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Sometime last week, I was amid a group of friends when the argument about the Pandora papers suddenly came up. In brief, the key questions raised were how come no one is talking about the Pandora papers again? What has happened to the investigations, and how come the story has now been relegated to the back seat within the media space? Although, we didn’t have enough time to debate the issues, I promised that I would be sharing my thoughts on this blog. So, I hope they are reading.
We can all agree that for many years, the issues of financial delinquencies and malfeasants have remained one of the major problems facing many societies. We have seen situations where Kleptocratic rulers and their associates loot and siphon state resources, and then stack them up in secret havens. Some of these Kleptocrats prefer to collect luxury Italian wines and French arts with their ill-gotten wealth, while others prefer to purchase luxury properties and 5-star apartments in Dubai, London and elsewhere. We find military generals participating in financial black operations, and we hear about law makers manipulating the gaps in the same laws they have created. In fact, in some spheres, we find ‘business tycoons’ exploiting violence-torn regions to smuggle gold, while in other spheres, some appointed public officers refuse to declare their assets because of fear of the future. Two years ago, we read about the two socialist presidents of the southern Spanish region and how they were found guilty of misuse of public funds. Totaling about €680m, you can imagine the good that could have been achieved in that region. We should also not forget the case of Ferdinand Marcos and his wife, both of whom (we are told) amassed over $10 billion during their reign in the Philippines. As we can see below that from the offshore leak of 2013 to the Panama papers of 2016 and then the 2017 Paradise papers, data leaks have continued to skyrocket. This simply demonstrates the level to which politicians and other official state representatives are taking to invest in this booming industry.
These stories are nothing new, we have always read about them – but then they fade away quicker than we expect. It is important to note that while some countries are swift in conducting investigation when issues like these arise, very little is known about others. So, in this blog, I will simply be highlighting some of the reasons why I think news relating to these issues have a short life span.
To start with, the system of financial corruption is often controlled and executed by those holding on to power very firmly. The firepower of their legal defence team is usually unmatchable, and the way they utilise their wealth and connections often make it incredibly difficult to tackle. For example, when leaks like these appear, some journalists are usually mindful of making certain remarks about the situation for the avoidance of being sued for libel and defamation of character. Secondly, financial crimes are always complex to investigate, and prosecution often takes forever. The problem of plurality in jurisdiction is also important in this analysis as it sometimes slows down the processes of investigation and prosecution. In some countries, there is something called ‘the immunity clause’, where certain state representatives are protected from being arraigned while in office. This issue has continued to raise concerns about the position of truth, power, and political will of governments to fight corruption. Another issue to consider is the issue of confidentiality clause, or what many call corporate secrecy in offshore firms. These policies make it very difficult to know who owns what or who is purchasing what. So, for as long as these clauses remain, news relating to these issues may continue to fade out faster than we imagine. Perhaps Young (2012) was right in her analysis of illicit practices in banking & other offshore financial centres when she insisted that ‘offshore financial centers such as the Cayman Islands, often labelled secrecy jurisdictions, frustrate attempts to recover criminal wealth because they provide strong confidentiality in international finance to legitimate clients as well as to the crooks and criminals who wish to hide information – thereby attracting a large and varied client base with their own and varied reasons for wanting an offshore account’, (Young 2012, 136). This idea has also been raised by our leader, Nikos Passas who believe that effective transparency is an essential component of unscrambling the illicit partnerships in these structures.
While all these dirty behaviours have continued to damage our social systems, they yet again remind us how the network of greed remains at the core centre of human injustice. I found the animalist commandant of the pigs in the novel Animal Farm, by George Orwell to be quite relevant in this circumstance. The decree spells: all animals are equal, but some animals are more equal than others. This idea rightly describes the hypocrisy that we find in modern democracies; where citizens are made to believe that everyone is equal before the law but when in fact the law, (and in many instances more privileges) are often tilted in favour of the elites.
