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Who Benefits, again?

An interesting article in the NYT of Oct. 10, 2015 by David Segal illustrated the utility of technology to evade identity and accountability under (variable) corporate forms across the U.S. A remedy is posited: Detection of real identity and initiation of attachment of real accountability for the decision-making individuals operating and benefiting from wrongful schemes would be enhanced by resort to the data of the institution receiving the financial resources of the victim (e.g., records of electronic transfers of cash) for conversion by the corporate form and its breathing persons to their own secreted (and remote from legal process such as bankruptcy) private property. The electronic trail of the financial flows provides inculpatory (and exculpatory) documentary evidence.

Confidentiality as policy embedded in law and regulation is a public good where it promotes responsible stewardship of resources protected under federal or state laws (e.g., private property rights, broadcast rights). Where it allows the exercise of undisclosed (breathing) principals to exploit confidentiality and create a pool of fools in the dark, responsible stewardship is practicably in the eyes of the beholders – including undisclosed principals – a privately defined and maintained concept.

Sources and uses of financial resources, especially privately created money under the protection and support of the Federal Reserve System – an institution partially accountable to the public under its Board of Governors specifically and federal laws generally, lead to the issue of whose money is it? The account holder? The institutions backstopping it? The public whose tax payments support the state and its infrastructure (e.g., roads) and capacity (e.g., public safety)? The state whose public interests trump private interests?

Ironically, deficient and short-sighted reasoning similar to that used by individuals who do not care about their privacy rights as ‘if you are not doing anything wrong, who cares if the government and its private contractors are eavesdropping?’ may be applied to confidentiality that allows financial flows to remain hidden to all but a few – why not disclose the identities of the principals if they are not doing anything wrong? Is protection of private sector profitability a means to lead to the highest and best use of resources? In all cases? Fraud risk management and due diligence, including financial forensics and analysis, are not easy where the public domain is not the default repository of data.