Wednesday Night #1779

Written by  //  April 6, 2016  //  Wednesday Nights  //  No comments

We were delighted to welcome Jean Gagnon, a colleague and friend of Tom Haslam-Jones.

The sheer amount of the Panama Papers data astounds our computer experts and the ramifications, all agree, will be huge. The first victim is the Prime Minister of Iceland – a country most of us have deeply admired for its probity and ability to take hard decisions.
It is well known that WN’s network extends to many corners of the globe, thus no surprise to hear from a Wednesday Nighter wintering in Panama:
“It’s odd reading about this as I sit in here in Panama in an idyllic setting on the Pacific. There has always been talk about money laundering here due to its proximity to Columbia and the fact that it’s an ‘International Banking Centre’. Downtown Panama City is festooned with bank towers from all over the world, so this doesn’t surprise me. I think we can expect to see the scope of this to be truly massive.”

A fascinating discussion on many topics including TPP.

One somewhat related story is that of the proposed merger of Pfizer and Allergan.
U.S. drugmaker Pfizer and Irish competitor Allergan were planning to combine into the largest pharmaceutical giant in the world. However,
“The Treasury Department on Monday introduced rules aimed at reducing the incentives for companies to carry out inversions. That’s a controversial practice in which a U.S. company merges with a firm in a foreign country, such as Ireland, and moves its headquarters there to take advantage of that nation’s lower tax rate.”In most cases, the move is something of a legal fig leaf, because the company continues to operate in the U.S. in much the same manner as before. “President Obama today called inversions ‘one of the most insidious tax loopholes out there.’
There was general agreement that this was a smart move by the Administration.

P R O L O G U E

Despite an array of geopolitical developments and the ever-entertaining antics of the American political scene, it is the leak of The Panama Papers that is dominating the news cycle this week.In case you doubted that this was a big deal, consider that the leak includes more than 4.8 million emails, 3 million database files, and 2.1 million PDFs, amounting to 2.6 terabytes. WikiLeaks published a paltry 1.73 gigabytes. (For more, see Corruption).

The list includes the dealings of 12 current or former heads of state of such  countries as  Iceland, Ukraine, Argentina, Pakistan, Saudi Arabia, China and Russia. The documents also reveal alleged links to family members and friends of former and current authoritarian leaders Syrian President Bashar al-Assad, Zimbabwean President Robert Mugabe, Pakistani Prime Minister Nawaz Sharif, former Libyan leader Moammar Gadhafi and ousted Egyptian president Hosni Mubarak. Embarrassment, prosecution, political instability and murder — all possible ramifications, say some observers, of the leak of millions of confidential documents revealing the hidden offshore assets of billionaires, top government officials, celebrities and athletes. CBC quotes Ian Bremmer of Eurasia Group: “I’d be stunned if insiders in the authoritarian governments that this has been leaked on are not caught up in purges and killed as a consequence of this information.”

For those not conversant with  the subtleties of tax avoidance/evasion and havens, we highly recommend this short, simple story about piggy banks

According to the Toronto Star, some 350 Canadian individuals with offshore tax haven investments have been identified in the leaked documents.
Fall-out from the leaks includes spotlighting RBC, which was identified as having created 370 offshore companies in Panama through Mossack Fonseca

However, there is another way to out those who are hiding assets. It seems that the Super-rich are caught out by children’s Instagram accounts – and not only can detectives use the photographs as evidence, they can also use the metadata stored in Instagram images to figure out where these rich people live (and what foreign properties they own).

As a  tangential item, we recently became aware of the Hudson Institute’s Kleptocracy Initiative, which, according to its website “examines the growing threat posed to Western democracies by autocratic regimes. The Achilles’ heel of today’s autocracies is they are politically structured as kleptocracies, creating the potential to expose the massive and often hidden financial mechanisms used to shelter misappropriated assets.” That’s a timely observation

In case you had forgotten, Harper Signed Free Trade Deal With Panama Despite Tax Haven Concerns (and the Liberals voted for it). This was despite warnings that “The Canada-Panama trade deal would worsen the tax haven problem … As the OECD has noted, having a trade agreement without first tackling Panama’s financial secrecy would incentivize even more offshore tax dodging.” Perhaps someone could remind us of the benefits of a free-trade agreement with Panama?

