On March 8, Wall Street On Parade reported that despite announcements by British Petroleum (BP), Shell and ExxonMobil that they were cutting business ties to Russia in response to Russia’s brutal invasion of Ukraine, another oil conglomerate, Koch Industries, remained silent.
Koch Industries is the privately-owned cash cow that has fueled the infamous “Koch Brothers” creepy intrusions into every nook and cranny of American politics, using labyrinthine layers of well-financed front groups. The oldest brother, Charles Koch, whose personal wealth is estimated at $53 billion according to Forbes, remains at the helm of Koch Industries and a sprawling political power base. David Koch died in 2019.
On Wednesday of this week, 20 days since the invasion of Ukraine by Russia, Koch Industries finallyposted a statement on its website. The statement indicated that Koch plans to keep its glass manufacturing plants operating in Russia, preposterously claiming that it would “do more harm than good” to close them. Apparently, Charles Koch believes he is smarter than the CEOs of 400 other corporations that have severed business ties with Russia to show support for Ukraine and outrage at Putin’s bombing Ukraine cities to rubble while killing thousands of civilians, including more than 100 children.
The claim by Koch Industries that severing business ties with Russia could “do more harm than good,” directly undermines the solidarity of the famous brands around the world that have rallied to supplement the stiff sanctions imposed by the European Commission, the U.S., U.K., Canada and their allies. (Undermining government has been the stock and trade of Charles Koch for the past 40 years. See the comments by Senator Bernie Sanders in the video below.)
The Koch statement also attempted to play down the size of Koch’s Guardian Industries glass manufacturing operations in Russia, writing that it represented a “very small part of Koch.” But a 2011 press release said this about one of the glass plants in the Rostov region of Russia:
“The $220-million plant will be Guardian’s largest, producing 900 tons of glass per day, and will include a technologically advanced glass coater…The location is a good fit for Guardian’s growth strategy to supply glass to Russia and neighboring countries….”
Adding to the stench of propaganda around Koch’s statement, the President of one of the numerous front groups funded with Koch money, Will Ruger of the American Institute for Economic Research, mapped out the official talking points in a podcast with Nick Gillespie at Reason Magazine on March 2. Ruger says this:
“Ukraine simply doesn’t matter to America’s security or our prosperity. It’s unfortunate for Ukraine but the fact is we won the Cold War with the Ukraine being part of the Soviet Union. They just don’t matter strategically. They’re far away from us, they’re even far away from some of our allies….”
Ukraine is a country of 44 million people with a democratically-elected President who is courageously rallying his country and the world to challenge an illegal and deadly invasion by the megalomaniac President of Russia who also happens to have 5,977 nuclear warheads. Ukraine’s land mass represents a geographic buffer between Russia and NATO countries that have a legal responsibility to defend each other should one be attacked. The U.S. is a NATO member. To suggest that Ukraine “doesn’t matter to America’s security” smacks of pure Putin propaganda.
The man who made that statement, Will Ruger, was previously the Vice President for Research and Policy of the Charles Koch Institute before becoming the President of the Koch-funded American Institute for Economic Research. In fact, the Charles Koch Institute, as of this morning, still has Ruger listed as its Vice President.
DeSmog describes the American Institute for Economic Research (AIER) as follows:
“AIER operates a program called the Bastiat Society that promotes its free-market, anti-government ideology and partners with other Koch-funded think tanks, networks, and organizations that are some of the most prominent disseminators of disinformation on climate science and climate policies. These include the Atlas Network, State Policy Network, Manhattan Institute, Cato Institute, Charles Koch Institute, Competitive Enterprise Institute, and others.”
