The world is changing rapidly in front of our eyes and what we see unfolding in our midst on the local, regional and international stages are the machinations of global geopolitics that were once happening behind the scenes coming to the foreground in all of our deliberations. The issues of debt, taxes, bank solvency, wars in all of their manifestations inclusive of terrorism, the refugee crisis, global inequality, and last but not least accelerating climate change are consequences of our economic and political systems that are no longer fit for purpose in terms of management of our households, be it at the community, nation-state and international level. We had two competing economic and political systems and after the fall of communism in the 1980’s, it was declared that neoliberal capitalism was the best system for humankind, as there was no other alternative!
On closer reflection, it is patently obvious that the only reason why capitalism “succeeded” had to do with the competitive advantage and creative destructiveness that the petrodollar recycling scheme gave to the neoliberal policymakers back then, as they gave the west the wiggle room to print unlimited monies to finance perpetual wars and create instabilities in different regions in the world to justify this unlimited money printing and perpetual wars.
The conflicts around the world we see today at the local, regional and international levels are the consequences of the petrodollar recycling scheme as I endeavoured to show in my previous blog article. Although there were conflicts before this era from time immemorial, I submit that scheme captured every form of human activity now on a planetary scale and destroyed everything in an exponential manner in its wake, from our individual mental, social and physical health and wellbeing, to that of the health and wellbeing of our communities and that of the planet. Instead of our rules for political and economic engagement helping to create healthogenic life-enabling environments, we have created in its stead diseasogenic life-disabling environments in which our present financial, military and pharmaceutical industrial complexes strive to profit from and to fuel its continued creative destructiveness. (Please see It is time for healing!! Transitioning from a debasing petrodollar recycling dictatorship to a rebased life-capital recycling democracy and its hyperlinks for more details).
At this point in our human experimentation of our various politcal and economic systems of the past and present, what is there we can learn to make our systems better and fitter for purpose?
What readily comes to my mind’s eye is that the Soviet union at the time was not able to keep up, and given the lack of transparency and accountability in their society, the state communist model was destined to fail because of the secrecy of their jurisdictions in hiding information from the public, and their blatant lack of dialogue and engagement with the people they were supposed to serve. As a result, the requisite checks and balances and the pivotal management of their political and economic systems by the societies they were purported to serve were based more on power and control by the elite state actors rather than empowerment and life justice for everyone else.
In light of the leak of the “Panama Papers” it is once again becoming obvious in my mind’s eye that our neoliberal political economic systems have all along morphed into a “communistic” global state in which the supranational entitiy of the 1% set the global rules in secrecy also with lack of transparency and accountabilty, where authentic democracy is now being eroded and we have in effect a form of corporate croney capitalism which is no different in form or function to state communism, where the few at the top control most of the resources and the bottom struggle to just get by. In other words, instead of having a system of true political and economic freedom, democracy and justice, all of the rules in society are now fashioned to serve the vested interest of the minority at the top rather than the majority of us at the bottom. Even the media, the fourth estate of checks and balances in all western governments, have become captured by The Establishment and are no longer independent, and have become corporatized and have carved up the cognitive map of understanding to block out the process of consilidation of power and priviledge that has been going on behind the corporate scenes.
Interestingly, President J F Kennedy’s address before the American Newspaper Publishers Association in April 27, 1961, may have on the surface been referring to communism at the time, but given the fact that this speech was given to the Western press, I have reasons to believe he was being critical of our secretive international banking and intelligence systems which fueled and financed the previous world wars and have brought into ascendancy and legitimized a global “communism” that has “layered” and laid to ruin all of the dimensions of life goods and life capital to this day.
The secretive jurisdictions of international financial centers which claim to be essential for capital growth and development, like state communism, is going to be the downfall of corporate crony capitalism, as both support conformity and rigidity of ideas in a top-down hierarchical pattern as “efficiently” as possible. This is done without challenge from outside; hence the stifling of genuine innovation and genuine resilience and ability to adapt to new knowledge of our destructive potentials in all of life’s spheres of influence and concerns, hence producing the persistent lack of truth and reconciliation and healing of all of the maladies of humanity and the planet. If this is not a form of globalised supranational “communism” now on steroids, where there is pervasive reverse projection, where the meanings of our labels have been tranmorgrified and no longer mean what they are supposed to mean any more, then I don’t know what is!
