The revelations from the so-called “Panama Papers” have been coming fast and furious this week.
They have implicated the prime minister of Iceland, who has since resigned, the family of the prime minister of Pakistan, the president of Ukraine, family members of China’s political leadership, Kofi Annan and his son, the president of FIFA, and many others.
(Interestingly enough, the New York Times reported that, “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.”)
Aside from highlighting the lengths to which many will go to hide their assets and avoid (if not necessarily evade) taxes, the release of the Panama Papers is a powerful reminder that true secrecy in financial dealings is almost impossible to maintain today. For good or ill, your books are just a hack or a leak by a disgruntled insider away.
Can Your Governance Pass the New York Times Test?
The New York Times Test involves a simple question that leaders can ask in order to decide whether or not their ideas are ethical. To whit: How would you feel if your actions were described in detail on the front page of the New York Times?
At the moment hundreds of politicians and wealthy celebrities are finding out exactly how this feels.
What makes this question devilishly difficult to answer, however, is the fact that, as far as it has been suggested so far, we are not necessarily talking about illegal behavior exposed by this leak. In point of fact, there is nothing inherently illegal in, for example, obscuring ownership of real estate by making purchases through a shell company.
That is, the biggest problem isn’t criminal prosecution, but bad press.
