Gordon Campbell on how class colours the reactions to the Panama Papers

Not many heroes so far in the Panama Papers saga, but any number of villains. Those villains happen to include: criminals laundering their ill gotten gains, terrorists funding their nefarious activities, and shadowy figures guilty of varying levels of larceny stashing their wealth in bolt-holes, offshore. Much of the talk about the need for greater “transparency” and “reputational risk” is about whether New Zealand is aiding and abetting such people – either (a) consciously for gain (b) carelessly or (c) via an ideological reluctance to regulate the foreign trust sector.

In the murkier, moral grey zone however, reside the lawyers and lobbyists and enablers who profit from this trade – some of which is legal, and some of which isn’t. There are also the pliable politicians, and the lobbyists out to influence them. In addition, there are the investors hiding money from the taxman quite legally – and apparently feeling few pangs of conscience about being social parasites.

So far, the policy response to the Panama Papers revelations has reflected the differences – and yes, these are class differences – in how the problems are viewed. Or indeed, over whether there is any problem at all. There are politicians (eg Prime Minister John Key) who seem willing to use whatever tactics they can find to muddy the pond.

In all likelihood, Key may get away with it, politically. Most of the public have more pressing things on their minds than the transparency rules surrounding foreign trusts. Many people also probably view the Panama Papers as just the latest version of a familiar story: of rich people using lawyers to escape paying a fair share of tax on their wealth. Labour and Green politicians have traded on the underlying public resentment of that situation to get the Panama Papers issues up on the rails, but they’ve then been quickly stymied by the blurry distinctions between tax evasion – which is illegal – and tax avoidance, which is legal. Politically, it is a hard sell to bang the drum that foreign trusts are a very, very bad bolt-hole for some rich people to hide their money from the taxman, while simultaneously saying that oh, but some other trusts are a quite acceptable way for some rich people to hide their money from the taxman.

The media’s role in all of this? On one hand, the media have done a great job of reporting on and evaluating the Panama Papers. The collaboration with the German newspaper holding the initial leaked data, and between ONE News, RNZ and journalist Nicky Hager has been a breakthrough. In Hager’s case, it has been long overdue. For the past 20 years or more, Hager has been an outstanding journalist of global standing, but he has been treated – entirely because of political timidity – as an outsider, and someone to be kept carefully at arm’s length by the mainstream media. Lets hope that the inclusion of Hager within the tent this time, is the beginning of a trend whereby our main media outlets will judge potential allies on their merits of their work, rather than on how the Beehive might react.

On the other hand – and this is where the class difference comes in – the lawyers and accountants dealing in foreign trusts don’t seem to think they’re engaged in anything that’s inherently dodgy. Nor do many of their counterparts in other white collar occupations, including the media. When Labour leader Andrew Little for instance claimed this week that New Zealand’s growth industry in foreign trusts was “a grubby little business” the RNZ presenter’s reaction to that term was quite interesting:

Presenter: Right. And all the people who are operating in it, fit that description, do they?

Little: What ? The grubby little industry? Of course that’s what it is. They know that.

Presenter: So all those people who are working in this industry – all the lawyers, all the accountants and officers. All of those people in that $30 million industry are grubby?…….

It was the industry, Little explained, that he had described as ‘grubby.’ Safe to say, the same level of concern about reputational damage is often not quite as evident when the media is discussing other forms of socially damaging behaviours prevalent say, among the underclass. Likewise, the politicians and corporates who commonly avail themselves of trusts to shield their wealth from the taxman, are showing little sense of urgency about the Panama Papers revelations.

The problem is not simply the cosy relationship between say… Key, his personal lawyer, the lawyer’s financial interest in the status quo, and the use of prime ministerial name dropping to stop IRD’s planned reforms in their tracks. That was bad enough. Yet the wider problem is that those in power seem to be struggling to view the tax vehicles in question as anything other than business as usual. As the Scottish comedian and Guardian columnist Frankie Boyle pointed out, there’s a shared world view at work here:

If you spend a sizeable chunk of your career making sure corporations can take their money offshore, and hope to work for those companies later in your career with some title like Non-Executive Director Of Thanks For All The Favours, and if corporations actively court political influence through massive lobbying operations, then you will end up with a certain level of symbiosis.

