How capital captured politics - Why was TISA kept secret?

WikiLeaks has shown us that western democracies are now ruled by market forces that debase the very notion of freedom

• 
• • Slavoj Žižek
  • The Guardian, Sunday 13 July 2014 20.15 BST

'The Trade in Services Agreement prohibits more regulation of financial services, despite the fact the 2007-08 meltdown is generally perceived as resulting from a lack of regulation.' Photograph: Andy Mueller/Reuters

In May, an international trade agreement was signed that effectively serves as a kind of legal backbone for the restructuring of world markets. While the Trade in Services Agreement (Tisa) negotiations were not censored outright, they were barely mentioned in our media. This marginalisation and secrecy was in stark contrast to the global historical importance of what was agreed upon.

In June, WikiLeaks made public the secret draft text of the agreement. It covers 50 countries and most of the world's trade in services.

It sets rules that would assist the expansion of financial multinationals into other nations by preventing regulatory barriers. It prohibits more regulation of financial services, despite the fact that the 2007-08 financial meltdown is generally perceived as resulting from a lack of regulation. Furthermore, the US is particularly keen on boosting cross-border data flow, including traffic of personal and financial data. Despite all this, we heard little about it.

Yet is this discrepancy between importance and secrecy really surprising? Is it not rather a sad but precise indication of where do we, in western liberal democratic countries, stand with regard to democracy? A century and a half ago, in Das Kapital, Karl Marx characterised the market exchange between worker and capitalist as "a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham." For Marx, the ironic addition of Jeremy Bentham, the philosopher of egotistical utilitarianism, provides the key to what freedom and equality effectively mean in capitalist society. To quote The Communist Manifesto: "By freedom is meant – under the present bourgeois conditions of production – free trade, free selling and buying." And by equality is meant the legal formal equality of buyer and seller, even if one of them is forced to sell his labour under any conditions (like today's precarious workers).

The main culprits of the 2008 financial meltdown now impose themselves on us as experts leading us on the painful path to financial recovery. Their advice should trump parliamentary politics. Or, as Mario Monti put it: "Those who govern must not allow themselves to be completely bound by parliamentarians." What, then, is the higher force whose authority can suspend the decisions of the democratically elected representatives of the people? As far back as 1998, the answer was provided by Hans Tietmeyer, the then governor of the Deutsche Bundesbank, who praised national governments for preferring "the permanent plebiscite of global markets" to the "plebiscite of the ballot box".

Note the democratic rhetoric of this obscene statement: global markets are more democratic than parliamentary elections, since the process of voting goes on in them permanently (and is permanently reflected in market fluctuations) and at a global level, not only within the limits of a nation state.

This, then, is where we stand with regard to democracy, and the Tisa agreement is a perfect example. The key decisions concerning our economy are negotiated and enforced in secret, and set the coordinates for the unencumbered rule of capital. In this way, the space for decision-making by the democratically elected politicians is severely limited, and the political process deals predominantly with issues towards which capital is indifferent (like culture wars).

This is why the release of the Tisa draft marks a new stage in the WikiLeaks strategy: until now its activity has been focused on making public how our lives are monitored and regulated by the intelligence agencies – the standard liberal topic of individuals threatened by oppressive state apparatuses. Now another controlling force appears – capital – which threatens our freedom in a much more twisted way: by perverting our very sense of what the word means.

Breaking the wall of secrecy on the sexual abuse of men by women

Our collective difficulty in understanding and addressing this taboo is tied up in our archaic conceptions of sexuality

• 
• • Ally Fogg
  • theguardian.com, Monday 9 June 2014 11.21 BST

‘How does it happen? Alcohol is implicated in a very large proportion of accounts.’ Photograph: joefoxphoto/Alamy

"You don't feel like a person any more. You feel like a thing. Like you're subhuman. It gets to you, and you stop thinking of yourself as human. You stop thinking you deserve to be happy, or that you deserve to have friends or to be loved.

"Eventually, you stop thinking you deserve to live. Maybe you act on those feelings, maybe you don't. I did. I was hospitalised four times before I finally got help and found a therapist who took me seriously and told me it wasn't my fault."

