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The Corruption Revealed in the Panama Papers Opened the Door to Isis
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Who shall doubt ‘the secret hid

Under Cheopspyramid

Was that the contractor did

Cheops out of several millions?

The message of Rudyard Kipling’s poem is that corruption is always with us and has not changed much down the ages. There is some truth in this, but degrees of corruption greatly matter, as the Cheops would have found to his cost if he tried to build his pyramid in modern Iraq instead of ancient Egypt. The project would cost him billions rather than millions – and he would be more likely to end up with a hole in the ground than anything resembling a pyramid.

Three years ago I was in Baghdad after it had rained heavily, driving for miles through streets that had disappeared under grey-coloured flood water combined with raw sewage. Later I asked Shirouk Abayachi, an advisor to the Ministry of Water Resources, why this was happening and she said that “since 2003, $7bn has been spent to build a new sewage system for Baghdad, but either the sewers weren’t built or they were built very badly”. She concluded that “corruption is the key to all this”.

Anybody discussing the Panama Papers and the practices of the law firm Mossack Fonseca should think about the ultimate destination of the $7bn not spent on the Baghdad drainage system. There will be many go-betweens and middle men protecting anyone who profited from this huge sum, but the suspicion must be that a proportion of it will have ended up in offshore financial centres where money is hidden and can be turned into legally held assets.

There is no obvious link between the revelations in the Panama Papers, the rise of Islamic State and the wars tearing apart at least nine countries in the Middle East and North Africa. But these three developments are intimately connected as ruling elites, who syphon off wealth into tax havens and foreign property, lose political credibility. No ordinary Afghans, Iraqis and Syrians will fight and die for rulers they detest as swindlers. Crucial to the rise of Isis, al-Qaeda and the Taliban in Iraq, Syria, Afghanistan is not their own strength and popularity, but the weakness and unpopularity of the governments to which they are opposed.

Kipling was right in believing that there has always been corruption, but since the early 1990s corrupt states have often mutated into kleptocracies. Ruling families and the narrow coteries around them have taken a larger and larger share of the economic cake.

In Syria since the turn of the century, for instance, the rural population and the urban poor no longer enjoyed the limited benefits they had previously received under an equally harsh but more egalitarian regime. By 2011, President Bashar al-Assad’s first cousin Rami Makhlouf was reported to be a dominant player in 60 per cent of the Syrian economy and to have a personal worth of $5 billion.

In Iraq earlier this year, a financial specialist, who wished to remain anonymous, said that the government of prime minister Haider al-Abadi held files on corrupt individuals, including “one politician who has amassed a fortune of $6 billion through corrupt dealings.”

The danger of citing extreme examples of corruption from exotic and war-ravaged countries like Iraq, Afghanistan and Syria is that these may sound like events happening on another planet. But the political and economic systems in Iraq and Afghanistan were devised under the tutelage of the US and allies like Britain. They were proponents of free market economics which in the West may increase inequality and benefit the wealthy, but in Kabul and Baghdad were a license to steal by anybody with power.

Neo-liberal economists have a lot to answer for. A few days after Isis had captured Mosul in June 2014, I was in Baghdad and asked a recently retired four-star Iraqi general why the much larger and better-equipped Iraqi army had been defeated so swiftly and humiliatingly. He replied that the explanation was: “Corruption! Corruption! Corruption!”

He added that this was pervasive and had begun when the US was building a new Iraqi military after the overthrow of Saddam Hussein in 2003, when the American commanders had insisted on out-sourcing food and other supplies to private contractors. These businessmen and the army officers soon determined that, if the Iraqi government was paying money to feed and equip a battalion of 600 men, but its real strength was only 150, they could pocket the difference. So profitable was this arrangement that by 2014 all officers’ jobs were for sale and it cost $200,000 to become a colonel and up to $2m a general in charge of a division.

