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David Cameron left dangerously exposed by Panama Papers fallout

The Guardian reports: David Cameron was left dangerously exposed on Tuesday after repeatedly failing to provide a clear and full account about links to an offshore fund set up by his late father, as the storm over the Panama Papers gathered strength in both the UK and elsewhere around the world.

The prime minister and his office have now offered three partial answers about the fund set up by his father Ian, which avoided ever paying tax in Britain. The key unanswered question is whether the prime minister’s family stands to gain in the future from his father’s company, Blairmore, an investment fund run from the Bahamas.

After Downing Street said on Monday that the fund was a “private matter”, a journalist asked Cameron about it during a visit to Birmingham on Tuesday.

Cameron replied: “I own no shares, no offshore trusts, no offshore funds, nothing like that. And, so that, I think, is a very clear description.”

He dodged the key part of the question about whether he or his family stood to benefit. [Continue reading…]

The Guardian reports: David Cameron intervened personally to prevent offshore trusts from being dragged into an EU-wide crackdown on tax avoidance, it has emerged.

In a 2013 letter to the then president of the European council, Herman Van Rompuy, the prime minister said that trusts should not automatically be subject to the same transparency requirements as companies.

The EU planned to shine a light on the dealings of offshore bodies by publishing a central register of their ultimate owners but, in a letter unearthed by the Financial Times that remains publicly available on the government’s website, Cameron said: “It is clearly important we recognise 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.” [Continue reading…]

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Panama Papers reveal London as center of ‘spider’s web’

AFP reports: As-well as shining a spotlight on the secret financial arrangements of the rich and powerful, the so-called Panama Papers have laid bare London’s role as a vital organ of the world’s tax-haven network.

The files leaked from Panama law firm Mossack Fonseca exposed Britain’s link to thousands of firms based in tax havens and how secret money is invested in British assets, particularly London property.

Critics accuse British authorities of turning a blind eye to the inflow of suspect money and of being too close to the financial sector to clamp down on the use of its overseas territories as havens, with the British Virgin Islands alone hosting 110,000 of the Mossack Fonseca’s clients.

“London is the epicentre of so much of the sleaze that happens in the world,” Nicholas Shaxson, author of the book “Treasure Islands”, which examines the role of offshore banks and tax havens, told AFP.

The political analyst said that Britain itself was relatively transparent and clean, but that companies used the country’s territories abroad — relics of the days of empire — to “farm out the seedier stuff”, often under the guise of shell companies with anonymous owners.

“Tax evasion and stuff like that will be done in the external parts of the network. Usually there will be links to the City of London, UK law firms, UK accountancy firms and to UK banks,” he said, calling London the centre of a “spider’s web”. [Continue reading…]

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Vladimir Putin says allegations in Panama Papers are an American plot

The New York Times reports: President Vladimir V. Putin dismissed on Thursday reports based on leaked legal documents that some of his close associates had shoveled around $2 billion through offshore accounts in the Caribbean, calling the allegations an American plot to try to undermine Russian unity.

The Russian president, making his first public remarks on the subject, also defended the cellist Sergei P. Roldugin, an old and close friend who was named in reports about the leaked documents, known as the Panama Papers. The cellist was at the center of a scheme to hide money from Russian state banks offshore, the reports said.

Mr. Putin said that Mr. Roldugin, like many Russians, had tried his hand at business, in his case to support his love of music by getting the money to buy expensive instruments.

“Almost all the money he earned he spent on musical instruments that he bought abroad,” Mr. Putin said at a public forum for regional journalists in St. Petersburg, broadcast live by state-run television. The musician had then donated the instruments to government institutions.

On paper, Mr. Roldugin’s shares in various enterprises linked to friends of Mr. Putin, especially Bank Rossiya, give him a net worth of hundreds of millions of dollars. Mr. Roldugin is the artistic director of the House of Music, which trains classical musicians in St. Petersburg. [Continue reading…]

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Panama Papers tie more of China’s elite to secret accounts

The New York Times reports: At least three of the seven people on the Chinese Communist Party’s most powerful committee, including President Xi Jinping, have relatives who have controlled secretive offshore companies, the organization that has publicized a trove of leaked documents about hidden wealth reported on Wednesday.

