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by backtoiam » Thu Apr 07, 2016 9:37 pm
smiths wrote:
Also, I agree with many others who have argued that,
The whole line that ' there are genuine legal honest reasons to have an offshore account set up' is bullshit
by justdrew » Thu Apr 07, 2016 11:14 pm
Harvey » 07 Apr 2016 15:22 wrote:0_0 » Thu Apr 07, 2016 10:33 pm wrote:justdrew » Wed Apr 06, 2016 9:46 pm wrote:Here is the central question I would prefer people focus on:
Why in the fuck would Icelandic voters return these imbeciles to power? How on earth can human behavior be modified so that we stop electing sociopaths, virtually knowingly. It's as though a large part of the population, globally, is conditioned to follow such people almost mindlessly. It's probably a built in human instinct of some sort.
Among a troop of savanna baboons in Kenya, a terrible outbreak of tuberculosis 20 years ago selectively killed off the biggest, nastiest and most despotic males, setting the stage for a social and behavioral transformation unlike any seen in this notoriously truculent primate.
http://www.nytimes.com/2004/04/13/scien ... .html?_r=0
On the evidence provided: ''And if baboons can do it,'' he said, ''why not us? The bad news is that you might have to first knock out all the most aggressive males to get there.''
As occurred in the example from this evidence, and yet:
"I confess I'm rooting for the troop to stay like this forever, but I worry about how vulnerable they may be,'' he said. ''All it would take is two or three jerky adolescent males entering at the same time to tilt the balance and destroy the culture.''
Such is life.
by JackRiddler » Fri Apr 08, 2016 1:50 am
Harvey » Thu Apr 07, 2016 2:43 pm wrote:Instead of imagining global conspiracy, imagine instead what it would take for you to be involved. What beliefs you'd need as your working assumptions, what you imagine your job is contributing to, who you imagine you work for. Next, how would you begin to realise that you are actually on the wrong side yourself? Who pays your social security or your medical insurance, who pays for your car, the food you eat, who made the affordable clothes you wear?
Choice, no choice, bad guy, good guy, it's all in how you wear it.
by JackRiddler » Fri Apr 08, 2016 8:12 am
The Macri administration put out a statement saying that the president was never a stakeholder in the ghost company, but that he did play an occasional role as CEO.
by JackRiddler » Fri Apr 08, 2016 10:36 am
With Iceland’s Pirate Party Surging in the Polls, Its Government Resists New Elections
Robert Mackey
Apr. 7 2016, 1:49 p.m.
THROWN INTO DISARRAY by a Panama Papers scandal, Iceland’s coalition government appointed a new prime minister on Thursday, refusing to call early elections to resolve a crisis in public confidence brought about by the revelation that three senior ministers had secret offshore accounts.
Opinion polls suggest that the government would be trounced in any immediate election, and most likely replaced by Iceland’s branch of the Pirate Party, a pan-European movement founded in Sweden in 2006 to fight for internet freedom and direct democracy. The Icelandic branch currently holds just three seats in the nation’s parliament, the Althing.
Protesters, who have massed outside the Althing in Reykjavik’s Austurvöllur square every day this week, have made it clear that they are not satisfied with just the bizarre resignation of Prime Minister Sigmundur Davíð Gunnlaugsson, who intends to keep his seat in parliament and remain in charge of his party despite officially ceding power to his deputy, Sigurður Ingi Jóhannesson.
Opposition parties are also outraged that the finance minister, Bjarni Benediktsson, and the interior minister, Ólöf Nordal, have not resigned, despite also being named in the Panama Papers investigation as the holders of offshore accounts.
On social networks, Icelanders shared memes describing the slightest of reshuffles as merely a cosmetic change.
After Benediktsson spoke to the press on Wednesday night inside parliament, alongside the prime minister’s hand-picked replacement, Jóhannesson, one of the three Pirate representatives, Ásta Helgadóttir, expressed her indignation at the finance minister’s claim that the government had to stay in place because the opposition was “rubbish.”
Helgadóttir phoned The Intercept from the Althing a few minutes later to say that the reshuffle was “a farce” and the coalition’s plan to delay elections until an unspecified date in the autumn is “not what the people are asking for.” The current crisis, she added, demonstrates that the country needs the new constitution her party has promised to implement, “with some sort of mechanism” for more direct democracy and ways to ensure that “politicians have to listen to the people.”
Helgadóttir also said that while the party is still focused on issues related to the web, “This is all interconnected — internet freedom is about how to practice fundamental human rights in the 21st century, and democracy is one of those rights.”
Another of the Pirates in parliament is Birgitta Jónsdóttir, a free speech and digital rights activist who helped edit the WikiLeaks video “Collateral Murder,” and has led the effort to make Iceland a haven for whistleblowers.
Speaking to Democracy Now on Wednesday, Jónsdóttir pointed out that the Pirate Party has consistently led in the polls for the last year.
