This Week’s Editorial: Whistleblowers and leakers welcome

Whistle-blowing isn’t a new phenomenon.

Becoming the norm

In 2002, an employee at LGT, a Liechtenstein private bank, leaked the details of 1,250 of its richest customers – most of which were German. That gave the country’s tax authority the upper hand for a while!

In recent years, we have seen Edward Snowden and Wikileaks embarrass public agencies – even in the US with comprehensive public access.

In Denmark, since Vestas introduced the first internal anonymous whistle-blower lines to expose instances of sexual harassment, fraud and corruption within company ranks, nearly 500 companies have followed suit.

And now, this past week, millions of files have been leaked from Panama.

Tax haven anything but
Tax havens are closing down as mutual information exchange agreements are increasingly becoming a reality between governments. Even a Swiss bank account is only available if you annually declare to the bank that you have declared everything according to your home country’s tax regime.

It is understandable that tax evasion is a popular sport. It is like drug trafficking. The profits are sky high.

In the digital world, where the money comes in ones and zeros, it has become increasingly harder not to leave a trace, and the same is true of banks and service providers.

It is virtually impossible to spend big money on consumer goods without leaving a paper trail, and the cash needs to be washed more than once to slip under the radar. Even casinos are now under surveillance and probably not a good place to go with hot money.

The files from Panama are shocking. If just one law firm can produce this many files about offshore companies, what do we have in waiting when the leaks start dripping in from the Cayman Islands, Luxembourg and the Antilles. And they will.

Rich and greedy
The depressing revelation is that rich people who have no need to cheat, and even worse are often entrusted with other people’s funds and faith, have not held back and willingly enlisted the assistance of bankers and advisors to diddle the system.

We salute the whistle-blowers and blame the culprits. Nobody can today claim self-defence as an excuse for fraud and tax. Those caught red-handed deserve no pity – they should have known better. Disclosure is the best remedy. That is what rich people fear.

Only more transparency and better morals will make whistle-blowing obsolete.