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Broken Labor

OSHA Rule Targets Worker Exposure to Silica

August 24th 2013

Health and Human Services Washington D.C.

The Occupational Safety and Health Administration on Friday proposed a long-awaited rule to control worker exposures to silica, a toxic mineral that can cause the deadly lung disease silicosis, lung cancer and other ailments.

The rule could save nearly 700 lives and prevent 1,600 new cases of silicosis each year, OSHA chief David Michaels told reporters in a conference call. Tiny silica particles are unleashed through activities such as sandblasting, concrete-cutting and a form of oil and gas drilling called hydraulic fracturing, or fracking.

“This proposal is long overdue,” Michaels said. “OSHA’s current standards are dangerously out of date and do not adequately protect workers’ health.” The agency estimates that 2.2 million workers, most of them in construction, are exposed to silica in the United States. The rule will likely take “many months” to become final, Michaels said, with public hearings planned for March. Read more ..


Montenegro on Edge

Bankruptcy, Layoffs, And Lawsuits Plague Montenegrin Aluminum Plant

August 19th 2013

Euro Bills

The no-holds-barred conflict over a key piece of Montenegro's economy has just taken a billion-euro turn for the worse. That much became clear in a video press conference from Moscow for journalists in the Montenegrin capital, Podgorica.

Yury Moiseyev, the former director of the Podgorica Aluminum Plant (KAP), said the plant's Russian shareholder that he represents was preparing an enormous lawsuit against the Montenegrin government, seeking compensation for alleged unfulfilled promises and lost profits.

"The government of Montenegro did not give us the chance to realize our plans for developing the plant and we, of course, are applying to arbitration courts. We have hired several law firms," Moiseyev said.

"We at present have submitted a lawsuit [in Podgorica] for 93 million euros ($123 million) and we will be filing with [an arbitration court in] Frankfurt a complaint on the falsification during the privatization of KAP, of the lack of fulfillment of the civil agreement. So far, preliminarily, we set the sum of damages at 1 billion euros." Read more ..


Inside Politics

William Koch Emerges from Shadow of Famous Siblings

August 13th 2013

Bundles of Money

Billionaire businessman William Koch once operated green energy plants on multiple continents and had a reputation for being more politically moderate than his better-known brothers, Charles and David — the principal owners of Koch Industries, Inc..

But William now rejects the “apocalypse of global warming.” He says investing in alternative energy is “foolhardy.” And ahead of the 2012 election, he criticized President Barack Obama for trying to “socialize” the country.

Koch is putting his fortune where his mouth is and is also using his companies’ funds to do so. He has spent millions of dollars to aid politicians he sees as more business-friendly and to fight the Obama administration’s moves to combat climate change, which could mean costly new regulations for Koch’s expansive Oxbow Carbon LLC business network.

Unlike his brothers who have favored politically active nonprofits as their vehicles of choice to back conservative causes, William Koch has poured resources into super PACs, with millions of dollars coming straight from the corporate treasuries of his firms. Meanwhile, donations from his company’s traditional political action committee are at an all-time high — as are Oxbow’s lobbying expenditures. Read more ..


Broken Elections

Washington DC Groups Spent Big In Special Elections

July 18th 2013

Money Bands=Happiness

Carpetbagging super PACs and nonprofit groups are dominating this year’s special congressional elections in a potential foreshadowing of the 2014 midterms, where even the sleepiest locales aren’t immune from out-of-state, cash-flush special interests.

Take Massachusetts’ U.S. Senate election, which last month propelled veteran Rep. Ed Markey, D-Mass., to Congress’ upper chamber — and attracted millions of dollars in outside spending from political groups based in California, New York and Florida.

Organizations in Illinois, meanwhile, spent precisely zero dollars to advocate for or against several candidates who vied early this year to replace ex-Rep. Jesse Jackson Jr., D-Ill., while outfits from everywhere but collectively burned through more than $2 million. Read more ..


The Digital Edge

How Hackers Can Take Control of Your Car

July 12th 2013

car door

You might have seen that frightening episode of the CBS series, Person of Interest, in which a fictional social media company's billionaire founder loses control of his car. From the street, the driver appears to be either a total nutcase (well, in this case, he is) or heavily intoxicated. His car weaves through traffic left and right, crossing lanes willy-nilly and clipping other cars. But inside the car, the driver is helpless. Any control he tries, especially the brakes, is overridden, apparently by the car itself. Unbeknownst to the driver, of course, the car is under remote control.

Inevitably, the car blows up (creating an exciting visual). However, the software genius escapes in the nick of time.This, of course, is TV drama. It's fiction. A remotely compromised car is a scenario that makes a good thriller and scares the bejesus out of viewers. But possible in real life? No way.Well, wait a minute.Way. Read more ..


