Transcripts For CSPAN2 Jake Bernstein Secrecy World 20180116

They offer a sobering view of how the world really works. We may once have trusted. Jay was an investigative journalist that broke the Panama Papers. He earned his first field surprise for National Coverage of the financial crisis in 2011. Hes written for the national post, the guardian and has appeared on bbc, nbc, cnn and npr. He was the editor of the texas observer. Lets give a warm welcome. [applause] wow. All right. It is great to be here. It is great to see so many old friends that we havent seen a long time. Thank you so much to books and books and to mitchell kaplan, proprietor of this wonderful bookstore. I dont know if you all know but mitchell now makes movies in addition to selling books in his latest is currently in theaters called the man who invented christmas. My wife and i saw the other day and it was delightful. The secrecy world. What is it . It in compasses an entire shadow economy. It increases tax havens and also places that offer secret Bank Accounts like switzerland and singapore and hong kong and also the intermediaries who service this world. I wish we had invented this phrase but i did not. I came upon it while rummaging through the Panama Papers. There are more than 11. 5 million documents for the pan Panamanian Law Firm and they were plundered by an anonymous source and given to a journalist new source which then shared it with the international consortium. I was part of the team that spent a year digging through those documents and in the documents i found this amazing glossary of offshore terms. It had been written by a junior employee and what made it so fantastic was that a Senior Lawyer had gone through the document and deleted the places where the original author had been a little too candid, a little too truthful with all their plain as day. There was an entry and they removed the phrase uncertain legality and stuff like that. Anyway, toward the end of the document i came across this term circus secrecy world. It encompasses the unregulated market and all those who create and promote secrecy jurisdictions and what they offer. Indeed, while Anonymous Companies can be completely legal and perhaps a shrewd business strategy, one of their greatest values was that they offer concealment. They could also be hiding from government tax collectors or Law Enforcement because you are laundering money, for example. They told many, many stories, these 11. 5 million documents and a stretch back as far as the early 1980s and there were some that went back even further. The secrecy world is not static. It morphs and changes and reacts. The files tell a story of the evolution of this world, the secret world. For long time, particularly in the 1980s and 90s it was the wild west. Those three monkeys, see nothing see nothing, say nothing. That created an anonymous Shell Company. It wasnt necessarily to know who actually owned the company. Once the company was created you put it in a file and forgot about it until it passed he ends up selling his office to the firm and leaving the country in the middle of the night. Before that he had joked with subordinates that he slept with a gun under his pillow. He never renewed it until the client needed it for something. It was highvolume, lowcost, think of nick donalds. They were interviewed hers and they took an island chain known for tourism and drug smuggling, the british version islands were nothing much was happening and turned it into Shell Companies. So many followed their lead and i will read you a little bit about that right now. As they crowded in they look to increase their business elsewhere. The United States pointed the way. Since the 1950s they had registered ships under its own flag but the public registry was never based in africa. Rather the registry resided in new york city. It was created by former u. S. Secretary of state in conjunction with corporate interests like shell oil. They readily assented in return for a cut of the proceeds. If the americans can have a monopoly by running their own public registry, why couldnt they. They sent the recently widowed manager, and american named nancy to the south pacific. Her instructions were to find a friendly country that would allow itself to be used as an exclusive jurisdiction. She disappeared for a week, literally disappeared into ginny. We were worried. We were thought maybe she was working by cannibals. One at the conference she was sitting at the hotel bar and struck up a conversation with the neighbor on the stool beside her. She told him she had been sent out to find a magical land to serve as a new location for offshore companies. Her new friend listened with interest. We can do that. Her barmaid, frank louis was the premier of the island nation. Firstly populated outcrop situated in the middle of nowhere, northeast of new zealand. Its currently 103 square miles in size with rising sea levels threatening to shrink its land mass. They first laid eyes on the place in 1774 when the locals repeatedly prevented captain james cook from landing there prompting him to debit savage island. In 1901 they approved under an Association Agreement in 1974. They received a stipend but the money wasnt enough to make ends meet. The allen leaders were already investigating to create additional income. They traveled and largely copied the bvi law which had been copied from delaware the law allowed Company Names in chinese characters in the russian of that. The company act passed in 1994. Later that term they took him to hong kong to salvage jurisdictions to the chinese. They advertise the island as the jewel in the crown of the selfie. The firm could crank out the company and under an hour in whatever price they determined. Officers around the world have the official seals presigned by the deputy registrar. All he had to do is check with panama to ensure it was available, and get the number, pull up the template and hit print. We can control the process and the quality and the speed. All that control did not prevent it from being used by criminals. The governor of nigerias rich state while Still Holding office using it to buy extensive robbery in london. In 2012 prosecutors in the uk convicted them of fraud and corruption sentencing him to 13 years in prison. They made it appear as if an outside company was buying shares in his investment company. In argentina, a father and son operated a network of offshore companies that u. S. Prosecutors alleged were used to pay bribes in exchange for multimillion dollar television contracts to broadcast soccer matches. The files show that one of these companies, cross trading, purchased the rights for ecuadorian soccer matches for 111,000 and then quickly flipped them to the ecuadorian broadcaster for 311,000. And never equaled the success of the bdi. Despite the ease of incorporation it was always a tough sell to many potential customers. If you think people dont know we are entering where the bdi was, trikes planing to them