For Americans who don’t want to funnel more profits to Koch Industries, below are some of the major brands produced by companies owned by Koch Industries that you might want to avoid in the future:
Consumer Paper Products:
Dixie disposable paper plates, bowls and cups
Northern Quilted and Angel Soft bath tissue
Brawny and Sparkle paper towels
Vanity Fair and Mardi Gras table napkins
Georgia-Pacific Wood Products:
ForceField® Air and Water Barrier System
DryGuard® and DryMax® Enhanced Sub–floors
Thermostat® radiant barrier roof sheathing
Georgia-Pacific Gypsum Products:
GOLD Dens® brand of fiberglass mat gypsum panels
ToughRock® Fireguard 45® Gypsum Board
FireDefender
Invista Brands:
Antron flooring products
Dacron fiberfill used in pillows, comforters and mattress toppers
Cordura fabric for military clothing and high-performance gear
For more background on what the Koch political platform has in mind for America, you can listen to Senator Bernie Sanders’ revealing remarks in the video below:
Vladimir Putin gave a couple of crazy-assed speeches this week. On Thursday, he managed to almost go full Stalin. You never go full Stalin. Shooting all your generals immediately prior or during armed combat is always a terrible idea. Putin hasn't gone there yet, but he warned “traitors” that he’s coming for them next. FromReuters:
The Kremlin leader assailed Russians who he said were more mentally in tune with the West than Russia, and said the Russian people would quickly be able to tell the difference between traitors and patriots. "Of course they (the West) will try to bet on the so-called fifth column, on traitors - on those who earn their money here, but live over there. Live, not in the geographical sense, but in the sense of their thoughts, their slavish thinking," he told government ministers, three weeks into Russia's war with Ukraine. "Any people, and especially the Russian people, will always be able to distinguish the true patriots from the scum and the traitors, and just to spit them out like a midge that accidentally flew into their mouths.”
Then, on Friday, he got up in front of a stadium full of witnesses, some of whom may even have been happy to be there, and praised how unified all of Russia is behind him and his new project of doing war crimes in Ukraine. From theGuardian:
Putin sought to justify his actions during his speech byrepeating his unfounded claimsthat Ukraine was committing genocide in the Donbas region. “This really was genocide. Stopping that was the goal of the special operation,” Putin said, adding – contrary to evidence – that Ukrainian civilians had welcomed Moscow’s invading troops. Dressed in a turtleneck and coat, Putin said the operation in Ukraine was necessary because the US was using the country to threaten Russia. He also hailed the actions of the military fighting in Ukraine by paraphrasing a Bible saying. “There is no greater love than giving up one’s soul for one’s friends,” he said.
And, in a civil court in the Beyond, St. John the Apostle files a copyright infringement suit. Alas for the Russian president, the TV feed of his stadium rally cut out right before his big finish. And not once did Putin point at the cameras and complain thatthey turn them off when I’m right.
Frankly, I don’t think the fellow is very well-strung these days. A lot of his political and kleptocratic secrets have been revealed to the world, in part due to the sanctions levied on Putin and many of his oligarchical hirelings. And how he came to have these hirelings is the subject of a terrific story inThe New Yorkerby Patrick Radden Keefe. The piece begins with the saga of Roman Abramovich, the oligarch most famous for having purchased Chelsea, a club in the English Premier League. (That’s soccer, you barbarians.) Simply put, Putin took oligarchs like Abramovich and gave them the same sort of deal that Whitey Bulger once offered to the owners of the South Boston Liquor Mart, although Whitey never sent anyone to the wastes of the Arctic as part of the deal.
When Abramovich went to Chukotka, Belton tells us, he did so “on Putin’s orders.” The first generation of post-Soviet capitalists had accumulated vast private fortunes, and Putin set out to bring the oligarchs under state control. He had leverage over government officials, so he forced Abramovich to become one. “Putin told me that if Abramovich breaks the law as governor, he can put him immediately in jail,” one Abramovich associate told Belton. A “feudal system” was beginning to emerge, Belton contends, in which the owners of Russia’s biggest companies would be forced to “operate as hired managers, working on behalf of the state.” Their gaudy displays of personal wealth were a diversion; these oligarchs were mere capos, who answered to the don. It wasn’t even their wealth, really: it was Putin’s. They were “no more than the guardians,” Belton writes, and “they kept their businesses by the Kremlin’s grace.”
All gangsters are the same. Some of them just have nukes is all.
Weekly WWOZ Pick To Click:“Ninety-Nine and a Half”(New Orleans Spiritualettes): Yeah, I still pretty much love New Orleans.
Weekly Visit To The Pathe Archives:Here, from 1930, the Irish National Army parades on St. Patrick’s Day. Only a decade earlier, of course, some of those people were considered terrorists and traitors to the British Empire. History is so cool.
