As the two weeks end the sensational revelations no longer even occupy the inside pages of our media.
The ICIJ’s investigations revealed the accumulation of wealth in tax havens by heads of States, businessmen, politicos and a wide range of other individuals and other places allegedly in violation of money laundering and other laws in their home countries. The names of the individuals and the positions they held in their home countries made the revelations all the more sensational.
In the list of names were two Sri Lankans: Nirupama Rajapaksa, a former Deputy Minister, and her husband Thirukumar Nadesan who according to the ICIJ had accumulated substantial offshore assets.
A Sinhala newspaper also claimed that 93 other individuals from Sri Lanka had been named in the Pandora Papers although no details of such people were immediately available.
While Nadesan, in a letter to President Gotabaya Rajapaksa said he and his wife “are totally innocent and are guilty of no wrongdoing” the President ordered the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) to investigate and submit a report within a month.
The Sunday Times in its editorial of October 10, 2021 referred to the President’s directive as “tantamount to a bad joke” citing the poor track record of CIABOC since it was set up in 1994.
Interestingly the President’s direction to the CIABOC further confirms the allegation that the 20th Amendment did away with the independence of the CIABOC and other commissions. Prior to the enactment of the 20th Amendment no President could give directions, good or bad, to any of the commissions.
However for a country like Sri Lanka there are many issues beyond the individual culpability of the two individuals named in the Pandora Papers. The people will recall that when the political transition from the Mahinda Rajapaksa Presidency to the Maithripala Sirisena Presidency took place on the night of January 8, 2015, it was this same Thirukumar Nadesan who visited Temple Trees with Ranil Wickremesinghe in the dead of night to facilitate the transition.
The UN SG’s Panel FACTI calculated a staggering US$ seven trillion in stolen assets parked in largely offshore tax havens.”
This incident clearly reflects the duality in the world of Sri Lankan politics in which powerful individuals exercise influence in the corridors of powers while the masses shout themselves hoarse in the streets believing that it is they who are influencing changes for the benefit of the country.
If such individuals play a public role in matters as important as transitioning a regime change, one can only shudder to think what roles that they play and what influences they bring to bear on governance away from the public eye.
The other aspect of the story of the Pandora Papers is its impact on the economy and therefore the lives of the citizens of Sri Lanka and those in other similarly placed countries.
The records which were part of the two-year investigation found billions pouring out of impoverished and autocratic nations and into private accounts listed under the names of shell companies and trusts, often hidden from courts, creditors and law enforcement. The allegations range from corruption to money laundering and tax evasion.
One media report goes on to say, “Investigations have shown that as a result of the movement of these funds Governments around the world are starved of desperately needed resources, and global wealth is concentrated into ever fewer hands.”
What is of significance to Sri Lanka, even more than the individual culpability of the two individuals named, is that lax tax regulations have been a boon for the wealthy and powerful. The country which is still recovering from the impact of the three decade armed conflict compounded by the current pandemic has to struggle to raise funds for badly needed economic development and social reform programmes to uplift the poor and marginalised while resources owned by it are stashed away elsewhere.
The Sunday Times Editorial of October 10, 2021 underlined the impact on poorer countries when it stated: “The furor over the Panama Papers, which the same ICIJ broke not long ago, has now blown over, and in all likelihood even the names listed in the Pandora Papers will go into the limbo of forgotten things very soon. That is the stark reality because of the nexus between politicians and the businessmen named.”
“Many countries, especially in the West, profit from allowing foreigners to park their money with them. These papers show the amount of properties purchased in the UK, Australia etc., with the dodgy cash. These countries are only concerned if the money is used for terrorist purposes against them, or for drug trafficking – again, only if it affects them. They care a damn about anything else and as long as these funds help to bolster their economies, they are fine with it, merely paying lip service to the concept of money laundering or the plunder of the wealth of the poorer nations.”
In neighbouring Pakistan, Prime Minister Imran Khan tweeted: “We welcome the Pandora Papers exposing the ill-gotten wealth of elites, accumulated through tax evasion & corruption & laundered out to financial “havens”. The UN SG’s Panel FACTI calculated a staggering US$ seven trillion in stolen assets parked in largely offshore tax havens.”
Ownership of offshore holding companies is not illegal in most countries, and does not indicate wrongdoing, but the instrument is frequently used to avoid tax liability or to maintain secrecy around large financial transactions.
The former Pakistan cricket captain’s Government has been rocked by allegations in the Pandora Papers that have named more than 700 Pakistani citizens including Ministers, Imran Khan’s party allies, and families of military officials. The Prime Minister has ordered investigations into the revelations.
Imran Khan has strongly criticized tax havens and the like, which provide opportunities for corrupt elements particularly in the poorer countries to siphon off and park ill-gotten wealth in such havens, thus bleeding such countries of much needed resources for development.
Imran Khan has bemoaned the lack of political will in rich countries to do away with these offshore safe tax havens. He points out that the existence of such places not only deprives the developing countries of much needed resources but it is also not a deterrent for criminally corrupt elements in poorer countries.
It is time that countries like Sri Lanka and Pakistan take the lead to canvass world opinion to dismantle such safe havens that are morally reprehensible. So long as these structures facilitate the movement of such funds the corrupt will always find ways to make use of them.
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