Panama Papers: Why None of Us Should Be Surprised

April 6, 2016, 3:56 PM UTC
Iceland's Prime Minister Gunnlaugsson speaks to media outside Iceland president's residence in Reykjavik
Iceland's Prime Minister Sigmundur David Gunnlaugsson speaks to media outside Iceland president's residence in Reykjavik, Iceland, April 5, 2016.
Sigtryggur Johannsson — Reuters

The beginning of the fallout from the Panama Papers is certainly dramatic, but everyone, especially leaders, must get used to such revelations. Even the release of 11.6 million private documents is only the continuation of a trend that will keep intensifying. It isn’t actually very surprising.

Just 48 hours after media outlets around the world broke the story of the papers, Icelandic Prime Minister Sigmundur David Gunnlaugsson resigned. Turns out he and his wife held $4 million of bonds in Icelandic banks through a shell company, which he didn’t disclose when he took office, according to the report. Also in the past two days, opposition leaders in the Ukrainian parliament have demanded impeachment proceedings against President Petro Poroshenko, who allegedly owned assorted assets through a British Virgin Islands holding company. Probable demands for the ouster of China’s Xi Jinping and Russia’s Vladimir Putin won’t get anywhere, of course, but those leaders’ friends, family, and associates show up owning dizzying networks of B.V.I. companies. In all these cases and those of the many other government leaders named in the Panama Papers, the main issue isn’t whether they were evading taxes but rather how they got all that money.

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While this is big news, you may have noticed that an impeachment epidemic was already underway. Brazilian President Dilma Rousseff has been drawing most of the attention, and the impeachment forces there are still gaining strength. Every day it appears more likely that if she isn’t corrupt, she’s the only current or former government official associated with Petrobras who isn’t. South Africa’s parliament, controlled by the party of President Jacob Zuma, on Tuesday defeated a motion to impeach him despite growing evidence of corruption. In Alabama, Republican legislators introduced a resolution to impeach Republican Governor Robert Bentley, who allegedly had an affair with a staffer, having campaigned on promises of ethics and integrity.



Are today’s leaders more corrupt, venal, or dishonest than yesterday’s? Human nature being what it is, it’s hard to believe that they are. What’s new is that in a digital world, keeping secrets is far harder than it used to be. The impeachment movements against Rousseff, Zuma, and Bentley are all supported in part by secret recordings. As for the Panama Papers, those 11.6 million documents weren’t leaked to the media in truckloads of boxes; they were all digital. Even in that form, analyzing them would have taken an army of journalists years of work. The job was actually done by high-powered data analytics software. There was no other way.

One could argue that today’s leaders may be, on the whole, less corrupt than yesterday’s because they’re disciplined by the increased threat of exposure. That notion is and will remain conjecture. The bottom line reality was well expressed by Starbucks CEO Howard Schultz, who last year told Fortune that today, “The currency of leadership is transparency.”

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