Swiss Bank HSBC: World’s 2nd Largest Has Titanic Public Relations Problem.

Posted on February 9, 2015

by Jerry Alatalo

(Comment: The question to consider while reading the following information about recently revealed Swiss banking secrecy is this: “Why has it seemingly become the job of journalists from 45 countries around the world, instead of governments, to investigate the multi-billion dollar, decades-old global tax haven/evasion industry?” Perhaps if governments got serious by offering university law and accounting graduates student loan forgiveness, adequate pay and tools to end the world’s massive tax evasion industry – enabled by the world’s largest accounting and legal firms – the world would be a better place.)

*******

(Thank you to the International Consortium of Investigate Journalists for the following article. For more information on Swiss Leaks, visit: www.icij.org)

Swiss Leaks lifts the veil on a secretive banking system

Gerard Ryle, Marina Walker, Gérard Davet and Fabrice Lhomme.ICIJ’s Gerard Ryle, left, and Marina Walker Guevara with Le Monde reporters Gérard Davet and Fabrice Lhomme. Photo: Melissa Golden/Le Monde

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws, a new International Consortium of Investigative Journalists investigation has found.

The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion.

“We hope this will help the public understand the perils and the potential downside of so much secrecy,” said Gerard Ryle, the director of ICIJ. “What we are exposing is a world most people never get to see.”

The documents, obtained by ICIJ via the French newspaper Le Monde, show the bank’s dealings with clients engaged in a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities. They also show bank records of famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.

Find out how you can support collaborative cross-border journalism and help ICIJ continue its work.

The disclosures shine a light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, one of the world’s largest banks.

“The Consortium is at the forefront of exposing global tax avoidance, a problem world leaders recognize as a factor in growing inequality,” said Peter Bale, chief executive of the Center for Public Integrity. “The global reach of the Consortium’s network, the sophistication of its analytical tools and the rigor of its journalism allow it to tackle complex and far-reaching stories of this nature.”

HSBC, which is headquartered in London and has offices in 74 nations and territories on six continents, initially insisted that ICIJ destroy the data. Late last month, after being informed of the full extent of the reporting team’s findings, HSBC gave a final response: “We acknowledge that the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today.”

How the offshore banking industry shelters money and hides secrets has enormous implications for societies across the globe. Academics conservatively estimate that $7.6 trillion is held in overseas tax havens, costing government treasuries at least $200 billion a year.

The secret files analyzed by ICIJ and its media partners — covering accounts up to 2007 associated with more than 100,000 individuals and legal entities from more than 200 nations — are a version of the ones the French government obtained and shared with other governments in 2010, leading to prosecutions or settlements with individuals for tax evasion in several countries.

ICIJ enlisted more than 140 journalists from 45 countries, including reporters from Le Monde, BBC, The Guardian, 60 Minutes, Süddeutsche Zeitung and more than 45 other media organizations.

The reporters found in the nearly 60,000 leaked files the names of current and former politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, the Philippines and Algeria, among others.

“The world of offshore finance and secret bank accounts is deliberately complex, driven by an intricate network that crosses multiple jurisdictions. Large-scale cross-border investigations are the only way to investigate this world in depth, and uncover the layers of secrecy,” Ryle said.

“ICIJ’s model of collaborative journalism links reporters around the world to dig deeper and tell these stories in greater detail than ever before.”

ICIJ is a non-profit news organization that provides its services to newsrooms around the world. You can support ICIJ’s work in a number of ways:

Queen Elizabeth Demands ‘My Government’ Abolish Tax Haven Industry.

Posted on June 19, 2014

by Jerry Alatalo

ocean22It’s been around three years since the International Consortium of Investigative Journalists (icij.org) received, then released to the public, hundreds of thousands of bank records supplied by a whistleblower from the British Virgin Islands. The story quickly traveled around the world in the first large and important exposure of a decades old, massive tax evasion industry.  ICIJ has created the world’s first searchable tax haven database for any person interested in researching by person, company, or nation – on the internet at offshoreleaks.icij.org.

