Secrecy World

Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite
By Jake Bernstein 
Published in November 2017
352 Pages
Thibault’s Score: 2/5

The Panama Papers revealed that dozens of hundreds of world leaders, criminals, politicians, businessmen, and celebrities had registered entities with a Panamanian law firm called Mossack Fonseca. This book chronicles the history of this law firm, explains how this firm helped its clients mitigate taxes, hide their assets, and eventually how it leaked data which resulted in its downfall.

Mossack Fonseca was founded by the 1986 merger of two small law firms. One was founded by the son of a German WW2 refugee and the other by a Panamanian leftist revolutionary turned lawyer. This firm specialized in finding jurisdictions that had favorable taxes and secrecy laws, and helping clients register businesses there. The firm was most active in the early 2000s, when it opened dozens of law officers across the world 

I actually have many good friends in this very business. Many work with citizenship by investment programs, Special Economic Zones, and small countries. The industry has not changed significantly despite the revelations of the Panama Papers and Pandora Papers.

The first half of the book covers the founding of the firm, its growth, and activities. It is somewhat interesting. However, the author is an obvious communist who cannot resist inserting judgmental statements about politics which can be tedious at times.

Eventually, the firm’s data was leaked due to lazy opsec and cybersecurity practices. The rest of the book follows the - very boring - lives of the journalists who leaked the data. The second half of the book is excruciating because the journalists are mostly losers and complainers. I can summarize 100 pages in one sentence: going through the Panama Papers was a lot of hard work, and the journalists had to work on short deadlines.

For money laundering books to be good, they must fall into one of two categories: they must either be very informative, or very exciting. This book was neither. I didn’t learn anything new (although, to be fair, I already am somewhat of an industry insider). It also wasn’t exciting - the most exciting segments detail the lives of journalists crunching through deadlines and dealing with obtrusive funding committees.

Finally, the author is very judgmental. He makes many assumptions which he doesn’t adequately defend. He just assumes that measures to create financial secrecy are bad, and I have no sense that he has even considered the other side of the argument.

He creates a straw man - that supporters of tax havens just care about the economic benefits they bring to countries like Liechtenstein - and then attacks that by countering that tax havens deprive money for social programs.

For example, he doesn’t acknowledge that the US government is a downright evil police state which uses taxpayer money to fund genocide in Palestine, racist cops who kill black people in cold blood, finances right wing terrorists in Latin America, and irradiates Iraq using depleted uranium. He simply assumes that everyone who has money is bad, and the government is a fundamentally benign institution.

My position is the polar opposite. Our world is becoming an increasingly repressive, violent, and totalitarian police state. Any steps which private citizens can take to undermine the state are welcome breaths of fresh air. The economist Ludwig von Mises once wrote that “capitalism breathes through loopholes.”

I do not recommend this book. There are much better books on the world of financial secrecy. 

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