The Guardian reports: The network of offshore companies linked to the man who financed Britain’s campaign to quit the European Union has been revealed in previously unpublished documents from the Panama Papers.
The British Virgin Islands and Gibraltar emerge as key locations in the financial affairs of Arron Banks, who spent £7.5m funding Nigel Farage’s Leave.EU campaign group ahead of the Brexit referendum on 23 June. New details of Banks’s financial dealings are contained in the massive leaked database of the world’s fourth biggest offshore law firm, Mossack Fonseca, which has revealed the myriad ways in which the rich can exploit secretive offshore tax regimes.
Banks is a close friend of the Ukip leader, revealing last month that the two men went “skinny-dipping” in Bournemouth to celebrate Farage’s short-lived retirement from heading the party. Banks has also been at Farage’s side in America, where he has been supporting Donald Trump’s presidential campaign. [Continue reading…]
Alan Rusbridger writes: In a seminar room in Oxford, one of the reporters who worked on the Panama Papers is describing the main conclusion he drew from his months of delving into millions of leaked documents about tax evasion. “Basically, we’re the dupes in this story,” he says. “Previously, we thought that the offshore world was a shadowy, but minor, part of our economic system. What we learned from the Panama Papers is that it is the economic system.”
Luke Harding, a former Moscow correspondent for The Guardian, was in Oxford to talk about his work as one of four hundred–odd journalists around the world who had access to the 2.6 terabytes of information about tax havens — the so-called Panama Papers — that were revealed to the world in simultaneous publication in eighty countries this spring. “The economic system is, basically, that the rich and the powerful exited long ago from the messy business of paying tax,” Harding told an audience of academics and research students. “They don’t pay tax anymore, and they haven’t paid tax for quite a long time. We pay tax, but they don’t pay tax. The burden of taxation has moved inexorably away from multinational companies and rich people to ordinary people.”
The extraordinary material in the documents drew the curtain back on a world of secretive tax planning, just as WikiLeaks had revealed the backroom chatter of diplomats and Edward Snowden had shown how intelligence agencies could routinely scoop up vast server farms of data on entire populations. The Panama Papers — a name chosen for its echoes of Daniel Ellsberg’s 1971 leak of the Pentagon Papers — unveiled how a great many rich individuals used one Panamanian law firm, Mossack Fonseca (“Mossfon” for short), to shield their money from prying eyes, whether it was tax authorities, law enforcement agencies, or vengeful former spouses. [Continue reading…]
RFE/RL reports: When liberal rights activist Ella Pamfilova was named to head Russia’s election commission in March, she promised to clean house and oversee transparent, democratic elections.
“We will change a lot, and radically, in the way the Central Election Commission operates. A lot and radically — this is something I can promise you,” she said at the time.
However, a statistical analysis of the official preliminary results of the country’s September 18 State Duma elections points to a familiar story: massive fraud in favor of the ruling United Russia party comparable to what independent analysts found in 2007 and 2011.
“The results of the current Duma elections were falsified on the same level as the Duma and presidential elections of 2011, 2008, and 2007, the most falsified elections in post-Soviet history, as far as we can tell,” physicist and data analyst Sergei Shpilkin told RFE/RL’s Russian Service. “By my estimate, the scope of the falsification in favor of United Russia in these elections amounted to approximately 12 million votes.” [Continue reading…]
For those who might find a statistical analysis unpersuasive, perhaps the most compelling evidence of fraud can be seen in numerous CCTV videos that have been posted on YouTube showing election officials stuffing ballot boxes. And for those who are skeptical about the provenance of these videos, Russian state-funded RT has posted a compilation:
Might this be bad for the image of the beneficiary of the fraud, Vladimir Putin? Evidently not, since the most common response from RT’s devoted followers, as seen in the comments below this video, is to celebrate the channel’s transparency! Meanwhile, as for prominent news reporting on election fraud, thus far, not surprisingly, RT has none.
