Yves here. Our Richard Smith provides a broader look into the question of why so little has changed on the secrecy front despite a fair bit of press and even some regulatory and legislative efforts to rein it in. The short version is: “It’s hard!” but there are specific devices the shadowy money types employ to evade what to most would seem to be pretty clear-cut rules.
Our Richard Smith is back! As you can see below, he’s a co-author of a new piece at openDemocracy on a favorite topic: how shady investment vehicles like Scottish limited partnerships facilitate scams and money laundering.
Richard took up this beat when a friend lost a lot of money to an international scammer. He discovered that the authorities won’t get out of bed if the ripoff is below $20 million, and even then it’s hard to get their attention, since cross border crime is harder to pursue than the domestic sort. And who wants to have to share credit?
Richard and his allies have been documenting how investment vehicles like Scottish limited partnerships, which provide for historically no and recently only lax disclosure of who is behind them, and dodgy company registries are essential for these crooks to flourish. But this is a decidedly technical and therefore unsexy topic, at least as far as the press and regulators are concerned. So despite officials saying they want to Do Something when stories like the Panama Papers and now the Pandora Papers break, their eyes glaze over when they find they have to get into the weeds to actually have an impact.
Funny that the same impediments also help private equity scamming to continue virtually unchecked, even with the SEC having woken up briefly to make noise about it.
By Richard Smith, a researcher documenting shell company abuse whose collaborations, credited and uncredited, include Australian Broadcasting Corporation, BBC, BBC, Canadian Broadcasting Corporation, Al-Jazeera, interest.co.nz, Glasgow Herald; blog posts at www.nakedcapitalism.com. Originally published at openDemocracy