Unless you’ve spent the past week on Jeff Bezos’s space capsule, you’ve probably at least heard about ProPublica’s bombshell tax exposé. The report, based on a trove of anonymously leaked tax records, shows the scandalously low tax rate America’s ultrarich pay, entirely legally, to the federal government when their declared income is put next to their actual wealth.
The report and its follow-ups have already shaken the political world. Figures ranging from reliable names like Bernie Sanders and Elizabeth Warren to banker-senator Pat Toomey and former hedgefund enthusiast Jim Cramer have reacted with outrage, breathing new life into calls to tax extreme wealth, calls that were largely sidelined with the end of Bernie Sanders’s presidential campaign.
It’s unclear whether this will translate into anything concrete. Democrats’ plans to beef up tax enforcement face an uncertain fate, while Joe Biden is focused solely on taxing the wealth of those who have died, otherwise proposing modest raises in US tax rates that are, in reality, a hefty corporate tax cut vis-à-vis the Barack Obama years, this time with bipartisan legitimacy. And even those meager tax hikes would be taken off the table by the unnecessary bipartisan infrastructure deal Biden has spent weeks pursuing.
Still, the report has sparked a renewed conversation across the United States about extreme wealth and how to rein it in. Depending on what happens in the next few weeks, we could well look back on it as having helped shift political momentum in that direction. It’s a testament to the continued power and worth of a free, muckraking press, when it’s truly aimed at applying scrutiny to the powerful.
But if Biden and officials from his party have their way, ignored or even cheered on by well-meaning but misguided left-of-center voters, the shady practices of the ultrarich will be shielded from scrutiny and journalism like this will be silenced.
The Never-Ending War on Whistleblowers
The administration’s response to the ProPublica exposé was not, as one might imagine, to seize on the revelations to end this scandalous tax avoidance. Rather, it was to move swiftly to find the culprit who carried out this public service and put them in prison, thereby sending a message to any future whistleblowers.
A Treasury spokesperson swiftly announced the leak was being investigated, with Biden’s press secretary telling reporters that “we take this very seriously.” So did the commissioner of the IRS, an agency that has admitted it mostly audits the poor because targeting the rich and powerful is too hard and expensive, letting nearly 900,000 high-income earners get away with not filing a return over 2014–16.
“We will find out about the Pro Publica article,” the IRS commissioner assured the Senate finance committee on June 8, later confirming the culprit would be prosecuted.
They were joined by attorney general Merrick Garland, who told a Senate subcommittee the next day that he would put the matter “at the top of my list.” The issue was raised by Sen. Susan Collins (R-ME), who pointed to Richard Nixon and Watergate and the “incredible danger to private citizens and the credibility of the federal government if information is used for political or other purposes.”
“I very well remember what President Nixon did in the Watergate period, the creation of enemies list and the punishment of people who were doing their tax returns,” Garland assured her.
This is all in the context of a years-long bipartisan war on whistleblowers, started by Barack Obama and carried on under Donald Trump and, now, Biden. Biden’s administration has continued the dangerous prosecution of WikiLeaks founder Julian Assange, continued to subpoena press outlets to gather information on leaks (until it was caught in the act), and refused to pardon former NSA translator Reality Winner, sentenced to the longest ever prison stay ever given to someone who passed classified information to the press, for trying to prove to the public Russia’s 2016 election interference (Winner was released yesterday for good behavior). The parade of prison sentences for leakers, even relatively trivial ones, has had a chilling effect on reporting.
If the IRS leaker is found and prosecuted, they won’t even be the first financial whistleblower to be imprisoned this year. That honor belongs to former Treasury official Natalie Mayflower Sours Edwards, who, alarmed by the massive volume of criminal money she saw freely moving through the world’s biggest financial institutions, and failing to get anywhere through official channels — a common experience for government whistleblowers — handed fifty thousand secret documents to Buzzfeed News, forming the basis of their blockbuster “FinCEN Files” series last year.
At the heart of the revelations was the fact that banks’ suspicious activity reports, meant to alert financial authorities about potentially criminal transactions, were not just being ignored by the Treasury but were effectively an ass-covering operation for the banks in question, giving them immunity from prosecution while letting them carry on moving dirty money around and getting rich off the transaction fees. The disclosure spawned a sprawling international news investigation involving 108 newsrooms and four hundred journalists across eighty-eight countries, and helped lead to the passage of landmark anti-money-laundering legislation in the United States, while spurring similar efforts in the UK, the European Parliament, Thailand, and other governments. It won a host of awards across different countries and was nominated for a Pulitzer.
