The inevitable and most plain fact about the Panama Papers leak is starting to be grasped by a few folks. Contrary to what the leak seems to confirm at first glance “it’s those horribly corrupt third world countries that are at their shenanigans again”, the fact is the richest countries in the world are the greatest offenders – since they were the ones who set up this corrupt financial and fiscal system in the first place.
Their legislators and politicians are the ones who crafted it, at the behest of the elites which they serve, often through various kinds of disguised bribes and political quid pro quos.
Their militaries are the ones who move in and murder and plot and bomb any time anyone in a developing country tries to elect into power someone with ethics who is intent on really fighting the destructive, corrupt, crony capitalism that is imposed by the sword on their suffering populations.
And so, among the greatest offenders of fiscal and financial corruption, who do we find? Why, surprise, surprise, the US and Europe (which has a particular nefarious member, the UK).
Thus RT’s article: Britain is the heart and soul of tax evasion by Dan Glazebrook.
The British government’s claim to be tackling tax evasion is about as credible as Al Capone claiming to be leading the fight against organized crime. In fact, Britain is at the heart of the global tax haven network, and continues to lead the fight against its regulation.
For whilst corruption exists in every country, what enables that corruption to flourish and become institutionalized is the network of secretive financial regimes that allow the world’s biggest criminals and fraudsters to escape taxation, regulation and oversight of their activities. And this network is a conscious creation of the British state.
Of the 215,000 companies identified in the Mossack Fonseca documents, over half were incorporated in the British Virgin Islands, one single territory in what tax haven expert Nicholas Shaxson calls a “spider’s web” of well over a dozen separate UK-controlled dens of financial chicanery.
In addition, the UK was ranked number two of those jurisdictions where the banks, law firms and other middlemen associated with the Panama Papers operate, only topped by Hong Kong, whose institutional environment is itself a creation of the UK. And of the ten banks who most frequently asked Mossack Fonseca to set up paper companies to hide their client’s finances, four were British: HSBC, Coutts, Rothschild and UBS.
HSBC, recently fined $1.9bn for laundering the money of Mexico’s most violent drug cartels, used the Panamanian firm to create 2,300 offshore companies, whilst Coutts – the family bank of the Windsors – set up just under 500.
That Britain should emerge as central to this scandal is no surprise. For as Nicholas Shaxson, a leading authority on tax havens put it when I interviewed him in 2011, “The City of London is effectively the grand-daddy of the global offshore system.” Whilst there are various different lists of tax havens in existence, depending on how exactly they are defined, on any one of them explains Shaxson, “you will see that about half of the tax havens on there, of the ones that matter, are in some way British or partly British.” Firstly, are “Jersey, Guernsey and the Isle of Man: the crown dependencies. They’re very fundamentally controlled by Britain.” Then there are the Overseas Territories, such as the Caymans, Bermuda, and the Virgin Islands, in which “all the things that matter are effectively controlled by Great Britain.”
Of course, it suits the British government to portray all these territories as ‘autonomous’ or ‘self-governing’ in order to provide itself with plausible deniability about what they are doing. But the reality is they are run by a governor appointed by the Queen on the British government’s advice.
Obviously the British government, as well as American and European Union financial and fiscal authorities all know how this system works. They know it perfectly well because they were the ones who crafted it down to every detail:
Casey Gill, one of the earliest lawyers specializing in offshore operations explained how legislation was devised in the Caymans: tax experts and accountants would fly in from all over the world “and say ‘these are the loopholes in our system’. And Caymans legislation would be designed accordingly,” often by a conglomerate run by Gill, before being sent to the British Foreign Office for approval. Shaxson asked Gill if Britain, who had the power to veto such legislation, ever raised any objections. “No,” he said, “Not ever. Never.”
The entire UK-controlled web is home to offshore deposits estimated in 2009 to be worth $3.2 trillion, 55 percent of the global total: equivalent to roughly $500 for every man, woman and child on the planet.
Another point underscoring what a failure our so-called modern democracies are. A democratic system cannot work if both its people and its respective authorities are corrupt to the core, which is what we see in the US, the UK, and France, just to name three of the greatest offenders.
What we have is corruption run amok, backed by state or private repression, whenever necessary.
Not only that, this system, as Glazebrook explains so clearly, is the same old, same old colonialism of the past now disguised in a shameless fraudulent cover of independence.
This web emerged In the 1960s. Whilst ostensibly involved in a process of ‘decolonization’, in fact the UK hung on to a large global network of small, sparsely-populated islands: “The British empire”, Shaxson wrote, “had faked its own death.” These islands were to serve the same imperial purpose the empire had always had: the projection of British power and the channeling of African, Asian and Latin American wealth into Britain.
Nicholas Shaxson is a leading authority on tax havens, interviewed by Glazebrook. And:
In Shaxson’s words, the role of these tax havens is to “capture passing foreign business and channel it to London just as a spider’s web catches insects” whilst also acting as a “money laundering filter that lets the City get involved in dirty business while providing it with enough distance to maintain plausible deniability.”
When you see pictures of millions suffering starvation and misery, lack of health care and education in African and Latin America, this system provides a part of the key.
In 2008, Global Financial Integrity estimated that flows of illicit money out of developing countries into tax havens were running at about $1.25 trillion per year, roughly ten times the total value of aid given to developing countries by the rich world. Whilst those such as Cameron are more interested in handwringing about ‘corrupt African governments’ than in examining the system that enabled and promoted this corruption, tax havens are facilitating the plunder, by the London banks, of African wealth. And they are doing so because this is what they were designed to do – to continue the extortion of colonialism, just at the moment Britain was forced to give up the bulk of its formal empire.
Notice that UK and American MSM papers and news producers are not admitting any of this, and continue to spin the story in a way that serves to hide the big picture of Western plunder and corruption.
Let us hope, however, that with the Internet there is a bit of a chance for more people to understand that the root causes for global corruption lie in the West, those with the greatest power. Local corrupt governments in other parts of the world, while also guilty, are only dancing to their masters’ tune. Merely putting a few corrupt third world leaders in prison or carrying out assassinations, as the West is so fond of doing now and then, won’t change a thing in the overall scheme.