With the release last week of the so-called Panama Papers, a cache of more than eleven million documents detailing the offshore tax havens of the rich and powerful, scandal has shot across the globe. Implicating world leaders and captains of industry alike, the papers—and the breathless reportage surrounding them—paint a picture of duplicitous oligarchs shirking their civic duties while playing fast and loose with laws designed to benefit the super rich. Britain’s left-wing The Guardian newspaper has taken an early lead on this story (though the leak has been dripping in the German press since last year), and the overriding media tone has been denunciatory towards those involved. But the reactions to these revelations from voters have varied wildly from country to country, revealing yet another way in which civil society shapes political expectations.
Unsurprisingly, public backlash has been harshest in those countries in which hefty tax rates underwrite an especially springy safety net. In Iceland, for instance, where nearly half of income-tested payments support pensioner programs, the Progressive Prime Minister Sigmundur Davíð Gunnlaugsson has been forced out of office after it was revealed that his family hid several million dollars worth of wealth outside the country. Gunnlaugsson’s timing was especially unlucky, as news of his tax avoidance comes while Icelanders still struggle to swallow significant cutbacks in social spending and a hefty dose of austerity after major bank failure and economic depression in 2008. To be sure, the Prime Minister was already fighting back a surging left and his political future was anything but certain, but the impact of the Panama Papers should not therefore be underestimated: they had the power to draw together crowds of protestors as large as that country had seen in nearly ten years.
Reaction could hardly have been more different in Russia. One still waits with bated breath for the crowds of protestors to storm Red Square. This tumbleweed-across-the-prairie response comes despite extensive reporting showing that more than $2 billion flowed through President Vladimir Putin’s inner circle, particularly one Sergei Roldugin, a bosom pal of the Russian leader and godfather to his eldest daughter. Roldugin runs the St. Petersburg Music House, a posh concert venue, and he and Putin have decided to tell Russian media that the billions in question were spent on rare instruments. In fact, Putin seems to see no need to go on the defensive, even bullishly suggesting that the whole story is part of the ongoing Western plot against his reputation and national stability in Russia. That the unreconstructed KGB strongman spouts these talking points with such bold abandon should come as no surprise at this point; that he appears to be suffering no discernible blowback among his own people is truly telling. As the Guardian reports, the Russian paper participating in the global investigation into the Panama Papers, Novoya Gazeta, has a small circulation and weak reach inside Russia, mostly catering to dissident intellectuals and government critics. As one friend from that part of the world put it to me recently, “People would be more scandalized if they learned that Putin was not involved in this sort of corruption.”
Britain, meanwhile, provides something of an interesting middle ground between Iceland’s swift indignation and Russia’s cynical apathy. National newspapers are up in arms over the affair—either outraged that Prime Minister David Cameron directly benefitted from money that his father Ian had kept offshore before he died or, alternatively, outraged that anyone would be outraged by this. The Guardian’s editorial board seemed to agree with Labour MP Dennis Skinner’s characterization of Cameron as “Dodgy Dave” (Skinner was ejected from the Commons for refusing to retract his barb), while the Tory-friendly Daily Telegraph urged the PM to use this opportunity to unabashedly advocate for lower corporate tax rates and a cut to the inheritance tax. Though Cameron did initially face calls to resign he nevertheless managed to navigate a stormy Commons this week and appears to be moving ahead, bruised but intact. What is noteworthy, though, is how starkly public opinion in Britain is divided on this question, and the vigorousness of the debate that has sprung up around it. This debate is a sign of a healthy society.
Of course, Cameron’s involvement in this scandal, such as it is, comes nowhere near the criminality of what’s going on in Russia, but not just for that reason has the discourse out of London been both more honest and constructive than the party line from Moscow. There is in fact a tradition in Britain of enterprise, fair play, and government transparency around which partisans can at least structure their political skirmishes. This is the invaluable contribution of civil society: to act as leaven to public debate. When half of Brits are happy to see successful parents pass on hard-earned legacies to their children while the other half balk at the attempt to preserve one’s earnings from the common pot, there’s a real conflict of values at play. But a free society takes that conflict seriously, as Britain is now. Russia, with its ingrained traditions of absolutism and corruption, struggles to even have such debate.
One should note, as well, that very few Americans’ names appear in the Papers. Others have already noted this is because Americans have many better options for tax havens both in and outside the Union, but one still wonders, given the class warfare rhetoric bandied about by the left and the presence on the right of a brash billionaire who “fights like hell” to avoid paying his own taxes, how the debate would be unfurling Stateside.