The Panama Papers have revealed an offshore tax haven for the rich and powerful. Over 11 million documents leaked Sunday show how Panama-based law firm Mossack Fonseca has helped its wealthy clients all over the world launder money and dodge taxes.
Managing director of Global Financial Integrity (GFI), Tom Cardamone, says this massive operation should be of major concern to taxpayers.
If you are a taxpayer and you pay what you owe and you pay it on time, you should be very angry about this. And if you have money in a financial institution or a pension plan, you should be very scared about this.
What’s the role of Global Financial Integrity?
GFI works primarily with developing country governments to address issues of illicit money coming out of their economy. The goal is to prevent such a thing from happening at all, but Cardamone estimates over a trillion dollars per year comes out of developing countries due to money laundering and tax secrecy.
That’s only what we can count…
Massive scale of Panama Papers may only be the tip of the iceberg
Though Cardamone has seen his fair share of investigations, he says the sheer volume of the Panama Papers is unprecedented.
It’s just a stunning revelation of numbers of documents, numbers of companies, over 200,000 companies that have been created by this firm, 14,000 clients. The scale of this is just very difficult to get your head around really, but what it does ultimately is underscore how often this happens, how easy it is to arrange, and how widespread the problem is.
Will political powers step up?
Cardamone hopes that the Panama Papers will ignite a crack-down on this type of crime that he feels has been glossed over by those who have the power to stop it.
At the end of the day this is not a very technically difficult problem to address, it’s one purely of political will and does the political will exist? Not only in the U.S. or Canada or Australia, but globally in the G8 and the G20. Do those groups of very powerful nations have the political will to institute requirements where companies or financial entities like trusts must have an identifiable, beneficial owner? Who is the person, the flesh and blood person, who controls this entity?