And the shit just hit the fan.
April 3, 2016 12:02 PM   Subscribe

The Panama Papers - Overview The largest leak journalists have ever had to deal with.
Panama company Mossack Fonseca has helped clients launder money, dodge sanctions and evade tax. The documents show links to 72 current or former heads of state in the data, including dictators accused of looting their own countries. They were obtained by the German newspaper Suddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ). BBC Panorama and The Guardian are among 107 media organisations in 78 countries that have been analysing the documents.
posted by adamvasco (235 comments total) 121 users marked this as a favorite
 
The site is under DDOS attacks, so if it doesn't load, be patient.
posted by k8t at 12:13 PM on April 3, 2016 [1 favorite]


Hard to believe a man like Putin could be involved with something like this.
posted by LastOfHisKind at 12:13 PM on April 3, 2016 [21 favorites]




ICIJ site
posted by adamvasco at 12:16 PM on April 3, 2016 [2 favorites]


Thank you adamvasco!
posted by infini at 12:18 PM on April 3, 2016 [1 favorite]


This is going to take weeks to unfold.
posted by AlexiaSky at 12:19 PM on April 3, 2016 [1 favorite]


IAN CAMERON - Father of David Cameron

The father of Great Britain’s current Conservative Prime Minister died in 2010, having amassed a fortune in smart investments. According to the documents, “Cameron helped create and develop Blairmore Holdings Inc. in Panama in 1982 and was involved in the investment fund until his 2010 death.” Blairmore was valued at $20 million in 1998 and was promoted to investors in brochures as “not liable to taxation on its income or capital gains.” The promotional literature added that Cameron’s fund “will not be subject to United Kingdom corporation tax or income tax on its profits.”


Wait - Blairmore?! BLAIR MORE? Seriously (checks date to see if April 1st is over)
posted by Wordshore at 12:19 PM on April 3, 2016 [24 favorites]


Is there a way to search the papers? This is so big that there's a real risk the smaller (relatively) fish will slip away in the slurry of "big data".
posted by chavenet at 12:19 PM on April 3, 2016 [1 favorite]


Some good background on the Panamanian Law firm Mossack Fonseca where this leak originated.
posted by theory at 12:22 PM on April 3, 2016 [1 favorite]


The first few high ranking pols I've looked at, at least the non-dictator ones, seem to be of the wealthy before they got into politics variety. For them, this looks to be less about (directly) stealing from their people, and more about hiding from the taxes they enforce on their population and how being rich and being a head of state go hand in hand.
posted by thecjm at 12:23 PM on April 3, 2016 [6 favorites]


I think that, regarding how big the data are, is that journalists and activists from various countries will do the work. I focus on a few small states and my social media Timeline is full of specifics that are relevant to oligarchs and politicians from these places. Moreover, they had 172 media organizations on it and as I understand it, there is a very coordinated effort to divide and conquer.
posted by k8t at 12:29 PM on April 3, 2016 [2 favorites]


Facebook has a #panamapapers tag which many news publications in various languages are using.
posted by adamvasco at 12:30 PM on April 3, 2016


Direct link to a longform expose from Fusion.net, which was also the source of theory's link.
posted by KMB at 12:39 PM on April 3, 2016 [2 favorites]


Wow, this is amazing. I'm looking at the Power Players, which include such intriguing people as Jacob Zuma's nephew, the former premier of China's daughter, a man who helped bankroll the former president of Cote d'Ivoire, the former prime minister of Iraq, lots of members of parliament of lots of different countries, etc. etc.
posted by ChuraChura at 12:45 PM on April 3, 2016 [1 favorite]


I'm edging towards supporting a global French Revolution.
Put all the fuckers against a wall (metaphorical or otherwise) and start over.
At least the new fuckers who take their place will take a while to rebuild the massive, systemic corruption networks.
posted by signal at 12:46 PM on April 3, 2016 [40 favorites]


Oh, wow. The former head of intelligence in Rwanda. The governor of the Delta State in Nigeria. The deputy chief justice of Kenya. Head of the spy agency in Peru. A lot of people from Iceland. Interesting stuff. I wonder how easily people will be able to weasel out of this.
posted by ChuraChura at 12:54 PM on April 3, 2016 [1 favorite]


Everyone implicated seem to be saying that it's all legal. If so, the fallout will be political rather than legal (i.e. minimal). David Cameron's dad was a tax-dodger? It'll take more than that to sink him.
posted by YAMWAK at 12:58 PM on April 3, 2016 [2 favorites]


" I wonder how easily people will be able to weasel out of this."

I was just talking about this with my wife — my hunch is that because so many of the rich and powerful are implicated, nothing will happen. In many cases, what they did was "legal" because of loopholes inserted into law for this purpose, and I can't imagine something this complicated ginning up protests in the streets. There will likely be a thin-soup "reform" that makes the most egregious abuses illegal, but doesn't touch the underlying system.
posted by klangklangston at 1:00 PM on April 3, 2016 [16 favorites]


FIFA, corrupt?!

!
posted by the uncomplicated soups of my childhood at 1:00 PM on April 3, 2016 [4 favorites]


Iceland's prime minister, Sigmundur Davíð Gunnlaugsson, walks out of an interview over tax haven questions. He's been accused of hiding millions of dollars of investments in an offshore company.
posted by theory at 1:03 PM on April 3, 2016 [7 favorites]


In my neck of the woods, there have already been dozens of similar exposes and nothing happens. People know that these assholes are rich and hiding money already. Then the journalists that do the expose are jailed. And nothing changes.
posted by k8t at 1:13 PM on April 3, 2016 [6 favorites]


David Cameron's dad was a tax-dodger? It'll take more than that to sink him.

If anything it would hurt his prospects to be found out as the child of a taxpayer.
posted by Pope Guilty at 1:14 PM on April 3, 2016 [40 favorites]


FAMILY OF NAWAZ SHARIF
PM of Pakistan

For years, Sharif, a longtime presence in Pakistani politics, has had to answer questions about his family’s “riches from a network of businesses that include steel, sugar and paper mills and extensive international property holdings,” ICIJ says. Mossacks’ documents show a series of offshore companies operated by Sharif’s children, Mariam, Hussein and Hasan, including one to hold “a UK property each for use by the family” and others that moved million in assets. Mossack Fonseca resigned from a company Hasan directed in 2007, calling him “a politically exposed person.” The Sharif family did not respond to the ICIJ’s requests for comment.


Bwahahaha! Finally something concrete I can point PMLN supporters to!
posted by bardophile at 1:22 PM on April 3, 2016 [2 favorites]


There will likely be a thin-soup "reform" that makes the most egregious abuses illegal, but doesn't touch the underlying system.

I doubt we'll even get that; more likely, a token few of the people in this leak will emerge, in the media narrative, as the "true crooks" for having crossed over some meaningless line that the others didn't (or simply for bungling the PR spin, like Iceland's PM has so far), they'll get showy trials and slaps on the wrist to make "examples" out of them, and the world leaders that are engaged in the same shitty behavior will say "hey look, we got the bad guys, everything's okay again". And then they'll all go back to tax dodging.

The most serious fallout from this will probably be for the law firm - once Mossack Fonseca's a household name, it'll hemorrhage clients (I expect this is happening already!) and be watched by journalists and regulators for a while; ultimately it'll probably have to dissolve and re-form as a new firm with a new name to re-claim its anonymity, and it'll probably never get back all the clients it loses. Its competitor firms must be ecstatic today. Here's hoping they all get hit the same way tomorrow.
posted by mstokes650 at 1:24 PM on April 3, 2016 [10 favorites]


One reason I like real estate -- land value -- taxation is that it's impossible to dodge.

Let "the 1%" have their shell games, but it all comes back to the land eventually.

The "Single Taxers" were really onto something, 100+ years ago.
posted by Heywood Mogroot III at 1:29 PM on April 3, 2016 [3 favorites]


One does wonder how many of his father's interests Dave inherited, and how much that influenced his decision to stand down as Prime Minister before the next election. I'm not sure what the rules are about business matters and being PM, whether things are put in trust during time in office, but there's some digging to be done there.

From Wikipedia: In October 2010, David Cameron inherited £300,000 from his father's will, at that time it was just under the £325,000 threshold on which tax of 40 per cent is paid. The Camerons' family fortune was built up by his late father, Ian Cameron, who had worked as a stockbroker in the City. Ian Cameron used multimillion-pound investment funds based in offshore tax havens, such as Jersey, Panama City, and Geneva, to increase the family wealth. In 1979 he took advantage of the end of capital controls made by Margaret Thatcher during her first month in power. The change in the law made it legal to take money out of the country without it being taxed or subject to any financial controls by the UK government. An estimate of his worth is £3.2 million, though this figure excludes the million-pound legacies Cameron is expected to inherit from both sides of his family.

Good old dad - he even died tax-efficiently.

I've lost count of how many large leaks of confidential data thete have been from within secretive organisations by now. It's an interesting new dynamic - perhaps we're moving towards a self-regulating, semi-transparent environment by default, but if so it'll be a painful metamorphosis.
posted by Devonian at 1:31 PM on April 3, 2016 [1 favorite]


CTRL+F trump ohpleaseohpleaseohplease
posted by nevercalm at 1:37 PM on April 3, 2016 [9 favorites]


It says the records go back to the 70s so....CRTL+F kissinger ohopleaseohpleaseohplease
posted by bonobothegreat at 1:39 PM on April 3, 2016 [10 favorites]


CTRL+F trump ohpleaseohpleaseohplease

Trump, like most US citizens, doesn't need Panama because the US allows its rich and famous to avoid taxes domestically. The trick is to make sure your money never is cash. You always have it tied up in assets which aren't taxed and take out loans using those assets as collateral.

This will mostly impact the European rich who need to go to much more extreme measures to keep the taxman out of their shit.
posted by Talez at 1:42 PM on April 3, 2016 [47 favorites]


Much as this is interesting, nothing will change, the rich and powerful have it all sewn up now, the game is so rigged in their favour that even this won't change anything. They own the means of production and the media, they own the governments and banks. What can we even do? Nothing. Helpless doesn't even begin to describe the feeling.

Interestingly, most tax havens are Crown Territories, which links them to the Monarchy, and (if you believe the conspiracy theories) to the Ruling Elite which links to the Monarchy.
posted by marienbad at 1:50 PM on April 3, 2016 [3 favorites]


Unless there are more Westerners in there (British, Americans, Germans) this is a damp squib politically. Non-Western states are corrupt, and their leaders steal money from their oppressed people? Well, yes, we know that. What are we going to do, depose Putin?

Or am I missing something? It didn't look like there was much to get Ashcroft on. And Cameron's dad did some nifty inheritance tax planning? After we accepted Eton, Bullingdon and That Pig, don't think there is anything there to trouble the PM.

(It'll be fun on the football front, of course!)
posted by alasdair at 2:18 PM on April 3, 2016 [3 favorites]


Craig Murray is not impressed with how the leak's being handled by the media...
posted by Devonian at 2:23 PM on April 3, 2016 [19 favorites]


Not a single U.S. news outlet has woken up from its after-brunch nap to report on this. (Okay, Slate and USA Today, you get points for trying)
posted by RobotVoodooPower at 2:25 PM on April 3, 2016 [2 favorites]


Nothing will change. I wish it would, but nothing will change.

It takes 3 steps, at least, in a case like this for there to be real change - the insider has to leak the information, the press has to expose the scale of the corruption and then people or their representatives have to do something about it. These days we never seem to get beyond step 2. I guess it's too easy to bury the problem.
posted by dazed_one at 2:40 PM on April 3, 2016 [2 favorites]


I'm edging towards supporting a global French Revolution.
Put all the fuckers against a wall (metaphorical or otherwise) and start over.
At least the new fuckers who take their place will take a while to rebuild the massive, systemic corruption networks.


We're talking about Russia here, right? They've tried this a few times now, and the new fuckers come alone quick. I mean, you can't shoot everyone.
posted by bonaldi at 2:51 PM on April 3, 2016 [10 favorites]


At least the new fuckers who take their place will take a while to rebuild the massive, systemic corruption networks.

