International Policy Digest

Remy Steinegger
World News /05 Feb 2020
02.05.20

How Long Will the Rich Continue to Evade Justice?

The fallout from former Nissan chief Carlos Ghosn’s spectacular escape from Japan to Lebanon—some Lebanese media outlets have even suggested that the wealthy ex-CEO evaded scrutiny by being carried out of the country in a musical instrument case—is still rippling around the globe. Following Ghosn’s allegations that Japan’s justice system is inherently biased against him, Masako Mori, Japan’s justice minister, was compelled to publicly announce that the country will consider reforming its justice system – an apparent bow to Ghosn’s large-scale campaign to exonerate himself.

Ghosn, who faced numerous charges of financial misconduct, has been blasting Japanese justice ever since his 2018 arrest in Tokyo made global headlines. Despite being charged with “aggravated breach of trust” and fraud—specifically, underreporting his compensation to the tune of $85 million—Ghosn has tried to portray himself as a victim, claiming he “did not escape justice – I fled injustice and persecution,” and that he was “brutally taken from my world as I knew it, ripped from my family, my friends, my communities.”

Ghosn’s protestations of innocence are now largely a red herring—Ghosn holds a Lebanese passport, and Beirut does not often extradite its own nationals. But the saga has drawn renewed attention onto the often-dishonest machinations of global elites. Indeed, the most important takeaway from Ghosn’s case is just how easily the world’s rich and powerful continue to evade all forms of real justice.

The Bouvier Affair

If Ghosn was willing to throw anyone under the bus in order to pull off his high-profile escape—his Japanese lawyers were taken aback by his escape, testifying to the deep sense of betrayal they felt as their client flew the coop and since resigning from their positions—he’s far from the only ultra-wealthy individual to take no prisoners to get ahead and to escape charges of financial wrongdoing.

Take, for example, the highly personal betrayal at the heart of the art world drama dubbed “the Bouvier Affair.” Swiss art dealer Yves Bouvier and his client, Russian businessman Dmitry Rybolovlev, had originally bonded over a shared desire to collate the “most beautiful collection in the third millennium.” Over twelve years, Rybolovlev trusted Bouvier to acquire 38 of the world’s greatest masterworks on his behalf; in parallel, Bouvier subsequently became a close friend and attended Rybolovlev’s luxurious parties around the globe.

Rybolovlev believed that Bouvier was using his insider knowledge—gathered during years of working at his father’s company which specialised in shipping luxury items, including art—to secure the best possible prices, and taking a 2% commission for his troubles. Instead, Bouvier was himself pocketing up to $1 billion in mark-ups undisclosed to Rybolovlev. In 2015, he acquired the Mark Rothko “No 6 (Violet, Green and Red)” for $80 million-plus his habitual commission. Rybolovlev, meanwhile, was stuck with a bill for $180 million, netting Bouvier a potential profit of close to $100 million.

Not surprisingly, Rybolovlev has taken Bouvier to court over what has been labeled the “biggest fraud in art history” by international observers. The Swiss art dealer denies all charges and has fervently pleaded his innocence.

Yet so far, the story is a familiar one. Like Ghosn, the Swiss dealer has so far been able to skirt actual punishment – the case against him in Monaco was dropped for procedural reasons, even as the case is still ongoing in Switzerland, the U.S., and Singapore, as well as a separate investigation in Switzerland for tax evasion and money laundering. In fact, Bouvier has never made a secret out of his cold-blooded approach to doing business. In an exposé about the “Bouvier Affair” published in The New Yorker as early as 2016, Bouvier was quoted as saying “For me, I will be clear,” he said. “If I buy for two and I can sell for eleven, I will sell for eleven.”

Have the Panama Papers changed the justice game?

If Carlos Ghosn has so far managed to escape the consequences for allegedly bilking the Japanese government out of millions in tax revenue, and Yves Bouvier has so far managed to escape the consequences of apparently defrauding his client out of more than a billion dollars, these cases are symptomatic of a wider trend. As the Panama Papers starkly revealed, the world’s ultra-rich have been lining their pockets at the rest of the world’s expense for years.

The more than 11 million secret files leaked to the public in 2016 lifted the lid on an intricate tax-evasion and money-laundering operation. The Panama Papers quickly sparked public outrage and more than 150 investigations in 79 countries around the world. Considering the vast scale of the crimes uncovered by the leaked documents, however, the number of indicted persons and legal entities remains laughably small. Only roughly 140 politicians and public officials, and 33 individuals or companies on a U.S. fraud blacklist, were exposed to an angry public.

While it seems like the biggest fish seem to have avoided the long arm of justice once again, the Panama Papers reveal was nevertheless a seminal event that changed the global justice landscape forever, albeit at an excruciatingly slow pace. Consequently, a tidal wave of regulatory change has been initiated as the public eye has become more damning. For example, the U.S. House of Representatives has passed the Corporate Transparency Act to curb anonymous shell companies, and European lawmakers have committed to creating a permanent subcommittee to investigate financial crimes, including tax evasion. Governments the world over are beginning to collect billions in unpaid taxes.

Indeed, it’s thanks to the Panama Papers that there’s been such widespread coverage of Carlos Ghosn and Yves Bouvier, because the leaks have sensitized the “average” citizen about what cons are going on in all kinds of industries. It is true that Carlos Ghosn, Yves Bouvier and most of those named in the Panama Papers have not had to face up to justice just yet. There remains a long way to go, but justice will eventually come to those who deserve it.