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 Close These Refuges for ScoundrelsPosted on Apr 2, 2009By Joe Conason While the leaders of the world’s largest economies debate stimulus and regulation in London, let us hope they do not forget about crime and punishment. Rooted in the most massive swindles in financial history, the global crisis offers an unprecedented opportunity to prosecute the criminals whose machinations steered us toward disaster—and to deter them in the future. Unfolding on the very doorstep of London’s G-20 meeting and in Washington is the instructive story of Joseph Cassano, former head of American International Group’s financial products group, whose role in his company’s crash—which triggered the ruin of world money markets—may soon lead to criminal charges against him. What the Cassano story points up once more is how tax and regulatory havens across the world encourage nefarious conduct, lack of transparency, evasion of taxes and corporate criminality. According to a new investigative report from “ABC News,” Cassano is the subject of a criminal fraud investigation by the FBI that is examining how he and his colleagues in AIG’s financial products division set up the scheme to insure more than a trillion dollars of junk mortgage paper held by major banks. He walked away from those bad deals with over $300 million in personal profit. Aside from the fascinating matter of how he managed to commit these catastrophic bets without interference from his superiors, the most pertinent question is how he gamed the gaping loopholes in the international regulatory and legal systems. Evidently Cassano established dozens of separate companies, including many that were located offshore, to handle the allegedly fraudulent transactions—a maneuver that was designed to keep the deals effectively off the books of AIG and to mislead regulators in the United States and Britain. The crooks at Enron Corp. used the same techniques, essentially, to conceal what should have been reported on their corporate balance sheets—and they too used offshore locations as instruments of fraud. Jack Blum, a former Senate staffer who helped to lead the investigation of the Bank of Credit and Commerce International more than a decade ago, told ABC reporters that the abuse of tax havens “is the other very important issue underneath the AIG scandal. All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion.” Advertisement At the highest levels, those fraudulent transactions were aided by the existence of “secrecy spaces” in nice quaint places from Switzerland to Anguilla, where the malefactors could rely upon local authorities to collude in their conspiracies. Not only do the governments in the tax and regulatory havens pretend not to see what their corporate visitors are doing, but they actively shut out the scrutiny of anyone who might take action. The costs imposed on the world by those selfish little entities are too great to ignore any longer. Vast amounts of taxable wealth, last estimated to exceed $12 trillion, are hidden in the protected banks of tax-haven principalities, with annual losses to the U.S. treasury that may well be greater than $100 billion. Those same places appear to have provided a regulatory twilight zone where financiers like Joseph Cassano could run wild and ruin the rest of the world for profit. The urge to cheat on taxes and the desire to evade regulation represent the same destructive impulse, which governments around the world should now take steps to suppress. Joe Conason writes for The New York Observer. © 2009 Creators Syndicate Inc.  Previous item: The Nobelists vs. Obama and Geithner Next item: Silence Meets Despair of Afghan Women CommentsAre you a Truthdig member yet? Login now, or register with Truthdig. Add Your Comment |
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By vanzari auto, February 19, 2010 at 12:57 am Link to this comment
(Unregistered commenter)
Surely will forget all those murders and tortures. Will remove all the slate.
Report thisBy KDelphi, April 7, 2009 at 3:02 pm Link to this comment
garth—Agree with everything, save the “stupid” part…that is their best trick. They convince people that they are “stupid” when they really just dont give a rat’s ass about anyone…
Stabinow voted for THAT?! What a dispappointment. But, they never fail to disappoint. It doesnt seem to bother them at all. “
Report thisMove on”! Right…
By garth, April 7, 2009 at 8:09 am Link to this comment
KDelphi,
I agree. I still find myself falling into the mistaken belief that Democrats are somehow better than Republicans for workers. Then, someone like Senator Blanche Lincoln comes out against the union voting bill, bowing, no doubt, from the pressure from WalMart. There’s a myriad of other examples.
It has become painfully obvious that these elected officials stand for nothing, and we are being played over and over again.
Report thisI agree with Max Shields on another thread. To paraphrase, we should form something like a shadow government and a shadow (underground) economy based on regions, say bio regions for food, etc.
According to the status quo economists we’re on the verge of a rebound. According to honest economists, the workers cannot go any further into debt and the market can’t sucker the money that’s waiting cautiously on the sidelines. In short, we’re locked into a path that leads directly to a stepp drop into a depression. Obama, playing with words, said he does not want the U.S. to “slide” (emphasis on the word slide) into a depression. (He’ll wake in the fall and say to Michelle, “Wha happen?”)
Meanwhile, sleazeballs like DeLauro in CT and the other jerk with the bow tie in Oregon are trying to sneak bills through the House that make it illegal to grow vegetables and collect rainwater, respectively.
