Pandora Papers: What’s next?
It’s common knowledge that the rich and powerful of the world dodge taxes and funnel wealth into secretive offshore accounts and shell companies.
They have been doing this for decades and won’t show signs of stopping unless tough financial regulations are implemented worldwide. For the average citizen, tax evasion and money laundering means hefty penalties and jail time, whereas these monetary misdemeanours are merely a sport for the elite as proven time and time again.
The Pandora Papers leaked almost 12 million documents and files exposing secret wealth and dealings of world leaders, politicians and billionaires. The data was obtained by the International Consortium of Investigative Journalists (ICIJ) in Washington DC which has led one of the biggest ever global investigations. More than 600 journalists from 117 countries have looked at the hidden fortunes of some of the most powerful people in the world.
But how will the world’s Government’s react to those mentioned in these leaks? Will they kick down the doors of their mansions and drag them before the Courts or are the authorities themselves complicit to the crimes? When the global COVID-19 pandemic is ravaging economies, when our individual financial security hangs in the balance, the Pandora Papers becomes a rallying cry for justice.
While most of us are looking at a future of joblessness, shortage and uncertainty, the wealthy and the powerful have been busy avoiding their civic obligation and hording up all that cash they are supposed to pay to the State; the cash that could have gone to improving our infrastructure, services and lives.
But just a day after the leaks several world leaders have denied wrongdoing after featuring in a huge leak of financial documents from offshore companies. On the other hand, Pakistan’s Prime Minister Imran Khan has vowed to investigate citizens linked to the Pandora Papers. Hundreds of Pakistanis, including members of Khan’s Cabinet, are linked to the leak. Likewise, the US State Department said it is reviewing findings of leaked financial documents but is not in a position to comment on specifics.
The leaks also revealed a location that nobody could have guessed is a tax haven. When you think about where rich people are hiding their money it’s usually Switzerland, Panama or Hong Kong. What surprised everyone with the Panama Papers was that they prominently mention the US State of South Dakota. South Dakota is a classic low-tax State.
It has no income tax, no inheritance tax, and no capital gains tax. The fees paid by trusts accrue to the State’s treasury. One American historian Christopher Lasch elaborates this phenomenon as post-modern capitalism characterised by an elite which defines itself as entirely separate from civic and national concerns. Gone are the days of patriotic industrialists pushing countries to new economic heights, instead we have selfish jetsetters who are nothing more than separatists compared to ordinary tax paying citizens.
Lasch argues that the markets on which the fortunes of the new elites rely are tied to enterprises that operate across international boundaries and have more in common with their counterparts in London and Brussels than with the masses. Their children go to exclusive private schools and pay for their own system of high-class healthcare, security and services that makes them so much removed from the public and have no need to pay for the public services they don’t even use.
The Pandora Papers has also collected evidence of offshore shell companies belonging to the husband (Thirukumar Nadesan) of former Deputy Minister Nirupama Rajapaksa. The wealth funnelled to these tax havens are in the millions and including an art collection. Nadesan had also sought citizenship in Cyprus in 2013 where his children’s applications had been successful. President Gotabaya Rajapaksa has instructed the Director-General of the Commission to Investigate Allegations of Bribery or Corruption to investigate the matters relating to the Pandora Papers on Sri Lanka and report to him within a month. We will be waiting