Tuesday, 12 April 2016
The World Of David Cameron & Mossack Fonseca
I have never had any investments. No shares. No ISAs. No pension plan. Partly because I've never had any disposable income I could afford to put aside. But also because I was exposed to such a world as a child by the dealings of my father and was completely repulsed by what I saw even at that tender age.
But I'm going to offer a story that in some ways best illustrates that world and which may throw some light upon the revelations of the Panama Papers albeit at a much lower level. It's a world that the average person is completely outside of and thus why revelations such as the Panama Papers seem to come as such a surprise when the story breaks. But it shouldn't come as too much of a surprise really. Just think about it, the firm Mossack & Fonseca are merely one of these type of operators across a fistful of countries and dependencies, who host such offshore financial arrangements that so benefit their rich clients. I'd suggest it represented just the tip of the iceberg, except these countries tend to have hot weather and any ice would melt.
Okay, so on a more personal scale. My father was up in court accused of insider dealing on shares in the 1990s. The law he was prosecuted under was fairly new and was intended to prevent professionals who came by sensitive information regarding companies then made a profit from it through buying or selling shares based on the information. My father was a lawyer and had come by the information when one of his clients, an accountant, came to see him about possibly suing a company who were tarnishing his reputation as he served as a broker between it and another company who were looking to merge. The accountant had bought shares on the basis of this upcoming merger (and eventually pleaded guilty to one count while being cleared of 3 others, which was bizarre since the one he claimed guilt for was buying shares on behalf of his grand-daughter who was under 10 years old....) After the meeting in which he distributed legal advice on the slander and defamation of character, my father then proceeded to buy shares in one of the companies. And that was what he was on trial for. If the accountant hadn't have pleaded guilty to his one charge and subsequently been cleared of that as well as the other 3, then the authorities could not have come after my father, being a stage further removed from the privileged information, when they would have failed to successfully prosecute the primary source.
So I attended the court case over the 4 days it took place. My first warning should have been the moment we stepped up to the building. There was my father in his usual suit and bow tie, in the middle of defendants from the other more run of the mill cases, the Notting Hill drug dealers and gangsters. The contrast was blatant. Next thing I notice was that I'd played football regularly against one of the members of the jury which was a heck of a coincidence. I was in the public gallery so I don't know if he clocked me or knew my relationship to the accused, so it almost certainly weighed more upon my impressions than it did his. And then the trial got started.
One after the other, either for the defence or the prosecution, marched up to the witness box a parade of stockbrokers, lawyers, accountants and civil servants. Now I credit that I'm a reasonably intelligent person, well educated and reasonably well read, but I couldn't pick the bones out of what they were saying. The world of investments and stocks and shares they talked about, was as alien a landscape to me as a reality TV programme would have been to them (a slight anachronism since this was an era still relatively unsullied by the form). Again, maybe this is fanciful on my part, but I imagined I could see the eyes of the jury glaze over, because this world being presented to them just did not compute. These men and yes they were all men were arrogant and presumptive that we all knew about what they were talking about and therefore they had no need to explain and define what they did. Which was use money to make more money and to move money about. They reminded me of Catholic Priests of old jealously guarding the exclusivity of Latin that prevented any body challenging their status or knowledge. The accountants and stockbrokers were made to squirm by the QCs, because bandying words was not really their thing. The lawyers in the box were better suited to the fencing. All were odious to my judgemental eye.
Having sat through that trial, I was none the wiser whether my father was guilty under the law or not (as per usual any legislation drafted by Parliament you can normally drive a bus through its loopholes or lack of definition. Information is a precious commodity in the world of speculators and investors, a bit like getting the scoop on how a horse is training from the stables ahead of a big race. But it remains inestimably hard to decide what and who is 'privileged' in regard to information. I think my father was certainly morally culpable if not technically guilty, a bit like David Cameron. Anyway he was found guilty and as a final disorienting landmark, the fine was paltry compared to the fees of my father's legal team which was what actually bankrupted him. Money chasing after money again, yet not quite at the same level of no win no fee have you injured yourself at work the rest of us get bombarded with on TV...
So the world of investment remains abstruse to many of us. Hence when the shock horror, rich people salt their gotten gains away from the taxman revelation emerges, it really shouldn't be a surprise at all, but inevitably is. I loathe those for whom money is the only interest they have, not just professionally but in their whole mien, so that though they would proudly pledge themselves to the UK, at the same time getting their money safe from the talons of Her Majesty's Revenue and Customs, no matter how legally they are behaving. In the same manner as the moment the government mentions a crackdown on corporate tax avoidance, some firms start making noises they'll quit the UK for more tolerant tax regimes. These people have no deep stake in our country. Like the offshore operators they utilise, have money will travel to find the best deal. It behooves us all to try and educate ourselves, to arm ourselves with the information to be able to nail these sharp practitioners who screw the country out of valuable funds. This is why Cameron can bare faced stand up and proclaim he has done nothing illegal, which is true, but it gives the lie to his political message of one nation Conservatism, we're all in this together, the cuts to the welfare budget are all that stand between the UK and economic bankruptcy, etc etc. As my father's case demonstrated, there is the letter of the law and then there is its spirit.
Justice is blindfolded rather than blind... Coincidently, when I did jury service, one of my cases was about the receipt of stolen weighing scales...