Our world is in sad shape – corruption, misinformation, growing inequality, tax evasion, unending partisanship, stagnation in Washington, anti-democracy rulings, and a pandemic that continues to divide society on vaccinations and curtail economic recovery. Frustration is deep as there is seldom any accountability or little progress for resolving all these problems.
Recently a glimmer of hope has appeared. Three encouraging events have occurred this fall that demonstrate how new data mainly from whistle-blowers will convincingly expose the corrupt and unethical behavior of leading politicians, billionaires and elite business people. In the past, many corrupt exploitations had been identified, but the power of these “leaders” successfully negated any effective resolution or accountability, hence minimizing any damage to their personal or institutional brand reputation.
Since 2017, new laws provide safer protection and anonymity for whistle-blowers. Technology has also facilitated the dissemination of huge troves of data to journalists and the public. And the continued decline of trust of all government branches has contributed to new calls for greater transparency and action. Here are the three recent events that reflect these trends and how the risks of failing brand reputation may help turn the tide for combatting corruption and unethical behavior.
The Pandora Papers
In early October, 12 million records of confidential financial data arrived from 14 different offshore service firms, leaked to “The International Consortium of Investigative Journalists” (ICIJ) which consists of 600 journalists from 150 media outlets in 117 countries. These files expose the secrets of people who use tax and mysterious havens to buy property and hide assets, avoid taxes and worse. They include more than 330 politicians (including 35 current and former heads of state), 130 Forbes billionaires and many celebrities, fraudsters, drug dealers, royal family members and leaders of religious groups around the world.
These files are more meaningful than the former leaks of the Paradise Papers in 2017 (13.4 million files) and the Panama Papers in 2016 (11.5 million files) in scale, diversity and detail. Unfortunately there has been no accountability or resolution imposed from these, resulting in only 30 convictions (with only one politician). This huge offshore financial industry is contributing to economic and political inequality, destabilizing the world and representing serious risks to democracy.
However there is evidence that public opinion is growing more negative toward tax avoidance from these elites’ use of offshore financial services. While many of these investments may be legal, or the powerful have the means to get around the law, the public considers these tax avoidance moves immoral and unpatriotic. As a result the personal reputation costs of these elites are becoming more relevant than the threat of fines or prosecution. For example, one of the heads of state identified was Prime Minister Andrej Babis of the Czech Republic, who just lost his re-election this week.
Another embarrassing revelation by a whistle-blower surfaced recently when an ex-manager at Facebook, Frances Haugen, gave a trove of leaked documents to The Wall Street Journal. This included detailed research that confirmed Facebook’s role in spreading misinformation after the 2020 election which contributed to the January 6 insurrection at the U.S. Capitol. These internal findings also showed that Facebook knew their Instagram apps had a negative impact on teenagers’ mental health.
One of the Facebook documents clearly stated that it “knew its algorithms and platforms promoted this type of harmful content, and it failed to deploy internally recommended or lasting countermeasures”. Needless to say, the reputational cost for the Facebook brand will be severe as Congress will now try to develop stiffer regulations for greater transparency and governance.
U.S. Supreme Court
The September legislation in Texas for abolishing abortion after six weeks has ignited an uproar of public opinion that will collide with the conservative temperament of the U.S. Supreme Court. There is definitely a growing perception that the Court is polarized along partisan lines. This abortion case is particularly explosive. Three major polls recently showed that fewer than a third of Americans want Roe vs. Wade overturned. Yet the three new Justices were selected by Trump because of their commitment to overturn Roe vs. Wade.
The negative reaction to the Supreme Court refusal to prevent Texas from shutting down access to legal abortion was exacerbated by the growing use of its emergency “shadow” document to resolve important issues, which excludes hearing arguments and lengthy opinions that are normally signed. All this has resulted in a distinct drop in public support and trust. A Gallup Poll taken in September showed that public approval of the Court has plunged to just 40 percent, the lowest in its 21 year history, from 58 percent a year ago. The hope is that the reputational cost for the Supreme Court brand legitimacy may help neutralize partisan preferences in our highest court, or at least the perception of this bias, as they consider more often what is right for the broad public interest.
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