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Archive for April 6th, 2013

Tax Evasion. Isn’t it a natural behavior? Linked to a large global web of Tax Havens?

A 15-month investigation carried out by the International Consortium of Investigative Journalists, which involved dozens of reporters sifting through thousands of leaked files from offshore companies and trusts, highlights the dirty dealings between politicians and the mega-rich involved in tax evasion.

A trove of leaked documents, 160 times the size of Wikileaks’ cache, reveals the vast global web of tax havens. This web is established to aid the world’s wealthiest hide their fortunes

LeakSource posted on April 4/2013 “The Largest Leak on Tax Evasion web”

“The leaked files provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike,” noted ICIJ on the investigation’s publication.

The trove of data — believed to be the largest leak in history — exposes some 120,000 letterbox entities, offshore accounts and other nefarious deals in more than 170 countries, alongside the names of 140,000 individuals alleged to have placed their money in known tax havens.

The investigation found high profile individuals from around the world — from oligarchs to the family members of dictators, to wealthy American financiers and professionals — engaged in efforts to dodge fiscal authorities. Individuals and groups found to be part of the tax evasion web include:

1. Individuals and companies linked to Russia’s Magnitsky Affair, a tax fraud scandal that has strained U.S.-Russia relations and led to a ban on Americans adopting Russian orphans.

2. A Venezuelan deal maker accused of using offshore entities to bankroll a U.S.-based Ponzi scheme and funneling millions of dollars in bribes to a Venezuelan government official.

3. A corporate mogul who won billions of dollars in contracts amid Azerbaijani President Ilham Aliyev’s massive construction boom even as he served as a director of secrecy-shrouded offshore companies owned by the president’s daughters.

4. Indonesian billionaires with ties to the late dictator Suharto, who enriched a circle of elites during his decades in power.

5. The eldest daughter of the late dictator Ferdinand Marcos, Maria Imelda Marcos Manotoc, found to be a beneficiary of a British Virgin Islands (BVI) trust. (Philippine officials said they were eager to find out whether any assets in the trust are part of the estimated $5 billion her father amassed through corruption.)

6. The wife of Russia’s deputy prime minister, Igor Shuvalov, and two top executives with Gazprom, the Russian government-owned corporate behemoth that is the world’s largest extractor of natural gas, identified in offshore data.

7. Among nearly 4,000 American names is Denise Rich, a Grammy-nominated songwriter whose ex-husband was at the center of an American pardon scandal that erupted as President Bill Clinton left office.

Among the Sham directors:

The Guardian, whose investigative journalists collaborated with ICIJ in the tax haven project, highlights a list of “sham directors” uncovered in the leaked files. These individuals “appear on official records as directors of companies while acting only on the instructions of its real owners, who stay invisible and off-the-books.”

8. Over 22,000 companies use this network of 0nly 28 sham directors — some with over 700 companies to their names with offshore account holdings. See here for a full table of these sham directors.

9. Nominee directors, military and intelligence links:

As was original highlighted by the Guardian/ICIJ last year, a number of so-called nominee directors of companies registered in the British Virgin Islands (BVI) have connections to military or intelligence activities.

Notably Gamma Group — the firm that develops surveillance software that (as noted here) has been used by oppressive regimes against activists including in Bahrain — was found to have offshore funds in the BVI:

10. Louthean Nelson owns the Gamma Group, a controversial computer surveillance firm employing ex-military personnel. It sells bugging technology to Middle East and south-east Asian governments.

Nelson owns a BVI offshore arm, Gamma Group International Ltd.

11. Martin Muench, who has a 15% share in the company’s German subsidiary, said he was the group’s sole press spokesman, and told us: “Louthean Nelson is not associated with any company by the name of Gamma Group International Ltd. If by chance you are referring to any other Gamma company, then the explanation is the same for each and every one of them.”

After he was confronted with evidence obtained by the ICIJ/Guardian investigation, Muench changed his position. He told us: “You are absolutely right, apparently there is a Gamma Group International Ltd.”

The ICIJ also notes a “sham” director who is U.K.-based operative working to hide money for the Islamic Republic of Iran Shipping Line – a firm the E.U., the U.N. and the U.S. have accused IRISL of aiding Iran’s nuclear-development program.

12. Under the front name “Tamalaris Consolidated Limited,” the company registered in the BVI with the British-based operative named as director.

And here are some more notable individuals found by the Guardian/ICIJ investigation to be hiding funds in offshore accounts:

13. Jean-Jacques Augier, France’s François Hollande’s 2012 election campaign co-treasurer, launched a Caymans-based distributor in China with a 25% partner in a BVI company. Augier says his partner was Xi Shu, a Chinese businessman.

14. Mongolia’s former finance minister. Bayartsogt Sangajav set up “Legend Plus Capital Ltd” with a Swiss bank account, while he served as finance minister of the impoverished state from 2008 to 2012. He says it was “a mistake” not to declare it, and says “I probably should consider resigning from my position”.

15. The president of Azerbaijan and his family. A local construction magnate, Hassan Gozal, controls entities set up in the names of President Ilham Aliyev’s two daughters.

16. A senator’s husband in Canada. Lawyer Tony Merchant deposited more than US$800,000 into an offshore trust.

17. Spain’s wealthiest art collector, Baroness Carmen Thyssen-Bornemisza, a former beauty queen and widow of a Thyssen steel billionaire, who uses offshore entities to buy art.

