The Panama Papers: Here’s What We Know
nytimes.com
nytimes.com
All this was triggered by the following quote: "Using information/documentation unlawfully obtained is a crime, and we will not hesitate to pursue all available criminal and civil remedies”.
[1] Mossack Fonseca was indeed engaged in illegal activities because they obstructed the US justice over companies suspected of connections to politicians. But this was not known in advance.
At it's most simple level: a movie leak is a social ill, breaking of the social copyright contract, and a political leak is a social good, revelation of corruptions and education.
That's a simplification of course, copyright is abused, for instance to prevent all access to the copyrighted material in some places and fair use thwarted. Political leaks are sometimes simply scurrilous and provide more heat than light.
This really comes down to the classic question of whether it's more important to benefit society in general or the rights of property holders. There are people who strongly believe in both extremes and lots of people in the middle. Some say that property is the foundation of freedom and we should sacrifice social good for the promotion of property and others say that the needs of the many outsweigh the needs of the few, even that property is theft of social value. Where any person might stand on these issues is complicated, to say the least.
Copyright is a limited monopoly, granted by society, to provide incentive for the creation of content; breaking that contract is a social ill. I disagree society breaking that contract, in a bait and switch, can ever be a social good.
So this issue of leaked materials being overall good or bad is really a proxy for a deeper argument. If you're starting from the position that property rights are more important than the spread of culture and the availability of material, you can still believe that leaks are overall a social good, one which needs to be sacrificed at times for the greater good of copyright and protection of intellectual property. We have to make these kinds of sacrifices all the time, which leads to interesting situations like this.
Sometimes, the best thing for society is that laws are broken, even if those laws are essentially correct. The perfect society isn't necessarily one that always follows the rules, but one that makes the right sacrifices for the overall good. Copyright is probably the best example of this situation. Even if the laws are entirely justified, there are plenty of situations in which innovation happened because someone learned something from leaked copyrighted material.
It's tempting to believe that it's possible to create a set of rules that everyone can agree to and always create the optimal situation, but in the real world, this never happens. The real world is messy, and sometimes entirely justifiable laws have a net positive effect when they're broken.
The concept of copyright became stronger as lobbying and surveillance state became stronger.
Creative people will create regardless. Creative people who have ample free time and who don't have to think about bills much, will create more and, more importantly, more accessible works. The sophisticated thing to do is to allow copying anybody's ideas¹ and give people a guaranteed income².
¹ I think plagiarism, ie not giving credit where its due, should be punished. I'm not sure if it should fall in the realm of the law though, maybe it could be kept check under social pressure.
² If it can't be universal, then make it scholarship based, subject to renewal, or something.
The lobbying part I can understand, and agree, but I'm lost on your surveillance state thing.
All those creative people with all their creativity is covered by copyright as soon as they get done being creative. In the US at least. But whether they make money from their copyrighted creativity, that's a different problem. Copyright doesn't help me make money but it helps me prevent you from making money off my work.
Is that really true? I would have thought that the art itself is still copyrighted, but the artist is unlikely to pursue redress as that would effectively be giving evidence of a crime (graffiti).
The panama papers, and such things, aren't actually available to the average person nor do I believe there are legal ways to check this sort of thing. It most definitely isn't socically acceptable - in fact, many of us attempting even a small portion of such a thing would be put in jail if ever found out. Furthermore, some of this seems to the expense of the people - Iceland, for example, took a hit as a country only to show that a politician had a nice, cushy account somewhere safe from the stuff that happened at home.
More worryingly, how hard is it to create fake data? People are leery of accusations by prosecutors, far less so of "data". Video and audio evidence can even be faked now.
For instance, a bunch of your emails get dumped (all of which are indeed your real e-mails). But then there's one (fake) message to a random email address nobody knows the identity of, "Yes, I'd like to buy 100 kilos of coke and I need help laundering the money after I sell it." Who is the burden of proof on? You to prove that you didn't write it? Or them to prove that you did?
I'm not sure what the legal situation is in every country but as I understand it, similar trade-offs exist in German law (which otherwise has a very strong stance on privacy).
"One reason there may be relatively few Americans named in the documents is that it is fairly easy to form shell companies in the United States. James Henry, an economist and senior adviser to the Tax Justice Network, told Fusion that Americans “really don’t need to go to Panama.”"
Turns out that in many cases, forming a company within the US can be more secretive that forming in British Virgin Islands, Panama or the Bahamas.
> If you form a British Virgin Islands company you have to declare who you are to the person forming the company for you; if you form in Nevada, for example, you don’t… So Nevada is great because it’s much more secret than the British Virgin Islands.
Extraction of dirty money (from bribery) is also very easy to do with offshore companies.
The third reason is to add confusion about ownership of companies and real estate.
More simply, offshore companies help rich people pay less taxes.
Why do countries permit offshore companies to dominate and rob their economies ? Could anyone explain it to me ?
Wouldn't banning trade with offshore companies have the effect of drastically reduced corruption and illegal "schemes" ?
Edit: By "offshore" I mean companies registered in small island nations or "tax havens".
Even something as small as a single person consultancy that has clients in 2 countries (Canada/USA say) are frequently benefitted by having entities in each location.
Those entities also need money, frequently in each location, so holding cash in banks in each location is also beneficial.
Having offshore corporations is not evil, its just mechanics.
Having entities in different countries for easier interface with local customers and authorities is very different from transferring ownership or large chunks of money to a company registered in the British Virgin Islands, population 28,054.
Maybe "it's just mechanics" in some countries where corruption is low, but the world is very corrupt and offshore companies are tools which allow for this corruption to happen.