I agree with the prescription given by President Obama who once said that strengthening democracy entails building strong institutions over strong men. This is true because the absence of strong institutions will only continue to pave way for powerful groups to explore the limits of democracy. This also means that there must be strong political will to sanction these powerful groups engaging in this ‘thievocracy’. I know that political will is often used too loosely these days, but what I am inferring here is genuine determination to prosecute powerful criminals with transparency. This also suggests the need for better stability and stronger coordination of law across jurisdictions. Transparency should not only be limited to governments in societies, but also in those havens. It is also important to note that tackling financial crimes of the powerful should not be the duty of the state alone, but of all. Simply, it should be a collective effort of all, and it must require a joint action. By joint action I mean that civil societies and other private sectors must come together to advocate for stronger sanctions. We must seek collective participation in social movements because such actions can bring about social change – particularly when the democratic processes are proving unable to tackle such issues. Research institutes and academics must do their best by engaging in research to understand the depth of these problems as well as proffering possible solutions. Illicit financial delinquencies, we know, thrive when societies trivialize the extent and depth of its problem. Therefore, the media must continue to do their best in identifying these problems, just as we have consistently seen with the works of the International Consortium of Investigative Journalists and a few others. So, in a nutshell and to answer my friends, part of the reasons why issues like this often fade away quicker than expected has to do with some of the issues that I have pointed out. It is hoped however that those engaged in this incessant accretion of wealth will be confronted rather than conferred with national honors by their friends.
BBC (2021) Pandora Papers: A simple guide to the Pandora Papers leak. Available at: https://www.bbc.co.uk/news/world-58780561 (Accessed: 26 May 2022)
Young, M.A., 2012. Banking secrecy and offshore financial centres: money laundering and offshore banking, Routledge
The Independent Inquiry into Child Sexual Abuse published a damming report regarding child protection in religious organisations and settings. One of the findings was that ‘In many cases, concerns about external involvement are connected to a desire to protect the reputation of a religious organisation’. Of course, there are many other issues highlighted in the report, but I wanted to concentrate on this notion of protecting organisational reputation. When I hear the phrase ‘organisational reputation’ my blood generally runs cold because I know that behind these words lay a multitude of sins.
Companies and public sector bodies have policies that are designed, at least in part to protect organisational reputation. The rationale behind these policies often lacks transparency. It might be that the protection of the organisation’s reputation ensures it maintains its customer or client base, an enhanced reputation sees more customers or clients, a poor reputation might see this dwindle, to the detriment of the organisation and ultimately to the detriment of its employees and owners. It is difficult to recover from a poor reputation and in the case of business, this is sometimes catastrophic.
However, behind the notions of organisational reputation and policies lays a multi-layer of complex organisational and human behaviours which ultimately lead to institutional corruption and violence. Things will go wrong in organisations, whether that be as a result of human behaviour such as poor decision making or illegal activity or as a result of system failure, such as the failure of software or hardware. Any of these failures might harm the reputation of the organisation and herein lies the nub of the matter. When there are failures, because of organisational culture, which often finds its basis in finding someone to blame, there is a propensity to try to keep the issues ‘in house’, to protect the organisation. By doing so, managers and those in charge ensure that they are not scrutinised regarding the failure, be that individual failures, failures of policies or failures of systems and processes. So, the organisational reputation is not necessarily about protecting the organisation, it is more about avoiding scrutiny of those individuals in power. The mention of organisational reputation in policies and processes has another effect, it silences employees. Whistle blowing policies are subjugated to notions of organisational reputation and as a result silence is maintained for fear of some form of informal sanction. The maintenance of silence ensures organisational reputation, but this corruption also ensures continued institutional violence and corrupt practices. The longer it continues the more those in power have a vested interest in ensuring that the issues are not addressed, lest they are uncovered as offenders through their inaction. ‘We are all in this together’ takes on a new meaning. Thus, corrupt or criminal practices simply continue.
And if the wrongdoing is uncovered, becomes public, then the first reaction is to find a scapegoat thus avoiding the scrutiny of those in power. Rarely in these inquiries do we find that those put in the dock are the managing directors, the chief constables, the heads of children’s services, the archbishops or politicians. Rarely do we see those that caused the problem through inadequate or unworkable policies or strategies or working conditions are ever brought to book. Often its simply portrayed as one or two bad apples in the organisation. Thus, organisational reputation is maintained by further institutional violence perpetrated against the employee. That is not to say that in some cases, the employee should not be brought to book, but rarely should they be standing in the dock on their own.
For ‘organisational reputation, just read institutional corruption and violence.