Napoleon walked in real quick after the original French Revolution, so I'm not sure how long it would actually take.
posted by BungaDunga at 2:54 PM on April 3, 2016 [8 favorites]


Not a single U.S. news outlet has woken up from its after-brunch nap to report on this. (Okay, Slate and USA Today, you get points for trying)

Miami Herald was one of just I think three U.S. media outlets that participated in the investigation -- their report focused on South Florida real estate corruption; they're part of the McClatchy newspaper group which has a DC-bureau based article on similar corruption in Nevada connected to the papers; I think the whole McClatchy group were recipients of the leak after the SZ paper went "ok this is huge we need help."

Other U.S. media part of the ICIJ investigation: Fusion (linked above) and Univision.

I'll be very interested to see how the initial journalists who viewed the data decided who else they wanted to show it to.
posted by none of these will bring disaster at 2:57 PM on April 3, 2016 [6 favorites]


You always have it tied up in assets which aren't taxed and take out loans using those assets as collateral.

And as long as the loan never has to be repaid, the interest rate increases, or the asset decreases in value, then that'll work great.
posted by jpe at 3:05 PM on April 3, 2016


You just use the loan to fund lobbying to ensure that those problems never come to bear.
posted by rhizome at 3:15 PM on April 3, 2016 [5 favorites]


Tangent: I find it interesting to watch the development (or, "development") of the Wikipedia article about this type of news over time. This link is to Wikipedia's article as of this post (the article was started Apr 3 in UTC terms) while this link will be the future-most-recent version.
posted by sylvanshine at 3:18 PM on April 3, 2016 [1 favorite]


And as long as the loan never has to be repaid, the interest rate increases, or the asset decreases in value, then that'll work great.

Loan needs to be repaid? Either use the profits from the cash your borrowed (and deduct the interest while you're at it) or give the asset over if you wanted it just to fling some cash around without paying tax on selling the asset.

The important thing is that loans can be used to avoid triggering a loss or a gain almost at will. When you're rich and have access to lines of credit you can avoid or delay massive amounts of tax using it.
posted by Talez at 3:18 PM on April 3, 2016 [3 favorites]


Interestingly, rhizome, I would think your username is probably the most apt description of this dump. A tangled web with no beginning or ending, but endless connections that defy our ability to truly understand the depth of what is going on here.

Which is part of why I agree with others, that nothing will come of it, because it's all too easy to use something as intentionally confusing as all this as a reason to deny any kind of wrongdoing. It's easy to deny when it is hard for others to pin down exactly what it was you did wrong.

So....

Make rhizomes, not roots!
posted by deadaluspark at 3:20 PM on April 3, 2016 [3 favorites]


I predict the reaction will be:

* Five days of newspaper headlines/scandal/op-eds
* New terrorist outrage (we've had underpants bombers and shoe bombers, how about, I dunno, EXPLODING FOOTBALLS?!?)
* Five days of newspaper headlines/op-eds about terrorism
* New anti-terrorism laws that coincidentally provide for draconian punishments for anyone leaking information on money-laundering investigations in progress
* The end.

Am I too cynical?
posted by cstross at 3:29 PM on April 3, 2016 [82 favorites]


Am I too cynical?

nope. clairvoyant.
posted by xcasex at 3:37 PM on April 3, 2016 [6 favorites]


I don't think it's possible to be too cynical, at least as far as these fuckers are concerned.
posted by Grangousier at 3:39 PM on April 3, 2016 [3 favorites]


I mean, for any of them, imagine the worst thing you can, then add paedophilia and you'll be close to the truth.
posted by Grangousier at 3:40 PM on April 3, 2016 [5 favorites]


give the asset over if you wanted it just to fling some cash around

Not sure what this means. If it refers to repayment in kind, that's a taxable event.

Either use the profits from the cash your borrowed

That's not going to repay the principal.

The interest may or may not be deductible. Depends on what the loan is used for.

At least in my experience, the wealthy generally don't use debt systematically as a tax avoidance tool. Leverage is always risky, and they're keenly aware of that.
posted by jpe at 3:40 PM on April 3, 2016 [1 favorite]


Am I too cynical?

Well as that Craig Murray link points out, the "Western 1%" don't really have much to fear from this kind of investigation since the methodology the ICIJ is using effectively prevents them from getting scooped up in the process. So they don't even need to resort to bait-and-switch terrorism fearmongering or backdoor legislative tricks to derail the scoop.

Perhaps not cynical enough.

Although I will never understand why "cynical" is used in this way. From what I understand, to be cynical is to act in a way that is inconsistent with your beliefs. To act as though global elites are looking out for the little guy when it has been repeatedly demonstrated that that is clearly not the case seems to be the truly cynical position, not the opposite!

Although there's an alternate theory about why Americans (for one) are not showing up in the data: Panama, by the time this tax-avoidance scheme was set up, had become an unattractive country for Americans to stash their money in.
posted by Noisy Pink Bubbles at 3:54 PM on April 3, 2016 [6 favorites]


And as long as the loan never has to be repaid, the interest rate increases, or the asset decreases in value, then that'll work great.

The point of the exercise is to convert asset appreciation into income without having to sell an underlying asset, because selling assets triggers a tax liability. Even if the asset is ultimately sold, it can be timed advantageously or otherwise structured in a way that will minimise tax.

The ultimate owner lives off the "loans" until he/she dies, at which point it will turn out that their estate is bankrupt and the "loans" to the shell company cannot be repaid. Literally the only people who lose are the poor sods who pay tax: the lender still has a mortgage over the asset (and can repossess it if they have to); and the rest of the family are unhurt because their money is in other trusts.

Australia introduced a bunch of laws to deal with this and other methods of tax evasion. The most powerful of these IMO is a law that basically says "If a transaction has been artificially structured to avoid tax, the tax office may ignore that structure and charge the tax that would have been paid if it hadn't been artificially structured." It's like the nuclear weapon of tax law and makes it very hard to get away with traditional tax schemes.
posted by Joe in Australia at 4:03 PM on April 3, 2016 [29 favorites]


"More than 1,000 Australian links to companies have been found in the data ..."

ABC news site has an explainer.
"Secrets of the Super Rich" is screening on Four Corners tonight.
posted by valetta at 4:05 PM on April 3, 2016 [4 favorites]


You can see more of the interview with Sigmundur Davíð Gunnlaugsson, the prime minister of Iceland, here, though parts of it are in Icelandic. Squirm is a universal language, though.

Sigmundur Davíð is something of a shitshow. The story has been rumbling along in Iceland for a fortnight now. His right-wing government got into power by basically promising the moon to everyone, but then only giving the moon to rich people, including himself (I wrote about it here, including how he lowered his personal tax burden by 55%).

He's quite rich, though his wealth is mostly through his wife. In fact, the off-shore company he's in trouble for was set up to store her wealth, which she got by suing her dad. Sigmundur Davíð's father is himself quite wealthy, and got his wealth largely through a shady, though probably legal, takeover of a government company that had been set up to work with the US military in Iceland.

What's particularly galling is that his whole career has been built on things like keeping the Icelandic króna, while keeping his wealth offshore. And he used really harsh language for those who had claims on the banks that went bankrupt in the 2008 collapse. Well, it turned out his company had claims on two of the big three banks.

That said, people in Iceland are largely not surprised that he has his money in a offshore tax haven, though people are shocked by the tawdry specifics (back-dated contracts, transparent lies, pretending to have a nuptial agreement). They're not surprised either that other right-wing elected officials have been found out as well (including the Minister of Finance and Interior Minister). But I people are shocked that the two governing coalition parties seem resolute in wanting to stick things through. I mean, it only takes a few MPs to crack under the pressure, but it's altogether possible that the government will muddle through until the next election, which isn't until spring next year. That's what's really shocking to people.
posted by Kattullus at 4:09 PM on April 3, 2016 [26 favorites]


marienbad: Interestingly, most tax havens are Crown Territories

That is interesting. I wonder if it's the combination of being properly British enough to always scrupulously Respect The Rights Of Property - it's no good putting your money somewhere corrupt - and being just the right size (30,000 - 60,000 people in the tax havens) to combine just enough people to run a financial services industry with just few enough people to make politics easily manipulable by the rich.
posted by clawsoon at 4:17 PM on April 3, 2016 [4 favorites]


The ultimate owner lives off the "loans" until he/she dies

That can work if the borrower is very old. Otherwise, no bank will make a loan on terms that make sense. In ten years of working with high net worth individuals in the US, I never saw the possibility even raised, because it's so absurd on its face. Maybe it's common practice abroad; but in the US, not so much. As you mention, debt is used for timing purposes, like to avoid selling into a down market, but it's not a long-term tax avoidance tool.

Australia introduced a bunch of laws to deal with this and other methods of tax evasion. The most powerful of these IMO is a law that basically says "If a transaction has been artificially structured to avoid tax, the tax office may ignore that structure

I'm surprised they didn't already have that. The US has had it for about as long as there's been a tax code. (although it was formally added to the tax code only recently)
posted by jpe at 4:17 PM on April 3, 2016 [6 favorites]


Came back to say what cstross said. They can even engineer that if they want to, to distract everyone away from this. So what if a few of us plebs die, as long as the Rich and Powerful get what they want.
posted by marienbad at 4:23 PM on April 3, 2016 [3 favorites]


I think we're all rooting for Iceland to be the one place that actually does something about this, given that they were the one place to jail bankers after 2008. Glad to see that the Prime Minister there is already being made to squirm.
posted by clawsoon at 4:24 PM on April 3, 2016 [6 favorites]


Mossask Fonseca, the Panamanian company, is big in China:

Dalian, Hangzhou, Hong Kong, Jinan, Ningbo, Qingdao, Shanghai, Shenzhen

mossfon: contact our offices

posted by Mister Bijou at 4:28 PM on April 3, 2016


Third party tax havens don't really do much for Americans because of global taxation. If you want to evade taxes you have to do something more complex. Which is good for you if you are in the business of helping rich people hide money.
posted by JPD at 4:32 PM on April 3, 2016 [1 favorite]


The us also has an affirmative tax policy - meaning unless the IRS or previous case law approved a shelter it can be looked through. Most UK and former UK domiciled have a good faith rule, that means even dodgy transactions are legal until they aren't.

It used to be most finance bonuses in London were paid through the channel islands. That way you bought your house in France tax free.
posted by JPD at 4:36 PM on April 3, 2016 [3 favorites]


That can work if the borrower is very old. Otherwise, no bank will make a loan on terms that make sense.

It hasn't been used by Australians while I've been around, but I understand that the loans were a bit nudge-nudge, wink-winkey. I.e., "loans" made in conjunction with other business these people were doing. And they weren't usually made by a major bank directly, but by one of the high-flying subsidiaries they regularly set up to attract wealthy individuals ... then closed down with great professions of alarm and shock when their dodgy schemes became a liability. Back in the 1970s Australia was a great place for tax evasion, from what I hear. Look up "bottom of the harbour scheme" for some fun reading.
posted by Joe in Australia at 4:42 PM on April 3, 2016


Oh, and one more thing. The company of Sigmundur Davíð and his wife is called Wintris.

Just imagine the deluge of Game of Thrones puns that has hit Icelandic social media.
posted by Kattullus at 4:43 PM on April 3, 2016 [7 favorites]


From the fusion.net story:
MAURICIO MACRI
President of Argentina
...His spokesman said didn’t list Fleg Trading Ltd. as an asset because he had no capital participation in the company. The company, used to participate in interests in Brazil, was related to the family business group. “This is why Maricio Macri was occasionally its director,” he said, reiterating that Macri was not a shareholder.
I invested in a company once whose CEO had a relationship with a tax-haven firm which was almost exactly like this. After all the money I had invested disappeared, it became clear (with some hindsight and research) exactly why he had set things up this way. He was pumping dividends from the main Chinese company out the respectable Canadian front company and into his offshore holding company. If he was the owner of the holding company, it would have been illegal under Chinese law; Chinese nationals aren't allowed to pay themselves dividends in hard currencies which were earned as yuan. The Chinese government considers it a transparent attempt to get around currency conversion laws.

So the trick he used - and I think there was a catchy name for it, though I forget now - was to be the director of the offshore holding company, and make some random person the owner. He set things up so that, as director, he had full control of the holding company's money. Effectively, he was owner in all but name.

