{"id":239376,"date":"2016-04-22T03:31:42","date_gmt":"2016-04-22T03:31:42","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/a-global-industry-is-raiding-treasuries-all-over-the-planet\/"},"modified":"2016-04-22T19:43:16","modified_gmt":"2016-04-22T19:43:16","slug":"a-global-industry-is-raiding-treasuries-all-over-the-planet","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/a-global-industry-is-raiding-treasuries-all-over-the-planet\/","title":{"rendered":"\u2018A Global Industry Is Raiding Treasuries All Over the Planet\u2019"},"content":{"rendered":"

Janine Jackson interviewed James Henry about the Panama Papers for the April 15, 2016, episode<\/a> of CounterSpin<\/strong>. This is a lightly edited transcript.<\/em><\/p>\n

\"James<\/a><\/p>\n

James Henry: \u201cThe laws tend to be influenced by people who have much more representation than they do taxation.\u201d<\/p>\n<\/div>\n

\n
\u00a0http:\/\/www.fair.org\/audio\/counterspin\/CounterSpin160415.mp3<\/div>\n<\/div>\n

MP3 Link<\/strong><\/a><\/p>\n

Janine Jackson:<\/b> The worry about media reaction to the Panama Papers was that the press would treat revelations of the rich and powerful\u2019s ability to hide their wealth as somehow new or exotic. But we\u2019re moving beyond that now with acknowledgement of, for instance, the US role as a tax haven. A few have pointed to a Reuters<\/b> piece<\/a> from 2011 that dubbed Cheyenne, Wyoming, \u201ca little Cayman Island on the Great Plains.\u201d And a piece<\/a> in the Las Vegas Review<\/b> Journal <\/b>noted that as money launderers, Nevada\u2019s shell companies leave its casinos in the dust.<\/p>\n

But seeing it could just as easily have been the \u201cDelaware Papers\u201d is just the beginning of understanding the scope and the impact of global financial secrecy. And saying it should come as no shock doesn\u2019t mean that it isn\u2019t cause for outrage.<\/p>\n

We\u2019re joined now by investigative economist James Henry, author of the The Blood Bankers: Tales From the Global Underground Economy<\/i>. He\u2019s a senior fellow at the Columbia University Center for Sustainable International Investment, and a senior advisor with the Tax Justice Network. Welcome back to CounterSpin<\/b>, James Henry.<\/p>\n

James Henry:<\/b> Great to be here.<\/p>\n

\"Panama<\/a>JJ:<\/b> Well, let me ask you to say a bit about what this story is not<\/i> most importantly about. It\u2019s not about Panama, but it\u2019s also\u2014despite the headline\u2014not above all else about taxes, is it?<\/p>\n

JH:<\/b> No. It\u2019s really a global industry that of course is raiding the treasuries of rich and poor countries all over the planet, and increasing inequality and raising tax burdens on the middle class and the poor. It\u2019s a huge industry. We estimate at least $21 to $32 trillion of offshore financial wealth, most of which is untaxed, and that\u2019s as of 2010, and it\u2019s grown since then. And there\u2019s another $5 trillion, $10 trillion of nonfinancial wealth that\u2019s parked through offshore companies, like real estate or yachts or paintings.<\/p>\n

So we\u2019re talking about a huge phenomenon here. But the industry is not just about taxes. Because in this case, the Panama Papers, we saw a lot of political officials, what we call kleptocrats, people who have become rich either in office or as a result of bribery after office. It\u2019s not clear exactly where it all comes from. But kleptocracy is a problem that\u2019s kind of independent of the tax-dodging problem. Because many of these dictators and autocrats are in countries that don\u2019t really have effective taxation. Their issue is they\u2019re stealing from the tax base, they\u2019re stealing from the treasury or they\u2019re getting bribery. And more than 22, I think, heads of state and their families have been implicated in this so far. Putin\u2019s inner circle, who\u2019ve been caught out in this; the entire Chinese politburo, including relatives of the president of China. So this is a lot of behavior.<\/p>\n

