Archive | Panama Papers

The Panama Papers ICIJ Investigation

Thanks for Secrecy World Reviews

Secrecy World I’m feeling especially thankful today. And grateful, very grateful.

On Tuesday my book, Secrecy World, was published. We had a fantastic kickoff event at Barnes & Noble. Thank you to all who turned out.

As all books are, Secrecy World was a true labor of love. And, as with every book, the final product exists because of the support and insight of people other than the author. My list includes everyone from my superhumanly patient, brilliant wife Eve to sharp-eyed Holt editor Paul Golob to crackerjack reporter Ryan Chittum. The book also depended on the work of hundreds of kickass journalists around the world who form the International Consortium of Investigative Journalists. I am so thankful – as we all should be – that they labor on our behalf. Please see the acknowledgements in Secrecy World for a full list of all those who deserve thanks.

Now, the early reviews are beginning to arrive. And I am pleased for those who have read the book and found it meaningful, and even fun.

People like Joe Tauzer, who wrote on GoodReads:

This is book is great especially in the audio version! The reader is the author. This is not a liberal or conservative book, it’s an explanation of how what was learned in the Panama Papers. This book exposes how hiding money to avoid taxes is so universal among the world’s elite. How one companies hack has given the layman a window in to the creative and grotesque of accounting of the worlds rich.
ICIJ is the organization we have to thank for compiling most of the data from the hacks. They have a great website which I recommend you look in to and try your alma mater in the search bar. I found my former college along with many of the colorful characters in this book, in the ranks entities who own offshore accounts.

David, also on GoodReads:

A lot of this very readable book is about the efforts of a large and far-flung team of investigative journalists who, often defying personal egomania, stifling bureaucracy, and the 24-hour-newscycle-driven desire for content now at any cost, worked effectively as a team and published simultaneously across the globe for maximum effect. There are many interesting (in an enraging kind of way) digressions in the story on the path to this end. For example: the 292-foot yacht Donald Trump bought in 1988 (l. 396) had a previous life as a floating brothel for a corrupt arms dealer, and former Vice-president Dick Cheney “was no stranger to offshore companies” (l. 1181), especially during certain Wyoming land deals in the 1990s.

David Wineberg, who wrote on Amazon:

Jake Bernstein has followed the leads backwards and forwards. He fills in the details of who the players are and how they got there. He also takes some minor side trips to corrupt practices like drug dealing, a slave ship, abandoned construction and a fraudulent reinsurer, to show how these players are actively ruining the lives of others with their fake firms. There is even a side trip to the Swiss tax-free art warehouses, where a good hundred billion dollars in precious art is hidden from view and taxation.

The book is structured like a tree. Each of the roots gets an airing, and they all lead up to the visible trunk – Mossack Fonseca, the Panamanian law firm from which all the documents were leaked. The roots consist of Mossfon bureaus around the world, dealing with various corrupt governments, corrupt banks and eager clients. The crown is the billowing scandals the journalists perpetrated, going off in many directions, covering the sky with corruption on a truly global scale.

Eileen Ruth, who wrote on Amazon:

This book reads like a suspense novel. If you want to learn how not to pay your taxes, this is a must read. It seems that the rich from all over the world are doing this. Whether it’s thru shell companies or art work.

Brenda Jubin, who wrote on her blog Reading the Markets, the book was “both riveting and dispiriting”:

Secrecy World is a must-read book for anyone with an interest in, and perhaps a sense of outrage over, how the rich protect their wealth. And, I should note, it’s not just through secret offshore accounts. Delaware and Nevada allow incorporations with virtually no due diligence.

Kirkus, which gave it a starred review:

Mossfon remains a maze worthy of a Cretan palace, but Bernstein does first-rate work in providing a map to a scandal that has yet to unfold completely.

Have a safe and happy Thanksgiving everyone!



EU Committee Report on Panama Papers

It’s worth a quick revisit to the recent work on the secrecy world by a European parliamentary committee. Formed in the wake of the Panama Papers revelations, the committee approved its final report after an 18-month investigation.

A vote on the report by the full European Parliament in Strasbourg will come in December. The conclusions won’t change but the recommendations are likely to be weakened. There are simply too many powerful interests that favor the status quo.

Nonetheless, the battle lines are drawn.

The report by the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) is damning. It concludes that $2.6 trillion of financial private wealth in Europe is held offshore, leading to tax revenue losses of $78 billion annually. The report also estimates that money laundering accounts for around 2% to 5% of GDP worldwide.

There is plenty of blame to go around for the prevalence of tax evasion and money laundering from lawyers to accountants to company incorporators and tax officials. The list of malefactors is a lengthy one. But the committee was especially truculent toward European member states that have openly flouted EU rules for decades.

EU member states that received a special mention for failing to implement money laundering regulations were the United Kingdom, Luxembourg, Malta and Cyprus. It’s notable that Malta, Denmark and Hungary didn’t even bother to respond to the committee’s inquiries.

Luxembourg in particular was taken to task for prosecuting the whistleblowers behind the Lux Leaks investigation but doing nothing to punish the multinational accounting firms that orchestrated tax schemes to rob the public treasuries of its neighbors.

Shortly after the Panama Papers investigation was published, President Barack Obama gave a press conference. Obama noted that the true scandal of the secrecy world lay with what was legal. The EU parliamentary report points out that legislation around money laundering and who is behind company ownership in the United States, while less ambitious than in the EU, is more effectively enforced.

The committee report paints a picture of legal arbitrage where states benefit from the European Union while they actively sabotage fellow members. It details a number of loopholes that have hobbled European action. Member states fail to report tax information to their neighbors. Despite obligations to create registries of beneficial owners of companies, not all member states have complied nor made this information available to the financial investigative units of EU members.

Tax evasion in many member states is still not a precursor crime for money laundering.

“In many Member states, lawyers cannot be sanctioned for advising non-residents on how to evade tax or launder money in another jurisdiction,” the report notes.

It will be interesting to see if the committee’s more commonsense recommendations such as creating definitions for tax havens, tax evasion and tax avoidance and implementing the anti-money laundering laws already on the books will prosper.

What the report makes abundantly clear is that Europe has a long way to go before it gets a handle on its money laundering and tax evasion problem. What is less certain is whether the political will exists to change that reality.