Unethical but legal

Unethical but legal

What do the Panama Papers teach us about the law and morality?

Loren SeiboldNov 9, 2022, 2:55 AM

The decade of the 2010s will go down in history as the era of the data breach. Libertarian anticorruption whistleblowers hacked into computers to expose massive amounts of confidential information, mostly for idealistic—not financial—reasons. The same computer networks that store information in such convenient ways also make it very easy to circulate said information and once it’s loose, it can’t be made confidential again. 

Those whose secrets are suddenly no longer secret are angry, of course. For example, world leaders demanded that WikiLeaks’ Julian Assange be brought to justice for revealing the United States’ machinations in the Middle East and around the world. Chelsea Manning, who had stolen the documents for Assange, went to prison. And when Edward Snowden revealed that the United States government was spying on its own citizens, President Obama promised to prosecute him—if he could only get his hands on him. He claimed that this information so suddenly set free was stolen. 

Stolen it may well have been, but the crime paled in comparison to what it revealed: that governments and individuals had been doing things most of us thought at the very least to be unethical. Unethical, perhaps, but not illegal. In a widely quoted tweet, Jameel Jaffer, deputy legal director of the American Civil Liberties Union, said of the Snowden leaks, “The deeper scandal is what’s legal, not what’s not.” 

The largest data leak came in 2016 from a law firm in Panama, whose speciality was concealing large piles of rich people’s money from their country’s tax authorities. (The leaker remains unknown.) The astonishing thing about the Panama Papers is not how many important people were using offshore companies (we suspected that already), but that doing so isn’t, in many cases, illegal. 

Wrote journalist Matthew Yglesias on the news website Vox: “In­corp­orating your hedge fund in a country with no corporate income tax even though all your fund’s employees and investors live in the United States is perfectly legal. So is, in most cases, setting up a Panamanian shell company to own and manage most of your family’s fortune.” 

If you or I didn’t report our income in order to evade paying taxes, we’d be penalised and possibly prosecuted. But some people and many big companies have figured out how to do exactly that with impunity.

Legal or right?

When the scandal hit the mainstream news, lawyers rushed to say there are innocent purposes for these so-called shell companies. What if a celebrity wants to protect her privacy? Or a company, its patents? Yet the truth is that these legal instruments are usually used for one purpose: to hide something for the financial benefit of those able to afford their protection. It’s well known that when in the 1950s, Walt Disney purchased huge tracts of land in Southern California to build Disneyland, he did it through legal shell companies. Why? To hide from landowners that something huge was going to happen in their community and so underpay them for their real estate.

Here we confront one of our most vexing moral questions: If something is legal, does that make it right

We generally assume that a country’s laws reflect what a society considers ethical. And honest lawmakers do try to stay ahead of the legal loopholes that facilitate human selfishness. But not all lawmakers are honest and some are even worse than that. 

“Corrupted political and legal systems can be co-opted by the most powerful in order to legally sanction atrocious and destructive behaviour that serves their interests, typically with little or no public awareness that it’s been done,” writes Glen Greenwald on news website The Intercept. In other words, rich campaign contributors get the privileges they pay for and without leaks like the Panama Papers, we’d be none the wiser.

So it’s safe to say that we can’t depend on civil law to tell us what’s right or wrong except in a rather general way. “Proving that certain behaviour is ‘legal’ does not prove that it is ethical or just,” Greenwald says. “That’s because corrupted political systems, by definition, often protect and legalise exactly the behaviour that is most unjust.”

God’s law

It isn’t hard to see that the laws of countries around the world follow the principles of the Ten Commandments (Exodus 20:1–17): for example, don’t steal; don’t murder; don’t tell lies; don’t be sexually immoral. 

Yet we quickly carve out legal exceptions. Don’t kill—unless you’re killing someone your government deems an enemy. Don’t steal—though it’s just good business when a large financial institution employs intricate financial instruments to legally take money from others, without ever actually picking their wallets out of their pockets. Don’t lie—but you can hide things in fine print that no-one but corporate lawyers can untangle. As for sexual immorality, its main legal use nowadays seems to be as ammunition in divorce courts.

The Ten Commandments, it turns out, are a true but minimal schematic of moral behaviour. That is, they tell you what’s right or wrong in broad principles, but they leave many unanswered questions. Realising this, the rabbis expanded the Ten Commandments into 613 mitzvots—mini-commandments. Yet even 613 rules weren’t enough to prevent some from doing things that were technically legal but still wrong. Jesus describes a manoeuvre wherein a rich Pharisee would declare all of his assets dedicated to God so he needn’t obey the fifth commandment to support his own parents (Mark 7:9–13). Similarly, because the Jewish leaders never actually laid hands on Jesus, they regarded themselves as innocent of murder even though they had arranged His execution.

Jesus surely didn’t scorn the Ten Commandments (Matthew 5:17), but He did describe a morality that went deeper than merely following rules. One might never have sex with someone outside of marriage, He said, yet still be filled with sinful lust (Matthew 5:27, 28). One might never kill another human being with his own hand yet be hateful and destructive of others (Matthew 5:21, 22). The key to right behaviour was empathy: unless you loved your neighbour as you love yourself (Mark 12:31) and do to him only that which you would like done to you (Luke 6:31), your behaviour was unlikely to be fully ethical. 

The financial meltdown of the late 2000s was kicked off by deceptively written mortgages. “But we did nothing illegal,” the loan companies argued. “Nor did we lie. We just didn’t make a point of reading the fine print to our clients—which said they probably would be unable to make the payments and would ultimately get foreclosed. It was up to them to figure that out before they signed.”

Jesus’ principles of morality would analyse that situation differently. Jesus would ask, “Would you like your home taken from you because you were pressured into a contract you couldn’t understand?” Most people would answer “No.” “Then,” He would say, “don’t put someone else in that situation.”  

Beyond not doing

In one of Jesus’ final parables, He described a metaphorical judgement scenario with people gathered on His right and left like sheep and goats before their Shepherd (Matthew 25:31–46). To those on His right He says, “Come, you who are blessed by my Father; take your inheritance, the kingdom prepared for you since the creation of the world” (verse 34). What earns them that reward, they learn, is their merciful actions toward others. Those on the left He condemns by the same principle: whatever other sinful behaviours they might have avoided, they also had failed to show love and mercy.

Following God’s law isn’t just dodging sin. It’s also making bad situations better—something Jesus did throughout His ministry. Goodness isn’t merely an avoidance process. It’s a proactive one. Our trespasses can and will be forgiven (see Matthew 6:12), but unless we’re merciful and kind, we’ll be no more fit for heaven than if we’d spent our lives immersed in sin.

Showing mercy, it seems, is always the lawful thing to do.  

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