Maltese reporter who exposed high-level political corruption killed in car bomb

Daphne Caruana GaliziaMalta’s best known investigative journalist, whose reporting about offshore tax evasion prompted a major political crisis in the European Union member-state, has been killed by a powerful bomb near her home. Daphne Caruana Galizia, who died Monday, aged 53, gained international prominence last year, when she used information from various sources, including the leaked “Panama Papers”, to accuse senior members of Malta’s government of implication in tax-evasion schemes. Her reporting led to the resignation and eventual re-election of the country’s Labor government last year.

Caruana Galizia began her career in the late 1980s as a regular columnist for The Sunday Times of Malta, before being appointed associate editor of The Malta Independent. She eventually launched her personal English-language news blog, called Running Commentary, which became one of Malta’s most influential websites. The site’s popularity was only augmented by the fact that it reported scandals affecting both of Malta’s main political parties, the governing Labor Party and the opposition Nationalist Party. In April of 2016, following the release of the so-called Panama Papers, Caruana Galizia accused senior members of the Labor government, as well as the prime minister’s wife, of being involved in large-scale tax-evasion schemes and receiving bribes from oil-rich Azerbaijan’s ruling family. The allegations led to the resignation of the government and national elections, which the Labor Party won.

On Monday, Caruana Galizia died instantly when the rented Peugeot 108 car she was driving exploded near her home in the village of Bidnija, near Mosta, in central Malta. Eyewitnesses said that the explosion was so powerful that it tore apart the vehicle and was heard from several miles away. Subsequent reports in the Maltese media alleged that the investigative journalist had recently filed reports with the police, claiming that she was receiving threats against her life from persons unknown.

The bomb attack shocked Maltese society and immediately threw the European Union member-state’s political life into disarray. The country’s Prime Minister, Joseph Muscat, said in a statement that he was “devastated” by Caruana Galizia’s assassination, adding that he had instructed the island country’s police and intelligence agencies to “take all necessary steps to investigate” the murder and uncover its culprits. The killing was also condemned by nearly every senior European Union official and by the International Consortium of Investigative Journalists, the international arm of the Washington-based Center for Public Integrity, which uncovered the existence of the Panama Papers.

Author: Joseph Fitsanakis | Date: 17 October 2017 | Permalink | Research credit: J.A.

Germany’s most famous spy on trial for tax evasion, claims money is not his

Werner MaussThe most famous intelligence operative in Germany went on trial last week after his name was linked to dozens of offshore bank accounts and shell companies. But he claims he used these accounts to rescue hostages as part of his undercover work. Werner Mauss became known in 1997, when he was arrested in Colombia while using a forged passport. He had traveled to the Latin American country to secure the release of a German woman who had been kidnapped by leftist guerrillas. The Colombian authorities eventually released him, following heavy diplomatic pressure from the German government. But the German media began investigating his background, and it soon became known that he was working for the Federal Intelligence Service, specializing in negotiating the release of hostages.

Now, in his mid-70s, Mauss enjoys celebrity status in Germany. He claims on his personal website that he was directly involved in neutralizing over 100 criminal gangs and that his work led to the capture of 2,000 criminals and spies. He also claims to have helped prevent dangerous chemical substances from falling into the hands of terrorist groups.

Last Monday, however, Mauss appeared in court in the North Rhine-Westphalian city of Bochum, accused of placing millions of euros in undeclared offshore accounts. The German state prosecutor accuses the spy of having dozens of accounts in his name in offshore tax havens such as the Bahamas, Turks and Caicos, and Panama. Government investigators say Mauss hid nearly €15 million (approximately $23 million) in secret accounts between 2002 and 2013. It appears that at least some of the accounts had been opened under aliases that Mauss used during his spy operations.

According to reports in the German media, Mauss first appeared on the government’s radar several years ago, when investigators in North Rhine-Westphalia purchased a CD from a whistleblower who worked in Luxembourg’s UBS bank. Earlier this year, Mauss’ name appeared again, this time in the so-called Panama papers, the massive data leak of documents belonging to Panamanian law firm Mossack Fonseca that specialized in offshore wealth management.

According to his lawyers, Mauss did nothing wrong, and claims that he used the shell companies and offshore bank accounts to channel funds to kidnappers in order to secure the release of hostages. Mauss’ legal team also claims that the 76-year-old former spy cannot properly defend himself because he is prevented from speaking freely by the clandestine nature of his work for the government. It is believed that the trial will continue until the end of this year.

Author: Ian Allen | Date: 3 October 2016 | Permalink

Names of intelligence officials, agents, appear in Panama Papers

Panama PapersThe massive data leak of documents belonging to Panamanian law firm Mossack Fonseca has revealed the names of intelligence officials and agents form several countries, who employed front companies to conceal their financial activities. According to German newspaper Süddeutsche Zeitung, which was the initial recipient of the largest data leak in history last summer, the list of names includes intelligence officials from the Middle East, Latin America and Africa, as well as “close intermediaries of the [United States] Central Intelligence Agency”.

Referred to as ‘the Panama Papers’, the massive leak amounts to over 11.5 million internal files from Mossack Fonseca, one of the world’s most prolific registrars and administrators of shell companies in offshore locations. Throughout its history, the company has created more than 300,000 shell companies, most of them in offshore tax havens like the British Virgin Islands, Cyprus, or Guernsey. Its clients are offered the ability to incorporate a generic-sounding company and headquarter it in an offshore tax haven. In exchange for an annual fee, Mossack Fonseca provides the company with a sham director and shareholders, thus concealing the true owner and actual beneficiary of the business.