Inside Washington

Majority of Supreme Court Members Millionaires

June 17th 2013

Supreme Court

At least five and perhaps as many as eight of the nine members of the U.S. Supreme Court are millionaires according to recently released financial disclosures, and only two hold any consumer debt.

Assets on the forms are reported in a range making it impossible to say precisely how much each justice is worth, but suffice to say, none of them are hurting financially.

Ruth Bader Ginsburg boasts the highest potential net worth at $18.1 million with Stephen Breyer a close second at $17.1 million. Both were appointed by former President Bill Clinton.

However, Ginsburg’s actual net worth may be as low as $4.4 million and Breyer’s as low as $5 million. Federal officials are also exempt from disclosing the value of their homes, making an accurate calculation even more difficult. After collecting nearly $2 million in book advances, Justice Sonia Sotomayor's assets rose to between $1.7 and $10.3 million, ranking her No. 3 in terms of highest potential net worth. Sotomayor is an appointee of President Barack Obama. Read more ..


Obama's Second Term

Secret Court Judge Attended Expenses-Paid Terrorism Seminar

June 8th 2013

File Folders

U.S. District Judge Roger Vinson, who signed an order requiring Verizon to give the National Security Agency telephone records for tens of millions of American customers, attended an expense-paid judicial seminar sponsored by a libertarian think tank that featured lectures from a vocal proponent of executive branch powers.

Vinson, whose term on the secret Foreign Intelligence Surveillance Court began in 2006 and expired last month, was the only member of the special court to attend the August 2008 conference sponsored by the Foundation for Research on Economics & the Environment, according to disclosure records filed by the federal judge.

Disclosure records were collected as part of an investigative report that revealed how large corporations and conservative foundations routinely sponsor ideologically driven educational conferences for state and federal judges.

It’s unclear which lectures Vinson attended during the “Terrorism, Civil Liberty, & National Security” seminar. FREE’s website only provides a general agenda for the program and no lecture transcripts. Read more ..


Broken Banking

‘Fatal Blow’ Against Sham Corporate Directors Not So Fatal After All

May 27th 2013

Island of Sark

UK’s crackdown on Channel island ‘Sark Lark’ simply scattered key players to other tax havens.

Many Britons who make a living from ‘the signing’ as they call it, originate from the tiny Channel island of Sark, a notorious British tax haven.  Following scandals a decade ago about the “Sark Lark,” the group scattered, often setting up residence in far-flung jurisdictions such as Cyprus, Dubai, Vanuatu, Mauritius, or Nevis in the Caribbean. Many still keep in touch on Facebook.

They make up teams of sham company directors, according to documents we have seen, taking money to disguise the real ownership of thousands of international companies. This is not illegal, and they generally say they are helping owners preserve legitimate privacy. Sarah and Edward Petre-Mears, who moved residence to Nevis, worked through an agency in Northamptonshire. Some of their companies have been registered in the UK, at Companies House in Cardiff. Read more ..


Broken Banking

Inside the Shell: Drugs, Arms and Tax Scams

May 27th 2013

Indian Currency

On December 11, 2009, a former Soviet air force transport plane flying from North Korea to Iran stopped to refuel in Bangkok. The flight listed its cargo as spare parts for oil-drilling equipment. Instead police found 30 tonnes of explosives, rocket-propelled grenades and components for surface-to-air missiles, all being transported in breach of United Nations sanctions.

Three months later in a Miami courtroom, the U.S. Department of Justice revealed the country's largest money-laundering scheme involving billions of dollars from Mexican drug lords. Then, last April, documents emerged in London concerning Russia's largest tax fraud, an alleged $230 million heist that led to the untimely deaths of four people and threatens to damage the Russian government.

The story behind the three events is many degrees stranger than fiction, but it includes one common element – a number of shell companies associated with 68-year-old Queensland businessman Geoffrey Taylor or members of his family. Shell companies – that is, corporations with no apparent operations, no apparent employees and no apparent physical assets – are used by those who register them for a range of nefarious activities around the world. Read more ..


Broken Banking

British Virgin Islands Well-Known for Sunny Beaches – and Strict Secrecy

May 26th 2013

British-Virgin-Islands

Caribbean island chain is a favorite haven for attention-shy company owners. The British Virgin Islands are a micro-state whose national anthem is “God Save the Queen.” The islands consist of little more than a few stretches of tropical beach, with a population about the same size as that of the London suburban town of Windsor. 

British lawyers first realized during the 1980s Thatcher era that they could legally make money by selling financial secrecy there. Mrs. Thatcher’s abolition of exchange controls allowed British capital to move around freely. A few years later, when nearby Panama, the traditional location for obscure offshore entities, was disrupted by the 1990 U.S. invasion, worldwide demand for the corporate anonymity on offer from the BVI took off like a rocket. Read more ..


