Column – Gordon Campbell

Belatedly, US complicity in the global tax avoidance systems is now trickling out into daylight. To some, one of the suspicious aspects of the scandal to date has been how few firms and individuals from the US have featured in the document dump …

Gordon Campbell on the (missing) US links to the Panama Papers, and Merle Haggard

Belatedly, US complicity in the global tax avoidance systems is now trickling out into daylight. To some, one of the suspicious aspects of the scandal to date has been how few firms and individuals from the US have featured in the document dump from the Mossack Fonseca law firm. The Guardian did nothing to dispel the potential for paranoia about a Cold War agenda by making the scandal initially seem to be about Vladimir Putin and his cronies. Former British diplomat Craig Murray has come out strongly against the selective nature of the coverage to date.

Calls have been made to release all of the Panama Papers documents – right now – assuming a suitable place is found to store what is said to be 2 terrabytes of data, or 11.5 million documents. (The entire Snowden trove by comparison amounted to only 60 gigabytes. Years later, we’re still getting news stories based on Snowden’s mine of information. The same will presumably apply in this case.) The Panama Papers BTW, are not the biggest haul of data in history ; as Slate has reported, a Chinese hack into the US Defence department in 2007, is believed to have yielded 50 terrabtyes, including detailed plans of advanced US weaponry such as the F-35 warplane.

Back to that American connection though, to the Mossack Fonseca papers. Here’s the Japan Times on the subject:

…the United States ranks third in the world in financial secrecy, behind Switzerland and Hong Kong but ahead of notorious tax havens such as the Cayman Islands and Luxembourg. Under a 2010 law, passed after it was learned that the Swiss bank UBS helped thousands of Americans evade U.S. taxes, the United States demands that banks and other financial institutions disclose information on Americans abroad to make sure they pay their U.S. taxes.

But the U.S. doesn’t automatically return the favour. More than 90 countries have signed on to a 2014 information-sharing agreement set up by the Organization for Economic Cooperation and Development, but the U.S. is among the few that haven’t joined. American banks don’t even collect the kind of information foreign countries would need to identify tax dodgers.

So….although the US is (a) functioning at state level as a major tax haven and (b) dragging its feet federally, on global moves to minimise tax avoidance, only a few US firms and individuals are cropping up in the Mossack Fonseca coverage. Is this a conspiracy – or is it in reality, a reflection of Mossack Fonseca’s roster of clients? The McClatchy newspaper chain is the only major US news organisation associated with the International Consortium of Investigative Journalists (ICIJ) who acted as brokers on the Panama Papers release. Here’s part of McClatchy’s coverage:

The passports of at least 200 Americans show up in this week’s massive leak of secret data on secretive offshore shell companies.

Given the high-profile nature of some of the foreign names in the leaks – close associates of Russian President Vladimir Putin were seen moving more than $2 billion through shell companies – many of the Americans may seem like small fish. In four separate cases, the law firm Mossack Fonseca helped register offshore companies for Americans who are now either accused or convicted by federal prosecutors of serious financial crimes, including securities fraud and running a Ponzi scheme.

Small fish then, so far. John Cassidy in the New Yorker tackles the same issue. He too, points to the prominent US role in global tax avoidance. Among Cassidy’s observations is this possible explanation:

Eoin Higgins, a writer from Massachusetts, suggested another possible factor as well: the diplomatic relationship between Washington and Panama. In many cases, the entire point of setting up a shell company is to hide things. But, in 2010, the United States and Panama signed a trade-promotion agreement that, among other things, obliged Panama to provide to the U.S. authorities, on request, “information regarding the ownership of companies, partnerships, trusts, foundations, and other persons, including . . . . ownership information on all such persons in an ownership chain.” Higgins pointed out, “If Panama had ever been an attractive destination for American offshore storage of funds, this agreement shut the door on that possibility.”