The reach of Canadian law is pretty much zero in this case, so my portion of that money is probably gone. However, I don't think that he quite got away with it. Last I heard, he had failed to pay some big debts in China, and he failed to stay a step ahead of his creditors there.
posted by clawsoon at 5:33 PM on April 3, 2016 [4 favorites]


As noted upthread the majority of names here tends to be from outside the USA or Europe. I would love to see a similar infodump from say Bermuda or the Caymans or even Lichtenstein.
I hope Journalists from all Central and South American countries are sharpening their pencils. Probably more than a few Spanish corrupt politicos will be unearthed as well. This will take a few weeks to be trawled through.
More and more people are getting connected via social media apps and there is a growing trend in online journalism. The people now have proof that what they often suspected about their overlords is true and I think they will start to get angry.
Maybe the next global conflict won't be the traditional counntry vs country but more of a simmering global low intensity conflict against the 1% and their lackies. Somebody has to throw the first stone in every riot.
As signal points out it needs to be metaphorically or maybe not so metaphorically up against the wall for the lot of them.
I thought I was supposed to get more conservative as I get older but that is definitely a myth.
posted by adamvasco at 5:37 PM on April 3, 2016 [10 favorites]


Hey, only two hundred bucks to start up a shell company overseas? That's not bad! Is this an option for middle-middle-class folks, do you think? lol oh wait of course it's not, I would be executed in the street and my body jailed for 40 years if I tried something like that on an annual income of >$100K. The fucking ATO/DHS would set up a special task force just for me. Gotta start earning my first few million before it's ok to do this shit.
posted by turbid dahlia at 5:43 PM on April 3, 2016 [8 favorites]


Prediction: Fox News will figure out a way to tie this to the Clintons in the near future.
posted by humanfont at 6:33 PM on April 3, 2016 [5 favorites]


Between this and the Unaoil bribery story it's been a good week for transparency.
posted by Lyme Drop at 6:39 PM on April 3, 2016


Surprise surprise..... Berlusconi
posted by adamvasco at 6:43 PM on April 3, 2016 [1 favorite]


I assume anyone who deals with divorces where one party is assumed to have hidden money overseas will be all over this stuff looking for hidden treasures.
posted by rmd1023 at 6:48 PM on April 3, 2016 [2 favorites]


Gotta start earning my first few million before it's ok to do this shit.

That's certainly the case in Canada, anyway.
posted by clawsoon at 6:53 PM on April 3, 2016 [2 favorites]




I do hope my old nemesis, the Dodgy Duke who threatened to sue my organisation and eventually served a sentence for fraud, turns up in these papers. His alleged 'Foundation', which was charging genuine charities thousands of bucks to turn up to a dinner with an alleged Princess, was incorporated in Panama.
posted by andraste at 7:06 PM on April 3, 2016




>The fucking ATO/DHS would set up a special task force just for me.

By all means go ahead, I don't think the ATO will care. The trick that stops it being used more by the middle class is a lack of non-salary income. If you, for example, wrote a best selling book, you could sell the IP rights to an off-shore company you control for $1. That company can then amass the income from the book rights for as long as it likes without paying tax.
For you to get at the money, however, requires you to either take it as a dividend or employ yourself and pay yourself an income. Both these things will be added to your tax bill if you are resident in Australia, so offer no particular advantage although you could draw the income at a time that suits (e.g. you could retire early and live off that income while paying usual tax rates). Or you could become a resident of a low taxing jurisdiction, which some people do, but that involves spending more than half your year outside of Oz.

Seeing as the superannuation laws are very generously taxed in AU anyway, and are roundly viewed as upstanding and above board, better to just park your money in there.
posted by bystander at 7:40 PM on April 3, 2016 [3 favorites]


The governor of the Delta State in Nigeria.

and to think i almost helped that bastard get 2 million USD out of his country...
posted by quonsar II: smock fishpants and the temple of foon at 8:17 PM on April 3, 2016 [26 favorites]


One reason I like real estate -- land value -- taxation is that it's impossible to dodge.

Last month up here in Canada, Conrad Black but his mansion up for auction. Just before the auction began, it was announced that the house was sold for less than asking to an anonymous buyer. So Lord Black has to move out? Nope. He gets to stay put because his former home is now being leased back to him. Not sure if this is a property tax/asset dodge or not, but it certainly is a weird way to sell your house. There are ways around everything
posted by thecjm at 8:51 PM on April 3, 2016 [4 favorites]


Back in the 1970s Australia was a great place for tax evasion, from what I hear. Look up "bottom of the harbour scheme" for some fun reading.

Ah that takes me back. The Costigan Commission... Painters and Dockers... Goanna! Remember Goanna? And our current PM was his effing lawyer!
posted by um at 10:59 PM on April 3, 2016 [1 favorite]


> For you to get at the money, however, requires you to either take it as a dividend or employ yourself and pay yourself an income.

What does Australian tax code say about the holding company, or any other shell company, buying a some luxury cars, that the company owns, that you just happen to drive. And buying a couple houses you have keys to. And employing your housekeeper and cook. And how about when all those things are in a different country?
posted by fragmede at 11:06 PM on April 3, 2016 [2 favorites]


Clay Shirky: "Wikileaks' most important innovation wasn't secure servers but cross-border syndication of analysis. Shutdown-proof."

At least until media entities consolidate on a global scale. Keep your eyes on Murdoch's brood.
posted by a lungful of dragon at 11:34 PM on April 3, 2016 [2 favorites]


What does Australian tax code say about the holding company, or any other shell company, buying a some luxury cars, that the company owns, that you just happen to drive. And buying a couple houses you have keys to. And employing your housekeeper and cook. And how about when all those things are in a different country?

That is A-okay.
The ATO rules suck.
But you know that,
posted by Mezentian at 5:06 AM on April 4, 2016 [2 favorites]


The governor of the Delta State in Nigeria.
and to think i almost helped that bastard get 2 million USD out of his country...


Lulz. $2 million?
I saw something today about $2B in bribes associated with Shell, Eni and a SINGLE LICENCE in the Nigher Delta.

Did you have the lunch money?
posted by Mezentian at 5:07 AM on April 4, 2016


Hey, only two hundred bucks to start up a shell company overseas? That's not bad! Is this an option for middle-middle-class folks, do you think? lol oh wait of course it's not, I would be executed in the street and my body jailed for 40 years if I tried something like that on an annual income of >$100K.

It's not an option for two reasons:

1) Most of the middle-middle-class are salaried employees who have all their income taxed at source anyway.

In Greece, there was/is loads of tax evasion by middle class doctors and doctors, and less by private sector employees - even if some of those employees were actually better paid. That's because it's easy to under-report your income when you run a small business and hard when you are paid a monthly salary.

Of course, even if your income is taxed at source, you can still hide your accumulated wealth in an offshore fund to avoid paying taxes on the returns.

2) The middle-middle class doesn't have enough wealth that isn't already tied up in either their primary residence or tax-advantaged retirement accounts.

Those retirement accounts aren't what you want if you have enough income from your wealth that you can live on it before official retirement age because you lose the tax advantage if you do.

Also, the tax advantage comes from income that accrues but that you don't actually take out of the fund. If you're living in the UK, you have to pay tax on any of the money that you actually spend in the UK. None of this applies to Americans who have to pay tax on their global income anyway.

So really, these funds are for people who can either find things outside the UK to spend a lot of their money on or for people who are so rich that not only have they got a large stock of wealth, they don't even need to spend the returns and can let them accumulate until later.
posted by atrazine at 6:06 AM on April 4, 2016 [1 favorite]


fragmede: What does Australian tax code say about the holding company, or any other shell company, buying a some luxury cars, that the company owns, that you just happen to drive. And buying a couple houses you have keys to. And employing your housekeeper and cook. And how about when all those things are in a different country?

This level of write-off is legally available on the lowest rung of business taxation just about anywhere, isn't it? In Canada, in any sort of business you can write off all "legitimate" vehicle travel, and if you do enough business driving it makes perfect sense to lease a vehicle and write it all off, and if the vehicle is a beemer, so what? There has to be enough real revenue to do so, and a reasonable case for all that driving, but it's pretty easy to do.

The home office writeoff is easy (a percentage of the house costs). A separate office is easy. If you can somehow generate income from doing business in a vacation destination of your choice, you can then write off your lodgings there. I'm generalizing, but you get the idea.

And so on. But even with all the possible legitimate writeoffs, any tax is bad tax to the uberrich, I guess...

I want to see the list of US clients of MF and how much they've hid away. Should I hold my breath while waiting?
posted by Artful Codger at 6:45 AM on April 4, 2016 [1 favorite]


Wired: How Reporters Pulled Off the Panama Papers, the Biggest Leak in Whistleblower History
Each time the reporter and source re-established a connection, they would use a known question and answer to reauthenticate each other. “I’d say ‘is it sunny?’ you’d say ‘the moon is raining’ or whatever nonsense, and then both of us can verify it’s still the other person on the device,” Obermayer says.
posted by ChurchHatesTucker at 6:49 AM on April 4, 2016 [5 favorites]


I spent a lot of time watching Four Corners, and explaining to people why mid-high execs should be pulled from their houses and placed in detention (I hear PNG is nice) until such time as clarity was provided.

And the more I explained it, I really couldn't find a fault with my argument.

I think it is time to rewind the Palpatine Act.
posted by Mezentian at 6:52 AM on April 4, 2016


Each time the reporter and source re-established a connection, they would use a known question and answer to reauthenticate each other. “I’d say ‘is it sunny?’ you’d say ‘the moon is raining’ or whatever nonsense, and then both of us can verify it’s still the other person on the device,” Obermayer says.

That sounds like something that's ripe for man-in-the-middle attacks, though.
posted by ymgve at 7:23 AM on April 4, 2016 [1 favorite]


I want to see the list of US clients of MF and how much they've hid away. Should I hold my breath while waiting?

There just isn't a tremendous amount of utility to Panama for US citizens. Tax evasion/fraud in the US is necessarily more complex than just an offshore vehicle, hence things that are done offshore tend to be in more sophisticated jurisdictions like Bermuda.
posted by JPD at 7:35 AM on April 4, 2016 [1 favorite]




theory -- I think this is the link that you wanted for the US being the current favorite tax haven for the Global 1%. tl;dr: while the US has led the charge on increasing standards for financial disclosure by foreign banks, it's been lagging severely behind on actually signing up to those agreements. So now, Nevada and South Dakota are the new Switzerland.
posted by bl1nk at 8:16 AM on April 4, 2016 [1 favorite]


Potshots from the other side:

The Panama papers do not include any names of US officials. Looks interesting, does it not? One shall assume that the United States of America is home to world's most honest, incorruptible officials, who have absolutely no money anywhere and no offshore accounts either.

This idea may come to mind to many people especially when they think of recent scandals with Hillary Clinton and her efforts to protect a Swiss bank from the IRS.

The authors of the investigation were sponsored by USAID. Naturally, it is very uncomfortable to investigate the deeds of sponsors. This is the key to the "American silence."

posted by infini at 9:15 AM on April 4, 2016 [3 favorites]


That sounds like something that's ripe for man-in-the-middle attacks, though.

MIM protection was provided by the services they used. They switched between them, so that was confirming identity. (I am curious how they established their passphrase protocol, though)
posted by ChurchHatesTucker at 9:24 AM on April 4, 2016


I don't really expect anything substantial in the way of corrective actions/punishment to come from this.
posted by RedShrek at 11:16 AM on April 4, 2016 [1 favorite]




I see that live link is down for the time being.
I think this is a short clip of it, showing the scale of the crowd.
Some interviews.
Some AP video.
posted by Kabanos at 12:14 PM on April 4, 2016 [2 favorites]


The Toronto Star published an Editor's Note explaining some of the rationale for the investigation and stories it will be publishing which I think is a very good summary:
The Star and our partners, including France’s Le Monde, Britain’s Guardian and the International Consortium of Investigative Journalists, are publishing this material not because we believe something illegal is happening, but because we think Canadians should know about how the elite hide and shelter so much money. The rich get to play by different rules than the rest of us. We should all know about this unfairness.
Considering how high this reaches, this is absolutely a case of the system working as intended. I guess what would be needed is some kind of popular movement/leader taking the issue head-on. I'd hope that Jeremy Corbyn can take advantage of the situation as the contrast between him and Cameron on this is quite stark.
posted by any portmanteau in a storm at 12:16 PM on April 4, 2016 [4 favorites]


Vox is pretty good at explaining and tracking stories like this.

Vox updates on the Panama Papers story.

A comic-book illustration of shell companies. Based on a Reddit ELI5 comment.