To such folk, the secrecy involved is also merely a necessary means to a desirable end. From the TPP to the workings of foreign trusts, one must needs resort to secrecy, in order to avoid the scrutiny of the baying mob. Again, as Boyle says:

Perhaps we have all become too cynical. Why should we be suspicious of people who hide money deep within multiple shell companies on a tax-haven island with the transparency of a lead-lined coffin? It’s like being suspicious of your husband just because he’s hidden a second mobile phone in a box of Maltesers in his gym bag, wrapped in an old dust sheet, in the car, in the space where the spare wheel should be. This scandal suggests some complex element in the British psyche that knows this kind of thing is happening but can’t bear to be confronted with the knowledge.

All of which goes to show the uphill struggle that will be involved in fashioning an adequate policy response to the Panama Papers revelations, much less to marshal the political support required to get those policies through Parliament. The outcome the public would like to see is one whereby the rich and the relatively wealthy – be they individuals or firms – are required to pay a fairer share of tax on their wealth. Currently, wage and salary earners are sitting ducks for the IRD. The public would like to see the same rules applied with equal zeal to the wealthy. Therefore, the policy package required would need to narrow to the point of invisibility the difference between tax evasion and tax avoidance. It would mean tightening the tax screws on trusts, and enacting a meaningful tax on capital gains.

Safe to say though, a level playing field on taxation will not be achieved by tinkering with the transparency rules on foreign trusts in order to make life a bit more difficult for the occasional international fraudster on the lam, or the odd Colombian ‘car dealer’. Ultimately, the reputational risk that matters is not whether New Zealand is or isn’t seen to be a tax haven by some invisible entity tut-tutting about us overseas. It is the risk to democracy here at home, of a system whereby the wealthy avoid tax, whether illegally or via the current rules on what constitutes legality. Boyle again, got that one right :

In the end, as a senior politician having spent a career in what is the PR wing of corporatism, offshore tax arrangements might well be one of the few things you know anything about. I mean that quite literally. Politics is full of people who don’t know the price of a pint of milk but do understand the incorporation of a shell company. Why wouldn’t they have a trust in Panama? Corporations may hire celebrity spokesmodels, personify themselves as mascots, and in the US, demand that they have the constitutional rights of people, but they are not people. They are blueprints for making money, and they don’t address their social obligations because they don’t care.

Aesop’s Fables

Early next month, Aesop Rock aka Ian Bavitz turns 40. Hard to think of a more literate, more lyrically complex hip hop artist, with some of his stuff being as intricately packed and internally rigorous as a John Donne poem. Aesop’s new album The Impossible Kid is a tribute of sorts to his late colleague Camu Tao, who died of lung cancer in 2008. Previously, the El-P hit track “The Full Retard” had sampled a Camu track for its hook, and Camu did throw a large shadow over El-P’s entire Cancer 4 Cure album. To a point reportedly where this generated friction between El-P and Aesop Rock, over the right and proper way of dealing with the Camu Tao legacy.

Here are a couple of tracks from The Impossible Kid… “Get Out Of The Car” is a short piece containing the lyric that lends the album its title, while “Mystery Fish” deals with street life and the homeless in an alley Aesop used to live on in San Francisco :

Buzzed, gross and wholly unloved
Still hear an ex in his head yelling, “kiss the ring”
From a fortune to a Fisher King
Or from assisted care, blisters in his hair
New day, new diary of disrepair
Soups on, {soupcon?] 2-ton crucifix to bear
No shoes, no shirt, no fiscal year
I said hello to Marshall every morn for 6
He yelled at me every time, that’s amore, bitch…

Outside home is an open swim
Occultism in the throes of corrosive wind
A cold meal with the ghosts of friends
A whole host of meds
A deal on a Tone Loc cassette
I stepped over a body in the door
I pretend he asleep but it’s probably more, God damn
Profound apathy, heart with a crack
I’m ships in the night
I’m darts at a map….