Once again we see at play the perverse skepticism of this era defined by selective attention, outrage, and doubt: a willingness to believe some things in the absence of actual evidence while disbelieving other things that can easily be proved. Among those afflicted with this disease, reason and facts have no traction.
The Associated Press reports: The sugar industry began funding research that cast doubt on sugar’s role in heart disease — in part by pointing the finger at fat — as early as the 1960s, according to an analysis of newly uncovered documents.
The analysis published Monday in the journal JAMA Internal Medicine is based on correspondence between a sugar trade group and researchers at Harvard University, and is the latest example showing how food and beverage makers attempt to shape public understanding of nutrition.
In 1964, the group now known as the Sugar Assn. internally discussed a campaign to address “negative attitudes toward sugar” after studies began emerging linking sugar with heart disease, according to documents dug up from public archives. The following year the group approved “Project 226,” which entailed paying Harvard researchers today’s equivalent of $48,900 for an article reviewing the scientific literature, supplying materials they wanted reviewed, and receiving drafts of the article.
The resulting article published in 1967 concluded there was “no doubt” that reducing cholesterol and saturated fat was the only dietary intervention needed to prevent heart disease. The researchers overstated the consistency of the literature on fat and cholesterol while downplaying studies on sugar, according to the analysis. [Continue reading…]
Ken Silverstein writes: It is hard to overstate the devastating role that corruption has played in the failure of Iraq and the rise of ISIS. According to a report last March by the Iraqi parliament’s auditing committee, the country’s defense ministry has spent $150 billion on weapons during the past decade — but acquired only $20 billion worth of arms. Much of the equipment it did obtain was useless, 1970s-era matériel from former Soviet bloc states that was invoiced at up to four times its actual value. Late last year, well-placed sources tell me, the Pentagon delivered a shipment of new weapons to the Iraqi government, including .50-caliber sniper rifles, which were supposed to be sent to Sunni fighters in Anbar Province. Instead, corrupt officials in the Iraqi ministries of interior and defense sold the arms to ISIS, which is using them to kill Kurdish peshmerga fighters.
“The Kurds are still using equipment we gave them in 2003,” says a former CIA official who spends a good deal of time in Iraq. “They’re forced to buy ammo and weapons that the U.S. government gives to Baghdad from corrupt Iraqi government officials.”
Weapons aren’t the only target for corruption. When it comes to the vast sums of money that have flowed into Iraq for reconstruction and economic development, officials at every level of government have been more focused on lining their own pockets than rebuilding their ruined country. [Continue reading…]
CNN reports: FBI and Justice Department prosecutors are conducting an investigation into possible US ties to alleged corruption of the former pro-Russian president of Ukraine, including the work of Paul Manafort’s firm, according to multiple US law enforcement officials.
The investigation is broad and is looking into whether US companies and the financial system were used to aid alleged corruption by the party of former president Viktor Yanukovych.
Manafort, who resigned as chairman of Donald Trump’s campaign Friday, has not been the focus of the probe, according to the law enforcement officials. The investigation is ongoing and prosecutors haven’t ruled anything out, the officials said.
The probe is also examining the work of other firms linked to the former Ukrainian government, including that of the Podesta Group, the lobbying and public relations company run by Tony Podesta, brother of Clinton campaign chairman John Podesta. [Continue reading…]
The New York Times reports: On a leafy side street off Independence Square in Kiev is an office used for years by Donald J. Trump’s campaign chairman, Paul Manafort, when he consulted for Ukraine’s ruling political party. His furniture and personal items were still there as recently as May.
And Mr. Manafort’s presence remains elsewhere here in the capital, where government investigators examining secret records have found his name, as well as companies he sought business with, as they try to untangle a corrupt network they say was used to loot Ukrainian assets and influence elections during the administration of Mr. Manafort’s main client, former President Viktor F. Yanukovych.
Handwritten ledgers show $12.7 million in undisclosed cash payments designated for Mr. Manafort from Mr. Yanukovych’s pro-Russian political party from 2007 to 2012, according to Ukraine’s newly formed National Anti-Corruption Bureau. Investigators assert that the disbursements were part of an illegal off-the-books system whose recipients also included election officials.