The disclosures by the organization, the International Consortium of Investigative Journalists, risked new embarrassment for the Chinese authorities, already unnerved and infuriated by the organization’s leaks of the documents, known as the Panama Papers.

Chinese government censors have moved aggressively since the first release of leaked documents on Sunday to purge any media’s mention of them in China, going so far as to block Internet searches and online discussions that involve the words “Panama Papers.” [Continue reading…]

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Facebook groups act as weapons bazaars for militias

The New York Times reports: A terrorist hoping to buy an antiaircraft weapon in recent years needed to look no further than Facebook, which has been hosting sprawling online arms bazaars, offering weapons ranging from handguns and grenades to heavy machine guns and guided missiles.

The Facebook posts suggest evidence of large-scale efforts to sell military weapons coveted by terrorists and militants. The weapons include many distributed by the United States to security forces and their proxies in the Middle East. These online bazaars, which violate Facebook’s recent ban on the private sales of weapons, have been appearing in regions where the Islamic State has its strongest presence.

This week, after The New York Times provided Facebook with seven examples of suspicious groups, the company shut down six of them.

The findings were based on a study by the private consultancy Armament Research Services about arms trafficking on social media in Libya, along with reporting by The Times on similar trafficking in Syria, Iraq and Yemen. [Continue reading…]

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Libya’s Tripoli authority rejects UN-backed government

Al Jazeera reports: Libya’s new unity government has been thrown into chaos, as the head of its rival Tripoli-based authority apparently refused to cede power.

Contradicting an earlier announcement that his National Salvation Government was ready to step aside, Tripoli’s unrecognised Prime Minister Khalifa Ghweil urged his ministers not to stand down in a statement on Wednesday.

“Given the requirements of public interest… you are requested to continue your mission in accordance with the law,” he said, threatening to prosecute anyone working with the new government. [Continue reading…]

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Obama’s expanding ground war in Iraq

The Daily Beast reports: The U.S. military is planning to expand the number of so-called “fire bases” in northern Iraq to prepare for an assault on Mosul, ISIS’s Iraqi capital. The bases will be there to support local Iraqi forces. But they’ll also put U.S. troops near the frontlines of what will likely be the biggest battle of the war with the self-proclaimed Islamic State.

Troops at up to three temporary bases, on the north-south route from central Iraq to the northern city of Mosul, would advise Iraqi security forces, provide logistical support so Iraqi troops can move toward Mosul and even ground base support fire, defense officials told The Daily Beast.

The movement of U.S. troops within miles of the ISIS’s Iraqi capital would be yet another indication that the American military is increasingly conducting offensive operations even though President Obama has never publicly acknowledged the U.S. is back at war in Iraq.

On Wednesday, the Pentagon began sending out signals that the U.S. role in Iraq could change, one day after the president led a meeting with his top national security advisers about the war. [Continue reading…]

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Yemen: U.S. bombs used in deadliest market strike

Human Rights Watch: Saudi Arabia-led coalition airstrikes using United States-supplied bombs killed at least 97 civilians, including 25 children, in northwestern Yemen on March 15, 2016, Human Rights Watch said today. The two strikes, on a crowded market in the village of Mastaba that may have also killed about 10 Houthi fighters, caused indiscriminate or foreseeably disproportionate loss of civilian life, in violation of the laws of war. Such unlawful attacks when carried out deliberately or recklessly are war crimes.

Human Rights Watch conducted on-site investigations on March 28, and found remnants at the market of a GBU-31 satellite-guided bomb, which consists of a US-supplied MK-84 2,000-pound bomb mated with a JDAM satellite guidance kit, also US-supplied. A team of journalists from ITV, a British news channel, visited the site on March 26, and found remnants of an MK-84 bomb paired with a Paveway laser guidance kit. Human Rights Watch reviewed the journalists’ photographs and footage of these fragments.