For example, do we really still have a “free market” and “democracy” anymore? Aren’t these ideals now usurped by the diktats of the financial-military-corporate media-digital collusive complex which now reign supreme where we have concentration of wealth and power at the top? When The Establishment preaches freedom of choice, freedom of mobility and freedom of privacy, are they talking about freedom for entitlement of theirs at the top, while relegating those of us at the bottom to a form of mental, social and debt slavery? Where is the genuine democracy and freedom in that? Should we not have by now an intelligent system that matches unused life resources to unmet life needs by the supply and demand principles of the free market? What about the genuine ability of the electorate to chose a leader of their choice without the rules of engagement being gerrimandered to maintain the power structure in the first place? Where is the economic and political justice in all of this? Again I stand by my claim that the only difference between state communism and corporate croney capitalism is not one of kind, but one of degree and scale, and the reverse projections that the latter creates to block out the obvious consequences of our life destructive and human indignifying machinations.
I will leave you now to reflect on President J F Kennedy’s address before the American Newspaper Publishers Association in April 27, 1961, which I hope will provide much food for thought, rumination, digestion and assimilation in all of our deliberations, as what he has said in 1961 was very much prescient, and very much relevant to our societies and time of today.
“President John F. Kennedy
Waldorf-Astoria Hotel, New York City
April 27, 1961
Mr. Chairman, ladies and gentlemen:
I appreciate very much your generous invitation to be here tonight.
You bear heavy responsibilities these days and an article I read some time ago reminded me of how particularly heavily the burdens of present day events bear upon your profession.
You may remember that in 1851 the New York Herald Tribune under the sponsorship and publishing of Horace Greeley, employed as its London correspondent an obscure journalist by the name of Karl Marx.
We are told that foreign correspondent Marx, stone broke, and with a family ill and undernourished, constantly appealed to Greeley and managing editor Charles Dana for an increase in his munificent salary of $5 per installment, a salary which he and Engels ungratefully labeled as the “lousiest petty bourgeois cheating.”
But when all his financial appeals were refused, Marx looked around for other means of livelihood and fame, eventually terminating his relationship with the Tribune and devoting his talents full time to the cause that would bequeath the world the seeds of Leninism, Stalinism, revolution and the cold war.
If only this capitalistic New York newspaper had treated him more kindly; if only Marx had remained a foreign correspondent, history might have been different. And I hope all publishers will bear this lesson in mind the next time they receive a poverty-stricken appeal for a small increase in the expense account from an obscure newspaper man.
I have selected as the title of my remarks tonight “The President and the Press.” Some may suggest that this would be more naturally worded “The President Versus the Press.” But those are not my sentiments tonight.
It is true, however, that when a well-known diplomat from another country demanded recently that our State Department repudiate certain newspaper attacks on his colleague it was unnecessary for us to reply that this Administration was not responsible for the press, for the press had already made it clear that it was not responsible for this Administration.
Nevertheless, my purpose here tonight is not to deliver the usual assault on the so-called one party press. On the contrary, in recent months I have rarely heard any complaints about political bias in the press except from a few Republicans. Nor is it my purpose tonight to discuss or defend the televising of Presidential press conferences. I think it is highly beneficial to have some 20,000,000 Americans regularly sit in on these conferences to observe, if I may say so, the incisive, the intelligent and the courteous qualities displayed by your Washington correspondents.
Nor, finally, are these remarks intended to examine the proper degree of privacy which the press should allow to any President and his family.
If in the last few months your White House reporters and photographers have been attending church services with regularity, that has surely done them no harm.
On the other hand, I realize that your staff and wire service photographers may be complaining that they do not enjoy the same green privileges at the local golf courses that they once did.
It is true that my predecessor did not object as I do to pictures of one’s golfing skill in action. But neither on the other hand did he ever bean a Secret Service man.
My topic tonight is a more sober one of concern to publishers as well as editors.
I want to talk about our common responsibilities in the face of a common danger. The events of recent weeks may have helped to illuminate that challenge for some; but the dimensions of its threat have loomed large on the horizon for many years. Whatever our hopes may be for the future–for reducing this threat or living with it–there is no escaping either the gravity or the totality of its challenge to our survival and to our security–a challenge that confronts us in unaccustomed ways in every sphere of human activity.