where this empty spot in the middle of the Pacific Ocean was. Now there were all kinds of dangers that came from selling companies but asking no questions about the owners. At first these were the kind of problems that just afflicted society but not him personally. It didnt stay that way as the story illustrates. Rafael quintero. The founder of the ohara cocktail mightve been the first narcotics billionaire. He owes his fortune to transporting colombian cocaine and growing marijuana and opiates. In 1984 the u. S. Drug Enforcement Administration undercover agent infiltrated his thriving marijuana business. He led the da to a massive pot plantation where they found more than a thousand acres of plans. Mexican soldiers destroyed product likely worth several billion dollars. Consumed by fury and paranoia he lashed out. An american novelist from minneapolis in a dental student from fort worth were among the first to die. In january 1985 the two friends mistakenly walked into the crazy lobster, a restaurant that he owned outside guadalajara. The drug kingpin was having a private party inside. Revelers kidnapped the students who may have suspected as dea agents. They tortured them in the kitchens with knives and ice picks before bearing their bodies in a local park. One of them was still alive when they put him in the ground. The following month they grabbed a man after he left the american consulate in guadalajara. They burned him with cigarettes and beat him with a tire iron for todays in a secret chamber behind one of his mansions. A doctor was on call to keep the dea agent alive during the ordeal. Before mexican authorities discovered his mutilated body he boarded a falcon executive jet and left the country. That march he traveled to costa rica. He did business with jose, a local lawyer with a cricket clientele. A few years earlier when the u. S. Government wanted to serve an indictment on the fugitive robert vasco for leaving a mutual fund for hundreds of thousands of dollars the embassy suggested they deliver the papers to one of the attorneys. In the early days he provided Panamanian Companies and several other associates. On april 4 costa rica and authorities arrested him for criminal acts related to narcotics trafficking. During his time in the Central American nation he alternated between the four properties he owned, dined at the best restaurants and traveled around in limousines. Despite the publicity he managed to stay in the background. About a week after the extradition to mexico he registered the first of two Panamanian Companies on the druglords behalf with jurgen bosak. Wanting maximum secrecy, he paid him to act as a director of the company. He appears not to have known the real identity of the Beneficial Owner in this case. At least one of the companies has a sprawling mansion on the outskirts of the streaking capital. In 1989 a mexican judge sentenced him to 40 years in prison, the countrys then maximum. U. S. Authorities later accused him of continuing his business while behind bars. The Treasury Department sanctioned his friends and relatives for investing his considerable fortune in legitimate businesses. With his client in prison and the properties confiscated, he stopped paying. The companies fell into limbo. He died on Christmas Eve in 2004. A year later, a lawyer sent an email to the partners. The president and the secretary general of the Costa Rican National Olympic Committee had visited the office with a thorny problem. Go streaking government had given the committees mansion for its new headquarters but the committee couldnt acquire legal title because the druglords technically still held it to the panamanian company. The Olympic Committee wanted him as a director of the company to donate the property to the committee to avoid a complicated judicial process. Giving away property that still technically belong to one of the worlds most fearsome drug traffickers seemed ill advise. The firm decided the directors would resign her position, go streaking would have to solve the legal issues on their own. Pablo escobar was a child nursing at his mothers breast compared to concerto he explained in spanish in an email, referring to the colombian drug kingpin. I dont want to be among those he will visit after he leaves prison. His instinct for selfpreservation group press event. On august 9, 2013, a judge in guadalajara unexpectedly released him on a technicality with 12 months, 12 years remaining on his sentence. Before the United States could extradite him, he disappeared. As of this writing his name sits atop the deas list of fugitive. So the highvolume lowcost model, the high cost the highvolume lowcost model was particularly opportune because it came at the beginning of the computer age which made it easy to streamline. It was a time when there was incredible wealth in the developing world, even as countries like russia and china and the u. S. Proved increasingly unwilling to provide welfare for their citizens. The consequences of which can be seen in one heart rendering story that i found in the documents. It involves russia. As putin and his cronies transfer billions of dollars to their children, ordinary russians are struggling to survive. In a country rich in Natural Resources, russia has a gdp. Capita of about 9000. The Economic Situation has forced Many Russians to seek work abroad. People like this 63yearold machinist. In 2011 he joined the crew of the russian cargo ship ss ross. He signed a sixmonth contract that paid him 3000. Month, a small fortune. He was owned by a bvi Company Created in 2004 through an intermediary in the united arab emirates. According to him, according to his files this offshore company and others, through this offshore company and others, for russians owned it in several other ships. They added an additional layer of secrecy by shuffling the registration of their ships among small specific island nations like to blue which required Little Information or regulation for the ships that flew their flags. Instead of economic opportunity, he found himself a prisoner aboard a slave ship. The captain of the ross dripped him and the crewmen of their identification documents for the ship had no air conditioning. Vermin infested the cabin. Food and water were scarce. Soap, nonexistent. The captain physically abused sailors who complained and refused to pay them. At 423 feet it was compact with two large cranes in the middle and three enormous cargo holds below deck. While working on a Diesel Engine in the stern he took a bad fall. Despite docking at several ports the captain denied his request to seek medical care. Instead, he forced him to fulfill his duties including nightwatch. Within a month the machinist was dead. Another crewmate, edward portugal went missing from the ship after complaining to the Russian Seafarers Union about the conditions aboard. His body was never discovered. His wife is convinced her husband was thrown overboard. When the captain refused to pay the rest of the sailors they managed to escape and sought refuge at the russian embassy. Russian Police Issued an arrest warrant for the ship but the owner simply changed its name and continued sailing. The men also owned the ss. [inaudible] this ship may have been abandoned in the philippines stranding a crew including 12 russians, eight indians and one ukrainian without paying for the work. The owners declared bankruptcy and walked away from the company. In may 2012, russian prosecutors filed charges against two of the owners for use of slave labor with the threat of violence and slave labor which entailed the death of a person. The men were detained but to date have avoided trial or present. So, yes, you will say the secrecy world does allow for criminals to longer prey on the innocent but it also services plenty of innocent people, and most american multinational corporations so why does this matter to us . Miami is a great example of why. Foreign nationals bought nearly 6. 