[Marxism] Leak of Data on Offshore Account Holders Likely to Spread Fear and Anger
lnp3 at panix.com
Thu Apr 4 19:34:39 MDT 2013
NY Times April 4, 2013
Leak of Data on Offshore Account Holders Likely to Spread Fear and Anger
By ANDREW HIGGINS
BRUSSELS — They are a large and diverse group that includes a Spanish
heiress; the daughter of the former Philippine dictator Ferdinand
Marcos; and Denise Rich, the former wife of the disgraced trader Marc
Rich, who was pardoned by President Bill Clinton. But, according to a
trove of secret financial information released Thursday, all have money
and share a desire to hide it.
And, it seems safe to say, they — and thousands of others in Europe and
far beyond, in places like Mongolia — are suddenly very anxious after
the leak of 2.5 million files detailing the offshore bank accounts and
shell companies of wealthy individuals and tax-averse companies.
“There will be people all over the world today who are now scared
witless,” said Richard Murphy, research director for Tax Justice
Network, a British-based organization that has long campaigned to end
the secrecy that surrounds assets held in offshore havens. The leaked
files include the names of 4,000 Americans, celebrities as well as more
mundane doctors and dentists.
It is not the first time leaks have dented a thick carapace of
confidentiality that usually protects the identities of those who stash
funds in the British Virgin Islands, the Cayman Islands, Liechtenstein
and other havens. Nor, in most cases, is keeping money in such places
But the enormous size of the data dump obtained by the International
Consortium of Investigative Journalists, a Washington-based group that,
along with affiliated news media organizations, announced its coup on
Thursday, has punched a big hole in the secrecy that surrounds what the
Tax Justice Network estimates are assets worth at least $21 trillion
held in offshore havens. “This could be a game-changer,” said Mr.
Murphy, the author of a book about offshore tax shelters. “Secrecy is
the key product these places sell. Whether you are a criminal laundering
money or just someone trying to evade or avoid taxes, secrecy is the one
thing you want.” Once this is gone, he added, “it creates an enormous
fear factor” and has a “massive deterrent effect.”
And lifting the curtain on the identities of those who keep their money
offshore is likely to cause particular anger in austerity-blighted
Europe, where governments have been telling people to tighten their
belts but have mostly turned a blind eye to wealthier citizens who skirt
taxes with help from so-called offshore financial centers.
The leaked records, mainly from the British Virgin Islands, the Cook
Islands and Singapore, disclose proprietary information about more than
120,000 offshore companies and trusts and nearly 130,000 individuals and
agents, including the wealthiest people in more than 170 countries. Not
all of those named necessarily have secret bank accounts, and in some
cases only conducted business through companies they control that are
The embarrassment caused by Thursday’s revelations has been particularly
acute in France, where Socialist President François Hollande, who wants
to impose a 75 percent tax on millionaires, has been struggling to
contain a political firestorm touched off this week by a former budget
minister’s admission — after months of denials — that he had secret
foreign bank accounts.
The scandal looked set to widen on Thursday as senior members of the
government were forced to confront allegations that Mr. Hollande and
others may have been aware that the budget minister, Jérôme Cahuzac, who
resigned on March 19, was lying but failed to act.
Adding to the president’s trouble, the name of a close friend and
treasurer of his 2012 election campaign, Jean-Jacques Augier, appeared
in connection with the files released Thursday by the International
Consortium of Investigative Journalists. Mr. Augier, according to the
newspaper Le Monde, was identified as an investor in offshore businesses
in the Cayman Islands, another well-known tax haven.
Mr. Augier, a friend of Mr. Hollande, denied to Le Monde and Agence
France-Presse that he had done anything illegal or improper. He said he
had invested in funds that invested in China, and that he had no
personal bank account in the Cayman Islands or any direct personal
investment there. He conceded only that “maybe I lacked a bit of caution.”
Others identified included Maria Imelda Marcos Manotoc, a provincial
governor and eldest daughter of the former Philippine president; Olga
Shuvalova, the wife of Russia’s deputy prime minister, Igor Shuvalov;
Gunter Sachs, a German playboy and photographer who committed suicide in
May 2011 at age 78; and Baroness Carmen Thyssen-Bornemisza, Spain’s
wealthiest art collector and the widow of a Thyssen steel company
billionaire. The president of Azerbaijan, Ilham Aliyev, and his wife,
Mehriban, were featured in the documents as having set up an offshore
company in the British Virgin Islands, while their two daughters
appeared in connection with three other offshore outfits.
The consortium did not specify how it got the information or where it
came from. On its Web site, the group said “the leaked files provide
facts and figures — cash transfers, incorporation dates, links between
companies and individuals — that illustrate how offshore financial
secrecy has spread aggressively around the globe, allowing the wealthy
and the well connected to dodge taxes and fueling corruption and
economic woes in rich and poor nations alike.”
In Germany, now gearing up for national elections in September and a
country with both a strong sense of social justice and a long history of
tax evaders sneaking funds into nearby Switzerland, politicians
expressed concern, even outrage, over the disclosures. Of particular
concern were indications that big banks in Germany and elsewhere are
deeply involved in moving money beyond the reach of tax authorities.
“We should introduce tougher penalties for those financial institutions
that are ideal for tax fraud or take part in it,” Peer Steinbrück, the
Social Democratic Party’s candidate for chancellor, was quoted as saying
in the daily Süddeutsche Zeitung.
The issue of tax avoidance has become a highly charged issue across much
of Europe, particularly in richer northern countries that are
increasingly fed up with demands for bailout funds from heavily indebted
countries like Greece. A key demand of a recent bailout deal announced
for Cyprus was that nation drastically shrink its role as a financial
center and, many in Germany suspect, a haven for money laundering.
Robert Palmer, a policy adviser for Global Witness, a London research
group that focuses on corruption, said the naming of offshore account
holders could have powerful political reverberations across Europe
because “it shows that if you are wealthy and well connected you play by
He said the information released so far did not shed any new light on
how offshore finance works but was still significant because it
identified people who used hidden shelters.
“This is very unusual because it is so difficult to get any information
out of these places,” he said. “It adds to the picture of how easy it is
to move money around and will build up the anger of people who are being
asked to make cuts but see that there are people out there who benefit
hugely from the system.”
The disclosure of offshore financial information is also a potential
embarrassment for Prime Minister David Cameron of Britain, in that much
of the data released so far related to the British Virgin Islands, a
British-ruled territory in the Caribbean.
Mr. Cameron had earlier spoken about the importance of tax and financial
transparency and pledged to make it a priority issue at a meeting of the
leaders of the G8 group of advanced industrial nations in Northern
Ireland in June.
The British Caribbean territory, however, is notoriously secretive and,
Mr. Palmer said, one of the most egregious offenders in enabling wealthy
people to hide their money to avoid taxes.
In a statement issued Thursday, Global Witness called on Mr. Cameron and
fellow G8 leaders to “crack down on anonymous company ownership.”
Steven Erlanger contributed reporting from Paris, and Chris Cottrell
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