After three years no actions have been taken to stop tax evasion on a colossal scale by literally every large transnational corporation, as well as every super-rich family on the planet. A trillion dollars = one million millions, and estimates are that 25-30 trillion dollars have been deposited in offshore tax haven jurisdictions around the Earth. The world’s politicians have, in the approximately three years since ICIJ’s bombshell release, talked a good talk about “corporations and wealthy people must pay their fair share of taxes”, but have intentionally not “walked the walk.”

Nothing has occurred to slow down or stop the world’s tax haven, avoidance, and evasion industry

Queen Elizabeth spoke to the British Parliament in the Brit’s yearly monarchy charade where she gave “my government” suggestions on a variety of issues, but conveniently failed to mention anything about “her government” allowing the City of London financial center to continue being the world’s foremost tax haven hub. The City of London is the #1 financial capitol on Earth, the center of a wheel with spokes that travel to half the tax havens in the world, and in 2014 there has never been more money stashed in tax havens.

The British Crown jurisdiction of the Cayman Islands has more money in its banks than all the banks in New York City and Wall Street. The Cayman Islands is but one of over 70 tax haven jurisdictions in the world. In the U.S. Congress, proposals have come forward which allows repatriation of trillions of dollars – tax-free – to bring the tax-evasion funds of American corporations and wealthy families back in-country, but no effort is made to tackle the tax evasion industry.

According to documentary filmmaker Mark Donne, whose film about the UK’s tax evasion industry “The UK Gold” has received rave reviews, “tax havens have become hardwired into the economic models”, and new laws, written by the same businesses that use tax haven subsidiaries instead of independent accountants, lawyers, and economists, have made it easier to evade taxes. David Cameron is seen and heard “talking tough on tax evasion” but the reality has been the exact opposite.

The City of London, just as Wall Street in the United States Congress, has a tremendously powerful influence on Britain’s democratic structures.

Mr. Donne says that, “the primacy of the City of London and its policy wins and is supreme.”

Changes have been cosmetic and actually strengthened the City of London, the largest unregulated, tax evasion, financial center on Earth, and the actual tax haven jurisdictions which are part of the City of London’s operations represent a 2nd empire – a second branch of foreign policy. Between 40 and 50% of the world’s financial activity runs through the tax haven network, with, as mentioned, tens of trillions of dollars parked offshore.

In America, politicians are essentially silent on this issue, while vocal about government spending and accountability, with frequent calls for reductions in spending on healthcare, education, roads, food security, bridges, and other forms of social-uplift investment/expenditures.

Mark Donne believes that a “seismic change needs to come, but I’m not seeing it anywhere.”

The $multi-trillion tax evasion industry has been quietly facilitated for decades by the world’s largest accounting firms, banks, and legal corporations and continues to operate with impunity. At the same time, thousands die every day of starvation and easily curable disease, poverty afflicts a large percentage of humanity, homeless veterans sleep under bridges in America, wealth inequality has turned democracies into oligarchies, “austerity” measures deteriorate national economies, government tax agency budgets have been slashed, and wars are fought to increase the amount of money tax cheats can stash offshore.

When will politicians, academics, religious leaders, and all concerned citizens around the world finally act to stop the hypocritical white-collar criminals of the tax haven/evasion industry?

####

Destructive Nature Of Earth’s Tax Haven Club.

Posted April 11, 2014

by Jerry Alatalo

“Man is not a blood-thirsty animal, and war is only due to the greed and lust for power of relatively small groups, the conspiracy of the few against the many.”

– Albert Szent-Gyorgyi  (1893-1986) American biochemist, Nobel Prize 1937

superior444-1Viktor Yanukovych, the former, or deposed, or ousted president of Ukraine is alleged to have stolen $70 billion from his fellow Ukrainians and stashed it in offshore tax havens. Fellow tax haven users, including the owners of Western mass media corporations, have made sure that Yanukovych’ and their “secrets” are kept away from the consciousness of the citizens. Apple, Goggle, Microsoft, and Sysco Systems have hundreds of billions of dollars stashed offshore to avoid taxes.

The Bahamas, one of the premier tax haven jurisdictions of the over 70 around the world, has experienced big financial problems in their government. Instead of going after the people in the country who use tax avoidance schemes and have become very wealthy in the process, the government has proposed a regressive value-added tax (VAT) which hits the poor and middle class.