Speaking of Ireland, the national rugby team is having a great campaign in the Six Nations tournament. Amazon Prime carries the matches, but restricts them to citizens of the UK. So when a fan in Northern Ireland complained to Amazon that he was locked out of seeing the match, they told him it was because he didn’t live in the UK. Thus, for a day or so, Amazon managed to produce a 32-county Irish republic.
(Eventually, after a Twitterstorm and general hilarity, Amazon changed its policy with regard to Northern Ireland.)
Things I did not know before Thursday: that St. Peter’s point guard Matthew Lee, who played so well in the Peacocks’ upset of Kentucky, is the son of Marquette legend Butch Lee, so there is a small shrapnel of alma mater left in the field after that unfortunate tussle with North Carolina. And that’s all I have to say about that.
Hey,CNN. Is it a good day for dinosaur news?It’s always a good day for dinosaur news!
Scientists originally found remains of an armored dinosaur, which they named Yuxisaurus kopchicki, in 2017 in the Yuxi region of Yunnan province, an area that has been a hotspot for dinosaur discoveries. Research on the specimens began in 2019, according to study author Shundong Bi, professor at Indiana University of Pennsylvania.
The ancient creature belongs to the thyreophoran group, the same as its distant cousin the Stegosaurus, said study author Paul Barrett, merit researcher at the Natural History Museum in London. It likely lived 192 million to 174 million years ago and is the first thyreophoran from that time period to be recognized in the region, according to the study.
These primordial tanks are one of my favorite examples of evolution gone wild. And it continues to fascinate me that we’re forever discovering sub-groups of sub-groups of species. I remember when there were only about 10-12 dinosaurs you had to know. Still more proof that they lived then to make us happy now.
I’ll be back on Monday when the hearings into Judge Jackson’s nomination take their turn under the Big Top, in case you’ve forgotten what a tool Josh Hawley is. Be well and play nice, ya bastids. Stay above the snake-line, wear the damn mask, and get the damn shots, especially the boosters, roosters. And spare a prayer for Ukraine.
Koch 1980 platform (corruption): “We urge the repeal of federal campaign finance laws, and the immediate abolition of the despotic Federal Election Commission.”
“We favor the abolition of Medicare and Medicaidprograms.”
“We oppose any compulsory insurance or tax-supported plan to provide health services, including those which finance abortion services.”
“We also favor the deregulation of the medical insurance industry.”
“We favor the repeal of the fraudulent, virtually bankrupt, and increasingly oppressive Social Security system. Pending that repeal, participation in Social Security should be made voluntary.”
“We propose the abolition of the governmental Postal Service. The present system, in addition to being inefficient, encourages governmental surveillance of private correspondence. Pending abolition, we call for an end to the monopoly system and for allowing free competition in all aspects of postal service.”
“We oppose all personal and corporate income taxation, including capital gains taxes.”
“We support the eventual repeal of all taxation.”
“As an interim measure, all criminal and civil sanctions against tax evasion should be terminated immediately.”
“We support repeal of all law which impede the ability of any person to find employment, such as minimum wage laws.”
“We advocate the complete separation of education and State. Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.”
“We condemn compulsory education laws … and we call for the immediate repeal of such laws.”
“We support the repeal of all taxes on the income or property of private schools, whether profit or non-profit.”
“We support the abolition of the Environmental Protection Agency.”
“We support abolition of the Department of Energy.”
“We call for the dissolution of all government agencies concerned with transportation, including the Department of Transportation.”
“We demand the return of America's railroad system to private ownership. We call for the privatization of the public roads and national highway system.”
“We specifically oppose laws requiring an individual to buy or use so-called "self-protection" equipment such as safety belts, air bags, or crash helmets.”
“We advocate the abolition of the Federal Aviation Administration.”
“We advocate the abolition of the Food and Drug Administration.”
“We support an end to all subsidies for child-bearing built into our present laws, including all welfare plans and the provision of tax-supported services for children.”
“We oppose all government welfare, relief projects, and ‘aid to the poor’ programs. All these government programs are privacy-invading, paternalistic, demeaning, and inefficient. The proper source of help for such persons is the voluntary efforts of private groups and individuals.”