1 billion worth of property in south florida in 2015. Miami cash transactions for property has more than doubled the national average. Led by south americans venezuelans, brazilians, argentinians, most of the buying comes from those who distrust their countries and want to invest in the United States. When Anonymous Shell Companies are widely used, it also allows corrupt politicians and criminals to spirit their cash out of their country. If theyre not reporting to the local tax authorities it can deprive already resource for governments of needed revenue. In 2014, developing countries lost between 620,000,000,970,000,000,000 to illicit outflows of capital. At home, this behavior contributes to making miami one of the worst places to be a renter in the country. The United States by one estimate loses 70 billion. Year in tax revenue from shifting corporate profits to tax havens. Republicans perhaps naively hope that some of that money will return home when they lower Corporate Tax rates but there is little incentive to do so. Thats to say nothing of individuals who are avoiding taxes legally or illegally through the secrecy world. What the Panama Papers and other including most recently the Paradise Papers show is a global elite that is no longer bound by the nationstate in the way that most of us are. They live in multiple cities, they travel the world in private jets, and they keep their money offshore. 50 of the wealth held in tax havens belongs to households with more than 50 million in net worth. Today the top 1 of households earn more wealth than the bottom 90 combined. The secrecy world feeds and protects an astounding inequality both here, at home, and abroad and it is getting worse. This world of multimillionaires and billionaires is one present donald trump knows well and is working actively to benefit. Now real estate has long been a frequent user of the secrecy world and trump admitted during his campaign that he had 515 companies, including 378 registered in delaware, one of the leading tax havens of the world, in fact delawares inCorporation Law was used as a template for panama and other tax savings. I found nine of trumps foreign Business Partners mentioned in the Panama Papers. Many more were connected to indicted Campaign Manager Panama Papers<\/a>. He earned his first field surprise for National Coverage<\/a> of the financial crisis in 2011. Hes written for the national post, the guardian and has appeared on bbc, nbc, cnn and npr. He was the editor of the texas observer. Lets give a warm welcome. [applause] wow. All right. It is great to be here. It is great to see so many old friends that we havent seen a long time. Thank you so much to books and books and to mitchell kaplan, proprietor of this wonderful bookstore. I dont know if you all know but mitchell now makes movies in addition to selling books in his latest is currently in theaters called the man who invented christmas. My wife and i saw the other day and it was delightful. The secrecy world. What is it . It in compasses an entire shadow economy. It increases tax havens and also places that offer secret Bank Accounts<\/a> like switzerland and singapore and hong kong and also the intermediaries who service this world. I wish we had invented this phrase but i did not. I came upon it while rummaging through the Panama Papers<\/a>. There are more than 11. 5 million documents for the pan Panamanian Law Firm<\/a> and they were plundered by an anonymous source and given to a journalist new source which then shared it with the international consortium. I was part of the team that spent a year digging through those documents and in the documents i found this amazing glossary of offshore terms. It had been written by a junior employee and what made it so fantastic was that a Senior Lawyer<\/a> had gone through the document and deleted the places where the original author had been a little too candid, a little too truthful with all their plain as day. There was an entry and they removed the phrase uncertain legality and stuff like that. Anyway, toward the end of the document i came across this term circus secrecy world. It encompasses the unregulated market and all those who create and promote secrecy jurisdictions and what they offer. Indeed, while Anonymous Companies<\/a> can be completely legal and perhaps a shrewd business strategy, one of their greatest values was that they offer concealment. They could also be hiding from government tax collectors or Law Enforcement<\/a> because you are laundering money, for example. They told many, many stories, these 11. 5 million documents and a stretch back as far as the early 1980s and there were some that went back even further. The secrecy world is not static. It morphs and changes and reacts. The files tell a story of the evolution of this world, the secret world. For long time, particularly in the 1980s and 90s it was the wild west. Those three monkeys, see nothing see nothing, say nothing. That created an anonymous Shell Company<\/a>. It wasnt necessarily to know who actually owned the company. Once the company was created you put it in a file and forgot about it until it passed he ends up selling his office to the firm and leaving the country in the middle of the night. Before that he had joked with subordinates that he slept with a gun under his pillow. He never renewed it until the client needed it for something. It was highvolume, lowcost, think of nick donalds. They were interviewed hers and they took an island chain known for tourism and drug smuggling, the british version islands were nothing much was happening and turned it into Shell Companies<\/a>. So many followed their lead and i will read you a little bit about that right now. As they crowded in they look to increase their business elsewhere. The United States<\/a> pointed the way. Since the 1950s they had registered ships under its own flag but the public registry was never based in africa. Rather the registry resided in new york city. It was created by former u. S. Secretary of state in conjunction