Netflix’s “The Laundromat” And Money Laundering Ethics

Now streaming on Netflix, “The Laundromat” is an entertaining and flamboyant  examination of the phenomenon and roots of international money laundering, brought to us by director Steven Soderbergh (“Erin Brockovich,” “Traffic”) using a screenplay by Scott Z. Burns. The often tongue in cheek film is narrated by actors Gary Oldman and Antonio Bandaras playing lawyers Jürgen Mossack and Ramón Fonseca , whose now defunct firm set up tax shelters and shell corporations for the rich, corrupt and criminal  all over the world. Their empire was shattered by the Panama Papers data dump in 2016.

The film’s tone veers from smug to blunt as it focuses on three adaptations of true stories involving  Mossack Fonseca clients, all narrated by the excuse- and rationalization-spouting lawyers, the real life versions of which tried to sue to halt the production.

“The Panama Papers” as they are now called consisted of 11.5 million leaked documents that detailed financial and attorney–client information for more than 214,488 offshore entities, many of which were legal, but that supported fraudulent schemes and other crimes.  The documents were the property of  Mossack Fonseca. Even now, the fall-out from the release of the documents is unclear, in large part because so many of them involve attorney-client privilege, and the rules and laws governing their legal handling are spread over many nations, laws and ethics rules. The leak itself was a crime, and the hacker responsible, who goes by the name of “John Doe,” has never been identified.

This is an international ethics train wreck, and one that is so complicated that I didn’t cover it in 2016. That was ethics commentary malpractice on my part, I think. It was the biggest ethics story of the year, even if it is still largely unresolved.

Whether the law firm itself broke any laws is still a matter of debate. As Oldman and Bandaras constantly remind us, Mossack Fonseca set up arguably legal structures, and, they claim, didn’t know or care how they would be used. This is still a gray area of legal ethics in the U.S., one that was highlighted when “60 Minutes” broadcast its Global Witness episode in 2016 . Partners in eleven large Manhattan  law firms were caught on hidden cameras  exploring possible ways to represent an individual posing as the agent of an “African despot” seeking ways to launder millions of dollars. The ethics rules say that a lawyer may not knowingly assist a client in a crime or fraud, but contrived ignorance can be an effective, if unethical, device for lawyers to avoid  accountability when representing  unsavory (but profitable) clients.  Remember, Enron’s law firm avoided any sanctions, while the company’s accounting firm, Arthur Anderson, was prosecuted and destroyed.

No, Ethics Alarms didn’t cover the Global Witness scandal either, though I have talked about it in legal ethics seminars ever since. Clearly, money laundering has not had proper priority here. Again, my fault. I’ll do better.

Additional observations:

  • The most interesting of the intertwined stories for me was the second one. An African billionaire’s college-age daughter discovers that her best friend and room mate is having an affair with her father. The father warns the daughter that if she reveals the affair to her mother, the family and its finances will be torn apart. He e offers to give her all his shares in an investment company he says is worth 20 million dollars to remain silent, while also stating that he intends to keep having sex with her room mate. The father argues convincingly that everyone involved, including his wife, will be made miserable if the affair is revealed, while the deal he proposes benefits all parties.

Here’s a poll:

  • The first story in the film tells us about the travails of a widow  trying to get damages from the operators of a pleasure boat on Lake George, New York that capsized, drowning her elderly husband. She receives a minimal settlement of her law suit because the reinsurance company that the boat company’s owner bought their policy from was sold to another company that was only a trust in one of the Mossack firm’s shell companies.

The widow, played by Meryl Streep in self-righteous mode, becomes obsessed with connecting the dots in the fraud. It’s not a very compelling tale;  the widow seems to resent not getting a windfall out of an accident that looks like an “act of God” ( a rogue wave hits the boat), but she has the resources to fly around the world investigating the shell companies. Then we hear her complaining to God, saying things like “When are the meek going to inherit the Earth?” and “When are the last going to be first?”

It all sounds like a Bernie Sanders/AOC campaign ad, and maybe it is.

  • Not to pick on Streep, but I’m going to pick on Streep: we also have to listen to her, out of character and being Meryl Streep, end the film lecturing us about corruption, tax shelters, greed, lawyers, elected officials on the take and the need for campaign finance reform.

Yecch. I don’t want to hear this from her, of all people—a Harvey Weinstein acolyte, a Clinton supporter and donor (speaking of money laundering: Ladies and Gentlemen, I give you the Clinton Foundation! ), and an influential  Hollywood player when Hollywood itself is a tax shelter.

  • On the good side of the hypocrisy coin, the film has Bandaras, while explaining how Delaware allows corporations to duck taxes, smirkingly note that director Soderbergh has five such tax shelters in Delaware,and the screenwriter has one.

2 thoughts on “Netflix’s “The Laundromat” And Money Laundering Ethics

  1. The poll reminds me of the outcry when Trump was being accused of harassment by several different women. There are a lot of women cruising around looking for “Trumps” they can entice into giving them money, gifts, even marriage. I compare them to Groupies chasing the Rolling Stones and other rock groups around the country/world. The attention and power they’re looking for is very real, they’re everywhere and sometimes rewarded handsomely which is why they do it. So when the celebrity says “okay, why not” why are the celebrities the ones that are blamed when the gals cry “me too”? I’ve always wondered about that.

  2. Quiz: That kind of money is corrupting. I hope I would have the gumption to refuse the windfall and stay with whatever was the agreement for financing my college and start in life I already had. I’d give my honest opinion to both in the affair for being both stupid and cruel and it wasn’t my job to cover their affaire. I’d change schools or even drop out to stop enabling it and if I already had any money at my own discretion, start prepping for the divorce. I would not want to be the bearer of bad tidings to Mom either if she’s in denial or cooperation. The age gap and roomate status is just too creepy to leave my place in the mess as it is for any reason.

    Crusaders and Streep: I have nano-patience for crusaders who jet around to protest anything! I see that as vegans or animal rights people wearing all furs and leather, or environmentalists dining on far imported rare grains/fish or jet flying/littered with rare earth electric hogging tech… they really need to remove those planks in their eyes before scolding anyone else about ‘should.’ Streep is a great actress, but one red carpet dress is worth more than my income, let alone the jewelry. She would get my respect if she did more stepping up for real than acting woke. Why don’t people like that do something tangible to help, like the corrections school mentioned the other day? Buying tickets for underprivledged girls to see Captain Marvel is acting concerned, not helping with college prep or even finding scholarships for after the freshman year. The Woke are 99% posers on these issues, I don’t give posers respect.

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