Writing on the party’s website, Helgadóttir, Jónsdóttir, and their colleague Helgi Hrafn Gunnarsson admitted on Thursday that they are “still surprised by the popularity of the party,” themselves. “It’s the big riddle we’re always trying to solve,” they wrote.
By way of an answer, they suggested that the population is ready for radical change:
The confidence of the Icelandic people we believe rests in us, not only because we are a party that has not been a part of government, but also we think it is because people sense that we stand for enacting changes that have to do with reforming the systems, rather than changing minor things that might easily be changed back. Our policies therefore stand in stark contrast to what appears to be the pattern of modern politics; minor changes but always the same dysfunctional system. We do not define ourselves as left or right but rather as a party that focuses on the systems. In other words, we consider ourselves hackers — so to speak — of our current outdated systems of government.
They added, “The Icelandic Pirate Party will not be able to solve all of the ingrown problems in Iceland, but it will certainly be able to offer new hardware, complete with a new set of rules based on how we operate as a collective community.”
When the Pirate Party’s surge in the polls started last year, then-Prime Minister Gunnlaugsson cast them as dangerous anarchists in an interview with Visir, a Reykjavik newspaper. “If general discontent led to a revolutionary party — a party with some very unclear ideas about democracy, and a party which wants to upheave the foundations of society — becoming influential, that would be cause for concern for society as a whole,” he said. “It would take society in a whole other direction, where it would be difficult to hang onto those values that we possess and have been building on for decades.”
Less than a week after that dire warning, the Pirates celebrated their first legislative success, leading an effort to repeal Iceland’s law against blasphemy.
The Pirates, along with three other opposition parties, introduced a motion of no confidence in the government Gunnlaugsson has left behind, to be debated on Friday. By then, popular anger is likely to have ratcheted up still further, following reports on Thursday that three bankers who were jailed last year for their part in the collapse of Iceland’s Kaupthing bank in 2008 were granted early release, as the result of a new law passed by the current government.
by slimmouse » Fri Apr 08, 2016 12:13 pm
by Wombaticus Rex » Fri Apr 08, 2016 12:39 pm
by slimmouse » Fri Apr 08, 2016 12:47 pm
So much conspiracy thinking -- on either side, spelunking or debunking -- is haunted by the spectre of Omnipotence.
by JackRiddler » Fri Apr 08, 2016 5:56 pm
Wombaticus Rex » Fri Apr 08, 2016 11:39 am wrote:Does the existence of unintended effects prove that there was nothing behind this but plucky, honest journalism?
by seemslikeadream » Fri Apr 08, 2016 7:16 pm
by divideandconquer » Fri Apr 08, 2016 7:22 pm
Three top figures from Iceland’s failed Kaupthing Bank have been released from jail after barely serving a quarter of their sentences due to a new law. It comes as Iceland deals with a fresh scandal linking the ex-PM to both the Panama offshore revelations and the bank.
Former chairman of Kaupthing, Sigurdur Einarsson, its biggest shareholder, Olafur Olafsson, and the finance director of the Luxembourg branch, Magnus Gudmundsson, were released from the low-security Kviabryggju prison on Thursday.
The bankers have served just one year of their four-to-five year sentences. All were convicted of financial fraud ahead of the collapse of the country's biggest bank in October 2008.
The bankers were accused of concealing an investor from Qatar who bought a 5.1 percent equity stake in Kaupthing, with the money illegally provided as a loan from the bank itself.
The release was made possible due to a new law which was rushed through a parliamentary vote in March.
The law enables prisoners to spend double the amount of time under electronic surveillance in the comfort of their own homes than previously had been allowed, while being released earlier from jail.
The Icelandic Review explained the new law further:
“The parliamentary bill was changed in committee to allow five days of electronic monitoring for every month of a prisoner’s sentence, instead of 2.5 days as it has been. This means that a prisoner sentenced to one year in prison can now spend the last 60 days electronically tagged and in the community, instead of 30 days. The rule change means criminals can now be released earlier from prison.”
Icelandic media reports question why the new bill was passed so quickly. Some claimed that the chair of the Alþingi General Committee and MP for the Independence Party, Unnur Brá Konráðsdóttir, was responsible for the bill.
Left Green MP Bjarkey Olsen Gunnarsdóttir alleged to Iceland’s Stundin newspaper that the change in the law seemed to be made specifically for the three bankers, adding that rushing it through seemed inappropriate during this time.
Sigurdur Ingi Johannsson, minister of fisheries and agriculture of the Progressive Party who was named as new prime minister by two government coalition parties speaks in Reykjavik, Iceland on April 6, 2016 © Sigtryggur Johannsson That escalated quickly: Iceland appoints new PM, plans snap elections as Pirate Party’s ratings soar
Iceland has been dealing with a new financial scandal, after the Panama Papers leak revealed information that former Prime Minister Sigmundur David Gunnlaugsson allegedly failed to declare his stake in an offshore company based in the British Virgin Islands to avoid paying taxes in Iceland. Local media also linked the offshore allegations to the Icelandic banking crisis, for which Kaupthing Bank managers were jailed, and in connection to which Gunnlaugsson had already been accused of taking a softer stance towards the bankers.
