Craig Murray is a former British ambassador to Uzbekistan who came out the very first day the Panama Papers documents were released, calling them a coverup and following the next day with another blistering attack.
It seems way too early to be making this sort of call, particularly since some of Murray’s claims in his initial post are demonstrably off base.
But why does Murray have a following? It turns out he does know a thing or two about corruption, but his experience appears to have led him to get out over his skis on the Mossack Fonseca revelations. Mind you, he could prove to be right, or somewhat right. At the end of this post, I describe some things that you’d expect to see in the next month if the journalists are doing a thorough and fair job. And I hate to tell you, but there are also legitimate reasons to expect comparatively few prominent American individuals or companies to have been using Mossack Fonseca.
He is rightly renowned for this arrestingly undiplomatic, principled excursion, recorded by Nick Cohen of The Guardian:
In the middle of October, Craig Murray, our man in Uzbekistan, delivered a speech which broke with all the established principles of Foreign Office diplomacy. ‘This country,’ the brave and honest ambassador told an audience in Tashkent, ‘has made very disappointing progress in moving away from the dictatorship of the Soviet period … The major political parties are banned; Parliament is not subject to democratic election and checks and balances on the authority of the electorate are lacking. There is worse: we believe there to be between seven and 10,000 people in detention who we would consider as political and/or religious prisoners. In many cases they have been falsely convicted of crimes with which there appears to be no credible evidence they had any connection.’
The state-censored Uzbek media didn’t report his accurate description of life in the dictatorship. Such news is unfit to use. I would guess that until 11 September few outsiders would have cared about Murray’s denunciation of the near 100 per cent conviction rate of the state’s prosecutors and the gangsterism of its post-communist elite. (I would also guess that until 11 September few outsiders would have been able to find Uzbekistan on a map.)
After 9/11, things were different:
The ‘war’ on terrorism changed all that. I was in Washington in January and saw how events in Uzbekistan pushed delighted conservatives to declare themselves masters of an ‘Empire’. Until then, ‘the American Empire’ was an insult. The Right didn’t accept the Republic could have become any such thing. After Osama bin Laden unwittingly turned America from a superpower into a hyper-power, the men around Bush no longer could or wanted to deny that an empire was what they had. It was the opening of US bases in Uzbekistan which forced them to talk plainly. Here were American troops in a former Soviet Republic in the centre of central Asia and no one – not Russia, not China – could do anything about it. The world was their playground.
Uzbekistan represented a new peak for American imperialism but was also a test of what type of empire the American empire would be. On the level of realpolitik, the thugs in charge of Uzbekistan suited the West well. The President, Islam Karimov, was a Soviet apparatchik who found Muslim fundamentalism a useful justification for repression. Since 1997, his government has pursued a campaign against Muslims who worship outside the state-controlled religion. Some were insurgents dedicated to the most frightening versions of theocracy. But not all.
Alerts from Human Rights Watch give a flavour of how the war against terrorism became a war against democracy. Elena Urlaeva didn’t look like a potential suicide bomber. She was a member of the Human Rights Society of Uzbekistan, who protested outside the Ministry of Justice in Tashkent. She was shipped, Brezhnev style, to a mental hospital and stultified with drugs. Meanwhile, independent doctors have put their careers and more at risk by examining the bodies of prisoners who die in custody. One, the corpse of Muzafar Avazov, had no fingernails and ‘bore burns that could only be caused by immersing him in boiling water’. Neither of the above stories is exceptional.
Murray’s speech went down badly with the UK Foreign Office, which went into, well, Uzbekistan Mode:
…the personnel department outlined 18 disciplinary charges. Most were not supported by any evidence and others were petty. He was accused of “hiring dolly birds for above the usual rate” to work in the visa department, which had, he insists, an all-male staff. Yet he was also accused of having sex in his office with local girls in exchange for visas to the UK. The FCO said he had a week in which to resign. He was not allowed to discuss the charges with anyone or he would face prosecution – and maybe jail – under the Official Secrets Act.
Murray was exonerated of these wildly flaky looking charges, but he wasn’t backing down and the skids were under him. By October 2004, he was suspended after his claim that MI6 had used information obtained under torture by the Uzbekistan government was leaked to the press. The Foreign Office finally turfed him out in early 2005.
So he’s gone feral, Mr Murray, like many another brave, principled whistleblower. Of course, he now has a blog, and right now, he’s commenting on #panamapapers:
Whoever leaked the Mossack Fonseca papers appears motivated by a genuine desire to expose the system that enables the ultra wealthy to hide their massive stashes, often corruptly obtained and all involved in tax avoidance. These Panamanian lawyers hide the wealth of a significant proportion of the 1%, and the massive leak of their documents ought to be a wonderful thing.
So far, so good. But:
Unfortunately the leaker has made the dreadful mistake of turning to the western corporate media to publicise the results. In consequence the first major story, published today by the Guardian, is all about Vladimir Putin and a cellist on the fiddle. As it happens I believe the story and have no doubt Putin is bent.
No doubt; and leading off with the Putin story certainly looks like axe grinding, of course. Yet, in a crowded field, the story’s talk of $2Bn controlled by Putin proxies is not a particularly effective pop at Putin. Heck, even the tame onshore Russian media can do better than that: here is Kommersant, re-reported in BNE Europe, on a $46Bn money laundering scheme that comes just as close to Putin:
Russian law enforcement agencies have detained the alleged mastermind of a money laundering syndicate of 60 banks and 500 people said to be responsible for channelling some $46bn out of the country, Kommersant daily reported on November 3, citing unnamed sources.
Businessman Alexander Grigoryev, the former vice president of the Moscow Boxing Federation, is a co-owner of several bankrupt banks, including Zapadny, Transportny Doinvest, and Russian Land Bank, which together allegedly owe clients a total of more than RUB75bn ($1.19bn).
Currently Grigoryev is accused of two counts of large scale fraud amounting to RUB105bn ($1.67bn) and has demanded to be released on bail.
The newspaper claims that Grigoryev is accused of channelling prime assets out of banks about to be declared insolvent, as well as closing real estate deals on behalf of bankrupt credit institutions.
However, the biggest scam he is accused of running affected over 60 small banks and about 500 individuals, constituting a money laundering and outflow operation with a record turnover of over RUB1 trillion a year.
