Panama Papers – An Attack on Liberty

The Panama Papers are a gigantic leak of 2.6 Terabytes that is making the news all over the globe at the moment. We have not heart much about who the person behind the leak is, nor have we heart a lot of politicians condemning the theft and publication of this data. This is quite a different picture from other leaks we have seen in recent years, most famously of course the leak of Edward Snowden. When Snowden leaked his revelations about the evil doings of the NSA, a lot of the media and politicians focused their attention on condemning him for his evil crimes while trying to avoid talking about the content that was leaked. The opposite seems to happen now. No one seems to be bothered that the leaks are essentially stolen data. Hardly anyone, except maybe a few politicians who personally got caught up in the leak, really seem to care who the person behind the leak is.

So what is the difference between the Snowden leak and the Panama Papers? The difference is that Snowden leaked information about the evil doings of the government, while the Panama papers are information stolen from a private law firm. Mossack Fonseca is one of the largest providers of offshore services based in Panama. The firm was helping people to hide their money in so called tax havens via instruments like trusts and offshore companies, whose owners were kept secret. These services are used by all kinds of people. There are those who simply want some anonymity to hide a few nest eggs for a rainy day. There are those that do use these offshore entities to evade paying taxes. There are international companies who are, completely legally, avoiding taxes by using loop holes in the tax code via offshore companies. And then there are of course criminals from drug dealers and politicians, and those who are hiding stolen money.

The latter, and as far as I am concerned only the latter, deserves condemnation. The fact that Putin, a man who, for the record, I have no sympathy for, was the first to hit the news in this leak, makes me wonder whether there were some governments involved in stealing the data.

The fact of the matter is that in the last couple of years, governments have woken up to the fact that modern technology makes it very easy to live in one country and have your money in another. This has lead to an all out assault on financial privacy. The OECD is working on making the financial system all over the world completely transparent. I recently wrote about their latest tool, called the Compliance Reporting Standard (CRS). CRS is abolishing bank secrecy all at once in every one of the participating countries. And most countries around the world, including almost all so called tax havens are participating. Panama is one of the very few countries that is refusing to take part in it. So one wonders about the timing of these leaks, because the Panama Papers will now put a lot of pressure on the small, middle American country to change their practices and comply with the OECD. It seems that despite a few politicians making the news, the government is the biggest beneficiary of these leaks.

And let us be clear on who the real target of these papers are. It is not the Putin clan or criminals. These people have other means to hide their money and will not get into any bigger trouble over this. The real target is ordinary tax dodgers. The unfolding worldwide  tyranny of transparency is making it increasingly difficult for otherwise decent people to save some of their money from the greedy hands of Leviathan. And that is why we are not hearing any condemnation of this leak from politicians.

The internet is a great tool to spread information all over the globe. It is certainly helping to get the message of liberty out there. But the downside of having more and more of our data and wealth stored digitally is that the privacy of that data is increasingly difficult to guarantee. It seems that, if there is enough motivation to do so, all digital information can be, and at this point almost will be, hacked.

That makes me wonder, whether we will have to revert back, at least a bit, towards a more analogue approach in some areas. This is certainly true when it comes to storing our wealth. I will not be surprised if we see some offshore financial service providers, in the near future, going back to storing their sensitive information on paper rather than in a computer. It seems to be the only way to really secure the privacy of this information. It also seems wise to not have all of our wealth in digital form, like stocks or money in the bank. These can be hacked and once hacked, can be stolen or simply be erased. Putin alone has an army of thousands of hackers who are constantly trying to hack banks and stock exchanges. So one day you might wake up with an empty stock account and no one will know what happened, nor will it be possible to restore the data. The Panama Papers once more make it clear that the wonderful digital tools that seems to help liberty in many ways are also being used against us. And the latter is happening in an increasingly aggressive and sophisticated way.


  1. We differ on our opinion of Mr Snowden.

    An “enemy of the government” is not automatically a good person, not if he is working (and most likely always was working) for a worse government.

    To me Mr Snowden is no more a hero than Kim Philby was – true Mr Philby was much worse (he shook hands with men he betrayed to their deaths), but Snowden also worked for the other side.

    A “whistle blower” goes to Congress (where Rand Paul, and others, would be only glad to see him) – they do not go to the FSB and Mr Putin.

    As for “revealing” that the NSA spies on everyone it can – well I suppose there was someone out in the wilderness somewhere who did not know that, but everyone else already knew. What Mr Snowden actually did was reveal methods of spying

    Yes it is good for libertarian activists to know what methods the NSA uses – but it is also useful for ISIS (and so on) to know. And they owe Mr Snowden a debt of thanks – which means I do not feel particularly warm to the chap.

    Still Rand Paul is correct – the NSA buries itself (and has always buried itself) under a mountain of information (spying) on everyone.

