Panama Papers Show Global Corruption Got Worse in 2016: Watchdog


by Patrick Donahue

Revelations of tax-evasion and money-laundering networks on a global scale in the so-called Panama Papers helped make the world appear more corrupt last year, according to graft watchdog Transparency International.

The Berlin-based organization said there were more falling scores than rising ones on its 2016 Corruption Perceptions Index, published on Wednesday. A lower score means a country is seen as more corrupt.

Declines were driven by “massive and pervasive” public-sector corruption, the watchdog said in an e-mailed statement. The Panama Papers data-leak also prompted a wave of anger at wealthy individuals and companies using well-established methods of evasion. “It is still far too easy for the rich and powerful to exploit the opaqueness of the global financial system to enrich themselves at the expense of the public good,” Transparency International said.

Bottom of Form

The organization’s president, Jose Ugaz, also pointed to countries with increasingly autocratic governments as places where the perception of corruption has been on the rise. Turkey, where President Recep Tayyip Erdogan has sought to tighten his grip on power, scored 41 points on the CPI scale of zero to 100, down from 50 three years earlier. Hungary, where Prime Minister Viktor Orban has been criticized for increasing authoritarianism, fell to 48 from 51 a year earlier.

‘Professional Enablers’

“In countries with populist or autocratic leaders, we often see democracies in decline and a disturbing pattern of attempts to crack down on civil society, limit press freedom and weaken the independence of the judiciary,” Ugaz said.

The U.S. dropped two points to 74. In its release about the 2016 index, Transparency didn’t mention the election of Donald Trump as president in November. But in a separate statement last week, it said Trump’s government appointments were “rife with potential conflicts of interest.”

Qatar fell 10 points to 61 after the scandal over the bidding process by which the tiny, energy-rich Gulf country won the rights to host one of the biggest global sports tournaments, soccer’s 2022 FIFA World Cup.

Transparency called on governments to go beyond anti-corruption legislation to “deep-rooted systemic reforms,” including public registries to track corporate ownership and stiffer punishments for “professional enablers” of tax evasion and fraud.

Transparency’s ranking has become a benchmark gauge of perceptions of corruption and is used by analysts and investors. The usual champions — Denmark (90 points), New Zealand, Finland and Sweden — maintained their positions at the top of the 2016 list. Somalia ranked last for the 10th year in a row, with 10 points, followed by South Sudan and North Korea.


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