The Panamanian law firm of Mossack Fonseca, with 600 employees in 42 countries, is devoted to helping its wealthy clients hide their income. They have facilitated money-laundering, the defeat of protective regulations and ultimately, the evasion of taxes. Until recently, this has all taken place away from the prying eyes of the curious.
Then, just ten days ago, a group of 4oo journalists, after a year of work in secret, made public over 9 million Mossack Fonseca documents, lifting the lid on these nefarious and unsavory transactions. Now the game is on to see who has been caught in the trap. The resulting scandal is called the Panama Papers. Some world leaders are suddenly appearing in the nude. They include Chinese, Arab, Ukrainians and a long list of others. Some have already resigned including the Prime Minister of Iceland.
This huge net has also reeled in the name of Vladimir Putin. Rumors about his vast hidden fortune have been circulating for years, but his financial dealings are well disguised. His name is not on any paper. Many of his associates are named but no spotlight shines on him. Officially the Kremlin is waging a war against corruption and money laundering.
A few days ago Vladimir Vladimirovich staged his mammoth annual Press Conference. Enthroned in his comfortable swiveling chair, a beatific smile on his face, he chatted amiably with the press surrounding him. He had no notes. He does not need them. This event has been well prepared, rehearsed and staged. Putin answers pre-screened and vetted questions. What he has to say about the Mossack Fonseca “revelations” is that they are a vast smear campaign led and orchestrated by non-other than the United States, which wants to discredit him, alienate him from his people and undermine the upcoming parliamentary elections.
Many Russian people swallow this fairy tale. Many others cynically believe that even if Putin has stashed a fortune somewhere, well, every leader does it, so it is fine with them.
Heads may be rolling around him, but Putin may yet emerge from this with a halo.
Things are different in England where the Panama Papers revealed that the British Prime Minister, David Cameron, inherited from his father some interests in Mossack Fonseca. Cameron now admits that he did indeed own shares, but that he and his wife liquidated them when he came to power. He also promises to disclose documents showing that they payed taxes on the dividends. Even if nothing illegal took place, there is an aura of sleaziness and Cameron is facing serious challenges to his leadership.
What explains the discrepancy in the reactions in Britain and in Russia? We are tempted to say that the British have a long history of honorable political conduct and
an ethical political code to fall back on. Even more true is the they have a rival political party, the “loyal opposition,” which will exploit any apparent weakness on the other side.
This news is in rapid motion and it is only 10 days old. How many other shoes will be dropping? We await with interest.
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