with corporate interests like shell oil. They readily assented in return for a cut of the proceeds. If the americans can have a monopoly by running their own public registry, why couldnt they. They sent the recently widowed manager, and american named nancy to the south pacific. Her instructions were to find a friendly country that would allow itself to be used as an exclusive jurisdiction. She disappeared for a week, literally disappeared into ginny. We were worried. We were thought maybe she was working by cannibals. One at the conference she was sitting at the hotel bar and struck up a conversation with the neighbor on the stool beside her. She told him she had been sent out to find a magical land to serve as a new location for offshore companies. Her new friend listened with interest. We can do that. Her barmaid, frank louis was the premier of the island nation. Firstly populated outcrop situated in the middle of nowhere, northeast of new zealand. Its currently 103 square miles in size with rising sea levels threatening to shrink its land mass. They first laid eyes on the place in 1774 when the locals repeatedly prevented captain james cook from landing there prompting him to debit savage island. In 1901 they approved under an Association Agreement<\/a> in 1974. They received a stipend but the money wasnt enough to make ends meet. The allen leaders were already investigating to create additional income. They traveled and largely copied the bvi law which had been copied from delaware the law allowed Company Names<\/a> in chinese characters in the russian of that. The company act passed in 1994. Later that term they took him to hong kong to salvage jurisdictions to the chinese. They advertise the island as the jewel in the crown of the selfie. The firm could crank out the company and under an hour in whatever price they determined. Officers around the world have the official seals presigned by the deputy registrar. All he had to do is check with panama to ensure it was available, and get the number, pull up the template and hit print. We can control the process and the quality and the speed. All that control did not prevent it from being used by criminals. The governor of nigerias rich state while Still Holding<\/a> office using it to buy extensive robbery in london. In 2012 prosecutors in the uk convicted them of fraud and corruption sentencing him to 13 years in prison. They made it appear as if an outside company was buying shares in his investment company. In argentina, a father and son operated a network of offshore companies that u. S. Prosecutors alleged were used to pay bribes in exchange for multimillion dollar television contracts to broadcast soccer matches. The files show that one of these companies, cross trading, purchased the rights for ecuadorian soccer matches for 111,000 and then quickly flipped them to the ecuadorian broadcaster for 311,000. And never equaled the success of the bdi. Despite the ease of incorporation it was always a tough sell to many potential customers. If you think people dont know we are entering where the bdi was, trikes planing to them where this empty spot in the middle of the Pacific Ocean<\/a> was. Now there were all kinds of dangers that came from selling companies but asking no questions about the owners. At first these were the kind of problems that just afflicted society but not him personally. It didnt stay that way as the story illustrates. Rafael quintero. The founder of the ohara cocktail mightve been the first narcotics billionaire. He owes his fortune to transporting colombian cocaine and growing marijuana and opiates. In 1984 the u. S. Drug Enforcement Administration<\/a> undercover agent infiltrated his thriving marijuana business. He led the da to a massive pot plantation where they found more than a thousand acres of plans. Mexican soldiers destroyed product likely worth several billion dollars. Consumed by fury and paranoia he lashed out. An american novelist from minneapolis in a dental student from fort worth were among the first to die. In january 1985 the two friends mistakenly walked into the crazy lobster, a restaurant that he owned outside guadalajara. The drug kingpin was having a private party inside. Revelers kidnapped the students who may have suspected as dea agents. They tortured them in the kitchens with knives and ice picks before bearing their bodies in a local park. One of them was still alive when they put him in the ground. The following month they grabbed a man after he left the american consulate in guadalajara. They burned him with cigarettes and beat him with a tire iron for todays in a secret chamber behind one of his mansions. A doctor was on call to keep the dea agent alive during the ordeal. Before mexican authorities discovered his mutilated body he boarded a falcon executive jet and left the country. That march he traveled to costa rica. He did business with jose, a local lawyer with a cricket clientele. A few years earlier when the u. S. Government wanted to serve an indictment on the fugitive robert vasco for leaving a mutual fund for hundreds of thousands of dollars the embassy suggested they deliver the papers to one of the attorneys. In the early days he provided Panamanian Companies<\/a> and several other associates. On april 4 costa rica and authorities arrested him for criminal acts related to narcotics trafficking. During his time in the Central American<\/a> nation he alternated between the four properties he owned, dined at the best restaurants and traveled around in limousines. Despite the publicity he managed to stay in the background. About a week after the extradition to mexico he registered the first of two Panamanian Companies<\/a> on the druglords behalf with jurgen bosak. Wanting maximum secrecy, he paid him to act as a director of the company. He appears not to have known the real identity of the Beneficial Owner<\/a> in this case. At least one of the companies has a sprawling mansion on the outskirts of the streaking capital. In 1989 a mexican judge sentenced him to 40 years in prison, the countrys then maximum. U. S. Authorities later accused him of continuing his business while behind bars. The Treasury Department<\/a> sanctioned his friends and relatives for investing his considerable fortune in legitimate businesses. With his client in prison and the properties confiscated, he stopped paying. The companies fell into limbo. He died on Christmas Eve<\/a> in 2004. A year later, a lawyer sent an email to the partners. The president and the secretary general of the Costa Rican National<\/a> Olympic Committee<\/a> had visited the office with a thorny problem. Go streaking government had given the committees mansion for its new headquarters but the committee couldnt acquire legal title because the druglords technically still held it to the panamanian company. The Olympic Committee<\/a> wanted him as a director of the company to donate the property to the committee to avoid a complicated judicial process. Giving away property