Bernie Sanders Warned Congress About Panama’s Tax Havens In 2011
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Once again, history has proven Bernie Sanders to be exceedingly prophetic. On Twitter, David Sirota of IB Times posted an excerpt of a 2011 speech Sanders gave to the Senate regarding the Panama Free Trade Agreement. In the speech, Sanders questioned the U.S. government’s motives for urging such an agreement and cited Panama’s reputation for being a tax haven.
The PFTA, he warned, would neuter the United States’ authority and force the country to accept illegal behavior from tax cheats.
“…the trade agreement with Panama would effectively bar the U.S. from cracking down on illegal and abusive offshore tax havens in Panama. In fact, combating tax haven abuse in Panama would be a violation of this free trade agreement, exposing the U.S. to fines from international authorities.”
Since the Panama Papers leak, leaders around the globe are feeling the heat for their shady dealings with Panamanian law firm Mossack Fonseca, most notably Iceland’s prime minister, Sigmundur David Gunnlaugsson. Gunnlaugsson’s alleged shell company, Wintris, lost millions of dollars in the 2008 crash. According to the New York Times, the company is now claiming $4.2 million from three failed banks. He is facing criticism for conflict of interest and Icelanders are demanding his resignation, which he is resisting.
Editor of Süddeutsche Zeitung responded to the lack of U.S. individuals in the documents, saying "Just wait for what is coming next"
— Mathew Ingram (@mathewi) April 3, 2016
The 2.6-terabyte leak contains a total of more than 11.5 million documents and contains information on worldwide celebrities, politicians, world leaders, drug lords, and other wealthy individuals who have taken advantage of tax havens by using shell companies.
The leaks also come at a time when people around the world are feeling anger and frustration at increasingly callous and insensitive leaders who seem to do more for themselves than for their constituents. Whether it will spur violence, peaceful protests, or even suspicious deaths among some of those involved in the leaks remains to be seen.
The German paper which broke the leak, Sueddeutsche Zeitung, has not released any information yet on Americans; however, those may come later. Regardless, of whether SZ releases U.S. information, it is clear that Bernie Sanders was right when he questioned the PFTA, which Hillary Clinton vigorously supported.
After Congress approved the U.S.-Panama trade agreements, along with the U.S.-Columbia and the U.S.-Korea agreements, Hillary Clinton released the following statement.
“The Free Trade Agreements passed by Congress tonight will make it easier for American companies to sell their products to South Korea, Colombia and Panama, which will create jobs here at home. The Obama Administration is constantly working to deepen our economic engagement throughout the worked and these agreements are an example of that commitment.”
Sanders pointed out in his 2011 speech that Panama’s economic output is just $26.7 billion per year. That is just two-tenths of one percent of the entire U.S. economy. “Deepening” our economic engagement, as Clinton put it, would not enrich our nation substantially. It would not create a significant number of jobs, and it certainly would not (and has not) stimulated much in the way of economic growth in the United States.
German journalists involved in Panama Papers suggesting US officials also caught up in further docs to be released.
— ian bremmer (@ianbremmer) April 4, 2016
Looking at the unique dynamics of Central America, Sanders also noted that Panama is a favored money laundering location for drug cartels.
“Finally, Panama is also listed by the State Department as a major venue for Mexican and Colombian drug cartel money laundering. Should we be rewarding this country with a free trade agreement? I think the answer should be a resounding no.”
Sirota, in a separate story published on Monday, posted a photo of an email dated February 9, 2011, from Daniel Kurtz-Phelan to Jacob Sullivan. The email reveals that Clinton’s State Department, and President Obama, knew the PFTA would encourage the rich to hide even more money in Panama shell companies, yet forged ahead with the agreements.
German journalists involved in Panama Papers suggesting US officials also caught up in further docs to be released.
— ian bremmer (@ianbremmer) April 4, 2016
Why would the Obama Administration push through a free trade agreement with Panama knowing of its favorability for money laundering and tax havens? It illustrates a gross lack of judgment both from Obama and Clinton. The only reasonable conclusion for allowing such an economically disastrous trade deal to pass is that it was done for the very reasons Sanders (as well as several economic experts) warned against. This is pure speculation, of course, but it calls into question our government’s motives for such an agreement. Again, Panama’s economic output wouldn’t put a dent in the U.S.’, and little economic growth could have been realistically expected of the deal.
As Sanders warned before, the victims are once again, the innocent tax payers who are shouldering the massive tax bill that the millionaires and billionaires have long shirked. The question is, how many U.S. government officials are involved, and will anything change?
Since the 1960s, Bernie Sanders has fought for everyday Americans against corruption and economic inequality. The Panama Papers leak simply highlights how widespread and deep that corruption really goes.
[Photo: Scott Olson/Getty Images]