“We call for the privatization of the inland waterways, and of the distribution system that brings water to industry, agriculture and households.”
“We call for the repeal of the Occupational Safety and Health Act.”
“We call for the abolition of the Consumer Product Safety Commission.”
Koch Industries stays in Russia, backs groups opposing U.S. sanctions
BY KATE GIBSON
/ MONEYWATCH
As hundreds of major U.S. companies exit Russia over its invasion ofUkraine, Koch Industries is staying put.
The industrial conglomerate — the second-largest privately owned business in America, with $115 billion in annual revenue — is among thosedefying public pressureand continuing to operate manufacturing plants and sell products across Russia, while up until Wednesday remaining mum on that nation's relentless assault on Ukrainian cities.
Wichita, Kansas-based Koch has several business lines in Russia, and is among the nearly 40 companies described as "digging in" by refusing to curb or stop business in that nation, according to atallycompiled by Yale University professor Jeffrey Sonnenfeld and his research team.
Koch subsidiary Guardian Industries has two industrial glass manufacturing plants in Russia that employ about 600. Outside of Guardian, Koch employs 15 people in Russia, according to the company.
This is not new, but I encourage you to scrutinize the information and consider supporting ICIJ with a few dollars for the invaluable service they provide.
US OLIGARCHS park their $$ offshore and refuse to support government, cheating in lots of ways.
The list includes: KOCH/ALEC - BIG POLLUTERS, member of Mar-A-Lago; MERCERS - supported BREITBART, STEVE BANNON, War Monger Chicken Hawk John Bolton who couldn't be confirmed by REPUBLICAN SENATORS for UN Ambassador; SHELDON ADELSON who contributed + $170 MILLION and others.
execerpt: SHELDON ADELSON - The casino-owning couple and perennial super-spenders Sheldon and Miriam Adelson set a new record for donations from individuals in a single election cycle, giving $172.7 million.
The 2020 election cycle is projected to cost a record-smashing $11 billion. So far, an unprecedented amount, $2 billion, comes from outside spending groups, which can receive unlimited funds from wealthy billionaires like the Adelsons. The couple gave $170 million in outside spending this year. As they have for 30 years, all their donations went to Republicans and conservative groups.
The second biggest donors this year are Richard and Elizabeth Uihlein, the shipping supplies moguls who gave $59.2 million. That’s just over a third of what the Adelsons have spent so far. In third place are hedge fund manager and former presidential candidate Thomas Steyer and his wife Taylor, who gave $55.4 million this year. The individual totals exclude the failed self-financing of former presidential candidates Michael Bloomberg and Steyer.
Lots surrounds the NEO CON PNAC [Project for the New American Century] which is American Empire Building and we all know how EMPIRES end.
This creates INEQUALITY around the World.
Paradise Papers: Secrets of the Global Elite
A major global collaboration reveals secrets from one of the world’s most prestigious offshore law firms, a specialized trust company and 19 company registries in secrecy jurisdictions.
A new leak of confidential records reveals the financial hideaways of iconic brands and power brokers across the political spectrum.
BY ICIJ
NOV 05, 2017
A trove of 13.4 million records exposes ties between Russia and U.S. President Donald Trump’s billionaire commerce secretary, the secret dealings of the chief fundraiser for Canadian Prime Minister Justin Trudeau and the offshore interests of the queen of England and more than 120 politicians around the world.
The leaked documents, dubbed the Paradise Papers, show how deeply the offshore financial system is entangled with the overlapping worlds of political players, private wealth and corporate giants, including Apple, Nike, Uber and other global companies that avoid taxes through increasingly imaginative bookkeeping maneuvers.
One offshore web leads to Trump’s commerce secretary, private equity tycoon Wilbur Ross, who has a stake in a shipping company that has received more than $68 million in revenue since 2014 from a Russian energy company co-owned by the son-in-law of Russian President Vladimir Putin.
The new files come from two offshore services firms as well as from 19 corporate registries maintained by governments in jurisdictions that serve as waystations in the global shadow economy. The leaks were obtained by German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and a network of more than 380 journalists in 67 countries.