that still technically belong to one of the worlds most fearsome drug traffickers seemed ill advise. The firm decided the directors would resign her position, go streaking would have to solve the legal issues on their own. Pablo escobar was a child nursing at his mothers breast compared to concerto he explained in spanish in an email, referring to the colombian drug kingpin. I dont want to be among those he will visit after he leaves prison. His instinct for selfpreservation group press event. On august 9, 2013, a judge in guadalajara unexpectedly released him on a technicality with 12 months, 12 years remaining on his sentence. Before the United States<\/a> could extradite him, he disappeared. As of this writing his name sits atop the deas list of fugitive. So the highvolume lowcost model, the high cost the highvolume lowcost model was particularly opportune because it came at the beginning of the computer age which made it easy to streamline. It was a time when there was incredible wealth in the developing world, even as countries like russia and china and the u. S. Proved increasingly unwilling to provide welfare for their citizens. The consequences of which can be seen in one heart rendering story that i found in the documents. It involves russia. As putin and his cronies transfer billions of dollars to their children, ordinary russians are struggling to survive. In a country rich in Natural Resources<\/a>, russia has a gdp. Capita of about 9000. The Economic Situation<\/a> has forced Many Russians<\/a> to seek work abroad. People like this 63yearold machinist. In 2011 he joined the crew of the russian cargo ship ss ross. He signed a sixmonth contract that paid him 3000. Month, a small fortune. He was owned by a bvi Company Created<\/a> in 2004 through an intermediary in the united arab emirates. According to him, according to his files this offshore company and others, through this offshore company and others, for russians owned it in several other ships. They added an additional layer of secrecy by shuffling the registration of their ships among small specific island nations like to blue which required Little Information<\/a> or regulation for the ships that flew their flags. Instead of economic opportunity, he found himself a prisoner aboard a slave ship. The captain of the ross dripped him and the crewmen of their identification documents for the ship had no air conditioning. Vermin infested the cabin. Food and water were scarce. Soap, nonexistent. The captain physically abused sailors who complained and refused to pay them. At 423 feet it was compact with two large cranes in the middle and three enormous cargo holds below deck. While working on a Diesel Engine<\/a> in the stern he took a bad fall. Despite docking at several ports the captain denied his request to seek medical care. Instead, he forced him to fulfill his duties including nightwatch. Within a month the machinist was dead. Another crewmate, edward portugal went missing from the ship after complaining to the Russian Seafarers Union<\/a> about the conditions aboard. His body was never discovered. His wife is convinced her husband was thrown overboard. When the captain refused to pay the rest of the sailors they managed to escape and sought refuge at the russian embassy. Russian Police Issued<\/a> an arrest warrant for the ship but the owner simply changed its name and continued sailing. The men also owned the ss. [inaudible] this ship may have been abandoned in the philippines stranding a crew including 12 russians, eight indians and one ukrainian without paying for the work. The owners declared bankruptcy and walked away from the company. In may 2012, russian prosecutors filed charges against two of the owners for use of slave labor with the threat of violence and slave labor which entailed the death of a person. The men were detained but to date have avoided trial or present. So, yes, you will say the secrecy world does allow for criminals to longer prey on the innocent but it also services plenty of innocent people, and most american multinational corporations so why does this matter to us . Miami is a great example of why. Foreign nationals bought nearly 6. 1 billion worth of property in south florida in 2015. Miami cash transactions for property has more than doubled the national average. Led by south americans venezuelans, brazilians, argentinians, most of the buying comes from those who distrust their countries and want to invest in the United States<\/a>. When Anonymous Shell Companies<\/a> are widely used, it also allows corrupt politicians and criminals to spirit their cash out of their country. If theyre not reporting to the local tax authorities it can deprive already resource for governments of needed revenue. In 2014, developing countries lost between 620,000,000,970,000,000,000 to illicit outflows of capital. At home, this behavior contributes to making miami one of the worst places to be a renter in the country. The United States<\/a> by one estimate loses 70 billion. Year in tax revenue from shifting corporate profits to tax havens. Republicans perhaps naively hope that some of that money will return home when they lower Corporate Tax<\/a> rates but there is little incentive to do so. Thats to say nothing of individuals who are avoiding taxes legally or illegally through the secrecy world. What the Panama Papers<\/a> and other including most recently the Paradise Papers<\/a> show is a global elite that is no longer bound by the nationstate in the way that most of us are. They live in multiple cities, they travel the world in private jets, and they keep their money offshore. 50 of the wealth held in tax havens belongs to households with more than 50 million in net worth. Today the top 1 of households earn more wealth than the bottom 90 combined. The secrecy world feeds and protects an astounding inequality both here, at home, and abroad and it is getting worse. This world of multimillionaires and billionaires is one present donald trump knows well and is working actively to benefit. Now real estate has long been a frequent user of the secrecy world and trump admitted during his campaign that he had 515 companies, including 378 registered in delaware, one of the leading tax havens of the world, in fact delawares inCorporation Law<\/a> was used as a template for panama and other tax savings. I found nine of trumps foreign Business Partners<\/a> mentioned in the Panama Papers<\/a>. Many more were connected to indicted Campaign Manager<\/a> Paul Manafort<\/a> and summoned jared kushner. Heres the story of one of them. Another apparent investor, trump joined forces with iraq and 20 jan 2005 offering a brand name behind what they could coalesce. The bestknown project was trump soho, a condominium in one of the trendiest neighborhoods. Trump announced the project on his Television Show<\/a> the apprentice in 2006. For the use of his name and input trump received a 15 cut of sales with another 3 parceled out to his children. In 2007 he cut a deal the group