Posts Tagged ‘Panama Papers’

A new look at the secret hoards of the ultra-rich

November 6, 2017

Remember the Panama Papers?  That was a massive leak of documents from a Panama-based law firm called Mossack Fonsecka, revealing how the world’s richest and most powerful people hid billions of collars in investments from tax collectors and the public.

Now there is another big leak—called the Paradise Papers—from century-old Bermuda-based law firm called Appleby and its Singapore affiliate.

Like the Panama Papers, the anonymous leaker sent documents to a German newspaper called Süeddeutsche Zeitung, which teamed up with the International Consortium of Investigative Journalists, the Organized Crime and Corruption Reporting Project and some of the world’s other top newspapers, and spent a year going through 13.4 million files.

Some of the highlights of what was found:

  • Queen Elizabeth II’s investment manager, the Duchy of Lancaster, invested millions of pounds in a Cayman Islands fund, whose investments included Bright House, a rent-to-own UK furniture company that charged interest rates of up to 99%
  • Secretary of Commerce Wilbur Ross, who divested himself of ownership in 80 companies to avoid conflicts of interest, kept interests in nine offshore companies.  Four of them invested in a shipping company called Navigator Holdings, which did business with a Russian energy and chemical company called Sibur, whose key owners include Vladimir Putin’s son-in-law and a Russian oligarch under U.S. sanctions.
  • Stephen Bronfman, a key fund-raiser for Canadian Prime Minister Justin Trudeau, teamed up with key Liberal Party figures to evade Canadian, U.S. and Isreali taxes.

Major companies shown to do business through tax havens are Apple, Nike, Uber Barclay’s Bank, Goldman Sachs, BNP Paribas and Glencore, the world’s largest commodity trader.

None of this is, in itself, illegal.  But hidden offshore investments provide a way for criminals to launder money and for individuals, companies and governments to evade economic sanctions by the U.S. and other governments.

As several people have remarked, the worst scandals are not how the law is broken, but what can be done that is perfectly legal.

For what it’s worth, I don’t think any of this is evidence that the Russian government or Russian interests manipulated the 2016 elections in favor of Donald Trump,

(more…)

Clinton’s team has lobbyists for Russian bank

April 8, 2016

Hillary Clinton’s campaign team includes John and Tony Podesta, lobbyists for Sberbank, Russia’s largest financial institution.

Hillary Clinton and John Podesta

Hillary Clinton and John Podesta

John Podesta, the chair of the Clinton campaign, and his brother Tony, a bundler of Clinton campaign contributions, are the founders and heads of the Podesta Group, one of Washington D.C.’s top lobbying firms.  They registered the firm at a lobbyist for Sberbank, as required by law, at the end of March.

This was reported in an article in the Observer, an on-line news service.  A Sberbank affiliate, Troika Dialog Group, is mentioned in the Panama Papers leak.

Sberbank isn’t the Podestas’ only foreign client.  During the past 10 years, the brothers have lobbied on behalf of Saudi Arabia, Iraq, Myanmar (Burma), Qatar, Somalia, Azerbaijan, Egypt, Kenya, Ukraine and Vietnam.

Of course the Podesta Group has plenty of domestic clients as well, and it isn’t unusual for a K-Street lobbying firm to have foreign clients.  Hiring lobbyists is what both citizens and foreigners think they have to do to be heard in Washington.

Vladimir Putin and the Panama Papers

April 8, 2016

share_of_financial_wealth_held_offshore_chartbuilder

One of the Russian Federation’s big problems is that its millionaires and billionaires are sending their money abroad, adding to Russia’s serious economic problems.

Sergey Roldugin, friend of Vladimir Putin

Sergey Roldugin

The fact that the Panama Papers reveal that one of Vladimir Putin’s oldest friends, a cellist named Sergei Roldugin, is the nominal head of offshore companies controlling billions of dollars in assets, is a big deal – especially since Roldugin does not live the life of a millionaire or billionaire.

Putin said back in 2011 that rich Russians who keep their money offshore are unpatriotic.

The Panama Papers are a trove of documents about shell companies registered in tax havens in the files of a Panamanian law firm called Mossack Fonseca.  The documents were leaked about a year ago by an unknown person to a German newspaper, Seuddeutsche Zeitung, which shared them with other publications around the world and with the International Consortium of Investigative Journalists.  They spent a year picking through the material, and published their findings starting last Sunday.

