John Christensen was a government economist living on the beautiful island of Jersey, off England’s southern coast, in a “hillside villa with views of France.” But that lifestyle ended after he spoke out on a fraudulent currency trading scheme involving a UBS subsidiary in Jersey, according to Bloomberg.
Christensen had a head of dark hair when he helped to expose the Jersey currency scheme, which resulted in UBS’s Jersey unit and accounting firm Touche Ross & Co. — now Deloitte — paying almost $40 million to settle lawsuits. Regular bike rides keep Christensen as trim as two decades ago, but his hair has turned pearl white.
He said: “I was set. We had a pretty good lifestyle and plenty of friends.”
But he was forced to move to London as a result, where he now fights governments and campaigns against financial secrecy, including on his home island of Jersey.
He founded the Tax Justice Network in 2003 for the purposes of pushing greater regulation of tax havens. It’s estimated that $5 trillion to $32 trillion is currently stashed offshore for tax purposes – this is about a third of the entire global domestic product. Christensen thinks the number is at the “top end of that range”.
He said:
“We’ve won many of the intellectual and political arguments. And yet we’re not seeing it happen in practice. Look at where we are now. Rates of tax on capital have collapsed, inequality has gone through the roof and we’re now in a very dark place for democracy generally.”
But there are some legitimate reasons to keep money offshore. Hedge funds and money managers often pool assets into Cayman Islands master funds to reduce costs. Offshore havens also sometimes offer protection against unstable political regimes. But their lack of transparency also makes them attractive to drug dealers, kleptocrats, and money launderers.
After the Panama Papers leaked, governments have been pressuring offshore tax havens to disclose more details. Regulators are starting to hone in on long-established locations, too. So now the tax adverse wealthy are seeking out mainland arrangements in places like Hong Kong, London and the U.S.
Christensen continued:
“Capital has moved literally lock, stock and barrel beyond the ability of nation-states to regulate tax. If you don’t have a good referee in a football game, neither team is any good and it becomes a free-for-all and everything deteriorates.”
Russia leads the way for offshore stashing, with 60% of the country’s GDP held offshore. This compares to 15% in Continental Europe and just a few percent in Scandinavian countries.
But Russians are leaving one of their favorite offshore spots: the British Virgin Islands.
Increased transparency in the BVIs, combined with tighter tax laws, means that Russians can no longer anonymously accumulate tax free funds there. Legislation adopted this year in the BVIs requires companies registered there to actually show economic activity like hiring employees and renting offices or they are faced with fines.
Christensen and the Tax Justice Network are campaigning for public registers of company owners, and they’ve had some success so far. The U.K.’s overseas territories and crown dependencies, like Jersey and the BVIs, are set to introduce legislation by the end of 2023. But this still isn’t quick enough for Christensen.
“It took the allied powers six months to plan and successfully carry out the D-Day landings. It took Thomas Edison two years to create the light bulb,” he said, arguing against the timeline.
His Tax Justice Network was started over tea and cake in Jersey in 2002. Christensen and two friends discussed their concerns over the grip of the financial industry on the economy of Jersey.
By writing reports, posing questions at conferences and working with nonprofit groups, the network eventually caught the attention of policymakers. Two ideas that Christensen and his colleagues championed from the start — country-by-country breakdowns of multinational firms’ finances and improved exchanges of tax data between nations — helped shape global tax reforms this decade by the Organization for Economic Cooperation and Development.
Labour Party lawmaker Margaret Hodge said of Christensen’s group: “Their campaigning work is grounded in good analysis and proper facts. Without them, I wouldn’t have achieved as much as I’ve been able to do in Parliament.”
Two years ago the Organization for Economic Cooperation and Development introduced its tax disclosure system with tropical locations like the Cayman Islands and BVIs adopting it early. Both places have avoided the EU’s blacklist of tax havens, which now includes 15 jurisdictions like Bermuda and the U.S. Virgin Islands, where Jeffrey Epstein has a private island.
Instead of signing on to OECD’s system, the U.S. is sticking with the Foreign Account Tax Compliance Act, or FATCA, which has created loopholes for people putting foreign money in the U.S.
Offshore specialists follow the cash. Geneva-based Cisa Trust Co. has applied for a license in South Dakota and Trident Trust, another offshore trust provider, has moved dozens of accounts from Switzerland and Grand Cayman to Sioux Falls, South Dakota.
Christensen said: “It’s kind of Wild West stuff in South Dakota and Wyoming. Anything goes. The law no longer really applies.”
But the influx into the U.S. doesn’t mean that traditional tax havens still don’t have plenty of foreign cash.
Last year, four Chinese tycoons transferred more than $17 billion into family trusts with the ownership structures all involving entities in the Caribbean. Chinese individuals will account for about one-third of the total inflows for offshore financial centers over the next five years, according to an analysis by Boston Consulting Group.
Even though it resulted in exile, Christensen doesn’t regret outing the UBS subsidiary.
“I knew that if I didn’t do that, I would regret it for the rest of my life. Everything I stood for would’ve been shunted to one side if I hadn’t,” he concluded.
Donald Trump’s lawyer said on Monday that WikiLeaks publisher Julian Assange should not be prosecuted and he compared WikiLeaks publications to the Pentagon Papers.
Giuliani said, “We may not like what [Assange] communicates, but he was a media facility. He was putting that information out,” he said. “Every newspaper and station grabbed it, and published it.”
Rudy Giuliani, a lawyer for President Donald Trump, said Monday that WikiLeaks publisher Julian Assange had not done “anything wrong” and should not go to jail for disseminating stolen information just as major media does.
“Let’s take the Pentagon Papers,” Giuliani told Fox News. “The Pentagon Papers were stolen property, weren’t they? It was in The New York Times and The Washington Post. Nobody went to jail at The New York Times and The Washington Post.”
Giuliani said there were “revelations during the Bush administration” such as Abu Ghraib. “All of that is stolen property taken from the government, it’s against the law. But once it gets to a media publication, they can publish it,” Giuliani said, “for the purpose of informing people.”
“You can’t put Assange in a different position,” he said. “He was a guy who communicated.”
Giuliani said, “We may not like what [Assange] communicates, but he was a media facility. He was putting that information out,” he said. “Every newspaper and station grabbed it, and published it.”
The U.S. government has admitted that it has indicted Assange for publishing classified information, but it is battling in court to keep the details of the indictment secret. As a lawyer and close advisor to Trump, Giuliani could have influence on the president’s and the Justice Department’s thinking on Assange.
Giuliani also said there was no coordination between the Trump campaign and WikiLeaks. “I was with Donald Trump day in and day out during the last four months of the campaign,” he said. “He was as surprised as I was about the WikiLeaks disclosures. Sometimes surprised to the extent of ‘Oh my god, did they really say that?’ We were wondering if it was true. They [the Clinton campaign] never denied it.”
Giuliani said: “The thing that really got Hillary is not so much that it was revealed, but they were true. They actually had people as bad as that and she really was cheating on the debates. She really was getting from Donna Brazile the questions before hand. She really did completely screw Bernie Sanders.”
“Every bit of that was true,” he went on. “Just like the Pentagon Papers put a different view on Vietnam, this put a different view on Hillary Clinton.”
Giuliani said, “It was not right to hack. People who did it should go to jail, but no press person or person disseminating that for the purpose of informing did anything wrong.”
Assange has been holed up as a refugee in the Ecuador embassy in London for the past six years fearing that if he were to leave British authorities would arrest him and extradite him to the U.S. for prosecution.
You can watch the entire Fox News interview with Giuliani here:
Joe Lauria is editor-in-chief of Consortium News and a former correspondent for The Wall Street Journal, Boston Globe, Sunday Times of London and numerous other newspapers. He can be reached atjoelauria@consortiumnews.com and followed on Twitter @unjoe .
Operation Car Wash began in March 2014 at a petrol and car wash complex in Brasilia, Brazil’s capital, and it was initially thought to be routine.
The Federal Police team had the location under surveillance believing that it was the centre of a money -laundering operation run by Alberto Youseff, a former convicted criminal known as the “doleiro de doleiros” – the money launderer of money launderers.
When it was discovered in one of Youssef’s intercepted emails that he was paying for a Land Rover for an executive of Petrobras, Brazil’s national oil company, it immediately raised suspicions.
The executive turned out to be Paulo Roberto Costa, the man in charge of refining and supply. Costa became the main target in the first phase of the Car Wash investigation and was arrested.
Deltan Dallagnol, the lead Federal Prosecutor for the case, says that investigators uncovered “evidence of money laundering” totalling some 26 million Brazilian reals ($8m). Criminal charges were brought against Costa, who negotiated a plea bargain with authorities.
“That allowed for an exponential expansion of the investigation,” Dallagnol says. “It was the big bang of the Car Wash Operation.”
Never before did Brazil export corruption like it did in the Car Wash case.
Costa admitted that the Land Rover was just one of many bribes he received to issue contracts to construction companies, and told law enforcement officials participating in a task force set up to pursue the case that the bribing scheme was much larger than anything they imagined.
Corruption in the supply division he oversaw, Costa said, “was the tip of the iceberg”.
Bruno Brandao, the head of Transparency International in Brazil, says, “Never before did Brazil export corruption like it did in the Car Wash case.”
He adds that the problem of corruption in Brazil is systemic, and that in the Car Wash scandal, “the mechanism of corruption was traditional – overcharging of contracts and the setup of company cartels. What is new is the scale, the amounts of money and number of people involved – officials and companies. The dimensions of this case are what makes it extraordinary.”
Federal police inspector Felipe Hayashi, who heads the Financial Crimes Unit of the Car Wash taskforce, says the investigation “reached people of the highest rank and level of responsibility. That’s something that has never happened before.”