for 50 million in financing and three other trump related projects. That was in return for future profits. He signed a document agreeing to the arrangement. The group is an International Investment<\/a> Company Serving<\/a> the icelandic financial media. His shareholders spun off offshore countries like a pinwheel. A number of them through moscow. Fl group would go belly up in the financial crisis, expose the fraud behind, a search leads to substantial loans from icelandic banks and supermarket chains, investments in india and the largest debtor in luxembourg. Iceland special prosecutor charged the companys former ceo with embezzlement of about 22 million in corporate funds. The businessman was acquitted at trial. A civil suit filed by a former employee speculated that some of the money behind the group was russian in origin. He alleged that they operated through a pattern of continuous related crime including mail, wire, bank fraud, tax evasion, Money Laundering<\/a>, bribery, extortion and embezzlement. He further alleged that the investment in the trump soho project was disguised as a loan to avoid paying approximately 20 million in taxes. They denied the allegations and trump insisted he had nothing to do with the financing lending only his name saying i dont know who owns it despite having signed a document that stated clearly that fl group is helping to finance the project. I never really understood. Another apparent investor and trump soho, according to a Company Investment<\/a> was alexander, a russian billionaire who was part of a treo shareholder behind eurasian Natural Resources<\/a> corporation, enr c, a conglomerate with far interest. A spokesperson says billionaire never invested in trump soho or bayrack despite what the pamphlet said. The mining mobile was. [inaudible] s grandson and other relatives have their own companies. The three principles were accused in belgium of Money Laundering<\/a>. The charges were subsequently dropped when they agreed to pay a settlement for an undisclosed sum without admitting wrongdoing. They had deep ties dating to at least 2003, having connected with the law firm through a Trust Company<\/a> in jersey in the channel islands. Some of the companies were involved in mining in congo, in west africa it was implicated in a bribery investigation of the israeli diamond magnet who also had companies and swiss Bank Accounts<\/a>. They deny any wrongdoing. In 2014 the intermediary st. Peters trust attempted to move 15 companies directly, the law firms Compliant Department<\/a> reviewed the matter and discovered the companies were related, joint venture between a treo of investors. All people involved were politically exposed people. The nrc had recently been delisted after a massive price drop when investors bailed after controversy mining deal with the congolese president. The company faced multiple criminal investigations over corruption allegations in kazakhstan and africa. There are too many red flags even for. [inaudible] due to the adverse risk results found in the course of our investigation, the decision is to not accept these companies under our administration wrote one of the firms compliance officers. These were not bombs but apparently they rock or trump had. When the Panama Papers<\/a> broke, it was everywhere. Im sure everywhere we her chin here site in one way or another. The Prime Minister<\/a> resigned. He had a secret company and later the Prime Minister<\/a> of pakistan was also forced from office and you can read their stories in the secrecy world. Most acted not fully realize what had happened to his firm right after the publication. Until he turned on the television and saw his lifes work on every single channel. The journalistic collaboration had more than 300 reporters from around the world. Some worked in dangerous places like russia or egypt. Personally i had never thought of the European Union<\/a> is one of those places until the tragic assassination whose deaths by car bombing in broad daylight was clearly a message to journalists everywhere. Her son matthew is a staff member of the international consortium. It sketched out a self incriminating conspiracy theory. The first round could be a decoy they postulated. Once they received validation with new information to be published with senior officials of the government to justify increased interference and sanctions from the obama administration. Also to single out by name king for independent media organizations it said into the attack on the social drama from various countries reporters and editors wrestled with the data in the Public Interest<\/a> in europe and the United States<\/a> and with the latin america it is a vital issue but secondplace to political oppression. In ecuador the president denounced the project participants on twitter and to included the reporter social media accounts that was damaged with nasty comments. That was demonstrated with the two newspapers. The ecuadorian newspapers ran their stories without a byline after everybody else had already published and then they were sourced and not fully documented so the countrys attorney general and the secretary of intelligence were in the data. But the owner had alerted them of the bureau chief from that the company was created after it was threatened to shut it down as part of the efforts to rein in the media he had the orwellian named citizen participation social control counsel. A few years earlier. They sent letters demanding that they appear to hand over the data and respond to questions. They were declining to appear to explain that they did not have the data. The showdown appeared imminent. But on the intervening saturday 7. 8 magnitude earthquake devastated ecuador. Turning to the victims and the damage reporters were saved thank you very much that is all i prepared for a reading but i would love to take your questions i suspect we have knowledgeable people in this audience. How do they fall into this . Where apple really shows up is the Paradise Papers<\/a> that is slightly different they didnt have the same model it was more highend and with those corporations they try to stay away from american there were more than 30,000. So what is interesting about apple is they have come under quite a bit of attack with the European Union<\/a> because they used ireland to avoid millions of dollars of taxes and they are funneling profits into ireland instead of where they were made in europe. Because ireland has a very low tax rate but because the European Union<\/a> has started to clampdown on that they contacted appleby said find us another tax haven where we can continue to do this. Obviously this is not what they were saying publicly in fact tim cook testified before congress we will not do this. But the Paradise Papers<\/a> show that it is ongoing. If you try to find people that are evading taxes if you feel they are in the wrong. But at the same time then you have other countries that are corrupt and those citizens trying to protect their wealth. What