Panama Papers Remind How Trade Deals Miss Sweet Spot
You might wonder what the connection is between a friendly game of golf last summer in Martha’s Vineyard and the Panama Papers. Read on.
As anyone who hasn’t been in a cave — or otherwise away from the Internet — knows, last week the German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists, working with more than a hundred publications around the world, broke news of the biggest data leak in history, from an anonymous source tapping into the Panamanian law firm Mossack Fonseca.
Using eleven and a half million documents sent to them via encrypted files, the reporters are revealing the dark secrets of offshore tax havens and phony shell companies favored by the mega-rich and powerful — from plutocrats and politicians to movie stars and professional athletes — who use them to hide and hoard their fortunes, even as billions live and die in poverty.
But what about the United States — why haven’t our usual suspects, the parade of moneybags we’re used to seeing flaunt their wealth even as they do their best to conceal vast portions of it — made an appearance in the leaked data? Let’s go back to that golf game in Martha’s Vineyard.
It was a sunny August afternoon at the Farm Neck Golf Club, described by Golf Digest as “a jewel on the Vineyard” where 18 holes during summer prime time currently cost $170 a head. The players: President Obama, former President Bill Clinton, their mutual friend, inside-the-Beltway wheeler-dealer Vernon Jordan, and former US Trade Representative Ron Kirk.
Start with Clinton. No sooner was “the man from Hope” in the White House than he pushed for and signed NAFTA, the North American Free Trade Agreement that outsourced countless industries and, according to the Economic Policy Institute, siphoned hundreds of thousands of jobs from the United States to Mexico.
And Vernon Jordan? This one-time civil rights leader and champion of poor folks is now one of the richest corporate lobbyists in Washington. As we wrote a couple of years ago, “Jordan is senior counsel at the powerful law firm of Akin Gump Strauss Hauer & Feld, which recently became the most lucrative lobbying operation in America, earning $8.6 million in the second quarter of 2014”
If you would know his position on “free trade,” hearken back to October 2005, and a speech by President George W. Bush at the Economic Club of Washington (Jordan was then club president). “It’s important that people in Washington not use trade as a political issue,” Bush said. “The objective is to have strong support from Republicans and independents and discerning Democrats, like Vernon Jordan.”
The Presidents Obama and Clinton were out on the links in honor of Jordan’s 80th birthday. They could just as easily have been celebrating the ways in which the three of them — and Dubya — have helped give America a trade policy that has devastated the working class but made the rich much more wealthy.
When the Panama Papers were released last week, President Obama said, “There is no doubt that the problem of global tax avoidance generally, is a huge problem… There are folks here in America who are taking advantage of the same stuff. A lot of it is legal, but that’s exactly the problem. It’s not that they’re breaking the laws, it’s that the laws are so poorly designed that they allow people, if they’ve got enough lawyers and enough accountants, to wiggle out of responsibilities that ordinary citizens are having to abide by.”
And who’s responsible for that? Maybe the Panama Papers won’t reveal further offshore skullduggery by American business. But the fact is, we’re already in it up to our necks. Go back to our long history with Panama, pulling it away from Colombia to dig the canal and advance the interests of corporate America.
Bring that history right up to 2011. George W. Bush and Dick Cheney had pushed for, and Obama as president and Hillary Clinton as secretary of state consummated — as one of their first priorities when they came to power — the Panama free trade agreement, an early investment in further corporate support and further evidence that both parties are too often in league as agents of corporate interests.
And guess who was at the pivot? The other fellow in that Martha’s Vineyard foursome, Ron Kirk. As US Trade Representative, he was key to those Panama negotiations when Obama became president.
Barack Obama insists the White House did the right thing when the administration pushed the deal and maintains that in fact he brought greater transparency to Panama’s financial transactions by insisting on a tax information exchange agreement on the side.
But, as David Nakamura wrote in The Washington Post last week, “Consumer advocates who have fought U.S. trade policies said the administration and its allies are trying to claim credit for reforms in Panama without accepting responsibility for the revelations in the unfolding Panama Papers scandal about potentially widespread tax avoidance.”
Nakamura quoted Lori Wallach, director of Public Citizen’s Global Trade Watch: “The Panama Papers just show once again how entirely cynical and meaningless are American presidents’ and corporate boosters’ lavish promises of economic benefits and policy reforms from trade agreements… [I]nvestor protections and official U.S. stamp of approval made it safer to send dirty money to Panama.”
In 2011, Hillary Clinton praised the Panama free trade agreement, and similar deals with Colombia and South Korea, saying they would “make it easier for American companies to sell their products… The Obama administration is constantly working to deepen our economic engagement throughout the world, and these agreements are an example of that commitment.”
But as she, President Obama and Ron Kirk applied the thumbscrews to get the Panama deal passed, Bernie Sanders made a powerful speech on the floor of the Senate against the Panama deal saying that the pact “would make this bad situation much worse” and keep the United States from cracking down on abusive and illegal offshore tax havens.” Those remarks are now viral on the Web because it shows how much longer on this key issue Sanders has been right — just as the Panama Papers reveal how toothless our trade rules have been.
If Sanders were not around today, Hillary Clinton would still be the supporting TPP, the Trans Pacific Partnership. It’s the Panama deal on steroids. Until now the Democratic Party has been just as culpable as Republicans on talking “free trade” while using these trade agreements to rig the market for conglomerates. The main reason the Panama Papers probably haven’t revealed as much on US corporations is that the technicalities of the agreements effectively mask and “legalize” the hidden wiring that benefits the big boys and confuses the public.
These trade deals hide a lot, and our public officials, especially the Democrats who should know better, must not blindly buy into them. If Hillary Clinton wonders why so many working people are supporting Bernie Sanders — and Donald Trump, for that matter — she needs look no further than the closet where her husband keeps his golf clubs. It is, after all, a rich man’s game.
Originally published at billmoyers.com on April 13, 2016.