UK: Opinion - Fact, Fiction and Trusts

Last Updated: 22 November 1996
When John le Carre writes that he finds Panama to be a dangerous, corrupt and exhilarating place, we take no notice. He should know. An expert in detecting the shades of fear and doubt in political life, well known from the Spy who Came in from the Cold, and the Smiley spy novels, he has developed a fine sense in detecting these undercurrents. Such an opinion from a politician from a mainland centre would be dismissed as self propaganda but not from Le Carre. He has nothing to gain from this even if he is promoting his latest novel.

Why pick on Panama? His new novel is set in that country so those remarks made in an article in the Weekend Telegraph on 12th October could be dismissed as creating an atmosphere to support the book. But there is more to it than that.

The sting in the tail of the article is that Panama is not the only country in which the unseemly side of financial dealings is apparent.

How does he develop this thesis?

First, there is an extraordinary account of his encounter with a self-styled Panamanian diplomat who years later he found to have been an impostor. Le Carre was trying to recover œ500 which the Panamanian owed to his father. He failed. The demand was diverted by this charmer, with blue-eyes and artificially waved hair, calling himself a Count, with the aid of a glamorous companion, champagne and supper. This probably coloured future expectations of how Panamanians behave.

Readers of this column may think that discouraging things are about to be written on Panama. Far from it, but neither are we gong to try and fit into this heady description anything as mundane as a true appreciation of Panama's investment vehicles although readers will recall the interest which we have had recently in the Panamanian Foundations.

So, how did John le Carre arrive at his opinion? It was based on an experience of a visit to Panama seven years ago, when researching for a novel. His visit to Panama centred on an interview with the President at the time, President Endara, a lawyer whose preoccupation was with his new (second) wife, a former Panamanian beauty queen. I remember a similar interview about six years ago in The Palace of Cranes, so named after the birds which strut (and do other things) around the inner courtyard of the palace in a part of the town to which no foreigner should go unescorted. Inside the walls only nominal recognition was given to the memories of those who founded the country. A portrait of former President Arias and a few others were outnumbered by the photographs of the current President's recent wedding to a beauty queen. But the President was a courteous, if uninspired, lawyer. Talking about Panama and its role as an offshore centre was clearly not a matter to occupy him for long. John le Carre had a closer encounter. The President's lady warmed to his introduction on a claim that he knew Sean Connery. Thus the reader could draw a comparison between the early encounter and the more recent one. Is it that Panamanians are not concerned with matters of substance? What can one make of it all? For President Endara, his beauty queen wife and for Panama generally, these were certainly difficult days. The previous President, Noriega, had so fallen out with his American paymasters that they invaded the country! The collapse of BCCI had fuelled rumours of the country's instability, although no investors in the Panamanian branch of that bank had lost any money. Company formation was at an all-time low. The British Virgin Islands were taken over as the central American centre for company formation. That was seven years ago. His impressions were not used in his novel The Night Manager, but the atmosphere persisted and another visit has inspired The Taylor of Panama.

What is now conflict between the relatively poor countries which surround the rich Panama zone held in the hands of the Americans, is food and drink to the novelist. Now there are other factors: is Panama a geopolitical wild card as we drift into the 21st Century? He asks will Panama become another Singapore? Stepping into the offshore financial world he admits that this notion is being much pedalled these days. Panamanian bankers would like Panama to replace Miami as the spiritual capital of the hemisphere. There is a long way to go to catch up with Singapore. Panama must first feed, house and educate its poor. It must build roads, railways, hospitals and schools. It must impose real taxes - and collect them. This is, indeed, a difficult idea to sell to the ruling few in Panama. To become a Singapore it has to produce a hi-tech clerical class, it must rid itself of the present drugs trade and the wasteful effects of corruption.

Panamanians must invest in Panama. John le Carre found that, in the years between visits to Panama, everything and nothing had changed. John le Carre is too good a writer and too fair a person to condemn the country. He is not an American politician and one wonders where he is going. He is setting the scene. He is not analysing a country by its financiers' morality and, although one might argue with some of the facts, one suspects that there might be an unexpected conclusion.

But first let us make the point, obvious to the offshore world, that there are many fine brains, lawyers and banks in Panama and that the corruption and danger is no greater there than anywhere else although there is a slight overdramatisation by some of the bank security guards. There are many people who would like to see Panama become a Singapore, and they strive to achieve this. The purpose of le Carre's visit, and his description of Panama, is less to do with Panama than it is to show up what is now happening in England. This is where he makes his point. He quotes one of Noriega's ministers who said of Panama Plc 'its a business, and I know the boy who runs it'. John le Carre says that most of us have a shrewd idea who runs Britain Plc these days, and for whom. There's the rub! What would happen if the Panamanian equivalent of the Home Secretary insolently and repeatedly brushed aside the censure of his country's highest judges, as the UK Home Secretary has done, and the ruling political party refused to reveal where its cash came from. What, also, if the report on government involvement in an illegal arms trade had also been brushed aside, and so on, and so on? A former British Rail manager netted œ39 million in seven months for his share in the sale of a train-leasing company. Massive compensation was paid to failed company directors etc etc. The newspapers are full of it. Recent media reports show that a crime baron had conducted his empire from prison with the co-operation of the prison authorities. Chastenly le Carre returns to look at Panama again. He asks how many people died at the hands of Noriega's cynically misnomered Dignity Battalions and secret police? The total was 25. He refers to the mysterious self-righting mechanism that exists in Panama which has enabled it to escape, again and again, from the appalling disasters that have overtaken Guatemala, Nicaragua and San Salvador. There was little lynching when Noriega fell and afterwards the looting was mostly by the rich and there was little by way of retribution. Selective amnesia is a great natural attribute. The country appears to have a self-righting property despite the poor lack of investment and not keeping up with technology. The country has the ability to turn from disasters in the right direction. Are the people optimistic or just too poor to do anything about it?

Is there a comparison with the UK? Where the people are not too poor perhaps but they have lost the natural instincts of optimism and the ability to come up the right way.

What has this got to do with trusts? Probably more than meets the eye. A lot of overseas investment gains from the UK may have more than a little connection with a moral decline.

Trusts were once seen as primarily a tax planning vehicle, then for asset protection and as alternatives to wills, but now one can detect another factor in the rush offshore. Although it does not yet have a name there is a desire to place assets outside the UK to escape the possible, if yet unidentified consequences, of what many see as a political, religious and moral collapse of the country. Security and continuity may be seen as more likely to be achieved in an offshore centre than in the mismanaged and exploited economy of the UK. Perhaps the UK and other mainland centres can learn a lot from Panama.

Article by John Goldsworth

The views expressed in this article are the personal views of the author concerned and should not be taken to be the views or opinion of any other person, firm or company whose name or work appears on this web site and should not without further professional advice form the basis on which any action is taken.

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