The Importance of Whistleblowers in a Democracy
This week, ProPublica published a long, detailed article that blew the roof off two burning and intimately related questions currently in the news: wealth inequality and taxation. In the wake of the 2008 financial crisis, Thomas Piketty, Branko Milanovic and numerous pundits in the media have written reams on the topic. Politicians like Bernie Sanders and Elizabeth Warren have highlighted the issue and made proposals to address the problem. When Sanders suggested during the Democratic presidential primary that “billionaires shouldn’t exist,” the Democratic Party turned to one of the richest billionaires, Michael Bloomberg, counting on his financial clout to prevent the Vermont senator from winning the party’s nomination.
In the US, people are more easily impressed by wealth itself than by the serious problem that wealth inequality has created. ProPublica’s article may help to change the public’s focus.
They Are Coming for Us
ProPublica exposes the brutal fact that, contrary to the tenets of conservative Republican orthodoxy, the wealthy are the “takers” and people who work for a living, the “makers.” Worse, the taking they do no longer requires much effort. The tax system delivers everything they take away from others directly to their doorstep. Between 2014 and 2018, the 25 richest Americans “paid a total of $13.6 billion in federal income taxes.” The article calls it “a staggering sum, but it amounts to a true tax rate of only 3.4%.”
Among the many details, ProPublica highlights the case of Warren Buffett, signaling “his public stance as an advocate of higher taxes for the rich.” Between 2014 and 2018, “Buffett reported paying $23.7 million in taxes.” But given the increase in his wealth over that period, that impressive sum “works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.” Who wouldn’t be happy paying taxes at that rate? And for Buffett, it isn’t even on earnings, which for most people permit survival, but on the absolute growth of his net worth.
The article also cites the case of George Soros, the man who single-handedly broke the Bank of England. “Between 2016 and 2018,” according to a spokesman for the billionaire, “George Soros lost money on his investments, therefore he did not owe federal income taxes in those years.” The same spokesman, ProPublica reports, is quoted as affirming that “Mr. Soros has long supported higher taxes for wealthy Americans.”
Today’s Daily Devil’s Dictionary definition:
To sit on the sidelines and verbally encourage other people to do things one is disinclined to do or incapable of doing on one’s own
ProPublica has provided the world with a truly enlightening trove of information that sends a clear message. And this is only the beginning. The publication promises in the coming months to “explore how the nation’s wealthiest people — roughly the .001% — exploit the structure of our tax code to avoid the tax burdens borne by ordinary citizens.” Its reporting will certainly serve to clarify a debate that, for many, may have seemed too abstract and too polemical to try to take on board.
The numbers demonstrate the extreme, hyperreal nature of wealth distribution today. When the public learns that, in 2011, Jeff Bezos — who is, on and off, the richest man in the world — “claimed and received a $4,000 tax credit for his children” and that his true tax rate over time is less than 1%, they may begin to take the measure of how the tax system works and to whose benefit.
The figures, nevertheless, show that between 2006 and 2018, Bezos paid out $1.4 billion, a staggering amount for any ordinary wage-earner to even try to comprehend. But his personal fortune over that time ballooned to reach close to $200 billion today. Has he earned it through his hard work? No, it earns itself. That’s what money does. And thanks to his ability to hire tax advisers and clever accountants, all but crumbs of his wealth stay in his hands, never to pollute (or contribute to improving) the public sphere.
ProPublica went to great lengths to gather, verify and publish these carefully guarded tax secrets. Its editors were not surprised when, as Forbes reports, IRS Commissioner Charles Rettig “told lawmakers that internal and external investigators are working to determine whether the data ProPublica used was illegally obtained.” In the land that enshrined free speech as a right (First Amendment) apparently even more fundamental than the right to own an AR-15 (Second Amendment), all speech is legitimate except when it is blown through a whistle.
This simply means that the act of reporting certain types of scandalous abuse in the public interest is now deemed to violate the republic’s interest. We can expect the US government to spare no expense in its pursuit of the anonymous whistleblower who provided ProPublica with the tax returns it has put on display, whose secrecy is protected by the law.
This is not a great time for whistleblowers. The cases of Edward Snowden, Julian Assange and Chelsea Manning have made headlines over the past decade. They all did something that could be interpreted as technically illegal, especially when laws such as the Espionage Act happen to be on the books. But they clearly exposed essential information about how a democracy functions that purports to be “of the people, by the people and for the people.” Thomas Drake, John Kiriakou and Jeffrey Sterling and Reality Winner are among others who were prosecuted by the Obama and Trump administrations for making significant contributions to our understanding of how government manages and sometimes mismanages people’s lives, fortunes and deaths.
Last week, Natalie Mayflower Sours Edwards, who worked as a senior adviser at the US Treasury Department’s Financial Crimes Enforcement Network, was sentenced to six months in prison for revealing to BuzzFeed News what the International Consortium of Investigative Journalists qualifies as “financial corruption on a global scale.” She was arrested in 2018. Her crime consisted of sharing confidential bank documents with a journalist, an act that sparked “a global investigation into illicit money flows,” which, had she not acted, the public would never have known about.
BuzzFeed’s spokesman, Matt Mittenthal, helpfully explained that the resulting “investigation has helped to inspire major reform and legal action in the United States, the E.U., and countries around the world.” In other words, sometimes it is necessary to break the law to make it stronger and more equitable.
Ben Smith, a New York Times columnist, summed up Edwards’ plight in a tweet: “This woman is going to prison for six months for her role in revealing systemic global financial corruption, and inspiring legal changes all over the world.” The law did not go after BuzzFeed in this case. Nor did it end up going after ProPublica in a 2012 case concerning tax filings for Karl Rove’s nonprofit, Crossroads GPS, in which the IRS initially told BuzzFeed “that it would consider [the] publication of them to be criminal.”
In the eyes of the IRS, ProPublica has once again committed the crime of letting the truth out of the bag. It may well escape any punishment. The pattern is always to prosecute the whistleblower, but that requires identifying that person. If, as in the case of Edwards, the government does succeed in prosecuting and sentencing the whistleblower, that will not serve to put the truth back in the bag. That is why the government will be relentless in seeking the whistleblower and why the public should be grateful both to that person and to ProPublica.
The government’s aim is not to repair the damage already done, but to instill fear in any other courageous individual in the position to reveal the inner workings of a system designed for the financial elite and managed by the political elite. In Edwards’ case, US District Judge Gregory H. Woods made this point clear when he “said that it was necessary to impose a ’substantial meaningful sentence’ in order to discourage others from committing similar crimes.”
Publishing substantial meaningful truth will always provoke the call for a substantial meaningful sentence.
*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.