The Panama Papers and sacred cows

The widespread disclosure of what has been tagged the Panama Papers with details of how politically exposed and wealthy persons around the world have hidden their wealth in tax havens has brought to the attention of the world how unethical financial practices have indeed become cancerous. The result has been a tilting of the scale against the majority of the people, a spectacle of injustice and inequity which humanity must not tolerate.

The current leaks have shown that graft and illicit money flow are not a challenge for developing countries alone. The 11.5 million documents handled by the Panama-based Mossack Fonseca, released to an International Consortium of Journalists and a German newspaper have reverberated around world capitals. Mossack Fonseca is the world’s fourth largest offshore law firm and assists clients of all hues to register offshore entities sometimes used to launder money and evade tax.

It is not surprising that some Nigerian politically exposed leaders and businessmen have been fingered in the deals. From the report, it has been estimated that a whopping $21 trillion to $32 trillion of private financial wealth has been located untaxed, under-taxed in tax havens. Besides, it has been estimated that about £1 trillion per year of illicit cross-border financial flows around the world are involved in these transactions. In the sordid details, 12 heads of state or government including Ukraine’s Petro Poroshenko, United Kingdom’s David Cameron, Zayed al-Nahyan of the UAE, Salman al-Saud of Saudi Arabia, associates of Vladimir Putin of Russia, and 143 other political leaders the world over have been named in the offshore tax deals. What is more, iconic sports personalities such as Argentina’s Lionel Messi and even Gianni Infantino, the new FIFA President are included in the leaked list, which does not say yet that every one named is guilty of any crime.

In Nigeria, where war on corruption is a fundamental objective of the Muhammadu Buhari administration, some notable political leaders and businessmen have been named in the Panama Papers. Those fingered include the President of the Senate, Bukola Saraki, former Senate President, David Mark, former Delta State Governor, James Ibori (serving a jail term in United Kingdom) and Lt-General Theophilus Yakubu Danjuma (rtd), former Chief of Army Staff and Defence Minister. Saraki and Mark have since denied any wrong- doing.

Certainly, this is a very serious issue which should not be swept under the carpet as was done with the Halliburton, Siemens and other bribery or money laundering scandals involving Nigerian leaders. It will be recalled that some Nigerian public officers were alleged to have collected $182 million bribe for a contract to Halliburton, the oilfield services company while court papers in Germany had indicated that four Nigerian ministers received $17 million worth of bribe from the German technology firm, Siemens. It is noteworthy that while those implicated in the Halliburton and Siemens cases were prosecuted, fined and jailed in their countries, no Nigerian implicated in the two corruption cases has been prosecuted. Some of them have even contested elections or have been appointed into other sensitive high offices.

Countries with zero tolerance for corruption have since swung into action barely a week after the Panama leaks, but not Nigeria. A week ago, there was a popular protest in Malta when activists called on the Prime Minister, Joseph Muscat to resign following an allegation that two of his associates had been implicated in the scandal. British Prime Minister David Cameron is facing pressure from his governing Conservative Party for his involvement, his late father, Ian, having run a firm in the tax enclave, from which the son reportedly benefited even though this was before he was elected Prime Minister in 2010. In Iceland, Prime Minister Sigmundur David Gunnlaugsson has been forced to resign as a result of the Panama papers while in China, political leaders are already agitated that Li “Power Queen” Xiaolin, a daughter of former Prime Minister, Li Peng, who is reported to own offshore shell firms has been named. Police in Switzerland are already scouring the files in the offices of the European Football Union in search of documents that could link Infantino, the former secretary-general of the body to the leaked financial deals.

France, Spain, Australia, and the United States have also begun investigations. In Chile, Transparency International President, Gonzalo Delaveau, called it quits following a disclosure that he was involved in five offshore shell firms. A similar fate befell Michael Grahammer, head of Austria’s Landesbank Vorarlberg whose bank was also named in the deal. The Justice Department of the U.S. has launched inquiry into possible involvement of its citizens in the sordid deals while Francois Hollande, the French President, says the leak is “good news” in that “it will bring in tax revenue from those who have defrauded.”

The foregoing are great lessons to the Nigerian leadership. For the anti-graft agencies, especially the Economic and Financial Crimes Commission (EFCC), there is no waiting for any directive for the involvement of Nigerians named in the Panama Papers to be investigated. They should strike the iron while it is hot, lest it goes cold. Those Nigerians named in the Panama Papers must explain to investigators the sources of the monies and reasons for stashing them in tax havens.

In Nigeria where there are too many sacred cows and corruption cases are too often buried, this is one case with which the seriousness of the war against corruption would be measured.