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February 18, 2011

Loose Lips

By Spear's

The era of Wikileaks and disclosure en masse presents a new scale of challenge, one unregulated by law or morality

True luxury, for HNWs, has never been embodied in pretty playthings, but — more philosophically, perhaps more nebulously — in intangible virtues such as privacy or free time. There is the privacy of the personal life, but there is also the privacy of the bank account, a privacy that HNWs assume — because they are paying for the privilege of having smart young men in pinstripes and wingtips caress their money daily — is secure.

We have known for a while now, since the London G20 summit, where Gordon Brown declared that ‘the era of banking secrecy is over’, that a Swiss account no longer means anonymised numbers and clean hands. The many tax information exchange agreements signed globally ban fishing expeditions but make it significantly easier to obtain account-holders’ details. This much we have accepted as a step towards flushing out tax evasion and dirty money.

But the era of Wikileaks and disclosure en masse presents a new scale of challenge, one unregulated by law or morality. The phenomenon of rogue bankers selling client data to national governments has afflicted several institutions, the thieves being handsomely paid off (though it’s not like they can use it — one such rat has had to move to the Australian outback to avoid reprisals). This is bad enough, since it compromises many legitimate clients who are avoiding tax entirely within the law. It is the grasping hand of government, desperate to latch on to any new sources of taxable income, that has forced this.

Far worse is the recent handover of data — at a press conference, as if it were the handover of the Olympic torch! — to Wikileaks by Rudolf Elmer, a former employee of Julius Baer in the Cayman Islands. Professing a public service, ridding the world of the evil-doers who stash their money in the Caribbean, Elmer — who shortly after was found guilty of coercion and breaching bank secrecy in another case in Switzerland — presented Julian Assange with two CDs containing, allegedly, 2,000 confidential documents.

Wikileaks, as it its custom, will review the information and — if satisfied with it — will then release it in a ‘data dump’, just as it has done with logs from the Afghan and Iraqi wars and American diplomatic cables. The principal result of this is a gaping hole in privacy called ‘transparency’, which has benefits — it is in the public interest to know how many people have died in the conflicts — but as many costs: unredacted names of Afghans cooperating with the US and UK could lead to reprisals, and diplomats will now be much warier of expressing their honest opinions, essential for a true perspective on foreign affairs.

How, we have to ask, is the public disclosure of the details of HNWs in the public interest? One can possibly — possibly — understand giving it to a government so they can reclaim tax, but to breach the privacy of individuals in such a public manner, the main driver of which would seem to be vindictiveness, would be unforgivable.

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