“One of the deadliest strikes against civilians in Yemen’s year-long war involved US-supplied weapons, illustrating tragically why countries should stop selling arms to Saudi Arabia,” said Priyanka Motaparthy, emergencies researcher at Human Rights Watch. “The US and other coalition allies should send a clear message to Saudi Arabia that they want no part in unlawful killings of civilians.” [Continue reading…]

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Distract, deceive, destroy: Putin at war in Syria

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Atlantic Council: A new Atlantic Council report uses open-source data to debunk Russian claims that its military mostly struck Islamic State of Iraq and al-Sham (ISIS) targets, and links Russia to attacks on civilian facilities and the use of cluster bombs in Syria. So why haven’t Western governments that have more sophisticated intelligence capabilities employed similar technologies and techniques to counter Russian propaganda?

“Just as we saw an abuse of intelligence under the [George W.] Bush administration to make a case for specific action [in Iraq], I think you are seeing not as large an abuse but not proper use of intelligence right now because if they were to put this stuff out this would push their policy in a direction in which I don’t think they want to go,” said John E. Herbst, Director of the Atlantic Council’s Dinu Patriciu Eurasia Center.

Eliot Higgins, a Nonresident Senior Fellow at the Council’s Future Europe Initiative, said he didn’t think that the US government is using open-source data as much as one would assume. “In any bureaucratic establishment, it is going to take a long time for the wheels to turn and for this to be actually something that they do on a regular basis,” he said.

Herbst and Higgins are co-authors of the Atlantic Council report “Distract, Deceive, Destroy: Putin at War in Syria,” which was launched in Washington on April 5. [Continue reading…]

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Panama Papers firm linked to over 1,000 U.S. companies mostly in Nevada and Wyoming

USA Today reports: The law firm at the hub of a global financial scandal has links to more than 1,000 U.S. companies, formed mostly in Nevada and Wyoming since 2001, but appears to have largely escaped the scrutiny of U.S. financial regulators — at least in public.

The leak this week of more than 11 million records from the Panamanian firm, Mossack Fonseca, has led to a global uproar that prompted Iceland’s prime minister to step aside Tuesday. An international consortium of journalists has reported the documents tie the firm, which specializes in shell companies that can be used to conceal assets, to Russian oligarchs, former heads of state and world soccer’s scandal-plagued governing body.

Yet despite those apparent dealings and its operations in the United States, the firm has appeared in only a scattering of court cases and regulatory filings. Most involve government attempts to track money the authorities believed had been concealed behind overseas shell companies the firm helped establish.

The Justice Department is “reviewing the reports” published by international journalists, the head of its Criminal Division, Leslie Caldwell, said Tuesday, but declined to elaborate.

The firestorm around Mossack Fonseca has been tied mostly to its work for foreign customers. But state incorporation records show the firm helped set up nearly 1,100 business entities in the United States since 2001.

The majority of U.S.-based companies linked to Mossack Fonseca were formed in Nevada by M.F. Corporate Services (Nevada) Limited, a one-employee company based out of a low-slung tile-roofed office building 20 miles from the Las Vegas strip. MF Nevada has served as the registered agent for 1,026 business entities since 2001, according to USA TODAY’s review of Nevada business documents. [Continue reading…]

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Panama Papers law firm, Mossack Fonseca, says data hack was external, files complaint

Reuters reports: The Panamanian lawyer at the centre of a data leak scandal that has embarrassed a clutch of world leaders said on Tuesday his firm was a victim of a hack from outside the company, and has filed a complaint with state prosecutors.

Founding partner Ramon Fonseca said the firm, Mossack Fonseca, which specializes in setting up offshore companies, had broken no laws and that all its operations were legal. Nor had it ever destroyed any documents or helped anyone evade taxes or launder money, he added in an interview with Reuters.

