Forcing corruption out of the shadows

Let there be light! Panama unwittingly gave birth to the “Overcoming the Shadow Economy” project Keystone

Swiss anti-corruption campaigner and scourge of FIFA Mark Pieth has been busy in Davos promoting his recent paper on rooting out the root causes of corruption – be it money laundering, organised crime or tax evasion.

Ironically, the Panamanian government inspired the “Overcoming the Shadow Economy”External link report, following the Panama Papers scandal. Pieth and Nobel Prize winning economist Joseph Stiglitz co-wrote the paper after resigning from a Panama commission that was looking into the public exposé of its role in money laundering.

The pair decided to carry on their research and expanded it into a report on the global underground financial system. Published last November, the paper recommends public registers of beneficial owners of trusts, tougher penalties against lawyers and middlemen and disclosure of large cash real estate transactions.

Pieth and Stiglitz were at Davos talking on the theme of corruption. The Panama Papers scandal was “basically, nothing new”, to the 25-year veteran of global corruption investigations. “This is how the crooks of this world – organised criminals, kleptocrats and tax evaders – stash away their money,” Pieth said.

“The bigger issue for me is why we tolerate this, because we could stop it easily,” the Basel Institute on Governance chairman added.

Pieth also aimed a swipe at his home country, Switzerland, for operating a legal system that impedes people who try to recover dirty assets. “The laws are such that you can easily waste 10 years trying to get to the money – even if the money is blocked,” he chided.