are your lessons from this . This is a great question and observation. You are in ecuador and your neighbors are off showing their money. Because you would feel like a chump. And you dont see the results of that to say this will not work anymore. What is interesting about the Paradise Papers<\/a> is that there has been a global elite no longer feeling attached to any particular nation. And with those rules that govern most of us i think it has to happen from below and individual citizens. That if you do business you need to pay your taxes here. Many live in these tax havens because there was a highvolume low cost model and a way to democratize this behavior but that has changed little bit have to be much more wealthy but it has moved me a little bit so there is so much pressure with those tax savings people are moving to singapore and dubai for this type of behavior it is very difficult to stay about one of the ways so these bear shares they are a certificate a share of the company that if it has to shares and you own the certificates you own the company if i give these two shares to you then you on the company Law Enforcement<\/a> hates this because it is easy to move assets without any identifiable traces it is used by many launderers so the lawyer has to have control of it the only places that offer that our library a and Marshall Islands<\/a> and liberia run out of the United States<\/a>. But you can see in the jurisdiction and then in mate still offer them. So for this thing that evolves to continue to do that same behavior. Have you been to the island north of new zealand . And hearing that he committed suicide last month. He said to me he obviously went to see the most stars in the sky. And to talk about this later in the book and then got frustrated so i will up the stipend if you quit we will just give you the 3 million get out. It wasnt minting Anonymous Companies<\/a> they were doing phone numbers. I havent heard about the suicide but but in the secret world to believe that it will stay secret. But then they have these unintended consequences to u. S. Intelligence services has conjectured or postulated part of the reason but amir putin attacked the dnc is because he was so upset about the revelations of the Panama Papers<\/a> leaving the obama administration. That is one reason he decided to go after the election. But as we hear the attorneys are going around the planet to create a network to hunt down the hidden assets. So talk about unintended consequences and maybe this is where the solution comes from. That has been going on for a while depending on how successful they are but you really cant expect real change in that way but there are some Great Stories<\/a> i think dimitri is a Russian Oligarch<\/a> and he got involved with a multibilliondollar divorce and his wife accused him of hiding assets and they went to war and then managed to get a couple Million Dollars<\/a> out of him. Did i hear you say the secret world is responsible for high rent in miami . Basically all of the foreign nationals are buying up properties in cash through Anonymous Companies<\/a> and often times and question all providence where that money is coming from. Maybe not even living there which is a host of issues that crowds out people of more modest means who also want to buy properties but they are not available or pricing has skyrocketed. We were neighbors and former partners with the subjects also know a few lawyers involved. The sense the americans were never implemented or incriminated anything else . Great question. There are several hundred investigations underway and in panama city there are at least six different criminal proceedings it was more than two months it is quite funny actually they were detained or prosecuted for their role of operation Carte Blanche<\/a> Carte Blanche<\/a>. So the houses were searched and they would present themselves before the Public Ministry<\/a> and ramon who could be a hothead gave a press conference he basically accused the president and others to be involved in corruption that he was accused of and he believes that is why he ended up in jail for two months. Now there are several proceedings and then they have their own proceeding to figure out who hacked them that has different consequences depending on which it is. Are you ever threatened . Not personally. I was lucky one dash working out of new york and not with not a problem but that for our russian colleagues and others really had to be careful we did have a panamanian partner and that lead reporter needed a bodyguard. When they found out and send them questions, they singled out her and intimated they knew who she was so they said was prudent to get her a bodyguard. So personally, no we are fairly safe. And then the heavy lifting comes with processing so is at the face of Investigative Journalism<\/a> . To give you a Christmas Present<\/a> every so often . That is a big part of it. This big data dump is part of the future. There is so much now it is acceptable it is hard to keep under wraps. And now it is good to make this data accessible through their own secret platforms and to make them searchable. He came as a pdf for the audiophile and they managed to crunch the data to make it searchable so this is no easy task to pull off we will be seeing even more of that. Is there any coordination or endgame . The biggest players they know each other and attend conferences and they are very agile to lobby for their business. Through with those tax bill the republicans are discussing to be back those efforts for industry but there is just too much money involved. That is formidable. Talk about the Shell Companies<\/a> and then to raise the rent in miami but but this is a good thing for our city but now i see the cartoonist money and i think are we the winners . They are putting money into the economy. But then you cannot afford to live here. And a lot of the money is flighty. How much is preserved for taxes . Look at the infrastructure it is falling apart. Part of that as you know inability or abruption of the politicians of Miamidade County<\/a> but also even though money comes in for the services. There are taxes on hotels that are quite high. There is a benefit but it is not equal across the board. Without overall worldwide stock market if there is something they can do that is unknown to the rest of us . Global capital moves around. I have been talking a lot today about witt coin the 19 it is a favorite tool of the money launderers because there is more attention but in fact you is mobile because the money that went to banks is no longer going there because they have more rigorous systems. And now will have economic consequences. That is the way the system works to control that. But this actuation crosses political ideologies so it is dangerous it is the left and the right there are plenty of democratic donors and with the Paradise Papers<\/a> one of the biggest donors that were higher than anybody knew because he had a trust that nobody had