Investigators learned that there was a cartel of companies that dealt with Petrobras. According to a secret agreement that existed for more than 10 years, the cartel would nominate one of its members to be awarded each Petrobras contract – for refineries, oil rigs, and other multimillion-dollar projects.
“We secured documents that laid out the operation of the cartel in terms of championship rules for different sports,” says Dallagnol. “There were 16 championship players and their objective was to ‘maximise’ prizes in national and international markets alike. Obviously, these companies would never openly admit cartel arrangements in a clear way, so they tried to disguise them as championship rules for different sports.”
The cartel rules resulted in steep overpayments for the work done. Petrobras executives were bribed to go along, and the cost of the bribe built into the contract. In fact, the scheme stretched far beyond Petrobras to contracts for stadiums for the 2014 World Cup, the 2016 Rio Olympics and other major infrastructure projects throughout the country.
Brazil’s Car Wash scandal turned into the largest corruption case in Latin America’s history, involving some of the region’s most prominent public figures. [Getty Images]
The Odebrecht bribery machine
On June 19, 2015, the taskforce moved against the cartel players.
“It was time to take a step which had never been taken before in history; when big businessmen were finally reached, people who had been considered princes of enterprises in Brazil,” says Dallagnol.
Twelve top-level executives were arrested, among them Marcelo Odebrecht, CEO of the company that bears his name. Odebrecht is the largest construction company in Latin America. Its bribing operation typified that of cartel members and was the most extensive in the region.
Marcel Odebrecht was held without bail, and less than a year after his detention he was sentenced to 19 years in prison for corruption, money laundering and criminal association.
For decades and decades, in Brazil, you had to apply grease for everything. If a citizen wanted to obtain an ID, he certainly would have to pay something to a public agent to expedite the process.
Sergio Foguel, member of the Odebrecht Board of Directors
We headed to Salvador in northeast Brazil to get the Odebrecht Company’s response to the scandal.
The business was founded in 1944 by Marcelo Odebrecht’s grandfather, and the city is still its headquarters. Sergio Foguel, a long-time member of the Odebrecht Board of Directors, agreed to talk to us.
Despite the conviction of its CEO, the company still operates in more than 20 countries around the world and had revenues of about $26bn last year.
“There is no excuse to justify those acts of misconduct,” Foguel says. “But for decades and decades, in Brazil, you had to apply grease for everything. If a citizen wanted to obtain an ID, he certainly would have to pay something to a public agent to expedite the process”.
Our reporter, Gustavo Gorriti, wanted to know why the company had consistently denied any wrongdoing for months and months during the investigation.
“Despite all our strength as a company, we carried out acts within our organisation that today would be completely inadmissible,” Foguel says. “There was a collective blindness. Initially, corruption was tolerated and later, it expanded in an incredible way.”
A plea bargain by Odebrecht employees in the Lava Jato (Car Wash) corruption scandal led to testimony ensnaring nine ministers in President Michel Temer’s cabinet under investigation [Mario Tama/Getty]
‘Plug and play. It was serial corruption’
According to authorities, Odebrecht had a division of “Structured Operations” that ran an intricate off-the-books accounting system and a bank to bribe not only company executives, but also politicians.
This started to become clear when Marcelo Odebrecht began talking in hopes of reducing his 19-year sentence.
In testimony to prosecutors captured on audiotape, Odebrecht admitted that his company bribed politicians from all the major Brazilian parties in exchange for appointing Petrobras executives at the public company. Dozens of congressmen, senators and ministers have so far been implicated in the scandal.
Odebrecht’s testimony dealt a body blow to the Workers’ Party of former President Luiz Inacio Lula da Silva, and his successor Dilma Rousseff.
Amid a deep political crisis, Dilma Rousseff was impeached in August 2016. Two weeks later, Lula was formally charged with corruption in connection with the Car Wash scandal.
While Brazil’s elites were being held to account, investigators were also making steady progress on the international front with the help of the US Department of Justice. The country is one of the world’s main destinies for financial transactions.
“This provides the United States jurisdiction over a good deal of money laundering crimes that happen around the world,” Dallagnol says. “The US acted in a very efficient way, identifying accounts kept in their country to launder money and delivering documents very quickly.
In December 2016, Odebrecht pleaded guilty to American charges that it provided almost $800m in bribes for more than 100 projects in 12 countries. It agreed to pay a $3.5bn fine and disclose details of its corrupt activities in Latin America and Africa.
According to Brandao, “Odebrecht, at least in the 12 countries it operated, had the same system, the same mechanism – plug and play. It was serial corruption.”
From Brazil to Panama: Fake companies and big deals
Odebrecht’s guilty plea in the US set off investigations throughout Latin America. Key to those efforts was deciphering how the money flowed from the company to corrupt officials through countries like Panama that specialise in offshore banking.
Rolando Rodriguez, who heads the investigative unit of the Panamanian newspaper La Prensa, says that “From Panama, money went out to officials from Brazil, officials from Peru and other parts of the world.”
Panama’s police investigators uncovered a Panamanian company tied to Odebrecht called Contructora Internacional del Sur.
“It was a fake company that received money from Odebrecht and sent it out to accounts in different countries, especially Switzerland,” Rodriquez says. “So, the laundering structure was set up using companies, most of them from Panama, as well as bank accounts, most of them from abroad.”
Many of the shell companies used by members of the Brazilian construction cartel to dispense bribes were set up by Mossack Fonseca, the law firm at the centre of the Panama Papers leak, which exposed the financial dealings of some of the most powerful and wealthy people in the world.
“Mossack Fonseca is one of the oldest firms that work on setting up shell corporations,” Rodriguez says. “So, by arriving here in Panama you resolve the problem of having to travel to 10 different countries to get 100 corporations.”
Panama was not only a good transit point for corrupt payments. It was also a place to land large construction projects at inflated prices. With projects of some $9bn, Odebrecht is the most important construction company in Panama. Between 2010 and 2014, according to the US Department of Justice, Odebrecht paid tens of millions of dollars in bribes to secure public works contracts. One of the most profitable was building the Coast Highway.
I do harm to a country for $2 or $3bn. I agree to pay $300m, $500m or a billion and, after some time, I walk away free. What a business.
Jose Antonio Dominguez, legislator
“Panama ended up paying a great deal for a project that should have cost much less,” says Jose Antonio Dominguez, a legislator with the country’s governing Panamenista party who has been questioning the pricing of the project for years. “That project, without any change, suddenly was awarded for $189.5m instead of $133.5m. Why that $60m difference? For what?”
In July 2017, Odebrecht reached an agreement with the Panama authorities to pay $220m in fines and provide information about public corruption to settle bribery charges in the country.
“I do harm to a country for $2 or $3bn. I agree to pay $300m, $500m or a billion and, after some time, I walk away free. What a business,” says Dominguez.
A vast web of political and corporate corruption in Peru
Tensions over the way Odebrecht conducted its business are growing throughout Latin America. The latest flashpoint is Peru, where the country’s ruling establishment is reeling from its connections to the company.
Attorney Walter Alban served as the public ombudsman in Peru from 2000 to 2005 during the presidency of Alejandro Toledo, now accused of receiving bribes from Odebrecht.
“It’s been demonstrated that there were transfers through offshore companies and close friends of the former president,” he says.
Odebrecht wanted the lion’s share of a multibillion-dollar highway project connecting the Peruvian coast to Brazil and they got it. Toledo has been charged with accepting a $20m bribe to steer them the business.
Jorge Barata, the head of Odebrecht in Peru, confessed in 2016 that he struck the deal in a meeting at a Copa Cabana hotel in Brazil that Toledo attended. Peruvian prosecutors are trying to extradite Toledo from the US to face bribery charges, which he denies.
Alban says Odebrecht didn’t just pay off individual politicians. The company promoted its interests by gaining influence over the political system itself.
“The scheme Odebrecht had was not only related to bribes to get contracts,” Alban says. “There was also this practice of promoting candidates and financing political parties, and not just one but all that might have a chance of winning.”
In a videotaped confession to prosecutors obtained by Peruvian investigative journalism organisation IDL-Reporteros, Barata admitted to giving $3m to the Nationalist Party to help finance the 2011 presidential campaign of Ollanta Humala. Humala won and served as president from 2011 to 2016.
Corruption is not an issue of right or left, or ideology. But of a confluence of interests.
Walter Alban, lawyer
Barata also claimed his company supported the left-wing Humala not only to promote Odebrecht´s interests in Peru, but to curry favour with Lula’s Workers’ Party in Brazil. “The Workers Party had an interest that all South American presidents share the same political and economic line as the Workers Party. Humala had those characteristics,” Barata says.
According to Alban, Odebrecht had strong links with ex-president Lula’s party in Brazil. It is described as a “geopolitical strategy” he says, indicating that “corruption is not an issue of right or left, or ideology. But of a confluence of interests.”
Both Humala and his wife, Nadine Heredia who was general secretary of the Nationalist Party, are now in prison awaiting trial.
Keiko Fujimori and her Popular Force party are also under investigation for taking money from Odebrecht to fund her 2011 presidential bid. Fujimori says the accusation is false but Marcelo Odebrecht has testified that his company helped finance her campaign.
On February 28, Barata met Peruvian prosecutors and confirmed that the company gave money to support Fujimori in the presidential race – $1.2m.
“There aren’t political parties any more” says Alban, “There are groups that define themselves as political, but strictly speaking, they are supported in all cases by illegal funds”.