The large uranium producing country of Niger has decided to move against foreign mining companies to get a fairer percentage of royalties on uranium mined and shipped out of the nation. Zimbabwe, which is a big source of diamonds, has taken similar steps to recover some of the wealth from that natural resource that has been flowing out of Zimbabwe. In the Philippines, 19 mining and oil companies have been pressured to go public with their tax information.

Extraordinarily high levels of lobbying has been going on in Austria, Luxemburg, the United Kingdom and other nations to exclude trusts and offshore foundations from tax avoidance registries, thereby protecting their wealthiest clients. To the surprise of people in the broadcast, the International Monetary Fund has recently reported that countries which have been redistributing wealth strongly are experiencing a better quality of economic growth than countries that have maintained high levels of wealth inequality.

Niger has one of the richest deposits of uranium on Earth, but is also one of the poorest countries in the world. Ukraine has been looted by Ukrainian and Russian elites, a new group of looters has taken their place, and the threat of violence and war worries the people of the region. Financial records found around Viktor Yanukovych’ home after he fled to Russia read like a “who’s who” of the world’s tax havens. In recent years money stolen from Ukraine has been going to European tax havens, the British Virgin Islands, Lichtenstein, Austria, Panama, and many more.

Russian billionaires – 100 Russians own 35% of the country – park their money in the City of London in what is called a “special relationship”. Western powers cry loudly about Ukrainian and Russian corruption, while the kleptocrats have become fantastically wealthy because the West has facilitated the financial infrastructure that allowed their great wealth accumulation. Offshore tax havens are completely absent from Western sanctions against Yanukovych and Russian billionaires because “corruption travels in all directions”, and any knowledge of the tax-cheating activities of them opens up examination of the same cheating done by Westerners, Easterners, and any “ers” who have come to accumulate great wealth.

So, the billionaire and multi-billionaire bankers and industrialists from America, Russia, China, England, and all nations become motivated by extreme avarice to take very dangerous actions. These wealthiest people on Earth need to leave their avarice at the door, enter inside and get their act together. They need to erase the $ signs from their minds, and rely on spiritual and philosophical reason and wisdom to arrive at peaceful consensus which benefits the most people. They need to alter their perspectives from personal wealth and power accumulation to realize that their violent actions – both financial and military – are harming a great number of innocent human beings.

Trust funds, offshore foundations, tax-cheating billionaire elites need to stop harming and stealing from – and start helping – their fellow men, women, and children around this Earth.

****

Why Do Tax Havens Still Exist?

Posted February 19, 2014

by Jerry Alatalo

“Luxury and avarice – these pests have been the ruin of every state.”

– Marcus Porcius Cato (234 – 149 B.C.)

361a-1It’s been years since the International Consortium of Investigative Journalists (ICIJ / icij.org) released banking records from the British Virgin Islands that exposed the names and account information of thousands of tax haven users from around the world. At the time, the release caused an avalanche of publicity surrounding the worldwide industry called tax avoidance through “tax havens”, implemented by the largest corporate, accounting and legal firms on Earth.

The wealthiest individuals on the planet suffered extreme embarrassment to the point where politicians using tax havens had to resign from office in nations around the world. Politicians feigned shock and surprise at the expose, and spoke empty words like “we cannot stand for this… this has to be addressed..” and since then nobody has heard any more about it.

Why do tax havens still exist?

This seems a reasonable question to ask after the absolutely astounding revelations from ICIJ years ago. Here in America, there have been no reports of “landmark legislation” to end tax havens – or actions which have led to media-sensation reports of tax avoidance crimes committed by well-known politicians or wealthy persons or corporations. One can see a parallel between the issue of tax havens and tax avoidance with the total absence of prosecution of Wall Street fraudsters whose crimes brought down the world’s economy during the years 2000-2008. What is easily detected as far as connections between tax avoiders/tax haven users and Wall Street white-collar criminals is number one, the lack of accountability for what they have done.

Secondly, and perhaps most importantly, another connection between the groups is that they are all very wealthy. The only person in the United States government who has expressed concern about corporate avoidance of tax, much less tax havens and the need to close them down, is Senator Bernie Sanders. There have been no lawmakers in Washington, D.C. who have become outspoken on the specific issue of tax havens, or who have offered legislation to totally eliminate the problems associated with tax havens.

