Thursday, March 19, 2009

Our friend Persaud again

Is Reuters biased? No, it isn't, is the short answer. But bear with us. Recently we wrote an article asking whether the Financial Times had become biased in the tax haven vs. economic crisis debate, having not hosted any articles from experts without vested interests. We thought that they had. Our criticism was focused on Avinash Persaud, who (based on what he wrote) is clearly a non-expert who does not understand the materials he is dealing with - or is biased for some reason. Read our article for more details.

Now Reuters has come out with a new story, which starts like this:

"Cash-strapped western governments are firing their ammunition at smaller offshore financial centers in the hope of recovering unpaid tax, but they may be eyeing the wrong target."

And who do they wheel out? Our old friend Avinash Persaud! And read the story to see who else they canvassed. Every single one, on one side of the debate! No balancing argument. (However, we don't want to single out this journalist - as this is a systemic problem, as we describe below.)

Once again, Persaud serves up his favourite old chestnut:

"They tend to be small states so they are very easy targets."

Let's compare his words with those of Marshall Langer, someone who does know the offshore system very well (but who is, by the way, no friend of ours):

"It does not surprise anyone when I tell them that the most important tax haven in the world is an island. They are surprised, however, when I tell them that the name of the island is Manhattan. Moreover, the second most-important tax haven in the world is located on an island. It is a city called London in the United Kingdom."

The world of tax havens is much more extensive than people like Persaud, Martin Wolf and others understand. It is major states like US (Delaware etc), Switzerland, London and so on that have spread the contagion - encouraging places like Cayman, the Crown Dependencies and so on to craft themselves as tax havens and functional offshore centre - often channeling capital towards the big financial markets. So to set up "small island states" as being victims and scapegoats and then to conclude that the battle against tax havens is an irrelevance (while we agree that it's unfair to single them out) to set up an Aunt Sally (or straw man) and then knock it down. The trouble is, the Aunt Sally tactic is so often a successful one - people swallow the argument.

Today's blogger, as it happened, once worked for Reuters and can attest that it is a very fine organisation with highly competent journalists and with an almost obsessive focus on objectivity. And Reuters (including their journalist on this story) has certainly contacted TJN on these issues on several occasions in the past.

But here is the problem. The cheerleaders for the secrecy jurisdictions - you will find many hundreds of eagerly quotable ones inside any single accountancy firm - number in their hundreds of thousands, and they are reachable from all over the world. They will all put one side of the story. The number of experts who have worked inside the system and developed huge expertise - but who are horrified by what they have found out and have decided to speak out - is truly miniscule.

To be fair to Reuters, it puts out many, many stories, some of which do present opposing views even on these issues. And all media organisations (except, perhaps The Guardian and one or two others) fall into this imbalance trap. But, naturally, when they seek out the experts, the sheer imbalance in the numbers of people on each side of this debate gets reflected in their articles. To find proper balance, they need to know where to start. Whom to turn to?

This former KPMG accountant
might be a good place to start, recently described by Accountancy Age magazine as "the profession's most effective opposition party." Or you might try this former economic adviser to the tax haven state of Jersey. Or any of these people or our friends over here. Oh, and perhaps this page might be of interest too.

Time for some balanced reporting, please.


Anonymous Anonymous said...

Have you ever bothered to google "our friend Persaud"? I think you should. I can assure you - he is no mere financial journalist, and he does know what he's talking about.

Check out this link!

10:49 am  

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