The news item that’s caused the most buzz in the anticorruption community in the past month is likely the bombshell release of the so-called “Panama Papers” (though the initiation of impeachment proceedings against Brazilian President Dilma Rousseff runs a close second). Most readers of this blog probably don’t need much explanation of the Panama Papers or their significance. These documents, leaked from Panamanian law firm Mossack Fonseca to the International Consortium of Investigative Journalists, reveal how a very large number of very wealthy individuals, including many senior government officials and their close associates, have made use of middlemen, shell companies, obscure corporate secrecy rules, and other legal techniques to conceal their wealth from tax authorities, law enforcement, and the general public. (Rick’s post from a few weeks ago usefully highlights some of the most important legal loopholes that Mossack Fonseca helped its clients exploit.) Though in some cases the assets in question may have been acquired legitimately, in many cases they probably weren’t. And while it’s not entirely clear whether Mossack Fonseca broke any laws in assisting its clients, the whole affair is a window into the shadowy and often sordid practices that the very wealthy—including corrupt public officials and their cronies—use to hide their assets.

I haven’t yet weighed in on the Panama Papers brouhaha on this blog, mainly because I’m not sure what there is to say. On the one hand, the Panama Papers leaks are hugely consequential for at least two reasons: First, the identification of specific individuals—in addition to feeding our collective appetite for celebrity gossip—is likely to be important for holding those individuals legally or politically accountable. (And indeed, the release of the Panama Papers has already forced the resignation of Iceland’s former Prime Minister Davio Gunnlaugsson.) Second, the Panama Papers revelations have gotten a great deal of mainstream media attention, including front-page coverage on major newspapers and prominent discussions elsewhere. This may well help build momentum for efforts that anticorruption activists and others have been pushing for some time (such as crackdowns on corporate secrecy, closing gaps in the international money laundering regime, and other matters). Yet at the same time, individual names aside, it’s not clear that the Panama Papers revelations have told the anticorruption community anything that wasn’t already widely known (or at least strongly suspected): That corrupt leaders, and plenty of others with an interest in hiding their assets, take advantage of lax or uneven regulatory oversight, combined with networks of shell companies. So, while the added publicity is a boon, and the identification of individuals is necessary (though of course not sufficient) to holding them accountable, I’m not entirely sure whether the Panama Papers revelations have told us all that much that’s new. Of course, we still have a lot to learn from these documents—many of which haven’t yet been published—and I would be lying if I said I’d studied what has been released carefully enough to have any strong opinions. But I’ve been struggling to come up with something interesting to say about the Panama Papers, and mostly coming up empty.

There is, however, one thing about these revelations did strike me as potentially interesting, which I haven’t seen discussed in the coverage of the Panama Papers that I’ve read so far, so I thought I’d throw it out here to see what other people think: Continue reading →