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.
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, yesterday 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.”
You can share Power Sheet with friends and followers here.
What We're Reading Today
Pfizer, Allergan end $160 billion merger
The two sides mutually agreed to step away from the deal following new rules issued by the Treasury Dept. against tax inversions that made the merger not financially worthwhile. Pfizer CEO Ian Read had plans to merge the company's headquarters to Allergan's home in Ireland to avoid U.S. taxes. Pfizer will pay Brent Saunders' company $400 million to walk away from the agreement. CNBC
Jeff Bezos defends Amazon's culture
In a letter to shareholders, Bezos said that employees "self-select" the corporate culture that I want to belong to. Those who don't mind competition choose one culture, while others who prefer to innovate may choose another, he said. His comments were in response to an article published by the New York Times last year that described a brutal corporate culture at Amazon. Bezos admitted in the note that he isn't sure the online retailer has the "right" culture, but that it has one that works for the company. Fortune
Bill Ackman to answer to big losses
Ackman's hedge fund just suffered its worst quarterly loss ever, in part due to his continued support of Valeant Pharmaceuticals. Investors remain skeptical of Valeant, even though Ackman has joined the board and the company is looking to replace CEO J. Michael Pearson. Reuters
Icelandic Prime Minister resigns
Sigmundur Gunnlaugsson became the first political casualty since the release of the Panama Papers, which detailed how leaders and the wealthy hide money through offshore accounts. In the release, it was discovered that Gunnlaugsson's wife hid millions in a company created by the Panamanian law firm Mossack Fonseca. NYT
Building a Better Leader
PayPal cancels plans to build an operations center in Charlotte...
...because of North Carolina's new law that prevents anti-discrimination efforts focused on gender identity. The center was expected to create 400 jobs in the area. CNNMoney
Take notes by hand to improve retention
Researchers have found that students who take notes by hand, as opposed to using a laptop, retain information longer. Fortune
If you want to improve your gift for gab...
...remember that great conversationalists listen more than they talk and they don't always share their experiences. Fast Company
The Wisconsin Primary
Ted Cruz's win puts a major dent in Trump's chances
Cruz easily defeated Donald Trump in the Badger State, taking over 48% of the vote. Cruz's victory on Tuesday makes it very difficult for Trump to gain the requisite number of delegates, leaving the possibility of a contested GOP convention. Fortune
Bernie Sanders continues his hot streak
It marks Sanders' sixth victory in the past seven state contests, and becomes an embarrassing trend for frontrunner Hillary Clinton. Sanders still trails Clinton by a wide margin in delegates, but his victories have rallied his supporters, giving him hope as the two candidates head to New York. Washington Post
Trump, Clinton look to New York
Up next looms New York's primary in two weeks. Both candidates view the state as their home turf and it has the most amount of delegates left among the remaining primaries. It should be a welcome site for Clinton, who hopes to use New York as a way to put a stop to Sanders' momentum. Trump, who begins with a very large lead in the state, will likely spend most of his time upstate where much of the state's GOP voters live. WSJ
Up or Out
Marvell Technology Group CEO Sehat Sutardja and his wife, President Weili Dai, will step down from the company they founded. Fortune
Fortune Reads and Videos
eBay's plans to up its name recognition...
...includes selling branded boxes to its online marketplace sellers. Fortune
Megyn Kelly may leave Fox News
Donald Trump's nemesis is keeping her options open for when her contract expires in the fall. Fortune
Starbucks to open a 20,000 square-foot store in NYC
It'll be its largest store. Fortune
More than one-in-five households have cut the cord
1.1 million households got rid of their cable subscription last year. Fortune
Quote of the Day
"The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another. The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one – just that it’s ours – and over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful." —Jeff Bezos defending Amazon's culture in a letter to shareholders The Verge
Share Today's Power Sheet:
http://fortune.com/newsletter/powersheet/
| Produced by Ryan Derousseau | |
| @ryanderous | |
| powersheet@newsletters.fortune.com |