The first-person accounts posted on Reddit last week by survivors of sexual abuse have many familiar elements. They recount post-traumatic stress and emotional damage, the sexual dysfunction and difficulties forming relationships, and – most commonly – the disbelief and victim-blaming that greet attempts to report or share the details, even with trusted friends. The only difference with the hundreds of stories shared on one remarkable, often heartbreaking thread is that all were from men, recounting their abuse by women. Many told of childhood sexual abuse, others described sexual assaults, all the way up to forced penetrative sex, committed by women on teenage or adult males.

Of course Reddit is not a verified source. Anyone can register under any name, and many of the accounts were posted under so-called throwaway monikers. But before anyone dismisses the anecdotes out of hand, consider that whenever academic researchers have asked the question, they have found astonishingly high incidence of this crime.

In 2010, the largest survey of its type in the world – the US Centre for Disease Control'sNational Intimate Partner and Sexual Violence Survey – found that the rates of men being forced to penetrate women over the previous year were identical to the rates of women reporting being raped: 1.1%. Lifetime prevalence of the crimes were 4.8% for men and 17.8% for women. Meanwhile, men reporting sex through coercion was 1.5% over the past year (6% lifetime) compared with 2% (13% lifetime) for women.

These findings were not wildly out of step with precedent. I collated much of the previous research in a blogpost. A consensus emerged that not only do a significant minority of men report having been forced or coerced into a sexual act in their lifetime, even higher numbers of women admit to having forced or coerced a man to do so. Our collective ignorance of these issues does not arise from lack of data, but from a wilfully constructed wall of secrecy.

How does it happen? Alcohol is implicated in a very large proportion of accounts, men passing out at parties and coming around to find themselves being molested, or being assaulted by a woman. Other accounts include threats, blackmail or even brute force and violence. Not all men are bigger, stronger or more assertive than all women. There is very little understanding that not only is sexual abuse of men by women potentially damaging to the victim, it is also a criminal offence, carrying a maximum sentence of life imprisonment.

Whenever I have written on this topic, I receive a new batch of comments, emails and messages from men saying, yes, this happened to me too. Inevitably, I have received many more offering ridicule, mockery and outright denial. The most powerful response to such attitudes came in a stunning, stomach-twisting monologue by the actor and writer Andrew Bailey, which went viral a couple of months ago. Anyone who has ever reacted to this issue with words such as "lucky bastard, wish that had happened to me" should perhaps get their pocket money stopped until they have sat down and watched this brilliant little film to the end.

Just raising this issue is difficult. By talking about it, I will be accused of undermining attempts to address the rape and sexual assault of women which is, by any measure, the more extensive and harmful social phenomenon and public health crisis. There are indeed poisonous souls who use "yeah, well women are just as bad" as a vapid and vacuous response to complaints about male violence against women, and that is shameful. Such fears, however, cannot justify leaving any victims ignored, maligned and misunderstood. The only correct response to learning about the prevalence of male victims is not to treat female victims as a lower priority, but all victims as a higher priority.

Our collective difficulty in understanding and addressing the sexual abuse of men by women is tied up in our archaic and damaging conceptions of both male and female sexuality. No, boys and men are not always gagging for sex with anyone, under any circumstances. No, women are not invariably coy, chaste flowers awaiting a Romeo to sweep them off their feet. I thoroughly agree with the campaigners who call for better education of our young people on what true sexual consent really looks like. We also need to take on board that such lessons are not only needed by young men.

The nation at the heart of the offshore tax haven scandal is Britain

Britain's relationship with its overseas territories means it could – if it wanted – easily tackle offshore global secrecy

• 
• • James Ball
  • guardian.co.uk, Friday 5 April 2013 18.00 BST

'The British Virgin Islands are perhaps rivalled only by Switzerland as a global capital for the offshore industry'. Photograph: James Marshall/Corbis

It's a tumultuous time for the offshore industry. For decades, there's been an uneasy equilibrium: opprobrium from campaigners, torpor from regulators, apathy from the wider public, and delight for the wealthy benefiting from the arrangements to cut their tax bill or avoid regulatory scrutiny.

Recently, though, the rhetoric and action have changed. In tougher economic times – for which the financial sector has copped a huge amount of the blame – the public is more aggrieved by tax avoidance arrangements than ever, while recent proposed offshore crackdowns have been cautiously welcomed by campaigners as having the potential to actually be effective.

