Panama Gold

by wjw on April 5, 2016

So I was about to write something along the lines of, “Once again, the global financial underbelly has been exposed.”  But then I thought, Hey, how many global financial underbellies are there, anyway?

Lots, apparently.  Maybe 11.5 million of them.

11.5 million is the number of documents extracted from the Panamanian law firm of Mossack Fonseca, then given to the Süddeutsche Zeitung, which shared the information with the Guardian and the International Consortium of Investigative Journalists.  (No American paper or news network seems to have been involved, probably because none of them would have the slightest idea what to do with a real news story.  Redact it, probably.)

Mossack Fonseca advises rich people what to do with their money.  They’re not a bank, they’re not a brokerage, they don’t control the money themselves, but they set up companies and provide expertise and advice to people who need it.  Much of this has to do with tax avoidance, which can either be legal or not, or slimy or not.  That’s ostensibly up to the tax authorities in the appropriate jurisdictions— though those of us good citizens who pay our taxes, and who can’t afford pricey Panamanian lawyers, are certainly entitled to our opinions.

But it’s probably illegal to hide millions in in stolen gold, specifically the proceeds from Britain’s 1983 Brinks-Mat robbery, which netted 3.5 tonnes of bullion.  Jürgen Mossack personally helped shift the millions in profits around, though he did write a CYA memo for the files raising the possibility that the money was “illegitimately sourced.”

Vladimir Putin is widely believed to be the richest man in Russia, and the Panama Papers show where he’s stashed a couple hundred billion of his loot.  No account has his name on it, but a lot of his friends and associates seem to be very rich indeed, and you have to wonder where that money came from, and who actually controls it.  (Unless you think that Sergei Roldugin actually earned his $100 million playing the cello.)

In addition to Putin, the papers reveal the dealings of Prime Minister Sharif of Pakistan, members of China’s Politburo, world soccer association FIFA, and Ukranian President Petro Poroshenko.  (Hey, Ukraine, you knew he was an oligarch when you elected him!)

Ian Cameron, the father of British Prime Minister David Cameron, ran an offshore fund dedicated to tax avoidance.  In order to maintain the illusion that the firm was based in the Bahamas, Bahamian sock puppets were hired to play its president, treasurer, etc., while control remained firmly in Britain.  (This, it seems, is a fairly common strategy in offshore dealing.)

And apropos the Tories, some MPs and Conservative Lords are involved in such funds, as are businessmen who use their tax-free accounts to finance the campaigns of compliant politicians.  Which isn’t illegal, as I’m sure they will point out.

Iceland’s Prime Minister may be facing a new election after the revelations that he’s been hiding his wife’s millions from the tax authorities.

And— this one’s really gotta take the cake— British banker Nigel Cowie used Mossack Fonseca to set up a company to deal in arms sales on behalf of North Korea.  (Which is illegal, incidentally.)  The law firm apparently did not notice that Cowie gave his firm a North Korean address.

And that’s in the first 24 hours!

More underbelly to come.

John Appel April 5, 2016 at 11:15 am

As of yesterday afternoon, the only US paper that covered this “top of fold” was USA Today. The Washington Post did have a front page story. Meanwhile, the BBC is all over this (they’re one of participating news institutions).

At least some of the web outfits are giving this decent coverage here: Vox and The Atlantic, for two.

And the breaking news as I type this is that Iceland’s Prime Minister has resigned.

Steinar Bang April 10, 2016 at 12:52 pm

If the poll results hold up Birgitta Jónsdóttir of the Pirate Pary will be their next prime minister.

Certainly interesting times…

On a tie-in to “Reviews Too Late: The Heavy Water War“, and Norsk Hydro‘s ambigious WWII history, the fertilizer company Yara (which is the continuation of Norsk Hydro’s original core business), has been caught flat footed in the Panama Papers, in a deal involving russian corruption, to get access to phosphorus (not-quite-to-be-trusted google translation).

The fertilizer certainly hit the fan there…!

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