The Panama Papers were published on Sunday and are said to be “the largest leak in offshore history.” They claim to reveal the offshore holdings of over 100 international politicians and public officials, including 12 current and former world leaders.
The scandal escalated quickly in Iceland, with massive protests forcing Gunnlaugsson to resign on Tuesday, even though he denied violating the law. According to a Gallup poll conducted ahead of Gunnlaugsson’s resignation, a whopping 81 percent of Icelanders wanted the PM to resign.
The Icelandic center-right coalition appointed Sigurdur Ingi Johannsson, the deputy chairman of the disgraced former PM, as the country’s new prime minister and scheduled early elections for the fall.
by seemslikeadream » Fri Apr 08, 2016 8:04 pm
http://www.madcowprod.com/2016/03/17/do ... more-11619
Time out for a little comic relief
When Imelda Marcos went on trial in New York in 1990 for laundering tens of millions of dollars belonging to the people of the Philippines, her co-defendant was another close Trump associate, Adnan Khashoggi. (Both Marcos and Khashoggi were acquitted.)
The first time I saw Donald Trump’s name linked with Adnan Khashoggi’s was in a wickedly funny article from the early 90’s in Spy Magazine called ”Who is America’s cheapest zillionaire?”
Spy magazine— cruel, brilliant, beautifully-written, and feared by all—incorporated a company called the National Refund Clearinghouse, gave it its own checking account, and zipped out refund checks to 58 “well-known, well-heeled Americans” for $1.11 apiece.
s-l1600Chortling, the magazine’s editors settled back to see who cashed them.
26 frugal people—“The Bargain-Basement 26,” including Cher, Harry Helmsley, Michael Douglas, Shirley MacLaine, Kurt Vonnegut, and Donald Trump and Adnan Khashoggi, who partied together in swank Palm Beach Florida—cashed their $1.11 checks.
Each then receive a second “National Refund Clearinghouse” check, for 64 cents, half the amount of the first check as compensation said a cover letter, for ”a computer error.’ Trump, Khashoggi, and 11 other extraordinarily cheap people each cashed checks for 64 cents apiece.
“The Chintzy 13” then each received a final check for 13 cents.
Donald Trump & Adnan Khashoggi were the last men standing. Trump, who the magazine called a “short-fingered-vulgarian,” and Khashoggi, who personally endorsed his on the back, each cashed checks totaling one dime and three pennies.
Whether by accident, coincidence, or cosmic design, over the next two decades Trump and Khashoggi’s names will be inextricably linked.
by seemslikeadream » Fri Apr 08, 2016 9:20 pm
The Panama Papers Barely Scratches the Surface of UK Complicity in a Global Scandal
by Graham Vanbergen / April 7th, 2016
The recent revelation resulting from the Panama Papers is nothing new. It just helps to highlight the sheer scale of criminality being perpetrated by those wealthy enough to benefit. What we are witnessing from a tiny island, nestled neatly between North and South America, is a glimpse of a global money laundering fest on a truly oceanic scale.
There are 82 countries listed globally as tax havens or jurisdictions of financial secrecy. Collectively Britain is the number one on the list of offenders, mainly because of its extensive overseas territories such as Jersey, Isle of Man, Gibraltar etc. In reality, though, Britain is now itself a tax haven.
Since the Conservative government got their knees under the table, George Osborne has systematically gone about creating what is effectively a territorial tax system for companies and organisations thus ensuring that no UK-based multinational pays taxation in the UK on profits arising to it from outside the country. Of course, the organisation itself has to deliberately go about structuring itself to achieve that goal, but once done, they are shielded from the deliberately lethargic tax office (HMRC).
Osborne also created the ‘patent box scheme’ which initially sounded like it was protecting British inventions and intellectual property but in reality just facilitated yet more corporate tax reduction. One only has to look at the banking industry where British-based banks pay more taxes in different countries than they do in the UK, or Google, Facebook and others in a long line of recent tax scandals.
If confirmation were needed, here is just one example of the tax evading smoking gun as reported by ethicalconsumer.org:
In July the Financial Times reported: “[US pharmaceutical company] AbbVie has sealed its proposed £32bn takeover of Shire, the UK-listed speciality pharmaceuticals company, in one of the biggest deals so far to involve a US company shifting its tax residence overseas… AbbVie said that, while its administrative headquarters would remain in Chicago and its listing in New York, the merged entity would be incorporated in the Channel Island of Jersey and have its tax residence in the UK.”
In 2008 Shire left the UK for tax purposes. Then the object was to avoid any chance of UK tax arising under proposed changes to controlled foreign company laws by the then Labour government, changes that might have hit companies with substantial intellectual property (like Shire) hard. Labour did not have the courage to put through those changes that are still so obviously needed to tackle international tax abuse. But Shire left for Ireland anyway.