For comparison, Kommersant notes that to date, the largest busted laundering scheme in Russia, run by Sergey Magin, had a turnover of RUB169bn.
The scheme could involve Moldovan, Lithuanian, and Estonian banks servicing Russian and offshore shell firms that channelled money out of Russia under the pretence of issuing compensation for fake trade deals with local nationals.
According to the anti-money-laundering services of Moldova, in 2010-2013 alone Moldovan courts withdrew $18.5bn worth of compensation from Russian resident firms, which in reality was a cover-up for illegal capital flight.
The Putin link? That is via Russian Land Bank (RZB), where Putin’s cousin Igor served as a director until 2014.
If you like irony, this giant money laundering scheme was first written up by the OCCRP, now a big publisher of Panamapapers, in 2014. I hope Putin’s FSB, which led the Grigoriev bust, is grateful for the OCCRP’s $46Bn lead, which ought to compensate Putin a bit for the $2Bn cellist story, too.
Back to Craig Murray, who may not have an irony detector:
But why focus on Russia? Russian wealth is only a tiny minority of the money hidden away with the aid of Mossack Fonseca. In fact, it soon becomes obvious that the selective reporting is going to stink.
Well, the obvious rejoinder to that is that, whatever the merits of putting the Putin story out first, or at all, it’s only the first in an utterly enormous series. So the “focus on Russia” is likely to turn out to be a figment of Mr Murray’s imagination, and rather quickly, too. Selective reporting, anyone?
But that’s not quite Mr Murray’s point. He doesn’t like the funding sources behind the leak publication:
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.
… and ventures a prediction:
Expect hits at Russia, Iran and Syria and some tiny “balancing” western country like Iceland. A superannuated UK peer or two will be sacrificed – someone already with dementia.
That’s not looking like a great prediction so far. For instance, Poroshenko of Ukraine is very visibly close to the Open Society Foundation and Soros, one of the funders of panamapapers. Here is Poroshenko last November with Soros, having just given him a nice medal, after Soros cracked the whip on the pace of reforms. Poroshenko is generally considered to be pro-Western, with a particular affinity to Joe Biden. Here they are together, just a couple of weeks ago, jointly deploring the kidnapping to Russia and show trial of Nadiya Savchenko, allegedly a member of the Aidar militia, which Amnesty International considers to be war criminals.
So if Murray’s analysis is correct, Poroshenko is just about the last person you’d expect to find in panamapapers, day 1. Yet here he is:
Ukraine’s president, Petro Poroshenko, set up a secret offshore company in the British Virgin Islands at a time when his troops were being wiped out in a bloody battle with Russian troops and pro-Moscow rebels.
Leaked documents from the Panamanian law firm Mossack Fonseca show that Poroshenko registered the company, Prime Asset Partners Ltd, on 21 August 2014.
…
The Panama Papers show that Poroshenko used a Cypriot agent to register his new BVI firm. It is not illegal to open an offshore account. The president supplied a utility bill and a reference from the International Investment Bank (IIB) in Kiev.
The letter, dated October 2014 and marked confidential, says Poroshenko has been a customer of the IIB since 2009 and conducted his accounts “to our satisfaction”. It fails to mention one detail: Poroshenko owns the bank.
The inevitable impeachment proceedings have started. It’s not a good look for Biden or US policy in Ukraine, and I daresay Soros is frothing at the mouth. But the story did get out there PDQ, didn’t it?
Next, let’s take a look at the Western corporate media pushing these stories out. Mr Murray’s elastic term clearly includes, alongside Le Monde and the BBC and the Guardian: The Daily Monitor of Uganda, the Dépêches du Mali, the Indian Express, Krik (of Serbia), the Korea Center for Investigative Journalism, MalaysiaKini, Novaya Gazeta and Vedemosti of Russia. To be honest, this, and much more besides, looks as much like an approximation to the geographical footprint of Mossack Fonseca’s global client base as a western media stitch-up. Late breaking news: New Zealanders can follow the story at www.stuff.co.nz.
But let’s look at the US media, the paradigm for “Western corporate”. There’s no Washington Post, no New York Times, no WSJ. Instead, we have Univision and McClatchy, in their own name and via a couple of their titles, The Miami Herald (Panamapapers connection: numerous dodgy real estate deals) and the Charlotte Observer. There’s no Panamapapers coverage from the Charlotte Observer yet, but Charlotte does happen to be the home town of Bank of America, which might have something to do with it; we will have to see.
I haven’t much clue about Univision, but McClatchy, formerly Knight Ridder, are an interesting choice. Here’s their Iraq pedigree:
The Knight Ridder team, and now the McClatchy team, has frequently been cited as one of the few that got it right in the run-up to the invasion. At the time a lot of people said the rest of the media was ignoring you. Is that how you and the team felt at the time?
Well we certainly didn’t see anyone doing the same kinds of stories, with the exception of some stories by Walter Pincus at the Washington Post, and much, much later after the Los Angeles Times got onto Curveball. But during the period when I guess, arguably, it mattered, when it could have and should have been a debate about whether to engage in this war, I think we felt that we were fairly lonely.
What was it about the way the Knight Ridder bureau was approaching the story that made it so you didn’t get lost in the same wave of reporting that overtook the rest of the press corps?
There wasn’t any reporting in the rest of the press corps, there was stenography. The administration would make an assertion, people would make an assertion, people would write it down as if it were true, and put it in the newspaper or on television.
Well, if the same sort of mindset is in place at McClatchy now (Walcott has moved to Bloomberg), their coverage might not be too bad. So far they don’t look particularly like corporate stooges. We shall see.
There is one last American partner, Fusion (jointly owned by Disney and Univision), who have some interesting things to say about the strikingly (and so, suspiciously) small number of American names that turn up in the Mossack Fonseca leak:
So far, the International Consortium of Investigative Journalists (ICIJ) has only been able to identify 211 people with U.S. addresses who own companies in the data (not all of whom we’ve been able to investigate yet). We don’t know if those 211 people are necessarily U.S. citizens. And that figure covers only data from recent years available on a Mossack Fonseca internal database — not all 11.5 million files from the leak.