The Süddeutsche Zeitung said on Monday that senior intelligence officials from Rwanda and Colombia are listed as Mossack Fonseca customers, but did not report the names of the individuals. It did, however, single out the late Sheikh Kamal Adham, who was director of Saudi Arabia’s General Intelligence Directorate in the 1960s and 1970s. During his 14-year directorship of the GID, the agency became a leading intermediary between the CIA and Arab intelligence agencies, notably those of Egypt and Iraq. Sheikh Adham was also a personal friend of CIA Director George Bush, who was later elected US president.

According to the Süddeutsche Zeitung, Sheikh Adham is one of many individuals with close CIA links whose names appear in the Panama Papers. Another is Farhad Azima, an Iranian-born American businessman, who is rumored to have leased aircraft to the CIA in the 1980s. The American intelligence agency is said to have used the aircraft, which belonged to Azima’s Kansas City, Missouri-headquartered Global International Airways, to transport weapons to Iran. The secret transfers were part of what later became known as the Iran-Contra scandal, in which US officials secretly sold weapons to Iran in return for the release of American hostages held by Iran-linked groups in the Middle East. The funds acquired from these weapons sales were then secretly funneled to the Contras, a medley of anti-communist paramilitary groups fighting the Sandinista-led government of Nicaragua.

Author: Joseph Fitsanakis | Date: 13 April 2016 | Permalink

Analysis: The security implications of the Panama Papers

First Post HAside from their immediate shock value, the Panama Papers reveal the enormous extent of tax evasion on a worldwide scale. This unprecedented phenomenon is inextricably tied with broader trends in globalized finance-capitalism that directly threaten the very survival of the postwar welfare state. National intelligence agencies must begin to view offshore tax evasion as an existential threat to the security of organized government and need to augment their economic role as part of their overall mission to protect and secure law-abiding citizens.

THE BACKGROUND OF THE LEAK

The source of the Panama Papers leak —the largest in history— is apparently a single individual who contacted the widely respected German newspaper Süddeutsche Zeitung over a year ago. After receiving assurances that his or her anonymity would be safeguarded, the source proceeded to provide the paper with what eventually amounted to over 11.5 million files. They include company emails, banking transaction records, and files of clients that span the years 1977 to 2015. The source asked for no financial compensation or other form of reimbursement in return, saying only that he or she wanted to “make these crimes public”.

Faced with the largest data leak in recorded history, the Süddeutsche Zeitung reporters contacted the International Consortium of Investigative Journalists (ICIJ), which is the international arm of the Washington-based Center for Public Integrity. With ICIJ acting as an umbrella group, the German reporters were eventually joined by 370 journalists representing 100 news outlets from 76 Q Quotecountries. On Sunday, following a year-long analysis of the data, the reporting partners began publishing revelations from the Panama Papers, and say they will continue to do so for several days to come.

THE ROLE OF MOSSACK FONSECA

The documents are from the internal records of Mossack Fonseca, a law firm headquartered in Panama City, Panama, with offices in 42 countries. The company is one of the world’s most prolific registrars and administrators of shell companies in offshore locations. It has created more than 300,000 shell companies throughout its history, most of them in offshore tax havens like the British Virgin Islands, Cyprus, or Guernsey. Its clients are offered the ability to incorporate a generic-sounding company and headquarter it in an offshore tax haven. In exchange for an annual fee, Mossack Fonseca provides the company with a sham director and shareholders, thus concealing the true owner and actual beneficiary of the business.

The power of the leaked documents is that they reveal the actual owners of 214,000 offshore shell companies managed by Mossack Fonseca. The long list of names includes dozens of current and former heads of state, as well as hundreds of politicians, public figures and celebrities. Many of these individuals have failed to declare their earnings from their shell companies in their annual tax Q Quotestatements, which means they have not been paying taxes in their country of citizenship or residency. Thus, there are now thousands of Mossack Fonseca clients in over 100 countries who are preparing to face the legal consequences of tax evasion.

SECURITY IMPLICATIONS

Equally importantly, however, the leaked documents reveal that Mossack Fonseca’s clients appear to include at least 33 individuals and companies that are involved in organized crime or have close contacts with terrorist organizations. This sheds light on the increasingly disappearing line that once separated illicit activities such as tax avoidance and tax evasion, from money laundering, organized crime and terrorism. This phenomenon is assisted by unscrupulous companies like Mossack Fonseca, which act as anonymizing platforms for wealthy celebrities, criminals and terrorists alike.

The leak also shows the extent to which national governments have been unable to stem the tide of unfettered finance-capitalism, which today threatens the stability and cohesion of developed and developing economies alike. Moreover, the sheer scale of offshore capital funds, which, according to one expert, amount to as much as $32 trillion, threaten the economic security of nation states and must be viewed as an existential threat to the ability of states to fund public expenditures though taxation. The political arrangement that led to the creation of the postwar welfare state is today being directly threatened by the inability or unwillingness of organized states to monitor the largely unregulated flow of capital to offshore tax havens.

Today, entire economies, including much of southern Europe, the Balkans, as well as Latin America, are crumbling under the fiscal weight created by mass-scale tax evasion and organized crime. Organized criminals are now actively working closely with the banking sector, thus creating even more opportunities for money laundering and other financial illegality on an unprecedented scale. The Süddeutsche Zeitung revelations demonstrate that the line that separates legitimate economic activity from the rogue underbelly of global capitalism is exceedingly thin. It is high time that Western intelligence agencies viewed this worrying development as an asymmetrical threat against the security of law-abiding societies and began dealing with offshore tax havens with the same intensity that they have displayed against terrorist safe havens since 9/11.

Author: Joseph Fitsanakis | Date: 04 April 2016 | Permalink