Every time I sit in front of a computer these days, it’s as if the keys start typing away the words ‘Panama Papers’ automatically. Most permutations of the scandal have been covered and people have reached their own conclusions. If the Prime Minister is holding on for that exculpatory tax audit, it had better be soon because the whole Moviment is cracking under the Panama pressure.
Konrad Mizzi is reluctantly the main flak-magnet, which is only to be expected, seeing that he’s a minister who should never have even considered any connection to a renowned tax haven like Panama. He should bow out, just as Spain’s acting industry minister Jose Manuel Soria did, because his name has been linked to offshore companies. Soria resigned even though he stated that he “had no shares, nor participation, nor any position of responsibility” with the company and that it was simply a service provider for a family shipping business he used to run.
That’s what ethical politicians do – step aside on the remotest whiff of improper behaviour, and not hang on like leeches.
So the shrill cries for Mizzi to do the honourable thing are justified. However, there is a rather odd silence about a less-publicised aspect of the Panama Papers. Both the local and international press have reported another Maltese flavour to the offshore leaks scandal.
It turns out there are 676 companies included in the leaked documents of Mossack Fonseca that are associated with an address in Malta. Cumulatively these companies have 277 shareholders in all. The companies associated with a Maltese address have 42 clients and 59 beneficiaries.
That’s not to say that all these links to Maltese addresses automatically translate to a slew of money-launderers, moving stashes of cash to top secret, balmy tax havens. Maybe the unidentified individuals at those addresses have earned the tons of money that would make it worth their while to have a Panamanian company through the honest sweat of their brow and after saving all their money in their piggybanks since the age of seven.
It is not at all clear why only some individuals have been exposed as having associations with offshore havens while others remain comfortably concealed
And – let’s continue with this little exercise in suspending belief – maybe all the monies held in those offshore havens have been regularly reported to the tax authorities in Malta and every last cent of tax has been paid on them. You can all stop laughing now.
The fact remains that, to date, attention has been focussed on the high-profile political protagonists named in the Panama Papers. This is understandable, as elected ministers and public officials are in positions of power and have insider knowledge of legislation and tendering processes that may make them more susceptible to bribery.
But they do not operate in a vacuum. If we are concerned with the use of offshore havens for the purposes of tax evasion and money laundering, we should be similarly concerned with the ‘non-political’ or private individuals who may be carrying out such illicit activities. There may be businessmen, institutions or lobbies funnelling proceeds away from the Maltese taxman’s reach and concealing their source.
Apart from the obvious fiscal and ethical issues involved here, there are other implications – that there is a substrata of wealthy individuals or service providers in Malta who possess the means to influence wide aspects of life in Malta.
An individual with no known links to politicians – but with a massive amount of concealed funds at his disposal in an offshore haven – can easily influence public officials, prejudicing the common good. Their hidden funds give them a competitive advantage over honest competitors – in the field of business and also of public life. A tax evader may rely on his ill-gotten gains to fund his electoral campaign. In other words, ‘today’s money-launderers may be tomorrow’s ministers’.
The International Consortium of Investigative Journalists, which has worked on the Panama Papers, has indicated that it will not be releasing all the information regarding individuals featured in the documentation they received.
While this is within the ICIJ’s rights, it is not at all clear why only some individuals have been exposed as having associations with offshore havens while others remain comfortably concealed. Since there has been only selective leaking, we cannot be sure if there are still other people with links to power, whose identity has not be revealed.
Fuller disclosure would ensure that Maltese citizens can become aware of who is squirrelling away money to some fiscal paradise. Transparency should be across the board.
cl.bon@nextgen.net.mt