The real reason govts are turning blind eye to Panama Papers
It is instructive to look back at the Enron Corp collapse in 2001. In brief, Enron built such a maze of shell companies and subsidiaries that US regulators and investigators could not “follow the money”.
In a case like that, in which “creative accounting” is used to hide so much, a government could simply seize all the assets and put an end to the story. Those who get “too creative” could lose everything.
The same goes for cases of offshore companies that hide ownerships and transactions. If a government cannot easily and readily track these activities or if they are purposely obscured by using proxies, all of the assets could simply be seized.
If assets are in another country or territory like Panama or the Virgin Islands, a government could publicly claim ownership and make them almost impossible to sell.
Governments today could easily and legally do all of that – but they probably won’t because, in the real world, we all know who actually owns whom.
The real culprits are governments that protect the ultra-wealthy, which includes just about all governments.
Guy Baker