Broken Banking

Post-Soviet Billionaires Invade UK ... Via British Virgin Islands

May 26th 2013

Big Ben

Questions arise as mega-rich from Russia and former Soviet republics descend on London.

Britain’s friendly regime of offshore secrecy has tempted an extraordinary array of post-Soviet billionaires to descend on London, sometimes to the sound of gunfire.

Vladimir Antonov fled permanently to Britain after his father, Alexander, was gunned down in a Moscow street in 2009. Another associate, German Gorbuntsov, narrowly survived a volley of shots in London last March.

When Antonov bought a luxury yacht in Antibes, the Sea D, he was careful to register its ownership to an anonymous British Virgin Islands (BVI) entity, Danforth Ventures Inc. He also got his hands on enough cash to try to take over the ailing Swedish car manufacturer Saab, though he did not take control. He did succeed for a while in owning Portsmouth FC, the even more ailing British football club. Antonov is currently on bail in Britain. Lithuanian authorities are trying to extradite him for allegedly looting their collapsed bank Snoras, which he denies. Read more ..


Art News

Mega-Rich Use Tax Havens to Buy and Sell Masterpieces

May 24th 2013

Watermill-Van Gogh

Famed Spanish art patron uses island haven in South Pacific to manage her collection. Tourists who come to Spain’s capital often make a pilgrimage to the museums in Madrid’s so-called Art Triangle. After the Prado and the Reina Sofia, the next stop usually is the Thyssen-Bornemisza. The Spanish state owns the majority of the paintings inside this museum, but it also holds much of the private collection of Carmen Thyssen-Bornemisza, one of the world’s biggest art collectors.

What visitors don’t know as they look at these Monets, Matisses and other masterpieces is that many of them are legally owned by secrecy-guarded companies in tax havens: Liechtenstein, the Cayman Islands, the British Virgin Islands and the Cook Islands.

Van Gogh’s 1884 painting, Water Mill at Gennep, is one of the works Thyssen-Bornemisza purchased with the help of an offshore operative based in the Cook Islands, a South Pacific haven more than 10,000 miles from Madrid. Read more ..


Broken Banking

'Crony' of African Strongman Among Thai Names in Secret Offshore Files

May 24th 2013

International Currency 3

Nearly 600 Thais have owned offshore companies in the British Virgin Islands and other havens.

Politicians and billionaire business magnates are among the prominent Thais listed in secret documents as owners of offshore holdings in tropical tax havens.

The list includes the former wife of ousted Prime Minister Thaksin Shinawatra, a sitting senator, a former high-ranking defense ministry official, Forbes-listed tycoons, and a former government minister whose assets in the United States are frozen because of her alleged links to Zimbabwean dictator Robert Mugabe.

Documents obtained by the International Consortium of Investigative Journalists (ICIJ) and examined by Bangkok-based news portal Isra show nearly 600 Thais owning offshore companies in overseas havens such as the British Virgin Islands (BVI) and the Cook Islands. Some of the entities owned by politicians have been previously self-declared under tough local anti-graft laws, but at least one may have escaped scrutiny from authorities. Read more ..


Broken Banking

Canadian Senator's Husband Shifted Money Into Offshore Tax Havens

May 22nd 2013

Caribbean Sea Shore

Lawyer Tony Merchant, Canada’s “class action king,” sought secrecy for Cook Islands trust.  A prominent Canadian lawyer, husband to a Liberal senator, moved CA$1.7 million (US$1.1 million) to secretive financial havens while he was locked in battle with the Canada Revenue Agency over his taxes, according to documents in a massive leak of offshore financial data.

Tony Merchant of Saskatchewan, dubbed Canada's class-action king because of the large settlements he has won for his clients, transferred the money to a tax haven in the South Pacific and then onward to an account in the Caribbean, according to the files. His wife, Canadian Senator Pana Merchant, and their three sons were named in the documents as beneficiaries of the funds.

The transactions are detailed in a leak of offshore financial information obtained by the Washington, D.C.-based International Consortium of Investigative Journalists. The data covered more than 120,000 offshore companies and private trusts in the Cook Islands and other offshore havens. The Merchants are among the more than 400 Canadians whose names are included in the secret records. Tony Merchant didn’t reply to several requests from CBC News to discuss the matter. Read more ..


Azerbaijan on Edge

Offshore Companies Provide Link BetweenCorporate Mogul and Azerbaijan's President

May 22nd 2013

Azerbaijani President Allyea

Members of Azerbaijan’s first family have had been shareholders in at least four offshore companies, newly revealed records show.

A corporate mogul whose business empire has won building contracts worth billions of dollars amid Azerbaijani President Ilham Aliyev’s massive construction spree is tied to the president’s family through secretive offshore companies.