    It has so much information (on so many people) that it can not examine it properly – and can not concentrate on real threats. The intelligence services (especially the electronic ones, the NSA and GCHQ) have buried themselves in stuff – choking their operational worth.



  2. Leaving aside the world of “we want general warrants that allow us to know everything about everyone” – which makes a nonsense of the Bill of Rights and is also operational folly (because of “information overload”), and turning to the Panama Papers……

    Tax avoidance is not a crime – even the state admits this (no one has any duty to pay one Pound more in taxes than the LETTER of the law demands). Yet the media are treating tax avoidance as the same as tax evasion – and the state (indeed states internationally) is pushing this line.

    The doctrine of “Social Justice” holds that all income and wealth rightly belongs to the collective – and that it is “distributed” according to some rule of “fairness” (like mummy cutting a cake for the children) and, therefore, “the rich” and “big business” must “pay their fair share of tax”.

    The lie (and it is a lie – because the people who spread it know it is not true) is that if only “the rich” and “big business” paid “their fair share of tax” the government could provide wonderful benefits and “pubic services” for everyone……

    The vast lie that the current system could go on (and get better) if only “the rich” and “big business” “paid their fair share”.

    By the way…..

    “The rich” and “big business” already pay most Federal government taxes in the United States. And most of the taxes in such States as New York and California.

    But the public (brought up on a diet of Hollywood films and television shows where “big business corporations” are always the baddie – and with an “education” system that also teaches this nonsense) do not believe this.

    They (the public – or much of them) believe that “the rich” and “big business” pay little in taxes.

    And the Panama Papers will be uses to push this, false, narrative.



  3. You use the term ‘tax dodgers’ in the article. This is a pejorative, judgemental term widely bandied around by state-supremacist types, which implies that taxation is a legitimate imposition which it is somehow wrong to try to avoid.

    I would prefer to use a more neutral term such as ‘financial dissidents’.



    1. Isn’t ‘coffin dodger’ a term with a hint of grudging admiration? Or ‘bullet dodger’? Let’s ‘reclaim’ it.



  4. I agree entirely with Nico that to keep important records in electronic form only is to invite disaster; partly because of hacking and data-theft as methods of helping certain people to stuff (chiefly but not wholly financial) not theirs, and also partly because of the vulnerability of the electrical grid and such communications infrastructure as cell-phone towers and satellites.

    If these were properly maintained, there would inevitably be some risk. The sun will get to acting up and treating us to more EM storms, for instance; and here and there about the globe, as for instance in the U.S. (I am informed) the electrical grid and so forth are far from being “properly maintained.”

    Electronic data-storage and data-comm are wonderful things, as are various other uses uses of electronics and cybertechnology. But electricity and electronics are vulnerable. If I am correct, electrical grids and military systems (including weapons systems?) have been hacked already. And what about medical records, especially now that every medical establishment (and doctor) is supposedly able to read the records of every person, dog, or hamster in the Solar System?

    “But,” you say, “as far as vulnerability goes, paper is clearly even more vulnerable than are bits-‘n’-bytes. Fire. Flood. Loss, theft, physical damage.”

    Indeed so; nothing is 100%. Hence the concept of “backup.” Where possible, that is. So even if records are stored electronically, there should also be hard-copy, in a vault somewhere if they are sufficiently important.

    But this does nothing to solve the far greater problems of hacking, tracking, and private or governmental irresponsibility leading to cybercrime.

    Readers may remember the last Fall’s posting here* on the U.S. direct-pay physicians’ network, the American Association of Physicians and Surgeons**, many of whose presentations are available on YouTube***. Two of the talks struck me particularly. One of them was given by a young doctor just starting his practice, who was aiming for an entirely paper-free office; the other, by a doctor who is adamantly in favor of patients’ privacy and in particular, to keep The Gov out of medicine altogether, and who, therefore, vowed never to commit a single bit of patients’ info to the tender hands of Cyberspace.

    Smart man, that doc.


    (Among others, see Dr. Craig Wax’s presentations on EHR, that is, Electronic Health Records.)






  5. By the way, I’ve just watched another video on paper vs. electronic medical records. It begins by presenting the good points of systems of EMRs, but eventually says “but wait a minute–.”

    It goes on to explain the benefits of paper medical records (why oh why do they call them “charts” when they are no such thing! They are files or records or even graphs, but rarely are they charts! *end of wail*) which are no longer available when a practice relies on electronic records.

    “The seen and the unseen” does not only refer to M. Bastiat’s hidden costs. Many things go unseen, including real but rarely noticed benefits.

    . . .

    Or, as we say, Though this is surely a Brave New World — Look before you leap, and Don’t throw out the baby with the b.w.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s