There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose
Brooke Harrington
The promise of tax havens is secrecy – offshore locales create and oversee companies that often are difficult, or impossible, to trace back to their owners. While having an offshore entity is often legal, the built-in secrecy attracts money launderers, drug traffickers, kleptocrats and others who want to operate in the shadows. Offshore companies, often “shells” with no employees or office space, are also used in complex tax-avoidance structures that drain billions from national treasuries.
The offshore industry makes “the poor poorer” and is “deepening wealth inequality,” said Brooke Harrington, a certified wealth manager and Copenhagen Business School professor who is the author of ‘Capital without Borders: Wealth Managers and the One Percent.’
“There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose,” Harrington said. These people “live the dream” of enjoying “the benefits of society without being subject to any of its constraints.”
The records expand on the revelations from the leak of offshore documents that spawned the 2016 Panama Papers investigation by ICIJ and its media partners. The new files shine a light on a different cast of underexplored island havens, including some with cleaner reputations and higher price tags, such as the Cayman Islands and Bermuda.
The most detailed revelations emerge in decades of corporate records from the white-shoe offshore law firm Appleby and corporate services provider Estera, two businesses that operated together under the Appleby name until Estera became independent in 2016.
At least 31,000 of the individual and corporate clients included in Appleby’s records are U.S. citizens or have U.S. addresses, more than from any other country. Appleby also counted clients from the United Kingdom, China and Canada among its biggest sources of business.
A trove of 13.4 million records exposes ties between Russia and U.S. President Donald Trump’s billionaire commerce secretary, the secret dealings of the chief fundraiser for Canadian Prime Minister Justin Trudeau and the offshore interests of the queen of England and more than 120 politicians around the world.
The leaked documents, dubbed the Paradise Papers, show how deeply the offshore financial system is entangled with the overlapping worlds of political players, private wealth and corporate giants, including Apple, Nike, Uber and other global companies that avoid taxes through increasingly imaginative bookkeeping maneuvers.
One offshore web leads to Trump’s commerce secretary, private equity tycoon Wilbur Ross, who has a stake in a shipping company that has received more than $68 million in revenue since 2014 from a Russian energy company co-owned by the son-in-law of Russian President Vladimir Putin.
The new files come from two offshore services firms as well as from 19 corporate registries maintained by governments in jurisdictions that serve as waystations in the global shadow economy. The leaks were obtained by German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and a network of more than 380 journalists in 67 countries.
There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose
Brooke Harrington
The promise of tax havens is secrecy – offshore locales create and oversee companies that often are difficult, or impossible, to trace back to their owners. While having an offshore entity is often legal, the built-in secrecy attracts money launderers, drug traffickers, kleptocrats and others who want to operate in the shadows. Offshore companies, often “shells” with no employees or office space, are also used in complex tax-avoidance structures that drain billions from national treasuries.
The offshore industry makes “the poor poorer” and is “deepening wealth inequality,” said Brooke Harrington, a certified wealth manager and Copenhagen Business School professor who is the author of ‘Capital without Borders: Wealth Managers and the One Percent.’
“There is this small group of people who are not equally subject to the laws as the rest of us, and that’s on purpose,” Harrington said. These people “live the dream” of enjoying “the benefits of society without being subject to any of its constraints.”
The records expand on the revelations from the leak of offshore documents that spawned the 2016 Panama Papers investigation by ICIJ and its media partners. The new files shine a light on a different cast of underexplored island havens, including some with cleaner reputations and higher price tags, such as the Cayman Islands and Bermuda.
The most detailed revelations emerge in decades of corporate records from the white-shoe offshore law firm Appleby and corporate services provider Estera, two businesses that operated together under the Appleby name until Estera became independent in 2016.
At least 31,000 of the individual and corporate clients included in Appleby’s records are U.S. citizens or have U.S. addresses, more than from any other country. Appleby also counted clients from the United Kingdom, China and Canada among its biggest sources of business.
As the offshore riches grew, lawyers for Bronfman, the Kolbers and other wealthy interests lobbied Canada’s Parliament to fight legislative proposals to tax income from offshore trusts.
Bronfman remains a key fundraiser for Trudeau, who has championed openness in government and promised a crackdown on offshore tax dodging. In September, Trudeau told the U.N. General Assembly: “Right now, we have a system that encourages wealthy Canadians to use private corporations to pay a lower tax rate than middle-class Canadians. That’s not fair and we’re going to fix it.”
