Analysis by Reporting San Diego
Nov 6, 2017 (San Diego) Two years ago the Panama Papers exposed how great wealth is hidden in tax shelters used by the very wealthy. At the time the leak came from Mozack-Fonseca, a legal form serving the very wealthy in Panama City. This time the leak is called the Paradise Papers and they exposed the documents from Appleby and Associates and Estera, these companies are based in both the Cayman Islands and Barbados, two well known tax shelters.
Tax shelters use trusts, and other legal mechanisms to hide great amounts of money from many governments around the world, not just the United States, According to the International Consortium of Investigative Journalists the big American players include Wilbur Ross, US Secretary of Commerce, Rex Tillerson, Secretary of State, and Wesley Clark, former Democratic Candidate for the Presidency.
In the case of Secretary Ross, there are ties to a Russian shipping company Navigator Holdings, owned by Kiril Shamalov, son-in-law of Vladimir Putin. The company also trades with Sibur, a Russian gas producer.
The partial list of those in the cabinet and advisors or friends, that have ties to President Donald Trump are as follows:
Carl Icahn, who is a corporate raider. His interest include energy, metals, real estate and casinos, He resigned his post as presidential advisor on Aug 18, 2017. Reportedly, Icahn left in protest over the response to Charlottesville.
Gary Cohn, who is the president’s Director of the National Economic Council. This post is not well known, but helps determine the economic path the country takes.
Robert Mercer is the head of Renaissance Technologies, and until a couple days ago he had controlling interest in Breitbart News. He convinced Trump to hire Steve Bannon as a National Security Adviser, Mercer was also a friend of Richard Nixon. His influence in far right Republican politics is well known and has a very long history.
Randal Quarles is one of the supervisors of the Federal Reserve. He oversees the banking industry as part of it.
David and Charles Koch, who are among the most influential political donors in modern American history. Their interests also lie in energy and in the denial of climate change. They strongly favor the current tax plan in front of the House.
This list is not complete. The rest are here.
It is easy to make political hay of the fact that Secretary Ross did not disclose the links to the shipping company Navigator. Indeed, many are doing just that. But the problem with this is not the fact that the man possibly perjured himself before Congress. That is a legal matter, and possibly a federal crime. it also distracts from the real issue with this. What we mean is that these resources cannot be put to productive use by nation states, since this tax avoidance essentially robs these nations of necessary funds.
The big picture here is that according to David Zuchman in The Hidden Wealth of Nations:
There has, in fact, never been as much wealth in tax havens as today. On a global scale, 8% of the financial wealth of households is held in tax havens. According to the latest available information, in the spring of 2015 foreign wealth held in Switzerland reached $2.3 trillion. Since April 2009, when countries of the G20 held a summit in London and decreed the “end of banking secrecy,” the amount of money in Switzerland has increased by 18%. For all the world’s tax havens combined, the increase is even higher, close to 25%. And we are only talking about individuals here.
Corporations also use tax havens. Corporate filings show that US companies are shifting profits to Bermuda, Luxembourg, and similar countries on a massive and growing scale. Fifty-five percent of all the foreign profits of US firms are now kept in such havens. Since multinationals usually try to operate within the letter–if not the spirit–of the law, this profit shifting is better described as “tax avoidance” rather than outright fraud. But its cost is enormous–$130 billion a year for US firms alone–and since equity ownership is very concentrated, it essentially benefits only the wealthiest among us.
So what does these numbers translate into? The amount we are talking about is $7.5 trillion dollars, that was as of 2015. It is larger than the national budget for many nation states It is also larger than the budget for the State of California, which stands at $183 billion.
Global wealth, according to Credit Suisse, as of 2016 stood at $256 Trillion, and that year alone it grew by 2.5 trillion. The math is astounding. There is more wealth hidden in shelters, than the annual growth.
This report also found this:
The report further establishes that wealth inequality, measured by the share of the wealthiest 1 percent and wealthiest 10 percent of adults, as compared to the rest of the world’s adult population, continues to rise. While the bottom half collectively own less than 1 percent of total wealth, the wealthiest top 10 percent own 89 percent of all global assets.
There is more. The documents also reveal how Apple and Nike, for example. Also use these shelters to avoid paying their fair share of taxes.
This is the view from 30,000 feet. While there will be political consequences, as to who has been identified (and not just in the United States), in this leak. It speaks volumes to the lack of banking transparency, and how people hide personal assets. It also speaks to the very powerful global oligarchy that is increasingly entrenched.
Senator Bernie Sanders (V-I) told this to The Guardian.
“The major issue of our time is the rapid movement toward international oligarchy in which a handful of billionaires own and control a significant part of the global economy. The Paradise Papers shows how these billionaires and multi-national corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes,”
This is a global issue. The net not only caught Americans. Two former Canadian Prime Ministers, the British Crown, and a Saudi Prince are in the list. This is a global problem. One that we must address head on.