Company emails, extracts of which were published in an investigation by the U.S.-based International Consortium of Investigative Journalists and other media organizations, were “taken out of context” and misinterpreted, he added.

“We rule out an inside job. This is not a leak. This is a hack,” Fonseca, 63, said at the company’s headquarters in Panama City’s business district. “We have a theory and we are following it,” he added, without elaborating. [Continue reading…]

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Taliban leader, trying to end infighting, appoints critics to senior posts

The New York Times reports: In a compromise bid to unite the ranks after months of infighting, the Taliban’s new leader has appointed the brother and son of Mullah Muhammad Omar, the movement’s deceased founder, to senior leadership posts, a spokesman for the insurgent group said on Tuesday.

The appointments are the latest move by the supreme Taliban leader, Mullah Akhtar Muhammad Mansour, to publicly consolidate his authority after a leadership struggle last summer.

Facing criticism or outright rebellion from field commanders who distrusted his ties to Pakistan and his handling of the succession, Mullah Mansour brutally quashed breakaway groups and sought to buy the support of other skeptical commanders, all while maintaining a publicity campaign that has portrayed the Taliban as united under his command, according to interviews with Taliban members. They spoke on condition of anonymity to avoid angering Mullah Mansour.

Now, the announcement that he had formally brought two of the most influential skeptics back into the fold — Mullah Abdul Manan, the brother of Mullah Omar; and Mullah Muhammad Yaqoub, the founder’s son — was expected to help bring other dissenters into line right as the Taliban’s annual offensive is expected to pick up momentum in Afghanistan. [Continue reading…]

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Italian official warns Egypt over inquiry into Giulio Regeni’s death

The New York Times reports: The foreign minister of Italy said Tuesday that his government would take “immediate and proportional” measures against Egypt if it failed to help uncover the truth behind the death of an Italian graduate student in Cairo two months ago.

“We will stop only when we will find the truth, the real one,” Foreign Minister Paolo Gentiloni told Parliament, adding that he would not accept any “fabrication.”

The threat by Mr. Gentiloni came the day before a team of Egyptian investigators was scheduled to land in Rome for meetings on the case of the student, Giulio Regeni, 28, a doctoral candidate, whose brutalized body was discovered on a roadside in February in Cairo. [Continue reading…]

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Saudi Arabia passes Russia as world’s third biggest military spender

The Washington Post reports: Global military spending reached almost $1.7 trillion in 2015, marking a year-on-year increase for the first time since 2011, according to the Stockholm International Peace Research Institute, which tracks arms expenditure around the world.

The United States remained far and away the top spender, which despite a dip from 2014, accounted for more than a third of total global spending. It was followed by China and then, perhaps surprisingly, Saudi Arabia, which supplanted Russia in third place. [Continue reading…]

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One of Libya’s rival governments steps down as new UN-brokered unity government is installed

The Associated Press reports: One of Libya’s rival governments has resigned, a step that helps efforts by a new, UN-brokered unity government to assert itself in the capital Tripoli despite opposition from some local militias.

In a statement, the Tripoli-based National Salvation government said it would “cease duties” as executive authority, and therefore absolve itself of responsibility for the country’s fate.

“We put the interests of the nation above anything else, and stress that the bloodshed stop and the nation be saved from division and fragmentation,” the statement read.

Western nations view the new unity government as the best hope for ending Libya’s chaos and uniting all factions against an increasingly powerful Islamic State affiliate, which has seized the central city of Sirte. Another government, based in the eastern city of Tobruk, still opposes the UN-backed body. [Continue reading…]

The Washington Post reports: The United States and European allies, including Italy, France and Britain, have made the unity government’s establishment a key precondition for launching twin missions to begin an international stabilization effort and help combat a growing Islamic State affiliate there.