Demonstrators protest for the impeachment of President Dilma Rousseff and also against corruption being investigated involving resource diversion and money laundering in Petrobras scandal of corruption on March 16, 2016, in Sao Paulo, Brazil [Victor Moriyama/Getty]
A new attitude towards corruption in Latin America
Last December, the Car Wash scandal arrived at the doorstep of Peru’s current president, Pedro Pablo Kuczynski. Peru’s congress launched impeachment proceedings against him, alleging his companies received almost $800,000 from Odebrecht while he was serving as a public official.
Kuzcinsky vehemently denies all wrongdoing and narrowly avoided impeachment but prosecutors continue their investigations. In his February meeting with prosecutors, Barata said Odebrecht also contributed to Kuzcinsky’s 2011 presidential campaign.
Peru’s Attorney General Pablo Sanchez is overseeing the investigation of Peru’s high-level officials for dealings with Odebrecht. “We are talking about corruption and a series of very complex crimes that involve several different governments, not just one but at least three,” he says.
When asked why the corruption connected to the Car Wash case went so far in Peru, he says: “Our country is not prepared to face cases of this nature or prevent crime,” Sanchez says. “Our country has trusted too much in the behaviour of state officials and the politicians in our country. So in that way, we haven’t advanced at all, or just very little. What we do now, proper investigations, proper convictions, will help prevent this from happening again in the future.”
Car Wash in Brazil today is no longer just an investigation, nor a process. Lavo Jato today in Brazil is an attitude, an expectation that impunity will start to fade away.
Bruno Brandao, head of Transparency International
Every week seems to bring new developments around the world in connection with the Car Wash scandal.
Governments from Ecuador to Angola are dealing with the repercussions of the case. Meanwhile, back in Brazil, the Supreme Court is considering former President Lula’s appeal of a 12-year sentence he received for corruption. His plans to run for president this October are in danger of being derailed.
“Car Wash in Brazil today is no longer just an investigation, nor a process. Lava Jato today in Brazil is an attitude, an expectation that impunity will start to fade away,” Brandao says.
Alban agrees that a new attitude towards corruption is arising in Latin America. “Democratic societies in which we can say that the problem of corruption is at least controlled,” are those in which the public watches over how public resources are spent and demands “that public authorities be held to account. Because of the Car Wash case that is something that I believe is beginning to happen.”
While the people with luxury yachts are anxious to hang on to their wealth, capitalist economic growth is founded on the efforts of the less wealthy to improve their lot. (Yannis Behrakis/Reuters)
Capitalism makes poor people rich, but only when it’s working at its best.
In last week’s release of the Paradise Papers, CBC Investigates helped remind us of an alternative objective of capitalism echoed in Washington’s quest for tax breaks for the wealthiest.
That is the pressure to make sure rich people are able to hang on to their advantageous positions.
The historic argument over exactly how much tax each person should contribute is as much political as it is economic.
Taxation is theft (or is it property?)
The polarized politics might be characterized by contrasting the assertion by 18th-century anarchist Pierre-Joseph Proudhon that “property is theft” with the modern anarcho-capitalist insistence that “taxation is theft.”
Adam Smith, the father of modern capitalism, had a pragmatic take on taxes. He argued they were essential to a well-run state and so everyone should be required to contribute.
It was Scottish economist Adam Smith, often called the father of modern capitalism, who declared people should be taxed according to their ability to pay. (David Moir/Reuters)
Among his four basic requirements for a good tax system — which included the stipulation they should not be arbitrary and that they should be convenient to collect and to pay — was that they should be “proportionate to incomes or abilities to pay.”
It was Smith, not Karl Marx, who gave us the principle that rich people should pay more tax.
Someone has to pay
As previously pointed out during the 2016 release of the Panama Papers, someone has to pay for the roads and ports, corporate subsidies and bailouts that keep the Canadian economy ticking.
Every penny that the well-off fail to pay falls onto the shoulders of poorer wage earners who have no way of escaping the clutches of the Canada Revenue Agency.
In a world where the rich have disproportionate clout in the corridors of power, it is no surprise that the richest 1 per cent are expected to benefit the most from the U.S. tax changes proposed last week.
That may not be good for the global economy.
There are good reasons to think that the world is returning to an era where what John Maynard Keynes called “the functionless investor” is once again superseding the active capitalist that makes economies dynamic.
If you believe in the power of capitalism to make the world a better place, it is hard to fault people like Steve Jobs and his financial backers who took risks to create an entire new industry.
From Russia with nothing
In Canada there are many examples, including the Bronfman family that came to Canada from Russia with nothing and made themselves and Canada rich. Frank Stronach, founder of car parts giant Magna International, could tell a similar story.
But since those days, Canada and the world have experienced what Bank of Canada deputy governor Sylvain Leduc recently called “declining dynamism.”
It is certainly hard to see the social contribution of passive investors who hold onto the wealth and power created by their dynamic forebears by using that power to convince governments to let them pay less in taxes.
As we are told repeatedly by advocates for people and businesses that keep billions of dollars in low-tax offshore funds, they really aren’t breaking the rules.
Not illegal
“Offshore trusts are not illegal,” said Ian Lee, former banker and now professor at Carleton University’s Sprott School of Business.
Of course that raises the question of why the Government of Canada — as the representative of Canadian voters with a median income of about $30,000 — would create a set of laws that allows rich passive investors to avoid billions in taxes.
There is a consensus in mainstream economics that whether Proudhon was right or wrong, property ownership makes economies stronger. As even self-declared Communist countries such as China and Vietnam discovered, switching from collective farms to private small-holders caused a boom in agricultural production.
However, the breaking up of huge estates controlled by a passive landowning class has shown similar economic benefits.
When it comes to money, there is increasing evidence that the funding of capital projects from what Keynes called “the savings of the rich out of their superfluity,” is no longer as important as it once was. Certainly there is no shortage of cash to drive up the price of the world’s safest assets.
Places like the South America and the Persian Gulf, where the rich control almost all the resources, are not models of democratic or economic health. The strongest economies are not built on selling or getting tax breaks on a few yachts and private jets. They are those with active dynamic populations where everyone can participate.
If governments want to build strong capitalist economies, rather than using their laws to help keep the wealthy rich, the evidence is that legislators must let the already rich look after themselves, and turn their attention instead to making laws that help hard-working aspiring capitalists become rich for the first time.
Trouble in paradise: Bermuda is at the centre of the Paradise Papers leak. shutterstock.com
The so-called Paradise Papers may sound familiar – leaked documents from a law firm that specialises in offshore services reveal how the global elite avoids paying taxes. Even the name has the same ring to it as last year’s Panama Papers expose. But the Paradise Papers are different, reflecting the complexity of the global offshore tax system.
Panama is generally considered among tax haven experts as one of the least reformed corners of the offshore world. International rules regarding tax evasion and avoidance are intended to help national governments to pursue their own offenders, but the Panama Papers revealed that the country was being used primarily by the business and political elites of countries like Russia, China and many more in Latin America and Asia; countries where the governments are closely linked to business and which are less likely to use tools provided by new international rules to pursue offenders. Hence, relatively few Americans or Europeans were caught in the Panama story. And Mossack Fonseca, the law firm at the centre of the leak has since been discredited.
The Paradise Papers reveal the goings on of the elites of the offshore world – this time in the supposedly highly-regulated havens of the Cayman Islands, Bermuda, Singapore and the like. All places that received a fairly clean bill of health during the OECD peer review process only a few years ago. The law firm at the centre of this new leak, Appleby, insists there is “no evidence of wrongdoing” in any of the revelations.
Nonetheless, the Paradise Papers will tell us a lot about the activities of business and political elites of well-regulated countries like the US and UK – implicating big multinationals such as Nike and Apple, and individuals including the British Queen.
Clearly, jurisdictions such as the Caymans Islands and Bermuda that levy no income tax, capital gains tax, VAT, sales, wealth or corporate tax, still attract a great deal of businesses. Why, for instance, has the Duchy of Lancaster, the Queen’s private portfolio, invested in two offshore funds, in Cayman and Bermuda? After all, the Queen pays tax only voluntarily.
A more charitable interpretation is that any big investor who is seeking to diversify their portfolio would inevitably end up using offshore funds. The papers show that about £10m (US$13m) of the Queen’s private money was invested offshore – a very small percentage of her wealth. There is nothing illegal about this but the ethics of it have been questioned.
Practically, the entire wealth investment industry – the industry that invests for the rich and the wealthy of our world – operates through the offshore world. And the reason why is simple. Each fund or transaction, or aeroplane or yacht, or whatever that one cares to register in the Caymans or Bermuda, is not subject to tax. And it’s hidden from public view.
2. Secrecy prevails through trusts
Despite a spate of new regulations, the Paradise Papers show that anyone who wishes to conceal their affairs from competitors, allies, governments or the public can still do so with great ease. And they can do so through the facilities of a “trust”, an archaic Anglo-Saxon instrument that serves as a foolproof shield from scrutiny.
We have learned, for instance, that Wilbur Ross, the US secretary of commerce, had commercial links to Vladimir Putin’s family, which operated through a system of linked trusts located in various offshore jurisdictions. I do not think that even the Mueller inquiry in the US into the Trump administration’s links with Russia could have pierced the veil of secrecy offered by offshore trusts.
But the leaked documents from law firm Appleby reveal that any complex business deals that would involve concealment and subterfuge would work their way through trusts. It is high time we do something about these trusts.
3. Highly complex tools are used
The Paradise Papers show how complex financial innovations such as the use of derivatives and financial swaps arrangements, can be used for tax avoidance. This is an area of avoidance that is normally not well understood and scantily studied.
New research colleagues and I are conducting, however, has found that cross-currency interest rate swaps are used pervasively in tax minimisation mechanisms. It is difficult to detect and involves a parent and subsidiary companies swapping a loan in one currency to another. This swaps the risks and the interest rate of the original currency for the subsidiary’s – a legitimate risk minimisation instrument. At the same time, this facilitates moving funds offshore to low tax jurisdictions.
