Secrecy, once accepted, becomes an addiction.
– Edward Teller, theoretical physicist
There was a flurry of reports and allegations recently concerning foreign bank accounts belonging to Malaysian public officials. Facts supposedly reveal proof and evidence. Its axiomatic that people have the same right as facts to change their minds and perspectives. Thus, proof and evidence are transient and unreliable. Professional fabricators, manipulators and manufacturers of facts reign and rule the roost.
Banks are structured with a fiduciary duty by law to resist disclosure concerning customers’ accounts. The secrecy or confidentiality provision clearly prohibits a director or officer of any licensed banking institution from producing, divulging, revealing, publishing or disclosing any information pertaining to the affairs and conduct of customer accounts to another party.
Does law enforcement probing constitute ‘another party’? Banks supposedly conduct their own internal audits and investigations prior to allowing an outside investigation by law enforcement officials. But if these internal processes are insufficient, inadequate or inconclusive, then it makes sense that bank secrecy laws have a glass ceiling.
Exemptions from scrutiny are available for a parent holding company or one of its bank subsidiaries on behalf of all bank subsidiaries of the holding company, as long as the designation lists each bank subsidiary to which the designation shall apply. Or with a revocable trust arrangement. This immunity from law enforcement scrutiny offers great solace to those engaged in stealth banking!
A company that wished to carry on leasing, factoring, development finance or building credit business (previously referred to as scheduled business under BAFIA – Banking and Financial Institutions Act) was no longer required to obtain a written acknowledgement from Bank Negara Malaysia. But in 2013 BAFIA was repealed and replaced with the Financial Services Act (FSA). Is this why the Pandora Papers recently reared its hidden head?
In April 2016, the Panama Papers scandal severely rocked the banking community and its secretive clients. Some 11 million documents were electronically hijacked from the Panama-based law firm Mossack-Fonseca, and publicised by a German newspaper. This massive leak was an unprecedented catastrophe, but was swiftly resolved by better-packaged below-the-radar bank devices and mechanisms. Business as usual keeping the prophets of profits busy.
Scapegoat lawyers Juergen Mossack and Ramon Fonseca spent two months in jail on bribery charges, and for sequestering billions in Euros, USD, etc. This showcases the secretive fbi (finance banking industry) as a semi-regulated, flourishing, well-protected, and efficient system with well-entrenched immune mechanisms for all the wrong reasons and purposes.
The Israeli National Bank made some headlines recently for supposedly stashing billions of USD and Euros supposedly belonging to a former Malaysian prime minister and his family. If the bank exists as a legal entity, then it is well posited as no outsider qualifies to mess with Israel’s internal policies, projects and programmes. Those with such well-protected bank accounts sleep soundly. Vatican banks offer similar protections for super-rich insomniacs.
Banksters stay busy creating money out of thin air (fiat – let it be). The US Federal Reserve calls it Quantitative Easing (QE) when it wants to print more money to bail out collapsing banks, or to engineer inflation and manipulate interest rates. The economist John Kenneth Galbraith observed that the process by which banks create money is so simple that the mind is repelled. Governments are in on this, too.
The rich and powerful stay below the radar knowing every loophole in the law as an escape route. Truth be told, law-making legislators are bought off by the rich and powerful. Everything is above-board, assure their advisors, accountants and lawyers who try not to get caught for prevaricating. Most do.
Tax havens (treasure islands) are obviously a major attraction for people who can afford to challenge taxation to keep their money safe and secure by stealth. If a government can print money at will, why even bother with taxation. Experts say that death and taxes are unavoidable quite forgetting tax exemptions and exceptions while those acquiring immortality to evade death!
This couplet explains the wicked, warped, and weird global financial system where money mysteriously vanishes like the advisors when banks routinely go belly up: I had my money and a friendly bank; I put my money in that bank; I asked my money from that bank; I lost my money and the bank.
“Money is like a sixth sense; and you can’t make use of the other five without it,” quipped Somerset Maugham.
“In God we trust” fiat has become an incurable addiction. And that’s not a secret.
The views expressed here are those of the columnist and do not necessarily represent the views of New Sarawak Tribune.
