World in View: ‘Panama’ tip of iceberg

May 18, 2016

From the May-June 2016 issue of News & Letters

The leak of 11.5 million confidential documents from Panamanian law firm Mossack Fonseca gives a view into ruling class life. The “Panama Papers” show how those with political power hide personal fortunes by way of shell corporations.

For example, Iceland’s Prime Minister Sigmundor Davio promised to fight corruption in the banking industry; however, it was revealed that his wife had a secret interest in some failed banks. He resigned April 5, following huge demonstrations outside parliament.

Mossack Fonseca managed shell companies for relatives of former British Prime Minister Thatcher and current PM David Cameron. Heads of state from China’s Xi Jinping to the Palestinian Authority’s Mahmoud Abbas, Ukraine’s Petro Poroshenko, and Pakistan’s Nawaz Sharif, had similar relations.

Investigative reports into Vladimir Putin’s regime have shown how shell corporations and political power serve to entrench the rule of state-capitalist oligarchies. In Russia, this cronyism extends to those authorities charged with law enforcement—they own and trade shell companies that seize former state properties as assets.

Mossack Fonseca managed half a dozen companies for Bashar al-Assad’s cousin, Rami Makhlouf, a sadist and gangster who owned 60% of Syria’s economy, including its telecommunications. These “papers” are both a privileged glimpse into illegal machinations, and an insight into capitalist society’s actual power relations.

—Gerry Emmett

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