Secret Files Expose Offshore’s Global Impact(icij.org)
icij.org
Secret Files Expose Offshore’s Global Impact
http://www.icij.org/offshore/secret-files-expose-offshores-global-impact
41 comments
Speaking strictly for Americans, this simply isn't true. There are very, very, very few benefits to keeping your money offshore. Tax fraud is benefit #1. "Asset protection" (which generally means you're hiding money from your spouse or business partners) is benefit #2. Unless you actually own property in the country where you keep your money, or do real business there, those are basically the only benefits. There are also massive costs: (1) the literal costs that the foreign nation (and bank) will charge you to hold your money; (2) the risk that the money will actually be available when you want to access it; (3) the risk that the foreign government and bank will cooperate with the U.S. government when it comes knocking (this risk has greatly increased since the passage of MLAT and other recent treaties).
I could definitely see how citizens of other countries could legitimately use such accounts to get around immoral laws in their home countries. Whether this makes up "most people" who use offshore accounts, as you claim, is beyond my knowledge.
I would bet that a great percentage of the volume of money moving through these offshore havens are indeed a hedge against insolvent governments: the governors' own. There's a reason these island nations are where despots like Gaddafi, Mugabe, Marcos, Bashir, Afwerki, Mbasogo, Mubarak, Kagame, and others, and their extended families, park their money.
I could definitely see how citizens of other countries could legitimately use such accounts to get around immoral laws in their home countries. Whether this makes up "most people" who use offshore accounts, as you claim, is beyond my knowledge.
I would bet that a great percentage of the volume of money moving through these offshore havens are indeed a hedge against insolvent governments: the governors' own. There's a reason these island nations are where despots like Gaddafi, Mugabe, Marcos, Bashir, Afwerki, Mbasogo, Mubarak, Kagame, and others, and their extended families, park their money.
> Speaking strictly for Americans, this simply isn't true.
You are mistaken. Allow me to enlighten you:
- http://en.wikipedia.org/wiki/Executive_Order_6102
- http://www.progress.org/fold13.htm
- http://www.youtube.com/watch?v=ZsIGtSRDy54
Not to mention the rhetoric inherent in statements like "it's patriotic to pay taxes", or the implicit assumption in policies like tax withholding, that government owns the product of your labor, and 'grants' you a portion of it.
No, history shows us that broke governments are dangerous governments, and if you don't believe that the US is going broke, you are blind and helpless.
You are mistaken. Allow me to enlighten you:
- http://en.wikipedia.org/wiki/Executive_Order_6102
- http://www.progress.org/fold13.htm
- http://www.youtube.com/watch?v=ZsIGtSRDy54
Not to mention the rhetoric inherent in statements like "it's patriotic to pay taxes", or the implicit assumption in policies like tax withholding, that government owns the product of your labor, and 'grants' you a portion of it.
No, history shows us that broke governments are dangerous governments, and if you don't believe that the US is going broke, you are blind and helpless.
> The reality is that most people use offshoring as a hedge against insolvent governments
[citation needed]
And what does this actually mean? How do you define insolvent governments?
If you are thinking of one-off cuts when the state is actually going bankrupt (latest cyprus thingie, italy's cut in '92 etc) these don't seem to offer a different security from keeping money in a foreign non-offshore bank.
And these events don't seem so common to me.
Or are you considering governments insolvent in the sense that they just waste money and taxing is stealing etc ?
I am unsure how the situation is in these specific cases, but way way way often offshore accounts get found out in my country (italy) related to _massively illegal_ activities.
This is not a case of avoiding messing up a tax form, it's accounts used to pay bribes for falsified trial witnesses with money laundered from drug smuggling.
[citation needed]
And what does this actually mean? How do you define insolvent governments?
If you are thinking of one-off cuts when the state is actually going bankrupt (latest cyprus thingie, italy's cut in '92 etc) these don't seem to offer a different security from keeping money in a foreign non-offshore bank.
And these events don't seem so common to me.
Or are you considering governments insolvent in the sense that they just waste money and taxing is stealing etc ?
I am unsure how the situation is in these specific cases, but way way way often offshore accounts get found out in my country (italy) related to _massively illegal_ activities.
This is not a case of avoiding messing up a tax form, it's accounts used to pay bribes for falsified trial witnesses with money laundered from drug smuggling.
I expect that "insolvent governments" refers to the likelihood that a government in financial difficulties will eventually resort to confiscating the assets which its citizens hold in foreign accounts in addition to the confiscation of of domestic accounts, which has already occurred in Argentina in 2001 and in other places. In terms of the rate at which these events happen, I would consider 'once in a lifetime' to be a very high rate given that they can significantly reduce the wealth that you have managed to accumulate from a lifetime of hard work.
People living in countries with poorly managed economies, such as Italy and Spain, should be in the habit of keeping significant portions of their savings in foreign accounts; once the corralito hits, you're already done for.