But if you imagine the Star Wars<\/em> bar scene, you have drug dealers and arms dealers and tax dodgers and kleptocrats and people engaged in financial chicanery and many of our largest banks and multinationals sharing the same basic facilities, which are not, strictly speaking, just about taxes, but they\u2019re about financial secrecy. That\u2019s the shared facility.<\/p>\n

JJ:<\/b> I wonder if you could talk about the extent to which it\u2019s illegal? There\u2019s a helpful piece<\/a> by Brooke Harrington on the Atlantic<\/b> that says, you know, anybody can set up a shell company in order to hide from taxes or child support or whatever, but you might get caught. What rich people are paying for is the expertise that keeps them just on the right side of the law. So we shouldn\u2019t really be expecting many of the folks named in this Mossack Fonseca data dump to see the inside of a courtroom, not because they have the power to quash prosecution, though certainly some do, but because that\u2019s exactly what they\u2019ve paid for.<\/p>\n

JH:<\/b> Yes and no. I mean, the fact is a lot of this stuff clearly is illegal.<\/p>\n

JJ<\/b> Right.<\/p>\n

JH:<\/b> As Mossack\u2014we had a letter from one Mossack attorney to one of his clients, saying 95 percent of our clients are tax-dodging. We have people on the UN sanctions list, US Treasury sanctions against countries like North Korea. There are laws against public officials hiding wealth offshore; they\u2019re supposed to report that. And so a lot of that stuff is strictly illegal.<\/p>\n

The problem is in many of these countries we don\u2019t have courts that are independent and not for sale, so there\u2019s a real problem saying what is legal in China, for example, with respect to this kind of activity. It sort of varies day by day.<\/p>\n

The legal issue\u2014the legality sort of fig leaf\u2014is, I think, a bit of a canard. I mean, the problem is a lot of this behavior should be illegal. We\u2019re talking about a global system with all of this wealth. Mossack Fonseca is this one tiny Panama firm with $42 million of revenue; I mean, a Wall Street law firm does that every week. Credit Suisse, which is based in Zurich, has 2 million clients around the planet; they have a trillion dollars of assets under management, and they\u2019re in 41 countries. So God knows what we\u2019d find if we had a whistleblower from Credit Suisse.<\/p>\n

But this is a global industry. Mossack was dealing with 14,000 service providers, including 500 of the largest banks. I mean, banks like HSBC, the largest bank in the world, UBS, Credit Suisse, they\u2019re all sending them business. There\u2019s 1,800 tax lobbyists in Washington, and they\u2019re not working for you or me. So the laws tend to be influenced by people who have much more representation than they do taxation.<\/p>\n

JJ:<\/b> Indeed. Just because something is legal or illegal, it still is a practice or a policy that has an impact and that has victims. And while the media have been talking about Iceland\u2019s prime minister as being a victim, there are other people who are saying, well, let\u2019s really talk about working- and middle-class people who pay taxes, for example, as victims, or those who rely on the public works and benefits that are being starved. There was a piece<\/a> talking about women in particular as victims of this. What can you tell us about the real harm done to people and to countries?<\/p>\n

JH:<\/b> First of all, we\u2019re facilitating all of these particular kinds of crime, and if a light is shined on them, they won\u2019t sleep as well. I think the most important fact about this is that the global haven industry that we\u2019ve allowed to grow up since the 1970s is really a direct threat to democratic governments and the rule of law. To some extent, it\u2019s because it allows bad actors to conceal wealth, some terrorists and so forth. But the real thing is that if you have political leaders and a political class that\u2019s basically not responsible to their citizens and is hiding wealth offshore and free to engage in corruption, they\u2019re not going to be responsible to the people who elected them. They\u2019re going to be doing deals on the side, not only to enrich themselves but to extend their rule. And so it really undermines democracy. Anybody concerned about representative democracy and the rule of law, I think, should be concerned about this.<\/p>\n

