Who could have predicted that the global tax evasion by the world’s ultra-rich, made public this week with the release of the Panama Papers, was ushered in with the help of a free trade agreement?
Turns out, Sen. Bernie Sanders did.
In fiery speech before the U.S. Senate in 2011, Bernie Sanders declared his “strong opposition” to the “unfettered free trade agreements” with Korea, Columbia, and Panama—agreements that were being pushed for by both President Barack Obama and then-Secretary of State Hillary Clinton, Sanders’ current rival for the Democratic nomination.
“Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in off-shore tax havens,” Sanders stated. “And, the Panama Free Trade Agreement would make this bad situation much worse.”
Watch Sanders’ entire speech below:
Sanders was in the minority with that view and shortly thereafter the Panama-U.S. Trade Promotion Agreement (TPA) was passed and signed into law, a move that was lauded by Sec. Clinton as an example of the Obama Administration’s commitment to “deepen our economic engagement throughout the world.”
What’s more, as International Business Times senior editor David Sirota and others have pointed out, the Obama administration even included a loophole in the deal “that allows Panama to sidestep new tax transparency provisions” included in the trade pact.
Though the world was stunned by the leak of 11.5 million documents from the Panama-based law firm Mossack Fonseca, which detailed how government and corporate officials around the world erected shell companies to stash billions of dollars in to avoid tax liability, much of those activities were not necessarily illegal—thanks to agreements such as the Panama TPA.
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“Tax avoidance is an inevitable feature of any tax system, but the reason this particular form of avoidance grows and grows without bounds is that powerful politicians in powerful countries have chosen to let it happen,” Vox’s Matthew Yglesias wrote Sunday. “As the global economy has become more and more deeply integrated, powerful countries have created economic ‘rules of the road’ that foreign countries and multinational corporations must follow in order to gain lucrative market access.”
Indeed, reclaiming an economy that has been “rigged” for the one percent is the hallmark of Bernie Sanders’ presidential campaign, and it is a theme that has galvanized voters and fueled primary upsets across the United States.
On Monday, 22,000 people demonstrated outside the Parliament building in Reykjavik, Iceland calling for the resignation of Prime Minister Sigmundur Davíð Gunnlaugsson, who is just one of the world leaders implicated in the leak. Observers speculate that is just the beginning of the popular backlash to the revelations.
Though there has been little reporting on what Americans have been exposed in the Mossack Fonseca data dump, there are already murmurs that the Panama Papers can provide the necessary boost for Sanders to overtake Clinton.
“All of the presidential candidates will be questioned about the scandal. And nobody is going to be under more pressure than Hillary Clinton,” columnist Matthew Turner wrote at the Independent on Tuesday. “For some Americans, she is the embodiment of a ‘global elite,’ while Bernie Sanders is its antithesis.”
Sanders has not yet released a statement on the Panama Papers, but in an interview on Monday he sharpened his attack on “greed, recklessness and illegal behavior on Wall Street,” telling the New York Daily News:
“If that’s not a rigged economy,” Sanders adds, “I don’t know what a rigged economy is.”