And finally…n Aesop oldie, from 2002. “Train Buffer” was the first Aesop Rock track I ever really hooked onto:

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7 Comments on Gordon Campbell on how class colours the reactions to the Panama Papers

  1. A very perceptive assessment of the underlying reality in all this. John Key will wait for the media to lose interest and Andrew Little and his party lack any public credibility. Our best hope is in journalists like Nicky Hager exposing the truth and gradually fuelling public distrust of politicians and the political system to the point where there is open revolt and the volume of public protest becomes impossible to ignore.

    Unfortunately its a slow process, building the case for a return to real democracy one brick at a time, but the day of reckoning will eventually arrive.

  2. Yes people who work for corrupt corporations tend to loose themselves in the corporation and its goal for gain.
    These corporate employees are conflicted enslaved by the wages they get (and the fear of loss) they work for the benefit of the dead fiction/the corporation.
    Corporations are but legal fictions that were created by bankers just for the purpose.
    The fact we now have huge cancerous corporate monopolies that write up secret trusts( TPPA) taking over govts for special drawing rights shows how effective profit with “no social responsibility” or corporate group think is.

    In this drama of “corporate leaks” how can anyone point the finger at one corrupt law firm( *most of them are greedy crooks anyway) banks and their subsidiaries requested more than 15,000 shell companies . That’s what these lawyers at the law firm were engaged in “professional fraud”.Where do lawyers learn about morality and social obligations? From the bankers?

  3. @Ric Creasy revolutions and civil wars have always been used by the bankers to keep the status quo to keep in power.
    There has never been a people’s “democracy”. And whats great about ” democracy” to be ruled by a corporation with a vested interest that is different from the people.
    Your social media revolutionary ideology is especially toxic as in our case the majority of people are totally governed by ideas in social media.Ignorance abound, this is no state to not understand the system “protest” when told and go and slowly build a new prison brick by social media lobbyists brick.
    If you vote for your prison how can you protest it?

  4. Corruption is about those exploiting their position of power not really a “class” issue.

    Why would Key apologize for or try to cover up the Panama papers exposure of the corrupt companies posing as tax exempt ” charities” Greenpeace and Red Cross?

  5. Thanks for this article, Gordon.
    I say to the tax-dodger, “Get your flash car off the road I and all the other tax payers own. You are a trespasser.”

  6. We’ll need to see what happens over the next few polls – but arguably we already have some evidence that Key and the Nats have taken a hit over the affair.

    First, I know of 3 Polls that have been carried out since the Panama story broke: 1 Public Poll (Roy Morgan) and 2 Internal Party Polls (Curia for the Nats / UMR for Labour). Both Roy Morgan and the UMR have National down on 42% – its lowest rating in any Poll since the last Election (with the Govt Bloc also on its lowest rating and the Oppo Bloc on a 54% high in the Roy Morgan).

    The Nats are down 5.5 points on the February Roy Morgan and down a very similar 5 points on the previous 2 Internal National Party (Curia) polls (conducted before the story broke).

    Second, a mid-April UMR found strong (majority / plurality) concern (even among erstwhile National voters) about New Zealand’s reputation as a tax haven, about the way the Government had handled the fallout, and about the inadequacy of the proposed Shewan Review.

    And third, as I’ve mentioned in of a series of comments on The Standard through April, the latest UMR puts Key on his LOWEST EVER Favourability rating of just + 2 (compared to + 16 in the final quarter of 2015, + 27 in 2014, and + 58 during his first year in power).

    So, too early to tell for sure, but there are at least some initial hints of a slump in Tory support. Past experience, of course, does suggest that any such hit might just be temporary. We’ll just have to wait and see.

  7. Yeah yeah, you “wait and see” swordfish.
    Wait and see history repeated over and over again by gullible people who like to participate and support corruption by playing vote “wait and see”.
    What would you be waiting for?! The Empire to change from a banking cabal’s govt to a people’s govt?This cannot happen by voting for it to govern you ( “wait and see”).

    The rigged polls are a wee bit like the media monopolies used for (military term) “perception management”.

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