Another leak and another controversy, but so far no Instagram: Christine Lagarde Tries To Put Out Fire From Bombshell Greece Leak, But Doesn’t Apologize [we question the mixed metaphors of leaks and fires, but it is after all, HuffPost] after eport on Saturday that Tsipras had asked Lagarde whether Greece could “trust” the IMF in light of leaked remarks by IMF officials suggesting that a crisis-inducing “event” was necessary to get Greece to comply with IMF austerity requests. “Of course, any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense,” Lagarde wrote Sunday.

In an unrelated development, the UNHCR charges that Greece May Have Deported Some People ‘By Mistake’ — 13 Afghan and Congolese migrants didn’t get a chance to apply for asylum “due to administrative chaos”. Given the prevailing scepticism about the EU-Turkey migrant pact, this could probably have been expected.

Our friend C. Uday Bhaskar writes on the Nuclear Security Summit: It’s the Subtext Which is Disturbing. His gloomy conclusion: “The North Korea threat to nuke the USA , however ‘unreal’, points to yet another disturbing element of the subtext of the prevailing global nuclear discourse – the rather routine manner in which some nuclear weapon states refer to the use of tactical nuclear weapons to deal with asymmetric security threats. Again, Pakistan leads this group and the example set by both the US and Russia in refining the quality of their nuclear weapon capability and subtly referring to their possible use, erodes global nuclear stability.
“It is unlikely that NSS 2016 will be able to address this disturbing subtext with the objectivity and candour it warrants. The goals are laudable – an improvement in nuclear security behavior, and strengthening the global nuclear security architecture.
“Alas, the high desirability and low feasibility of these objectives being realised in a consensual manner are inversely proportional. Pyongyang may be prescient – for this could well be the ‘Last Chance.’”

Meanwhile, his beautiful and intelligent daughter {she would never post a thoughtless Instagram) Swara Bhaskar talks about being accepted by the mainstream audience, but not at the cost of her politics. If you create a culture where stupid is safe, you will get stupid art and entertainment, says Swara Bhaskar.

In the we-are-shocked category: Spiegel reports that Germany’s secret service has little trust in its EU partners, and has even spied on them. Spying on Friends? Atmosphere of Distrust Hinders EU Anti-Terror Cooperation.

The New York Times has published a disturbing report of brutal attempts to evict local inhabitants from land claimed by a Canadian mining company. The article points out that “For decades, overseas subsidiaries have acted as a shield for extractive companies even while human rights advocates say they have chronicled a long history of misbehavior, including environmental damage, the violent submission of protesters and the forced evictions of indigenous people.” Guatemalan Women’s Claims Put Focus on Canadian Firms’ Conduct Abroad. While there are indications that things are changing, the situation should be closely monitored.

To no-one’s surprise, Brad Wall has won another majority in what CBC terms Saskatchewan’s electoral déjà-vu in which only three seats changed hands. But John Ivison suggests that Brad Wall [is being] sought for federal leadership bid to prevent Conservative split

Close to home, congratulations to Marina Brzeski, who some months ago first shared with Wednesday Night her dismay over the proposed redevelopment of the Metro store and parking lot as an 80-condo unit. It’s not going to happen , thanks to Marina who spearheaded the opposition to the project.

Oh, you thought we would not mention Wisconsin? Yes, Cruz thumped Trump, but before you celebrate unduly, Vox has some cautionary notes.
Politicus USA (Here Are The Winners And Losers From The Wisconsin Primary), is downright gleeful “The wheels haven’t completely fallen off of the Trump campaign, but he is looking very beatable. No number of phone in interviews on cable news can help Trump recapture the image of the winner frontrunner who is going to make America great. Trump comes out of Wisconsin looking like a loser who is in way over his head.”
As expected, Bernie Sanders won and soon comes the big contest in New York. “If he can win in New York, he will change the trajectory of the Democratic primary, but before he could get to the Empire State, Sen. Sanders had to get the job done in Wisconsin.”

There’s so much else – but we will cease and desist as soon as we have mentioned that Nobel Laureate Joseph Stiglitz is warning Canada against the TPP:  “this is not about free trade. This is about changing the rules of the game for the market economy in ways that disadvantage ordinary people and advantage a few large corporations.” He was in Ottawa last week for a forum on TPP – if anyone has information on the forum, we would welcome it.

Last, but not least, please mark your calendars for what promises to be a fascinating evening on April 26th. CIC is hosting an intimate evening with one of the world’s foremost experts on the Middle East, Nadim Shehadi, director of the Fares Center for Eastern Mediterranean Studies at The Fletcher School of Law and Diplomacy, Tufts University and Associate Fellow of Chatham House in London Details

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