A tax haven is a jurisdiction with low or zero taxes which provides anonymity and protects financial secrecy.  Drew Schwartz of VICE news explained how a tax haven can be used to hide a money trail.

(more…)

U.S. has free trade pact with tax-haven Panama

April 5, 2016

Revised and updated.

ofshorefirmsarticle-doc-9c974-1Hf8o1PFQk6fd5ff048dd08d6c36-547_634x334.

In the light of the Panama Papers leaks of a Panama law firm’s files on tax havens, it is interesting to note that the United States signed a free trade agreement with Panama in 2012.

According to Senator Bernie Sanders, the agreement restricted the right of the United States to crack down on abusive tax havens.

Sanders voted against the agreement.  Senator Hillary Clinton voted for it.  Ted Cruz wasn’t yet a member of the Senate at the time.

Tax havens were a serious concern even before the trade agreement was signed, and the concern went far beyond Panama.  Still, the agreement with Panama didn’t help.

As the chart above shows, the Panamanian law firm Mossack Fonseca registered most of its shell companies in countries other than Panama.  Keep in mind that Mossack Fonseca is not the only law firm that registers shell companies in tax havens.  It is not even the largest such firm in Panama.

Here is what Sanders said about the free trade agreement.

Panama’s entire annual economic output is only $26.7 billion a year, or about two-tenths of one percent of the U.S. economy.  No-one can legitimately make the claim that approving this free trade agreement will significantly increase American jobs.

Then, why would we be considering a stand-alone free trade agreement with this country?

Well, it turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in off-shore tax havens.   And, the Panama Free Trade Agreement would make this bad situation much worse.

Each and every year, the wealthy and large corporations evade $100 billion in U.S. taxes through abusive and illegal offshore tax havens in Panama and other countries.

According to Citizens for Tax Justice, “A tax haven . . . has one of three characteristics: It has no income tax or a very low-rate income tax; it has bank secrecy laws; and it has a history of non-cooperation with other countries on exchanging information about tax matters.  Panama has all three of those. … They’re probably the worst.”

Mr. President, the trade agreement with Panama would effectively bar the U.S. from cracking down on illegal and abusive offshore tax havens in Panama.  In fact, combating tax haven abuse in Panama would be a violation of this free trade agreement, exposing the U.S. to fines from international authorities.

In 2008, the Government Accountability Office said that 17 of the 100 largest American companies were operating a total of 42 subsidiaries in Panama.  This free trade agreement would make it easier for the wealthy and large corporations to avoid paying U.S. taxes and it must be defeated.  At a time when we have a record-breaking $14.7 trillion national debt and an unsustainable federal deficit, the last thing that we should be doing is making it easier for the wealthiest people and most profitable corporations in this country to avoid paying their fair share in taxes by setting-up offshore tax havens in Panama.

(more…)

The selective revelations of the Panama Papers

April 4, 2016

Update 4/10/2016.  In fact some Americans are named in the Panama Papers documents.  And rich Americans and American corporations have ways to hide their wealth without going abroad.  There’s more in the links below.

Trillions of dollars—an enormous fraction of the world’s wealth—is concealed in secret accounts outside the jurisdiction of the nations of which the owners are citizensIt is invisible and inaccessible to criminal investigators, tax collectors, bill collectors and divorcing spouses.

Now the world has a glimpse of some of those secret accounts, thanks to a leak of documents from a Panamanian law firm, Mossack Fonseca, to a German daily newspaper, Sueddeutsche Zeitung.  Mossack Fonseca specializes in registering corporations in tax havens.  The leaked documents had information on more than 214,000 companies and 140 world leaders.

The staff of Sueddeutsche Zeitung and the International Consortium of Investigative Journalists spent a year sifting through the leaked documents, and shared their information with other news organizations.

blog_panama_papers_countries

Interestingly few if any of the leaked documents implicated Americans or American corporations.  Maybe Americans don’t happen to use Mossack Fonseca to register their companies.  Or maybe there is more information yet to be revealed.  Or maybe somebody had a hidden agenda.

(more…)