In other words, that 211 number comes from just a small sliver of the data. “It’s a complete underestimate,” says Mar Cabra, head of the data and research unit at the ICIJ. Finding a precise number of Americans in the data is difficult.
Not surprisingly, though, a lot of people are asking: If this is the biggest data leak in history – and our biggest window ever onto the offshore world – where are all the Americans? After all, an estimated $150 billion in potential U.S. tax revenues disappears into offshore tax schemes each year, according to a 2014 Senate subcommittee report. We asked top experts in offshore finance to break down the American-related aspects of the Panama Papers leak.
Here’s the picture that needs explaining. Say the experts:
Jack Blum: Every news entity that works on it has to go through the material and figure out what’s in it, and this is such an enormous database, it will take some time.
That’s dull but, with 11.5 million documents in the leak, clearly plausible. Next, they give a clear view of the US’s way with shell companies:
Shima Baradaran Baughman: Americans can form shell companies right in Wyoming, Delaware or Nevada. They have no need to go to Panama to form a shell company to use for illicit activities.
Jason Sharman: One of the forms of companies that’s even more secret than, say, a British Virgin Islands company is a company incorporated in almost any U.S. state. If you form a British Virgin Islands company you have to declare who you are to the person forming the company for you; if you form in Nevada, for example, you don’t… So Nevada is great because it’s much more secret than the British Virgin Islands.
Jack Blum: What should be one of the more shocking aspects of the documents is that Mossack Fonseca had a subsidiary to create American offshore corporations in Nevada, and it is a fact that the U.S. government has been talking about on and off over the years, about forcing U.S. corporations to disclose their beneficial ownership. It is a depressing fact that several administrations now have refused to make that a requirement… What’s happened is, some of the sleaziest offshore lawyers are now using American corporate shells to hide foreign corrupt activity. You’d think – you’d hope — that the U.S. government would crack down on this and do the right thing to force people to make public the beneficial ownership of corporation.
…Mossack Fonseca do indeed like Nevada companies: here’s their connection with a money laundering scheme conducted by Argentinian bigwigs close to President Kirchner.
And now the big picture for the US:
Shima Baradaran Baughman: The extent of money laundering and tax evasion demonstrated by the Panama papers is alarming for the entire world, including citizens and policy makers in the U.S. It is also relevant because it should make Americans look internally to see what kinds of corporate illegalities we are allowing within our own borders.
…
James Henry: The big thing we should be concerned about is, there is onshore haven behavior in the United States, and it is undermining our own tax compliance and tax citizenship. I mean, if ordinary people are the only ones paying taxes, then you’ll have a tax revolt on your hands…We depend for our tax system and for our democracy on ordinary people paying their taxes. If they go on strike, it’s going to be a serious problem. It’s nothing less than our democratic process at stake.
My own observation is that Panama is best-liked as an offshore by a very specific type of American: people who want to buy gold, survivalists, bit coin fetishists, Tea Party libertarians. They tend not to be big-time. I am not sure they relish would Mossack Fonseca’s upmarket fees. Occasionally the IRS gets after these types, for instance, here, via another dubious Panamanian agent, and via a renowned bank that also shows up in the Panamapapers, HSBC.
Lastly, we have a paranoid-looking expert guess about the level of deception that goes on over at Mossack Fonseca:
Don Semensky: Americans may have figured out a way to add another soft party who has a different nationality or identity. Let’s say [Mossack Fonseca] had a lot of American account holders or clients. It took [the U.S. Foreign Account Tax Compliance Act] over five years to get into place, which gave everyone plenty of time to close accounts and move their money—open up new corporations that didn’t look like they were held by Americans.
The identity paranoia gets an immediate confirming sighting over at the BBC, who spot a spectacular abuse that in fact predates the implementation of the Foreign Account Tax Compliance Act:
Eight years ago, business guru Marianna Olszewski had a problem.
The author of Live it, Love it, Earn it (A Woman’s Guide to Financial Freedom) offers financial advice directed at American women. Some of her personal fortune had been invested using a secret offshore company.
But in 2008, at the height of the financial crisis, she decided she wanted to get her $1.8m back.
The problem was that the bank that held the funds wouldn’t release the cash without knowing who was behind the offshore company – and Ms Olszewski was desperate to keep her identity secret.
Mossack Fonseca was willing to help. It offered to provide somebody who would pretend to be the real – or beneficial – owner of the cash.
An email from a Mossack executive to Ms Olszewski in January 2009 explained how she could deceive the bank: “We may use a natural person who will act as the beneficial owner… and therefore his name will be disclosed to the bank. Since this is a very sensitive matter, fees are quite high.”
She replied: “I do think we should go ahead with the natural person however I want to have your promise that you… will handle this in the most sensitive manner.”
So Mossack Fonseca hired an impostor to pretend to be the beneficiary of the account holding Ms Olszewski’s money:
The “natural person” Mossack Fonseca offered turned out to be a 90-year-old British citizen.
Mossack Fonseca told Ms Olszewski that the service would be expensive because it was so sensitive. Fees were normally $30,000 (about £20,000 at the time) for the first year and $15,000 for every subsequent year. But she was offered a discount – just $10,000 for year one and $7,500 for every year after.
One reason for the high cost is likely to have been the degree of deception. Another email from Mossack details what would be involved:
“We need to hire the Natural Person Nominee, pay him, make him sign lots of documents to cover us, make him sign resignations, make him get some proofs evidencing that he has the economic capacity to place such amount of moneys, letters of reference, proof of domicile, etc, etc.”
It’s a blatant breach of anti-money laundering rules, but Ms Olszewski signed up anyway.
Now then: if Mossack Fonseca have been doing that in any scale, for at least the last 8 years, tracing American nationals in the leak, or any other nationality, for that matter, is going to be quite tough.
There is a bigger implication of this single incident: banks simply can’t trust offshore company agents, key players in the offshore financial system, to tell the truth about the beneficiaries of the accounts they are opening. If that’s the case, how on earth can you plausibly claim to run a money-laundering-proof offshore financial system at all? Mr Murray has also seen this story, in its TV version, but overlooks this simple observation.