In addition, criminal prosecutors are investigating a group of offshore shell companies that helped members of Mr. Yanukovych’s inner circle finance their lavish lifestyles, including a palatial presidential residence with a private zoo, golf course and tennis court. Among the hundreds of murky transactions these companies engaged in was an $18 million deal to sell Ukrainian cable television assets to a partnership put together by Mr. Manafort and a Russian oligarch, Oleg Deripaska, a close ally of President Vladimir V. Putin. [Continue reading…]
Adam DuBard writes: If one could find a textbook example of the Washington GOP Establishment, Manafort would certainly fit the bill. In 1976 he was a key delegate manager with Gerald Ford’s campaign, and he also produced the Republican Conventions of 1984 with Reagan and 1996 with Bob Dole. More importantly, he has gained a reputation with his lobbying firms Black, Manafort, Stone, & Kelly and later Davis, Manafort, & Freedman of representing and rehabilitating the image of anyone willing to pay the right amount, no matter how brutal or controversial their past. While he was originally hired for the primary purpose of reining in delegates and assuring their allegiances, he has since ruthlessly risen to the top of Trump’s campaign, a development that should come as no surprise once one becomes familiar with Manafort’s intriguing and controversial past.
After his political education with the campaigns of Ford and Reagan, Manafort jumped into lobbying in 1985 with the first of two lobbying firms with his name on it, Black, Manafort, Stone, & Kelly. The Stone in that name is no other than Roger Stone, the still prominent Republican strategist known for underhanded tactics and longtime friend of Manafort and Trump. Stone would later say of the now defunct firm, “Black, Manafort, Stone, and Kelly, lined up most of the dictators of the world we could find. … Dictators are in the eye of the beholder.” The amount of work Paul Manafort has done on the behalf of international dictators is long and varied, especially for someone who’s, you know, managing the campaign of a candidate for “the leader of the free world.”
In 1985 Manafort’s firm agreed to work for Philippine dictator Ferdinand Marcos to the tune of $1 million in return for shaping up his image in front of the US media and government ahead of the upcoming Philippine election. Marcos ruled as the president of the Philippines for twenty one years and gained a reputation as a brutal and corrupt leader, with martial law being the law of the land from 1972 until 1981. According to Filipino news outlets, Marcos’ reign of martial law would result in 3,257 extra-judicial killings, 35,000 torture victims, and 70,000 incarcerations. In addition to his totalitarian mean streak, Marcos and his wife Imelda made a habit of amassing money in various illegal methods. The Philippine supreme court has estimated that the Marcos family accumulated around $10 billion while in office, despite the fact that his official yearly salary never exceeded $13,500. In the end Marcos proved too corrupt even for President Reagan to support, as he was pressured to step down amid election-fixing allegations just months after hiring Black, Manafort, Stone, and Kelly. [Continue reading…]
As PM orders removal of British-made fake bomb detectors, Iraqis say ‘corruption is the greatest threat we face’
The Guardian reports: For the past nine years, Iraq’s security forces have tried to stop car bombs with a British-made bomb detector wand that was long ago proven to be fake. A day after a car bomb killed at least 149 people in central Baghdad, the country’s prime minister, Haidar al-Abadi, has demanded their withdrawal.
After the single deadliest attack in Iraq this year, Abadi also ordered a renewed corruption investigation into the sale of the devices from 2007-10, which cost Iraq more than £53m and netted the Somerset businessman James McCormick enormous profits, as well as a 10-year jail sentence for fraud.
The cost to the Iraqi public will remain incalculable: the vast majority of the bombs that have killed and maimed at least 4,000 people since 2007 have been driven straight past police or soldiers using the devices at checkpoints.
Their withdrawal follows years of insistence by interior ministry officials, who bought the wands at vastly inflated fees, that they were effective in sensing odours from explosive components.