Each of those tasks will be strained by tensions among militia factions that Western nations hope will form a unified front against terrorist groups and by strong reluctance among European nations to wade into Libya’s chaos — even among those countries most threatened by the Islamic State’s growth across the Mediterranean.

The tentative political progress comes as the United States moves forward with plans to launch intensified attacks against the Islamic State’s Libyan branch, which has up to 8,000 fighters and is the group’s strongest affiliate outside Iraq and Syria. [Continue reading…]

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Unlike the secrets exposed by the Panama Papers, big U.S. tax dodging is done in full public view

Quartz reports: Unlike in emerging markets and in Europe, the main US tax avoidance problem isn’t about individuals. Data on financial assets such as stocks and bonds, instruments in which affluent people tend to park their wealth, show a relatively small share of US money is kept offshore.

No, in the US, tax avoidance has more to do with corporations. And much of that dodging has increasingly been done in the clear, bright light of public view.

In his terrific recent book on what he calls the “scourge of tax havens,” Gabriel Zucman, an economist at the University of California, Berkeley, estimates that the artificial shifting of profits to low-tax locales such as Ireland, Switzerland, and the Bahamas reduces US corporate tax liabilities by $130 billion per year.

But the US Treasury Department is taking steps to address this. On April 4, it imposed new limits on so-called tax inversions, a type of deal in which a US company merges with a smaller firm in a foreign country where taxes are lower, adopts the foreign address, and takes advantage of the discrepancy in tax rates.

Such deals have been one of the most popular type of M&A transaction in recent years. The $160 billion deal between US drug giant Pfizer and Ireland-based Allergan is perhaps the most eye-popping example of this. [Continue reading…]

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Mossack Fonseca serviced Rami Makhlouf, Assad’s cousin and ‘poster boy for corruption’

The Guardian reports: The firm at the centre of the Panama Papers leak serviced a string of companies for a top financier in Bashar al-Assad’s government in the face of international concern about corruption within the Syrian regime.

Documents show Mossack Fonseca’s links to Rami Makhlouf, a cousin of the Syrian president, who was described in US diplomatic cables as the country’s “poster boy for corruption”.

Washington imposed sanctions on Makhlouf in February 2008, saying he was a regime insider who “improperly benefits from and aids the public corruption of Syrian regime officials”. It blacklisted his brother Hafez Makhlouf in 2007.

The documents show, however, that the Panamanian firm continued to work with the Makhloufs, and in January 2011 it rejected the advice of its own compliance team to cut ties with the family as the crisis in Syria began to unfold.

Documents show a Mossack Fonseca compliance officer wrote: “I believe if an individual is found on a sanction list then this is a serious red flag and we should make every effort to disassociate ourselves from them.” [Continue reading…]

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Iceland PM calls to dissolve parliament after tax scandal

Reuters reports: Iceland’s prime minister asked the president on Tuesday to dissolve parliament in the face of a looming no-confidence vote and protests, after leaked files showed his wife owned an offshore firm with big claims on the country’s collapsed banks.

After a meeting with Prime Minister Sigmundur Gunnlaugsson, President Olafur Ragnar Grimsson said he had asked for talks with the main parties before making a decision. Dissolving parliament would almost certainly lead to a new election.

“I was not ready to agree to that request (for dissolving parliament) until I had a discussions with the leaders of other parties on their stand,” Grimsson told reporters.

“I do not think it is normal that the prime minister alone … should be given the authority to dissolve the parliament without the majority of the parliament being satisfied with that decision.”

Earlier on Tuesday, Gunnlaugsson said on his Facebook page: “I would dissolve parliament and call for new elections as soon as possible” if he lost support among his ruling coalition members.

On Monday, the opposition filed a motion of no-confidence and thousands of Icelanders gathered in front of parliament, hurling eggs and bananas and demanding the departure of the leader of the centre-right coalition government, in power since 2013.

Gunnlaugsson would be the first casualty of the “Panama Papers” a leaked collection of documents revealing the financial arrangements of politicians and public figures from around the world. [Continue reading…]

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