The revelations in the Paradise Papers detailing the offshore tax-avoiding activities of the global elite tell us what we already know: that whilst they demand austerity attacks for the vast majority, the super-rich do not pay their taxes. Ben Gliniecki looks at the latest scandal exposing the hypocrisy of the Establishment and their system.
The ‘Paradise Papers’ revelations aren’t surprising, only enraging. Over 13 million leaked documents detailing the offshore tax-avoiding activities of the global elite tell us what we already know: that while they cut healthcare, education, and welfare for the rest of us (with the excuse that there’s no money), the super-rich don’t pay tax.
In Britain, it’s the Queen who has hit the headlines. Recently, working-class people who actually do pay their taxes were required to fork out hundreds of millions of pounds to pay for repairs to the roof of her palace. Now it turns out that she had her own millions stashed away in an offshore fund all along. Not only that, but one of the Queen’s investments was in a company called BrightHouse, which provides household goods on hire-purchase agreements, charging extortionate interest rates of 99.99% in some cases. The company was recently forced to pay millions in compensation to the low-income families it pushed into debt.
In India, Prime Minister Narendra Modi has been running a high-profile crackdown on people and businesses who don’t pay their taxes. The fact that a minister in his own government, and MPs both in his own party and the main opposition party, are all named in the Paradise Papers highlights how hypocritical these politicians are. Likewise, a fundraiser, adviser, and friend of Canadian Prime Minister Justin Trudeau has been named in the papers, despite Trudeau’s campaign promise to clamp down on tax avoidance.
All the revelations in the Paradise Papers come as even less of a surprise due to the Panama Papers leak just 18 months ago, which detailed exactly the same lying and cheating by members of the global elite. Back then it was the Ukrainian President, the Argentinian President, the King of Saudi Arabia, the Emir of the United Arab Emirates, and senior officials of the Chinese Communist Party who were named. This time the Queen of the United Kingdom, the Queen of Jordan, the Ugandan foreign minister, the Brazilian foreign minister, and the US Commerce Secretary have joined that list of parasites.
It’s worth noting that all the figures listed above are state officials. Big businesses like Amazon and Nike are listed in the Paradise Papers as tax-dodgers, and the shady tax dealings of multi-national companies is regularly in the news. But these revelations highlight how it’s not just big business cheating us – it’s also the politicians and governments that are supposed to be putting a stop to it. No wonder nothing gets done about tax-dodging when the people catching the dodgers are up to their necks in it as well!
Sure enough, in a speech on the morning the Papers were released, the British Prime Minister Theresa May refused to commit to any new rules for offshore companies (many of which are registered in British Overseas Territories), or even to an inquiry into tax-dodging.
Marx and Engels wrote in the Communist Manifesto, that the modern state is just a committee for managing the affairs of the bourgeoisie. That is as true today as it was 170 years ago when they wrote it. These corrupt politicians, from May to Trudeau to Modi, and all the tax collecting agencies and regulators they control, are tied by a thousand threads to big business.
The usual chorus of calls for better regulation and a tightening up of the law is now echoing through the liberal media. But the more we see how rotten the establishment is, the clearer it becomes that reform won’t cut it. It’s only revolutionary change that can flush these parasites out of society.
The revelations have also shone a light on the murky world inhabited by the super-rich. Glencore PLC, the world’s biggest commodity trader and facilitator of child labour, environmental destruction, and industrial-scale bribery, was one of the top clients of the law firm whose leaked documents were the basis of the Papers. Glencore loaned money to an Israeli businessman who used it to provide the Kabila regime in the Democratic Republic of Congo (DRC) with weapons, bribes, and to secure monopoly mining rights over the country’s diamond mines. The result was an estimated loss of $1.3bn for the Congolese economy, all facilitated by offshore tax havens.
A couple of years ago the chair of the African Union panel on illicit money transfers said that over the last 50 years Africa has lost $1 trillion thanks to funnelling money through offshore tax havens. Meanwhile the tax-dodgers responsible encourage bloody conflict, atrocious loss of life, and the use of child labour in countries like the DRC to keep down their costs.
This is the world created and defended by the billionaire class – a world in which profit is the highest, and only, morality. The sheer scale of these revelations, and the number of people they implicate, shows us that this is not a case of one or two bad apples. Getting rich at all costs is a philosophy built into the foundations of the capitalist system. It’s those foundations that need to be uprooted.
The politics of the Papers
When the Panama Papers were released in April 2016, we wrote:
“These revelations have a political dimension to them. The investigation of the leaked documents was carried out by the International Consortium of Investigative Journalists (ICIJ), based in Washington DC and funded by, among others the Ford, Kellogg, Carnegie and Rockefeller foundations, all of which have aggressively pursued the interests of the US ruling class over a long period of time. On top of that, the ICIJ receives support from the US Agency for International Development (USAID) which “Provides economic, development and humanitarian assistance around the world in support of the foreign policy goals of the United States” – in other words, it is part of the US government, working closely with the CIA.