Kolber’s lawyers said in a letter to ICIJ’s partner CBC that “none of the transactions or entities at issue were effected or established to evade or even avoid taxation.” They added that the trusts “were always in full conformity with all applicable laws and requirements,” and said that no further comment would be provided by Stephen Bronfman. Trudeau’s office declined to comment.
In the United States, the files reveal personal or corporate offshore ties of key Trump associates who are charged with helping to put “America First.”
The Appleby files show how Ross, Trump’s commerce secretary, has used a chain of Cayman Islands entities to maintain a financial stake in Navigator Holdings, a shipping company whose top clients include the Kremlin-linked energy firm Sibur. Among Sibur’s key owners are Kirill Shamalov, Putin’s son-in-law, and Gennady Timchenko, a billionaire the U.S. government sanctioned in 2014 because of his links to Putin. Sibur is a major customer of Navigator, paying the company more than $23 million in 2016.
When he joined Trump’s Cabinet, Ross divested his interests in 80 companies. But he kept stakes in nine companies, including the four that connect him to Navigator and its Russian clients.
These revelations come against a backdrop of growing concerns about hidden Russian involvement in U.S. political affairs.
Sibur is “a company with crony connections,” said Daniel Fried, a Russia expert who has served in senior State Department posts in Republican and Democratic administrations. “Why would any officer of the U.S. government have any relationship with a Putin crony?”
A spokesman for Ross said that the Commerce Secretary never met Putin’s son-in-law or Sibur’s other owners and that he was not on the board of Navigator when it initiated its relationship with Sibur.
Ross recuses himself from matters that relate to international shipping, his spokesman said, and “has been generally supportive of the administration’s sanctions” against Russian entities.
The leaked files also led to other discoveries about U.S.-Russian business ties.
US President Donald Trump and Wilbur Ross first met in 1990. Image: Getty Images
A document in the new cache of records helped steer ICIJ and its media partners to public documents and Panama Papers files that illuminate links between a pair of Kremlin-owned financial firms and major investments in Twitter and Facebook.
In 2011, the investment fund run by tech mogul Yuri Milner received $191 million from one of the Russian government firms, VTB Bank, and quietly invested that money in Twitter. Documents also show that a financial subsidiary of the Kremlin-controlled energy giant Gazprom funded a shell company that invested in a Milner-affiliated company that held roughly $1 billion in Facebook shares shortly before the social network’s 2012 initial public offering.
More recently, Milner invested $850,000 in Cadre, a real estate firm co-founded by Trump’s son-in-law and White House adviser, Jared Kushner.
Milner is a Russian citizen who lives in Silicon Valley. His ties to Twitter, Facebook and Kushner’s firm have been previously disclosed. But his links to the Kremlin financial institutions weren’t known.
VTB confirmed that it had used Milner’s fund to make an investment in Twitter. Facebook and Twitter said they had properly reviewed Milner’s investments.
In an interview, Milner said he was unaware of any possible involvement by the Gazprom subsidiary in any of his deals and that none of his many investments have been related to politics. He said he used his own money in the Kushner investment.
On the other side of the U.S. political divide, Ross’ predecessor as secretary of commerce, Penny Pritzker, pledged to sell investments to avoid conflicts of interest after she assumed her post in Democratic President Barack Obama’s Cabinet. The files show that soon after she received Senate confirmation in June 2013, Pritzker transferred her interests in two Bermuda companies to a firm that used the same mailing address as her private investment firm in Chicago. The company was “owned by trusts that are for the benefit of Penny Pritzker’s children,” according to Appleby’s files. These transfers may have fallen short of federal ethics standards for divestment, according to ethics expert Lawrence Noble.
Republican and Democratic donors alike appear in offshore records, including Randal Quarles, a GOP-leaning donor and the new Wall Street watchdog at the Federal Reserve. Quarles was an officer of two Cayman Island companies, including one that was involved in a loan deal with a Bermudan bank, N.T. Butterfield & Son. Until recently, Quarles held an indirect interest in the bank, which is under investigation by U.S. authorities for possible tax evasion by its American account holders. Private equity funds controlled by Democratic mega-donor George Soros, a hedge fund billionaire, use Appleby to help manage a web of offshore entities, including an investment in one company engaged in reinsurance, or insurance for insurers. His charitable organization, the Open Society Foundations, is a donor to ICIJ.