People living in countries with poorly managed economies, such as Italy and Spain, should be in the habit of keeping significant portions of their savings in foreign accounts; once the corralito hits, you're already done for.
You could also group volatile taxation policy into the insolvent government bracket. It could be difficult to justify not diversifying if taxation on savings change by large amounts every time the political landscape changes.
Most people don't use offshoring at all, and for those who do, it is not extremely likely that it is a hedge against the insolvency of (say) the US government, or fear of being busted for marijuana (for example, large companies like Google move money around mostly just to save on taxes).
Your linked article draws the comparison between regulating unpasteurized milk and Nazi Germany, which seems not completely even-handed.
Your linked article draws the comparison between regulating unpasteurized milk and Nazi Germany, which seems not completely even-handed.
>I love how the article spins it such that offshoring is only for sinister, evil people. The reality is that most people use offshoring as a hedge against insolvent governments, and depending on their industry, the very real threat of criminal prosecution for benign activity.
In the Western world, most people use off shores to avoid paying taxes that regular citizens pay and that they, themselves would have to pay if not for hiding their money through various channels.
We might not like high taxation, in Europe, but we do believe in fair taxes and in our state having money for education, health, military, etc. And we consider those people using tax havens and offshoring to be the scum of the earth, at least in popular, average person, opinion. See the popular reaction to Gerard Depardieu seeking tax shelter outside France for an example.
In the Western world, most people use off shores to avoid paying taxes that regular citizens pay and that they, themselves would have to pay if not for hiding their money through various channels.
We might not like high taxation, in Europe, but we do believe in fair taxes and in our state having money for education, health, military, etc. And we consider those people using tax havens and offshoring to be the scum of the earth, at least in popular, average person, opinion. See the popular reaction to Gerard Depardieu seeking tax shelter outside France for an example.
Foreign depositary receipts are a good way of accessing global markets via domestic exchanges. You can invest in, say, a Dutch company, getting the advantages of a different tax jurisdiction as well as a different numéraire.
Coral cache may be helpful: http://www.icij.org.nyud.net/offshore/secret-files-expose-of...
This is really huge. Offshore accounts are thought to total up to $32 trillion. The Guardian / ICIJ archive accounts for only a portion of this, though I suspect the BVI are attractive to many for their stability (association with Britain provides its advantages).
On the technical side, I'd be interested in what tools are being used to analyze the archive. A related Guardian article notes:
"Unlike the smaller cache of US cables and war logs passed in 2010 to WikiLeaks, the offshore data was not structured or clean, but an unsorted collation of internal memos and instructions, official documents, emails, large and small databases and spreadsheets, scanned passports and accounting ledgers.
"Analysing the immense quantity of information required "free text retrieval" software, which can work with huge volumes of unsorted data. Such high-end systems have been sold for more than a decade to intelligence agencies, law firms and commercial corporations. Journalism is just catching up."
http://www.guardian.co.uk/uk/2013/apr/04/offshore-secrets-da...
Anyone have any specifics on this "free text retrieval" software, its capabilities, and how it compares with, say, standard Linux/Unix text search and processing tools?
This is really huge. Offshore accounts are thought to total up to $32 trillion. The Guardian / ICIJ archive accounts for only a portion of this, though I suspect the BVI are attractive to many for their stability (association with Britain provides its advantages).
On the technical side, I'd be interested in what tools are being used to analyze the archive. A related Guardian article notes:
"Unlike the smaller cache of US cables and war logs passed in 2010 to WikiLeaks, the offshore data was not structured or clean, but an unsorted collation of internal memos and instructions, official documents, emails, large and small databases and spreadsheets, scanned passports and accounting ledgers.
"Analysing the immense quantity of information required "free text retrieval" software, which can work with huge volumes of unsorted data. Such high-end systems have been sold for more than a decade to intelligence agencies, law firms and commercial corporations. Journalism is just catching up."
http://www.guardian.co.uk/uk/2013/apr/04/offshore-secrets-da...
Anyone have any specifics on this "free text retrieval" software, its capabilities, and how it compares with, say, standard Linux/Unix text search and processing tools?
They provide good detail about the software they used.
"The major software tools used for the Offshore Project were NUIX of Sydney, Australia, and dtSearch of Bethesda, Md. NUIX Pty Ltd provided ICIJ with a limited number of licenses to use its fully featured high-end e-discovery software, free of charge. The listed cost for the NUIX software was higher than a non-profit organization like the ICIJ could afford, if the software had not been donated."
Securiing their communications proved more difficult than free-text search, however:
"The project team’s attempts to use encrypted e-mail systems such as PGP (“Pretty Good Privacy”) were abandoned because of complexity and unreliability that slowed down information sharing."