“The findings of the investigation focus heavily on the Russians involved in the scheme and their links to Putin. Assad also features heavily, along with his family members. And yet not a single US politician or capitalist is featured. As the most powerful and most corrupt ruling class in the world, it beggars belief that members of the US 1% are not avoiding tax at least as much as their peers in other countries.”
This is relevant again today because the ICIJ is the source of the Paradise Papers. This time a key US establishment figures has been named in the papers – US Commerce Secretary Wilbur Ross. He has business interests, through an offshore firm, that link him with Russian President Vladimir Putin’s associates. US Democrats are claiming that this is more evidence of Trump’s ties to Russia. There’s no doubt that members of Trump’s cabinet, and Trump himself, deserve a place in the rogue’s gallery of the Paradise Papers. But the fact that only Wilbur Ross has been singled out suggests a political game being played by those funding the ICIJ from whom these revelations are coming.
Trump’s son-in-law has also been linked with Russian money in the Paradise Papers, through a Russian businessman who is a big investor in tech start-ups, as well as in Twitter and Facebook. Jared Kushner – a super-rich property developer and Trump advisor – will get no sympathy from the millions of people from whose poverty he profits. But it seems clear that he has been targeted to cause maximum damage to Trump by linking him with Russia.
This Russian investor, who gets money from the Russian state, has money in Twitter and Facebook, which US Democrats insinuate has something to do with the “fake news” about Hillary Clinton that circulated during the US presidential election campaign. For us, this indicates just how “free” the media really is. Dodgy money, funnelled through dodgy companies, penetrates every part of society under capitalism. Even the media outlets reporting on the Paradise Papers revelations have investments offshore, including, for example, the BBC’s pension fund.
Ultimately, when it comes to allegations of corruption and dodgy financial dealings there is not a single part of the establishment that is free from scandal. We can trust none of these hypocrites with their mock outrage and moralistic preaching. If we want to clean up our society, the entire ruling class needs to be swept aside en masse, with no exceptions or compromises.
Expropriate the tax-dodgers – overthrow the system
These new revelations are yet another blow to the confidence that people have in a system that has been continually undermined by scandal and crisis for the last decade. While cuts and austerity are still being imposed on the working-class, Oxfam have said that eight people own as much wealth as 3.6 billion people. No wonder we’ve seen a continuation of the trend towards anti-establishment politicians and parties.
This is best reflected in Jeremy Corbyn’s Labour Party, which registered a great election result earlier this year. Corbyn’s manifesto for the general election was titled ‘For the Many, Not the Few’ – and on that platform, he was able to mobilise Labour supporters to campaign for the election in a way that hasn’t been seen for years. This activist, anti-austerity mood means that now working class people in Britain are far less likely to lie down and accept the fact that the rich are dodging billions in tax, while the rest of us get sanctioned for being a couple of minutes late to a job centre meeting.
Unfortunately, in the wake of the Paradise Paper revelations Corbyn doesn’t seem to have harnessed this potential. He has called for better regulation and a begging plea to the bosses’ union (the Confederation of British Industry) to consider the “reputational damage” to their companies caused by tax avoidance. Corbyn, a lifelong republican, meekly half-suggested that the Queen should apologise for her use of offshore companies but quickly rowed back on this for fear of causing offence.
This is a terrible waste of an opportunity to expose the capitalist system in all its gory horror and call for a fundamental transformation of society. Corbyn should seize the chance to demand the expropriation without compensation of all the big businesses that have been dodging taxes, and issue an international call for the labour movement in every country to do the same. That way, the working-class people who bear the burden of this rogue behaviour can be compensated for their losses and, through working-class control of these businesses, it can be prevented from happening in the future.
These revelations show that the global ruling class has never been more rotten, corrupt, and ready to be swept into the dustbin of history. Lord Ashcroft, a major donor the British Conservative party, hid in a toilet to avoid answering questions about his offshore holdings. Meanwhile one of India’s richest politicians simply handed journalists a note saying that he’d taken a vow of silence when he was asked about his offshore companies.
It should give us enormous confidence that these laughable cowards are the class enemy against whom we’re fighting. They’ve been working us into the ground and robbing us blind to make themselves richer while the rest of us have been getting poorer. And the capitalist system allows them to get away with it.
One hundred years, almost to the day, since the Russian Revolution of 1917, it’s time to rediscover the spirit of the Bolshevik party and the Russian workers and peasants: to overthrow the bourgeois class and raze capitalism to the ground, and to construct a new world socialist order.