Ending the kinds of offshore abuses revealed by the Panama Papers scandal requires a global solution led by the United States and Europe, a report released today by Nobel Prize-winning economist Joseph Stiglitz and Swiss anti-corruption expert Mark Pieth says.
The 25-page report, “Overcoming the Shadow Economy,” argues that, as “economic leaders,” the U.S. and the European Union “have an obligation to force financial centers to comply with global transparency standards.”
The U.S. and EU have shown they have the tools to stem the flow of dirty money in the fight against terrorism, but have failed to use these same anti-money-laundering tools as forcefully in the fight against financial corruption and tax dodging, the report says.
“Secrecy has to be attacked globally – offshore and onshore,” the report says. “There can be no places to hide.”
The new report is an outgrowth of the pair’s initial work on a study committee appointed by the Panamanian government in response to a series of news stories by ICIJ and more than 100 media partners. The media partnership’s Panama Papers investigation revealed the inner workings of Mossack Fonseca, a law firm headquartered in Panama that has helped create offshore structures used by world leaders, wealthy individuals, drug lords and financial fraudsters.
Stiglitz and Pieth resigned from the Panamanian government committee in August, saying that government officials had refused to assure the panel it had full independence to investigate and make its findings public. The government blamed their resignations over “internal differences” on the committee.