The businessman, Hassan Gozal, is the director of three British Virgin Islands (BVI) companies set up in 2008 in the name of the president’s daughters, according to secret documents obtained by the International Consortium of Investigative Journalists. The daughters were 19 and 23 years old at the time. The documents obtained by ICIJ also show that the president and his wife, Mehriban, a member of Parliament, acquired their own BVI company in 2003, Rosamund International Ltd. Read more ..


Mongolia on Edge

Disclosure of Secret Offshore Documents May Force Top Mongolian Lawmaker to Resign

May 21st 2013

Mongolian-Lawmaker

Deputy speaker of Mongolia’s Parliament admits he had $1 million Swiss account. One of Mongolia’s most senior politicians says he is considering resigning from office after being confronted with evidence that he has an offshore company and a secret Swiss bank account.

“I shouldn’t have opened that account,” Bayartsogt Sangajav, Mongolia’s deputy speaker of Parliament, told the International Consortium of Investigative Journalists (ICIJ).

“I don’t worry about my reputation. I worry about my family,” he said after ICIJ asked him about records revealing his offshore holdings. “I probably should consider resigning from my position.” Bayartsogt, who says his Swiss account at one point contained more than $1 million, became his country’s finance minister in September 2008, a position he held until a cabinet reshuffle in August 2012. Read more ..


Broken Elections

Judicial Candidate Blames Mystery Nonprofit's Attacks for Defeat

May 17th 2013

One Million Dollars

When Ed Sheehy looked at his mail one day last fall, he was startled to see his face staring back at him, posed alongside the notorious “Christmas Day Killer.” Sheehy, as a public defender, had represented the man a year earlier. Now Sheehy was running for a seat on the Montana Supreme Court and someone was using the double-murder to accuse him of being soft on crime.

“I was furious,” the 60-year-old Sheehy, who was born in Butte, Mont., and now resides in Missoula, told the Center for Public Integrity. “It was misrepresenting what I did and what I do as a lawyer.” So who was behind the attack?

The mailer showed only that it was paid for by the “Montana Growth Network,” a “social welfare” nonprofit, registered under Section 501(c)(4) of the U.S. tax code. Montana election records revealed next to nothing about the organization, which, because of its tax status, is not required to disclose its donors. The nonprofit’s website says its goal is to make Montana “more business friendly.” Read more ..


The War on Terror

Islamist Terrorist's Home in Latin America and its Threat to the United States

May 17th 2013

Wassim el Abd Fadel - terrorist in Paraguay
Wassim el Abd Fadel in Paraguayan custody.

In December 2012, Paraguayan authorities detained Wassim el Abd Fadel, a suspected Hezbollah member with Paraguayan citizenship, and charged him with human trafficking, money laundering, and narco-trafficking. International authorities had connected Fadel to Nelida Raquel Cardozo Taboada, a Paraguayan national arrested in France the same month with 1.1 kilograms of cocaine in her stomach. Cardozo Taboada had claimed that Fadel and his wife hired her as a drug mule, prompting an Interpol investigation into Fadel’s finances.

According to Paraguayan police, Fadel deposited the proceeds of narco-trafficking and pirated music and movies into Turkish and Syrian bank accounts linked to Hezbollah.The Fadel arrest cast new light, and fresh international attention, on a long-running phenomenon. Read more ..


Broken Banking

Ponzi Scheme Used Offshore Hideaways To Shuffle Investors’ Money

May 15th 2013

Venezuelan Ponzi scheme

Francisco Illarramendi often called on Moris Beracha when he needed an infusion of cash.

The Venezuelan-born Illarramendi was a manager of a Connecticut-based investment advisory firm. Beracha was a Venezuelan financier close to the Hugo Chavez government who, a lawsuit against him claims, could produce multi-million-dollar advances of cash with relative ease — for the right price. On Nov. 2, 2007, Beracha emailed Illarramendi instructions to deposit more than $10 million — Beracha’s share of profits from a transaction — into three HSBC bank accounts in Switzerland, via an HSBC account in New York. “Dude, I am your biggest producer hahahahaha,” Beracha wrote in Spanish before he sent the message off to Illarramendi. Read more ..


Greece on Edge

Taxmen Have Little Clue of Offshore Companies Owned by Greeks

May 15th 2013

Mykonos harbor

Greek citizens who own or direct offshore companies in the British Virgin Islands and other tax havens rarely declare them to Greek tax officials, an International Consortium of Investigative Journalists' review of more than 100 companies shows. Just four out of 107 offshore companies investigated by ICIJ are registered with tax authorities as the law usually requires, particularly when the firms hold assets or conduct business in Greece.

Officials apparently have no record of the other 103 firms — or whether the owners declared any assets held by these entities or paid taxes on them. After learning about ICIJ's findings, the Greek Finance Ministry said it would examine the data and determine whether there's any evidence of improper or illegal conduct by owners of offshore companies. The companies’ owners are a surprising cross-section of Greek society, from the richest districts in Athens to remote northern villages. They include retail executives, shipping magnates and middle-class families. What these people have in common is that they are connected to offshore companies that appear to operate under the radar of tax authorities at a time when endemic tax evasion is fueling a financial crisis that has devastated Greece’s economy and threatened the future of the Euro. Read more ..


