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addiction of wealth
A Coca Cola executive once told me that he had to throw an underling out of his office. Why? The guy attempted to ingratiate himself by proposing that Coke pump up the bottom line big-time with accounting practices that would locate profits off-shore, beyond the reach of the IRS.
If your fondness for money exceeds your sense of civic responsibility, as say, in the case of our illegitimate president-elect, you would not throw this person out but rather promote them.
Investigative reporters Bastian Obermajer and Frederick Obermaier of the German newspaper Suddeutsche Zeitung, were contacted by a disgruntled source somewhere deep in the off-shore world of a Panamanian law firm called Mossfon. The source was weary of seeing wealthy people getting away with outrageous behavior.
He, or she, fed the reporters a massive trove of documents that exposed heads of states, oligarchs, defense contractors, mafia dons, gamblers, fraudsters, drug and arms dealers, prominent families and individuals to embarrassing disclosures about their tax avoidance schemes, money laundering, corporate shells etc.
The power of this class (who else needs financial management experts?), being in the cat bird’s seat when it comes to influencing legislation, means that much of what they did was perfectly legal.
Russian President Putin was one of these and was quick to point out that it broke no laws.
Also of note, several news organizations the whistleblower contacted were not interested, probably part of their knee-jerk shielding of the 1% who of course own the mainstream media.
You want to keep your job you don’t investigate the boss. As it turned out the cache was so overwhelming that the newspaper decided to share with an international investigative reporter organization. There’s safety in numbers, at least in the nations that have constitutional protections.
The Whistleblower was quite accurate in his/her assessment. The tax burden, especially in the U.S., has shifted from corporations to workers since the 50s, with a vengeance starting with Reagan.
Those who benefit least from government policies pay the most. Commerz Bank in Frankfurt, for example, received $18 billion in taxpayer subsidies during the financial meltdown yet routinely helped German clients avoid taxes.
The preponderance of the Panama Papers concerns clients of just one firm, Mossfon of Panama. We can assume other companies do similar financial management “services” for the wealthy allowing them to avoid taxes, law enforcement, and vengeful spouses. 52 of 54 African countries have used Mossfon. Over $500 billion has fled Africa, twice as much as its debt.
In an accompanying 2,000 word “manifesto,” the leaker claimed their intent was to expose inequality and how the wealth management industry had abetted crime, drug dealing and fraud on a truly grand scale involving trillions of dollars.
The various experts cited in the article hold little hope for reform. As the new administration comes into power here we can be sure that this particular business-as-usual will proceed unimpeded, probably with new vigor.
They do suggest that transparency would help, maybe embarrassing businesses and individuals into paying their share. We have public lists of who owns property, why not of who possesses wealth?
Taxing corporations based on where their sales occur is another measure that might recoup some of the lost revenue. If a corporation’s sales are primarily in the U.S. its taxes shouldn’t be based on sales in Bermuda. It isn’t just some numbers short on a balance sheet. Governments can’t adequately address inequality, poverty, disease, and starvation when the needed funds are parked off-shore.
Corporations occupy our government so there is little chance those goals would even arise and even less chance that corrective measures would see daylight. Since billionaires, again, own the media, there is little chance the public will even know of these shenanigans, as opposed to say, Brad Pitt’s latest divorce.
Google – if you use Goodsearch instead of Google, a penny per search goes to your favorite non-profit – made $13 billion by shifting its profits to the low-tax haven of Bermuda.
Apple funnels profits to the Cayman Islands to this same end, all perfectly legal. Apple however was hit with a $13 billion fine when the European Commission ruled that Ireland’s low tax rate amounted to an illegal subsidy. Ireland was only one stop on a Byzantine money route Apple had designed to reduce tax obligations.
The lack of regulation and secrecy off-shore is the draw and like the downward spiral of sweatshop wages and work conditions, banks are subject to competition. The client can just move on to whomever offers the least tax, regulation and the most secrecy.
The Koch Brothers et al., and Trump-level wealth preaches non-regulation as if it were a sacred principle blessing us all but we know, when we remove the blinders, who the beneficiaries actually are. I mean beneficiary in the sense that any addict benefits from the object of their addiction though that addiction ultimately represents dysfunction. When the addiction creates immense suffering, comes time for an intervention. When the addiction is unsustainable and leads toward irreparable environmental damage and extinction, it is time for an alternative.
The election of an unapologetic denier of reality suggests that it might be too late.
Perhaps some other planet in the vast cosmos will succeed in evolving beyond greed and war.
- Image: Offshore bank by Tom Ferguson.