Tax fraud fuels right-wing extremism around the world
Another day another gigantic leak about how oligarchs around the world are abusing the global financial system to hide billions of dollars. This latest report, dubbed the “Pandora Papers”, is based on 2.94 terabytes of data somehow obtained from 14 different “offshore service providers” and disclosed to the International Consortium of Investigative Journalists. , who shared them with many other publications. Some 600 journalists have been looking at the data for months, and now the results have been released to the ICIJ, The Washington Post, The Guardian, and other publications.
As well as exposing a small chunk of the dirty laundry of the global oligarchy, this report is a rare window into how the systematic corruption of the global financial system is fueling right-wing extremism around the world.
On some level, Leaks have the usual assortment of wealthy people engaged in sordid schemes to hide their money from the tax authorities or public scrutiny, or cover up outright crime. The persons described include “130 Forbes billionaires, as well as celebrities, fraudsters, drug dealers, royals and leaders of religious groups around the world, ”write ICIJ reporters. To post reports that several states, particularly South Dakota, have become quite similar to these offshore tax havens: “Perhaps the most disturbing revelations for the United States, however, center on their growing complicity in the offshore economy . South Dakota, Nevada, and other states have adopted financial secrecy laws that rival those of offshore jurisdictions. “
But the leak also concerns more than 330 politicians, including 35 current and former national leaders – such as Russia’s Vladimir Putin, King Abdullah of Jordan, Andrej Babis of the Czech Republic and Uhuru Kenyatta of Kenya. If the late Eric Hobsbawm wrote a story of the past 30 years, it could be called The era of transplant.
There are two main ways that this type of international black money pushes world politics to the right. The first is the mechanical influence of Russian Vladimir Putin, who has become a kind of international source of right-wing extremism. Putin’s political formula is quite simple: win the election one way or another, then rig the political process to end democratic competition, crush independent media and dissidents, and surround yourself with the rich rich. who depend on your protection for their money. Then push back popular disaffection by stoking xenophobic hysteria and the occasional modest war.
“Putin’s corrupt system has made many of them rich and might as well make them poor again,” the ICIJ notes of the Russian oligarchs. He has pushed his political model around the world, especially where countries already have large corrupt right-wing movements. Most notoriously, he used espionage to help Donald Trump become president in 2016 and tried to aid his re-election campaign in 2020. Putin used similar tactics to help right-wing politicians and fuel corruption in Bulgaria , in Hungary and the Czech Republic, and tried to do so in France and Germany (although it did not work in the last two cases).
All of Putin’s allies and affiliates tend to behave like him. Trump (who has been a blatant tax engraver his entire life) has openly used the presidency to line his pockets. Hungarian President Viktor Orban has rigged almost the entire Hungarian economy to flow into his pockets and those of those around him. And in the Czech Republic, the Pandora Papers reveal that Prime Minister Babis – who has adopted the political personality of Trump in bulk, including an iconic trucker cap and a slogan to ‘make the Czech Republic strong again’ – turns out to be have “moved $ 22 million.” via offshore companies to buy a sumptuous estate on the Côte d’Azur in 2009 while keeping its property secret, ”reports the ICIJ.
It is the right-wing movement in almost every country: a corrupt cabal of crooks, racists and demagogues bringing national wealth into their personal offshore bank accounts, while distracting the population with garish xenophobia. Putin by no means invented this policy, but he is the Johnny Appleseed of the movement, and many have copied his example or stumbled upon the same strategy independently.
The second way in which black money fuels law is less straightforward. Even though the citizens of all of these countries may not fully understand the complex financial mechanics revealed in the Pandora Papers (or countless previous stories), it is blatantly obvious that their savings are being rigged. Americans, Hungarians, Brazilians, we can all see the ultra-rich kissing each other like bandits while ordinary people have to subsist on relative scraps. The inability of traditional elites to cope – especially when globalization and deregulation creates a financial crisis, as happened in 2008 – opens the door for self-proclaimed outsiders like Trump to capitalize on latent discontent and inconsistent outrage by making immigrants or minorities scapegoats. As Philip Stephens writes in Financial TimeWhat Trump understood, like populists elsewhere, is that voters’ respect for established politics is rooted in a market. Public confidence in democracy – in the rule of law and the institutions of law ‘State – based on perception at least nods towards fairness. “
Now that does not mean that the Conservatives are the only ones guilty of corruption. Many center-left personalities (former British Prime Minister Tony Blair, for example) or simply apolitical authoritarians can be found in the Pandora Papers. But while the Democratic Party can contain many corrupt personalities, corruption is not a central pillar of its functioning. One of the virtues of President Biden’s proposed tax hikes on the rich, additional resources for the IRS, and the global minimum tax regime is that they would drain many of those pools of black money and cut off the breath to the international right. extremism.
Making the rich pay their fair share is not just a matter of political justice, it is a way to protect democracy itself.