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Panama scandal just capitalism in all its rotten glory


Changes: David Cameron

Changes: David Cameron

AFP/Getty Images

Changes: David Cameron

The publication of the Panama Papers is a reminder that, when it comes to colonialism and corruption, there's nothing new under the tropical sun.

The state of Panama was carved out from Colombia by the United States in 1903 precisely to facilitate the super-rich in squirreling their wealth away out of sight of the tax authorities.

In the same year, the US imposed the Cuban-American Treaty of Relations, under which Cuba undertook to hand over land for the construction of a military base over which the US would have sovereignty - Guantanamo Bay - and gave the US a right to intervene unilaterally in Cuban affairs any time it felt its interests were not being looked after.

In 1906, US Secretary for War, future president William Taft, concerned about opposition to the US's role in the Caribbean, appointed an administration of his own in Havana and declared himself Governor of Cuba.

Taft's "government" stepped down once Washington was content that the Cubans would mind their manners in future. But the Treaty of Relations remained in force as a fall-back.

Cuba became a mafia state, controlled by US gangsters and gangster politicians, until Castro swept into Havana on New Year's Day 1959. Castro's regime was/is far from perfect. But it didn't launder dirty money for drugs criminals, or provide the global elite with bespoke tax-evasion services.

This is the proper context for evaluation of the complaints from US Republicans and Cuban exiles that Barack Obama had been too soft when he promised to lift sanctions without waiting to see whether the Cubans had met US conditions. The conditions had mainly to do not with human freedoms, but with free access to the island for US capital. The old story.

Meanwhile, across the bay, the major Western banks were up to their oxters in Panamanian chicanery. In the Observer last Sunday, Ed Vulliamy wrote that, in hacking Panama out of Colombia, "Roosevelt acted at the behest of various banking groups, among them JP Morgan and Company".

The paperwork for the establishment of the new state was handled by a Republican lawyer, William Cromwell, legal counsel to JP Morgan. The bank itself became Panama's first "fiscal agent" - supervising the inflow and outflow of funds.

Three years ago, JP Morgan confessed to having played a major role in the 2008 banking crash, which almost brought down the world economy and agreed to a $13bn settlement for having sold fraudulent, mortgage-backed securities to the tune of tens of billions. One of the bank's current "global ambassadors" is former prime minister Tony Blair. No surprise there.

(There has been comment on the fact that few US companies, or individuals, have been mentioned in the Panama Papers. But hold on. Only a fraction of the leaked material has so far been released. The editor of Suddeutsche Zeitung, the German newspaper which partnered an international consortium of journalists to publish the Panama material, said last weekend: "Just wait for what is coming next.")

And wait to see what effect it might have on the race to the White House.

David Cameron may well feel aggrieved to have been placed in a glaring spotlight over his relatively modest personal profit from his father's by-no-means-modest immersion in Panamanian practices. Panamanian practice differed in degree, but hardly in principle, from what was happening day to day in the City of London.

In May last year, the National Crime Agency declared that: "We assess that hundreds of billions of US dollars of criminal money almost certainly continue to be laundered through UK banks." The same laundering networks used by criminal gangs were also being used by terrorists, the agency said. We can take it that the networks were paying no tax on the dodgy, undeclared dosh.

The largest UK bank of all, HSBC, was fined more than a million pounds four years ago for acting as launderer-in-chief for the Mexican Sinaloa cartel, washing tens of billions of dollars of contaminated money clean before funnelling it into ostensibly respectable accounts.

Few will have sympathy for Cameron in a predicament of his own making. But it ought to be said, if not in his defence, then at least in explanation, that he may have believed his misdemeanour pretty harmless given the scale of the felonies condoned in the past on both sides of the Atlantic and the ocean of sleaze which has engulfed not an exotic pip-squeak made-up state in Central America, but the linchpin of finance capital itself, the soaring City of London.

Asked for a comment, Bernie Sanders responded: "It's just capitalism."

Sound man, that Sanders.

Belfast Telegraph