It is true that the US has been a tax haven of sorts. You know, I first wrote my piece called \u201cThe US Is a Tax Haven\u201d in the Washington Post<\/b> in February 1989. This is an old story.<\/p>\n

JJ:<\/b> Let me just ask you, finally: I can get a little cynical about journalists\u2019 emphasis on this as primarily a feat of journalism. You know, I worry that it can be a kind of hall of mirrors where we forget to notice if the world changes as a result of the latest blockbuster, award-winning whatever.<\/p>\n

But it is meaningful that this came from reporters and not from the government regulators ostensibly tasked with it. But I just wonder, now that the sort of journalistic jets are open, where would you like to point reporters, where would you like to encourage them to investigate and maybe direct them away from in terms of moving the story forward?<\/p>\n

JH:<\/b> I think there\u2019s always a threat of a kind of a revelation fatigue in this kind of situation that\u2019s focused on names and prominent people and all that, as opposed to the institutions that are involved. From my standpoint, every decade since the \u201970s, when I first started writing about the offshore haven industry\u2014in a case called the Castle Bank & Trust case, which involved US citizens investing in the Bahamas\u2014every decade we\u2019ve had scandals involving the offshore haven industry. There\u2019s increasing scandals from BCCI and Noriega, Salinas money, you know, on to Swiss banks in the last five years, and then finally this thing.<\/p>\n

So I\u2019m about to say, you know, look, I\u2019m sick of this subject. If you can\u2019t finally have a policy breakthrough\u2014governments have known about this literally for decades and done nothing. I mean, it can\u2019t be just a question of reality TV. We have to turn this into reform. So I would invite journalists to\u2014I mean, a lot of young journalists are learning for the first time about this industry, and it\u2019s great. Now they need to focus on the really big players in the industry, like banks, US banks, that are involved in global private banking, and the fact that there are other critical havens, like the Cayman Islands, that are host to most of the world\u2019s hedge funds.<\/p>\n

There\u2019s just plenty of work to be done on all kinds of aspects of this story. We\u2019ve just, for example, found that Geneva Freeports<\/a> are being used as a parking lot for Picasso paintings by the hundreds, by way of offshore companies that are holding them in their names. And they\u2019re being used to launder money. I mean, they\u2019re being swapped back and forth. If you have $50 million to launder, you know, well, I got it from a Picasso, I sold a Picasso; what a wonderful device. So the art market is being affected by this. There are just tons of stories like that that are crying out for more detailed investigation.<\/p>\n

What this story shows is the power of, in this case, more than 300 journalists who have gotten together across the planet and sort of carved it up and worked together, and that\u2019s a real role model for future journalist effort.<\/p>\n

JJ:<\/b> We\u2019ve been speaking with James Henry. You can find his article<\/a>, \u201cTaxing Tax Havens: How to Respond to the Panama Papers,\u201d on ForeignAffairs.com<\/b>. James Henry, thank you so much for joining us this week on CounterSpin<\/b>.<\/p>\n

JH:<\/b> It\u2019s been a pleasure. Thank you.<\/p>\n

This piece was reprinted by RINF Alternative News<\/a> with permission from FAIR<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Janine Jackson interviewed James Henry about the Panama Papers for the April 15, 2016, episode of CounterSpin. This is a lightly edited transcript. James Henry: \u201cThe laws tend to be influenced by people who have much more representation than they do taxation.\u201d \u00a0http:\/\/www.fair.org\/audio\/counterspin\/CounterSpin160415.mp3 MP3 Link Janine Jackson: The worry about media reaction to the Panama […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519,18],"tags":[],"class_list":{"0":"post-239376","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire","7":"category-latest-news"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/239376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=239376"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/239376\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=239376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=239376"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=239376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}