The 8 most important things to read to understand the Panama Papers document leak. Includes the Planet Money podcast where they set up a couple shell companies (Unbelizeable and Delawho).
posted by russilwvong at 12:40 PM on April 4, 2016 [7 favorites]




I read somewhere that Mossack Fonseca is the world's fourth largest incorporator of offshore shell companies.
Fourth.
posted by rocket88 at 2:48 PM on April 4, 2016 [2 favorites]


Looks like the USA is playing catch-up as Bloomburg reported at the beginning of the year - The World’s Favorite New Tax Haven Is the United States.
posted by adamvasco at 3:36 PM on April 4, 2016


Here's an excellent English-language article about Sigmundur Davíð Gunnlaugsson's case from Süddeutsche Zeitung. It includes the whole squirmtastic video interview, with English subtitles of the Icelandic. It includes many nuggets of weird, including the following exchange:

Jóhannes Kr. Kristjánsson: "You are the nation's prime minister."
Sigmundur Davíð Gunnlaugsson: "Absolutely."
posted by Kattullus at 4:59 PM on April 4, 2016 [2 favorites]


I wonder if it's reasonable to require all elected officials, if not all state actors, to report all accounts regardless of whether the IRS is entitled to a piece of them.
posted by rhizome at 5:59 PM on April 4, 2016 [1 favorite]


Image
posted by adamvasco at 6:15 PM on April 4, 2016 [2 favorites]


I believe you are required to report all foreign bank accounts if you are an American.
posted by JPD at 6:33 PM on April 4, 2016 [1 favorite]


I want to see the list of US clients of MF and how much they've hid away.

Twenty bucks, same as in town.

Oh, not this MF.
posted by the road and the damned at 6:53 PM on April 4, 2016 [3 favorites]


The Toronto Star sent a journalist to the British Virgin Islands, which immediately kicked him right out.
posted by parudox at 7:04 PM on April 4, 2016 [2 favorites]


Some talk of more disclosures (possibly involving US persons) coming next...
posted by Noisy Pink Bubbles at 7:42 PM on April 4, 2016




You are only required to report your foreign bank accounts, and contents, if you have less than 25 foreign bank accounts, JPD. If you have more than 25 foreign bank accounts, then you must report this fact and retain the records, but you do not need to report the contents. As usual that law only impacts normal people, the rich do not even need to check their balances to fill out the form correctly.
posted by jeffburdges at 10:31 PM on April 4, 2016 [6 favorites]


I'd love it if prosecutors take on the tax dodgers, and tax loop holes get plugged, but those actions take time.

In the shorter term, one should recall from Julian Assange's Conspiracy as Governance that merely exposing the unethical activities via leaking imposes costs upon the unethical activities.

America's intelligence agencies are instructing staff to spy on their colleagues to prevent whistleblowers from further exposing their ongoing crimes.

It'll impose huge costs on tax evasion if law firms like Mossask Fonseca must become paranoid about their employees, adopt extreme security measures, screen their customers, etc.

And Americans might find buying or renting property in places like South Florida more affordable too.
posted by jeffburdges at 11:10 PM on April 4, 2016 [1 favorite]


You have to report all foreign financial assets including stakes in lps and corps.
posted by JPD at 4:58 AM on April 5, 2016


Yes, it's all foreign assets, not just bank accounts. I suppose that simplifies reaching 25 so that you do not need to report details, for people with time and money to play the markets.
posted by jeffburdges at 5:05 AM on April 5, 2016


From May 2015:
"Experts link the growing number of renunciations by citizens and permanent residents to a tax enforcement campaign against U.S. taxpayers with undeclared offshore accounts. The campaign began after Swiss banking giant UBS admitted in 2009 that it had encouraged U.S. taxpayers to hide assets in secret Swiss accounts."
Record Number Give Up U.S. Citizenship (WSJ)
posted by Mister Bijou at 6:07 AM on April 5, 2016 [1 favorite]


One securities account with five hundred different assets would could as one account. Plus I can't find where on the IRS Reporting form there is this exclusion for 25 or more accounts.
posted by JPD at 6:24 AM on April 5, 2016




And the President says "No". Meanwhile, in the UK, Cameron carefully words his answers about whether he or his family are engaged in tax avoidance. Sneaky bastard. The press should have pushed him on that.
posted by longbaugh at 7:10 AM on April 5, 2016


From the Craig Murray piece linked by Devonian:

The leak is being managed by the grandly but laughably named “International Consortium of Investigative Journalists”, which is funded and organised entirely by the USA’s Center for Public Integrity. Their funders include

Ford Foundation
Carnegie Endowment
Rockefeller Family Fund
W K Kellogg Foundation
Open Society Foundation (Soros)

among many others. Do not expect a genuine expose of western capitalism. The dirty secrets of western corporations will remain unpublished.

posted by bukvich at 7:52 AM on April 5, 2016 [2 favorites]


nothing will happen

And nothing changes.

And then they'll all go back to tax dodging.

What can we even do? Nothing.

I guess it's too easy to bury the problem.

nothing will come of it, because it's all too easy

Am I too cynical?

Perhaps not cynical enough.

You Think This Is Bad - "Any intelligent and well-intentioned person should have a huge, even over-riding preference for leaving existing social and political institutions and hierarchies alone, just because they are the existing ones."*

Their Real Goal: To Make Us All So Cynical About Government, We Give Up - "Then they're free to take over everything... They want to sow even greater cynicism about the capacity of government to do much of anything... And on this score, they're winning."*

On the perception of elite inevitability - "Since this elite has an interest in preserving the status quo, it also has every incentive to reinforce cultural maps, rules, and taxonomies. Or, to put it another way, an elite stays in power over time not just by controlling resources, or what Bourdieu described as 'economic capital' (money), but also by amassing 'cultural capital' (symbols associated with power). When they amass this cultural capital, this helps to make the status of the elite seem natural and inevitable."*
posted by kliuless at 9:14 AM on April 5, 2016 [8 favorites]


Gunnlaugsson resigned.

Shit just got real.
posted by gwint at 9:27 AM on April 5, 2016 [10 favorites]


"Any intelligent and well-intentioned person should have a huge, even over-riding preference for leaving existing social and political institutions and hierarchies alone, just because they are the existing ones."

That's always the dilemma. As bad as things are, revolutions are usually worse. And elites use that fact to slowly crank up the level of oppression, to give themselves an ever bigger slice of the pie, because they know that we know that flipping the system on its head can lead to the horrors of civil war. And they hold enough levers and resources to guarantee that there'll be civil war if anyone tries to push them out, so the threat is real.

Syria is a great current example, but there are many, many more as you look back in history.

One of the most interesting things about the Cultural Revolution was one of Mao's justifications for it: If there isn't permanent revolution, the bureaucratic power structure will ossify and all we will have accomplished with the Communist Revolution was to create a new elite just as bad as the old one.

Mao was exactly right: That is exactly what has happened since the Cultural Revolution ended. However, the only thing worse than that was the Cultural Revolution itself.
posted by clawsoon at 9:29 AM on April 5, 2016 [6 favorites]


Gunnlaugsson resigned.


link
posted by ChurchHatesTucker at 9:36 AM on April 5, 2016 [1 favorite]




From adamvasco's link: "it is a legal way to avoid unnecessary tax"

That sums it up. It's legal because you're in power and made it legal. Contributing a fair portion of your money to your nation is "unnecessary tax".
posted by clawsoon at 10:34 AM on April 5, 2016 [4 favorites]


In case this is of interest to anyone: Edward Snowden will be doing a live webcast tonight at 7 pm Vancouver time.

I'll bet that the Panama Papers will come up in conversation.

Audience members will have the opportunity to submit questions via Twitter using the hashtags #snowden and #bigdata during the discussion.
posted by wenat at 10:36 AM on April 5, 2016 [1 favorite]


"Properties owned by offshore landlords aren’t illegal, nor are they the only reason for the precipitously escalating house prices across the country, but they are a factor. And as these companies and the, until now, mostly anonymous people behind them, buy more properties across the country, the dream of young adults buying a house, not as an investment, but as a home, gets further and further out of reach."

Source
posted by Mister Bijou at 10:36 AM on April 5, 2016 [2 favorites]


We may soon see a country with a Pirate Party government.
posted by ChurchHatesTucker at 10:50 AM on April 5, 2016 [3 favorites]


I take it everyone has seen Private Eye's UK offshore-owned property map?
posted by longbaugh at 10:51 AM on April 5, 2016 [2 favorites]


NY Times: The prime minister of Iceland resigned on Tuesday after an enormous leak of documents from a secretive Panamanian law firm about offshore shell companies and tax shelters.
Mr. Gunnlaugsson had said that the leak contained no news, adding that he and his wife, Anna Sigurlaug Palsdottir, had not hidden their assets or avoided paying taxes.

But the company, Wintris Inc., lost millions of dollars as a result of the 2008 financial crash, which crippled Iceland, and the company is claiming about $4.2 million from three failed Icelandic banks. As prime minister since 2013, Mr. Gunnlaugsson was involved in reaching a deal for the banks’ claimants, so he is now being accused of a conflict of interest.
posted by filthy light thief at 10:54 AM on April 5, 2016 [3 favorites]




Probably, iirc, what little I'd heard about just how important, economically, culturally, and politically, the fisheries are to Iceland.
posted by infini at 11:07 AM on April 5, 2016


Yesterday (April 4): Thousands of Icelanders call on PM to resign (Reuters video), which is being reported as the largest protest in the country's history.

Vox: Why Iceland’s prime minister just resigned over the Panama Papers leak
The financial crisis (2008-2011) was a disaster for Iceland, and one that made the public very wary of shady financial dealings. Finding out that the prime minister's family was holding on to huge secret cash reserves was bad enough. To make matters worse, Gunnlaugsson himself was involved in purchasing the shell company in 2007. He sold it to his wife for a pittance at the end of 2009, just one day before he would have had to disclose it due to his position in the country's government.

But the worst detail, by far, is Wintris' involvement in the Icelandic banking system. The shell company used by the prime minister's wife had actually invested in Iceland's banks before the financial crisis, and is currently claiming it's owed $4.2 million by the banks as a result. Gunnlaugsson had promised to deal with Iceland's remaining creditors after the collapse and international bailout; it turns out that his family was, in fact, one of the creditors. It essentially made his pledge to clean up the country seem totally incredible, leading to mass outrage — and, ultimately, his resignation.
I was going to shrug about the Panama Papers, considering this just the ugly truth of the rich hiding their earnings off-shore, but I had naively overlooked that these papers might just show the world some very ugly, if not illegal, ways that the rich got richer.
posted by filthy light thief at 12:01 PM on April 5, 2016 [3 favorites]


Thousands of Icelanders call on PM to resign

And remember that Iceland is only about 300K people. This was a percentage of the country protesting.
posted by Etrigan at 12:03 PM on April 5, 2016


David Cay Johnston: Panama Papers Tip of the Iceberg As Congress Aids Tax Cheats & Terrorists - "America has its own state thieves, embezzlers and liars (steal) protection acts."[1,2,3]
posted by kliuless at 12:21 PM on April 5, 2016 [4 favorites]


7.5%
posted by infini at 12:22 PM on April 5, 2016 [2 favorites]


Another Craig Murray post about the Panorama episode: Disgraceful BBC Panorama Propaganda Hides Grim Truth About Britain
posted by Grangousier at 12:51 PM on April 5, 2016 [5 favorites]


A couple updates from the Reykjavík Grapevine:

City Councilperson Resigns
Independence Party city councilperson for Reykjavík Júlíus Vífill Ingvarsson has just announced he is resigning from his post.

... Júlíus established the company Silwood Foundation in Panama in 2014. This company was intended to take care of his account at the bank Julius Bär in Switzerland. None of this was listed with the city as one of his vested interests.

In the email communications uncovered in the leak, special emphasis is placed on making sure Júlíus’ part in the company is kept as hidden as possible...

...Progressive city councilperson Sveinbjörg Birna Sveinbjörnsdóttir – who was also implicated in the Panama Papers scandal – has asked for an extension of her maternity leave.
Opposition Unhappy With New PM Choice, Will Press For Dissolution
The parliamentary opposition will not withdraw a proposal to dissolve parliament, saying that the new PM is not enough to improve matters.

