Mossack Fonseca, the law firm at the center of the Panama Papers investigation, argued that the documents were obtained illegally and, therefore, the investigation is constitutional. In Panama, the law firm was able to suspend the investigation with that argument, reports Deutsche Welle.
Let’s quickly go over the background. Some 2.6 Terabytes of the firm’s data were obtained and provided to International Consortium of Investigative Journalists (ICIJ), which released a report and all of the documents to the world. The data included 11.5 million documents that contained how the firm helped the wealthy all around the world form shell corporations to hide wealth and avoid taxes in tax havens with complicated organizational structures to elude tax authorities. The fallout included ousting of national leaders and revelation of unlikely political connections.
This does not stop investigations in other nations of their subjects, but it does crimp some of the investigations because Panama is one of the major sources of those investigations because of its status as original jurisdiction.
Sanction are backed by legislation and one key element of it is that the President of the United State does not need to run the list of those being sanctioned by Congress. There is a question as to whether the President can end Sanctions against our enemies, which the Democrats might address by filing a lawsuit. However, while such a judgment has not been given, the President has the sole decider of the active sanctions list.
Sanctions work on a political level because it works on an economic level, impacting people’s wallets. Which means, this is a tool which the President use to target individuals. It is one of the rare few such tools. It also differs in that many of the other tools targeting individuals positively affect the target, such tools as pardoning convicted criminals.
Sanctions is also an interesting tool because it can be used as a law enforcement tool but without coupling it with any other tool. If the President sanctioned an individual without any other acts, it will stand as is. In that sense, it is powerful and versatile.
So, to lift such a thing from our enemy and our allies’ enemy opens us up to the risk of financing interests against our own. While most would agree that there are no benefits worth that risk, but most don’t realize what those benefits might be.
One benefit is simply the opening up of channels of transactions we can observe. If, for a brief time, we let the flood gates open to the money laundering and the financing of counter-American interests, we might discover new alliances we had not observed before.
We cannot know how the such benefits will be worth the risk. And not knowing the value of those benefits is a risk in itself.
So, how long are we willing to take those risks to find out what Russian money laundered has bought real estate in Manhattan, a very common practice?
President Trump has some very interesting priorities and preferences. Interesting, in this case, could be signs of risks in areas that this blog often does not venture into. This blog focuses on risks and potential risks of money laundering and terrorist financing. But this blog cannot ignore the fact that the incoming president introduces new risks in these areas that did not exist before. The primary risk is a switch in policy toward Russia.
When Russia was our enemy, we were adamant about two things: defending ourselves from whatever the Kremlin would throw our way, and proving that Capitalism works better than Communism.
The latter we have stopped proving after the fall of the USSR in 1989. The result is that we no longer have Capitalism. Most of our wealthiest people are not productive people, they are people who know how to fix the economic rules in their favor or find ways to define other people’s economic output as capital gains. I won’t go into the economics here.
However, the former, the defense, now has new dimensions that we did not face in the cold war. The worry is that if President Trump decides to “side” with Russia against our current allies, we would be pulling down our defenses against a state that has been on the constant attack of our defenses and infrastructure. Terrorism is one thing that attacks us and our way of life. Russia has been another, with constant cyber warfare, land and people grab of allied nations, and, most recently, outright lying about its support for a terrorism financing state.
Let’s also note that if President Trump decides that the United States should take sides with Russia against our current allies, we are not ready to defend ourselves from our allies. This is setting aside the fact that Russia is not likely to give up its efforts to disrupt the US in fundamental ways since President Trump and his policies are not likely to last beyond his term(s) in office. This is an incredible opportunity for Russia.
Even with our defenses, there are signs that Russia is getting through, as Washington Post recently reported. Now, if we let them in, it will be worse that the Trojan Horse because we would not require them to hide themselves in anyway.