Instead, he accuses the BBC of directing attention away from the involvement of the British Virgin Islands in Mossack Fonseca’s skullduggery, by not dwelling for long enough on a company registration form briefly displayed in the course of the exposition:
Richard Bilton of the BBC today exposed himself as the most corrupt and bankrupt of state media shills – while pretending to be fronting an expose of corruption. There could not be a more perfect example of the western state and corporate media pretending to reveal the Panama leak data while actually engaging in pure misdirection.
…
Richard Bilton deliberately suppressed the information that all the companies involved were in fact not Panamanian but in the corrupt British colony of the British Virgin Islands. At no stage did Bilton even mention the British Virgin Islands.
Well, that’s how TV works: lots of fast moving visuals. If the fleeting BVI shot is a misdirection, it’s kind of inept of the BBC to display the form at all. They could easily have put up another Panama cityscape instead, a form of visual blether abundant in that particular show.
By today, with a Times leader thundering away at the UK’s lax supervision of the BVI, Mr Murray’s “BBC propaganda”, whether it is a figment of his imagination or not, looks a bit forlorn:
The UK is institutionally complicit in tax evasion, moneylaundering and corporate cover-ups. Many of the secretive tax havens, including the Cayman Islands and the British Virgin Islands, are British overseas territories that are self governing but remain under the jusrisdiction and sovereignty of the United Kingdom.
Sounds great. Let’s see some action.
Here is my own list of stories that should come out but haven’t yet.
Big banks: when will the banks that get so many name checks in the Panamapapers, for instance, HSBC, Coutts (a subsidiary of RBS) and UBS get some serious scrutiny? Rona Fairhead, chairman of the BBC Trust, whose job is to protect the BBC’s independence, last year quit the board of HSBC after a row over her handling of a tax evasion scandal at HSBC Switzerland. It would of course be great to see the BBC take a deep dive into HSBC’s links with Mossack Fonseca, this year, after another tax evasion scandal. Once again, we shall see.
Big oil: as an instance, Vitol is a large oil trader whose Panamanian subsidiary was created by Mossack Fonseca. Vitol has interests in Azerbaijan, whose ruler Aliyev is in the Panamapapers too. Where is big oil in the Panamapapers?
Big oil and big banks: Special friends of Vitol seem to be special friends of HSBC too, as I noticed in this blog post last year. One would like to understand why.
Publication: one can certainly concede one point to Mr Murray:
The corporate media – the Guardian and BBC in the UK – have exclusive access to the database which you and I cannot see.
I agree with him that that’s not at all desirable. The original ICIJ Offshore Leaks went online and the sky did not fall in – where were the privacy issue then? Are the ICIJ really sure they should be the gatekeepers of Panamapapers, forever? It’s different data, much bulkier and seemingly, less structured. But I think I’d like to add my voice to the choir requesting wider access. The choir already includes Alex Cobham of the Tax Justice Network and there will be more.
Meanwhile, I think Mr Murray, whose courage I esteem, should consider reading more Panamapapers, watching less TV, thinking harder, and writing less, until the picture’s a bit clearer, which may take a while. If he is half the man I think he is, Mr Murray will ignore me.
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Something doesn’t quite smell right about the means by which the Panama Papers were obtained, are being managed and selectively released.
The sheer size of the data set. The ability to get it “in the clear” (i.e. free from encryption). The expertise in arranging media exposure.
But whatever or whoever the shadowy group behind it is, I’m not really bothered as the end result is — about time — an exposure of a lot elite wrongdoings. For what it’s worth, the leak has all the hallmarks of an inside job done by a group of disgruntled employees who didn’t work alone, had a very well thought-out plan and got some sophisticated backing. Maybe it was an extortion attempt whose bluff was called — but they weren’t bluffing.
The other tantalising possibility is that it was a security services operation, with whichever government’s agency it was throwing its weight around and putting the frighteners on the relevant political class in their country of origin. But this is all descending into tin foil hat territory so I’ll quit here before I risk looking ridiculous.
Yes, I think there is a lot going on here which isn’t clear at all – only time will tell. The targets for the initial stories are suggestive of an agenda, but we’ll see I think over time if this is the case.
I do wonder about whether the loss of the data needs necessarily to have been due to a sophisticated plot or hack. The problem a lot of shadowy companies have is that precisely because they try to keep a low profile they don’t often have access to the best systems, and sometimes are heavily dependent on the one ‘tech guy’ who keeps everything running. Its not an area of expertise for me, but I’ve heard all sorts of stories from techie friends about the ineptness of some companies when it comes to protecting data, especially if you have a secretive, control obsessed bosses, who want everything at their fingertips, even if they are far away from their server.
Yes, you’re right, it’s all too easy to end up creating something like the script for a wonky episode of The Blacklist out of nothing substantive whatsoever. The really lame beginner’s error explanation I also thought of for the data breach was that it is from backup tapes from the email server which were simply allowed to float around without any serious controls on them (e.g. there were put into offsite secure storage but there wasn’t any multi factor authentication for access or even dual-control in place). That just requires someone to get lucky and realise what they have in their hands. But storing the data in a backup in the clear is so dumb, it seems unlikely. However, The Crappification of Everything is a risk for the 0.001% too, so maybe us plebs get the last laugh. That would be nice.
That all said, even allowing for “noddy” explanations, knowing you have something exploitable is one thing, being able to exploit it is another. If I had access to such data, I’m not really sure I would be able to do anything useful with it, I just don’t have the sort of network of contacts needed to leverage it. There’s too many unlikely connections that had to happen for this to be explained away completely with simple happenstance. And I wouldn’t have the nerve to try anything clever by way of blackmail etc. The chances of ending up in the Thames wearing concrete boots are too high to be worth it — again, unless you know the right people to conspire with.
Law firms and data security are two words that never meet…add modern krapification…thinking this began by some former hardware supplier to mf who got fired and was careless or worse…some lazy internal person just threw some hard drives in the trash bin…any firm that would “email” this data back and forth is already cutting corners…whatever happened to the old days of couriers ?
Was about to say stupid email and data management are a simple set of reasons to explain why Hillary is not qualified to sit in the oval office…and then a dreadful thought in my wild imagiation hit me…
Either way…can not think of an easier target to get datableed than a law firm…maybe the take out joints near a data target might be easier…but not by much…
Funny thing, it was only after I typed about ‘secretive, control obsessed bosses…’ that I realised how closely that description suited a certain presidential candidate known for her fondness for leaky Blackberrys.