...coalition co-leader and Finance Minister Bjarni Benediktsson told RÚV that he will be meeting with Sigurður to discuss the matter. Bjarni said he has no intention to seek the Prime Minister slot for himself, but told reporters that new developments will come to light over the next few days.

...not everyone is on board with the choice of new PM. Sigurður has publicly defended the Prime Minister since the Panama Papers story broke, going so far as to defend the use of offshore accounts by saying, “It is complicated to have money in Iceland.”

Pirate Party captain Birgitta Jónsdóttir told RÚV that she sees no reason to withdraw the opposition’s proposal to dissolve parliament. She furthermore said that many things are still left unclear, such as whether Sigmundur will continue to be an MP.

Left-Green chairperson Katrín Jakobsdóttir was of much the same mind...“I believe that this matter is serious enough that it is very important for the public to have the opportunity to vote for a new parliament,” she said.

For his part, Bjarni emphasised to RÚV that it is not a given that Sigurður will be the next Prime Minister, and that he will discuss with the Progressives whether early elections will be considered.

Another round of protests are scheduled to take place today.
A reporter interviews a few people at yesterday's protest

(All these reports are are by Paul Fontaine.)
posted by nangar at 1:04 PM on April 5, 2016 [4 favorites]


Play the tax evasion game! I am pretty good at evading taxes.
posted by jeather at 1:21 PM on April 5, 2016 [3 favorites]


I wonder how much of this stuff the NSA already knows, and has known for a long time.
posted by clawsoon at 1:28 PM on April 5, 2016 [1 favorite]


Not just the NSA/intelligence community right? How long have American branches of government known?
posted by kyp at 1:42 PM on April 5, 2016




Another Craig Murray post about the Panorama episode: Disgraceful BBC Panorama Propaganda Hides Grim Truth About Britain

From the very end of the post:
The BBC could also address why their Pacific Quay HQ in Glasgow is leased for £100 million from a hidden ownership company in the Cayman Islands.
Yikes.
posted by ZeusHumms at 2:19 PM on April 5, 2016 [4 favorites]


It's clear the NSA collects all this data kyp. It's potentially useful for making themselves look less clueless after a terrorist attack.

It's unclear if they examine it much under normal operating conditions. If anyone important with their "clients" wants you damaged, blackmailed, arrested, etc., then they'll search all their database for you, and recursively for additional selectors. It's clear they'd find your, or your contacts', involvement with tax havens. If attacking you through tax authorities sounds best, then they'll quietly pass the surveillance data to tax authorities in your country, possibly the IRS. It's only one type of vulnerability they might employ however.
posted by jeffburdges at 2:29 PM on April 5, 2016 [1 favorite]


Gunnlaugsson himself was involved in purchasing the shell company in 2007. He sold it to his wife for a pittance at the end of 2009, just one day before he would have had to disclose it due to his position in the country's government.

Just for clarity, the pittance was 1 dollar. 1 fucking dollar.
posted by dazed_one at 3:01 PM on April 5, 2016 [3 favorites]


This guy is slippery: Sigmundur Davíð Gunnlaugsson has in fact not resigned his position as Prime Minister, as was stated earlier today, but will be temporarily relieved by the Vice Chairman, Sigurður Ingi Jóhannsson, “for an unspecified amount of time”.
About the only thing these kleptocrats will understand is torches and pitchforks.
posted by adamvasco at 3:31 PM on April 5, 2016 [8 favorites]




As usual the banks are part of the problem. The Panama Papers reveal that more than 500 banks registered almost 15,600 shell companies with Mossack Fonseca. The biggest offender on the list of big names? HSBC, which, along with subsidiaries, account for more than 2,300 of the companies in the report.
posted by adamvasco at 3:45 PM on April 5, 2016


The torches are out already. I don't know how the PM thinks he can keep playing this.
posted by nangar at 3:50 PM on April 5, 2016


The torches are out already. I don't know how the PM thinks he can keep playing this.

I dunno, after witnessing the sorry non-prosecutions that happened in the face of the righteous anger of the international Western public after '08 I'm loathe to assume that people won't get away with stuff. But if there's anywhere it might happen, it's Iceland I guess.
posted by tivalasvegas at 4:03 PM on April 5, 2016






Oh good grief what an absolute shitstorm of a day in Iceland.

So, after yesterday's absolutely massive protest, it was pretty clear that the only course forward was that the prime minister needed to resign, promptly followed by the other implicated ministers.

It was thus a bit of a surprise that the prime minister went on a morning radio show and said that there was little chance that his government would collapse. Then, he went to a meeting with his finance minister, who's the leader of the party in coalition with the prime minister's party. He emerged from that meeting, wrote a Facebook post saying that he was going to dissolve parliament if the other party did not support him. He then went to the president's residence.

What happened there is unclear. What everyone expected would happen was that the prime minister would ask the president to dissolve parliament, triggering an election. This has happened twice in the history of Icelandic politics, in 1931 and 1974. Both times this lead to a new election. However, after the meeting the president announced he was not going to dissolve parliament, unless it was clear that the prime minister's coalition partner agreed with it. On Icelandic TV they interviewed a professor of law and governance right after that, and her reaction was that of a person who's trying to maintain her composure and bearing after having just been told that the coffee she just drank was brewed from her ground up dog. It seems that the president's refusal was unprecedented, though since the last dissolution of parliament, there was a law change which may have given him the option to do that. Though if so the implication of that law had passed by the professor of law and governance.

As for what went on in meeting itself, well... I'll get back to that.

The next development was that the prime minister went to meet with the members of his parliamentary party. Once the meeting ended, the announcement was that he would step down as prime minister, and that his party would nominate the vice-chairman of the party to be prime minister, if the coalition party agreed to that, which it quickly indicated that it did.

However, then things start getting really weird. The prime minister (still talking about the same guy, more on which anon) wrote on Facebook that he had in fact never made a request to the president for the dissolution of parliament, the implication being that the president had lied. The president then went on the evening TV news, and restated his story from before, offering all kinds of somewhat weird information, like that the top bureaucrats of the prime minister's office had accompanied the prime minister, carrying the necessary documents for the president to sign. So, basically, the president and the prime minister were calling each other liars.

Okay, so then things continue pretty much as normal. The prime-minister-in-waiting and the finance minister go on television and answer questions. Then the nation starts getting ready for the night, digesting the news of the day, and few people are actively happy. Then suddenly, around ten at night, reports start trickling in from foreign journalists, asking why the public relations officers of the prime minister have told them that he has not, in fact, resigned. Icelandic journalists start calling and slowly the picture emerges that:

A) The prime minister is stepping aside for now, but leaves the option open for returning again.
B) That the public relations department, and presumably the prime minister as well, is really hung up on technicalities of whether he is still in office.

Which, basically, after everything that's gone down in the last few days, means that the only change in government is that the prime minister will be temporarily replaced.

If the Icelandic national mood after all this could be summarized in one emoji, it would be 'puzzled as fuck'. The main question is whether people wake up angry tomorrow, or just exhausted.

Interesting times. In the proverbial sense.
posted by Kattullus at 6:50 PM on April 5, 2016 [38 favorites]


Kattullus does anybody have a decent estimate on how much money the prime minister has cheated the taxpayers of Iceland? If it's big enough when they wake up tomorrow they are likely to be plenty angry. If he is a penny pinching frugal business man and it's just a few pennies per taxpayer that might just be a bad look.
posted by bukvich at 7:07 PM on April 5, 2016


Clinton campaign chief linked to Russian bank listed in Panama Papers

The link is pretty weak: the Panama Papers mention Russian Sberbank as a bank with ties to Putin's cronies, and Russian Sberbank has recently employed The Podesta Group, a US lobby firm, which was founded by John Podesta. John Podesta's brother Tony works as a lobbyist for Russian Sberbank and as a bundler for the Hillary 2016 campaign.

So yes, there's a link, but it doesn't appear to have anything to do with Hillary's campaign funneling money to/from a firm linked to these reports.
posted by Joe in Australia at 7:35 PM on April 5, 2016


Unlike any other source on the internet, we are blessedly lucky to have our own Kattullus on the scene.
posted by infini at 12:16 AM on April 6, 2016 [4 favorites]


Plus I can't find where on the IRS Reporting form there is this exclusion for 25 or more accounts.
Reporting a Financial Interest in 25 or More Foreign Financial Accounts: A United States person with a financial interest in 25 or more foreign financial accounts should check the Yes box in Part I, item 14a, and indicate the number of accounts in the space provided. The United States person should not complete Part II or Part III of the report but maintain records of the information.
posted by junco at 2:07 AM on April 6, 2016 [2 favorites]


The Guardian is liveblogging the UK reaction to the Panama Papers, primarily this is concerned with the Prime Minister David Cameron, this is their summary of Mr Cameron's positions over the last 48 hours:

1 - Monday morning: This is what the prime minister’s spokesman told journalists at the lobby briefing when asked if the Cameron family still had money in Cameron’s late father’s offshore fund.

"That is a private matter. I will focus on what the government is doing."

2 - Tuesday afternoon: This is what Cameron himself said at the Q&A in Birmingham when he was asked by Sky if he or his family had derived any benefit from the fund in the past, or would do so in the future.

"In terms of my own financial affairs, I own no shares. I have a salary as prime minister and I have some savings, which I get some interest from and I have a house, which we used to live in, which we now let out while we are living in Downing Street and that’s all I have. I have no shares, no offshore trusts, no offshore funds, nothing like that. And, so that, I think, is a very clear description."

3 - Late Tuesday afternoon: This is what a Number 10 spokesperson said later on Tuesday afternoon in response to complaints that Cameron had not fully answered the question.

"To be clear, the prime minister, his wife and their children do not benefit from any offshore funds. The prime minister owns no shares. As has been previously reported, Mrs Cameron owns a small number of shares connected to her father’s land, which she declares on her tax return."

4 - Wednesday morning: The statement issued this morning was the fourth related to the Panama Papers revelations.

"There are no offshore funds/trusts which the prime minister, Mrs Cameron or their children will benefit from in future."
posted by biffa at 3:58 AM on April 6, 2016 [4 favorites]


Is there any way in which that last statement can be looked at that could in any possible way be even remotely true?
posted by longbaugh at 4:00 AM on April 6, 2016 [2 favorites]


bukvich: Kattullus does anybody have a decent estimate on how much money the prime minister has cheated the taxpayers of Iceland?

No one knows. The prime minister and his party insist that everything was declared to the tax authorities, and the same is said by the other elected officials named in leaked documents. However, the prime minister has not answered whether he or his wife submitted controlled foreign corporation documents to the tax office. Admittedly, there's been a lot going on and he may just never have gotten around to answering the question, but recent behavior makes it difficult to trust anything he says or doesn't say.
posted by Kattullus at 4:04 AM on April 6, 2016 [1 favorite]




Here's a roundup of links.

The Guardian: Iceland PM steps aside after protests over Panama Papers revelations and Iceland’s prime ministerial scandal is Nordic noir come to life.

Financial Times: Iceland PM ‘resigns’ over Panama Papers leak.

And if you want to hear me yammer on England's LBC radio station after midnight, you can listen to me here. I start about 13 minutes in. I'm outside on a cell phone, which can be clearly heard in the audio quality. You can also hear that I'm a bit wired after a crazy day.
posted by Kattullus at 5:00 AM on April 6, 2016 [13 favorites]


Thanks, Kattullus.
posted by nangar at 5:49 AM on April 6, 2016 [1 favorite]


New poll numbers in Iceland (Reykjavík Grapevine)
The results of a new Gallup poll show that 81% of Icelanders want Sigmundur Davíð Gunnlaugsson to resign once and for all.