"The major software tools used for the Offshore Project were NUIX of Sydney, Australia, and dtSearch of Bethesda, Md. NUIX Pty Ltd provided ICIJ with a limited number of licenses to use its fully featured high-end e-discovery software, free of charge. The listed cost for the NUIX software was higher than a non-profit organization like the ICIJ could afford, if the software had not been donated."
Securiing their communications proved more difficult than free-text search, however:
"The project team’s attempts to use encrypted e-mail systems such as PGP (“Pretty Good Privacy”) were abandoned because of complexity and unreliability that slowed down information sharing."
Ah. My read of the PGP comment was that the offshore-banking individuals / organizations had tried to use PGP but bailed. Seems that your interpretation it was the investigative team that tried but failed is the actual case.
Interesting. Sadly, far too common. I've been using PGP for well over a decade, know a small handful of people (outside of technical mailing lists) who have and can access their keys, and have actually been chewed out by some of these for sending encrypted mail.
Interesting. Sadly, far too common. I've been using PGP for well over a decade, know a small handful of people (outside of technical mailing lists) who have and can access their keys, and have actually been chewed out by some of these for sending encrypted mail.
Re "free text retrieval": This reminds me of a discussion on the POPCNT or sideways add instruction of early processors: http://cryptome.org/jya/sadd.htm
POPCNT has recently landed as part of SSE4.2 in Intel processors.
POPCNT has recently landed as part of SSE4.2 in Intel processors.
Having seen how journalists will blow hundreds of dollars on proprietary but basic scraping and processing software, I wouldn't be surprised if the software was an adroit use of NLP with OCR, but nothing out-of-this-world fancy. Management of documents and data is important too, so perhaps this software provided a good front end for it?
edit: in response to the downvotes, I'm not saying journalists are dumb, but that the data/technical problems they face are myriad and they often don't get the grounding they need to tackle them, so they, in my opinion, are too quick to pay for commercial software that only solves part of the problem they need to fix. Not just "opinion" here, but actual experience with colleagues and consulting on projects with outside groups. That said, the software they allude to sounds like a system that can mass-process scanned documents, OCR them, and I would assume, use NLP to reduce the amount of work needed to hand clean. But I'm betting that there was still an incredible amount of hand-cleaning that had to be done.
edit: in response to the downvotes, I'm not saying journalists are dumb, but that the data/technical problems they face are myriad and they often don't get the grounding they need to tackle them, so they, in my opinion, are too quick to pay for commercial software that only solves part of the problem they need to fix. Not just "opinion" here, but actual experience with colleagues and consulting on projects with outside groups. That said, the software they allude to sounds like a system that can mass-process scanned documents, OCR them, and I would assume, use NLP to reduce the amount of work needed to hand clean. But I'm betting that there was still an incredible amount of hand-cleaning that had to be done.
I wonder where they got this information trove from?
Also, I highly recommend the book Treasure Islands by Nicholas Shaxson (http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-B...) to understand the enormity of the problem and its historical context (yes, the growth in activity is easily traced).
Also, I highly recommend the book Treasure Islands by Nicholas Shaxson (http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-B...) to understand the enormity of the problem and its historical context (yes, the growth in activity is easily traced).
http://www.guardian.co.uk/uk/2013/apr/04/offshore-secrets-da...
A related article at The Guardian provides more details. Specifically: "The ICIJ's exploration of offshore secrets began when a computer hard drive packed with corporate data arrived in the post. Gerard Ryle, ICIJ's director, obtained the small black box as a result of his three-year investigation of Australia's Firepower scandal, a case involving offshore havens and corporate fraud."
As for the Firepower Scandal: http://en.wikipedia.org/wiki/Firepower_International
"Firepower International was advertised as a Hong Kong-based company owned and operated by Global Fuel Technologies Ltd, specializing in technology purporting to reduce the fuel consumption and environmental impact of petrol-operated vehicles.[1] There were other offices in Sydney, China, Rhodes, Athens and Papua New Guinea, according to the now-defunct official company website. But "in reality it was a handful of people in an industrial estate in Perth", who were conducting a complex of fraudulent operations.[2] The original entity—Firepower Operations Pty Ltd—was a $1 company, first registered in December 2004, owned by Firepower Holdings Group Ltd, a company with an address in the British Virgin Islands.[3]"
Oh what a wicked web we weave ...
A related article at The Guardian provides more details. Specifically: "The ICIJ's exploration of offshore secrets began when a computer hard drive packed with corporate data arrived in the post. Gerard Ryle, ICIJ's director, obtained the small black box as a result of his three-year investigation of Australia's Firepower scandal, a case involving offshore havens and corporate fraud."