But yeah, i take your point about the knowledge needed to disseminate it safely. of course, we can’t be sure the person(s) involved are not right now forming part of a Caribbean harbour, they just managed to mail the stuff out in time. I’ve often thought about how I’d do it in the unlikely event of having something to whistle blow. I’d know enough to keep all my search histories and email clear and not use any work based copying facilities (or if I was doing so, to use someone else’s pc/photocopier). But even then, I wouldn’t be certain I’d be safe, not least because I know the journalist\politician I would choose to confide in might also be security compromised.
On the point of security, I would never discount all sorts of incompetence. The one time when I once reported a security breach to my employer at the time (a friend who was using hacking software on his pc for legitimate use when browsing my employers website accidentally hacked into supposedly firewalled information), the response I received after a month was ‘we asked the vendor, he said its impossible’. And that was that.
I think it’s just the new product people aren’t used to. Wikileaks models made data available to all for research and disseminate in exchange for free/donations. It was leaking for public good. People would be motivated to act.
Leaking is now monetized and exists only for profit…. media quickly adjusts. A few lesser elites can be sacrificed, think of the page hits! but dribble the data out to diffuse the rage.
The controversial raw data is controversial, and therefore must be cherry picked, because sensibilities.
Better to smear some with a broad brush.
I think there’s a lot going on here that is not public. For example, both the ICIJ and the Sud-Deutcher outfit are reputedly agency-funded and staffed. Craig Murray undoubtedly has only part of the picture, but he’s on to something. Just listen to this interview on Democracy Now with an ICIJ and a Sud-Deutcher journalist. Much repetition of anti-Russia and anti-Assad memes – it has many hallmarks of a propaganda operation.
http://www.democracynow.org/2016/4/5/panama_papers_reporters_explain_how_the
Now – the propaganda part may well be “a word from our sponsors” – and more useful non-propaganda info to come. We shall see.
From here in Oz, I am sure the revelations are not surprising to NC readers.
What gets me most about this is that the trillions of tax dollars stolen we will never get back by asking for it. We can only ever get those dollars back by making them ‘want’ to give it back. Right now, those dollars are in some very wealthy hands, working for them and they will never give them back, if our current leaders continue to work for the wealthy and for corporations and banks.
It is us, the people, that have to create that ‘want’ in our wealthy humans. Persuasion would be a nice outcome, but history suggests, at least, a dagger at their throats would be required.
Clearly, our governments have enabled this to happen, through inadequate controls on companies and the protection of banks.
We allow them to own real estate, farms, mines, infrastructure, businesses and many other assets, real and synthetic.
And yet, they take this ‘license’ to operate in our communities and then go on to steal from the poorer people, those that rent or have debts and mortgages.
Not only do they steal taxes they would otherwise have paid, they offshore our jobs, mechanise our service industries and put profit before people and the societies and countries in which we allow them to conduct business.
When is enough, enough? Never it would seem.
Governments have allowed this. Our elected representatives.
The money is gone and, in the world of zero interest, is not earning much in those ‘offshore’ accounts. But you don’t really care when you have that much.
Tip of the icelanderberg.
“The money is gone and, in the world of zero interest, is not earning much in those ‘offshore’ accounts.”
Hate to throw cold water on your happy thought, but these accounts can be managed by hedge funds, and might be getting 10-15% compounded tax free. How else will we get our first trillionaire in only one lifetime???
good post. i’m also baffled by the number of well-meaning left commentators denouncing the leaks as misdirection or coverup from day 1 (!!!). Let’s wait until the dust settles. if governments don’t fall and rules don’t change then, they can make their point.
Hi NC,
I would also like to bring to your attention the very suspicious rule that the panamapapers reddit IRC chat(https://webchat.snoonet.org/panamapapers) has implemented the day after the leak happened, that is on tuesday. The rule is that one is not allowed to talk or speculate about the USA unless verified. The moderators say that it was to reduce the amount of people coming in asking about the US which was getting too much. I tried to discuss it with them that why not ban all speculation unless backed up by a verified source. After all if a 100 bulgarians came in asking about their country it wouldn’t be banned according to the rules. Suspiciously enough they were not willing to even entertain that their rule was unfairly biased towards the USA and stangely nationalistic for an online reddit community. Anyway, I got banned soon after for simply politely discussing it with the moderators and asking them to make their rule more fair. Very weird behaviour for a community based on ‘openness’
Funnily enough, a few hours later this turned up! – http://www.theguardian.com/news/2016/apr/05/panama-papers-leak-americans-exposed-tax-havens
it might be tied to fear of litigation. I heard that, anyway
Isnt it also weird that the same class of people who use offshore-ing to avoid taxes are the same ones who use their propaganda machines as soon as the government even contemplates of deficit spending instead of relying on taxes. It really is quite a brilliant and disgusting tactic to keep the government under their control.
I think that Mr. Murray misses the point although his critics have some merit. I have looked at what the spanish media that have been provided with the leaked documents are publishing and there is something rigth about his critics. In Spain, the media has signalled some individuals involved in the panama papers. The first to be known where Messi (famous soccer player), the aunt of the King Felipe VI, and Almodovar, (spanish most well known film director). It seems that at first media prioritised “mediatic” or well known characters. New names are appearing not so mediatic like, for instance the wife of a politician (former minister and currently commisioner at the EU) and now three families that own the three main spanish hotel chains. It is weird that only two spanish media have access to the papers (what about unfair competition/coverage?). Why only two? It is also noticeable that many names involved in the panamapapers scandal migth not be as easily traceable for the media and we could probably miss some and even the most important players in tax evasion schemes. If the papers where openly distributed the chances to identify those would be much greater.
Given the size of the leak I think that the true reason not to release the papers to the general public is just fear. Fear that some names could inconveniently appear. Fear that a tide of names would make the words written by James Henry to be prescient.
Here in Ireland its something similar. The first ‘victims‘ of the release are a well known media friendly political advisor, and two prominent businessmen who have spent the last 7 years fighting various government regulators over hidden money. Its logical I suppose that the first people the newspapers focuses on are those who are known to the public, and are already known to be a little dodgy in one way or another.