Near the scene of Sunday’s bomb attack in the suburb of Karrada, which was claimed by Islamic State, Iraqis reacted with derision at the ban, which follows years of complaints from citizens and warnings by both the British government and US military that the wands have no scientific value.
“This should have happened a long time ago,” said Sheikh Qadhim al-Sayyed, standing near the scorched remains of a shopping district in Karrada, just south of the Tigris River. “There isn’t a person in the country who thinks they work. No one here is responsible for what they do. It should be an eye for an eye, a tooth for a tooth. Corruption is the greatest threat we face.” [Continue reading…]
On JANUARY 23, 2010, the New York Times reported: The director of a British company that supplies bomb detectors to Iraq has been arrested on fraud charges, and the export of the devices has been banned, British government officials confirmed Saturday.
Iraqi officials reacted with fury to the news, noting a series of horrific bombings in the past six months despite the widespread use of the bomb detectors at hundreds of checkpoints in the capital.
“This company not only caused grave and massive losses of funds, but it has caused grave and massive losses of the lives of innocent Iraqi civilians, by the hundreds and thousands, from attacks that we thought we were immune to because we have this device,” said Ammar Tuma, a member of the Iraqi Parliament’s Security and Defense Committee.
But the Ministry of the Interior has not withdrawn the device from duty, and police officers continue to use them. [Continue reading…]
— Reza H. Akbari (@rezahakbari) June 21, 2016
Eduardo Salcedo-Albarán and Luis Jorge Garay-Salamanca report: In the early morning hours of Friday, January 8, 2016, Mexican marines closed in on the world’s most wanted man: Joaquín Guzmán Loera, better known as El Chapo, a notorious drug trafficker with a net worth estimated near $1 billion. The climactic shootout in Sinaloa, Mexico, took place after Guzmán made a getaway into the sewer system from a house that the authorities had been watching. He was finally apprehended after he reemerged and stole a car. His capture brought to a close six months of humiliation for the Mexican government, which had struggled to explain how Guzmán could escape from a maximum-security prison by walking into the shower, under full view of a video camera, and slipping away through a tiny hole in the floor that led to a 30-foot-deep, mile-long tunnel that had taken perhaps a year to construct. It was the second time that El Chapo had broken out of prison under the noses of Mexican officials. Mexican officials are currently debating whether to hold Guzmán — really, whether they can hold him or — extradite him to the United States, where he faces indictments in multiple federal courts on drug trafficking and murder charges. His organization, the Sinaloa cartel, has smuggled vast quantities of drugs into the United States through elaborate tunnel systems near the border between the two countries.
In Mexico, the confrontation between cartels such as Sinaloa, Los Zetas, and Caballeros Templarios (Knights Templar) has cost nearly 44,000 lives during the presidency of Enrique Peña Nieto. Human rights organizations counted more than 100,000 deaths during the tenure of Nieto’s predecessor. These and other criminal networks originating in Mexico pay bribes and co-opt police chiefs, mayors, local legislators, and municipal and state police. They infiltrate state institutions, such as courts and attorney offices, especially at the local level, spreading corruption and violence across the country. Though usually defined as “Mexican drug cartels,” they don’t confine their operations to Mexico or their activities to drug trafficking. They extort, kidnap, and murder across Mexico, Guatemala, Honduras, and El Salvador. Los Zetas has perpetrated mass murders in Guatemala, while members of Sinaloa operate in Colombia and Venezuela.
As the United States’ interest in extraditing Guzmán shows, the impact of these activities is often felt beyond Latin America. In 2012, the U.S. Justice Department’s Criminal Division pointed out that at least $881 million in proceeds from drug trafficking, some of which involved Sinaloa in Mexico and the Norte del Valle cartel in Colombia, had been laundered through HSBC Bank USA, without being detected. A U.S. district court requested extradition of former Guatemalan president Alfonso Portillo in 2013, and convicted him in 2014, for laundering millions of dollars through American bank accounts with the help of Jorge Armando Llort, whom he had appointed director of a semi-state-owned bank, Banco de Crédito Hipotecario Nacional. No Guatemalan courts sentenced the bank’s director or the former president.