In other words, the Mossack Fonseca papers are only one window on a global system whereby the wealthy avoid paying their just share of taxes. New Zealand of course, has bought into that system boots and all, and the Key government denials that we are a tax haven are indeed ‘rubbish’as the ICIJ told RNZ this morning.

For the best part of ten years, Key has enthusiastically promoted New Zealand as a tax shelter, without shame. The dream of making us the Switzerland of the South Seas though…has just gotten a lot more difficult to realise.


The TPP charade continues

If it is blasé about tax avoidance, the Key government simply cannot be bothered going through the motions of democratic process on, you know, major trade deals that aim to bind us in perpetuity. The time allocated for parliamentary submission (and report back) on the Trans Pacific Partnership is being significantly reduced.

And why? Reportedly, Mark Mitchell the National MP and chair of the select committee hearing the submissions, thinks that people have made up their minds. Heaven forbid! Quel horreur that people should have an opinion of their own, and damn their eyes if it is an opinion different from the one being promoted by government. Lets have a submission process where people simply turn up and shout “huzzah” at every will and whim of their wise governors, preferably while tossing their caps in the air.

What is really irksome about the shortened submission/report back is that it comes at the end of a long line of travesties. Remember the claimed need for secrecy, because supposedly that’s how trade negotiations are done – even though (a) trade negotiators actually know in detail what each other’s positions are and (b) in the case of every delegation, the corporates and friends of government were being extensively briefed throughout the process. Only the general public was being kept in the dark. The “ secrecy” excuse before the deal was done was a sham…and now, the end game is a similar travesty.

Reportedly, the Obama White House is planning on a Congressional vote on the TPP during the “lame duck” session that occurs between the November election and the inauguration of the next President in January. Typical. So…US legislators who won’t be around to administer the TPP and its consequences, will help to vote it into law – while those elected in November to deal with its consequences won’t get to vote on it. When I asked Prime Minister John Key at last Monday’s post Cabinet press conference whether he thought that this situation in any way undermined the mandate for the TPP, he denied that it did. Nothing to see here folks, move on.

Antonin Scalia, adieu.

Liked the news item this week that George Mason University in the US has been forced into a name change for its bid to commemorate the recently deceased US Supreme Court judge, Antonin Scalia. The ‘Antonia Scalia School of Law’ had sounded like such a good idea, until someone noticed the alarming (and some would say, entirely appropriate) acronym: ASSoL.

Merle Haggard, RIP

The great country singer and songwriter died earlier this week, at the age of 79. Haggard was one of the last remaining links to the Okie migration to California, and his upbringing was legendarily difficult ; he’d been in 17 correctional institutions by the age of 21, culminating in a two years, nine month stretch in San Quentin prison. After turning to music as a career, Haggard’s subsequent charity work among disadvantaged children was one sign of the empathy that marks his greatest songs. “Kern River” is a particular favourite, a song I first became aware of it through this version by Dave Alvin:

Alvin later talked eloquently about the song – and its writer – to Rolling Stone magazine back in 2009:

When you say, ‘Who’s the great California songwriter?’ people say, ‘Brian Wilson,’ ” says California guitarist and songwriter Dave Alvin. “And he is, for a particular California. But Merle is the voice of another California.” Alvin singles out “Kern River” — about a girl drowning in the treacherous waters that separated Bakersfield from the Okie settlements — as one of the great evocations of place and class in the Golden State. “It’s amazingly deep and complicated,” he says. “I hear a lot of California in those two and a half minutes….”
One of Haggard’s own favourite interpreters of his music was Iris Dement. He particularly loved her version of “Big City” – on which, he told the writer Nicholas Dawidoff in Dawidoff’s book In The Country of Country, Dement sounded exactly the way that he imagined the song, when he wrote it.

Finally, Haggard was a great singer of his own compositions, too. This is a live version of ‘Kern River.’ It is a stripped back visitation of this utterly eerie and haunting song, and of the region in which Haggard was raised, and which he’d fled through as a young fugitive…It was also where he built a house (on the shores of Lake Shasta) for the second of his five wives, after he’d become successful.

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