Yes it is logical. But they should know better and try to avoid informative biases or, at least aknowledge them. Something like saying “names like this or that attracted our attention because they are well known” but…
I feel like I have leak ennui.
Fast and furious, wikileaks cablegate, Snowden, Hillary’s emails, Libor and price fixing, HFT and banking fraud, Cyprus and Greece, now the Panama papers.
The corruption going on in the world is so big and so wide and so tall as to be nearly unmeasurable. Information about this widespread ongoing corruption hits the internet now with regularity. Millions of people see this evidence of conspiracy, corruption, lawlessness, and theft.
And then nothing happens.
The fraudsters continue to carry on and we move to the next international scandal; one year after the next, another and another and yet nothing changes.
Crisis to denouement. Crisis to denouement. The system of fraud remains in place through it all and keeps on churning. Some of the players may change from time to time.
Something is already happening with these leaks and we are only three days into them. The Iceland PM resigned and Cameron had to defend his father. The US loves to bust foreign money laundering banks, so you can be sure they will be all over HSBC and UBS like a cheap suit.
You say “bust”, Yves, but wouldn’t “shakedown” be more accurate?
The $9.8 billion fine to Paribas was bigger than “shakedown”. Foreign regulators were genuinely upset.
The US loves to bust foreign money laundering banks, so you can be sure they will be all over HSBC and UBS like a cheap suit.
When you say “bust”, You mean surely overlooking blatant criminal conduct and settling for fines and consent decrees…HSBC long ago should have had its bank charter lifted, and banned from any US activities…an scandalous operator mimicking an outright criminal syndicate.
The US got 13 execs or so to leave Paribas. And we eventually put enough heat on intransigent Peter Sands, the head of Standard Chartered, to get his board to remove him.
I agree they should have their banking licenses removed in theory, but in practice, they are systemically important banks and they do substantial trading business in US $ (thus lots of US and Eurobank counterparties) and have lots of customers who use them for those services. If their US banking license were pulled, you’d have a systemic crisis.
We should prosecute execs but many are overseas and I know in Switzerland, this sort of thing would not be something for which anyone could be extradited.
Although Yves makes a good point about some “things” happening, and there might be more (hopefully), I agree w/you gardener1. It seems we are often provided with a lot pretty good, usually verifiable Intel about corruption, theft, chicanery, etc. Yes yes, some “things” happen, and some people get the chop in one fashion or another.
But from where I sit in the far reaches of the peanut gallery, it always seems like a few scapegoats get the rap, and then… bupkiss. The real BIGS never seem to suffer many consequences, and the few consequences they may experience are usually less than a tap on the wrist and any fines are, for them, chump change. How many Bernie Maddoffs were there, after all, after the 2008 crash? How many can you actually NAME?? Think about it.
And then the beat down on the middle/working classes and the poor continues apace with nary a bump in the road.
Look at the 2008 crash – we mostly all know now who was responsible for it, but the big banks & wall st, in lock step with the corporate-owned media, continues to this day to blame poor people. And of course, the heavily propagandized US populace rallies to the cry of kissing up and kicking down. This even after movies like the Big Short, and other popular forms of explanation about WHO really is responsible. US citizens continue to want to demonize poor people and shrug their shoulders (at best) about the real corporate criminals.
What legislation has been put in place to deal with this. I tell you: effectively, nothing. Yet US citizens continue to be drawn to the siren call of blaming Obama for being an N-word, while voting in the same old same old congress sh*ts who keep ripping us all off.
THAT’s what gets me. So now we’ll have some scapegoats, like the Iceland PM, get the boot and then… I can almost guarantee that nothing much else will happen. The rich will continue to rip us off and beat us down – with the compliance of a lot of US citizens (and others world wide) – and they’ll continue to get away with it.
Will there be legislation passed to even attempt to deal with these kinds of egregious tax evasions? Hell no. But we’ll hear TONS and TONS about poor people ripping us off. Bank on it.
gardener1, you are expressing my feelings exactly. Maybe in our world the only honest people are poor people. The mind boggles when commentators insist that in some cases there was no illegality in putting money offshore. Really? Who would believe that BS?
Maybe it’s the ennui basically good people (which these days may as well be called “chumps”, but probably encompasses a decent chunk of the 99s) feel in a world that ultimately seems to be run by bad people. Why do they have to be so bad, what’s wrong with them anyway? Can’t they just not be evil for once in their lives? The truth is probably that they are the type of people certainly this system, but maybe all human hierarchical systems, encourage. Well that’s the leaks about actual corruption, theft etc.. The Snowden leaks are a bit different since it’s debatable policy (I don’t favor it mind you and it was kept semi-hidden, but it’s not the same as pure corruption except when it’s used for that).
Was this a leak or was it a hack?
The news media reporting on this are all calling it a “leak”, yet the Süddeutsche Zeitung acknowledges it knows nothing about the source of the data. Mossack Fonseca, on the other hand, claims that their servers have been hacked. If the MF servers were in fact hacked, who did it? An individual, a government, or an NGO? This obviously raises questions about the motivations of the source. Craig Murray may or may not be barking up the wrong tree, but there ought to be a whole lot more barking.
Note that if the New York Times had been given access to the data, it is not clear that it would have met their journalistic standards on sourcing, or passed muster with their legal department.
It’s hard to imagine a data breach of this magnitude, particularly for a company engaged in this line of work (as in you’d expect them to be more buttoned down IT wise).
One reader said that it was a lover of one of the partners (you’d assume also an employee but the comment didn’t say so specifically) who was jilted and downloaded the records as revenge.
On your point about Poroshenko’s having been exposed, it may well be that the US, especially Nuland, is very upset at their loss of control over the neo-nazis (Right Sector and another whose name I’ve forgotten). And according to Michael Hudson:
And yet the Ukrainian economy is still in desperate straits, perhaps due to reported corruption. Perhaps a regime change by NGOs is in the works?
I can’t seem to get the Hudson link in by editing:
http://michael-hudson.com/2016/02/the-commanding-heights/
The Hudson link by wendy davis is an excellent synopsis of the effects of TPP and the changing rules of the IMF.