What few observers realize is that, while El Chapo’s capture made for a dramatic story, the criminal operations of his Sinaloa cartel will proceed almost as if nothing happened. In his notorious Rolling Stone interview with Sean Penn, El Chapo observed: “The day I don’t exist, it’s not going to decrease in any way at all. Drug trafficking does not depend on just one person.”
Sinaloa and other criminal cartels have evolved structures that no longer depend on the direction of single leaders. They have become transnational criminal networks — enormous, decentralized, and difficult to map and control. Their operations, too, have become more varied, not only in their criminal activities but in their infiltration and co-optation of legal entities, including government and law enforcement. Even in some countries with strong rule-of-law traditions, they have overcome judicial systems, reconfigured state institutions, and influenced formal democratic processes. [Continue reading…]
The New York Times reports: Over the years, William R. Ponsoldt had earned tens of millions of dollars building a string of successful companies. He had renovated apartment buildings in the New York City area. Bred Arabian horses. Run a yacht club in the Bahamas, a rock quarry in Michigan, an auto-parts company in Canada, even a multibillion-dollar hedge fund.
Now, as he neared retirement, Mr. Ponsoldt, of Jensen Beach, Fla., had a special request for Mossack Fonseca, a Panama-based law firm well placed in the world of offshore finance: How could he confidentially shift his money into overseas bank accounts and use them to buy real estate and move funds to his children?
“He is the manager of one of the richest hedge funds in the world,” a lawyer at Mossack Fonseca wrote when the firm was introduced to Mr. Ponsoldt in 2004. “Primary objective is to maintain the utmost confidentiality and ideally to open bank accounts without disclosing his name as a private person.”
In summary, the firm explained: “He needs asset protection schemes, which we are trying to sell him.”
Thus began a relationship that would last at least through 2015 as Mossack Fonseca managed eight shell companies and a foundation on the family’s behalf, moving at least $134 million through seven banks in six countries — little of which could be traced directly to Mr. Ponsoldt or his children.
These transactions and others like them for a stable of wealthy clients from the United States are outlined in extraordinary detail in the trove of internal Mossack Fonseca documents known as the Panama Papers. The materials were obtained by the German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists, and have now been shared with The New York Times. [Continue reading…]
Luay al-Khatteeb writes: Once again, the subject of illicit financial flows from kleptocratic regimes is in the international spotlight, this time in the form of the “Panama Papers.”
What is surprising is the level of shock at something that should have been obvious. For a long time, many financial institutions turned a blind eye to nefarious PEPs (politically exposed persons) and not just in Switzerland, as we see now with big names such as HSBC, once again deflecting allegations.
The industrialized world can’t afford any more surprises like this, otherwise aid and loans will continue to enter weak states, only to be rapidly snuck out.
Encouragingly, there are signs that governments and regulators are being energized by the Panama Papers. The U.S. Treasury will soon announce a requirement that banks disclose the owners of shell companies, and in the UK regulators set a deadline for banks to disclose details of clients’ relations with Mossack Fonseca, the company at the centre of the current storm.
Iraq, with lamentably high corruption, can be a litmus test for revived effort. Iraq also desperately needs to recover stolen assets, because it is running out of money for both fighting ISIS and rebuilding Iraq, in order to prevent ISIS 2.0.
Luckily, the United States is leading the way with the formation of the Kleptocracy Asset Recovery Initiative (KARI), but far more global coordination is needed. In Iraq, financial assistance should be put into ministries to train people in spotting and preventing corruption.
There are certainly good young people who want change in the Iraqi government, the challenge is creating a culture where they can speak out. That will take a renewed and internationally coordinated capacity building effort. As an example, the Higher Council of Education Development, an Iraqi organization that has sent four thousand students overseas to help ministerial capacity, had a budget of just over $100 million last year. The international community must urgently help Iraq to resource such work, because so far war expenditures dwarf other efforts. [Continue reading…]