Sunday, April 3, 2016

Corruption Revelations in the Air

Corruption is in the air. A year ago the top-to-bottom tale of corruption in international football was staggering in its scale, but that pales in comparison to not one, but two investigations in Brazil last month, one looking at the pillage of the state-owned oil company, another suspecting hundreds of businesses of bribing a tax appeals court. Then last week there was the revelation of systematic bribery carried out by people linked to a shadowy company called Unaoil and reaching into most of the countries that produce or consume oil. And today there is more. The unauthorized release of the “Panama papers” is claimed to be bigger than all the preceding combined. The 11 million documents are said to provide an inside look at 200,000 shell companies set up to hide money, avoid taxes, and deliver bribes that could not be easily traced.

Early reports about the Panama papers mention officials of Iceland, United Kingdom, and Russia and hint at offshore money under the control of hundreds of well-known global figures. It will take weeks to sift through the information that has already been made public — and who knows what leaks and revelations are coming next? There is reason to imagine that there is more to come, and not just because three is a trend. The low level of overlap among the five scandals I mentioned hints that what we are seeing so far is not yet the tip of the iceberg, but just a few random windows into the corporate world of shadow money. The corporate form in the electronic era is inherently vulnerable to just this kind of leak, so other hidden crime corporations can hardly gloat at their competitors’ misfortunes. Instead they are obliged to ask how soon their own shadow money might be brought into the light.