Greased Palms: Biden Unlikely to Tighten Screws on US Rich & Tax Havens, Observers Say
© REUTERS / EVELYN HOCKSTEIN
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The Pandora Papers leak is serious cause for concern for the world's rich and powerful, exposing their secret deals and hidden assets. The dump details over 29,000 offshore accounts – double the number identified in 2016 in the so-called Panama Papers, which was regarded at the time as the largest data leak journalists had ever worked with.
The Pandora trove consists of 11.9 million files that shed light on offshore structures and trusts in tax havens, such as Panama, Dubai, Monaco, Switzerland, and the Cayman Islands. In addition, the huge leak has revealed the explosive growth of offshore banking inside the US: specifically, South Dakota and Nevada, which are among the states that have "adopted financial secrecy laws that rival those of offshore jurisdictions."
In the aftermath of the leak the Biden administration announced that "it’s time to deal in hard working Americans and ensure the super-wealthy pay their fair share" and vowed to "crack down on the unfair schemes that give big corporations a leg up." Earlier this year, Treasury Secretary Janet Yellen called upon G20 leaders to implement a global minimum corporate tax rate above the 15 percent floor in order to prevent the super-rich from avoiding taxes.
Yet Another Blow to Washington After Afghanistan Debacle
"The fact is that the Pandora Papers spotlight the offshore system, with the US emerging as a critical place in the offshore world," says Adriel Kasonta, a London-based foreign affairs analyst and former chairman of the International Affairs Committee at Bow Group, a conservative think tank in the UK. "According to the investigation, almost $360 billion in customer assets is placed in South Dakota trusts. Some of it is tied to foreign individuals and companies accused of human rights abuses and other wrongdoing."
The Pandora Papers have dealt yet another blow to Washington's image in the wake of the Afghan chaotic withdrawal, according to the analyst. Kasonta expects that the Republicans will push the president and Democrats "to do more to save the good name of the US in the eyes of the international community and public."
"I’m sure we can expect new legislative initiatives to be introduced in the coming days, months to tackle the offshore problem, or, in other words, protect the US/West against rogue foreign billionaires," the British conservative scholar believes.
BOOM: Journalists just exposed the Pandora Papers – files exposing billionaires' secret tax evasion schemes. It's DOUBLE the size of the Panama Papers.
— Chip Franklin🏛InsideTheBeltway.com (@chipfranklin) October 3, 2021
Who else thinks @JoeBiden should track down EVERY US Citizen on this list to make sure they pay their fair share? 🖐️
'Biden Himself is Product of Ultra-Loose Hot Money Corporate Culture'
Still, the Biden administration's promises to crack down on safe havens and unfair schemes should be taken with a grain of salt, argues Daniel Lazare, writer and political theorist: "I am absolutely convinced they will do the opposite," he says.
To illustrate his point the writer referred to what happened in Afghanistan and Ukraine after Washington interfered into the countries' domestic affairs.
"There, the US pledged to clean up corruption and corruption became only worse and worse over the years until the point where it was actually fatal to the Kabul regime," Lazare notes. "The US is doing the same thing in Ukraine, promising to clean it up. The corruption is only increasing; the president himself is involved. Joe Biden has vowed to crack down on these activities, but Biden himself is the product himself of this ultra-loose hot money corporate culture."
It's common knowledge that South Dakota and Nevada have become a hot money haven in recent years, according to the political theorist. However, Delaware – Joe Biden's home state – has also opened its doors wider to these kinds of hot money flows, Lazare highlights.
"Therefore, I think there's little chance the US will take any effective action to rein these practices in," he believes. "The US is actually expanding and is actually more welcoming to these kinds of capital inflows than it was a few years ago during the Panama Papers scandal."
I'm told by the reporting team this is the biggest offshore-finance leak—and journalistic collaboration—*ever.*
— Edward Snowden (@Snowden) October 3, 2021
They expose the intentionally concealed finances of 35 world leaders and 300+ other public officials in 90+ countries.
...and they aren't finished. https://t.co/wbw4Gpx8jT
David Marchant, investigative journalist and founder of OffshoreAlert, shares Lazare's skepticism; he points to the fact that money drives politics and donors while politicians' words are worth nothing.
"Just if you think this through logically, if you are a wealthy person and you donate money to a political party, is it in the interest of the political party to clamp down on something that you as a donor are using?" Marchant asks. "And I would suggest no – it would be counterintuitive for politicians to upset their financial backers."
This does not mean, however, that the US federal government has no leverage to end offshore banking and corporate secrecy, according to Lucy Komisar, a New York-based prominent financial fraud investigative reporter.
"All the US has to do is declare that offshore banks are threats to the US and ban transfers from those banks to the US," Komisar says citing her 1997 interview with Robert Morgenthau, former district attorney of New York, who was "a mortal enemy" of the corrupt offshore banking and corporate secrecy system.
She notes that the big US banks have lots of offshore subsidiaries. Previously they used to declare them in annual reports to the US Securities and Exchange Commission, but then stopped deciding they were not "material," Komisar explains. "The big banks and corporations own the US Congress," she remarks. "They write the tax laws."
U.S. Defense Secretary Lloyd Austin, Vice President Kamala Harris, Secretary of State Antony Blinken and National Security advisor Jake Sullivan listen as President Joe Biden delivers remarks on evacuation efforts and the ongoing situation in Afghanistan during a speech in the East Room at the White House in Washington, U.S., August 20, 2021.
© REUTERS / KEN CEDENO
'US Tax Havens Aren't Washington's Biggest Problem Right Now'
At the same time, the latest leak is unlikely to have a huge impact on US domestic public opinion, according to Alex Krainer, political analyst and author. He notes that the Biden administration already has a lot on its plate, including COVID-19, the southern border crisis, soaring inflation, and legislative dramas in Congress, so that the Americans are unlikely to get "too excited about questions of money laundering and transparency."
"Maybe there will be questions at some press conferences, but Joe Biden is not going to answer them or he's going to give them, like Kamala Harris and the border crisis, they're going to give some platitudes and slogans, but essentially nothing is going to change," Krainer says. "I think this doesn't even count as one of their biggest problems."
Joe Biden's approval rating is continuing to plummet following the deadly evacuation from Afghanistan, the emergence of the Delta variant of coronavirus, the Haitian refugee scandal, and looming default, according to a new poll by The Associated Press-NORC Centre for Public Affairs Research. The survey highlighted that Biden’s rating has especially dipped among independents – from 62 percent to 38 percent.
While the latest AP-NORC poll indicates that the president's approval is fluctuating around 50 percent, the Gallup study released on 22 September highlighted that eight months after Biden's inauguration, his job approval rating has fallen six percentage points to 43%, the lowest of his presidency. For its part, the October IBD/TIPP poll has found that Biden's job approval even among Democrats is "leaking air."