4. The law needs to change
Many professional service firms operate through offshore jurisdictions. They all claim to be highly professional, following not only the letter, but also the spirit of the law.
But if these firms are not directly liable for the activities of their clients, the offshore world will continue to thrive. These firms take advantage of regulatory loopholes to arbitrate between different rules and jurisdictions in order to minimise taxation. The question is for how long such practices are going to be considered legitimate.
The Paradise Papers reveal how little the world really knows about the level of tax avoidance that takes place. UK citizens, for instance, can legally invest in offshore funds and set up companies in those havens. But they must reveal these holdings to the tax man. We do not know whether those named in the papers did, and we do not know whether the tax authorities will do something about those who did not. We only know that a lot is going through offshore. The Paradise Papers show that, despite promises of the opposite, opacity is still pervasive in the offshore world.
A large cache of leaked documents has revealed that more than £10 million of the Queen’s private wealth has been invested offshore and in a UK company accused of preying on Britain’s poorest people.
Details of the investments were leaked as part of the Paradise Papers on Sunday, a trove of more than 13 million documents from the world’s leading offshore law firms released through the International Consortium for Investigative Journalists (ICIJ), of which the BBC is a part.
More than 120,000 people and companies have been identified during the leak, including Queen Elizabeth II.
A spokesperson for the Duchy of Lancaster told the BBC: “We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate. The Queen voluntarily pays tax on any income she receives from the Duchy.”
The Queen invested in Brighthouse, a company responsible for the misery of thousands of people on low incomes. #ParadisePapers
10:57 AM – 5 Nov 2017
According to the leaked documents, the Duchy of Lancaster invested $7.5 million of the Queen’s private income and financial portfolio in Dover Street VI Cayman Fund LP in 2005.
Files from offshore law firm Appleby reveal that the fund made investments in pharmaceutical and high-tech companies, including a company that developed fingerprint technology for mobile phones.
The Queen’s estate received about $360,000 from its investment.
The papers also revealed that the Dover Street fund bought a small interest in something called ‘Project Bertie,’ which involved the takeover of rent-to-buy company BrightHouse, a company slammed by consumer watchdogs for selling household items on payment plans with annual interest rates as high as 99.99 percent.
#ParadisePapers sending ripples all over the world. Queen investing in Bright House WTF?! Govts worldwide have encouraged tax evasion. The rich get richer. Makes me so angry when everyone else is paying taxes. All that money hidden away could have made world better place
10:55 PM – 5 Nov 2017
Dover Street VI Cayman Fund LP also purchased a 75 percent stake in First Quench Retailing Ltd, which included the off-licence chain Threshers that went into administration in 2009.
Chris Adcock, chief finance officer for the Duchy, told the Guardian it had been unaware of the indirect holding in BrightHouse.
“Investors commit to a fund for a given period and are not party to its ongoing investment decisions,” he said.
“We are not aware of any tax advantages to the Duchy in investing in offshore funds.
#ParadisePapers again prove what I said at #PMQs: There’s one rule for the super-rich and another for the rest when it comes to paying tax. Nov 5, 2017
“The Duchy’s investment policy is based on advice and recommendations from our investment consultants and asset allocation, rather than tax strategy.”
Royal officials told the Daily Mail that the Queen had no direct involvement, and they were “not aware of any tax advantages.”
Labour leader Jeremy Corbyn said the information revealed by the Paradise Papers proves that “there’s one rule for the super-rich and another for the rest when it comes to paying tax.”
The fact that the United Kingdom is on par with the United States as one of the most corrupt countries in the world is hardly a secret, even though the governments of these two nations have been launched various public relations campaigns in a bid to persuade their citizens that they are in no way involved in such crimes.
Over the past couple of decades, London’s accountants and lawyers have helped launder billions of dollars of stolen money through the British Virgin Islands, among other British overseas territories the British property market -. like the New York property market – has long functioned like an old-fashioned Swiss bank, providing safe real estate investments for owners who wish their identities and their sources of income to be hidden.
In rich Western states, like the UK and US, governments often lend a helping hand to various criminal organizations that seek ways to launder money stolen from budgets and aid programs of various countries. In order to prevent the officials of those robbed states from accessing those funds, Western authorities often create large commercial entities that serve the sole purpose of hiding this money. In a number of US states like Delaware, New Mexico, Nevada and Wyoming, along with the British Virgin Islands, a territory that is inhabited by 28,000 people, anonymous investors can register a countless number of companies, without being subjected to any form of screening by local authorities.
As it is stated by prominent journalist Roberto Saviano, who has dedicated over a decade of his life to the investigation of the criminal activities of the Italian Mafia, 90 per cent of the owners of capital in London have their headquarters offshore. Jersey and the Cayman’s serve as gateways through which criminal capital in Europe and the UK flows. The journalist would note that a total of 57 billion pounds (74 billion euros) is being laundered in the United Kingdom, which makes the City of London and Wall Street the two largest centers for money laundering in the world, where drug cartels are able to transform their criminally acquired cash into legal money.
London – is an international financial center that services millions of transactions with a total worth of hundreds of billions of pounds every year, while offering the most sophisticated financial services on Earth. But, at the same time, the British capital is the center of the global offshore system.
In 2015, the National Crime Agency published an influential report that would state that criminals would launder hundreds of billions of dollars using UK banks and their branches.” It was also reported that the amount of money laundered constitutes a direct threat to the economy and the reputation of the United Kingdom.
Mind you, that the release of the so-called Panama Papers has directly affected British PM David Cameron since they revealed that his father was running a large offshore investment fund. Yet another interesting revelation was made by Transparency UK which released a report in March 2015 that would state that London’s real estate market is being used to conceal illegal income and launder money obtained through bribes. It would note that 36,342 properties covering 2.2 square miles (5.7 square kilometres) of London – an area twice the size of London’s financial district – are owned by shell companies, while 75 per cent of UK properties currently being investigated because of corruption are registered in secret safe havens. The British division of Transparency International has even launched a special website ukunmaskthecorrupt.org, where anyone can trace such properties through an interactive map of London.
This further confirms the fact that corruption and financial crimes have deep roots in the UK, and all sorts of criminals across the world are perfectly aware of the fact that they can find a financial safe heaven in London.
Against this background one can only be amazed by the blatant hypocrisy that the leader of the ruling Conservative Party has demonstrated. Last May, David Cameron organized an international meeting in London, with representatives of dozens of countries sending their representatives. The meeting was labeled an Anti-corruption Summit, which provoked a wave of bitter criticism and ridicule in the British Parliament. In particular, opposition party members directly demanded the Prime Minister close all commercial entities that have been created for the purpose of money laundering in the UK and its overseas territories.
So while UK authorities, like their colleagues across the Atlantic, are declaring their determination to fight corruption, in reality they keep providing criminals of all kinds the ideal safe haven for laundering their money in London and New-York.
Recently, a total of 300 prominent economists have signed a joint statement that demanded that David Cameron and the leaders of other wealthy and influential states actually start a genuine fight against corruption. . Jorge Sachs, who put his signature upon the statement, would declare bluntly that the world needs to put an end to the critical role that Britain plays at the center of this ongoing corruption.
Martin Berger is a freelance journalist and geopolitical analyst, exclusively for the online magazine “New Eastern Outlook.”
“If I asked you what is the most corrupt place on Earth you might tell me well it’s Afghanistan, maybe the South of Italy and I will tell you it’s the U.K.”
United Kingdom — When someone who has spent more than a decade exposing the criminal underbelly of the Italian mafia calls a country the “most corrupt on earth,” it’s time to sit up and listen. This is precisely what happened in the U.K. this week during a world-renowned mafia expert’s rare and historic appearance at a literary festival.
Author and journalist Roberto Saviano has lived under police protection since he publicly spilled the beans on Italy’s gangsters in 2006. In the eyes of the gangs, the 36-year-old’s crime is his best-selling book, Gomorrah, which exposes the Camorra, the Mafia of Naples. According to Saviano, the network of criminal gangs dwarfs the original Mafia of Sicily and other organised gangs, both in economic power and ruthless violence.
In 2015, the U.K. ranked 10th in Transparency International’s Corruption Perception Index, which measures perceived levels of corruption worldwide. However, Saviano disagrees with this assessment. Flanked by a heavy security presence at Hay-on-Wye literary festival, he told the audience why:
“If I asked you what is the most corrupt place on Earth you might tell me well it’s Afghanistan, maybe Greece, Nigeria, the South of Italy and I will tell you it’s the U.K.”
He continued:
“It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital. Ninety per cent of the owners of capital in London have their headquarters offshore.”
Going on to accuse Jersey and the Cayman Islands of being the access gates to criminal capital in Europe, he said this is because the U.K. is allowing it. “That is why it is important, why it is so crucial for me to be here today and to talk to you because I want to tell you this is about you, this is about your life, this is about your government,” he added.
Weighing in on the E.U referendum, Saviano claimed “Brexit,” the term for the U.K.’s exit from the European-wide government, will give the green light to corruption. “It means allowing the Qatari societies, the Mexican cartels, the Russia Mafia to gain even more power and HSBC has paid £2 billion Euros in fines to the US government, because it confessed that it had laundered money coming from the cartels and the Iranian companies,” he said.
“We have proof, we have evidence,” Saviano added.
The world-renowned mafia expert’s comments come in the wake of revelations from the Panama Papers that Prime Minister David Cameron benefited from an offshore fund set up by his late father. His accusations also echo the findings of a 2015 Private Eyeinvestigation that revealed over £100 billion worth of property in London was snapped up by wealthy investors, some using shadowy offshore companies linked to money laundering and tax evasion. Two-thirds of the purchases were made by companies registered in four “British” tax havens — Jersey, Guernsey, the Isle of Man and the British Virgin Islands.