I’ll be completely floored if any of the names of real powerful Americans or their corporate entities are revealed. As one other commenter noted, releasing all the names might reveal some that are “inconvenient” for the public to be made aware of. If there are any Americans, you can trust that it will be a few athletes, maybe a movie or rock star or two. But the real elites, the ones who broker power on a daily basis? Sadly, I don’t see much chance of those names becoming public.
sorry,i’m a bit confused this morning. Craig Murray is a former British diplomat who got fired for blowing the whistle on UK complicity in our war crimes. So here we got Richard, a much respected (and appreciated) blogger speculating that the speculations of Murray about reveations a month off might be off base. Sounds like NYT pap:” Hardhitting “insightfull” and totally fucking embarrassing.
and shit, rich….”and naturally has a blog” really?
Summarizing for you: brave as he is, and popular as his commentary is, Murray has already got a bunch of stuff wildly wrong on panamapapers. That’s not speculation: it’s documented, already.
So you can’t read across from his courage as a whistleblower to his reliability as a commentator on panamapapers. Is that idea really so difficult to grasp?
IMHO, Craig Murray gets it right >95% but <100% of the time. Not a bad strike rate. That he opined a bit early on the Panama Papers was probably a mistake, but I really don't think Craig Murray is the story here.
His piece was a useful warning to us all to think twice about how the BBC and The Guardian are covering the story. It's important to realise that the BBC has changed quite noticeably in the last 11 months from acting like a broadly independent liberal broadcaster (during peacetime) to acting like a state broadcaster all the time – in response to the threats of the Tory Government to destroy them. It's been quite a shock to us British liberals. It's part of the culture here to act cynical but deep down to trust Aunty Beeb to play fair. The BBC and The Guardian's really blatant biased coverage of the Scottish independence referendum particularly upset Scottish Nationalists, of which Craig Murray is one.
The BBC Panorama team (the investigative programme) have been particularly criticised and have lost credibility as a genuine speak truth to (British establishment) power outfit. Meanwhile, The Guardian is pursuing a feud with Julian Assange and are not above nasty tricks. In that fight, Craig sides with Assange, rightly I don't doubt.
https://consortiumnews.com/2016/04/04/corruption-as-a-propaganda-weapon/
tinfoil hat?? You can each decide.
Just a note: the link to the connection to an associate of ex-Argentina President Kirchner is from Fact Check Argentina, which is a website that was set up by NML Capital/Paul Singer as part of its media campaign to discredit the Argentine regime that was refusing to pay the Vulture Funds (and which may have helped bring in the government that now agreed to NML’s demands).
I would not be the least bit surprised that the aide in question, Daniel Muñoz, is guilty of money laundering, but the link you used to show this is not a reliable source by any stretch of the imagination.
Thanks. For alternative sources for the claim that Mossack Fonseca set up shell companies in Nevada that laundered Argentinian money, you could try here or here
Ha. Your first leak is the exposé Silverstein did and claimed the Pierre Omidyar wouldn’t publish.
https://twitter.com/KenSilverstein1/status/716803985915703297
Why or Why is the ICIJ not being checked into??????
The filtering of this Mossack Fonseca information by the corporate media follows a direct western governmental agenda. There is no mention at all of use of Mossack Fonseca by massive western corporations or western billionaires – the main customers. And the Guardian is quick to reassure that “much of the leaked material will remain private.”
What do you expect? 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)
Do any one of you believe that any US person is going to be listed when you have a group of so journalist backed by the likes of the above named? I will bet that just after the phone numbers and list from the Washington Madam X are released then we will read all the name and deals. Which will be NEVER.
Reading compression fail, or a violation of our rule, no commenting unless you’ve bothered to read the post.
1. Suddeutche Zeitung is in charge, not IJI
2. ICJI is very well regarded here, save for the fact that they are sometimes arbitrary and can be prickly. They’ve done a ton of work on political donations and people who know that space cold say ICJI is honest.
3. You clearly missed that your little list comes from Cameron Murray, and that’s who this post is about????
4. You clearly also missed that the very first day, the news story outed Ukraine’s Poroshenko? Soros is a huge backer of the Ukraine gov’t.
5. In general, donors don’t exercise influence over the mission of a not for profit unless they are huge donors. The ICJI has been around long enough that none of these donors are so large that them pulling would make a meaningful dent. And it would look really really bad if they did in the context of Panama Papers. The ICJI could stare them down, fundraise off any departure, and probably come out ahead $ wise and definitely reputation wise.
Better conspiracy theories. please.
Look, there are only 11.5 million documents. They’ve had them for a year. Maybe this still surprises some people to hear, but that is not a particularly large corpus.
Any half decent team of reviewers could have been through them in a couple of months, and with techniques like machine learning (routinely used in court cases) significant documents would not have taken long to identify. In addition much of the volume consists of database files… these are not files humans need to read, in most cases keyword search is enough.
If the journalists lack the time/money for a reasonable review effort they should have turned them loose months ago. Instead they’re chasing stories and exclusives and grinding political axes at the expense of the public’s right to know.
It’s certainly what WikiLeaks is calling for:
https://twitter.com/wikileaks/status/717463758847799296
There’ve been discussions about the doxing of personal info, some answering ‘Zo what?’
A year for well over a hundred news organizations to dig into them? Yves had said ‘only three days’ yesterday; I dunno.
Also, rezlez, I’d left you a comment on Ian’s ‘Better than capitalism’ questions diary; it took a day or so to get out of moderation.
I would not trust the Guardian as far as I can throw a cow.
I would also point out that the Obama/Clinton Admin signed a ‘trade’ deal with Panama that essentially maintained Panama as a tax shelter for US persons (corporate and otherwise). Given this is only 1 of the top firms in Panama engaged in this sordid activity, and given US intelligence could access any of this stuff, I wonder if we’re being led away from the story, not to it.
Also worth noting is that a number of US States are engaged in a competitive race to the bottom in terms of tax laws, making the US itself a global haven for ‘legal’ tax evasion.
http://www.huffingtonpost.com/2011/08/09/panama-trade-deal_n_922398.html
Only problem with this article is that the ICIJ has been investigating this deal for a year now…
Yes, and there are 11.5 million records and 370 journalists on this. And the ICIJ is not the lead actor on this. This is the Siddeutche Zeitung’s drill. They are the ones who invited other organizations in.
