Kleptocracy: the real scandal behind the Panama Papers



A “Kleptocracy Tour” of London’s luxury houses bought by shady international tycoons and officials was set up by anti-corruption campaigner Roman Borisovich, who aims to expose dirty money fueling the high-end London property market and the teams of British “enablers” who make it happen, AFP reports.

“The idea behind the tour is to attract public attention to the fact of massive money laundering through properties in London,” Borisovich told AFP on the tour this week, ahead of an international anti-corruption summit being hosted by Prime Minister David Cameron.

Investigative journalists posted online for the first time a searchable database revealing the offshore assets of wealthy politicians and celebrities, RFE/RL reports:

The International Consortium of Investigative Journalists database covering more than 200,000 Panamanian shell companies became accessible on May 9 at offshoreleaks.icij.org. It features information derived from millions of leaked documents from the Panama law firm Mossack Fonseca, which specializes in setting up secret shell companies.

The real scandal of the Panama Papers is not that corruption continues to exist; it is that many of the methods that kleptocrats and criminals use to hide dirty money remain perfectly legal, argue analysts Molly Elgin-Cossart and Trevor Sutton. But there are meaningful ways the United States can crack down on corrupt actors at home and abroad without congressional action, they write in a paper for the Center for American Progress:

  • First, the United States should finalize a proposed Securities and Exchange Commission rule requiring company-specific, project-level public disclosure of payment information in the opaque and corruption-ridden extractives industry. …
  • Second, the U.S. government should require beneficial ownership transparency for federal contractors. …. Despite high-level commitments that the United States endorsed at the G20 in 2014, according to the Open Contracting Partnership, more than 20 percent of 2016 U.S. federal contracts failed to properly identify the contractors providing services to the government…..
  • Third, the United States should encourage and provide support to regional anti-corruption bodies and pursue meaningful enforcement of the Organization for Economic Cooperation and Development, or OECD, Anti-Bribery Convention—similar to the global commitment to counter terror financing after 9/11. In 2014, 20 of the 41 parties to the anti-bribery convention engaged in zero criminal enforcement actions under the agreement, while nine others brought fewer than five cases. By contrast, the United States brought actions against 154 persons or firms, or nearly one-third of the total actions globally, and added dedicated kleptocracy squads to the U.S. Department of Justice. …
  • Finally, the United States, as well as overseas partners, should dedicate greater resources to support anti-corruption efforts because the fight against corruption is only as strong as its weakest link. In the United States, the independent inspectors general within more than 70 federal agencies are badly in need of funds and support. The United States should also proactively engage with law enforcement authorities and prosecutors among a broader range of partners and work through regional and multilateral bodies where possible. Strengthening other countries’ systems and enforcement capabilities must be a priority—especially at a time when nations such as Russia seek to use corruption as a geopolitical tool to coerce other nations at the expense of U.S. interests.


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