This deadly challenge imposes upon our society two requirements of direct concern both to the press and to the President–two requirements that may seem almost contradictory in tone, but which must be reconciled and fulfilled if we are to meet this national peril. I refer, first, to the need for a far greater public information; and, second, to the need for far greater official secrecy.
The very word “secrecy” is repugnant in a free and open society; and we are as a people inherently and historically opposed to secret societies, to secret oaths and to secret proceedings. We decided long ago that the dangers of excessive and unwarranted concealment of pertinent facts far outweighed the dangers which are cited to justify it. Even today, there is little value in opposing the threat of a closed society by imitating its arbitrary restrictions. Even today, there is little value in insuring the survival of our nation if our traditions do not survive with it. And there is very grave danger that an announced need for increased security will be seized upon by those anxious to expand its meaning to the very limits of official censorship and concealment. That I do not intend to permit to the extent that it is in my control. And no official of my Administration, whether his rank is high or low, civilian or military, should interpret my words here tonight as an excuse to censor the news, to stifle dissent, to cover up our mistakes or to withhold from the press and the public the facts they deserve to know.
But I do ask every publisher, every editor, and every newsman in the nation to reexamine his own standards, and to recognize the nature of our country’s peril. In time of war, the government and the press have customarily joined in an effort based largely on self-discipline, to prevent unauthorized disclosures to the enemy. In time of “clear and present danger,” the courts have held that even the privileged rights of the First Amendment must yield to the public’s need for national security.
Today no war has been declared–and however fierce the struggle may be, it may never be declared in the traditional fashion. Our way of life is under attack. Those who make themselves our enemy are advancing around the globe. The survival of our friends is in danger. And yet no war has been declared, no borders have been crossed by marching troops, no missiles have been fired.
If the press is awaiting a declaration of war before it imposes the self-discipline of combat conditions, then I can only say that no war ever posed a greater threat to our security. If you are awaiting a finding of “clear and present danger,” then I can only say that the danger has never been more clear and its presence has never been more imminent.
It requires a change in outlook, a change in tactics, a change in missions–by the government, by the people, by every businessman or labor leader, and by every newspaper. For we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence–on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.
Its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed. It conducts the Cold War, in short, with a war-time discipline no democracy would ever hope or wish to match.
Nevertheless, every democracy recognizes the necessary restraints of national security–and the question remains whether those restraints need to be more strictly observed if we are to oppose this kind of attack as well as outright invasion.
For the facts of the matter are that this nation’s foes have openly boasted of acquiring through our newspapers information they would otherwise hire agents to acquire through theft, bribery or espionage; that details of this nation’s covert preparations to counter the enemy’s covert operations have been available to every newspaper reader, friend and foe alike; that the size, the strength, the location and the nature of our forces and weapons, and our plans and strategy for their use, have all been pinpointed in the press and other news media to a degree sufficient to satisfy any foreign power; and that, in at least in one case, the publication of details concerning a secret mechanism whereby satellites were followed required its alteration at the expense of considerable time and money.
The newspapers which printed these stories were loyal, patriotic, responsible and well-meaning. Had we been engaged in open warfare, they undoubtedly would not have published such items. But in the absence of open warfare, they recognized only the tests of journalism and not the tests of national security. And my question tonight is whether additional tests should not now be adopted.
The question is for you alone to answer. No public official should answer it for you. No governmental plan should impose its restraints against your will. But I would be failing in my duty to the nation, in considering all of the responsibilities that we now bear and all of the means at hand to meet those responsibilities, if I did not commend this problem to your attention, and urge its thoughtful consideration.
On many earlier occasions, I have said–and your newspapers have constantly said–that these are times that appeal to every citizen’s sense of sacrifice and self-discipline. They call out to every citizen to weigh his rights and comforts against his obligations to the common good. I cannot now believe that those citizens who serve in the newspaper business consider themselves exempt from that appeal.
I have no intention of establishing a new Office of War Information to govern the flow of news. I am not suggesting any new forms of censorship or any new types of security classifications. I have no easy answer to the dilemma that I have posed, and would not seek to impose it if I had one. But I am asking the members of the newspaper profession and the industry in this country to reexamine their own responsibilities, to consider the degree and the nature of the present danger, and to heed the duty of self-restraint which that danger imposes upon us all.
