Saturday, October 26, 2019

Saturday Movie Blogging: The Laundromat

The Laundromat is Steven Soderbergh’s (and Netflix’s) loose adaptation of James Bernstein’s nonfiction book, Secrecy World: Inside the Panama Papers, illustrating the conduct facilitated  by shell companies and the lawyers who supply the paperwork.  Both in style and substance, it echoes Adam McKay’s The Big Short – which is why every. single. review. draws that comparison, and so will I – but sadly, I found it neither as entertaining nor as coherent.

The Laundromat takes the form of multiple vignettes regarding people whose lives are touched by the shell entities facilitated by the lawyers at Mossack Fonseca, with Gary Oldman and Antonio Banderas narrating as Mossack and Fonseca, respectively.  They break the fourth wall as they offer tuxedo-clad, cynical descriptions of the services the firm provides.

 

Despite shoutouts to 1209 North Orange and its 285,000 companies – as well as the confession, I assume truthful, that Soderbergh has companies at that location – the film never really offers an explanation of precisely what shell companies do for their owners.  That was one of the things I thought The Big Short attempted reasonably well: It took the complexity of the financial crisis and made a decent stab of explaining it in an entertaining way (my prior review here).  The Laundromat tells us that these companies are stuffed with (illict) assets and that they offer privacy, but never goes further than that.

In fact, what explanations the film does offer are somewhat contradictory.  We’re told that shell companies facilitate legal tax evasion, but the vignettes have nothing to do with tax evasion; they have to do with fraud, bribery, and other crimes.  Moreover, multiple characters – including Mossack and Fonseca – end up in jail, so it’s clear that somebody did something illegal and the shell companies couldn’t protect them.

The truth, of course, is that shell entities have a variety of purposes, and can be used for both legal and illegal purposes, but that’s far too complex a story to portray on film, leaving The Laundromat’s explanations muddled and – from a pedagogical point of view – deeply disappointing.

At the same time, the movie doesn’t really stand on its own simply as a movie, divorced from the intricacies of the scandal that inspired it.  The vignettes are half-finished, because they exist only as vehicles to illustrate the broader point about how wealthy people shield themselves from liability to the masses, which means that the failure to effectively so illustrate dooms the entire project.

https://lawprofessors.typepad.com/business_law/2019/10/saturday-movie-blogging-the-laundromat.html

Ann Lipton | Permalink

Comments

I thought it was fun to watch these actors, and didn't know enough about the scandal to assess the movie's faithfulness. What broke my "suspension of disbelief" was the diatribe about Delaware and the suggestion that incorporation in Delaware had something to do with tax avoidance or evasion. There IS (or was, I don't know because this is 25+ history to me) a state tax play that involved transferring the corporation's IP to a corporation organized in a state with a "unitary" state income tax, but I don't recall how it worked and it had nothing to with Delaware (I think Arizona law facilitated it).

Posted by: Jeff Lipshaw | Oct 28, 2019 8:59:30 AM

Hi Jeff - yes, you're right about the Delaware/tax thing; that was another area where the distinction between shell entities for tax avoidance and for other purposes became muddled. And the thing is, there are states that almost specialize in permitting shell reinsurance companies -which would have meshed nicely with the Streep storyline - but it's not mentioned.

Posted by: Ann Lipton | Oct 28, 2019 9:08:41 AM

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