As far as the Senate goes, you have to go pretty far to find anyone as stupid as Jim (Dimwit) Dimint from SC, Session from AL, Imhofe from OK and the Democrats own Debbie Stabenow from MI, the blowzy air head who voted for the Bankruptcy law. She’s said to top them all or sholud I say bottom.
By KDelphi, April 6, 2009 at 7:54 pm Link to this comment
msgmi—Whats the diff? they are the same people. Yes.
Report thisBy msgmi, April 6, 2009 at 4:23 pm Link to this comment
(Unregistered commenter)
Could it be that the Cassano’s of Wall Street were enabled by their colleagues on Capitol Hill. They both have lost contact with Main Street a long time ago.
Report thisBy KDelphi, April 6, 2009 at 11:44 am Link to this comment
garth—maybe the problem is the “worship” of great personhood…
Vladimir Ilyich Lenin quotes:
Report this“All our lives we fought against exalting the individual, against the elevation of the single person, and long ago we were over and done with the business of a hero, and here it comes up again: the glorification of one personality. This is not good at all…”
good at all
By garth, April 6, 2009 at 5:25 am Link to this comment
If they’re going to add space to the neon sign in Times Square that flashes the national debt to a quadrillion dollars, it means that we are going to be stuck with the whole debt left by the credit default swaps of the big banks. But, relax. It will all come out in a payroll deduction so you’ll barely miss it. Of course, if Obama can get the other countries to chip in, it might lighten our load a little.
Report thisIt seems odd to me. In this country that cherishes the idea fo great personhood, in fact, we teach our history courses based on that premise, that we cannot find one now.
The Revolutionary War brought out George Washington. The Civil War, Abraham Lincoln. The Depression and the Second World War, Franklin Delano Roosevelt. Now, two wars that were once called the long war, and something that might be the greatest bank heist in history that will bankrupt us and we get, Bojangles.
By Jim Yell, April 6, 2009 at 4:51 am Link to this comment
(Unregistered commenter)
This issue has not been addressed by decades of Democratic and Republican Administrations.
It can’t be because they didn’t know, so it clearly is because they all use these tax havens to cheat and enrich themselves.
These people always talk about their money, but a lot of their money is generated by our government from our taxes. A lot of their wealth is generated by corrupting our elected officials.
Not only do these tax havens need to be shut down, but we also need to recognize and legislate against the bribes paid to elected officials and appointed officials that masquerade as book deals, over the top compensation for speeches given and supposed campaign contributions.
Our government is rotten to the core. We voted for change and appear to be getting more corporate graft.
Report thisBy KDelphi, April 5, 2009 at 12:09 pm Link to this comment
SteveL—To the contrary, Under capitalism, I think they are supposed to be in a positon of “he who dies with the most toys wins”.
Have you listened to some of these guys?? They are incorrigiable! The people on Wall St (and, transferred to Wall St) dont give a rat’s butt about anything but themselves. Listen to them. Believe what your gut tells you about them. It is much more accurate than their words!Do you hear anything about common good, or fair play, or work being its own reward? How about doing what best for your country’s people—let alone citizen of the planet!(patriostism is the last refuge of scoundrals—truly, it is indefense of Empire , which is in defense of money—nothing else)
Report thisBy SteveL, April 4, 2009 at 3:47 pm Link to this comment
The heads of these various financial institutions are supposed to be in positions of trust. Too bad they don’t see it that way.
Report thisBy KDelphi, April 4, 2009 at 11:22 am Link to this comment
There is a “New Way Forward” protest on Apr. 11th, and there is a petition to sign. There is a list of reforms and regulatins that could occur, to stop the banks from putting this bailout on the backs of the poor and working classes.
http://salsa.democracyinaction.org/o/771/t/8404/petition.jsp?petition_KEY=1889
This is the petition:
I Pledge to Take Action!
12 million unemployed. Foreclosures up 81%. Wall Street has taken over. We must break up the banks and never again let them get so big that they distort our politics and take down the economy.
If it’s too big to fail, it’s too big to exist. Dismantle the power of the financial elite and make policies that keep a new crop from springing up. We want our economy and politics restored for the public. END
William Black was on Bill Moyers lasat night, talking about how , despite protests that “all was legal”, FRAUD was very obviously commited, in many of these instances. (He said that Madoff is actually a very small player!)
On Wash Journal (c-span.org), I could scarcely believe nmy ears, when I heard Kevin Hill, of McClatchy News tell the host that the “signs saying that capitalism isnt working are wrong” (ie the G-20 protests)and that he was “amazed at how well it HAD worked”! He said, that the wrong-doers “had been punished by their corporations going bankrupt”!! They should be i n prison!
http://www.c-span.org/Watch/watch.aspx?ProgramId=WJE-A-41424
Is the uS insane??