[snip]

Not that Sigmundur is alone in terms of low levels of support. A poll conducted by Fréttablaðið/Stöð 2 shows that 69% believe Minister of Finance and Independence Party chairperson Bjarni Benediktsson should also resign, and 63% believe Minister of the Interior Ólöf Nordal should resign as well. They, as well as Sigmundur, have all been implicated in the Panama Papers scandal.
Support for political parties:
Ruling coalition
Progressive – 8% (down from 13%)
Independence – 22% (down from 28%)
Opposition
Pirates – 43%
Left-Greens – 11%
Social Democrats – 10%
Bright Future – 4%
posted by nangar at 6:55 AM on April 6, 2016 [4 favorites]


Democracy Now! April 5, 2016: Panama Papers' Reporters Explain How the Biggest Leak in Data Journalism's History Materialized -- the German newspaper Süddeutsche Zeitung was first contacted by an anonymous source who offered data, and when SZ saw how much they had, they shared the materials with International Consortium of Investigative Journalists (ICIJ), which allows the story to get a lot more traction as data digestion is "crowdsourced" around the world.
posted by filthy light thief at 7:42 AM on April 6, 2016 [4 favorites]


more from mcclatchy...
-Anger over Panama Papers roils Iceland, Pakistan
-US scolds others about offshores, but looks other way at home

also btw...
-The Panama Papers show something Bernie Sanders gets right about the economy
-Tax Havens: International Tax Avoidance and Evasion (via)
-Cass Sunstein on tax havens (via)
-Henry Farrell on tax havens
-Gabriel Zucman on tax havens (via) [1,2,3]
-Farrell interviews Zucman on (how to measure) the scale of tax evasion
-'The Hidden Wealth Of Nations' Author Explores World Of Offshore Tax Havens
ZUCMAN: ...there's about 8 percent of the world's financial wealth [around $95.5 trillion] that is held in tax havens globally. So that's about $7.6 trillion today, a huge amount of wealth... about 20 percent of this wealth is duly reported on tax returns so does not correspond to illegal behavior. But 80 percent is not reported, and that's criminal tax evasion.
down from over 90% since 2009 iirc, but that's as: "the use of tax havens has grown 25 percent from 2009 to 2015. Zucman estimates that US citizens have at least $1.2 trillion stashed offshore, costing [$35-100 billion] a year worldwide in lost tax revenue from wealthy individuals. US multinational corporations underpay their taxes worldwide by $130 billion by engaging in corporate tax avoidance."

what to do? "As for a solution, Zucman recommends a global financial registry in which international assets can be tracked by tax authorities in different countries, as well as sanctions against financial institutions and countries that don't comply. (This is also one of the proposals to come out of the U.K. after the release of the Panama Papers.)"

sunstein: "With the register, tax authorities could tell, essentially immediately, if their citizens are using tax havens. Zucman notes that a global register of this kind could have other benefits, helping to combat the financing of terrorism, bribery, and money laundering; public and private corruption might be added to this list. He notes too (and here he will immediately lose some readers) that such a register could facilitate the imposition of a global wealth tax, of the sort proposed, very controversially, by Thomas Piketty... [one of zucman's mentors ;]"

i'm guessing that's (one reason) why banks are busy building their own blockchain registry? [1,2,3]

besides putin and messi, i'm curious about the chinese fallout (if any) given xi's 'anti-corruption' drive: "Family members of at least eight current or former members of China’s Politburo Standing Committee, the country's main ruling body, have offshore companies arranged though Mossack Fonseca. They include President Xi's brother-in-law, who set up two British Virgin Islands companies in 2009."

oh and...
go pirates!
posted by kliuless at 11:00 AM on April 6, 2016 [10 favorites]


Quick round up
Guardian - Revelations so far
Independent - US Department of Justice begins inquiry into offshore dealings scandal.
The Intercept - The Price Countries pay
Slate - The latest.
posted by adamvasco at 11:19 AM on April 6, 2016




A man, a plan, a scandal.
posted by pantufla_milagrosa at 12:06 PM on April 6, 2016 [4 favorites]


I don't really understand what the Icelandic PM thinks he is doing. Sure even the party currently in power must realize you can't have a Heisenberg-PM? Someone is either in power or not, someone has to have the authority to make the decisions.
posted by tavella at 12:17 PM on April 6, 2016 [1 favorite]




Interesting looking talk from that article :
Westward the Course of Empire
posted by jeffburdges at 12:47 PM on April 6, 2016 [1 favorite]


Oops, I forgot the article on whistleblowers from where that talk came.
posted by jeffburdges at 1:12 PM on April 6, 2016 [2 favorites]


I don't want to belabor this as the other things are massively more interesting, but junco that link is in relation to fbar which while issues by the IRS goes to a different part of Treasury. The IRS themselves have a second form that is part of your actual return (8968?) That requires all the accounts to be announced.
posted by JPD at 1:13 PM on April 6, 2016


Zucman's definition of evasion is just flat out wrong and always has been so all of his numbers are suspect. It's not evasion if the tax code says it is legal. The tax code is idiotic in a lot of cases, but if the state says "this is legal" and you do that, well it's legal and not evasion. Should those rules be changed? Yes -of course. The problem is a lot of them were originally written for something that actually makes sense. Tax authorities are playing whack-a-mole.
posted by JPD at 1:17 PM on April 6, 2016 [1 favorite]


Panama Papers law firm helped create more than 1,000 U.S. companies

From the article: Mossack Fonseca's Nevada subsidiary, MF Corporate Services, is located in an office park near Las Vegas airport.

That name is really on the nose.
posted by donatella at 4:52 PM on April 6, 2016 [3 favorites]


Well, today in Icelandic politics wasn't a total shit show, so I'll give it that. The day started with discussion about what exactly had happened last night. Apparently the public relations team of the prime minister decided on its own to send out that weird statement without consulting the rest of the office, though it is assumed that the prime minister was involved.

There were plans for a protest, and a fairly large number showed up, around 3000-5000 people, but nothing like the massive turnout on Monday (22000 in the square in front of the parliament, more on the streets leading to it who couldn't get in). As an aside, I walked home to pick up my son to take him to the protest on Monday. And everywhere I walked there were people walking towards the protest. The bus I had taken downtown was full of protesters as well. This was quite astounding to see so many people all traveling to the protest.

Today was mostly spent waiting for people to go to meetings, and get out of meetings. Various politicians in the ruling coalition met throughout the day. The only bit of extensive communication came when the still-technically-prime-minister wrote a Facebook post angrily denouncing an Icelandic media organization for repeating an incorrect claim by The Daily Mail that his wife had bought a ticket to fly into orbit with Virgin Galactic. The Daily Mail confused the still-technically-prime-minister's wife with the wife of the Icelandic president. True story.

Finally, around dinnertime, things started happening. The members of parliament for each of the two coalition parties met separately to go over the results of all those meetings. At the end of those, the still-technically-prime-minister walked down a set of stairs where a surprisingly large amount of local and international media organizations had set up shop waiting for a formal announcement. He indicated that an agreement had been made, but would not go into details. Then he forced his way through the journothrong, sporting a slightly less unnerving version of the grin that has been his constant companion in media appearances in the last few days.

Then one member of parliament for the ruling coalition comes walking down said set of stairs. This member of parliament is set upon by journalists, and starts answering questions quite forthrightly, about who's going to be prime minister, that one new minister will be added to the cabinet, and who this new minister is. A few questions in it dawns on the member of parliament that he's unwittingly spilled the beans (realization starting at about 2:13 into the video at the bottom of this news story). So he just admits so out loud, and that he had thought that the prime-minister-in-waiting and the finance minister had already spoken to the media. He had just been walking out of the building and not realized he would walk straight into the gaping news maw of world media. He then ended the interview and pushed his way out.

Finally the prime-minister-in-waiting and the finance minister appear. And give a somewhat intemperate news conference (the finance minister especially looked and sounded like he was on the verge of indiscriminate mayhem) explaining what the two parties had agreed to. The long and short of it was that the still-technically-prime-minister would retain his seat in parliament, and that the vice chairman of his party would become prime minister. Replacing the latter as minister of agriculture and fisheries would be one of the still-technically-prime-minister's aides (who's the daughter of one of Iceland's most reviled politicians, but otherwise seems like a reasonably competent government official). Also, that the parties were going to call for an election in autumn.

During the news conference the finance minister used the opportunity to vent his spleen at the opposition parties, and in an interview afterwards his affect suggested he'd done nothing but dream of murder all day. He's clearly not happy with how things turned out. Neither is the prime-minister-in-waiting, nor opposition politicians, nor pundits or anyone really. It may be a sign of a good compromise that everybody leaves mad, but the question is whether people will keep protesting long enough and forcefully enough to force the coalition parties to have a rethink.

So, basically, it all comes down to whether Icelanders wake up tomorrow resigned to events, or just as pissed as they were this morning.
posted by Kattullus at 5:10 PM on April 6, 2016 [28 favorites]


journothrong

We Canadians call this a media scrum, or just a "scrum". The term comes from rugby. I think it has caught on elsewhere. It's a good word for it.
posted by clawsoon at 5:25 PM on April 6, 2016 [1 favorite]


Thank you Kattullus for such excellent reporting!
posted by zachlipton at 6:00 PM on April 6, 2016 [7 favorites]


Spies and shadowy allies lurk in secret, thanks to firm’s bag of tricks
The documents also pull back the curtain on hundreds of details about how former CIA gun-runners and contractors use offshore companies for personal and private gain. Further, they illuminate the workings of a host of other characters who used offshore companies during or after their work as spy chiefs, secret agents or operatives for the CIA and other intelligence agencies.
posted by the man of twists and turns at 10:27 PM on April 6, 2016 [2 favorites]




Spies and shadowy allies lurk in secret, thanks to firm’s bag of tricks .... CIA and other intelligence agencies

No wonder governments, especially those of the US and UK, can't shut down jurisdictions that allow dirty tricks to be hidden - they're major clients!
posted by clawsoon at 5:08 AM on April 7, 2016 [2 favorites]


A fifth answer from Cameron to go with the four from above: He had an investment in the Blairmore fund until 2010 when he cashed it in just before becoming PM.
posted by biffa at 2:27 PM on April 7, 2016 [2 favorites]


Pretty sure that given another week's worth of 'final answers' from Cameron that we'll find out that he actually owns Panama.
posted by reynir at 2:49 PM on April 7, 2016 [7 favorites]


"Oh...there's that script I wrote!" --Homer Simpson
posted by rhizome at 3:13 PM on April 7, 2016


I'm slightly worried about starting to write about today before ten in the evening, because in the last few days major developments have taken place well into the night. But that said, things seem to have reached an equilibrium.

In the afternoon the former prime minister resigned, successfully this time, and the new prime minister took over. The other big news is that the other new minister will take over as foreign minister, and the old foreign minister will take over as the minister for fisheries and agriculture. What has people on alert is that this might signal a change in the government's position on Russian trade sanctions (I wrote about the issue here a while back). Though because it has been noticed, the government is probably not going to try to stir things up.

Another third rail that the government has indicated is not going to be touched is the issue of bank privatization. The banks which were built from the ruins of the collapsed financial institutions are still owned by the public. The finance minister's extended family is active in all kinds of business dealings, and one cousin was involved in a highly questionable purchase of a credit card processing company from one of the public banks. Actually, the list of scandals connected to Bjarni Benediktsson, the finance minister, has long since become farcical. The height, so far, of the absurdity is when his e-mail popped up in the Ashley Madison data leak, linked with the absurd username "IceHot1". He claimed that he and his wife had registered the account together because they thought it was a funny idea. To which the entire nation of Iceland replied: "Oh, is that so?" But because his entire party is still reeling from the financial collapse, there's no obvious candidate to succeed him. His closest rival had to resign herself because of a scandal last winter where she and/or her aides smeared an asylum seeker (which I also wrote about).

But enough digressions. The new cabinet has begun working today, and things seem fairly calm. The anger seems to have plateaued. There were about the same number of protesters today as there were yesterday, somewhere between 3000-5000. The finance minister poo-pooed the protests, and seemed to be deep into raging arrogance. Judging from vox pops on the news and polls released in the last few days, there's still a lot of anger out there, but it's lacking a focal point. I think that unless something else outrageous happens, things are going to stay at this level of anger.

There's also an ambient level of discord in the ruling parties. Members of parliament for both of them have declared that they were not happy with how things turned out, that either the two other ministers who were implicated by the Panama Papers should also have resigned, or a new election called immediately. Again, unless something else happens, this discord probably won't come to much. The former prime minister sniped at the finance minister, saying that the two cases weren't so different, implying that the finance minister should resign. But considering everything else that's gone on, it's pretty low level stuff. Some non-politicians have been implicated in the leaks, including the editor of a pro-government newspaper, but no one especially surprising. So it's been a fairly calm day, all told.