Every newspaper now asks itself, with respect to every story: “Is it news?” All I suggest is that you add the question: “Is it in the interest of the national security?” And I hope that every group in America–unions and businessmen and public officials at every level– will ask the same question of their endeavors, and subject their actions to the same exacting tests.
And should the press of America consider and recommend the voluntary assumption of specific new steps or machinery, I can assure you that we will cooperate whole-heartedly with those recommendations.
Perhaps there will be no recommendations. Perhaps there is no answer to the dilemma faced by a free and open society in a cold and secret war. In times of peace, any discussion of this subject, and any action that results, are both painful and without precedent. But this is a time of peace and peril which knows no precedent in history.
It is the unprecedented nature of this challenge that also gives rise to your second obligation–an obligation which I share. And that is our obligation to inform and alert the American people–to make certain that they possess all the facts that they need, and understand them as well–the perils, the prospects, the purposes of our program and the choices that we face.
No President should fear public scrutiny of his program. For from that scrutiny comes understanding; and from that understanding comes support or opposition. And both are necessary. I am not asking your newspapers to support the Administration, but I am asking your help in the tremendous task of informing and alerting the American people. For I have complete confidence in the response and dedication of our citizens whenever they are fully informed.
I not only could not stifle controversy among your readers–I welcome it. This Administration intends to be candid about its errors; for as a wise man once said: “An error does not become a mistake until you refuse to correct it.” We intend to accept full responsibility for our errors; and we expect you to point them out when we miss them.
Without debate, without criticism, no Administration and no country can succeed–and no republic can survive. That is why the Athenian lawmaker Solon decreed it a crime for any citizen to shrink from controversy. And that is why our press was protected by the First Amendment– the only business in America specifically protected by the Constitution- -not primarily to amuse and entertain, not to emphasize the trivial and the sentimental, not to simply “give the public what it wants”–but to inform, to arouse, to reflect, to state our dangers and our opportunities, to indicate our crises and our choices, to lead, mold, educate and sometimes even anger public opinion.
This means greater coverage and analysis of international news–for it is no longer far away and foreign but close at hand and local. It means greater attention to improved understanding of the news as well as improved transmission. And it means, finally, that government at all levels, must meet its obligation to provide you with the fullest possible information outside the narrowest limits of national security–and we intend to do it.
It was early in the Seventeenth Century that Francis Bacon remarked on three recent inventions already transforming the world: the compass, gunpowder and the printing press. Now the links between the nations first forged by the compass have made us all citizens of the world, the hopes and threats of one becoming the hopes and threats of us all. In that one world’s efforts to live together, the evolution of gunpowder to its ultimate limit has warned mankind of the terrible consequences of failure.
And so it is to the printing press–to the recorder of man’s deeds, the keeper of his conscience, the courier of his news–that we look for strength and assistance, confident that with your help man will be what he was born to be: free and independent.”
Some revealing quotes from The Moral Decoding of 9-11 by Professor John McMurtry:
“…What has been least appreciated about the long-term strategic plan unfolding on both sides of what was immediately called “9-11” – Call Emergency! — is that supreme banker and global money director David Rockefeller had summarized “the plan” to fellow money-party elites across borders at the Bildersberg meeting in Baden Baden Germany in June 1991 – exactly at the same time that the Soviet Union and its resistant barriers fell.  Bear in mind that Rockefeller among other initiatives appointed both Kissinger and Brzezinski for the lead in both the supranational Bilderberg and Trilateral strategic bodies of which he was the lead patron, not to mention financed the unemployed academic Leo Strauss out of Germany to be the godfather “philosopher” of the “new world order”. Rockefeller speaks very precisely to his fellow “elite of the elite” of the Western world where only Americans and Europe are invited and reportage excluded:
“A supranational sovereignty of an intellectual elite and bankers is surely preferable to the national auto-determination practiced in past centuries,” Rockefeller said. …
…The 9-11 sacrifice is better understood within the deep-structural context of the unfolding plan. Thus David Rockefeller gave special thanks to media like “the New York Times, Washington Post, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion” in co-operating with the plan. Rockefeller was again precise:
This plan for the world would have been impossible for us to develop if we had been subjected to the light of publicity during those years. …
…Nothing in this doctrine is too mendacious, greed-crazed and murderous if it fulfills the plan of this limitless private-capital rule as ultimate moral ground and compass. In Strauss’s canonical teaching of U.S. national security advisers and intellectual following, the ruling moral absolute is expressed by the core master idea behind the “supranational sovereignty” of an “intellectual elite and bankers”:
“…These “treasure islands” are not limited to sultry tropical paradises such as the Bahamas, Anguilla, Aruba, Barbados, Belize, Bermuda, BVI, the Cayman Islands, Panama, St. Lucia, St. Kitts, and St. Vincent. They also include much older traditional European havens, including Andorra, the Channel Islands, Cyprus, Gibraltar, the Isle of Man, Jersey, Guernsey, Liechtenstein, Malta, and Monaco. There are also many other newer, even more remote, havens, including the Cook Islands, Mauritius, the Marshall Islands, Nauru, the Seychelles, and Vanuatu. For certain purposes, several reputable “onshore” secrecy jurisdictions-the City of London, Switzerland, Delaware, Nevada, Luxembourg, Dubai, Singapore, Malaysia, and Hong Kong-have also become important members of the pack.