The beautiful irony of Britain being labelled “the most corrupt place on earth” will not be lost on many, particularly in light of David Cameron’s recent embarrassment after he was caught on camera describing Nigeria and Afghanistan as “fantastically corrupt.”
The notorious Panama Papers, the largest document leak in history, exposing offshore tax haven users, is now online as a searchable database.
The enormous bundle of 11.5 million documents exposing hundreds of thousands of companies and individuals is online as a searchable database with interactive visualization depicting links between persons, companies and countries.
According to the International Consortium of Investigative Journalists (ICIJ), an organization which, until today, had sole access to the documents, the database reveals the names of the real owners of many shell companies.
The website opens with a disclaimer, noting that there not all people and organizations on the list use tax havens illegally. The statement also mentions that many people have similar names, and recommends diligent ID validation.
The documents, revealing some 360,000 names of companies and people, were extracted and leaked by an unknown source from a database owned by the Mossack Fonseca law firm. The firm, which has chosen to continue practicing, claims it was hacked.
Mossack Fonseca issued a cease-and-desist order on Thursday to the journalist group, claiming that revealing the information publicly is a violation of attorney-client privilege. The ICIJ, however, published the information, claiming it is acting in the ‘public interest.’
Tax havens, of which Panama is widely known, are often used to conceal wealth and, of course, evade taxes. Reporting based on the documents caused swift fall-out for some of the prominent clients around the globe — including the resignation of Iceland’s prime minister.
By using public services paid for by society and then hiding their proceeds offshore, clients of tax havens are effectively freeloading on the rest of society, Dr. Ha-Joon Chang, an institutional economist specializing in development economics, told Radio Sputnik.
On Monday the International Consortium of Investigative Journalists (ICIJ) published a searchable database of nearly 214,000 offshore entities created in 21 jurisdictions, from Nevada to Hong Kong and the British Virgin Islands.
The ICIJ says that what they have published so far is a fraction of what have been dubbed the Panama Papers, more than 11.5 million leaked files that belong to Panama-based law firm and corporate service provider Mossack Fonseca.
On Thursday an anti-corruption summit in London will be attended by officials from 40 countries, and from the World Bank and International Monetary Fund.
In an open letter published ahead of the summit on Monday, over 300 internationally renowned economists called on world leaders to put an end to tax havens, writing that they “serve no useful economic purpose.”One of the signatories of the letter is Dr. Ha-Joon Chang, an institutional economist specializing in development economics, a Reader in the Political Economy of Development at the University of Cambridge and author of the books “23 Things They Don’t Tell You About Capitalism,” and “Economics: the User’s Guide.”
He told Radio Sputnik that people who hide money in tax havens are using “financial engineering” to freeload from taxpayers by making up paper companies and using them to avoid tax.
“Individuals and their companies who are using these tax havens are basically freeriding on the rest of humanity. These individuals and companies are making money in one country, using the labor force educated by taxpayers’ money, using the roads, ports and other infrastructure provided by public investment and even taking advantage of scientific research and development done in that county and taking that money away to another country where they just park the money.”
“What usually happens is that they set up this paper company which charges for bogus services and siphoning off profit and in the country where the real activity was done, the company says ‘we haven’t made any money.'”
Chang said that the appeal of low taxes for businesses is balanced by the quality of infrastructure and services provided in that country, and so the appeal of areas with little or no tax is limited to the prospect of saving money rather than using the public services to conduct business there.
“If low tax was so good, why doesn’t every rich individual move to Guatemala, where the top income tax rate is seven percent? If low corporate income taxes are so good why don’t all companies relocate to Paraguay, where the tax rate is ten percent? Of course, these people don’t go there, because instead of paying little tax they get rubbish public service.”
Chang said that while officials at the upcoming anti-corruption summit will take some notice of the economists’ joint letter about havens, their existence is a result of a lack of political will to get rid of them, rather than technical difficulty.
“Ultimately these tax havens only exist because the rich and the powerful in the world want them to exist.”
“It’s actually one of the easiest things to change, because we worry about say climate change, we say we have to make a transition to renewable energy. Even if we know we should do that, it’ll take years and lots of money to make the transition, whereas these tax havens will cease to exist if say the 20 richest countries declare that any financial transaction involving these non-corporative tax havens will be illegal.”
It stinks worse than a surfeit of skunks crashing a Texas Fourth of July picnic. Look at even the superficial facts of the so-called “Panama Papers.”
A Munich Germany mainstream pro-NATO newspaper editor we are told gets an anonymous gift of alleged files of thousands of high net worth tax dodgers from around the world. To read the front pages of major mainstream western newspapers or BBC and CNN these past days one would be convinced that some hacker had uncovered smoking gun proof that Russia’s Vladimir Putin along with China President Xi Jinping and other “enemies” of the Washington Agenda had stashed billions in secret accounts managed by a Panama law firm called Mossack Fonseca.
With no explanation how or from whom, the Süddeutsche Zeitung says it came into possession of 11.5 million confidential documents sent them by someone they never met who went by the anonymous name “John Doe,” a typical American moniker. The “Panama Papers” handover was done a year ago, with, we are told, detailed information about more than 214,000 offshore companies listed by the Panama law firm, Mossack Fonseca. The file cache contained the identities of shareholders and directors of the offshore companies.
Immediately Süddeutsche Zeitung’s editors say they contacted a highly select cabal or group of journalists and a year later, with precise timing, western mainstream corporate-owned media have now begun coordinated, orchestrated selective leaks of alleged contents.
Now it gets quite interesting.
The Süddeutsche Zeitung was perhaps unwittingly helpful for genuine investigative journalists in detailing the methodology the mainstream media journalists holding the huge file cache used to find certain offshore tax dodgers. They simply did a data search for any names associated with sanction-breaking dealings of UN sanctioned regimes. That naturally targeted regimes pursuing policies inimical to the USA which pushes almost all economic sanctions these days. So, abracadabra, names from North Korea, Russia, Syria and Zimbabwe feature in the “exposes.” The Panama Papers is being promoted as “the largest leak journalists have ever worked with.”
ICIJ?
Süddeutsche Zeitung editors also stated proudly on their website that they immediately decided to go to an organization called the International Consortium of Investigative Journalism (ICIJ) to help them decide how to deal with the huge store of stolen data files they had come into.
We might ask what exactly is this International Consortium of Investigative Journalists or ICIJ? If we do a little investigating of the consortium for “investigative journalists” or ICIJ, it turns out ICIJ is a “global network of more than 190 investigative journalists in more than 65 countries who collaborate on in-depth investigative stories.” Founded in 1997, “ICIJ was launched as a project of the Center for Public Integrity to extend the Center’s style of watchdog journalism, focusing on issues that do not stop at national frontiers: cross-border crime, corruption, and the accountability of power.”
Gosh, this really sounds like a noble, selfless organization of heroic journalists seeking “truth, justice and the American way of life,” as Clark Kent used to say in the Superman TV series. Only thing is, it isn’t.
First let’s investigate the founder and funder of ICIJ. It is the Washington DC-based Center for Public Integrity, their name something of an oxymoron in today’s Washington, where public integrity seems to be very out of fashion. The Center for Public Integrity, according to its website, was founded in 1989, “to serve democracy by revealing abuses of power, corruption and betrayal of public trust by powerful public and private institutions…”
They neglect to say they are very selective in whose corruption they reveal. Very much so with the Panama Papers where no significant western names such as George Soros or David Rockefeller or Bill Gates or countless other US or EU figures are named other than a few expendables such as the Prime Minister of Iceland or the father of David Cameron, or several former heads of government in places like Iraq who are of no consequence for Washington. In fact, as the Saker points out in an analysis of the CIA Panama dirty ops, the leaks name, “Not a single American citizen, not one. The best I found was “Tina Turner, American-born Swiss singer.“ The only other American citizens mentioned are four indicted or convicted US citizens accused or convicted of serious financial crimes, including securities fraud. But not convicted financial fraudster and insider trader George Soros who does all his serious business offshore. He finances the game.
If we follow the money trail of the Center for Public Integrity we find the following listed financial sugar daddies as among their sponsors:
George Soros’ Open Society Foundations
Rockefeller Brothers Fund
Rockefeller Family Fund
Carnegie Corporation
Ford Foundation
Foundation for National Progress, Soros-backed mother of Mother Jones
Fidelity Brokerage Services, second largest mutual fund in the world
Right away we begin to smell those Texas Fourth of July picnic skunks behind the selective Panama Papers leaks.
He’d Have to Be Crazy…
For example, let’s take a closer look at the “Putin revelations” revealed in the Panama Papers. To read mainstream UK, German or US mainstream corporate media press we would get the impression that the Panama Papers’ main expose is hard proof of billions stashed away by that nasty Russian ‘Evil Knievel’, Wladimir Wladimirowitsch Putin, known in the West as Vladimir Putin, not to be confused with Vlad The Impaler, who was Romanian.
On the first day of the Panama Papers story, Putin’s face was on the front page of most every major NATO country newspaper. BBC News of the UK, one of the elite media given the full Panama Papers document cache, in its sub-headline the first day writes, “Links to politicians including President Putin and Iceland’s PM exposed.”
What links to President Putin actually were found? If we manage to get past the strong impression created by artful headlines and photos of Putin, we find the following “hard” proof that Putin has stashed a cool billion dollars with the Panama boys at Mossack Fonseca: None.
