The Paradise Papers, the internal documents of a Bermuda law firm, reveal a problem far more pernicious than the unethical conduct by tens of thousands of wealthy individuals around the world.

Humans will always have to cope with personal dishonesty. What the Paradise Papers show is how dishonesty is being promoted on a mass scale and how corruption is being institutionalized. The 13.4m files show that what are supposed to be windows of disclosure into the finances of high officials are easily covered with blinds made by piecing together business laws from multiple jurisdictions.

As the super-rich increasingly hold the reins of governments in the US and other countries, the rules to make sure they act with integrity and in the public interest fail. That’s because the rules were written to guard against petty corruption among people of little to no wealth.

None other than Donald Trump told us this. In July 2015, a few weeks after launching his presidential campaign, Trump filed his first financial disclosure statement and then denigrated the requirements. “This report was not designed for a man of Mr. Trump’s massive wealth,” he wrote in a statement.



Conflict of interest, ethics and financial disclosure rules conceived in earlier times to reveal bribes and favors are of little use when the elected or appointed officials are already rich – especially should they seek to evade disclosure of their holdings, hide their unsavory associations and avoid taxes, whether through dubious business structures or outright fraud.

Wilbur Ross, Trump’s commerce secretary, is revealed in the Paradise Papers to do business with the family of Vladimir Putin.

This is astonishing given the insistence by Trump and his administration that only “fake news” connects his administration, his campaign and him personally to the Kremlin, which clearly sought to influence the 2016 presidential election on Trump’s behalf.

Ross defends his investment in the shipping company Navigator Holdings by noting he is not the majority shareholder. True, but misleading. Ross was in control before becoming commerce secretary, his private equity firm still owns nearly a third of the company and his personal financial disclosure shows he owns a stake worth up to $10m. That is a tiny share of the billionaire’s wealth, but it is not, as the tax lawyers like to say, de minimis.

In all, the Paradise Papers show, Ross is involved with 50 Cayman Islands companies and partnerships administered by Appleby, the law firm whose files were obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian. The ICIJ is the same organization that last year brought forth the Panama Papers, files from the law firm Mossack Fonseca.

Offshore business entities can have legitimate purposes, as the journalist group was careful to note. But the Appleby files, like those from Mossack Fonseca, make clear that plenty of dubious and probably illegal conduct was taking place, too.

The law firm Appleby, with its home in Bermuda and satellite offices in nine other tax havens, says it has done nothing wrong. Appleby says it that it is the victim of criminals hacking into its computers. It also says it is not perfect, so if illegal conduct is found it was because of what it characterizes as mistakes that all humans make.

Appleby’s attitude toward integrity in foreign jurisdictions is hinted at in a PowerPoint presentation about anti-money laundering. One slide says: “Some of the crap we accept is amazing, totally amazing.”

That it does not violate the law in a country where Appleby has offices to facilitate tax cheating by citizens of another country is a solid legal defense. It is not, however, an ethical defense.

The nearly 13.4m Appleby files show systematic undermining of not just tax regimes, but of ethical conduct by public officials. And that is where the real harm lies, in chipping away at one of the pillars of liberty and self-governance: integrity and the expectation that elected and appointed officials will act solely in the public interest, never against it.

Appleby clients get away with their misconduct because rules governing finance and cash movements have not caught up with the realities of the modern financial systems.

We need a robust public debate about the need for rigorous rules on conflicts of interest, corruption and disclosure. Without it, dark money will rule the world and put our liberties, and our fortunes, in jeopardy. Tell your lawmakers to act in the public interest – or you’ll vote for someone who will.