Blatant corruption at the top in Kabul and Baghdad has been frequently reported over the years, though nothing much seems to change. But it is a mistake to imagine that this was simply the outcome of a culture of corruption specific to Afghanistan and Iraq. The most corrupt ministers were appointed and the most crooked contracts signed at a time when US officials were the real decision-makers in Baghdad.

For example, the entire military procurement budget of $1.2 billion was effectively stolen in 2004/5 when the Defence Ministry was substantially under US control, raising questions of the competence, or even collusion, of the US authorities.

The situation has got worse, not better. “I feared seven or eight years ago that Iraq would become like Nigeria,” said one former minister in 2013, “but in fact it is far worse.”

He cited as evidence a $1.3bn contract signed by a minister with one foreign company that had only a nominal existence – and a second company that was bankrupt. This took place in a country in which one third of the labour force is unemployed, and, if the underemployed are taken into account, the figure rises to over half.

ORDER IT NOW

The use of offshore financial centres by the moneyed elite in the oil states and much of the rest of the world is not always to avoid taxes which they would not pay if they kept the money at home, but in some cases to conceal what they have stolen and later to legally launder it.

Some of this can be done by buying property in places like Baghdad, which explains why property prices in that dangerous city are as high as London. But it is safer and better to buy property in London itself, something that will ultimately require the services of a company like Mossack Fonseca – though these services will be far removed from the original toxic source of the investment.

The Panama Papers give insight into the names and mechanisms through which globalised elites hide their wealth and avoid paying tax on it. Commentators now predict that popular disgust with political establishments will benefit radical leaders like Bernie Sanders in the US and Jeremy Corbyn in the UK.

What they do not see is that the way in which the detachment of interests of elites from the countries they rule has already produced states that have failed or are failing, or are wracked by conflict and war.

(Republished from The Independent by permission of author or representative)
 
• Category: Foreign Policy • Tags: Corruption, Iraq, Panama Papers 
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  1. KA says:

    Are we accepting this false inevitability when we say :”money could no longer be traced ” , or ” money has been laundered through drug cartel into the banks”?
    Why could it not be traced?

    Citizen accept a lot of explanations out of laziness and for not still being directly affected by it.

    I see people salivating at the specter of Putin being seen by Russian as corrupt .They are same people who would vote for Cruz or Hillary depending on their support or lack of any support to the gay marriage and the access to the oral contraceptive . But the two are created or are the creators of abysmal corruption that hurt people from Macao to Mexico City .

    In US if it is corrupt -solution is to legalize it – lobbying and receiving

    fees or donations for celebratory dinner speeches are nothing but corruptions.

    Banks and airlines have colluded with drug money .

    All the off shores entities are one or another way are the creations of the western powers . The money stolen in Iraq or Kabul or Delhi dont go to Saudi or China or Brazil. They end up in dollar system and in banks protected by western powers . Just like “money given to listen to the speech” – the stolen money from 3 rd world travels through another intermediary which is called off shore banking system.

    BTW wasn’t HSBC created to launder and “white “the money created out of opium trade in post 1800 .The victims were Chinese empire and the Indian farmers . The larger size victims can be seen in the desolation that still stamp the countryside of Northern and Eastern India Who took those money-Britain did .What did they do with the money ? Britain financed most of its wars from 1830 to 1930 from the drug trades.

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  2. conatus says:

    Trump said, “The Iraq war was a disaster. It was a mistake. We spent $2 trillion, thousands of lives, thousands of lives, wounded warriors who we love all over the place. What do we have? Nothing. Absolutely nothing. Iran is taking over Iraq as sure as you’re sitting there. And that’s the way it is. We get nothing. They get the oil, they get everything. We get nothing. So it was a huge mistake.”

    Two trillion for what?
    Chaos?