To thos who support tax havens (cheats) please remember that the uS is not only AT WAR, we are also bankrupt. It is about time that the upper 98th Quintile started , at least PAYING their fair share, if not fighting the g-damn thing!!
Is see garth’s comment above, thanks. It is worth viewing online…http://www.pbs.org/moyers/journal/index-flash.html
Report thisBy godistwaddle, April 4, 2009 at 7:50 am Link to this comment
That these people are still living is a wonderment to me. No descendent of good American stock would allow it. Oh, wait. Sheep.
Report thisBy garth, April 3, 2009 at 6:32 pm Link to this comment
Check out William G. Black, author of “The Best Way to Rob a Bank is Own One”, on the Bill Moyers Show Friday, April 3 2009.
Report thisBy wildflower, April 2, 2009 at 7:58 pm Link to this comment
RE Joe Conason: “Vast amounts of taxable wealth, last estimated to exceed $12 trillion, are hidden in the protected banks of tax-haven principalities, with annual losses to the U.S. treasury that may well be greater than $100 billion.”
I vote to close the refuges for these crooks and scoundrels as well. It’s also good to see that investors are finally suing some of these directors:
“. . . a retired California judge filed a lawsuit in Los Angeles accusing several AIG directors of authorizing about $1 billion in bonuses to executives and workers, including $400 million doled out at the financial products unit considered to be at the heart of the insurer’s problems.
The complaint was one of dozens filed in past months against the U.S. insurer, which has become a lightning rod for populist anger after shelling out hundreds of millions of dollars in bonuses despite raking in a government bailout to stave off its collapse.
In his suit, former judge John Bible—an AIG shareholder—accused several directors of falsely claiming that the bonuses were needed to retain employees, to deflect criticism from their decision, his lawyers said in a statement.
http://uk.reuters.com/article/marketsNewsUS/idUKN0147108720090402?pageNumber=1
Report thisBy Scoppertop, April 2, 2009 at 6:10 pm Link to this comment
(Unregistered commenter)
Thanks for a great article. This concept isn’t simple enough for the clueless to understand yet… they need to be told that the money the scoundrels have hidden in offshore accounts is their monthly rent or mortgage they’ve been paying all these years. Where do people think all that money came from?
Report thisBy Kaelieh, April 2, 2009 at 8:45 am Link to this comment
(Unregistered commenter)
I believe Switzerland is starting to lose some of its prestige as the banking nation and appeal to tax evaders, in the former because of selling off their gold reserves and the recent artificial lowering of interest rates by their central bank. Whereas for the tax evaders the key concern is that Switzerland is synonymous with secret and illicit actives. (By Swiss law for the banks to act as money launders is a big no-no and gets more than just a slap on the wrist. But by their secrecy laws, which the evader likes, and more importantly their own tax laws, which are very different especially concerning international trade as compared to other western countries, notably the United States. As the US is the only major country that taxes based on citizenship (the only other countries with such policies are North Korea and Soviet Russia). Other countries tax based on residence.
Personally, I don’t hold much hostility towards Americans using tax havens. Which seems sorta weird since I believe in progressive taxation. (Putting the cap at 250,000 is just ridiculous when there is such a huge gap between those making 250,000 and say 500,000 a year. I really think that 500,000 should be the top bracket.) I think make lack of disdain for them is that once I find another job I fully intend to boycott federal taxes as an act of civil disobedience; rejecting their infringement of my inalienable rights, their disregard for the US Constitution, and in protest of their imperialist foreign policy, misappropriation of revenues, and excessive government spending and debt. (Granted I’m positive that they are motivated by greed and not my Thoreaun position, either way we’re both not paying our “proper” tax.)
Granted, I’m sure this will be considered an unpopular assertion, but since I hold such strong Jeffersonian principles I’ve got to ask, in trying to clamp down on tax evaders are we also going to trample on another nation’s sovereignty? It honestly concerns me because I feel like we do not have the right to violate their laws because of our nation’s (American and European) bad apples are trying not to pay their due tax. Yes, the tax heavens are equally guilty by enabling them, my chief concern is with expanding government. Sure it’d bring reveune back home and thus benefit us, but each step that violates another nation’s sovereignty leads to another and another until it’s a commonly excepted practice (like our federal government dictating to law on clearly state matters). Keeping your sovereignty is essential to protecting civil liberties, so how do we stop our countryman’s dubious activities and not violate other countries’ laws and rights in the process?
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