May 15, 2019

May 14, 2019: Lots of Piggies, Dirty Little Secret, Enter The tRUMPs




Everywhere there's lots of piggies
living piggy lives
you can see them out for dinner
with their piggy wives
clutching forks and knives
to eat their bacon”

              ----George Harrison “Piggies”

When one thinks of tax havens one conjures images of the Cayman Islands, Switzerland or, perhaps, Ireland. But the biggest tax haven in the world is the United States, where “there is 'little appetite' for helping foreign governments retrieve money laundered within its borders”. Indeed, bowing to pressure from the banking industry, the United States stands alone in refusing to join an agreement forged by the Organization for Economic Cooperation and Development requiring banks to “report foreign accounts to the tax authorities in the account holders' home country”. (1) As a result, Franklin Foer, writes in The Atlantic:

This obstinacy stood to subvert everything the country had done to lead the fight against dirty money: while the U.S. can ask almost any other nation's banks for financial information about American citizens, it has no obligation to provide other countries with the same. 'The United States had bullied the rest of the world into scrapping financial secrecy...but hadn't applied the same standards to itself.' (2) A Zurich-based lawyer vividly spelled out the consequences to “Bloomberg” 'How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour...That 'giant sucking sound' you hear? It is the sound of money rushing to the USA.” (3)

In 2010 when “USB admitted to hiding 20 billion in American money” the problem became to big to ignore, almost, anyway. Congress moved to pass the Foreign Account Tax Compliance Act (FATCA), wherein foreign banks cannot hold American cash without notifying the IRS—failure to comply risks hefty fines. Congress did nothing, however to close the loophole in the Patriot Act dealing with foreign money finding a haven here.

Here was anti-corruption leadership at work—and U.S. waffling on display”, writes Foer. “According to one powerful strain of American exceptionalism, the nation boasts superior financial hygiene and a bedrock culture of good government. Indeed, the U.S. government has devoted more attention to money laundering than perhaps any other nation on the planet. But the bar isn't very high, and the vigilance has its limits. In 2011, the Obama administration sought to collect more information about foreigners' bank accounts and to share it with the relevant home countries. But banks—along with their lobbyists and intellectual mouthpieces—worked furiously to prevent the expansion .“ (4)

The closest the nation has come to real regulation was embodied in The Patriot Act, legislation following the attacks on 9/11. Banks are now required to report suspicious activity, suspicious money transferred from abroad. And Banks face serious criminal charges for ”failing to establish sufficient safeguards against the flow of corrupt cash”. (5)

But there is a catch, there is always a catch. “Every House district in the country has real estate, and lobbyists for that business had pleaded for relief from the PATRIOT Act's monitoring of dubious foreign transactions. They all but conjured up images of suburban moms staking FOR SALE signs on lawns, ill-equipped to vet every buyer. And they persuaded Congress to grant the industry a temporary exemption from having to enforce the new law.

The exemption was a gaping loophole—and an extraordinary growth opportunity for high-end real estate. For all the new fastidiousness of the financial system, foreigners could still buy penthouse apartments or mansions anonymously and with ease, by hiding behind shell companies set up in states such as Delaware and Nevada. Those states, along with a few others, had turned the registration of shell companies into a hugely lucrative racket—and it was stunningly simple to arrange such a Potemkin front on behalf of a dictator, a drug dealer, or an oligarch. According to Global Witness, a London-based anti-corruption NGO founded in 1993, procuring a library card requires more identification in many states than does creating an anonymous shell company”. (6)

The dirty little secret is that the United States has long been a haven for money-laundering and recent developments in the explosion of organized crime—particularly foreign organized crime has made New York, along with Los Angeles and Miami cesspools for money laundering. This is because, like London and elsewhere, high-end properties purchased by shell companies are the preferred avenues for skirting the reporting requirements and not only keeping the source of the money hidden from view but legitimizing future transactions—thus 'cleaning or laundering the money' by future sale of the properties.

All of this is known. What is telling about Foer's report is the link between these real estate transactions and the wholesale plundering of the Russian Federation by the Russian oligarchy. What happened in Russia after the fall of Communism was plunder on an unprecedented scale. “When Berkeley economist Gabriel Zucman studied the problem in 2015, he found that 52 percent of Russia's wealth resided outside the country.

The collapse of communism in the other post-Soviet states, along with China's turn toward capitalism, only added to the kleptocratic fortunes that were hustled abroad for secret safekeeping. Officials around the world have always looted their countries' coffers and accumulated bribes. But the globalization of banking made the export of their ill-gotten money far more convenient than it had been—which, of course, inspired more theft. By one estimate, more than $1 trillion now exits the world's developing countries each year in the forms of laundered money and evaded taxes.” (7)

Enter the tRUMPs.

In 2017,” Floer tells us, “Reuters examined the sale of Trump Organization properties in Florida. It found that 77 of 2,044 units in developments were owned by Russians. But that was likely an incomplete portrait. More than one-third of the units had been sold to corporate vehicles, which can readily hide the identity of the true owner. As Oliver Bullough remarks, 'They might have belonged to Vladimir Putin, for all anyone else could know.' Around the time that Trump took up occupancy in the White House, the PATRIOT Act's 'temporary' exemption for real estate entered its 15th year.” (8)

And it isn't just in Florida where tRUMP engages in highly suspect business operations. Statistics for Trump Tower show similar behavior even after he was elevated to the Oval Office. Then there were properties in Panama and Azerbaijan. It is a violation of the RICO statutes, governing the prosecution of organized crime, to deal with known criminals in any business transaction. And ignorance of the law, or the nature of persons with whom one is doing business is no excuse. One is expected to know one's business partners. Disgustus and his organization have violated this law in several jurisdictions. But that isn't the end of it.

The deal usually goes like this. Disgustus and his family put up no money but the name goes on the building. He gets a cut for that. But his real value is that his organization manages the place and it is in the management, the purchase agreements, that one finds the real meat of the matter. For in exchange for the prestige and the money, Disgustus and his family receive the money from the crime syndicates and make their theft whole.

One must ask, in view of the revelations of The New York Times that Disgustus lost over a billion dollars in the 10 years leading up to the fall of the old Soviet Union, just where he is getting his money? How is it that in the wake of such a colossal failure we find him paying cash for his acquisitions? Where is he getting his money, and to whom is he beholden? Is it mere coincidence that the plundering of the Russian Federation began in earnest just about the time that the Russians came to the rescue of America's biggest loser? I'm sure the Russians were desperate to find someone, anyone, to help stash half the country's wealth. And so, the search began for a pliable “useful idiot.”

This, too, is the legacy of the Generation of Swine.

An Br'er Putin, he jus' laugh and laugh

Impeach and Imprison
_______________

  1. Foer, Franklin. “How Kleptocracy Came To America” The Atlantic Magazine. Vol. 323. No. 2. March, 2019. Pp. 86-95. See page 91
  2. Foer is here quoting Oliver Bullough Moneyland:Why Thieves and Crooks Now Rule the World and How to Take It Back.
  3. Op. Cit. Page 91.
  4. Ibid. Page 90
  5. Ibid. Page 88
  6. Ibid. Page 88-89.


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