And now it’s on its way back for tax purposes. It will use Jersey to save stamp duty. And tax haven UK does very nicely for all other purposes.
As we have reported on a number of occasions, Her Majesty’s British Overseas Territories and Crown Dependencies make up around 25 per cent of the world’s tax havens, which are now blacklisted by the European Commission and ranked as the most important player of financial secrecy in the world. The revelations contained in the Panama Papers is a drop in a much larger cess pool of crime and the likes of Britain’s Prime Minister and his right hand man at the Exchequer swim in it.
Tax havens featured on the EC’s blacklist of June last year include the British territories of; Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos Islands to name just a few and each is inextricably linked to the City of London, where, according to Donald Toon, the boss of the National Crime Agency, “hundreds of £billions are being laundered every year” facilitated by UK banks and the legal professions.
In the meantime, even the Queen was warned that her British territories were now the world’s biggest tax havens, harbouring tens of trillions of illegally stashed cash and assets that was described as a “web of secrecy jurisdictions” by The Tax Justice Network (TJN) who has now declared that Britain rules the world of tax havens.
Any claim by politicians in Britain that they are getting tough on tax evasion in Britain is simply not true.
Britain has seen a 600 per cent increase in foreign millionaires buying property in London since David Cameron got his knees under the table at No 10. Behind Russian millionaires getting visas to stay in Britain, Chinese investors are the second largest category of investor visa applicants, accounting for 15 per cent. Around 30 per cent went to high net worth individuals from the Former Soviet Union states, including Armenia, Azerbaijan, Kazakhstan and Ukraine.
The visas are merely seen as a fast-track process for wealthy foreign nationals, irrespective of their suitability, to acquire British citizenship, experts claim. Many are hiding stolen money and assets in what is seen internationally as the safe haven of Britain and some even donate to the Conservative party to keep them nice and safe from their home jurisdictions.
It was only a year ago that HSBC’s Swiss banking arm was caught in another leak helping wealthy customers evade taxes and conceal hundreds of millions of dollars of assets, whilst dishing out bricks of untraceable cash and advising these clients on how to circumvent domestic tax authorities. At the time it was the biggest banking leak in history containing the details of 30,000 accounts holding nearly £80 billion, an average per account of £2.6 million. Britain’s tax office HMRC was warned in 2010 of the scale of the problem, then it was given this leak a few years later and after months of investigating, it managed to make just one prosecution in what is seen by the criminal and tax evading fraternity as little more than a theatrical joke of some sort.
Britain’s complicity highlighted in the Panama Papers confirms one thing. More than half of the company formations set up by the partners and associates of Mossack Fonseca were registered to the British overseas territory of BVI or British Virgin Isles. Identified in the leak were 110,000 company formations hiding god knows how much in the BVI but if scaled against the HSBC Swiss leak, we are looking at around £300 billion.
Finally, mainstream media coverage of the Panama Papers has been interesting. The Guardian’s exposé focusing on Vladimir Putin was pure comedy, and this from a company that despite its high-mindedness has tax-dodging ingrained from its very birth.
According to one report, in 1936 the paper was placed into a trust by its founder to avoid inheritance tax that was eventually wound up and then converted into a limited company to avoid a £60 million tax bill arising from the sale of Autotrader magazine a few years ago. Who is to know what complexities lies behind this business set-up and what arrangements exist today. Not that other establishment press organisations can brag.
by seemslikeadream » Fri Apr 08, 2016 9:30 pm
Syria: Al-Assad Family’s Massive Stolen Wealth in Panama Papers helps explain Revolution
By Juan Cole | Apr. 6, 2016 |
By Juan Cole | (Informed Comment) | – –
The revelation in the leaked Panama Papers that Mossack Fonseca and Swiss bank HSBC serviced the companies of corrupt Syrian billionaire Rami Makhlouf (first cousin of dictator Bashar al-Assad) long after the US imposed sanctions on him is a reminder of why Syrians revolted against the regime in 2011 in the first place. Makhlouf was said to be worth $5 billion (likely more than Donald Trump) before the revolution, and to have dominated 60% of Syria’s economy. Below is something I wrote about the political economy of Syria’s revolution, which I never published– but it makes even more sense, I think, in view of the Panama Papers.
P.S. The original cover image for this posting ws of Ribal al-Assad, a dissident member of the clan who has spoken out forcefully against corruption; it was extracted by a plug-in from the video interview cited below.
