Column: Panama Papers crash free trade politics, Sanders gains


Democratic presidential candidate, Sen. Bernie Sanders, I-Vt. speaks during a campaign stop, Thursday, April 7, 2016, at the Pennsylvania AFL-CIO Convention in Philadelphia. (AP Photo/Matt Rourke)

A historically large data leak recently revealed offshore tax evasion by some of the world’s richest leaders, and the political fallout is massive. While not entirely illegal in all scenarios, offshore tax dodging guts national and local budgets, with undue stress then being placed on budget lines for assistance and public programs for middle and lower-income families – and it happens in America.

Specifically, the massive document leak known as the Panama Papers gives perspective into Mossack Fonseca, a Panamanian tax law firm that specializes in fraudulent shell companies. This sheltered financial network hides the secret fortunes of both world leaders and underworld operatives.

Only one American has been identified so far, according to The International Consortium of Investigative Journalism, which analyzed the leaked files, but more Americans are involved. However, with barely any Americans identified in this leak so far, what relevance could the leak have to average American voters? More than you’d think.

Tax evasion is not an issue tied strictly to this specific leak, Mossack Fonseca, or even just Panama. According to Ana Owens, a tax and budget advocate at U.S. Public Interest Research Group (PIRG),  “This firm is one of thousands in the world and there are hundreds of thousands just like it in the U.S.” She even cited several recent stories of federal authorities failing to catch a “corporation mill” committing fraud in California, despite evidence of financial crimes.

In the wake of the documents being released, President Barack Obama underscored the devastating effects these tax breaks and loopholes have on American families. In an address Tuesday, President Obama called on Congress to overhaul the corporate tax system, and for the Treasury Department to restrict inversions, which allow U.S. companies to be acquired by foreign entities and avoid U.S. corporate income tax rates.

“When companies exploit loopholes like this, it makes it harder to invest in the things that are going to make the American economy strong for generations to come,” the President said. “ It makes hard working Americans feel like the deck is stacked against them.”

Somebody call Bernie Sanders, he wants his rhetoric back.

Jokes aside, as the longest-serving independent U.S. congressional history, Vermont Senator Bernie Sanders opposed the Panama Free Trade Agreement years ago, calling Panama an “offshore tax haven.” Secretary Clinton opposed the trade agreement when running against Obama for the Democratic nomination in 2008, but praised the agreement while serving as Secretary of State when the agreement passed and was signed by Obama in 2011. Sanders and 21 Democratic senators voted against it.

Many will argue that the release of the Panama Papers and the cost of tax evasion in the U.S. and worldwide are not issues that really matter to the average voter, but shouldn’t they be?

The policy landscape set up by Congress in Panama makes it incredibly difficult for the U.S. to combat questionable activity and tax haven abuse after giving it increased financial secrecy. In skipping out on corporate income taxes and taking advantage of these loopholes and underground money laundering rings, the wealthiest people and largest corporations rob the tax structures and communities their business were built on.

When you hear Bernie Sanders talk about how the wealthiest people in this country need to pay their fair share of taxes, this is partly what he’s talking about. In fact, his campaign has committed to terminating the Panama Free Trade Agreement within the first six months of his presidency, and to finally prosecute, after investigation, corporations and wealthy individuals who have violated U.S. law.

Free trade has to be about a meaningful exchange of goods and services if the concept’s lauded and theorized goals of lifting other developing countries out of extreme poverty are to be realized. Free trade cannot stand as a nice-sounding pseudonym for the kind of tax evasion, outsourcing of jobs and exploitation of slave wages that current policies allow.

And worse, as the would-be taxes of America’s wealthiest individuals and corporations float into offshore tax havens, it becomes increasingly hard to fund public programs and assistance for middle and lower-income Americans.

The Panama Papers leak and discussion around it, hopefully provides perspective for voters on the corrupt nature of tax evasion, and bolster the will to elect a candidate who’s been serious about taking a stand against it.

Bennett Cognato is a staff writer to The Daily Campus opinion section. He can be reached via email at

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