A spokesperson at the Federal Reserve said Quarles divested his indirect interest in the Bermudan bank after he was confirmed for the government post. Soros declined to comment. Pritzker did not respond to requests for comment.
Boardroom secrets
When Appleby is not serving the interests of some of the world’s wealthiest individuals, it provides nuts-and-bolts legal help to corporations that seek to reduce their taxes in the countries where they do business. Appleby is not a tax adviser, but the firm plays a role in tax programs used by companies across the world.
In addition to top-flight international banks such as Barclays, Goldman Sachs and BNP Paribas, other elite Appleby clients have included the founder of one of the Middle East’s largest construction conglomerates, the Saad Group, and the Japanese company operating the crippled nuclear power plant in Fukushima.
The files reveal that America’s most profitable company, Apple Inc., shopped around Europe and the Caribbean for a new island tax shelter after a U.S. Senate inquiry found that the tech giant had avoided tens of billions of dollars in taxes by shifting profits into Irish subsidiaries.
In one email exchange, Apple’s lawyers asked Appleby to confirm that a possible move to one of six offshore tax havens would allow an Irish subsidiary to “conduct management activities . . . without being subject to taxation in these jurisdictions.” Apple declined to comment on details of the corporate reorganization but told ICIJ that it explained the new arrangements to government authorities and that the changes did not reduce its tax payments.
The files also reveal how big corporations cut their taxes by creating offshore shell companies to hold intangible assets such as the design of Nike’s “Swoosh” logo and the creative rights to silicone breast implants.
One of Appleby’s top corporate clients was Glencore PLC, the world’s largest commodity trader. The files contain decades of deals, emails and multimillion-dollar loans to bankroll ventures in Russia, Latin America, Africa and Australia.
Inside Appleby’s Bermuda headquarters there used to be a room dedicated to Glencore. Image: Hidefumi Nogami/The Asahi Shimbun
Company board meeting minutes document how Glencore representatives leaned on Daniel Gertler, an Israeli businessman with high-level friends in the Democratic Republic of the Congo, to help seal a deal for a valuable copper mine. Glencore lent millions to a company, widely believed to belong to Gertler, described in a U.S. Department of Justice inquiry as a conduit for bribes. Gertler and Glencore were not named in the case.
Glencore said its background checks on Gertler were “extensive and thorough.” The Justice Department investigation “does not constitute evidence of anything against Mr. Gertler,” his lawyers said, adding that he “rejects absolutely any allegations of wrongdoing or criminality by him.” No loans were used improperly or for inappropriate purposes, Gertler’s lawyers said.
Offshore operatives
The offshore industry is a globe-circling labyrinth of accountants, bankers, money managers, lawyers and middlemen who get paid to serve the interests of the rich and well-connected.
Appleby, for example, is one link in a chain of offshore actors who helped sports stars, Russian oligarchs and government officials to purchase jets, yachts and other luxury items. The offshore experts helped Arkady and Boris Rotenberg, two Russian billionaires and childhood friends of President Putin, buy jets worth more than $20 million in 2013. U.S authorities blacklisted the Rotenbergs in 2014 for their support of “Putin’s pet projects” and for having banked “high price contracts” through the Russian government. Appleby cut its ties with the brothers but, in one case, received approval from the Isle of Man government nearly two years after sanctions were imposed to disburse fees to keep one of the brothers’ companies on the business register. The Rotenbergs did not reply to Süddeutsche Zeitung’s requests for comment.
Clients prize Appleby for its expertise, efficiency and global network of professionals. Its peers repeatedly crown it Offshore Law Firm of the Year.
But decades of private documents also show that even one of the offshore industry’s brightest stars has hidden shortcomings: accepting questionable clients and failing to monitor multimillion-dollar money flows.