There is nowhere one iota of evidence revealed in the leak of the Panama Papers that Putin or any relatives have stashed their alleged dough offshore. The best they come up with is a Russian cellist from St Petersburg who was a childhood friend of Putin. The documents leaked indicated that Sergei Roldugin, a professional cellist described by the anti-Putin Novaya Gazeta as Vladimir Putin’s best friend, had acquired assets worth at least $100 million, including a 12.5% stake in Video International, Russia’s largest television advertising firm.
PROOF! Send Putin to the gallows! Better, off with his head!, like the Red Queen would demand in Alice in Wonderland.
In the interest of truth, let’s look more closely at Vladimir Putin in this dodgy Panama Papers affair. If I imagine for sake of argument I were Putin, former head of Russian intelligence, a life-long KGB agent and a master of international networks of the US intelligence, I’d have to be crazy, plumb out of my mind, to hide money in offshore Panama, a country under total treaty disclosure requirements to US regulators. Panama is the offshore haven for Colombian and Mexican cocaine cartels, and is well-known worldwide as a fully-controlled mailbox dirty offshore entity completely under the thumb of Washington. Excuse me? Would I be so suicidal, were I to have such billions to stash, to go to Panama of all places? I’m afraid not. On that basis alone the Putin Panama Papers allegations show up as putative fraud, CIA dirty ops.
Waffen SS Totenkopf Division
Moreover, a look at the law firm is also revealing. No doubt KGB files would have also shown that Erhard Mossack, father of Jurgen Mossack, co-founder of Mossack Fonseca, served as soldier in the Waffen SS during World War II, a member of the savage “Totenkopf” (Death’s Head) SS Division. The Totenkopf members were selected from the most savage guards of the Nazi concentration camps starting with Auschwitz. Erhard Mossack, left Germany to Panama in 1948 with his family including son Jurgen. While in Panama, Jurgen offered, nice guy that he was, to work for the CIA. In short, Langley, Virginia CIA or something very close across the Potomac River is behind the Panama Papers. The entire operation is being executed with the sophistication and finesse of an elephant in a Chinese porcelain shop.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”
The Panama Papers should be no surprise. I was there in the 1970s, when the system they’ve exposed was set in motion. As an Economic Hit Man (an EHM), I helped forge this global economy that is based on legalized crimes. It’s a system in which 62 individuals have as much wealth as half the world’s population, and a handful of the super-rich control governments around the globe. Big corporations benefit from infrastructure and social services without having to foot the bill. Instead, average U.S.
“The Panama Papers,” writes Perkins, “are a warning: we can’t turn a blind eye on legalized crimes.” (Photo: The Weekly Bull/flickr/cc)
The Panama Papers should be no surprise. I was there in the 1970s, when the system they’ve exposed was set in motion. As an Economic Hit Man (an EHM), I helped forge this global economy that is based on legalized crimes. It’s a system in which 62 individuals have as much wealth as half the world’s population, and a handful of the super-rich control governments around the globe. Big corporations benefit from infrastructure and social services without having to foot the bill. Instead, average U.S. citizens pay for it with their hard-earned tax dollars, while the very rich and their corporations shelter their incomes in tax havens like Panama.
“The revelations of the Panama Papers are one more indictment of a failed system.”
The foundations for Panama as a tax shelter go back to 1903, when President Theodore Roosevelt fomented a rebellion to wrest Panama from Colombia so the U.S. could build the Panama Canal. J.P. Morgan and Company became the new country’s official fiscal agent. Soon Panama passed laws allowing John D. Rockefeller’s Standard Oil Company to register its ships there, avoiding U.S. taxes and regulations — and Panamanian tax shelters were born.
I was sent to Panama to convince then-head of state Omar Torrijos to stop insisting the U.S. turn canal ownership over to Panama, and to soften his support for Latin America’s nationalistic movements. Torrijos would not yield on the canal. But he did let his country become a tax haven for international corporations. He told me, “If your country is determined to exploit mine, the least I can do is help your corporations avoid paying taxes that support the CIA and Pentagon!”
Torrijos died in 1981 in a plane crash many believe was orchestrated by the CIA. Since then, Panamanian administrations have remained a puppet of U.S. business interests, and the country is a tax shelter for the super rich. Over the past 12 years, the system that helped create it has spread from developing countries to the United States, Europe, and the rest of the world. The result: a failed global economy: Two and a half billion people live below the poverty level, on less than $2 a day. Seven out of 10 people live in countries with worse inequality than 30 years ago. Less than 5% of the world’s population lives in the United States, yet consumes 25% of the world’s resources. Less than 1% of that 5% dictate not only U.S. policies, but those of most other countries. It is an economic system based on debt, fear, militarization, and the extraction of the resources that support it, consuming itself into extinction.
There’s a lesson here. In this election year, we must understand that the next U.S. president has very limited powers. The powers rest in the big corporations and the people who run them. When billionaires are able to get laws passed such as the US-Panama Trade Promotion Agreement of 2012 and NAFTA, giving their corporations more power than sovereign nations, it’s time for change. We must create an economy dedicated to cleaning up pollution, developing new technologies that recycle and spare the earth, and creating systems that alleviate desperation, poverty, hunger, and the causes of violence and terrorism. This system must include fair taxation: those who benefit from the infrastructure must help pay for it.
The revelations of the Panama Papers are one more indictment of a failed system that I know only too well. It’s very possible these latest revelations are the proverbial straw that breaks the camel’s back and encourages us to understand that we have a responsibility to ourselves and future generations to reverse this terribly destructive course.
Can it be reversed? Look at Vermont. In a state with under 0.2% of U.S. population, a small group of activists and bloggers successfully pressured some of the biggest food producers in the country — Kellogg, General Mills, Campbell Soup, Mars, and ConAgri — to change their policies and commit to national GMO labeling. David can defeat Goliath.
Many will want to focus on the “arch enemies” exposed by the Panama Papers, like Putin, and on overpaid celebrities and athletes. Let us not be distracted. Let us instead focus on the super rich — those who finance the political campaigns that support their interests, promise lucrative consulting jobs when politicians lose or leave office, and hide their fortunes in tax havens like Panama.
The Panama Papers are a warning: we can’t turn a blind eye on legalized crimes. Let the people of Vermont encourage all of us to take action.
The Panama Papers will likely become a dividing point in world history.
We can divide modern world history into pre and post 911 periods. The previous dividing point in our history was the assassination of President Kennedy and the resulting Vietnam War.
I believe one of the reasons JFK was assassinated was so we could go into the Vietnam war and lose it. Our Secret Government wanted to addict millions of white people to drugs. Previously, Her Majesty’s Jewish Government fought two Opium Wars against China so Jewish Bankers could replace the profits they had lost when their African slave trade was ended by white male voters.
Of course Kennedy was also killed because he opposed Israel’s acquisition of nuclear weapons. He was assassinated on the 53rd anniversary of the conclave that created the Federal Reserve Bank. That was a message to the rest of us that the Bankers run America and we do not. A similar message was given on the first anniversary of Martin Luther King Jr’s anti-war speech at Riverside Church in New York City. I believe King was killed to tell us that we cannot successfully say No to war. If the Bankers want us to die in a war for them or for Israel, then we must sacrifice our children to our rulers. The decision is theirs and not ours. At least, that is what they believe to be true.
You didn’t really believe you lived in a democracy did you?
Journalists have been decoding 11.5 million documents leaked from Panamanian law firm Mossack Fonseca. The 2.6 terabytes of data show tens of billions of dollars worth of transactions dating back 40 years. 200,000 firms and 14,000 individuals are involved.
Secretary of State Hillary Clinton lobbied successfully for the Panama-United States Trade Promotion Agreement. She paved the way for major banks and corporations, most notably Deutsche Bank, to skirt national laws and regulations. After she resigned as Secretary of State, Deutsche Bank paid her $485,000 for a speech.
Bernie Sanders won 7 of the last 7 caucuses and primaries but still trails Hillary in delegates for the nomination. That is fair because she took money from Goldman Sachs, J P Morgan and Deutsche Bank which she gave to Democratic officials in the various state party organizations to buy delegates. Who cares about voters when you have campaign cash from known criminals?
I feel that I should disabuse you of the notion that Deutsche Bank is a German run institution. I have written annotated Bilderberg members lists for their past several meetings. The last two Deutsche Bank CEOs prior to the current predicament were Jewish. One from Switzerland and the other Israel. It is the duty of German taxpayers to bail out Deutsche Bank as it is the duty of French and British taxpayers to bail out the Rothschilds. So what if the Rothschilds have been investigated for stealing pensioners’ retirement funds? Are those old people so greedy that they expected to eat more than one meal a week in their old age?
Obama and his Jewish Treasury Secretary Jack Lew have decided to Double Down on tax cheating for billionaires, Drug Lords and other criminals. They have come up with a new rule that makes it even more difficult for bank regulators to determine who actually owns all those shell corporations that are hiding tens of trillions of dollars they stole from us. Currently, lawyers do not have to reveal who actually is the CEO or even who sits on the board of directors on these shady corporations. Lawyers use nominees to stand in for the real culprits. And this does not just happen in Panama. Obama and Lew under their new Treasury rule would raise the amount of stock that has to be owned by one party before his lawyers had to reveal his name. Of course even I can think of work arounds. Suppose I own 4 holding companies that are all offshore. I can put my stock under their names so I am never cited as an owner and pay zero taxes.
Let’s be honest. I read recently of a US program to win the hearts and minds of the people of Afghanistan. They went to Italy and bought 9 very nice looking goats. The flew them first class from Italy to Afghanistan. The total cost of this program to the taxpayers was $6 million. Now if you were a multi-billionaire, would you be willing to pay $6 million for 9 goats to make one Afghan farmer happy? That kind of generosity should be limited to the middle class taxpayer.
