By Peter Ewart

A year ago, an unknown hacker leaked a massive dump of secret financial information about offshore shell companies and accounts of the international elite, including bankers, politicians, sports figures, as well as drug lords, criminals and Ponzi scheme fraudsters.The information, amounting to 11.5 million documents, is connected to the Panamanian law firm Mossack Fonseca, which for forty years, has helped members of the world’s rich and powerful set up thousands of shell companies and offshore accounts, in some cases, it is suspected, to avoid paying taxes in their own countries or in other cases to launder or hide illicit money.

The unknown hacker initially leaked the secret financial information to the International Consortium of Investigative Journalists (ICIJ) which, in turn, forwarded it to certain mainstream media outlets in Europe and North America.  These media outlets have now released selective bits of information on 12 current or former world leaders, as well as 128 politicians and public officials from various countries, several sports and movie stars, financiers, banks, and so on.  However, they have not, as yet, released the documents in their entirety and it is not clear that they ever will.

In a hyper-globalized world economy, offshore accounts for the wealthy pose a serious problem to the economies of many nation states.  It is estimated that upwards of 32 trillion dollars of assets could be hidden away in offshore accounts and shell companies (1).  In 2011, losses to the U.S. economy from non-payment of taxes alone are estimated to be $345 billion and, to the European economy, $350 billion a year.  This does not take into account the impact and social cost of money laundering and other criminal activities carried out through offshore accounts which can result in skewing real estate markets, stock market pumping, and other distortions.  How all of this can be investigated without violating the privacy rights of law-abiding citizens who have offshore accounts is a serious question.

That being said, one of the curious things about this scandal is the highly selective manner in which the Panama Paper documents are being released.  Instead of making all the documents available for both mainstream and alternative media to comb through, mainstream media outlets, such as the Guardian in Britain, McClatchy in the U.S., and CBC and Toronto Star in Canada, have total charge over which documents are released which, according to some reporters in the alternative media, may be resulting in journalistic bias.

For its part, Wikileaks, which has itself leaked many secret documents in the past, has criticized the selective leaking of documents and called for entire trove to be released in order to avoid such bias (2).  Others have charged that U.S. and European mainstream media outlets have unfairly targeted Vladimir Putin, president of Russia, in their news coverage.  Despite the fact that Putin’s name does not even come up once in the 11.7 million documents, his image was highlighted in much of the news coverage.  Indeed, some of the more lurid coverage seemed to suggest that the entire Panama Papers scandal was all about Putin and his cronies (3) (4).

It is true that several associates of Putin are named in the scandal, but basic evidential standards of journalism should be upheld, otherwise news coverage descends into yellow journalism.

And it is also true that simply having an offshore account or company does not necessarily mean that the holder is engaged in some sort of criminal activity.  In that regard, CEO of RBC, Canada’s largest bank  (which, the leak revealed, is associated with 378 shell companies registered with Mossack Fonseca), has stated, there can be “many legitimate reasons for setting up such companies” and that it is important not to “conflate tax evasion … with tax planning” (5).

Some analysts fear that selective release of secret financial documents can play into international politics and power games (6).  For example, they cite the fact that the International Consortium of Investigative Journalists is financially backed by U.S. government and big business organizations, including the USAID, Ford Foundation, Rockefeller foundation, as well as the anti-Russian financial oligarch George Soros (7).

Likewise the mainstream media conglomerates in Europe and North America who control the release of these secret documents have their own connections and interests.  As one commentator has suggested, why not make all the documents available and allow the names of these big media owners, editors and foundation funders to be run through the document search engine (7)?

One thing is clear.  Corruption is a huge problem on a world scale and offshore shell companies and bank accounts are an important contributing factor.  Yes, it is well known that countries like Russia, China and others have serious corruption problems.  But what about right here in North America?

For example, according to a top official from the Rothschild banking interests, the U.S. has become “the biggest tax haven in the world” for offshore depositors and tax evaders with some analysts even calling it “the new Switzerland”.  This has taken place after years of the U.S. government “lambasting other countries” for hiding offshore accounts (8).

Canada has its own problems with tax evasion, money laundering and offshore accounts.  News reports suggest that Canada “has done a terrible job of going after big-time tax cheats” especially overseas tax evaders (9).  In addition, it is estimated that Canadian multinational corporations have about $170 billion sitting abroad in overseas tax havens (10), and that illegal tax evasion advice regarding offshore accounts has been openly offered to clients by certain lawyers and bankers in Canada (11).

