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Panama Papers: sad truth voiced by Slavoj Žižek is no surprise to readers of this website

Anne sends a link to the ‘shameful’ news that the 50 biggest US companies have more money stashed offshore than the entire GDP of Spain, Mexico or Australia, collectively keeping about $1.3trn (£0.91trn) in territories where the money does not count towards US tax, according to a new report by Oxfam.

panama papers

Several readers have sent material about the Panama Papers but until now they have not been mentioned on this site – because, as Žižek writes: “The only truly surprising thing about the Panama Papers leak is that there is no surprise in them:

“Didn’t we learn exactly what we expected to learn from them?”

He highlights the ‘shameless cynicism’ of the existing global order and our shame for tolerating their power. In Vox.Com Tara Goshan elaborates:

“Corruption is not a contingent deviation of the global capitalist system, it is part of its basic functioning . . . The papers demonstrate how wealthy people live in a separate world in which different rules apply, in which legal system and police authority are heavily twisted and not only protect the rich, but are even ready to systematically bend the rule of law to accommodate them”.

She points out that, after many years of pressure on Swiss banks to reveal information about rich Americans who hide their money offshore, the U.S. is resisting new global disclosure standards; wealth management experts are now helping the world’s rich move accounts from places like the Bahamas to Nevada, Wyoming, and South Dakota. Goshan quotes Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal:

“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour. That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

The Labour Leader Jeremy Corbyn responded to the prime minister’s statement to the House of Commons about his tax affairs:

“I’m honestly not sure Mr Speaker that the Prime Minister fully appreciates the anger that is out there over this injustice.

“How can it be right that street cleaners, teaching assistants and nurses work and pay their taxes yet some of those at the top think the rules simply don’t apply to them.

“The truth is, is that the UK is at the heart of the global tax avoidance industry. It’s a national scandal and it’s got to end”.

99%-3

Anne comments on the focus away from this international scandal, sending a link to the news that today the Security Council holds an open debate on counter-terrorism.

Will the attention of the 99% once again be successfully distracted by the political-corporate alliance?


ICIJ & Sachs: tax havens are not just gaps in the world’s financial system; they ARE the system!

Investigative journalism on money laundering – with names!
ICIJ header
The editor of an Indian TV station contacted PCU to say: “Truly great journalism released in April but sadly under-reported by the media in all countries. Please share widely!!”

He refers to news of the publication of the secret records obtained by the International Consortium of Investigative Journalists naming banks, dictators, businessmen, celebrities, politicians and monarchs from 170 countries, including India, the US, Malaysia, the UK, Russia, France, Australia etc. who use havens like Singapore, British Virgin Islands, Switzerland, Cook Islands etc. to hide and launder their money.

Dozens of journalists sifted through millions of leaked records and thousands of names to produce ICIJ’s investigation into offshore secrecy ­

tax havens graphicA cache of 2.5 million files has cracked open the secrets of more than 120,000 offshore companies and trusts, exposing hidden dealings of politicians, con men and the mega-rich the world over. It publishes the names behind covert companies and private trusts in the British Virgin Islands, the Cook Islands and other offshore havens.

The vast flow of offshore money — legal and illegal, personal and corporate — deprives the ‘home’ economies of revenue and impacts on other countries. The Greek fiscal disaster is said to have been exacerbated by offshore tax cheating and local banks’ assets Cyprus, inflated by waves of cash from Russia, are now in ‘meltdown’.

ICIJ’s 15-month investigation found that, alongside perfectly legal transactions, the secrecy and lax oversight offered by the offshore world allows fraud, tax dodging and political corruption to thrive. Studies have estimated that cross-border flows of global proceeds of financial crimes total between $1 trillion and $1.6 trillion a year. See video here.

Jeffrey Sachs comments in the Financial Times A-List:

jeffrey sachs“Week after week, Americans and Europeans worn down by budget austerity have learnt about the secret accounts of their politicians, tax evasion by leading companies and hot money destabilising the world economy. The darker truth is that these havens are not gaps in the world’s financial system; they are the system . . .

Jérôme Cahuzac has resigned in disgrace from his position as budget minister following the revelation that he held a secret account in Switzerland. He has since been charged with tax fraud. Spain’s ruling party has been making payments from secret Swiss accounts for years. One senior Greek politician has been sentenced to jail for falsifying financial declarations. Many more revelations will come, especially now that investigative journalists have their hands on the records of hundreds of thousands of offshore accounts.

“Groups such as Apple, Google and Starbucks have been shown in recent months to have used outlandish accounting gimmicks to shelter their profits. These include Google’s claim, approved by the US Internal Revenue Service, that its intellectual capital resides in Bermuda. There are thousands more like them working with the tax authorities to keep their money out of reach. Banks such as HSBC and UBS have been caught in the money laundering that facilitates this process”.

Recent estimates by the Tax Justice Network suggest that deposits are in the range of $21tn. The havens serve countless purposes:
  • They support massive tax evasion.
  • They underpin a global system of bribery to corrupt officials.
  • They service the accounts of drug runners, arms traders and terrorist groups.
  • They create veils of secrecy through shell companies, which allow tax evasion, land grabs and environmental destruction.

The prime movers of the world’s tax havens are the US, Switzerland and the UK. Indeed, many of the leading havens, including the British Virgin Islands, Cayman and Bermuda, are British Overseas Territories.

Professor Sachs ends by asking if these abuses will be addressed at the summits of the G8 leading nations in June and the G20 in September.

Further reading

http://www.ft.com/cms/s/0/74a62e9a-b0f0-11e2-9f24-00144feabdc0.html#ixzz2SDqnMlsB
http://www.icij.org/offshore/secret-files-expose-offshores-global-impact
http://www.ft.com/cms/s/0/7ca55c98-9d49-11e2-88e9-00144feabdc0.html#axzz2SOTYCtLB 
http://www.guardian.co.uk/uk/2012/nov/25/offshore-secrets-revealed-shadowy-side