For making all of it happen, Edwards was repaid by the US government with a six-month prison sentence, the maximum amount under sentencing guidelines. Prosecutors called it an “egregious abuse of public trust” and wanted to “send a resounding message to individuals with access to sensitive, protected information” that “flagrant violations of the public trust will be met with real consequences.”
Drawing on the same upside-down war-is-peace logic as Collins and Garland’s allusions to Nixon, prosecutors painted Edwards — not the banks she exposed for lining their pockets off human trafficking and corruption — as the powerful malefactor who had acted outrageously. Her sentence, US attorney Audrey Strauss said, “demonstrates that public servants who abuse the power entrusted to them will face steep consequences for their actions” (my emphasis).
This is precisely backwards. Nixon’s misdeeds and the enemies list he targeted with them weren’t aimed at exposing the crimes and misconduct of the ruling elite and the powerful institutions that serve them; they aimed to protect them and their interests by spying on a variety of ordinary people fighting injustice (antiwar dissenters, civil rights activists, and others), or were a strikingly petty lineup of grudges against political opponents and critical journalists.
Similarly, what heavy-handed prosecutions of people like Edwards and potentially this IRS leaker will do — what they clearly intended to do, in fact — is make any future financial whistleblower think twice about exposing the criminality or misbehavior of the economic elite. Someone here is definitely living out Nixon’s legacy, but it isn’t the whistleblowers.
Besides this, Collins, Garland, and others’ supposed privacy concerns in this case are hard to take seriously. The only personal information of billionaires these disclosures have revealed via ProPublica is about how little tax these billionaires pay — certainly embarrassing, but of an entirely different nature to news about Bezos’s dick pics or Bill Gates’s close friendship with the world’s most notorious sex offender.
The Folly of Tech Censorship
The bipartisan war on leaks isn’t the only way disclosures like these might be shut down. Under the rules set out in our post-2016 world, where tech censorship reigns, cheered on by liberals and even some socialists, everything is already in place to suppress such reporting.
Recall that at the climax of last year’s presidential election, Twitter and Facebook suppressed a story damaging to Biden, barring users from sharing the piece on the platforms and locking the account of the newspaper that published it. With much of the Democratic world convinced Trump was only sitting in the White House because of Russia’s alleged hacking of the DNC and the tidal wave of critical reporting that stemmed from it, these and other companies had adopted a series of policies barring content based on “hacked material” or, in Twitter’s case, “content obtained without authorization.” Before then, Twitter had used this policy to block the account of an activist group responsible for the “BlueLeaks” disclosures that revealed a variety of police misconduct.
As Jacobin and other publications pointed out at the time, the trouble with such rules is that content based on “hacked material” or “obtained without authorization” is also known as journalism. From Vaza Jato and the Pentagon Papers to the FinCEN files and Edward Snowden’s NSA leaks, earthshaking reporting doesn’t happen without someone getting their hands on information they’re not supposed to share and giving it to a reporter, making virtually any investigative journalism of consequence fair game for smothering by our tech overlords.
This includes ProPublica’s recent reporting. As the outlet explained, it has no idea who gave them these tax documents, why or how they got them, and acknowledged it could’ve been “a state actor hostile to American interests” with its own, possibly nefarious, motives. The Financial Times’ Edward Luce has similarly speculated the source could’ve been “an entity that does not wish US democracy well,” hoping to “deepen public cynicism about America’s creed of playing fair and working hard.” It’s not just social media companies’ new rules, but the arguments mobilized against the media’s coverage of the 2016 DNC hacks, that could potentially apply to this story.
Fortunately, and perhaps owing to the firestorm over the Biden story’s suppression last October, the tech giants tweaked their rules around hacked material, and didn’t touch this most recent ProPublica story. But of course, with no real democratic input or accountability over their decisions, and a famously inconsistent approach to what they do and don’t censor, there’s no reason to trust these companies will do the right thing next time. This is particularly the case given their actions are largely driven by pressure from elected officials — officials who believe, as past-and-probably-future Senate majority leader Mitch McConnell put it, the IRS leaker should be “hunted down and thrown in jail,” because they were trying to “affect the tax debate,” when in this country “we don’t tax wealth.”
We should be outraged that elected officials are angrier that the tax-rigging of the ultrarich has been exposed than that it’s going on at all. Whether by pressuring social media companies or throwing the book at whistleblowers, the Washington establishment would love to make sure you don’t hear about financial crimes and misconduct. At the very least, we shouldn’t help them do it.