Indeed, just one day after the Panama Papers scandal was publicized, the Ottawa-based Financial Transactions and Reports analysis Centre of Canada (FINTRAC) announced that it has levied a $1.1 million fine against an unidentified Canadian bank for “failing to report a suspicious transaction and various money transfers” (12).  For some reason, the name of the offending bank has not been released, nor whether it is linked to the Panama Papers.

What is clear worldwide is that, despite some attempts to crack down, corruption has grown to an unprecedented scale in a digitized, globalized world where billions of dollars of dirty money can be shuffled around with the click of a computer mouse and channeled through potentially compromised financial institutions, law firms and other bodies.  All of this has been facilitated by widespread de-regulation of the financial and banking sector which, among other things, played a big role in precipitating the financial meltdown of 2008-2009 on Wall Street and elsewhere.

On a global scale, private interests are trumping public interest and the public good.  How to reverse this trend and put the public interest in first place, while respecting legitimate privacy, has become an issue of prime importance for all countries.  Paradoxically, while the digitization of the world has ramped up the magnitude of global corruption, it also has created the means by which it can be exposed as never before.

Peter Ewart is a columnist and writer based in Prince George, British Columbia.  He can be reached at: peter.ewart@shaw.ca

1. Katasonov, Valentin & Michel Chossudovsky.  “History of the Panama Papers: Offshore banking havens: Hidden agenda behind the 2013 operation ‘Offshore Leaks’?”  globalresearch.ca. April 5, 2016.  http://www.globalresearch.ca/tax-free-offshore-banking-havens-hidden-agenda-behind-operation-offshore-leaks/5331792
2. “Panama Papers: WikiLeaks’ Kristinn Hrafnsson calls for data leak to be released in full.”  Belfast Telgraph.  April 5, 2016.  http://www.belfasttelegraph.co.uk/news/panama-papers/panama-papers-wikileaks-kristinn-hrafnsson-calls-for-data-leak-to-be-released-in-full-34601909.html  
3. “Panama Papers cause Guardian to collapse into self-parody.”  off.guardian.org.  April 3, 2016.  http://off-guardian.org/2016/04/03/panama-papers-cause-guardian-to-collapse-into-self-parody/
4. Bridge, Robert.  “Panama leak reveals more about Western journalism than Vladimir Putin.”  Russia Today.  April 4, 2016.  https://www.rt.com/op-edge/338388-putin-western-media-leaks/
5. Posadzki, Alexandra.  “Panama Papers fallout pushes RBC to dig through 40 years of records.”  The Star.  April 6, 2016.  http://www.thestar.com/business/2016/04/06/panama-papers-fallout-pushes-rbc-to-dig-through-40-years-of-records.html
6. Parry, Robert.  “’Corruption’ as a propaganda weapon.”  April 4, 2016.  Consortium News.  https://consortiumnews.com/2016/04/04/corruption-as-a-propaganda-weapon/
7. “Corporate media gatekeepers protect Western 1% from Panama leak.”  craigmurray.org.uk.  https://www.craigmurray.org.uk/archives/2016/04/corporate-media-gatekeepers-protect-western-1-from-panama-leak/ S
8. Drucker, Jesse.  “The world’s favorite new tax haven is the United States.” Bloomberg News.  January 26, 2016.  http://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states
9. Raj, Althea.  “Liberals’ tax-evasion crackdown expected to have a big payoff.”  Huffington Post.  March 24, 2016.  http://www.cbc.ca/news/canada/tax-evasion-sophisticated-scam-revealed-by-cbc-hidden-camera-1.1874067
10. “Corporate tax avoidance ‘scheme’ hurting Canada, expert says.”  CBC News.  March 15, 2014.  http://www.cbc.ca/news/corporate-tax-avoidance-scheme-hurting-canada-expert-says-1.2572712
11. “Tax evasion: Sophisticated scam revealed by hidden CBC camera.”  CBC News.  September 30, 2013.  http://www.cbc.ca/news/canada/tax-evasion-sophisticated-scam-revealed-by-cbc-hidden-camera-1.1874067
12. “Canadian bank fined $1.1-million for failing to report suspicious transaction.”  BNN.  April 5, 2016. http://www.bnn.ca/News/2016/4/5/Canadian-bank-fined-11-million-for-failing-to-report-suspicious-dealing.aspx