In 1963 the secular, Arab nationalist and socialist Baath Party came to power in Syria. Conflicts within the ranks of the party, which had military and civilian wings, kept the country unstable until 1970. In that year, an Air Force general, Hafez al-Assad made a coup. A member of the Alawite, Shiite minority that comprises about ten to fourteen percent of the population, al-Assad turned the Baath Party into a mechanism for dealing with Syria’s transformation from a largely rural, peasant society to a majority urban one. He reversed earlier Baath hostility to the agricultural business classes, allowing a vigorous private sector in the countryside. The public sector under his version of the Baath Part concentrated on organizing small-holding peasants and extending irrigation in the Ghab and the Euphrates Basin. The Baath building of dams and waterworks endeared it to small-holding rural Sunni Arabs, and over time incomes rose and cities expanded modestly. The regime was not universally popular, and in the small cities at the center of the country a powerful Muslim Brotherhood opposition flourished, with a class basis in businessmen, shopkeepers and artisans hostile to secular Baath socialism. In 1982, al-Assad brutally crushed a Brotherhood uprising in Hama, killing thousands.[i]
By the 1980s the gains from the Baath Party’s agricultural policies had reached a plateau. Economic and other discontents burgeoned. Syria’s government embarked late in that decade on a privatization program, and during the 1990s the percentage of the non-oil industrial economy in private hands nearly doubled from 45 to 82 percent. Syria entered the new millennium no longer a socialist economy. The al-Assad clan benefited from the turn to a new entrepreneurial spirit. The president’s brother Jamil, for instance, went into the import-export business and came to dominate the Mediterranean port of Latakia. He developed a relationship with semi-criminal elements among the dock workers and underground of the city, and deployed them in a protection racket in the port. Also drawn from his Alawite ethnic group, they were known as the “specters” (shabiha), and went on to engage in smuggling (especially tobacco) and occasionally to challenge the police.[ii]
Hafez al-Assad had designated his son Basil, head of presidential security, to be his successor, the first of the republican princes to prepare to come to power. Basil’s death in an automobile collision in 1994 caused Hafez al-Assad to designate his second son, Bashar, as the next president for life instead. Bashar was then studying ophthalmology in Britain (he only lived there 18 months), and his soft-spoken, timid manner did not suggest he would be a decisive leader. He admitted he was a fan of Phil Collins’s music, and had enjoyed making home videos as he came of age in Damascus. He succeeded to power in 2000, in part because influential Baath generals and politicians preferred another al-Assad to seeing one of their rivals become president.[iii]
Bashar al-Assad was unable effectively to address the economic problems of the country. Some of his difficulties were geopolitical. After a brief honeymoon with the United States from 2000 through 2002 (which included post-September 11 help in detaining, interrogating, and torturing al-Qaeda suspects), relations increasingly soured after Bush’s invasion of Iraq. Al-Assad’s Syria attracted the ire of Western hawks and the Neoconservatives. He was allied with Iran, with which Washington had increasingly bad relations after 2003. He proved unable or unwilling to police his long border with American-dominated Iraq (through which Sunni Arab, anti-American guerrilla groups infiltrated that country). He paid lip service, at least, to supporting the Rejectionist forces in the Israeli-Arab conflict, i.e. Lebanon’s Hizbullah and the more militant Palestinians. In December, 2003, Congress passed and Bush signed the Syria Accountability Act. Likewise, France joined the US on the UN Security Council in objecting to the continued Syrian occupation of and meddling in Lebanon. Al-Assad’s Syria found itself blocked from favorable trading terms in Europe and the United States. The full impact of such sanctions can be seen if we compare Syria after 2002 to Turkey, a NATO member, where the Islamically-tinged government of the Justice and Development Party vastly expanded trade and industry from 2002 because of its special tariff treatment by the US and the EU.
Al-Assad was initially young and inexperienced, and faced an entrenched Baathist bureaucracy suspicious of his experiences in Britain (though these were quite limited). He announced on coming to power that he would allow private banks to operate in Syria. He may have been influenced by his British-born wife, Asma al-Assad, who had worked as a broker at J.P. Morgan on Wall Street before she married. It took years for this decree to be implemented. Political scientist David Lesch interviewed her about the long delay in moving to private banking: “We have not had private banks in Syria for 50 years. Our public banks are not functioning…. We have staff who do not speak English, who do not have computers. So we are on a very, very basic level. …We had no idea how to do this. We don’t have the experience.”[iv] Over time, private banks began operating, though the six public banks continued to be dominant, and Western sanctions hurt some of those.[v] From 2005, al-Assad implemented his New Social Market, which added on a private sector to previous socialist institutions and allowed a new class of boisterous entrepreneurs to transform downtown Damascus.[vi] In 2009 a stock market was opened. The new private sector was not enough, however, to create even a fraction of the new jobs demanded by Syria’s Millennials, or to jumpstart the economy, and cronyism ensured that it functioned mainly to make wealth “trickle up” to the small elite. From 2005, the regime increasingly reduced subsidies, which hit the poor and working classes hard. On top of all that, the zeroes witnessed the beginnings of a severe drought in Syria, which deeply harmed farmers and the small towns that served as their initial distributors. If the Baath Party had been relatively good at water management and incorporated the rural Sunnis in the 1970s, it increasingly failed on both of those scores under Bashar. Either the challenge was too great, or the high Baath officials by then had other priorities (especially making billions through corrupt deals in the growing urban sector).[vii]
By 2004, Syria’s per capita gross domestic product was, in nominal terms, only $1,190 a year—half that of neighboring Jordan, a fourth that of Turkey, and a fifth that of Lebanon. Six years later, in 2010– on the eve of the outbreak of massive protests, the per capita GDP was still less than $3000 a year (124th out of 183 countries ranked), whereas neighboring Turkey’s was nearly $11,000 (61st), according to the International Monetary Fund. That is, in 2010 Syria was similar in this regard to Honduras and the Congo, whereas Turkey was more in the neighborhood of emergent economies such as Malaysia and Brazil. By the outbreak of protests in 2011, the poverty rate in Syria had climbed to something between 11 and 30 percent, depending on how it was measured.[viii]