    What about our own Elite(you know, those brilliant Harvard and Yalies who have so much life experience?) plunging the world into a destabilized Middle East for what?
    Oh I forgot….freedom.
    We are getting to that point (19 trillion in debt)where Janis Joplin’s long ago song should be our national anthem.
    “Freedom’s just another word for nuthin’ left to lose”

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  3. Ivy says:

    The novel Catch-22 about the WWII era included the quaint concept of “everyone has a piece of the action”.
    That is now updated to Catch-21st Century, where the action has more zeroes and people kid themselves that they have a piece of the action.
    History has shown when gross imbalances and injustices are inflicted on the masses, they often end up rebelling. Pitchforks, guillotines and other methods were used in France, Russia, various Eastern European countries, the Middle East (with much aiding and abetting) and even closer to home.
    Alexander Hamilton has been in the news for that play, but should be instead for his Federalist Papers, such as #17.

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  4. Rehmat says:

    Corruption you said, Mr. Cockburn!

    The Panama Papers are as much creation of the Organized Jewry as was The Protocols of Zion. Lean truth from Canadian Jewish academic, Henry Makow, PhD.

    http://henrymakow.com/2014/09/Authenticity-of-Protocols-of-Zion-Affirmed%20.html

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  5. Corruption, like most crimes, will always be with us. The question is ‘Are corrupt people ever jailed’, ie is there any risk in being corrupt.

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  6. anonymous says: • Disclaimer

    This is a hit piece on Assad disguised as even-handed reporting.

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    • Replies: @Rehmat
    Doesn't Patrick Cockburn works for UK's daily INDEPENDENT, owned by Rusian Zionist Jewish oligarch Evgeny Lebedev? That speaks Cockburn's hatred of Muslims and any country that stands up against the Zionist regime.

    Thanks to Syrian army, Hizbullah, Iran and four-year late arrival of Israel-ally Russia - Bashar al-Assad is no leaving his throne - letting US-Israel to turn Syria into another Sudan, Libya or Iraq.

    On February 15, 2016, former British ambassador to Syria and Bahrain, Peter Ford blamed David Cameron’s ME policy for prolonging five-year Syrians’ agony by joining the US-led coalition to bring an anti-Iran regime change in Damascus.

    “Assad is not going to be overthrown. This becomes more clear with every day passes. Western analysts have been indulging in wishful thinking for five years; it’s time to get real, we owe it to Syrian people to be much more realistic and hard headed about this. The West has to stop propping the so-called moderate opposition, which is not moderate at all by the way, and it has to allow Syrian Army backed possibly by the Russian to deal with ISIS,” Ford said at BBC’s The Big Questions, hosted by Nicky Campbell, an Islamophobe. (watch a video below).

    https://rehmat1.com/2016/03/06/ex-uk-ambassador-no-regime-change-in-syria/
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  7. Rehmat says:
    @anonymous
    This is a hit piece on Assad disguised as even-handed reporting.

    Doesn’t Patrick Cockburn works for UK’s daily INDEPENDENT, owned by Rusian Zionist Jewish oligarch Evgeny Lebedev? That speaks Cockburn’s hatred of Muslims and any country that stands up against the Zionist regime.

    Thanks to Syrian army, Hizbullah, Iran and four-year late arrival of Israel-ally Russia – Bashar al-Assad is no leaving his throne – letting US-Israel to turn Syria into another Sudan, Libya or Iraq.

    On February 15, 2016, former British ambassador to Syria and Bahrain, Peter Ford blamed David Cameron’s ME policy for prolonging five-year Syrians’ agony by joining the US-led coalition to bring an anti-Iran regime change in Damascus.

    “Assad is not going to be overthrown. This becomes more clear with every day passes. Western analysts have been indulging in wishful thinking for five years; it’s time to get real, we owe it to Syrian people to be much more realistic and hard headed about this. The West has to stop propping the so-called moderate opposition, which is not moderate at all by the way, and it has to allow Syrian Army backed possibly by the Russian to deal with ISIS,” Ford said at BBC’s The Big Questions, hosted by Nicky Campbell, an Islamophobe. (watch a video below).

    https://rehmat1.com/2016/03/06/ex-uk-ambassador-no-regime-change-in-syria/

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  8. […] Corruption Revealed in Panama Papers Opened the Door to ISIS  by Patrick Cockburn […]

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  9. Bernie Sanders is a “radical leader”? Obviously the author either knows nothing about Mr. Sanders’ long public record as a moderate politician at the local, state and national level for several decades, or chooses to ignore that record and misbrand him as a “radical leader” whose position(s) can be readily ignored. Sincerely, an 85-year-old US citizen who has been critically observing US politics for longer than the author has been alive.

