Wednesday, 6 April 2016

Bernie Sanders was right about Panama

The leak of the Panama Papers has vindicated Bernie Sanders stance against tax-dodging. In 2011 Sanders strongly criticised the Panama Free Trade agreement while his rival for the 2016 Democratic Presidential nomination Hillary Clinton voted in favour of the Panama free trade agreement.

Here's what he said to Congress on October 12th 2011.

"Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade US taxes by stashing their cash in offshore tax havens. The Panama free trade agreement will make this bad situation much worse. Each and every year, the wealthiest people in this country and the largest corporations evade about $100 billion in taxes through abusive and illegal offshore tax havens in Panama and in other countries." [source]
As Secretary of State in the Obama administration Hillary Clinton not only voted for the Panama free trade agreement, she also publicly advocated it, and congratulated President Obama when the deal was passed saying "these initiatives are the leading edge of a job-creating trade agenda that will open markets, level the playing field for our businesses and workers, and champion America’s working families in an age of tough global competition".

The confidence with which Clinton celebrated this deal with one of the most notorious tax havens in the world is staggering. As Bernie Sanders pointed out during his speech opposing the deal, the Panamanian economy is only 0.2% of the size of the US economy, so anyone talking up a free trade agreement between the two countries in terms of being some kind of jobs bonanza is clearly being disingenuous. As for the bits about "levelling the playing field" and "championing working families" they're utterly absurd black=white assertions. How on earth is a trade agreement with a notorious tax haven where wealthy US citizens and corporations stash their ill-gotten gains good for ordinary working families?

After the initial furore over the high profile politicians implicated in the Panama Papers had died down, the media team who are carefully stage-managing the release of information quietly announced some of the first American names in the Mosack Fonseca client list which included:

  • Robert Miracle (convicted fraudster)
  • Benjamin Wey (indicted on securities fraud charges in 2015)
  • Igor Olenicoff (found guilty of stashing $200m in offshore accounts in 2007)
  • Anthony J. Gumbiner (guilty of SEC fraud in the 1980s)
  • John Michael 'Red' Crim (found guilty of a $10m tax fraud in 2008)
  • Jonathan Kaplan (found guilty in 2007 of accepting a $400,000 commercial bribe) 
It's astonishing that back in 2011 Hillary Clinton used such misleading language to celebrate a free trade deal with an economy that provides a bolt hole for criminals like those listed above to stash the ill-gotten gains they've ripped off from American working families (either directly through fraud, or indirectly by dodging their taxes meaning either services have to be cut, or other American citizens have to make up the shortfall).

It's also worth noting that the vast majority of Republicans (in Congress and in the Senate) supported Barack Obama's Panama free trade agreement, while the bulk of the limited opposition in both houses came from Democrats.

Here is what Bernie Sanders had to say after the Panama Papers came out:

"I was opposed to the Panama Free Trade Agreement from day one. I predicted that the passage of this disastrous trade deal would make it easier, not harder, for the wealthy and large corporations to evade taxes by sheltering billions of dollars offshore. I wish I had been proven wrong about this, but it has now come to light that the extent of Panama’s tax avoidance scams is even worse than I had feared.  
My opponent [Hillary Clinton], on the other hand, opposed this trade agreement when she was running against Barack Obama for president in 2008. But when it really mattered she quickly reversed course and helped push the Panama Free Trade Agreement through Congress as Secretary of State. The results have been a disaster.
The American people are sick and tired of establishment politicians who say one thing during a campaign and do the exact opposite the day after the election. “It is time for real change. As president, I will use my authority to terminate the Panama Free Trade Agreement within six months. My administration will conduct an immediate investigation into U.S. banks, corporations and wealthy individuals who have been stashing their cash in Panama to avoid taxes. If any of them have violated U.S. law, my administration will prosecute them to the fullest extent of the law."
In stark contrast to the empty tough-talking rhetoric about tax-dodging from UK Prime Minister David Cameron, it's possible to actually believe Bernie Sanders is serious about confronting the problem because he's got an actual track record of opposing tax-dodging, and opposing free trade deals with notorious tax haven economies.

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