As for the Firepower Scandal: http://en.wikipedia.org/wiki/Firepower_International
"Firepower International was advertised as a Hong Kong-based company owned and operated by Global Fuel Technologies Ltd, specializing in technology purporting to reduce the fuel consumption and environmental impact of petrol-operated vehicles.[1] There were other offices in Sydney, China, Rhodes, Athens and Papua New Guinea, according to the now-defunct official company website. But "in reality it was a handful of people in an industrial estate in Perth", who were conducting a complex of fraudulent operations.[2] The original entity—Firepower Operations Pty Ltd—was a $1 company, first registered in December 2004, owned by Firepower Holdings Group Ltd, a company with an address in the British Virgin Islands.[3]"
Oh what a wicked web we weave ...
Nice try Guardian: http://order-order.com/2013/04/04/a-tip-off-for-the-guardian...
The hypocrisy is so common. I just read on that site that the French politician leading the tax avoidance crack down resigned as he had 600,000 euros in an off short account!
Currently the ICIJ web site is buckling from the traffic, but the article and the various summaries elsewhere make for interesting reads.
I can't say I'm not surprised about these revelations, there have been other leaks, articles and essays discussing the problem, but not with the specific details. I'd love to get the full set of documents and run it against specific individuals/corporations in my area, but it would probably confirm what I already suspect.
I can't say I'm not surprised about these revelations, there have been other leaks, articles and essays discussing the problem, but not with the specific details. I'd love to get the full set of documents and run it against specific individuals/corporations in my area, but it would probably confirm what I already suspect.
Is this scoop an unintentional advertisement for Swiss banking ? I did a text search for India , Sharad Pawar , Gandhi and Yadav --- nothing showed up. But the rich in India always favor Swiss banking for their illicit wealth.
They also like Mauritius.
ICIJ have a nice and useful (cough) "Interactive: Stash Your Cash" too (http://www.icij.org/offshore/interactive-stash-your-cash)
Wow. Phoney lawsuit: brilliant.
(not condoning this behavior in any way)
(not condoning this behavior in any way)
Why they haven't released that data for public download on the Internet?
Because they are private banking records - some of the account info released is from private citizens doing nothing illegal (offshore banking is explicitly legal in many countries)
One way to look at it is: how would you like it if it was discovered that a drug lord was using the same bank as you to launder money, and therefore your bank account balances and recent transfers were released to the public, even though you had nothing to do with the drug lord other than storing your money at the same bank?
One way to look at it is: how would you like it if it was discovered that a drug lord was using the same bank as you to launder money, and therefore your bank account balances and recent transfers were released to the public, even though you had nothing to do with the drug lord other than storing your money at the same bank?
Of course there isn't something illegal in using offshore accounts, but why they would put only selected names publicly, while many others remain hidden. What will happen if in those files we find out that there are people working for/related with Guardian and those major news agencies that investigate this case? Are they the new judges? I think if they have such information they should release everything, because they don't have the right to select just a few names and put them on display.
I see no problem at all with my bank account balances being published on the Internet. In Norway everybody's total balance is published by the government. I really find irrational some ordinary people desire to keep stuff like net worth, salary, etc. secret.
This is not an irrational fear, nor a cultural one. It's mostly tied with local laws and rules. For example, the US being such a hotbed for class actions and frivolous law suits, I can imagine that some wealthy individuals would rather keep their balance from lawsuit 'trolls' ... But that is just my opinion
Sure, for the wealthy there are reasons, but not for the 99%.
Let me get this straight, because I don't want to misread you. What you are saying here is the wealthy deserve separate protection under the law and anyone in the 99% should have their records published because they don't "need" privacy?
Nope, where did I say that anything about making new laws? It want matter much anyway as the really rich people and privately hold companies don't keep the majority of their money in own bank accounts.
In Norway everybody's total balance is published by the government. I really find irrational some ordinary people desire to keep stuff like net worth, salary, etc. secret.
Wow, that's horrible. I'm assuming it's some kind of "societal good" social engineering Norway is doing there. But why anybody would think that's a good thing is beyond me.
Wow, that's horrible. I'm assuming it's some kind of "societal good" social engineering Norway is doing there. But why anybody would think that's a good thing is beyond me.
I don't know about your location, but where I live having an offshore account isn't illegal in and of itself.
Perhaps I'm concerned about the quality of my country's management. If for that or any other reason, I decide to put some money into foreign currency and place it with another country's banking system, while continuing to comply with my own country's tax laws, what right do you have to steal the information and publish it on the internet?
Perhaps I'm concerned about the quality of my country's management. If for that or any other reason, I decide to put some money into foreign currency and place it with another country's banking system, while continuing to comply with my own country's tax laws, what right do you have to steal the information and publish it on the internet?
On their twitter, they said they are considering uploading it (30 minutes ago).
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The moral question isn't 'how can this be prevented?', but 'how can it be made more accessible for the average person?'. I see huge startup opportunities right now around helping people cheaply and easily diversify internationally.
[0] http://maxkeiser.com/2013/01/17/a-broken-justice-system-most...