{"id":71792,"date":"2016-04-11T12:00:16","date_gmt":"2016-04-11T11:00:16","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=71792"},"modified":"2016-04-18T12:59:30","modified_gmt":"2016-04-18T11:59:30","slug":"a-key-similarity-between-snowden-leak-and-panama-papers-scandal-is-whats-been-legalized","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2016\/04\/a-key-similarity-between-snowden-leak-and-panama-papers-scandal-is-whats-been-legalized\/","title":{"rendered":"A Key Similarity between Snowden Leak and Panama Papers: Scandal Is What\u2019s Been Legalized"},"content":{"rendered":"

\"glenn<\/a>4 Apr 2016 – <\/em>From the start\u00a0of the reporting based on\u00a0Edward Snowden\u2019s leaked document archive, government defenders\u00a0insisted that no illegal behavior was revealed. That was always false: Multiple courts have now found the domestic metadata spying program in violation of the Constitution and relevant statutes<\/a>\u00a0and have issued similar rulings for\u00a0other mass surveillance programs<\/a>; numerous articles\u00a0on NSA and GCHQ documented the targeting of people and groups<\/a> for blatantly<\/a>\u00a0political<\/a>\u00a0or legally<\/a>\u00a0impermissible<\/a>\u00a0purposes<\/a>; and the leak revealed that President Obama\u2019s top national security official (still), James Clapper, blatantly lied<\/a> when testifying before Congress about the NSA\u2019s\u00a0activities \u2014\u00a0a felony<\/a>.<\/p>\n

But illegality was never the crux of the scandal triggered by those NSA revelations. Instead, what was most shocking was what had been legalized: the secret construction of the largest system<\/a> of suspicionless spying<\/a>\u00a0in human history<\/a>. What was scandalous was not that most of this spying was against the law, but rather that the law \u2014 at least as applied and interpreted by the Justice Department and\u00a0secret, one-sided FISA \u201ccourts\u201d \u2014 now permitted the U.S. government and its partners to engage in mass surveillance of entire populations, including their own. As the ACLU\u2019s Jameel Jaffer put it<\/a> after the\u00a0Washington Post<\/em>\u2019s\u00a0publication of documents\u00a0showing NSA analysts engaged in illegal spying: \u201cThe \u2018non-compliance\u2019 angle is important, but don\u2019t get carried away. The deeper scandal is what\u2019s legal, not what\u2019s not.\u201d<\/p>\n

\"A<\/a>

A sign outside the building of Panama-based law firm Mossack Fonseca in Panama City, April 4, 2016.<\/p><\/div>\n

Yesterday, dozens of newspapers around the world<\/a> reported on what they are calling the Panama Papers: a gargantuan leak of documents from a Panama-based law firm that specializes in creating offshore shell companies. The documents reveal billions of dollars being funneled to offshore tax havens by\u00a0leading governmental and corporate officials in numerous countries (the U.S. was oddly missing<\/a> from the initial reporting, though journalists vow that will change shortly<\/a>).<\/p>\n

Some of these documents undoubtedly reveal criminality: either monies that were illegally obtained (and are being hidden for that reason) or assets being concealed in order to criminally evade tax debts. But the crux of this activity \u2014 placing assets offshore in order to avoid incurring tax liability \u2014 has been legalized. That\u2019s because Western democracies, along with overt tyrannies, are typically controlled by societies\u2019 wealthiest, and laws are enacted to serve their interests. Vox<\/em>\u2019s Matt Yglesias this morning published\u00a0a very good explainer<\/a> of various aspects of this leak and he makes that point clear:<\/p>\n

Even as the world\u2019s wealthiest and most powerful nations have engaged in increasingly complex and intensive efforts at international cooperation to smooth the wheels of global commerce, they have willfully chosen to allow the wealthiest members of Western society to shield their financial assets from taxation (and in many cases divorce or bankruptcy settlement) by taking advantage of shell companies and tax havens.<\/em><\/p>\n

If Panama or the Cayman Islands were acting to undermine the integrity of the global pharmaceutical patent system, the United States would stop them. But the political elite of powerful Western nations have\u00a0not acted to stop relatively puny Caribbean nations from undermining the integrity of the global tax system \u2014 largely because Western economic elites don\u2019t want them to. \u2026<\/em><\/p>\n

\u2026 But even though various criminal money-laundering schemes are the sexiest possible use of shell companies, the day-to-day tax dodging is what really pays the bills. As a manager of offshore bank accounts told me years ago, \u201cPeople think of banking secrecy as all about terrorists and drug smugglers, but the truth is there are a lot of rich people who don\u2019t want to pay taxes.\u201d And the system persists because there are a lot of politicians in the West who don\u2019t particularly want to make them. \u2026<\/em><\/p>\n

\u2026 Incorporating your hedge fund in a country with no corporate income tax even though all your fund\u2019s employees and investors live in the United States is perfectly legal. So is, in most cases, setting up a Panamanian shell company to own and manage most of your family\u2019s fortune.<\/em><\/p>\n

Tax avoidance is an inevitable feature of any tax system, but the reason this particular form of avoidance grows and grows without bounds is that powerful politicians in powerful countries have chosen to let it happen. As the global economy has become more and more deeply integrated, powerful countries have created economic \u201crules of the road\u201d that foreign countries and multinational corporations must follow in order to gain lucrative market access.<\/em><\/p>\n

Proving that certain behavior is \u201clegal\u201d does not prove that it is ethical or just. That\u2019s because corrupted political systems, by definition, often protect and legalize exactly the behavior that is most unjust. Vital journalism does not only expose law breaking. It also highlights how corrupted political and legal systems can be co-opted by the most powerful in order to legally sanction atrocious and destructive behavior that serves their interests, typically\u00a0with little or no public awareness that it\u2019s been done.<\/p>\n

In such cases, as Jaffer put it, \u201cThe deeper scandal is what\u2019s legal, not what\u2019s not.\u201d The key revelation is not the illegality of the specific behavior in question but rather the light shined on how our political systems function and for whose benefit they work. That was true of the Snowden leak, and it\u2019s true of the Panama Papers as well.<\/p>\n

______________________________________________<\/p>\n

Glenn Greenwald<\/a> – \u2709glenn.greenwald@theintercept.com<\/a><\/em><\/p>\n

Go to Original \u2013 theintercept.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Vital journalism does not only expose law breaking. It also highlights how corrupted political and legal systems can be co-opted by the most powerful in order to legally sanction atrocious and destructive behavior that serves their interests, typically with little or no public awareness that it\u2019s been done.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[225,55,60],"tags":[],"class_list":["post-71792","post","type-post","status-publish","format-standard","hentry","category-spotlight","category-capitalism","category-whistleblowing-surveillance"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/71792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=71792"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/71792\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=71792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=71792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=71792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}