Broken Banking

Deutsche Bank Helped Customers Maintain Hundreds of Offshore Entities

May 11th 2013

Deutsche Bank

Germany’s largest financial institution, Deutsche Bank, helped its customers maintain more than 300 secretive offshore companies and trusts through its Singapore branch, an investigation by German newspaper Sueddeutsche Zeitung, German public broadcaster NDR and the International Consortium of Investigative Journalists has found.

More than 100 customer consultants at Deutsche Bank Singapore helped create or manage 309 offshore entities for its customers in the British Virgin Islands and other tax havens, according to secret records obtained by the news organizations. Most of the companies carry fantasy names like “Thrilling Returns Incorporated,” “Amazing Opportunity Limited” or “Market Dollar Group Limited.” Public sources don’t show any business activities for most of these companies. Read more ..


France on Edge

François Hollande’s Campaign Treasurer’s Investments in the Cayman Islands

May 5th 2013

French Presiident Francois Hollande

Jean-Jacques Augier says that his actions were fully legal and attributes his participation in these schemes to his “adventurous nature”.

French president François Hollande faces more embarrassment after it emerged that a close friend and treasurer for his presidential election campaign invested in offshore businesses in the Cayman Islands. The revelation comes at the worse possible time, as France is reeling from the Budget Minister Cahuzac scandal.

The name of 59-year-old Jean-Jacques Augier, a businessman and an unobtrusive figure on the French publishing scene who was François Hollande’s treasurer during the 2012 presidential campaign, features in documents obtained by the International Consortium of Investigative Journalists (ICIJ) and seen by Le Monde. These show that he has shares in two offshore firms in the Cayman Islands through his financial holding company Eurane.  Read more ..


Broken Banking

Caribbean Go-Between Provided Shelter for Far-Away Frauds

May 5th 2013

Indonesian-Beaches

British Virgin Islands firm kept doing business with shady characters even as regulators prodded it to obey anti-money-laundering laws.

The tangled trail of the Magnitsky Affair, a case that’s strained U.S.-Russian relations and blocked American adoptions of Russian orphans, snakes through an offshore haven in the Caribbean.

The death of Moscow tax attorney Sergei Magnitsky sparked international outrage. It also fueled a push to unravel secret deals that had prompted him to claim that gangsters and government insiders had stolen $230 million from Russia’s treasury.

Magnitsky and other private attorneys investigating the affair on behalf of a major hedge fund followed a path from Russia to bank accounts in Switzerland and luxury properties in Dubai — ending up at a small firm based in the British Virgin Islands that specializes in setting up offshore companies for clients who want to remain in the shadows. Read more ..


Broken Banking

Philippine Government to Probe Marcos Daughter’s Offshore Trust

May 4th 2013

Caribbean Sea Shore

Philippine government officials said Friday that they will look into a media organization’s disclosure that the eldest daughter of the late dictator Ferdinand Marcos was a beneficiary of a secret offshore trust in the British Virgin Islands.

Maria Imelda Marcos Manotoc, more popularly known as Imee Marcos, did not report her offshore trust on asset disclosure statements that she’s required to file every year as a public official, according to a story released Thursday by the International Consortium of Investigative Journalists and the Philippine Center for Investigative Journalism.

She has been governor of Ilocos Norte province, her father’s traditional political bailiwick, since 2010, and was a member of the Philippine’s House of Representatives from 1998 to 2007.

“We are duty bound to investigate and, depending upon informed preliminary findings, decide whether to pursue the matter,” Andres Bautista, the chairman of the Presidential Commission on Good Government, told Agent France-Presse. The commission is tasked with recovering the Marcos family’s alleged ill-gotten wealth. Read more ..


Broken Banking

After Multi-Million Inheritance, Playboy Sachs Goes Offshore

April 29th 2013

International Currency 2

He's known as Brigitte Bardot’s husband, photographer, director, art collector. Now another aspect has come to light:  a man who set up an intricate offshore scheme to manage his vast fortune, a scheme that remained inscrutable to the fiscal authorities until the end.

The hand that governs everything must remain invisible. It certainly must not sign anything. That is why Hanswerner Schwenk, a private secretary in his 50s, sets off for the Pacific island of Rarotonga.

Meanwhile, the man behind the scenes can relax: in London, Paris or St. Tropez, on one of his many estates. His name must not appear in any official document, for such is the nature of an anonymous enterprise. Otherwise one would not need to bother with all the hassle, after all: the South Seas, the lawyers and all that secretiveness.