Tomorrow won't be quiet, though. The opposition will put a motion of no confidence before parliament. It will probably not pass, but it will be debated fiercely. There will be protests during the parliamentary vote, but it will probably be about the same size as today and yesterday. Though, given all that's happened in the last few days, it's not implausible to think that something outrageous will happen.
posted by Kattullus at 3:36 PM on April 7, 2016 [23 favorites]


Once again, thanks for your updates, Kattullus.
posted by nangar at 3:51 PM on April 7, 2016 [5 favorites]


Here's an excerpt from Le Petit Journal, a French satirical news program, where a journalist asks Bjarni Benediktsson while he's standing on that staircase yesterday why he doesn't resign. He, well, doesn't have a good answer.
posted by Kattullus at 4:49 PM on April 7, 2016 [1 favorite]


Meanwhile the fallout on HSBC (again) is growing.
‘The more we learn, the more questions HSBC and Mr Gulliver have to answer.
‘There is a small elite that seem to think it’s all right to do wrong.

HSBC is heavily involved in both UnaOil and the Panama Papers.
HSBC lobbyied on behalf of Pangates, a shell company blacklisted by the US for providing oil to Syria.

Mossack Fonseca also incorporated Drex Trechnologies and continued to represent Mr Makhlouf until September 2011. The Swiss branch of HSBC, which had provided him with financial services told the legal firm in 2010, two years after the sanctions were imposed, that Drex Technologies was a company of “ good standing”. According to the leaked documents, a Mossack Fonseca email in February 2011 said “ We have contacted HSBC who stated that they were very aware of the fact that Mr Makhlouf is the cousin of the President of Syria. The HSBC compliance department of the bank not only in Geneva but also in their headquarters in London…confirm that they are comfortable with him.”
posted by adamvasco at 5:39 PM on April 7, 2016 [1 favorite]






Dox Populi: A Few Missing Links
The unexamined presumption in such recursive and rudderless counter-taking is that Beauchamp and his colleagues, or anyone else notionally tasked with reporting on the inner workings of wealth accumulation in our new millennial gilded age, thinks at all about offshore capital shelters. Far from being an exotic plaything of thuggish world leaders like Putin, or merely corrupt ones like Iceland’s ex-Prime Minister Sigmundur Gunnlaugsson (who laid the groundwork for his parliamentary exit on Tuesday in the wake of the news that he’d used Mossack Fonseca shell firms to conceal banking assets at the height of the global financial crisis), the phony incorporation trick is at the heart of America’s own decrepit, financialized, and top-heavy economic order.
posted by the man of twists and turns at 8:51 PM on April 7, 2016 [2 favorites]


My bank has shown up in the political cartoons here in Finland. Should I pull out now?
posted by infini at 11:10 PM on April 7, 2016


btw, learnt a new word courtesy katullus

shitwittery has been the order of the day
posted by infini at 11:12 PM on April 7, 2016 [1 favorite]




I donno if I believe that Cameron could be forced from office in less than 24 hours. If so, it sounds embarrassing for Iceland if the U.K. of all places managed to ditch Cameron first while Iceland's government runs around freeing all their jailed bankers.
posted by jeffburdges at 5:55 AM on April 8, 2016


December 2014 The Law Firm That Works with Oligarchs, Money Launderers, and Dictators.
Which has this in the comments section
I live guilt free, and I dont give a shit all you people making fun of my family in this article and of Panama. We are a happy country where nobodyworks because ALL THE CRIMINALS *from others countries) bring their dirty money here. LOL we just spend it. YOUR goverments are the ones making crimes. What else can lawyers do
posted by adamvasco at 6:04 AM on April 8, 2016


Don't know if anyone else saw this but on Rachel Maddow on Monday (I think) she said that Suddeutsche Zeitung says there are Americans on the list, they just haven't gotten around to publishing them yet and their time will come.
posted by LizBoBiz at 6:13 AM on April 8, 2016


I donno if I believe that Cameron could be forced from office in less than 24 hours.

The Canary is a left-wing Daily Mail, but worse. There's no chance of it happening, at least not in 24 hours. The Tories don't move that quickly.

I also don't think people really want it to happen, given the likely impact on the upcoming EU referendum -- any Cameron replacement is likely to campaign hard for the UK to leave the EU.
posted by bonaldi at 7:36 AM on April 8, 2016 [1 favorite]


David Cameron's EU intervention on trusts set up tax loophole
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.”

Britain has emerged as the strongest European rival to Switzerland for private banking and wealth management, administering £1.2tn of assets, according to Deloitte. The sector contributed £3.2bn to the economy, according to 2014 estimates from the British Bankers’ Association.

A senior government source said that Mr Cameron’s letter reflected official advice that creating a central registry for trusts would have been complex and would have distracted from the main objective of shining a light on the ownership of shell companies... Cameron’s 2013 intervention in the EU’s push for greater financial transparency was sparked by an EU initiative to set up national public registers to disclose the true, “beneficial” owners of shell companies and trusts.

According to Judith Sargentini, a Dutch lawmaker who led the parliament’s work on the draft law, the UK’s argument was that strict transparency rules would be a damaging interference into people’s privacy. It argued that trusts have a special role in Britain in helping families manage issues around inheritance...

While the final version of the law, adopted in 2015, was explicit in requiring central registers of companies’ true owners, the language for trusts was more ambiguous. Although a significant victory for Britain, it prompted warnings of potential abuse... With power in the hands of the trustees, it is possible, and can be intentional, that someone does not even know that they stand to be a beneficiary.
Cracking Shell Company Secrecy: Sanctions for Offshore Havens, Transparency at Home - "Some readers might be concerned that financial registries would threaten individual privacy. Yet countries have had property records for land and real estate for centuries; these records are public; and there seems to be little misuse. The notion that a register of financial wealth would be a radical departure from earlier practices concerning privacy is wrong."

US tax dodges are done in full public view - "Unlike in emerging markets and in Europe, the main US tax avoidance problem isn't about individuals... in the US, tax avoidance has more to do with corporations... An effort to curtail the usage of low-tax locales by US corporations is long overdue, since the relentless decline in US effective tax rates for corporations comes even as official corporate tax rates have stayed stable in recent years."

An industry that flourishes in the gaps and holes of international finance
How did all these politicians, dictators, criminals, billionaires and celebrities amass vast wealth and then benefit from elaborate webs of shell companies to disguise their identities and their assets? Would there have been no reckoning had the leak not occurred?

And then the core question: After these revelations, will anything change? Many formal denials and pledges of official investigations have been made. But to what degree do the law and public shaming still have dominion over this global elite? A public scarred by repeated revelations of corruption in government, sports and finance will demand to know.
In some places it's more difficult to get a fishing license then create a shell corporation to hide income - "Setting up a shell corporation in the United States is simple — especially in states like Delaware, Wyoming and Nevada."

Watch how easy it is to start an anonymous shell company for your cat in Delaware - "Watch how easy it was. Whether your business idea is legit or shady, you can do it, too, by following these simple steps."

For research, we pretended to be crooks and terrorists and tried to buy shell companies. The results were disturbing. - "If you want to launder your money through a shell firm with no questions asked, don't go to Panama. Try Delaware instead."

More should be done to make offshore tax havens less murky
Many schemes described in the Panama papers involve anonymous shell companies, whose real owners hide behind hired “nominees”. Such vehicles are known as the “getaway cars” for tax dodgers, launderers and crooked officials. It is time to untint their windows by creating central registers of beneficial ownership that are open to tax officials, law-enforcers—and the public. The penalties for lying when registering a firm should be stiff. Britain and a few smaller countries have led the way in this. Others should follow.

Next, regulate the law firms and other intermediaries that set up and husband offshore companies and trusts. They are supposed to know their clients, weeding out the dodgy ones. But too many are paid to act as buffers, offering an extra layer of protection against those who pry. Governments make great efforts to ensure that global banks comply with anti-money-laundering rules, while this shadow financial system is barely policed. That must change. Governments could start by making it a criminal offence to enable tax evasion by others. Mr Cameron will host a global anti-corruption summit next month. The Panama papers give him just the platform he needs to persuade other governments, and his own, to turn their tough talk of recent years into action.
Larry Summers: Data collection is the ultimate public good - "This is the work of both governments and the private sector. It is fantasy to suppose data, as the ultimate public good, will come into being without government effort."
posted by kliuless at 8:09 AM on April 8, 2016 [11 favorites]


Panama is only one head of the tax haven Hydra
The Paris-based club of mostly rich nations [OECD] is developing a global transparency initiative to crack down on tax haven secrecy. Most havens have agreed to participate and from 2017 will start to share financial data automatically so that each can tax its taxpayers appropriately...

But it is vital not to lose sight of the bigger picture. It is hard to crack down on the sprawling and many-layered system of tax havens and offshore secrecy. Any efforts will be undermined by armies of offshore enablers looking for loopholes: accounting firms, offshore company formation agents and trust companies and banks. In this case, the law firm in question has worked with some of the world’s biggest banks including HSBC, Société Générale, Credit Suisse, UBS and Commerzbank to set up thousands of offshore companies that foxed tax and law enforcement authorities worldwide.

So action beyond the OECD’s is needed. David Cameron, UK prime minister, hosts an anti-corruption conference in May. He should announce steps to force the UK’s Overseas Territories and Crown Dependencies to create publicly accessible registries of the beneficial ownership of companies, and open trusts and foundations to scrutiny.

There are many ways to put pressure on the private infrastructure of enablers. One of the most potent brings into focus one of the biggest offshore operators: the US. America has its own anti-tax haven programme, the Foreign Account Tax Compliance Act, which does a decent job of cracking down on American tax cheats. Fatca has a big stick: it imposes a 30 per cent tax on payments originating in the US to any financial institution that does not comply. Financial institutions do not want to be shut out of US markets so they put pressure on other countries to let them share data — becoming in the process lobbyists for reform.

Though the OECD scheme is modelled on Fatca, the US will not participate directly... America is fast becoming a tax haven of choice. The OECD knows this but has not been brave enough to call for action. The only other body with the clout to confront Washington is the EU. It should summon the courage to impose a withholding tax on payments originating in the union to non-compliant jurisdictions such as the US, copying Fatca’s big stick. That would unblock arguably the most powerful guardian of financial secrecy in the system.
Let the light in - "In this sense, though, transparency is insufficient: much of what the Panama Papers reveal is legal. But transparency, while insufficient, is also essential. The gradual journey into public consciousness of the facts of how the rich arrange their financial affairs is what has created the public pressure for stricter rules adopted over the past decade... There is a strong democratic argument for putting every citizen's basic tax information into the public domain, as many US jurisdictions used to and some Nordic countries still do: it is a way to ensure confidence in their equality under the law."

The Secret Life of Panama City - "It may be mere coincidence, but it was interesting to note that Erhard Mossack, the father of Jürgen Mossack, a part owner of Mossack Fonseca, was a former Waffen-S.S. officer who immigrated to Panama with his family after the Second World War. Then, as now, Panama was an extremely accommodating place."
posted by kliuless at 8:42 AM on April 8, 2016 [10 favorites]




ooh look, an Icelandic sidebar on the front page! WTG Katullus!
posted by infini at 11:08 AM on April 8, 2016 [5 favorites]






We need to move to an asset tax for individuals with a high net worth. Make them pay 0.5% of total assets per year with some offset for income taxes paid. So Donald Trump's minimum tax bill is $60 million.
posted by humanfont at 4:40 PM on April 8, 2016 [1 favorite]


So, has anyone heard anything about the data being released, like a big ol wikileaks? I'd love to troll through it.
posted by SecretAgentSockpuppet at 4:53 PM on April 8, 2016


> Meanwhile the fallout on HSBC (again) is growing.

Ever since HSBC got away with laundering billions of dollars for drug cartels, I've just assumed they were bullet proof.
posted by homunculus at 5:02 PM on April 8, 2016 [4 favorites]


With the leaked Panama Papers shining a spotlight on the use offshore accounts to hide investments by of some the world’s most powerful people, the International Transport Workers’ Federation is using the exposure to call out foreign flags of convenience as a prime example of the sort of tax avoidance activity that seems to fly under the radar with tacit approval.
“If Chevron and other multinationals paid the tax they should be paying, austerity wouldn’t be an issue. We wouldn’t be seeing cuts in funding for education, public transport, healthcare.”
posted by adamvasco at 5:30 PM on April 8, 2016 [6 favorites]


Well, today was pretty calm, all told. The big showpiece was the vote of no confidence, and the separate vote to dissolve parliament. In the vote of no confidence, all 38 ruling coalition MPs voted that they had confidence in their own government. One member of the Independence Party (the party led by the finance minister) voted to dissolve parliament, but the other 37 held firm. Meanwhile, outside there were protesters (including me), but not as many as the two previous days.