Syria, like many other Arab countries, has difficulty growing its economy faster than its population. Its population growth rate remains relatively high, at 2.4 percent per annum, which will lead, if it remains unchanged, to a doubling of the national population in roughly 30 years, from 22 million to 42 million. That is, it will go from being about as big as today’s Florida to being more populous than today’s California (or in European terms, from being somewhat larger than the Netherlands to nearly as populous as Spain). Because the population growth rate was even higher in previous decades, Syria’s labor force grows 4.5 percent a year, adding nearly 300,000 would-be workers. In the youngest cohort, from 15 to 24, unemployment ran as high as 70 percent before the revolution broke out. Because poverty has increasingly caused teenagers and even children to drop out of school to work, illiteracy has actually been rising in the past two decades.[ix]
Governance in Syria under the Baath Party resembled the rings of an onion. The outer ring was the party, which incorporated Sunni businessmen and farmers, Christians, Druze (an esoteric Shiite sect), and the Alawites (another esoteric Shiite sect). The upper echelons of the party and the officer corps were disproportionately dominated by members of the minority Alawite sect. (The Alawite form of Shi’ite Islam has more folk elements and is less bookish, clerical and formal than the Twelver Shiite branch that dominates Iraq and Iran). The very inner circle was the al-Assad extended family or jama`at al-Assad. The al-Assad clan had opportunities to benefit from insider trading practices, given that they controlled government economic policy, and to receive business licenses and contracts. Already in the time of Hafez al-Assad, his propensity for promoting his friends and relatives inspired other members of his junta to do likewise. His longtime foreign minister and then vice president, `Abd al-Halim Khaddam, the informal viceroy of Lebanon, developed front companies in that country. He became a fixture in Beirut night clubs. He developed a close relationship to Lebanese-Saudi billionaire Rafiq al-Hariri, who made a gift to him of one of Aristotle Onassis’s former apartments in Paris and set him up in the telecommunications business. Hariri also brought Khaddam’s two sons into business ventures in Saudi Arabia, where he had made his money.[x] Hafez al-Assad’s Sunni minister of defense, Mustafa Talas (usually spelled Tlass in the Western press), had one son who became a big businessman, Firas. Firas had extensive holdings in real estate, food distribution, and banking, and was said to among the richest men in the country. The other, Manaf, became a general in the army (he defected to the opposition in July, 2012).[xi]
The rising business class in the Syria of the zeroes was hardly, however, confident or loyal to the regime that fostered it. The secretive and conspiratorial mindset of the Baath Party ensured that those who became wealthy were often under suspicion of corruption, that is, of stealing from the regime. In 2009, a Syrian newspaper published a list of Syria’s one hundred wealthiest businessmen, conveniently omitting some prominent relatives of the president, and even the names of the owners of the newspaper itself. The edition was said by the US chargé in Damascus to have sent chills up and down the spines of the families profiled, who were sure that the Syrian tax authorities would use it as an excuse to look into them. Most were probably nouveaux riches, with the old Baathist monied families excused from the ignominy of being discussed in public. The year before, a high security aide to the president had been killed in the port of Tartous by sniper fire while the president was out of country, and, when searched, the basement of one of his residences yielded $60 million. Periodic anti-corruption drives caught even those related to the president. A distant cousin of the president was arrested in 2009 for possibly abusing his position in the customs administration. The same year, a prominent Sunni client of the regime given the bid on key internet services was arrested after he made little progress in providing them, after pocketing the government’s payment.[xii]
If the sons of courtiers could do well, denizens of the presidential palace were even more favored. The brother of the president, Gen. Maher al-Assad, commander of the Republican Guards and of the Fourth Armored Division, was accused by dissidents of laundering money through agents in Lebanon for Iraqi Baathists. The “Youth of Rage” charged him in spring of 2011 with using businessman and media mogul Mohammad Hamsho as a corrupt silent partner (some alleged that Maher had a popular private television station closed so that Hamsho could open his own and garner the advertising revenue instead). They also accused him of hiding his ill-gotten gains in Swiss bank accounts.[xiii] Foremost among the new generation of Syrian crony capitalists is Rami Makhlouf, first cousin of Bashar on his mother’s side. The Makhloufs are an Alawite family that initially served the al-Assads in the security forces. Then in the 1990s, the patriarch of that branch of the family, Muhammad Makhlouf, had had to be brought in as a silent partner in the private Real Estate Bank (REB), which by the late zeroes was said to earn over $110 million a year – “largely from its monopoly on processing credit card and ATM transactions.” [xiv] At the height of his prominence, Muhammad’s son Rami Makhlouf’s holdings included monopoly corporations or semi-monopolies in construction, oil, airlines and airport concessions, real estate, telecoms and import-export. He was known to use his connections to the regime to close down others’ lucrative projects, using thugs, and then buy them for a song. [xv] He and his clan were alleged to be worth $5 billion in a country where the annual gross domestic product in nominal terms in 2011 was $59 billion. One dissident member of the al-Assad family, Ribal, characterized him as owning three-fourths of Syria.[xvi] Makhlouf is famed for sharp business practices that depended on his access to power. For instance, he went into the wireless telephone business with Orascom, an Egyptian concern, and when he decided to take over Orascom’s shares, he allegedly had the company chased out of the country.[xvii] The “Youth of Rage” charged that the resulting company, called “Syriatel,” proved a bonanza that was shared with Gen. Maher al-Assad, the president’s brother.