The basic role of such treasure islands is to rent their sovereignty to wealthy foreigners. They provide anonymity for financial and corporate capital, intellectual property, and non-financial assets, helping to put the foreigners’ offshore private wealth beyond the reach of taxes, regulations, and law enforcement.
But here is the catch: most of this wealth is not actually invested in the treasure islands themselves. The reason is simple: the very things that make the islands good places to stash money also make them dangerous places to do so. They generally have tiny capital markets and loose financial regulations; they are home to regulators, police, and judges who are not quite as impervious to back-door influences as First World enforcers. So offshore investors are generally unwilling to trust such places with large amounts of their financial wealth. Like ordinary domestic investors, tax dodgers like to be able to count on reliable legal frameworks and the rule of law when it comes to protecting their investments. They also prefer to invest in places with liquid markets, access to top-flight investment managers, and financial and political stability.
Most of these benefits are readily available only in the world’s most advanced capital markets. And that helps explain why most offshore wealth winds up being routed by way of treasure islands to the ultimate havens-First World financial centers such as New York, London, Zurich, Geneva, Frankfurt, and, to a lesser extent, Singapore, Hong Kong, and Dubai. It is these ultimate havens, and not the archipelago of offshore conduits or treasure islands, that is the final resting place for the vast bulk of so-called offshore private wealth.
What is more, the architects and network traffic controllers shaping the rise of the global haven industry have been the world’s largest private banks-giant brand-name institutions like HSBC, UBS, Credit Suisse, Citigroup, Bank of America, RBS, Barclays, Lloyds, Standard Chartered, JPMorgan Chase, Wells Fargo, Santander, Credit Agricole, ING, Deutsche Bank, BNP Paribas, Morgan Stanley, and Goldman Sachs. Since the 1970s, these banks have played a lead role in recruiting wealthy investors and senior officials as clients, helping them move their wealth abroad and invest it tax-free under the cover of offshore trusts and companies, providing portfolio management services, and also helping them access their wealth from afar…”
“By The Hon Mark AG Brantley, MP, Deputy Premier of Nevis and Federal Minister of Foreign Affairs and Aviation and Professor Gilbert NMO Morris, Chairman of the Turks and Caicos Resorts Economic Council (12/04/2016)
On Monday, 4 April 2016, a group referring to themselves as the ‘International Consortium of Investigative Journalists’ (ICIJ), after taking it upon themselves to ‘investigate’ a Panamanian law firm called Mossack Fonseca, dumped 11.5 million documents into the public domain. The documents revealed the longstanding financial transactions, dating back 40 years, of over 200,000 companies and 14,000 clients of the firm.
According to the documents themselves, and as was confirmed by a variety of international newspapers, the documents revealed the accounts of:
• 12 heads of state
• Nearly 200 politicians
• 29 billionaires on the Forbes list
• Financiers of terrorism
• Nuclear-weapons proliferators
• Numerous CIA-linked companies
More than 500 banks worldwide were implicated, including Credit Suisse, HSBC, UBS, Landesbank, and Rothschild’s.
There are some notable revelations, which are important, if only because these individuals played some role in inflicting consequences on and reputational damage to small nations in the name of anti-corruption or transparency.