This is a full bore effort. You suggest they should have gone out against powerful targets half baked instead? I know professional journalists, and it can easily take them months to do a single story properly. Or go watch the movie Spotlight on the abuse of children by the Catholic clergy and how the church covered it up. That team was on that story what appears to have been a year before they reported it, and then it was a full year of resulting stories, over 600 in 2002.
I may well be wrong on some of it – I make no claim to being perfect. But I am honest and well-intentioned, and those are two things which I know that many of the mainstream media journalists, proprietors or state managers are not.
And we will never kow unless they actually ublish the full data, which should be done. I am not moved by the prvacy arguments. I do not accept the argument that there are “legitimate reasons” to organise and operate through Panama an offshore company and offshore bank accounts. Who the hell are these mainstream media journalists to play God and cherry pick what we are and are not allowed to see.
The data must be given to the people.
thanks for dropping in Craig. Richard’s normally a fact-oriented, well-researched kind of guy, brings much of value to this site. It’s lamentable (for me, anyway) that he hasn’t given us the background for his apparent hard-on for craig murray. Best to both of you……
Hi Craig,
My main beef is this: I think that *tons* of good info about the skulduggery of the rich and powerful and the criminal is going to surface in these leaks, willy nilly, almost irrespective of the underlying agenda. Clearly selection bias and all sort of agenda are built into it but there should still be rich pickings for the careful.
I do believe you to be honest (heroically so, actually) and well-intentioned also. But still: writing the whole panamaleaks off straight away as a Western media stunt seemed like a big enough mistake to me to be worth challenging. Since you lead with the chin a bit (that’s part of the package, I suspect, you might even recognise that trait yourself!), some of your forecasts faceplanted almost immediately, so that was my angle.
What comes of it in terms of reform of ‘offshore’ – very possibly, damn all. But this leak is the best shot there’s ever been, by far, at providing detailed info about the sort of thing one has always suspected goes on. So it has to be attended to, carefully, I think.
I hope that answers the commenter above, too.
Anyway, all the best.
I think that Craig Murray’s initial response was correct as to how things were presented at the time. The UK press gave people the impression that the Panama Papers were all about exposing Putin’s corruption. This is incorrect for the very reasons you give yourself Richard, that there is a lot more than Putin that is now being revealed and will be revealed. However, first impressions are important and why Putin is highlighted when he is never directly mentioned, appears odd, especially when the focus on David Cameron now would suggest that this should have been the leader. After all other countries you mention have given a primary focus to their local connections.
I’m sorry, that’s bogus and a misrepresentation of what Murray said. He spend a considerable amount of shellacking the ICIJ, which is an American group with a long and solid history of doing investigative work on money in politics. He asserted that its big-name American donors like the Ford Foundation (without having any idea of how signifiant those donors are; any organization will promote its marquee backers irrespective of how much they give) would impose restrictions on what was published. Soros was on that list.
In fact, the first day revelations included Urkaine’s Poroshenko, and Soros is deeply involved in supporting his government.
In addition, if you are citing first day coverage, Putin was indeed featured first in most stories, but he was not alone. It was not until the second day that the FT did a huge treatment on Putin alone. And the FT is not one of the media outlets that has access to the underlying records.
Better trolls, please.
Your technique is flawed Richard. When you are taking-down a corrupt system you focus on your object and not on others who are doing the same as you.
Adopt the plan of the condotteri – be soft on like-minded people and hard on the opposition. Craig may have followed his intuition and not deliberated sufficiently this time but all-in-all he provides a good service and useful opinions. Spare him. His concerns about ICIJ – its sudden recent appearance when the whole world was already doubtful about mainstream journalism – was strange and its funding is suspicious.
Btw, there is little American media coverage because Americans don’t need Panama for their tax planning – they can do that at home, cheaply and just as effectively.
Well, “doing the same as you” is a fine case of question-begging, is it not?
That is bollocks. Critics of the system above all need to be accurate, since the establishment will focus on the people who are wrong, easily demonstrate that they are in error, and use those errors to dismiss all critics.
Ironic is the coincidence of the US Treasury Dept’s newfound backbone on corporate inversions and Labor Dept’s rulebook change on fiduciary responsibility. Probably too early for bait and switch. I can only hope that the Panama Papers first few days is truly tip of the iceberg and explosive implications are yet to come.
Having said this, it seems to be deafening silence thus far in the US media.
Poroshenko was working for the Americans since 2006 as evinced by his wikileaks communications with the CIA, its all available online. The US want rid of him and Yatsenshuk, its just a question of how they can make it look like they fell on their own sword(s) So thats a bingo for Poroshenko. The US have their ‘ukranian born’ Finance minister who they placed in office 18 months ago to take over from Yatsenshuk so it will be interesting to see how they arrange that one, he’s corrupt as the day is long and obviously spreads the money around thus making it unlikely the cronies in parliament will willingly allow a ‘straight’ PM to enter into office. The Americans are tired of Ukraine, it was a bad mistake for them egged on by Soros and the EU can’t afford another Greece which is what Ukraine is fast becoming. However for geopolitical reasons they’ll try to hang onto it on the cheap if they can.
I’ve often wondered: What if we made US public corporations pay taxes on the SAME net income they report to Wall Street?
Is that possible? Would it work?
The release of the leaks in the UK kicked off with saturation coverage – not just the Guardian and BBC – of the Putin aspect. I think Craig’s response was justified, though he does have a tendency to go OTT, particularly where the Guardian is concerned. Our media would have been more relevantly employed in exploring the affairs of Michael Ashcroft, who is a major donor to, and sometime deputy chairman of the Conservative Party. He has also given large sums to the Australian Liberal Party. His offshore connections (he has effectively triple nationality – UK, BVI, Turks and Caicos) have been a continuing issue within British politics, over which he exerts considerable influence. His presence in the leaked files merited a passing paragraph in the Guardian. Possibly because, in the words of Dean Barrow, then the PM of Belize – “Ashcroft is an extremely powerful man. His net worth may well be equal to Belize’s entire GDP. He is nobody to cross”
On the whole, though, the scattergun nature of the files, and the range of politicians on whom they shed a dim light, both permits the construction of any conspiracy theory you please and argues against any one of those theories. And the possibility that some selection by the original source occurred, remains unexplored. If not unexplorable.
Belize, not BVI. Sorry, failed to edit in time.