We will continue to update this post once more details from the extensive tax evasion leaks emerge.

taxhavens

Via Salon

Unusual scholarship from Oxford University to students in Gaza

Rawan Yaghi is a bookish 19 year old student of literature at Gaza’s Islamic University.  She is currently studying English literature, and among other books, George Orwell’s Animal Farm and William Golding’s Lord of the Flies.

Her favorite book is Mornings In Jenin by the Palestinian American writer Susan Abul Hawa. The novel follows the story of three generations of a Palestinian family who became refugees after the creation of the state of Israel in 1948.

Rawan’s life is about to take a different direction: She has just won a scholarship to Oxford University to study linguistics and Italian.

Jon Donnison of BBC New published from Gaza City on April 4, 2013: “Gazan heads to Oxford University on unusual scholarship”

Portrait of Rawan Yaghi, 19 year old Gazan student who is wearing head scarf.
The scholarship offers Rawan Yaghi a life-changing opportunity

” Rawan arrives to meet me in Gaza with a text tucked under her arm.

It is a well-thumbed copy of Catch 22, Joseph Heller‘s classic satirical novel on the absurdities of war: Rawan spent her entire life amid one of the Middle East’s most intractable conflicts.

Rawan says: “Most people think [Gaza] is like a war zone and that everyone here is really depressed and involved in politics. But it’s not always about war. It’s also about families, friends and love”

Rawan is looking forward to moving from the minarets of Gaza to the city of “dreaming spires”.

“I’m very excited. I can’t wait,” she smiles. “It’s going to be different but it’s going to be fun.”

Few have made such a journey for this Unusual scholarship: all the other students at Oxford’s Jesus College will pay some of the cost of Rawan’s studies.

As part of the recently established Jesus College Junior Members Scholarship most of the other students have each agreed to pay £3.90 ($5.90) per term towards Rawan’s fees.

The scholarship was set up by Oxford graduate Emily Dreyfus after she realized that few people in Gaza had ever had the chance to study at one of Britain’s most prestigious universities.

Emily Dreyfus at her graduation ceremony
Emily Dreyfus says most students are happy to contribute to Rawan’s scholarship

“They voted for this from the outset. They recognize that this is a very small contribution to make which has a disproportionately positive benefit.”

The student contributions will raise around £6,300 a year towards Rawan’s living costs. This is only a fraction of the estimated £30,000 annual costs needed to complete the four-year course.

And the university has agreed to waive around 60% of the tuition fees.

The rest of the costs are being paid for by three charities: The Hani Qaddumi Scholarship Foundation, the AM Qattan Foundation and the Hoping Foundation, which supports Palestinian refugees around the world.

Rawan still had to apply for and win the place against fierce competition, but she knows the other students at Jesus have given her a rare opportunity.

“I really appreciate that Emily believed in people here and she gave somebody like me a life changing chance,” Rawan says.

Rawan has only once before left the tiny Palestinian territory, when she went on a study trip to the United States.

Israel’s blockade of Gaza and the ongoing conflict with Hamas which governs here make it difficult for Palestinians to leave through Israel.

Before it withdrew from Gaza, Israel had been refusing permission for Palestinian students to leave Gaza in order to carry out studies abroad. Rawan will likely leave Gaza through Egypt in order to travel to Oxford.

Rawan is also a fan of JK Rowling, author of the Harry Potter books.

Students walk under the Bridge of Sighs along New College Lane on March 22, 2012 in Oxford, England.
Rawan’s second trip out of Gaza will be to the historic city of Oxford

“Her style of writing is very subtle. There are little things in her stories that grab your attention.”

Education is highly valued in Gaza. There are no fewer than 7 universities in the territory for a population of 1.7 million people.

But Rawan is expecting a different study experience at Oxford.

“The education system is completely different. I’m going to have my own tutors not like in Gaza where I am among hundreds of students who have the same teacher.”

Cultural differences?

She will also have to get used to mixed education. At the Islamic University, where she studies now, men and women are taught separately.

“I don’t think it’s going to be a problem. The culture there is obviously very different but I’m open to that.”

Rawan also accepts that she is going to miss home.

“Of course I will be homesick. But I have to go through that and get used to it because I have something more important to achieve.”

Emily Dreyfus expects the young Palestinian will be given a warm welcome.

Graduation ceremony of Palestinian engineering students at The Islamic University of Gaza on July 31, 2005. All of the student are women wearing Islamic head scarf. Some of them wear Niqab.
Graduation day at Gaza’s Islamic University: Rawan is expecting a very different cultural experience at Oxford

“I’m confident that she’s going to have a wonderful time and I know that there are a lot of people at the college eager to meet her and to welcome her to their community.”

“Most people think it’s like a war zone here and that everyone here is really depressed and involved in politics,” she says.

“But it’s not always about war. It’s also about families, friends and love. It’s not only about the conflict with Israel.”

And despite the chance to broaden her horizons, she is adamant that once she has finished her four years in Oxford, she will return to Gaza.

“I still haven’t thought about what I’ll do after university but I’ll definitely come back here. Although it may seem difficult to live here, it’s still interesting and adventurous at times,” she says with a wry smile.

“There is ugliness in Gaza but you can’t leave it and turn your back on it.”


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