OPINION: Panama Papers point to corporate accountability

by | Apr 8, 2016 | Canadian News, Opinion

Phil Witmer

We should not let the Panama Papers revelations slide even though the bottom line on the recent  exposé is sadly inevitable.

Of course the world’s wealthiest 1 per cent keeps trillions in tax holdings at secret offshore locations. It’s ludicrous that it is so obviously believable.

No major power was safe from the international investigative effort, with many banks and corporations making swift moves to cover-up.

Among them was our very own Royal Bank of Canada, RBC.

Yes, Canada’s largest bank set up some 370 offshore havens to evade Canadian taxes. But they’ve firmly denied any and all connections, with CEO Dave McKay saying that RBC officials “don’t have any understanding of the information”.

As with all other aspects of the Panama Papers case, the cover-up should be obvious. Still, the sheer scale of the Papers may find some of the public either too overwhelmed to engage with them or dismissing them as business section gibberish, to be read only by economists.

This is not what should be happening. Here are the facts:

The Panamanian firm Mossack Fonseca, released data on nearly a quarter million offshore companies situated on small islands in the Caribbean, the Indian Ocean, and the Pacific believed to be used as tax havens.

The leaders of Iceland, Saudi Arabia, Ukraine, Argentina, and the United Arab Emirates are all implicated, while higher-ups of forty more countries are as well.

These actions go back to at least the 1970s and may have resulted in $2 trillion lost. Iceland’s prime minister has already resigned due to his newly acquired scandal and it wouldn’t be surprising if more of the named world leaders take similar actions to take the heat off themselves.

Twitter was ablaze with a #cameronresign Friday morning, calling for the resignation of UK Prime Minister David Cameron, so the possibility isn’t too far off.

So, we come to RBC being implicated, and along with it, the Bank of Montreal.

Is there a general blindness among the public to the machinations of these banks or are they just good at hiding things?

The answer is most likely the former, seeing as it took journalists in more than 70 countries to crack the ring. If these havens have existed for decades, and the concept of tax evasion is even older, perhaps there should be little excuse to not have increased vigilance from Canadians.

Of course, the idea that Canadians could be corrupt is a challenge because we’re “the nice ones”.

Unfortunately, the world doesn’t work like that. The rich and scheming are the rich and scheming, no matter where they are.

There should probably be more financial literacy among the general public on where their money goes and how it’s processed once it gets to the skyscrapers of Bay Street.

It’s baby steps but perhaps this can lead to more transparency among larger corporations. After all, if everyone knows what goes on, it’s more difficult for banks and politicians to play coy.

Perhaps now that the Panama Papers have been exposed alongside the NSA leaks of 2013, the inner workings of powerful organizations will now more likely be laid bare.

There just shouldn’t be so much surprise when Canada is discovered to be a little bit rotten. Investigative efforts like these need to keep going, as they are the beginning of a new era, a sort of crowd-sourced security or whistleblower culture.

This is obviously a large-scale vision, and one that won’t see immediate results any time soon, but it’s nice to know what a bit of digging can do.