The pinnacle of power and wealth was Bashar and his immediate circle. The style of life of the palace was so opulent and cocooned that during the worst fighting of 2011 and 2012, first lady Asma al-Assad was obsessed with ordering gilt furniture, chandeliers and jewelry over the internet.[xviii] Her buyer confirmed in July of 2011 that she had acquired: “-1 Turquoise with yellow gold diamonds and small pave on side: – 1 Cornaline with yellow gold diamonds and small pave on side; – 1 Full Black Onyx with yellow gold diamonds and small pave on side; – 1 Amethyst with white gold diamonds and small pave on side.”[xix]
by seemslikeadream » Fri Apr 08, 2016 11:11 pm
The Covert Roots of the Panama Papers
Panama has long been a haven for money launderers—including the CIA.
BY STEVEN COHEN
April 8, 2016
It should come as no surprise that the CIA’s finances are a secret. One of the rare glimpses into the agency’s funding came when Edward Snowden leaked a copy of the intelligence “black budget” to The Washington Post in 2013. But if history is any indication, the CIA may well have resources that don’t appear on any congressional document, highly classified or otherwise. Covert operations, by their very nature, often require access to off-the-books funding. The CIA’s first operation was paid for with funds seized from the Nazis, and in the years since, the agency has been notoriously creative about how it obtains its money.
Signal
The Panama Papers underscore how tax havens are used by covert agencies and other shadowy players to launder dirty money, a practice that has a long history in which Panama, in particular, has played a notable part.
STEVEN COHEN
Adnan Khashoggi would know. A “principal foreign agent” of the United States, as one Senate report referred to him, the billionaire playboy made a fortune (more than $100 million between 1970 and 1975 alone) from commissions negotiating arms deals with his native Saudi Arabia. He used these windfalls, in turn, to cultivate political clout—including, allegedly, with President Richard Nixon. In the aftermath of Watergate, when Congress began reining in the CIA, Khashoggi helped establish the supranational intelligence partnership known as the Safari Club. Soon after, he aided the CIA in circumventing another congressional impediment. With money borrowed from the Saudi and U.S. intelligence-linked Bank of Credit and Commerce International, he financed the illegal arms sales that set off the Iran-Contra scandal.
One way Khashoggi structured his shadowy holdings during his heyday was through the specialized services of Mossack Fonseca, the law firm that is in the news for having helped global luminaries like Vladimir Putin hide their money. Thanks to a recent report from the International Consortium of Investigative Journalists, we now know Khashoggi to be among a number of former spies and CIA associates implicated by the 2.6 terabytes of offshore financial documents provided to the German newspaper Süddeutsche Zeitung last summer.
That his name should appear in an international dark money scandal suggests something about the nature of tax havens that much of the media’s coverage has thus far avoided grappling with. The Panama Papers have largely been presented as an unprecedented insight into how global elites hide their fortunes from tax collectors and other regulators. But they also underscore how tax havens are used by covert agencies and other shadowy players to launder dirty money, a practice that has a long history in which Panama, in particular, has played a notable part.
The Panama Papers date back to 1977. By then, the Carter administration, worried that it could jeopardize negotiations over the Panama Canal, had already willed itself into forgetting what the U.S. government had long known about Panama’s intimate role in the burgeoning South American cocaine trade. Serious allegations against Manuel Noriega, the intelligence chief who would go on to become the country’s ruler, had been brought to the attention of the now-defunct Bureau of Narcotics and Dangerous Drugs as early as 1971. But the United States’s interests in Panama were at least as strong as those of the emerging coke lords who were using Panama as a stopover for drug shipments headed north. In some cases, their interests were one and the same.
At the time, the Panama Canal Zone played host to the School of the Americas, the U.S. military training academy infamous for the remarkable array of atrocities committed by its highest-achieving graduates. Not far from the SOA facility was the classified U.S. communications network used to coordinate Operation Condor, the cross-border rendition, torture, execution, and assassination program implemented by the South American dictatorships of the era. With its abundance of U.S. surveillance hardware and constant influx of easily disguised foreigners, Panama became a sort of regional outpost for U.S. Cold War intelligence.
