From Panama City to Inner Harbor

Matthew Petti, JHU:

April 2016 has been a bad month for Mossack Fonseca, a Panamanian law firm. When a source known only as “John Doe” began anonymously sending in terabytes of the firm’s confidential documents, the German newspaper Süddeutsche Zeitung realized that they had something on their hands far larger than they could handle. The files were handed to the International Consortium of Investigative Journalists (ICIJ), which published some initial reports on April 3. Selected news agencies were also given access to the data, and several public figures’ and corporations’ sordid dealings in offshore banking were revealed throughout the following weeks. The Prime Minister of Iceland was forced to resign, and heads of state in governments from the United Kingdom to the Palestinian Authority were implicated in scandals. The Panama Papers rank among the most monumental leaks in history, with global implications, which may even extend to Baltimore City.

As the Baltimore Leveller reports, several members of the influential Cordish family of Baltimore have assets stored by Mossack Fonseca, held as the “Slade I Trust.” It is important to note that this, by itself, does not suggest any wrongdoing. As the ICIJ is keen to remind its readers, there are perfectly legitimate reasons to hold money in offshore accounts. Indeed, the Leveller may be a bit sensationalist in its claims that the leak “implicated” anyone without direct evidence of criminality. Nonetheless, the revelations raise important questions about the role of money in Baltimore politics. Owners of the Cordish Companies for three generations, the Cordishes own millions of dollars of real estate and entertainment establishments across Baltimore City. It is important for the public to know what the power-brokers of the city are doing behind closed doors. Indeed, their history with offshore accounts has not been spotless; as the New York Times reported in 2013, the Cordish family had already come up in a previous ICIJ leak. The Cordish family had stored over $116 million in a series of Cook Islands trusts, rendering it untouchable to the law.

Additionally, the Leveller did not have to exaggerate the Cordishes’ links to Baltimore (and national) politics. As the Baltimore Brew reports, Mayor Stephanie Rawlings-Blake came under fire in 2011 for accepting a donation from David S. Cordish “at a time when Cordish sought her blessing for $3 million in rent relief for his Power Plant attractions at the Inner Harbor.” Mr. Cordish has continued to foster connections with City Hall during this year’s hotly-contested mayoral race, giving $60,000 to the campaign of Elizabeth Embry through his family and businesses. Additionally, the Brew found that David Cordish and his subsidiaries had donated $2,000 in total to candidate Carl Stokes, when Mr. Stokes was still a member of city council. All of these contributions are perfectly legal, but they do call into question to whom each candidate is beholden, and how such contributions will affect their future decisions.

The Cordish real estate empire has deep connections to another important institution in Baltimore: its universities. A graduate of the Johns Hopkins University, Mr. Cordish is a major donor to the university. David Cordish has also served as a consultant for both JHU and Loy0la University. There is, of course, nothing wrong with someone maintaining links with their alma mater. There is nothing to implicate, as the Leveller has suggested, JHU in the Panama Papers scandal. However, it does suggest what many would consider an obvious conclusion. Baltimore has a small, self-regulating ruling class. JHU is an incredibly powerful institution in the city, and it should be no surprise that it is connected to other major power brokers.

Mr. Cordish and his family have not yet been implicated in anything illegal in relation to the Panama Papers, and it is not very likely that they will be, if only because prosecutors have “bigger fish” to fry. And nothing they have done for the city of Baltimore is illegal, either. That is part of the problem. Even if the Cordish family harbors no malice or greed, and uses its influence on the city entirely for good, they are still doing so through an entirely undemocratic institution. This is not to single out the Cordish family, either. If there is a corruption problem in Baltimore, they are far from its proximate cause; Elizabeth Embry raised $210,000 in total from large donors, including other real estate interests, dwarfing the Cordish contribution. The power brokers of Baltimore, even with the best of intentions, will administer the city from their and their donors’ perspective before anything else.

It is tempting to focus the most attention on sensational scandals like the Panama Papers, blaming the failure of institutions on simple villains and shadowy conspiracies. However, many more of the decisions which affect our daily lives are made by normal people weighing a set of costs and benefits. Nick Mosby and Elizabeth Embry are simply “doing their jobs” and looking out for the interests they are duty-bound to protect. It rarely individuals who are the problem – although there are some cases of particularly bad leaders – but the very structure of institutions. Rather than asking whether our leaders are competent or well-intentioned, we should be asking whose priorities are on the top of their agenda.


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