ever heard about. His plan was to use that as a charity he says. [laughter] that was completely unknown. Africa is a poster child and then to use Anonymous Companies<\/a> to pull those resources from africa without putting any money back into africa or not answer it to what they take out. The former head of nigeria putting hundreds of millions of dollars into a Swiss Bank Account<\/a> and they discover that 20 years ago and they are now getting the last bit back to nigeria it is a huge problem in africa and they can talk at length about transfer pricing because they are increasingly aware the system is a great disadvantage to them. Do you have any sense how the money people flocked to one place or another . How do all of them go to one place . What is that information all pipeline . Just what you would expect conferences and pamphlets and a great anecdote in the book there is a big debate with all of these pamphlets they want to hand out to tell you exactly how to avoid paying taxes in the United States<\/a> but they have to fly through the United States<\/a>. So they talk to one lawyer who was wellversed and he said they key is send it by mail then you can go to the United States<\/a> and you dont have to worry to tell them how to avoid paying taxes. But there are all kinds of conferences and different ways. This system is run by lawyers, accountants, and bankers to let the clients know how to use it. Thanks were big players in that a certain point it got too hot for them and they pushed it out the door but kept it going. There were relationship managers to set up these Anonymous Companies<\/a> and make it so they were no longer officially a member of the bank both with the bank and the client. So there is a hot potato game. Even though they set them up you say it is that intermediary. And nobody will really take responsibility for it. Have you seen evidence of a subpoena to be successful with the grand cayman bank . I know those that are multinational, i cannot remember which one in particular but arent there some inroads within order from u. S. District judge to invade the information barrier . There is a story i tell him the book about a lawsuit in nevada. He had a franchise and they claimed that really it wasnt part of the firm it was a separate entity and what we found through the documents and then to control everything but they proved this city area that the court has a right to depose the get information directly. So if you could show the bank was not operating independently you could use the same legal logic. All of the hiding of resources and money one of the greatest threats . Because of them wanting to hide the information . That those that call journalism fake news that is more than the offshore system in general. One of the effects is the publication that is the diminishment of the attorneyclient privilege because they are worried but there is a widespread belief that setting up the anonymous Shell Company<\/a> or trust is not legal activity. But the irs and Justice Department<\/a> they dont like to lose or invest resources it isnt guaranteed they will win. So a lot of people think it just isnt covered. There is a whole chapter but in particular to talk about those ports because of the high value of another commodity investment and then wait for that to appreciate so that dovetails very nicely and issues to cross the artworld with a group of collectors that might have brought a painting that could have been stolen and then to buyback then there is another story about the first big modern art auction. And the paintings that people thought belong to the collector family actually it was already purchased but nobody knew about it. Because it went to the annuity. So that world is changed within the same way with that offshore system to make any indication that the investigation from Robert Mueller<\/a> is part of the exploration . That is a great question. Looking at cybercompanies and clearly those allegations that sieber has been a bad actor in the world to buy the anonymous Shell Company<\/a> you have a bank account that comes with it. You didnt even have to open a bank account it became attached to the company nobody knew who was behind it. So to be accused of that system for Money Laundering<\/a> how to have a crack team of investigators or prosecutors. So i think they will be pushing those with a lot of those connections and does business with a lot of different people including ties that is a big part of the will scandal that was getting rid of the sanctions that it triggered. Wilbur ross was in those papers and it is interesting because we had some bad days recently but he wasnt exactly clear or specific in his testimony or his filing with the shipping business with russians was a fine law of Vladimir Putin<\/a> that was a bit of a scandal that he lied about his net worth. But again it is the ability of these offshore companies to dodge that transparency. And you got in the feedback that you got this wrong . Yes. Thankfully not so much that you got it wrong but you got it right. And it isnt black and white all the time and to have an offshore company but they said 95 of businesses to help avoid taxes but that is not illegal. It is evading taxes there is a distinction. Those that appreciate the fact say in the book the biggest players and influencers are the United States<\/a> and the u. K. And those are the biggest players and delaware is a monster coming to Anonymous Companies<\/a> 1 billion per Year Associated<\/a> with selling these companies. According to the Justice Department<\/a> with Eastern European<\/a> so those panamanians felt bruised and beaten and panama on zoning Corporation Law<\/a> comes from delaware. So to make that clear before you decide responsibility appropriately. Thank you so much. [applause] we will be signing books. I was looking at some of the question and one thing that i would say is as all of you know from watching the Trump Campaign<\/a> that i was out in los angeles and the library canceled on me. There is a fan test test eric government now run by the government so now to call margie rawson instantly picked up. Instantly. That was so wonderful you are a wonderful editor always available. But i didnt want to come back to my first book with gregory. And with that distinguishing characteristic but with regnery famously they have been able to take the books no new york publisher would publish them and then they become bestsellers. One of those was like from senator kennedy. And then after swimming out of the chappaquiddick river. So years later that new phone no new york publisher but then regnery publishes a 27 weeks it was flags of our fathers not flags of our mothers and then published it 44 weeks on the bestsellers list in this trump era this hysteria it is every day somehow the Facebook Page<\/a> so then you would notice upfront that you could not drive a mile without seeing the trump sign. [inaudible conversations] i need water. 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