It is a strenuous trip for Schwenk, who lives in Munich. Rarotonga is situated about halfway between New Zealand and Hawaii, and it takes him more than 40 hours to get there from Germany. At least his local partner, the International Trust Corporation Ltd., has arranged for a hotel and a rental car. Hanswerner Schwenk’s mission: confirm with his signature that the share issue of the recently founded company Triton Ltd. proceeded in a lawful way. Read more ..


Broken Banking

French Banks Traded in Secrecy

April 27th 2013

International Currency 3

The “Offshore Leaks” files published around the world on April 4 show that, from the late 1990s until the end of the 2000s, two major French banks, BNP Paribas and Crédit Agricole, oversaw the creation of a large number of totally opaque offshore companies in the British Virgin Islands, Samoa and Singapore for clients in search of secrecy and lower tax rates.

These are the findings unearthed by the International Consortium of Investigative Journalists (ICIJ), which has been researching the story for over a year. According to these secret documents, BNP Paribas channels operations through its Singapore and Hong Kong subsidiaries, whereas Crédit Agricole relies on its Geneva-based Swiss subsidiary.

Both banks have set up companies through their Asian subsidiaries with the help of Portcullis TrustNet, a service provider that specializes in offshore business and turnkey companies (the famous “quick” companies that can be incorporated within 48 hours) for rich clients claiming to be domiciled in Asia and concealed by nominees. Read more ..


Broken Banking

Jailed Property Man Hid Assets Offshore During Divorce

April 25th 2013

One Million Dollars

Jailed British property developer Scot Young, an associate of Russian oligarch Boris Berezovsky, constructed a secret network of offshore companies to hold his assets during a multimillion-pound divorce battle, according to the International Consortium of Investigative Journalists (ICIJ's) research.

His story graphically demonstrates the way hideaways such as the British Virgin Islands (BVI) can be used by a man bent on cheating the law.

Young, 51, described as a fixer for the super-rich, rose suddenly from working-class origins in Dundee to occupy a $21 million Oxfordshire mansion and to throw his money about in spectacular fashion. He once bought his then wife, Michelle, a Range-Rover filled to the roof with couture dresses. For her 40th birthday, he gave her a $1.5 million necklace. Read more ..


The Defense Edge

Pentagon Claims $757 Million Overbilling by Contractor in Afghanistan

April 24th 2013

US troops in Iraq

The Pentagon allowed a private firm providing food and water to U.S. troops in Afghanistan to overbill taxpayers $757 million and awarded the company no-bid contract extensions worth more than $4 billion over three years, according to the Pentagon’s chief internal watchdog and congressional investigators.

The deal represented one of the largest U.S. military contracts in Afghanistan. But the Defense Logistics Agency, which was overseeing the contract, failed repeatedly to verify that the contractor’s invoices were accurate, an official in the Defense Department inspector general’s office said. "This has to be one of the prime poster childs for a government contract spun out of control," Rep. John Mica, R-Fla., said last week.

Mica and other members of the House Oversight and Governmental Reform Subcommittee on National Security expressed outrage at a hearing last week about the Pentagon’s handling of the deal, especially two contract extensions awarded amid a dispute between the government and the company over as much as $1 billion. Read more ..


Broken Banking

Faux Corporate Directors Stand in for Fraudsters, Despots and Spies

April 23rd 2013

International Currency 3

On November 14, 2006, a man going by the name Paul William Hampel was arrested at a Canadian airport on charges of being a Russian spy. Hampel’s carefully constructed identity portrayed him as a successful businessman, yet for a decade his company did no business.

Only months before his capture, the same apparatus used to create his alias was also employed by a very different spy agency - the U.S. Central Intelligence Agency —to build a secret prison in Lithuania, where U.S. agents interrogated suspected al-Qaeda terrorists.

Earlier again, it was used by the regime of former Iraqi dictator Saddam Hussein to cheat the Oil for Food program.

All three deceptions employed a common subterfuge: far-flung corporate entities used as anonymous fronts, with “executives” who lacked knowledge of what the firms were up to. The activities of these so-called nominee directors are a little noticed part of the world of secretive offshore finance that’s grown so vast that it touches more than 170 of the globe’s 206 countries, but it’s one that’s often drenched in intrigue. Read more ..


Broken Banking

Top Malaysian Politicians Use Offshore Secrecy

April 18th 2013

Malaysia city

Key members of the Malaysian government, their families, and well-heeled associates are among those owning secretive offshore companies in Singapore and the British Virgin Islands, according to a cache of leaked documents.

They include former prime minister Mahathir Mohamad's son Mirzan, Federal Territories and Urban Well-Being Minister Raja Nong Chik Zainal Abidin and Michael Chia, the alleged ‘bagman' for Sabah Chief Minister Musa Aman.