A proud SOA alumnus himself, Noriega was recruited by the U.S. Defense Intelligence Agency in 1959 and received his first check from the CIA in 1967. The military coup that broke out that year catapulted him to the top of Panama’s spy agency, a position for which the ruthless, ideologically flexible Noriega proved to be uniquely well-suited.
Noriega had a talent for the double life. He would fly to Washington to meet with CIA Director William Casey one day and to Havana to meet with Fidel Castro the next, positioning himself as a key interlocutor between the sworn enemies and playing one side off the other. He was just as comfortable railing against Yankee imperialism as he was serving up rivals and narco-associates in exchange for DEA commendations. Noriega allegedly charged $200,000 a planeload to protect the Medellin Cartel’s shipment routes. The $200,000 a year he collected from the Reagan administration must have seemed a pittance by comparison.
CIA payments to Noriega were channeled through accounts he maintained at the Bank of Credit and Commerce International, the agency’s preferred conduit for its secret dealings with Saudi and Pakistani intelligence and with the heroin-trafficking mujahedeen insurgency in Afghanistan. During the same period, Adnan Khashoggi, who was listed on a 1991 Defense Intelligence Report as having sold machine guns to the Medellin Cartel, was borrowing from the bank to finance weapons sales to Iran—the proceeds for which, like some of Noriega’s earnings, were then funneled to the Nicaraguan Contras. Subsequent federal prosecutions determined BCCI’s Panamanian branch, in particular, to be actively engaged in money laundering for the Colombian drug trade. A Senate subcommittee report called the bank a “fundamentally corrupt criminal enterprise.”
But BCCI was hardly the only Panamanian financial house awash in drug profits and covert intrigue. As a 1985 House Foreign Affairs report explained, it was hard to find a Panamanian bank that wasn’t engaged, to one degree or another, in some form of untoward activity. “With more than one hundred banks, the U.S. dollar as the national currency, and strict bank secrecy laws, Panama is an ideal haven for laundering narcotics money. Unlimited amounts of money may be brought into and out of the country with no reporting requirements, and money laundering is not a crime.” Corruption in government and the military, the committee found, was “endemic and institutionalized.”
Panama, to borrow the words of the Senate’s Iran-Contra report, had become the “hemisphere’s first ‘narco-kleptocracy,’” a major financial clearing house not just for the Colombian cartels, but for illegal groups of all stripes in the region, as well as “legitimate” businesspeople drawn to the exciting new services being offered thanks to the logistical demands and largesse of the drug trade. Americans were sinking millions into this innovative tax haven, and the surplus of available dirty currency actually insulated Panama from the debt crises that were sweeping the region at the time—converting it into a secure, relatively stable place for the Third World rich to hide their money.
“Particularly popular with Latin Americans,” writes Dr. Rachel Ehrenfeld in Evil Money, “was a double-shell arrangement, in which the Bahamian cover was overlaid with Panamanian corporate shells. Panamanian lawyers were equally adept at creating fictitious companies. The money would be wired from one corporate account to another without revealing the identity of the real owner.”
Dummy companies of this sort, set up by the White House and registered in Panama, were used to float the Nicaraguan Contras. Noriega’s personal Swiss-based lawyer even helped Marine Colonel Oliver North construct a front for an airfield in Costa Rica. A veritable fleet of aircraft, including planes provided by Noriega and some paid for through a BCCI account, made the circuitous journey from secret runway to secret runway, dropping off weapons in Honduras and Costa Rica, cocaine in the southern United States, and large stacks of small-denomination bills in Panamanian bank vaults.
As we continue to dig through the many layers of corruption, lawbreaking, and bad faith that have accumulated in the intervening years, it’s important to recognize that the quintessentially private practices that now form the basis for the Panama Papers revelations emerged within a context of large-scale state criminality.
The 1989 U.S. invasion that led to Noriega’s arrest only exacerbated the underlying problems of Panamanian governance. As Jonathan Marshall, co-author of the indispensable Cocaine Politics, explained, between “economic sanctions, capital flight, war damage, and a more than a billion dollars’ worth of damage from post-conflict looting,” any new president would have faced significant challenges. It happened that the one the United States installed, Guillermo Endara, had dubious ties to a bank the DEA and FBI both suspected of money laundering. Endara’s appointees for attorney general, treasury minister, and chief Supreme Court justice had each served as director of a bank shut down for its alliance with Colombia’s Cali Cartel. By the U.S. government’s own estimation, trafficking and laundering got worse in the invasion’s aftermath, a legacy that has continued on to the present day. Facing corruption charges, the country’s most recent president has sought refuge in Miami.
After the invasion, a joke started circulating around Panama that seems fairly prescient, in light of the Panama Papers. “They took Ali Baba,” it went, “and left us with the 40 thieves.”
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