Bermuda financial regulators fined the firm’s trust unit for breaching anti-money-laundering rules, according to a confidential 2015 deal struck by Appleby and the regulator. This year, Appleby reached a $12.7 million settlement in a lawsuit in Canada in which nurses, firefighters and police officers accused the firm of unquestioningly circulating money on behalf of a client who designed an alleged alleged tax-avoidance scheme. Appleby and the alleged mastermind did not admit wrongdoing.
Family-owned Asiaciti advertises itself as helping clients to accumulate and “preserve wealth from the ravages of litigation,” political upheavals and family breakups. It has attracted Chinese millionaires, family members of a Kazakh official convicted of corruption and a broad swath of Americans, including doctors, poker players and a Colorado alfalfa farmer.
If you say that you’ve cleaned it up, at the end of the day, can you really say that you’ve picked up every piece of seaweed?
Adrian Alhassan
The leaked files from Asiaciti reveal how the firm set up trusts in the Cook Islands for Kevin Trudeau, a U.S. infomercial frontman who sold millions of copies of self-help books such as “The Weight-Loss Cure ‘They’ Don’t Want You to Know About.” In 2014, a Chicago judge sentenced Trudeau to 10 years in federal prison for criminal contempt, calling him a shameless fraudster who was “deceitful to the core” and once even used his mother’s Social Security number in one of his scams.
Appleby said in its online statement that it is committed to meeting regulators’ standards. Appleby provides advice to clients “on legitimate and lawful ways to conduct their business,” the firm said, and it does not tolerate illegal behavior.
“It is true that we are not infallible,” Appleby said. “Where we find that mistakes have happened we act quickly to put things right.”
Asiaciti did not respond to requests for comment.
Adrian Alhassan, a former compliance manager at Appleby’s Bermuda office told ICIJ that if someone is “hellbent” on breaking the law, there’s only so much an offshore services provider can do. “It’s not the FBI,” he said. If the law firm spent years doing background research on clients, it wouldn’t “get any work done.”
“It’s like cleaning a beach,” Alhassan said in a telephone interview. “If you say that you’ve cleaned it up, at the end of the day, can you really say that you’ve picked up every piece of seaweed?”
Deepening inequality
Tax havens’ secrecy laws entice those who wish to place their wealth and dealings beyond the reach of regulators, investigators and the tax collectors.
The documents from corporate registries in 19 such jurisdictions reveal company names and details, directors and real owners of companies created in many of the world’s busiest offshore hideouts.
The documents come from high- and low-profile bastions of financial secrecy such as Marshall Islands, Lebanon and St. Kitts and Nevis, a low-lying Caribbean country recently hit by hurricanes. Some jurisdictions’ records are publicly available but impossible to search by an individual’s name. Others, such as the Cayman Islands’ registry, charge more than $30 for a one-page record that provides only basic information. Six registries do not make information available online.
The leaked files contain more than a thousand records from Antigua and Barbuda, a Caribbean country that provides no online corporate information and more than 600,000 documents from the online registry of Barbados, which does not list shareholders or directors.
Over the past decade or more, the European Union and other international organizations have pressured offshore havens to reform their laws and require that offshore go-betweens aggressively screen clients. Progress has been slow, experts say, both because of the challenges of changing practices across a global web of jurisdictions and because powerful people and big companies benefit from the offshore system.
They do so at the expense of the many – shifting the burden of taxation to middle-income taxpayers and giving multinational corporations an advantage over smaller competitors. Where it hurts most is in nations struggling to provide the basics for their populations.
In West Africa, Burkina Faso officials who monitor the tax payments of the largest companies doing business there work from cramped offices with broken air-conditioning units. Burkina Faso is among the poorest countries in the world. On average, a citizen there earns less annually than the owner of an offshore company in Bermuda pays in registration fees. The country’s tax office sought $29 million in unpaid taxes and penalties from Glencore, the world’s 16th-largest company and a major user of Appleby’s services. Glencore protested and the penalty was reduced to $1.5 million.
Helping the rich get richer through offshore maneuvers is not a “benign benefit,” said Harrington, the Copenhagen Business School professor. “When the rich get richer, the poor get poorer, because individual wealthy people are not paying their fair share of taxes.”
“It won’t be lost on wealth managers and those in the offshore industry,” she said, “that we are reaching sort of French Revolution levels of inequality and injustice.”