The files, which were obtained by the Washington-based International Consortium of Investigative Journalists (ICIJ) and examined by Malaysiakini, show more than 1,500 Malaysians owning offshore companies in Singapore – dubbed as the new Switzerland  – as well as the British Virgin Islands (BVI), an international tax haven. The ICIJ list comprises a curious mix of Forbes-listed tycoons, parliamentarians, retired politicians, civil servants and their spouses, members of royal families, famous and infamous businesspeople, underworld kingpins and even former beauty queens. Read more ..


Broken Banking

Son of Leading Pakistani Politician Tied To Secret Caribbean Company

April 17th 2013

Caribbean Sea Shore

The scandal-buffeted heir to one of Pakistan’s most powerful political dynasties, the Chaudhry family, owned a secret company in the British Virgin Islands he created with the help of Swiss bank UBS, according to documents obtained by the International Consortium of Investigative Journalists.

Moonis Elahi, son of Chaudhry Pervaiz Elahi, who has just stepped down as deputy prime minister, was the sole shareholder in an offshore company called Olive Grove Assets Ltd, created in 2006 in the British Virgin Islands according to corporate records reviewed by ICIJ. In 2008 Moonis Elahi won a seat in the Punjab Provincial Assembly.

Elahi was swept up in scandal in 2011 when government prosecutors accused him of obtaining illegal payments in an alleged land scam involving the government-owned National Insurance Company Limited (NICL). Read more ..


Broken Banking

Lawyers and Accountants Help Rich Manage Their Money

April 17th 2013

Indonesian-Beaches

The story of Portcullis TrustNet and its birthplace — the Cook Islands — is in many ways the story of the offshore system itself.

It’s a largely invisible world, a curious blend of the parochial and the global that’s made up of the minor personalities and politics inside each offshore jurisdiction — many with populations no larger than a small town.

But by establishing special zones, these tiny provinces have changed the face of international finance and business and impacted law enforcement, tax policies and political and economic transparency across the planet. Read more ..


Broken Banking

Secret Files Reveal Rothschild’s Offshore Domain

April 16th 2013

EU flag

Baron Elie de Rothschild, the guardian of the French branch of the famed Rothschild banking dynasty, built an offshore empire in the palm-fringed Cook Islands between 1996 and 2003. Rothschild, a businessman and arts patron who died in 2007 at the age of 90, constructed a complex network of offshore trusts and front companies, according to secret documents obtained by the International Consortium of Investigative Journalists (ICIJ) and reviewed by Le Monde. The complex nature of the financial arrangements in the Pacific islands and their near-total secrecy made it difficult to identify his hand in the offshore entities. The internal documents reveal at least 20 trusts and 10 holding companies were set up for Rothschild in the Cook Islands, an independent territory in the South Pacific with close ties to New Zealand. The trusts have typically opaque names, Anon Trust, followed by the Benon Trust (apparently set up by Rothschild’s daughter Nelly) and Denon Trust, being notable examples. Read more ..


Broken Banking

The Swiss Lawyers Who Help Europe’s Richest Families Park Their Wealth Offshore

April 16th 2013

Swiss Banks' Lawyers

Little did Zurich-based lawyer Peter Hafter imagine how things would turn out when he ordered a $2,700 offshore kit to create a front company in the Cook Islands on September 13, 1993. Twenty years on from that day, the fax he sent, the ensuing emails and all his business correspondence with Portcullis TrustNet in Rarotonga, the largest island in the archipelago, have been copied and passed on to journalists around the world. Nor did the lawyer imagine that the internal revenue service would then reopen the case of one of his clients, and yet that is precisely what the spokesperson for the tax authorities in Berne, Yvonne von Kauffungen, announced on Thursday. This announcement was triggered by the publication of a preview based on our investigations into two decades of correspondence between Portcullis TrustNet and Peter Hafter. Matin Dimanche and SonntagsZeitung have reviewed hundreds of pages of confidential documents that are part of a cache of 2.5 million files obtained by the International Consortium of Investigative Journalists – probably the largest set of confidential financial data ever disclosed to the media.  Read more ..


Broken Banking

Billionaires Among Thousands of Indonesians Found in Secret Offshore Documents

April 15th 2013

Indonesian-Beaches

Nine of Indonesia’s 11 richest families have found shelter in tropical tax havens, holding ownership of more than 190 offshore trusts and companies, secret records obtained by the International Consortium of Investigative Journalists show.

The nine families, worth an estimated $36 billion among them, are at the top of a wealthy class that dominates Indonesia’s politics and economy. Six were closely tied to the late dictator Suharto, who helped a special circle of Indonesians grow rich during his 31-year rule by granting economic fiefdoms to family and friends. The billionaires are among nearly 2,500 Indonesians found in the files of Singapore-headquartered offshore services provider Portcullis TrustNet, which ICIJ has been analyzing and began reporting on last week. Read more ..