Everything happened as expected. Polls were released, showing that a large majority of people wanted the former prime minister to resign as a member of parliament, and that the two other ministers who had offshore companies step down as well. Members of both ruling parties have called for their implicated politicians to step down. As for the opposition parties, so far, the main polling beneficiary of the crisis is the Left-Green Party (the Pirate Party was already polling in the stratosphere).

That was about it. There have been a lot of articles in the media, interviews and analysis, but no new developments. One of these was by the fabulous KrakkaFréttir (Kids' News), which made a video explanation for children. You can see the video with English captions on their Facebook page (click the "sprocket" settings button if the captions don't appear automatically).

I think we might be heading into a fairly quiet period now.
posted by Kattullus at 6:01 PM on April 8, 2016 [6 favorites]




Iceland protest photos
posted by jeffburdges at 11:14 AM on April 9, 2016


Wow. Does he want to make sure that there are cameras positioned to capture his facial expressions as the blade drops? ...cause this is how you do that.
posted by bonobothegreat at 11:49 AM on April 9, 2016 [1 favorite]


Australian satirical news program The Weekly does a thing about The Panama Papers (includes a pretty funny bit about the admittedly comedic barrel of fish that is the interview with the former prime minister of Iceland).
posted by Kattullus at 1:37 PM on April 9, 2016


Unless something crazy happens, I think this will be my last daily update about Iceland.

There was another big protest today, the biggest since Monday's. Depending on who you talk to, it was between 5000-15000. The protesters were entertained by a Rage Against the Machine cover band (one of my Facebook friends commented: "Rage Against the Machine does not bring the generations together like we forty year olds assumed").

The other big news was that it was revealed that the Prime Minister's father also had a bunch of money in tax havens, but not a single person was surprised. His personal riches largely stem from a computer company that he bought from the government under somewhat murky circumstances. He gave an interview shortly before his son resigned to which people reacted by thinking: "Ah, now I understand a little bit better why the prime minister is like how he is." That was the second thought, anyway, the first being: "Holy shit, that's the second craziest interview this week."

Other than that, it was the least eventful day for a while now. It seems like protests will continue, and also that the ruling coalition will try to stick it out. They seem to have a solid enough majority to do that. Oh, one thing I should make clear. The prime minister did not resign as a member of parliament, nor as the chairman of his party. As party chairman he has a number of formal powers that make him quite powerful, for instance he seems to have handpicked the new foreign minister. So while Sigmundur Davíð is definitely down, he's not out. That said, it's hard to see him regain the trust of the electorate, and a number of party officials have spoken out against him in the last few days. That will probably keep rumbling along for a while. The finance minister, who's the chairman of his party, seems to have wider backing within the rank and file, who're mostly just blaming the former prime minister.

But yes, daily protests and politicians sticking around well past their sell-by date will be the new normal now. If there's something you want to know about the situation, or if something's unclear, feel free to ask.
posted by Kattullus at 4:00 PM on April 9, 2016 [8 favorites]






Steven Erlanger at The New York Times: “David Cameron Releases Tax Data After Panama Papers Backlash”
posted by Going To Maine at 1:21 AM on April 11, 2016 [1 favorite]


John Oliver on the Panama Papers: Iceland's PM and Cameron and Putin.
posted by Kattullus at 1:42 PM on April 11, 2016 [1 favorite]




Show me the endpoint.
posted by Going To Maine at 8:54 PM on April 12, 2016


For most unfortunately this is just *Yawn*.
'So what if Putin is corrupt?': Russia remains unmoved by offshore revelations.
Same shit different day.
posted by adamvasco at 5:17 AM on April 13, 2016


Yes, I think the hype this has gotten is disproportionate to its political ramifications. So far, we have the not-quite-resignation of a prime minister of a country of 300,000 people. The State Department Cables leak this a'int...
posted by Noisy Pink Bubbles at 7:37 AM on April 13, 2016 [1 favorite]


Are they done already? I doubt it. In any case, these files mostly show "legalized crimes", like the NSA's mass surveillance programs, or the Bush administration's torture program, so no jail time.

In the NSA's case, we're all victims of them recording our traffic. In the torture case, there are relatively few victims, but the victims are identifiable, and the torturers clearly committed crimes against humanity. We should all hope those torturers eventually stand trial somewhere if not the U.S.

In this case, we're all paying more taxes because the rich avoid paying, but that's actually a much more indirect and diffuse violation than the NSA violating our privacy. Are you personally more harmed by these tax evaders or by demands for corporate welfare? It's hard to know without doing some math.

A priori, I suspect individual tax havens do less nominal and real damage than corporate tax havens, which do less nominal damage than corporate welfare, which does less damage than rent seeking broadly interpreted. Although corporate welfare does horrendous real damage if you consider stuff like for-profit prisons and the War On Terror.


I suspect the major long-term impact here might be exposing the manor in which such financial transactions get handled.

There were vast swaths of important security precautions like encryption and anonymity software that the establishment commonly derided as paranoid right up until Edwhard Snowden blew the lid off the NSA's mass surveillance program. Now we've messaging programs like WhatsApp providing reasonable encryption and vendors shipping device encryption.

In the past, the establishment would condemn talk about Putin's cellist friend or David Cameron's father, but not that'll become more normal amongst IRS agents, journalists, and normal people. It'll become harder for rich people to hide their dealings.
posted by jeffburdges at 9:49 AM on April 13, 2016 [1 favorite]


I thought the idea was to release a bit of the leak at a time.
Ideally they'd leak a few bits, let politicians etc. lie and squirm and cover up and then release the next damning bit?

So, more to come?
posted by Just this guy, y'know at 9:58 AM on April 13, 2016




I, personally, would sooner just help all the little people get shell corporations. NPR: “Want To Set Up A Shell Corporation To Hide Your Millions? No Problem”
posted by Going To Maine at 2:41 PM on April 13, 2016 [1 favorite]


I would love to see someone deepdive shell corps to illustrate minimum levels of participation. That is, at what point can who realize benefits from doing so?
posted by rhizome at 3:22 PM on April 13, 2016


Definitely. I mean, presumably you must be one of those folks who itemizes deductions on your taxes, but that's still a fairly large chunk of the populace.
posted by Going To Maine at 4:04 PM on April 13, 2016


^ I think the hype this has gotten is disproportionate to its political ramifications.
I notice you live in the US so probably you aren't so aware about what is happening elsewhere. Also this is just the beginning of a very long bit of string that is being pulled.
Iceland having a political wobble and Cameron in UK facing down parliament is a warm up show. I mean Cameron fucked a pigs head for fucks sake and is still where he is.
Behind the noise the tax collectors of many countries are beginning to look for blood.
Just as these tax havens weren't built overnight so they won't be dismantled in such a hurry.
Australia is leading a 28 country investigation which kicks off in Paris next week. Meanwhile Germany & France have called for a common global blacklist of tax havens to counter tax evasion and money laundering.
The citizens are getting restless and bread and circuses will not really appease them whilest blatent and rampant theft of their benefits is occuring. Corrporate tax dodging in Europe is already being addressed. There are those in power against this of course especially from the Conservative side of the political spectrum.
Personally I would love some sort of public shaming to be reintroduced. At the moment Mr. filthy rich tax dodger can pass off a few grubby notes and is absolved. If that was combined with a week at the pillory in the local financial district where urchins and street people could throw dogshit at them then that would be much more fun and probably more effective Pour Encourager Les Autres.
posted by adamvasco at 5:37 PM on April 13, 2016 [2 favorites]


I notice you live in the US so probably you aren't so aware about what is happening elsewhere.

Dude, not cool.
posted by Etrigan at 6:34 PM on April 13, 2016 [2 favorites]


I would love to see someone deepdive shell corps to illustrate minimum levels of participation.

It isn't so much the amount of money as its source and the way you spend it.

You can only structure these things if your income is already offshore, or if you can funnel untaxed income offshore. If you're reliant on a salary then the tax office is already taxing you. Maybe you can accumulate savings offshore, but this is going to take a while to build up. In contrast, you have locally-untaxed income if you receive consultancy or speaking fees overseas, or if you have income from overseas investments, or if your local investments can send untaxed money overseas as "royalties" or whatever.

So let's say that your income is building up in an account somewhere overseas. How do you spend it? In the good old days you'd just go on holiday, withdraw a bunch of cash and fly back. Spending large amounts of cash is harder to do nowadays and it doesn't scale. Maybe you can have a credit card that's paid from your overseas account? Or you could set up trusts for your kids that pay them money, below whatever your local tax free threshold is. All of these techniques work to some extent (if you're not seriously audited and aren't stupid) but they don't work for large sums. It's much harder to repatriate large amounts of money unless you're something like a diplomat. This is one of the reasons you hear about scoundrels becoming the local consul of Tiny Islandia.

Anyway, assuming that you have enough money to make this worthwhile, you have to spend lengthy amounts of time overseas. Like, most of the year. Your local income pays for local expenses, your foreign income pays for your overseas expenses. Your local tax authority doesn't know how much you spend overseas, and as far as the overseas government is concerned you're living off taxed income in the USA/Australia/whatever. Consequently, you're saving the tax on whatever you spend overseas minus local VAT/Sales Tax, and minus the extra costs of the peripatetic lifestyle.

How much do you have to earn for this to be worthwhile? Not so much if this is a lifestyle choice and you like living in cheap places (parts of Asia, parts of South/Central America, etc.) but if you like living in the nice bits of Europe I'd suggest that you need to potentially earn at least a couple of hundred thousand per year from untaxed income before this makes financial sense. Even at that level, you're only saving fifty to eighty thousand dollars a year in taxes but you still have to pay for all the flights, rented accommodation, etc. If you're earning a million a year it's a different story: it's easily financially worthwhile and your lifestyle probably includes lots of travel anyway.
posted by Joe in Australia at 6:56 PM on April 13, 2016 [2 favorites]


JiA: ...you're only saving fifty to eighty thousand dollars a year in taxes but you still have to pay for all the flights, rented accommodation, etc. If you're earning a million a year it's a different story: it's easily financially worthwhile and your lifestyle probably includes lots of travel anyway.

This is true for your common or garden variety rich person and of course there's quite alot of them... but go up from there (eg top-level corporate, entertainer, tinpot dictator, heir with a big estate to hide, wealthy western politician), and the Panama Papers demonstrate that these people can effectively hide/shield wealth from taxation without doing all that foreign legwork. And for them it seems to be more about hiding and protecting amassed wealth than shielding an income; most already have ways of minimizing tax on income.
posted by Artful Codger at 4:59 AM on April 14, 2016




So, is there any indication if/when another story will be coming?
posted by Noisy Pink Bubbles at 7:43 AM on April 21, 2016


Other people's money - a column from the op/ed pages of Pakistan's leading English daily. The writer is focusing on public perceptions in Pakistan and why the current prime minister can afford to be shruggo about this whole affair.
posted by bardophile at 1:58 AM on April 22, 2016 [2 favorites]


So this happened:
President [of Iceland] Ólafur Ragnar Grímsson does in fact have connections to at least one offshore account, despite contentions to the contrary with CNN.

While the President told viewers of CNN that neither he nor his wife, Dorrit Moussaieff, have any connection to offshore accounts, The Grapevine has received documents that show this contention to be false.
For context, the president had announced he wasn't going to run for office way back on January 1st after sort of indicating he was going to run again (about which I wrote about here). In the wake of all the protests, he announced he was going to run for reelection, and one of his opponents had this information about him.
posted by Kattullus at 3:46 PM on April 25, 2016 [2 favorites]


P.S. Oh, and this story was broken by MeFi's Own Aya Hirano on the Astral Plane.
posted by Kattullus at 3:47 PM on April 25, 2016 [7 favorites]




For those asking what now? is there more?
On May 9 ICIJ will publish what will likely be the largest-ever release of information about secret offshore companies and the people behind them, based on data from the Panama Papers investigation. The searchable database will include information about more than 200,000 companies, trusts, foundations and funds incorporated in 21 tax havens, from Hong Kong to Nevada in the United States
posted by adamvasco at 4:30 PM on April 26, 2016 [2 favorites]


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