For instance, the President of the Transparency International’s Chilean Branch – Mr Gonzalo Delaveau – was ‘forced’ to resign because the leaked documents revealed that he was linked intimately with at least five companies in the cache of documents. This hints at what we think is the underlying problem in the reportage around these leaks. There is nothing inherently wrong about managing one’s financial matters through a law firm in Panama. However, Mr Delaveau and Transparency International took a dim view of people attempting merely to protect their assets, attacking the reputations of perfectly good people and companies, in IFCs that are mostly former colonial possessions, for handling transactions, which American and European firms and banks undertake without pause.
The documents also revealed that British Prime Minister, The Rt Hon David Cameron’s father maintained an account in The Bahamas through which he oversaw his financial affairs for 40 years, without paying UK tax. Yet the reports fail to mention that this was perfectly allowable within the law at the time.
Everyone has heard of the sensationalism around the resignation of the Icelandic Prime Minister, Sigmundur Davio Gunnlaugsson. However, it is unclear whether he resigned because he was found to have accounts offshore or because he failed to declare them, as Islandic parliamentary rules – in the Alþingi – require.
What does it all Mean?
We have noticed in the coverage a continuing set of mixed messaging, in respect of the characterisation of international financial centres (IFC). First, there is the term ‘tax haven’ – a term of paternalistic derision, which is more readily consistent with practices in London or New York and certainly a more apt description for what is available in Delaware, South Dakota, Alaska, Wisconsin, Colorado and Arizona than what could be found in Panama or any of the overtly compliant financial centres in the Caribbean. Second, nearly all the reports referring to asset protection – even after explaining that most of the transactions in the IFCs are perfectly legal – still use terms such as money ‘hidden’ offshore, or ‘funds out of the reach of’ tax authorities. Again – and irresponsibly – offering no truth to their own distinction that not everyone using IFCs is engaged in nefarious behaviour. Third, it is peculiar that the International Consortium of Investigative Journalists (ICIJ) held these documents for an entire year before releasing them.
This leaves an impression of a ‘selective release’, particularly since with 500 banks involved, scores of Forbes listed billionaires and a number of CIA linked companies, by some miracle, not a single American was flagged for wrong doing. The reportage around the leaked documents has thus far been written clearly – with the support of the international media punditocracy – in a manner to disparage IFCs, particularly in the Caribbean.
European Shame; Caribbean Blame
The international media has been consumed with – what in our view is – a fake scandal surrounding The Rt Hon David Cameron, MP – The Prime Minister of Britain. The Prime Minister’s father (Ian Cameron) is recorded in the Panama Papers to have had an account in The Bahamas for over 40 years. Mr Cameron has given four different answers to this non-issue, which was perfectly legal. And despite the silly hysteria surrounding the leaks, Mr Cameron has only himself to blame. The habit of Mr Cameron, previous British Prime Ministers (and much of the OECD and G20 leaders) in conflating tax evasion (illegal) and tax avoidance (legal), means that Cameron boxed himself into a unnecessary corner. So as he profited from his father’s perfectly legal actions, his attacks on tax avoidance placed the jobs and careers of many Caribbean professionals who work in the legitimate area of tax avoidance structures at risk by colouring them unfairly with a hint of criminality.
We find that there are still quite serious issues left unaddressed in the vast reporting on the Panama Papers around the world, for instance, the arrival of these documents into the public sphere is either a cybercrime or a breach of privacy or both. Whilst Mossack Fonseca – the world’s fourth largest firm specialising in ‘asset protection’ – is at the centre of the current breach of privacy, in fact Bloomberg news reported in 2015 that more than 80 per cent of the top 100 US law firms have been the subject of cybercrimes and so breaches of privacy.
We assert here, without fear of contradiction, that the western legal system and western democracy itself cannot withstand such breaches of privacy and survive. We argue that whilst we say that tax evasion, sanctions busting and terrorist financing are intolerable breaches of not merely the law, but the rule of law, we also argue that this constant fetish against privacy and confidentiality – from the OECD to the EU to the G20 – poses grave dangers to our way of life, particularly where the government is demanding greater secrecy whilst seeming determined to breach our rights, even as they claim their own breaches are to protect those very same rights.
Readers may observe this double-speak in the recent case of Apple against the FBI, which we say dramatised many of the issues referred to here.
What does this mean for International Financial Centres?