Broken Banking

Offshore Tax Havens Became Traps for Investors

April 12th 2013

International Currency 2

A New York hedge fund manager allegedly swindles $12 million from a prominent Baltimore family. An Indiana couple is accused of bilking hundreds of customers by charging for free trials of cosmetic products. A financial manager in Texas promises 23-percent returns but absconds with $33.5 million of his investors’ money in a classic Ponzi scheme.

All three cases have one thing in common: money that ended up in offshore accounts and trusts set up in tax havens around the world.

The existence of the trusts surfaced during a joint examination of the offshore world by The Washington Post and the International Consortium of Investigative Journalists, a D.C-based nonprofit news organization. ICIJ obtained 2.5 million records of more than 120,000 companies and trusts created by two offshore companies, Commonwealth Trust Ltd. (CTL) in the British Virgin Islands and Portcullis TrustNet, which operates mostly in Asia and the Cook Islands, a South Pacific nation. The records were obtained by Gerard Ryle, ICIJ’s director, as a result of an investigation he conducted in Australia. Read more ..


Broken Banking

Dutch Banking Giants Helped Clients Go Offshore

April 11th 2013

International Currency 3

The Dutch banks ING and ABN Amro registered dozens of companies for their clients in offshore refuges with lovely beaches and low tax rates such as the British Virgin Islands, the Cook Islands and the Malaysian island of Labuan, an investigation by Dutch newspaper Trouw and the International Consortium of Investigative Journalists has found.

Trouw found the information in leaked documents and emails from two companies — Singapore-based Portcullis TrustNet and British Virgin Islands-based Commonwealth Trust Limited — that specialize in helping customers set up and manage companies in offshore centers known as havens for individuals who want to reduce their taxes. ING and ABN Amro said they have never been party to tax evasion. “The companies were set up for international clients and always in compliance with local and international laws,” ABN Amro said in a statement. Read more ..


Broken Immigration

Illegal Aliens Bypass U.S. Border Agents via Indian Reservations: GAO

April 10th 2013

US/Mex Border fence

Foreign nationals seeking to enter the United States illegally have been known to avoid Border Patrol screening procedures by surreptitiously crossing into areas between these ports of entry, including Indian reservations, many of which have been vulnerable to illicit cross-border threat activity, such as drug smuggling, according to the Department of Homeland Security officials in a report released on Friday. The Government Accountability Office was requested by U.S. lawmakers to investigate DHS's efforts to coordinate border security activities on Indian reservations. In complying with Congress' request, GAO researchers examined DHS's efforts to coordinate with tribal governments to address border security threats and vulnerabilities on Indian reservations. GAO investigators reported that they interviewed DHS officials at headquarters and conducted interviews with eight tribes, selected based on factors such as proximity to the border, and the corresponding DHS field offices that have a role in border security for these Indian reservations. While GAO cannot generalize its results from these interviews to all Indian reservations and field offices along the border, they provide examples of border security coordination issues. Read more ..


Broken Government

Government's Green Car Loan Program Appears to be Stalling

March 19th 2013

Flat Tire

A Department of Energy loan program, infused with $25 billion to spur a wave of fuel-efficient vehicles, has not closed a loan in two years and is likely to leave two-thirds of the money unspent amid fallout over the Solyndra debacle and other factors.

Those findings, revealed Friday in a U.S. Government Accountability Office report, rekindle questions over how effectively the Energy Department picks winners and losers for its lucrative green energy portfolio.

The audit focuses on DOE loan programs, including one known as ATVM — the Advanced Technology Vehicles Manufacturing program.

That program was pitched as part of a broader government campaign to spur innovative, clean technologies that would both rev up the economy and clean the environment. Under ATVM, the government would help bankroll electric cars and other fuel-saving initiatives; this seed money would, in turn, trigger a domino effect for industry and consumers.

Yet the last loan closed in March 2011, and just $8.4 billion has been spent so far in five projects. Read more ..


The Toxic Edge

EPA Unaware of Industry Ties on Cancer Review Panel

February 13th 2013

Drain to ocean

In September 2010, scientists at the Environmental Protection Agency came to a startling conclusion: Even a small amount of a chemical compound commonly found in tap water may cause cancer.

The compound, hexavalent chromium, gained infamy in the Oscar-winning film Erin Brockovich, based on the David-vs.-Goliath legal duel between desert dwellers in Hinkley, Calif., and Pacific Gas & Electric Co. The film ends in Hollywood fashion, with the corporate polluter paying $333 million to people suffering from illnesses.

But in real life, the drama continues. More than 70 million Americans drink traces of chromium every day, according to the Environmental Working Group, a nonprofit research organization. And now, more than a decade after the film, EPA scientists cite “clear evidence” that the chemical compound, also known as chromium (VI), can cause cancer. The federal agency was poised to announce its findings in 2011, a step almost certain to trigger stricter drinking-water standards to prevent new cancers and deaths. Read more ..



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