As for legislating how you can do transfers/ownership/taxation etc of foreign entities and cash, every jurisdiction in the world already legislates that. This article is about a law firm that exists solely as experts in that area for instance.
http://www.npr.org/sections/money/2016/03/30/472452808/episo...
I was interested to hear the example they had for a legal reason:
JOFFE-WALT: But again, Daniel and David emphasized they do not help people launder money or do anything illegal with offshore entities. There are lots of legal reasons to have companies like these. They would repeat again and again as we spend time with them. For instance, they said, imagine, you know, you have a international T-shirt making company, and you have investors from Canada and Mexico and China, all over the world. So sure, you could set up your company here in the U.S. But if you do that, then the Canadian and Mexican and Chinese investors, they all have to file tax paperwork in the U.S. And sometimes it's just easier to set up the company offshore, have the company file all the paperwork. You know, the same amount of taxes gets paid, but ultimately, it's just less paperwork for all the investors.
Don't get me wrong, in general I would agree with you. It is completely unfair for folks in the US (Think casey antony) to be forced into protective custody after being found non-guilty because of the media coverage of her court case, and even as a teenager I found the whole thing surrounding OJ as ridiculous. But in extreme cases, this is often felt as the only recourse, especially to those in power whom may have some influence over whether or not they will ever be sued or arrested.
This case isn't a "trial by media". What is happening is that several investigative journalism groups are getting together to examine data acquired through a leak.
The examination may lead to lawsuits, criminal investigations, and legislative action, but is by no definition a trial.
The questions asked as a result of the examination of the leaked information may lead to uncomfortable questions in private and in public.
At this point, who is being accused of wrong-doing?
I.e. in the UK, Cameron is on the front pages for his father's activities, regardless of whether he had any part/they're genuine/benefited etc...
"Trial by media" is less a witch hunt, and more influencing the zeitgeist.
I am also not sure what you mean. Are you taking the view that "influencing the zeitgeist" should only happen in the court system?
Not saying that it should only happen in the court system, just saying that since the media has the widespread ability to do so, they need to hold themselves to a certain account and be satisfied that their definition of "in the public interest" is worthy enough.
In other words, it looks like this is having real and immediate consequences in Iceland, but I wouldn't hold my breath waiting for Vladimir Vladimirovich or any of his cronies to be indicted.
Leaks like this are about the only way it was realistically going to come to light.
Hiding true ownership. You can give % of shares to a politician in exchange for a law that will directly benefit you. Politician will be able to monetize on this once he is out of office.
Anti-monopoly regulations. You can own two companies that on paper are competition but in reality are same entity blocking any other company from entering the market.
On the legal side there are actually probably more reasons, anonymity being one (I.e. Hiding from your neighbors who just bought the house next door), numerous legal tax avoidance reasons (two common ones would be: 1. Because of the u.s. Tax code (unlike most other places) the u.s. Charges corporate tax on foreign income but only when it is repatriated - so many companies will avoid tax by having offshore subsidiaries that hold IP to keep profits from coming back to the u.s. and being subject to tax (see every big software company with irish subsidiaries or swiss corporate inversions) 2. Hedge fund/private equity business makes extensive use of offshore companies so that non-u.s investors do not become subject to US tax and also so that US non-taxable investors (pensions and universities) do not create inadvetant tax liability for themselves (UBTI in particular)), also simple local compliance i.e. if you are a u.s. citizens and want to buy land in mexico i believe there are certain areas (typically near the coast) where the only way you can do this is to form a mexican entity)
I'm characterizing this "event" as closer to a theft of credit card information than a Snowdon-esque expose of governments. This is a private company who's data was ransacked. Hope the lawyers at that firm are getting ready to be sued by all their private clients.
Should shell corporations be outlawed everywhere?
There are certainly legitimate reasons[1] for wanting a shell corporation, but is society more demanding of transparency and willing to reject the idea of shell corporations as a legitimate net good for society?
[1] http://www.vox.com/2016/4/5/11361992/panama-papers-authorita...
Because most of them are obviously shells, but if you want to outlaw something, you must define it first, and if you don't want your law being used to persecute whoever the police/government wants, you'd better have an objective and clear definition.
I'd think something like a company that has, say, less than 3 employees, and/or has no discernible "customers." But I'm taking a wild guess.
Sorry to be That Guy, but this would be a tidier title and fix the errant copy & paste:
Here’s What We Know About the ‘Panama Papers’
The reality is that a large part of the UK's so-called service industry is based exactly on the creation and maintenance of offshore schemes of all kinds, and much of the wealth of Cameron's party backers would evaporate if the schemes were made public.
Voters are mostly too uninformed to know much about this world. But public exposure plays very badly with them, because Cameron famously said "We're all in this together" while promoting austerity at the start of the first Coalition term.
Now, even the most unaware British voters are beginning to wonder if perhaps he was being less than entirely honest.
Conveniently, it would be the easiest thing in the world to throw Cameron overboard, leave Europe - so the scams can continue - and carry on with someone fresh, new, shiny, and untainted by association, who can guarantee business as usual behind the scenes.
It's still surprising how limited the revelations have been in the UK. It's very hard to believe that more household names aren't involved - but so far we've had a hit list of minor Lords hardly anyone has heard of, some former MPs no one cares about, and Lord Ashcroft, who may not be Cameron's favourite person after he offered some unexpected insights into Cameron's hobbies as a student earlier in the year.
http://www.cnbc.com/2016/04/05/reuters-america-white-house-s...