how the bank, law firm or individual is contrite about an ‘unwitting error’ about which they are now cooperating with the government, I now hear first a lie about not breaking the law, but then a startling truth. You see, I wonder if we shouldn’t think that the one truth being hidden in plain sight in all this is that the financial world has indeed been cooperating with governments — but doing so all along.
Does it not make more sense to think that what we are seeing is not a few rogue bank employees and lawyers breaking the law and embarrassing their employers and their pathetically useless, regulators, but rather two cooperating parts of a system of finance and government who are suddenly revealed together? It’s not dirty bankers and corrupt lawyers who are — now they have been caught — having to cooperate with government, to clean up. Not at all. I think we should at least consider that the better explanation is that the two, financial/legal world and government have been cooperating all along.”
Your thesis reflects much of the argument Ronen Palan has made over many years