Zero Hedge had an article recently about a law firm in Reno Nevada that is hiding money for the Rothschilds and their clients. Other US states like Delaware and Wyoming are doing the same so this Panama caper is not just overseas but also even inside the US.
Bernie Sanders is not the only one being robbed of delegates. When Trump voters went into voting booths in Texas and Wisconsin, many were not allowed to vote for him. Their votes went to Cruz. Both Sanders and Trump are being robbed of delegates at state conventions. Colorado decided to cancel all voting so Trump would not get even one delegate. This is In Your Face corruption. These politicians are willing to destroy their party’s chances of winning an election just to defend the continuation of bribery in Washington DC.
The Resistance Movement must now Double Down because the Panama Papers will give us wings. We will need to explain to the average citizen what the Uber Rich did and are doing to us as we head to the conventions. But the Panama Papers will increase the anger voters feel about the people who think they own our government.
Americans need to demand that their votes are counted. We need to demand resignations as they have done in Iceland and in Great Britain.
The next Big Event in world history will be the coming economic collapse. A Depression is a period in time when Unpayable Debts are cancelled en masse. Since we have far more Unpayable Debts to cancel than in the Great Depression, we will be in for very hard times unless there is monetary and bank reform combined with worldwide Debt Cancellation. Only the American government could organize worldwide Debt Cancellation.
The alternative is that we let the Uber Rich continue to run things. They would probably let a billion people starve to death, kill tens of millions in Race Wars and release a series of plagues to kill a few billion more of us.
We cannot accept the future they have planned for us.
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If you think the US government has nothing to do with the Drug Cartels, read this. They created the worldwide Drug Infrastructure for the cartels. The US government used their drug profits to buy a trillion dollars in American Treasury bonds dumped by foreign Central Banks over the past year.
People wonder why I support Trump. It want him to advance because he and Sanders are the focal points of American anger. I believe we need changes that not even a strong leader could accomplish. Economic collapse is coming. The only exit path I see is for a military coup to radically change things. Politicians whether Republican or Democrat will have to turn the country over to the US military and martial law as soon as the Nationwide Food riots begin. I see a military coup as Good News. Because only the military could arrest the Bankers and seize their assets to fund Debt Cancellation.
“For decades, Britain’s wealthy elite — as with other Western societies — have been allowed to shift the burden of taxation onto the vulnerable, the sick, the elderly and the vast majority working population. The systematic use of tax havens has been a vital instrument for this kleptocracy.
And Britain under Cameron’s Conservative government has emerged as the main global conduit for the elite to parasite off the wider population.”
(Where’s that pic of Cameron flirting with a pig? Now that would be appropriate)
The deluge of leaked files on tax dodging by the global elite appeared to be aimed at smearing Russian President Vladimir Putin. But it is the British authorities who have ended up being “dangerously exposed”.
When news headlines on the s0-called Panama Papers were circulated in Western mainstream media earlier this week, the main focus was on speculation that Putin was somehow implicated in scamming millions from tax avoidance.For more discerning viewers, the sensationalist speculations had the hallmark features of another wild-eyed smear-job. All hype and no substance, just as in many other previous attempts by the Western media to blacken the Russian leader’s reputation — based on nothing else but prejudice and innuendo. Recall the downing of Malaysian airliner MH17 and Putin’s “gunslinger walk” as but two such tawdry episodes.
Despite the convoluted hype, the Russian leader was not even named in the latest files leaked from the Panama-based law firm, Mossack-Fonseca. The firm specializes in setting up shell companies for rich clients in overseas jurisdictions, thus helping these clients evade tax in their home countries.
Western media outlets predictably leapt to racy implications about Putin because, among the thousands of clients named, some apparently had a personal friendship with the Russian president. The Kremlin dismissed the speculation of financial impropriety as “more fibs” that the Western media periodically indulges in in order to smear Putin.
Turns out, however, that the seeming attempt at smear has gone awry, and instead has backfired badly, with gooey egg running off the face of British Prime Minister David Cameron.
Cameron is under fire about allegations that he may have gained personally from tax avoidance schemes that his father set up while head of an investment firm. Cameron senior ran a firm called Blairmore which was a major intermediary of the Panama-based legal outfit, setting up shell companies for other British businesses. Typically, the shell companies would be registered in British-controlled overseas territories where they paid zero tax.Those territories include British Virgin Islands, the Bahamas, Cayman Islands, Guernsey and the Isle of Man. In this way, Britain’s rich elite, banks and other corporations could save billions of pounds from paying taxes to the British government.
Amazingly, perhaps, these rich men’s financial tricks are not considered illegal by the authorities. Although, most people would at least discern them to be unethical practice.
Premier David Cameron this week denied having any shares or trusts in overseas tax havens, and he claimed that his sole assets included his salary, savings and a family home. However, Cameron has been coy about answering directly the issue of whether he may have benefited from his father’s wheeling and dealing.
When Cameron’s father, Ian, died in 2010, his personal estate was reportedly valued to be the equivalent of $5 million, of which his son inherited $500,000. It was the same year that David Cameron was elected prime minister as leader of the Conservative Party.
Thus, it would seem self-evident that the British prime minister has indeed gained from the proceeds of tax avoidance through his late father’s legacy. While strictly not illegal, nevertheless such a connection has politically foul whiff about it.
This scandal is not only confined to the occupant of 10 Downing Street. Several other senior members of his own party, including former ministers, have been named in the Panama Papers as patrons of tax-dodging shell companies.
Last year, too, the British Chancellor (finance minister) George Osborne was also separately implicated in tax dodging. This stemmed from his father, Sir Peter, selling the premises of the family business in London to a property developer based in the British Virgin Islands. The developer reportedly avoided paying £2 million ($3m) in tax to the British exchequer.What is amusing in all this is that yet another lame bid to slander the Russian president has ended up boomeranging on the heads of Western governments, and Britain in particular.
Iceland’s prime minister Sigmundur David Gunnlaugsson has been forced out of office by widespread public anger over his involvement in alleged financial misconduct. Some 70 other world leaders and high public officials have also been singled out in the Panama Papers as having holdings in offshore firms.
With over 11 million files having been leaked, the financial dirt is bound to keep on mounting for weeks to come.
The heat is certainly growing under the feet of Britain’s David Cameron and others members of his Tory government.
Of course, why this has rebounded particularly badly for Britain is because, despite Cameron’s squeaky-clean image, London is the major international conduit for illicit money. Out of the Panama Paper’s thousands of named clients, most of them are either based in London or Britain’s former colony Hong Kong.
London serves as the sluice gate for the globe’s tax dodgers and criminal money-launderers alike. Laughably, Cameron is to host a summit next month purportedly aimed at cracking down on offshore tax havens and dodgy money. His chancellor, George Osborne, has previously lambasted such shady practices as “morally repugnant”.
Such hypocritical bombast belies the fact that the City of London, which is the lynchpin of the British economy, is awash with dirty money and schemes by the rich to shirk their tax obligations to society.
While Cameron’s government turns a blind eye to tax dodging by the wealthy at the very same time it is clawing billions from the less well off through cutbacks in public spending, claiming that it must “balance the books”.Britain’s population is languishing under government-enforced economic austerity and record levels of poverty, and its public infrastructure and basic services are crumbling from neglect.
For decades, Britain’s wealthy elite — as with other Western societies — have been allowed to shift the burden of taxation onto the vulnerable, the sick, the elderly and the vast majority working population. The systematic use of tax havens has been a vital instrument for this kleptocracy.
And Britain under Cameron’s Conservative government has emerged as the main global conduit for the elite to parasite off the wider population.
With sardonic irony, Western media efforts at smearing Vladimir Putin in an alleged tax-dodging scam have ended up indicting one of the main culprits in this global laundering racket. Cameron’s Britain.
The views expressed in this article are solely those of the author and do notnecessarily reflect the official position of Sputnik.
Besieged Prime Minister David Cameron is under fire yet again after a 2013 letter was unearthed showing he shielded offshore trusts from an EU crackdown.
The letter has come to light as the Tory PM faces mounting pressure over his late father Ian Cameron’s offshore trust Blairmore Holdings, details of which were exposed in the Panama Papers leak.
In the 2013 letter to then-European Council President Herman Van Rompuy, Cameron argued that trusts should not be subject to the same transparency rules as companies.
The EU had planned to publish a centralized register of offshore trusts’ main owners as part of a broad crackdown on secretive financial practices.
Cameron’s letter, unearthed by the Financial Times on Thursday, said an important distinction must be drawn between different financial entities.
“It is clearly important we recognize the important differences between companies and trusts … This means that the solution for addressing the potential misuse of companies – such as central public registries – may well not be appropriate generally,” Cameron wrote.
The PM’s alleged links to the tax dodging practices of Blairmore Holdings are particularly damaging given he has strived to appear a champion of fair taxation domestically.
In September 2015 he called for more transparency and urged territories like the Cayman Islands to create a public register of financial interests.
He told the Jamaican parliament at the time he wanted to “break the business model of stealing money and hiding it in places where it can’t be seen – transparency is the answer.”
He claimed he had “taken the lead” in making sure “terrorists, tax-avoiders, money launderers and criminals have nowhere to hide their ill-gotten gains.”
“Let me emphasize that this post isn’t about the veracity and merit of #Panamapapers leaks. In my view, we need as much as possible disclosure of truth on all levels. But it has to be unbiased and honest truth. While the actual leak may be absolutely beyond reproach, the problem is the attempt to turn it into anti-Putin, anti-Russia, anti-BRICS circus.
What US, UK and other MSM do is this: they take the truth and then bait and switch it with a lie convenient to them, parading it as truth.