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    • Replies: @Anonymous
    Radical, compared with the other establishment candidates, who are either entirely bought-and-paid-for by the ownership class or firmly on their side.
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  10. Agent76 says:

    Apr 6, 2016 The Panama Papers: Who Are The Real Criminals? Jeff Berwick on Press For Truth

    Dan Dicks interviews Jeff for Press For Truth, topics include: the biggest data dump in the history of journalism, the sinister propaganda uses of the leak, George Soros backed the project as did CIA front group USAID and the Rockefeller Foundation, most of those exposed are enemies of the western order, tax evasion is an act of heroism, the leak is part of the plan for one world government by demonizing offshore accounts, this is part of a financial war and increasing mass surveillance, a global socialist state, a crackdown on foreign bank accounts could send bitcoin skyrocketing, the Shemitah Jubilee year and the introduction of a one world currency in 2018, a major event in Israel in 2016, get prepared for the end game!

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  11. Agent76 says:

    The Panama Papers · ICIJ – Your guide to The Panama Papers.

    Leaders, criminals, celebrities, A giant leak of more than 11.5 million financial and legal records exposes a system that enables crime, corruption and wrongdoing, hidden by secretive offshore companies.

    https://panamapapers.icij.org

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  12. Anonymous says: • Disclaimer
    @richard young
    Bernie Sanders is a "radical leader"? Obviously the author either knows nothing about Mr. Sanders' long public record as a moderate politician at the local, state and national level for several decades, or chooses to ignore that record and misbrand him as a "radical leader" whose position(s) can be readily ignored. Sincerely, an 85-year-old US citizen who has been critically observing US politics for longer than the author has been alive.

    Radical, compared with the other establishment candidates, who are either entirely bought-and-paid-for by the ownership class or firmly on their side.

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    • Replies: @Rehmat
    Bernie Sanders is a "radical" Zionist Jew, while the other candidates are "radial" Zionist Christians.

    So is there a difference between these two?

    Last year, British solo acoustic artist of Autumn’s Here, Alison Chabloz, after refusing to be intimidated by ‘Israeli hound squad’ for over year, posted: "Up Yours!’ Zionists!" on her Facebook.

    https://rehmat1.com/2015/08/22/uks-female-artist-up-yours-zionists/
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  13. dahoit says:

    Wapo ?says Russia released the Panama papers.It’s all a Putin plot!
    The POToEZ;Of course it’s true.
    Look the f*ck around.

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  14. […] Corruption Revealed in Panama Papers Opened the Door to ISIS  by Patrick Cockburn […]

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  15. Zhu Bajie says:

    I always assumed that there were lots of corrupt Americans, military and civilian, profiting mightily from the occupations.

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  16. Rehmat says:
    @Anonymous
    Radical, compared with the other establishment candidates, who are either entirely bought-and-paid-for by the ownership class or firmly on their side.

    Bernie Sanders is a “radical” Zionist Jew, while the other candidates are “radial” Zionist Christians.

    So is there a difference between these two?

    Last year, British solo acoustic artist of Autumn’s Here, Alison Chabloz, after refusing to be intimidated by ‘Israeli hound squad’ for over year, posted: “Up Yours!’ Zionists!” on her Facebook.

    https://rehmat1.com/2015/08/22/uks-female-artist-up-yours-zionists/

    Read More
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  17. […] UNZ: The Corruption Revealed in the Panama Papers Opened the Door to Isis By PATRICK COCKBURN […]

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  18. […] Source: The Corruption Revealed in the Panama Papers Opened the Door to Isis – The Unz Review […]

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