Panama - The Unthinkable Truth

One of the fundamental truths about journalism is that more often than not, the biggest stories are the ones right under our noses: the stories that break and which are huge but which with retrospective vision really are not surprising in the least – all that was required was for somebody to turn over the stone and expose what lay beneath.

Into that category comes the Panama scandal.

It’s really not a surprise that the world’s wealthy have contrived to hide their assets on a massive scale. What is more disturbing is the apparent complicity of the global banking system and the apparently tacit contrivance of the global political establishment. Indeed, politicians representing a sizeable proportion of the world’s population are deeply involved, often personally.

It brings to mind one of the “Unthinkable Futures” published by musician Brian Eno a number of years ago. The premise of Unthinkable Futures was that what seems utterly improbable today, may well be commonplace in the not too distant future. Consider the following Unthinkable Future in the context of the global tax haven scandal:

“It turns out that nearly all the conspiracy theories you ever heard were actually true — that the world really is being run by 150 malevolent men with nasty prejudices.”

As Eno’s colleague in the exercise, Kevin Kelly says: “Much that is happening today would have been dismissed as unbelievably bad science fiction only 15 years ago. The US with secret prisons torturing Muslims? Street sweepers in India with their own cell phones? Obesity a contagious disease? A trusted encyclopedia written by anyone? Yeah, right, give me a break.”

So the main difficulty with the Panama scandal is not in fact the millions and millions of tax revenue foregone by cash-strapped states, particularly in the developing world, it is more to do with another damaging blow to credibility of governments and hence to democracy. The idea that governments throughout the world would apparently contrive to preserve systems and practices designed to keep secret and untaxed the wealth of the super-wealthy.

It is this that led the Guardian to abandon its journalistic reserve and objectivity to label Prime Minister David Cameron a “Panama prat”.

At this point it seems the involvement of Irish citizens in the Panama affair seems relatively slight but before we congratulate ourselves on our probity it should be remembered that we Irish have a long-standing attraction to the offshore world.

Beaten down by excessive taxation and reined in by exchange controls until the late-1980s, Irish citizens have long sought to get access to a more benevolent regime – something readily accommodated by the Irish banks. Remember the bogus non-resident account scandal? The Revenue clampdown on this and the widespread uncovering of offshore activity on the part of Irish citizens led to the closure of Irish bank's Isle of Man operations in 2012/13.

Over the past few days a host of individuals have been queuing up to reassure the sceptical public that having money offshore is in fact a perfectly respectable activity. That may be for some individuals but where this argument falls down is when the individuals in question move heaven and earth to preserve secrecy over their affairs. The awkward question arises: if offshore is ethical, then what is the problem with removing secrecy?

It would be perfectly easy for any government to pass a law for the beneficial owner of an offshore trust or bank account to be required to disclose that fact in their country of residence. It would then be up to Revenue to adjudicate on its legitimacy or otherwise.

Neither the government and certainly not the UK, where the London property market has become the world’s greatest money laundering operation, seems to have the appetite for this. Could it be that there is really a giant conspiracy to facilitate the wealthy and their massive support professions such as legal, banking, accounting and PR. Or is that just unthinkable?