We are in the period of the Great Earth Shift. Therefore, relentless attacks on Putin, Russia and anyone else attempting to shift to the new global set up, new global reality, will continue and intensify; such countries and leaders will continue being mercilessly attacked on all levels.
What did you expect? They are losing and they know time is short. They will use any means necessary. Obviously, they won’t dare attack Russia directly. They will use proxies and clandestine weapons. What is the West good at? MSM propaganda – definitely. They will continue using this weapon for as long as they can.”
New revelations from Wikileaks and others sources confirm what I said on April 4.
Wikileaks: ‘Panama Papers’ funded by US against Russian president:
Ford Foundation Carnegie Endowment Rockefeller Family Fund W K Kellogg Foundation Open Society Foundation (Soros)”
Are we not sick and tired of this grand worldwide corruption that enslaves us with their pathetic mind control games? We need a real free press out of reach and control from these parasites.
Whoever leaked the Mossack Fonseca papers appears motivated by a genuine desire to expose the system that enables the ultra wealthy to hide their massive stashes, often corruptly obtained and all involved in tax avoidance. These Panamanian lawyers hide the wealth of a significant proportion of the 1%, and the massive leak of their documents ought to be a wonderful thing.Unfortunately the leaker has made the dreadful mistake of turning to the western corporate media to publicise the results. In consequence the first major story, published today by the Guardian, is all about Vladimir Putin and a cellist on the fiddle. As it happens I believe the story and have no doubt Putin is bent.But why focus on Russia? Russian wealth is only a tiny minority of the money hidden away with the aid of Mossack Fonseca. In fact, it soon becomes obvious that the selective reporting is going to stink.
The Suddeutsche Zeitung, which received the leak, gives a detailed explanation of the methodology the corporate media used to search the files. The main search they have done is for names associated with breaking UN sanctions regimes. The Guardian reports this too and helpfully lists those countries as Zimbabwe, North Korea, Russia and Syria. The filtering of this Mossack Fonseca information by the corporate media follows a direct western governmental agenda. There is no mention at all of use of Mossack Fonseca by massive western corporations or western billionaires – the main customers. And the Guardian is quick to reassure that “much of the leaked material will remain private.”
What do you expect? The leak is being managed by the grandly but laughably named “International Consortium of Investigative Journalists”, which is funded and organised entirely by the USA’s Center for Public Integrity. Their funders include
Ford Foundation Carnegie Endowment Rockefeller Family Fund W K Kellogg Foundation Open Society Foundation (Soros)
among many others. Do not expect a genuine expose of western capitalism. The dirty secrets of western corporations will remain unpublished.
Expect hits at Russia, Iran and Syria and some tiny “balancing” western country like Iceland. A superannuated UK peer or two will be sacrificed – someone already with dementia.
The corporate media – the Guardian and BBC in the UK – have exclusive access to the database which you and I cannot see. They are protecting themselves from even seeing western corporations’ sensitive information by only looking at those documents which are brought up by specific searches such as UN sanctions busters. Never forget the Guardian smashed its copies of the Snowden files on the instruction of MI6.
What if they did Mossack Fonseca database searches on the owners of all the corporate media and their companies, and all the editors and senior corporate media journalists? What if they did Mossack Fonseca searches on all the most senior people at the BBC? What if they did Mossack Fonseca searches on every donor to the Center for Public Integrity and their companies?
What if they did Mossack Fonseca searches on every listed company in the western stock exchanges, and on every western millionaire they could trace?
That would be much more interesting. I know Russia and China are corrupt, you don’t have to tell me that. What if you look at things that we might, here in the west, be able to rise up and do something about?
And what if you corporate lapdogs let the people see the actual data?
UPDATE
Hundreds of thousands of people have read this post in the 11 hours since it was published – despite it being overnight here in the UK. There are 235,918 “impressions” on twitter (as twitter calls them) and over 3,700 people have “shared” so far on Facebook, bringing scores of new readers each.
I would remind you that this blog is produced free for the public good and you are welcome to republish or re-use this article or any other material freely anywhere without requesting further permission.
These papers should have been given to Wikileaks in the first place anyway. Do you trust the governments involved, the powers that be, or the presstitutes reporting on this? I don’t. This is a major and amateurish intelligence operation being played on us naive and gullible steeple.
(ANTIMEDIA)United Kingdom — A spokesperson for WikiLeaks has called for the Panama Papers to be published in full in order to ensure the public is fully informed of the revelations. In a snippet of an interview set to air on RT’s “Going Underground” Wednesday, the Icelandic investigative journalist-turned-Wikileaks representative criticized the media’s current coverage. “When they are saying this is responsible journalism, I totally disagree with the overall tone of that,” he said.
Kristin Hrafnsson, who became a spokesperson for WikiLeaks after Julian Assange became engulfed in legal battles, also told RT’S Afshin Rattansi:
“I do have a sympathy towards stalled releases, we certainly did that in WikiLeaks in 2010 and 2011 with the Diplomatic Cables and we were actually highly criticised for holding back the documents. But in the end the entire cache was put online in a searchable database.”
Saying this is what he wants to see with the Panama Papers, he said the leaked data should be available to the general public — not just the group of journalists directly working on reporting on the revelations. He added that while he understands there may be a slight delay in the release of the information — in order to maximise impact — ultimately, the public should have full access to it. “That’s the new way, it’s the way that WikiLeaks operates and it is highly appreciated by the general public.” Hrafnsson insisted.
In an attempt to combat what appears to be a mainstream news monopoly on the biggest data leak in history, by Tuesday evening WikiLeaks had made 149 of the of 11.5 million Panama Papers available to the public by sharing them via DocumentCloud.
In a Twitter poll, WikiLeaks asked people if the Panama Papers should be made public and searchable. Of the 85,000 who responded, 95% said they should be.
The Panama Papers are out and the Panama Papers propaganda is out right along with it. So why does this new mega-leak seemingly only expose those in the State Department crosshairs or expendable others and not a single prominent American politician or businessman? And what does this have to do with the OECD’s plan for a global taxation grid? Find out more in today’s Thought For The Day with James Corbett.
By the way, isn’t it amazing that no Americans were mentioned in these papers? Bravo to all Americans as you come out of this smelling like roses. Insert Happy Face emoticon here.
Mossack Fonseca, the Panamanian company at the heart of the leaked documents scandal, has set up over 1,000 businesses inside the US since 2001, highlighting the emergence of the US as an international tax haven.
Dubbed the “Panama Papers,” the leaked papers have pointed to several former and current government leaders across the world. Iceland’s Prime Minister Sigmundur Gunnlaugsson was pressured to resign over his role in the scandal, while the offshore fund run by the late father of UK Prime Minister David Cameron has been named as a client as well.
However, Mossack Fonseca has also operated in the United States, registering almost 1,100 businesses over the past 15 years. Its Nevada operation, which USA Today describes as “a one-employee company based out of a low-slung tile-roofed office building 20 miles from the Las Vegas strip,” is responsible for 1,026 registrations. Another business registration operation was set up in Wyoming the same year.
The Wyoming office is actually operated from Las Vegas, according to a testimony given in a Nevada court case in 2014 by Mossack Fonseca’s Patricia Amunategui, USA Today reported.
Among the corporations created by the Nevada subsidiary of Mossack Fonseca are 123 firms named in the corruption probe involving the current and former presidents of Argentina, and another entity implicated in the corruption scandal within FIFA, the international soccer association, according to USA Today.
On Monday, as “Panama Papers” revelations captivated the headlines, US President Barack Obama announced new rules aimed to prevent US corporations from using legal tricks such as “inversion” to avoid taxes.
The move is yet another step in the ongoing US crackdown on offshore tax havens, launched with the 2010 Foreign Account Tax Compliance Act (FATCA). The law requires financial firms to disclose accounts held by US citizens and report them to the Internal Revenue Service (IRS) or face penalties.
Yet when the Organization for Economic Cooperation and Development (OECD) sought to apply FATCA standards internationally, the US was among the handful of countries that refused to sign on – along with Bahrain, and the Pacific island nations of Nauru and Vanuatu, according to a Bloomberg report from January.
In fact, as Washington has blasted foreign tax havens, many transnational financial organizations have been setting up shop in the US, using the low taxes and confidentiality provisions in state laws in places like Nevada, Wyoming, South Dakota and Delaware.
Andrew Penney, managing director at the Rothschild Wealth Management & Trust, even went so far as to describe the US as “effectively the biggest tax haven in the world,” according to Bloomberg – though he ultimately decided to omit that description from a presentation given to clients in San Francisco, California last September.
Mossack Fonseca’s marketing materials have pointed out that Wyoming has no state taxes, low corporate taxes, and “robust protections for the assets of management and investors.” Likewise, limited liability companies “may be formed with a single member which can help avoid US federal income tax reporting requirements,” while ownership is “confidential and under state law may only be obtained by court order.”
The “Panama Papers” were initially leaked to the German newspaper Süddeutsche Zeitung (SZ) a year ago by an unknown hacker. The paper then forwarded them to the International Consortium of Investigative Journalists (ICIJ).
The ICIJ is “funded and organized entirely by the USA’s Center for Public Integrity,” former UK diplomat Craig Murray pointed out, noting that the CPI is backed by the US government’s international development agency (USAID), and foundations such as George Soros’s Open Society Fund, the Carnegie Endowment and the Rockefeller Family Fund.
While the ICIJ has denied targeting Russia, much of the coverage of the “Panama Papers” in the US and the UK has focused on Russian President Vladimir Putin, whose name does not appear anywhere in the documents.
“Our citizens should know the urgent facts…but they don’t because our media serves imperial, not popular interests. They lie, deceive, connive and suppress what everyone needs to know, substituting managed news misinformation and rubbish for hard truths…”—Oliver Stone
Tales from the Conspiratum 