There are clearly specified checks on how public officials may operate failing which they can be investigated by government accountants/auditors/law enforcement agencies who, ideally, undertake their task without fear or favour. The system's effectivity is naturally a function of how rigidly the clause without fear or favour is applied in letter as well as spirit.
The Panama Papers leak reflects a naming that shamed many into either resigning (Iceland's Prime Minister Sigmundur David Gunnlaugsson in office since 2013, for an offshore company owned by his wife Wintris) or presenting a vigorous defense (former British Prime Minister David Cameron who gave a detailed account of his offshore company to Parliament).
Others who resigned or were fired include the following:
(i) Kristján Örn Sigurðsson, CEO of the United Pension Fund in Iceland (Iceland), (ii) Keung Kwon-yuen,*Senior newspaper editor at Ming Pao newspaper, Hong Kong fired as "a cost-cutting measure the day he filled the front page with revelations about Hong Kong celebrities, officials and businessmen; (iii) Mihran Poghosyan, Chief Compulsory Enforcement Officer, Armenia, (iv) José Manuel Soria, Minister of Industry and Energy, Spain; (v) Júlíus Vífill Ingvarsson, Independence Party city councilperson for Reykjavík, Iceland; (vi) Bert Meerstadt, ABN Amro Bank Board Member, Netherlands; (vii) Juan Pedro Damiani, FIFA Ethics Committee Member, Uruguay, (viii) Michael Grahammer, CEO of Hypo Landesbank Vorarlberg, Austria, (ix) Gonzalo Delaveu, President of Transparency Chile, and (x) Kari Arnor Karaso, CEO of the Stapi Pension Fund, Iceland.
Not making too much of a dent in terms of the media coverage in their country was the revelation of offshore accounts in non-democratic countries including Russia, Syria, Iraq, the Sudan and Qatar.
In Pakistan, whether the government is elected or led by a military dictator naming and shaming has rarely produced any change in voting patterns in spite of allegations of serious crimes against particular politicians. Politicians implicated in corruption cases have successfully dismissed all charges against them as politically motivated - examples that include former prime ministers and their family members including Yousuf Raza Gilani, Raja Pervez Ashraf and more recently Nawaz Sharif. And few have been convicted in recent decades due to: (i) the oft cited National Reconciliation Ordinance wherein a total of 8041 including 34 politicians, bureaucrats and three ambassadors directly benefited by having their cases summarily dismissed by executive decree; (ii) deals made with the sitting government/powers-that-be which have stayed investigations by either the National Accountability Bureau/Federal Investigation Agency or the state prosecutors presented a weak defense which led to the dismissal of the case in the court; and (iii) NAB, through accepting plea bargains, has been accused of making corruption pay in the country through allowing the payment of a small percentage of the money reportedly stolen by the accused.
However, perhaps the most disturbing aspect of dealing with corruption and its associated money laundering has been granting a leave of absence to a finance minister who not only is implicated in money laundering - a charge that he acknowledged in a detailed affidavit - but, more disturbingly, is implicated in a case of having wealth beyond known means of income. It is indeed ironical that the man who claimed his publication of the taxes paid annually by members of parliament, a policy of naming and shaming, reflected his commitment to ensure that each parliamentarian paid taxes according to his real wealth is currently unable to provide the banking transactions that would show his claim that a large monthly stipend - to the tune of over 800,000 dollars a month - was credited to his account between 2002-08. To show a letter by his alleged employer that he was hired by him at an exorbitant monthly salary did not, justifiably, convince the court.
The question is has there been any outcome of the Panama papers in terms of policy? Perhaps the most commendable suggestion came from Jeremy Corbyn, leader of the British Labour Party who argued in favour of the British government imposing direct rule over dependencies (Virgin Islands/Isle of Man/Jersey) accused of being tax havens. No such action has been taken though subsequent to the recent Paradise Papers revelations, outing the Who's Who of the world including the Queen and the Crown Prince of UK, as well as several multinational companies for example Nike, Theresa May reportedly expressed frustration at BBC's and The Guardian's refusal, both recipients of the data from International Consortium of Investigative Journalists, to hand over evidence. May's spokesperson stated: "where journalists are advocating for further tax transparency we would wish to see that information rather than for it to be held back. Potentially it could help HMRC and other tax jurisdictions to investigate." European Union finance ministers called for a blacklist of tax havens to be drawn up for approval as part of kick back against what it sees as tax dodging by the rich and famous.
Obama when President addressed the matter of the leaks, "It's not that they're breaking the laws, it's that the laws are so poorly designed that they allow people, if they've got enough lawyers and enough accountants, to wiggle out of responsibilities that ordinary citizens are having to abide by." And this is a debate that is often cited by those Pakistanis whose names have been published in the Panama and Paradise papers notably that they stayed within the law.
Relevant laws have been promulgated in Pakistan that, if implemented, would make serious dents in money laundering, capital flight that continues to the extent of billions of dollars every year to this day, and ensuring that no one who has wealth beyond known means of income remains uninvestigated. At the same time there is a need to empower investigating agencies as well as strengthen the prosecution branch in both the federal and provincial levels. And last but not least the Federal Board of Revenue should look to plug loopholes provided by tax avoidance measures (legally admissible) as well as tax evasion (legally non-admissible).
Copyright Business Recorder, 2017