President Barack Obama evidently does not feel that the decades-old tax avoidance industry (and it is an industry orchestrated by the largest accounting, legal, and financial firms in the world) is important. He made no mention of tax havens in his recent State of the Union address. How is it that what could be the largest and most economically relevant scandal in history has been basically swept under the rug?

The mainstream media evidently does not feel that tax havens is a large enough issue to investigate thoroughly and report on. ABC, CBS, NBC, CNN, and PBS have offered no journalistic products to their audiences. While hour after hour of discussions about “fiscal cliffs” and “raising of the nation’s debt limit” and “sequestration” pound the airwaves, not a peep about corporations and wealthy individuals’ stashing the profits and cash in offshore havens like the Cayman Islands, British Virgin Islands, or any of dozens of locales around the world engaging in the huge tax avoidance/secrecy industry.

Nowhere found are the responses/opinions on tax havens coming from Queen Elizabeth or members of her “royal” family, Queen Beatrix of the Netherlands or her “royal” family, any multi-billionaires, or CEOs of major transnational corporations. Perhaps it would be good to know especially the British royal family’s views on tax havens, since most of their crown colonies are indeed tax havens. The question which needs to be asked is: is anyone going to take the issue of tax havens on directly, get to the bottom of it, and finally take actions to solve this major, major problem?

Now, this worldwide industry has operated for decades, so how is it that world leaders are acting so “surprised and shocked” – like they are only just learning about it? Frankly, any politician who does not admit that they have been aware of tax avoidance schemes and havens’ existence for decades is simply lying.

Perhaps the talk given by journalist/author Thomas Frank in the following video can help to explain why tax havens are a forgotten international scandal. Mr. Frank is the author of “Pity The Billionaire”, a book which delves into recent political movements, mainly the Tea Party, whose adherents have come to accept some of the ideas of Ayn Rand, whose “Atlas Shrugged” Mr. Frank describes as “reverse Marxism”.

In contrast to nineteenth century populism, where people exhibited a sense of neighborliness and civility, the populism of the Tea Party is illustrated by applause of an audience after presidential candidate Ron Paul was asked the question: “should we just let people without health insurance die?” Mr. Frank points out that, when confronted with the idea of Wall Street re-regulation, the typical Tea Party response is “get the government out of our lives” – failing in every way to understand that deregulation led to the crash of the entire world’s economy.

He shares his experience of watching a Tea Party sympathizing TV journalist reporting from the Chicago Board of Trade (CBOT) and, with reference to government bailout funds being directed to struggling homeowners facing foreclosure, instead of to the financiers who created the crash, the reporter goes on a tirade about “losers (homeowners)need to lose… we shouldn’t have to bail them out!” Mr. Frank goes on to describe how in the last century most people looked upon the CBOT and Wall Street operations as the pits of hell, whose actions ripped off the average citizens and left people poor and suffering.

“Atlas Shrugged” adorers, according to Mr. Frank the “flim-flam of our time”, have the idea that “meddling government” is the problem, not the wealthy billionaire tycoons avoidance of their fair share of taxes or white-collar criminals in the banking and finance sector. This way of thinking had reached the minds of so many Americans that in 2012 investment banker, 14% tax bracket, and tax haven user, Mitt Romney actually had a shot of getting elected – a situation that persons in Germany reacted to in talks with Mr. Frank by saying “What? That (Romney’s victory) could happen?”

Political discourse in America has devolved to the point where Social Security, one of the best social justice programs ever created, is now seen by many Ayn Rand disciples as an “injustice of protection of the weak”, and call for reform/privatization. Interstate highways, disaster relief, food stamps, overturning Citizens United, Wall Street regulation and prosecution, closing tax loopholes/tax havens, unemployment benefits, mention of 1950’s top tax rate of 91%, opposition to secret corporate-lawyer-written trade agreements,, a hike in the minimum wage, national parks, ending the Fed, etc. represent more “leeching, parasitic activity by the losers of society”.

But why do tax havens still exist?

****

(Thanks to Free Speech TV @ YouTube)