Look, again, at the coverage. In the Financial Times, Bloomberg News and even Time magazine, aside from the attempt to generate a conspiracy of ‘hiding money’, the American press has tried to shoe-horn this Panama spectacle into a debate between the 1% and the 99%, as fodder for their presidential campaigns.
In our view, this habit of witnessing criminality in the North and pointing immediately to the South will not end with the American politicians and press. At their next G20 meeting in Hangzhou – the first to be held in China – G20 leaders, exhausted with the various stalemates in international affairs – from Syria to Russia and the Ukraine, Libya, Venezuela and South Korea, not to mention the anaemic results of Quantitative Easing – they will have nothing concrete to solve, save that they can pledge to eliminate international financial centres.
Given the attempts on the life of IFCs, we can say without fanfare, rumours of the death of financial centres are often greatly exaggerated. The unprecedented and criminal assault on the privacy of thousands of people across the globe occasioned by the Panama Papers is not the death knell of financial centres. Rather the attention now being focused provides a platform for a new and more analytical narrative of the critical relevance of these financial centres to the international financial system, capital aggregation and the global flow of business.
In fact, taking a full measure of the state of the global financial system, together with the prerogatives of the expanding state power, even by anti-statists, we believe there are two options for the future of financial centres:
Either, owing to an attitude of capitulation without raising important questions about privacy rights, constitutionalism and the rule of law, small financial centres will be crushed by their own lack of professional and institutional rectitude, in earning their place at the heart of the global financial system. They cannot claim to operate at the apex of financial management skill and sophistication, yet refuse to cultivate and leverage a corollary sophistication in active and targeted diplomacy. They must show a demand for equal footing on a level playing field, that anticipates the primacy of law and rule-governed legitimacy rather than the current vogue of ‘do as we say not as we do’ or that ‘might is always right’.
Failing that, international financial centres, particularly in the Caribbean, will lose their place if they maintain the habit of accusing each other of failing in 100 per cent compliance with goalpost moving new rules, invented and applied selectively by those G20 nations that engage in everything the rules seek to prevent. Yet, ‘the rules’, whilst necessary for everyone equally, are being imposed in a one-sided fashion, with the aim not of compliance but elimination.
This does not mean that jurisdictions should abhor rules that bring stability or transparency through cooperation in the global financial system. But smaller nations should and must demand that all nations, particularly those that are larger and stronger – and engaged in the exact same business practices as Panama – also follow the rules they seek to impose.
The second possibility is that the business will move – apart from the current flight being seen into America’s onshore ‘offshore’ centres (Delaware, South Dakota, Alaska, Wisconsin, Colorado and Arizona) – to jurisdictions that have little reason to heed a European or American call for prudential cooperation in financial matters. And rather than being subject to a rules-based system, the new global financial services regime will reflect the current stalemates in international affairs, subject to the same mistrust and recriminations, which increasingly characterises international relations today.
If international financial centres are to avoid this fate, they must learn the protocols of diplomatic proactivity, functioning with all the subtlety and aplomb necessary to operate at the very top of the global financial system. This means establishing an organisation to speak to the world on their behalf, rather than defending themselves individually, always in a moment of crisis, after the global media has brazenly and falsely defined the sector and region negatively, without fear of correction.
The Panama Papers then afford IFCs a platform to organise themselves into a potent and proactive force to speak to the world clearly and authoritatively on the critical relevance of IFCs to global commerce and to correct the false media narrative that Alsatia has somehow shed its London roots for Panama and the Caribbean. Such an organisation must demand an equal footing on a level playing field, that anticipates the primacy of law and rule-governed legitimacy rather than that ‘might is always right’.
To paraphrase an old diplomatic saying: We shall not have the financial centres we had or the ones we hope for. Rather we shall have or not, only the financial centres for which we possess the grace and skill to negotiate.
About the Authors:
The Hon Mark AG Brantley, MP and Professor Gilbert NMO Morris met at Oxford University almost 21 years ago, and have remained friends since then. Brantley is a distinguished Barrister and is now Deputy Premier of Nevis and Federal Minister of Foreign Affairs and Aviation. Professor Morris was Professor at George Mason University, is the former Chairman of the National Investment Agency & National Bank of the Turks and Caicos Islands and is now Chairman of the Turks and Caicos Resorts Economic Council (TCREC).