Monday, May 09, 2016

We should put the money launderers out of business

Radio New Zealand, One News and Nicky Hager this morning have exposed the New Zealand branch of Mossack-Fonesca's global money laundering system: a New Zealand accounting firm called "Bentleys". Their founder, Roger Thompson, spouts off all the usual excuses: "within the rules", "legitimate and normal". Bullshit. According to Hager, Bentleys' clients include:

Arms traders. Billionaires quietly shifting their profits out of impoverished countries. Business people eager to win big contracts in countries with corrupt leaders. Hard core pornographers, hiding the identity of those raking in the profits. Pharmaceutical company money invisibly moved around to buy influence. And, more than anything, huge numbers of people who appeared to be cheating their tax departments.

In short, criminals. Bentleys provides financial services to criminals, just like Al Capone's accountant. And by doing so, they directly facilitate crime and corruption, as well as robbing other countries of their tax income. In English, that's called being a co-conspirator. Andrew Little is right: we should stamp out this corrupt, criminal industry.

But according to John Key, that's "risky" and could have "unintended consequences". Really? Like what? That criminals wouldn't be able to use us to launder their money? That people in other countries would have to pay their fair share of tax? That some criminal lawyers would go out of business (and maybe stop making generous donations to the National Party)? Sorry, but I just don't see the downside. But then again, I'm not a banker worth $50 million.

And that's what this scandal really highlights: the yawning chasm in worldview between ordinary kiwis and our multimillionaire banker Prime Minister. For Key, trusts, money laundering and tax evasion are "normal", part of doing business. For the rest of us, they're utterly alien. To point out the obvious, normal people don't need to make use of the financial services industry, because we just don't have that much money. And that's the case even if you're rich and have achieved the kiwi dream of bach, boat, and BMW, owning your own home (maybe even in Auckland) and an investment property or two: you still don't need them, because you can manage that level of wealth yourself. And normal, law-abiding people don't have "personal lawyers": they do business with one on a handful of occasions throughout their life (when buying a house or writing a will, or if someone dies or gets divorced). You have to be a long, long, long way into the one percent for that sort of thing to become a natural part of your mental landscape. And the more Key defends money laundering, the wider that chasm gets.