The leaking of more than 2m offshore files to the International Consortium of Investigative Journalists, and through them to the Guardian for our Offshore Secrets stories is just the latest in a series of unwelcome developments.

Amid this backdrop, and with ministers from George Osborne to Vince Cable willing to speak out strongly against offshoring and tax avoidance, it's easy to imagine the villains of the piece to be irresponsible foreign nations – happy to shelter the mega-rich in offshore secrecy, unconcerned about the tax avoided in other, larger countries.

If only the British government can prevail in these overseas battles, things will get better, it seems.
But such a stance ignores that one nation in particular has ties to offshore havens everywhere. It's a veritable nexus of offshore influence, related to havens in the Caribbean, and much closer to home. That nation is, of course, the United Kingdom.

The clue is quite often in the name. The British Virgin Islands are perhaps rivalled only by Switzerland as a global capital for the offshore industry, with more than 1m offshore companies registered on the Caribbean island (population 31,900). Plaques for registration agents, solicitors and more line almost every wall of the islands' tiny capital.

The islands are a British Overseas Territory: legally under the jurisdiction of the UK (and with a British governor), but in practice self-governed. Other havens with this UK imprimatur include the Cayman islands, Gibraltar, and the Turks and Caicos Islands.

Closer to home, the UK wields even more control over the crown dependencies: Jersey, Guernsey and the Isle of Man, whose role in legal tax avoidance techniques has been documented time and again for decades.
Even within the UK itself, little is done against tricks of the offshore trade that have been known for decades.

In 1999, Sark islander Philip Croshaw was struck off as a UK director for acting as a "nominee" – a sham director who hides a company's real controllers – for thousands of companies in the UK.

At the time, then-trade minister Kim Howells said: "The government today struck a fatal blow against the practice of so-called 'nominee directorships' … The trade in providing 'nominee director' services from the island of Sark has been a scandal … The courts have now effectively outlawed this abuse."

And yet today – 14 years later – more than 175,000 UK companies have had directors based in offshore havens, and the Guardian has identified 28 sham directors with tens of thousands of companies between them.

In short, a huge string of the world's foremost offshore havens have, at minimum, a strong and long-lasting symbolic relationship with the UK, and in practice are susceptible to significant influence and pressure from the UK government.

Even at home, offshore practices known and deplored by governments for more than a decade are still going strong. The temptation for campaigners and government alike is to look overseas for the villains in the offshore trade. The reality is more complex, and the trouble closer to home. The upside of this is it means that if Britain really wants to tackle global offshore secrecy, there's a lot it can do.

But so far, everywhere – on its home turf, in its dependencies, and in its overseas territories – the UK brand is on both sides of the fight. For Britain, the battle against offshore tax havens – if it wants to fight it – begins at home.

Cyprus - Treasure Island Trauma

Paul Krugman in The New York Times

A couple of years ago, the journalist Nicholas Shaxson published a fascinating, chilling book titled “Treasure Islands,” which explained how international tax havens — which are also, as the author pointed out, “secrecy jurisdictions” where many rules don’t apply — undermine economies around the world. Not only do they bleed revenues from cash-strapped governments and enable corruption; they distort the flow of capital, helping to feed ever-bigger financial crises.

Enlarge This Image

Fred R. Conrad/The New York Times

Paul Krugman

 

 

One question Mr. Shaxson didn’t get into much, however, is what happens when a secrecy jurisdiction itself goes bust. That’s the story of Cyprus right now. And whatever the outcome for Cyprus itself (hint: it’s not likely to be happy), the Cyprus mess shows just how unreformed the world banking system remains, almost five years after the global financial crisis began.

So, about Cyprus: You might wonder why anyone cares about a tiny nation with an economy not much biggerthan that of metropolitan Scranton, Pa. Cyprus is, however, a member of the euro zone, so events there could trigger contagion (for example, bank runs) in larger nations. And there’s something else: While the Cypriot economy may be tiny, it’s a surprisingly large financial player, with a banking sector four or five times as big as you might expect given the size of its economy.

Why are Cypriot banks so big? Because the country is a tax haven where corporations and wealthy foreigners stash their money. Officially, 37 percent of the deposits in Cypriot banks come from nonresidents; the true number, once you take into account wealthy expatriates and people who are only nominally resident in Cyprus, is surely much higher. Basically, Cyprus is a place where people, especially but not only Russians, hide their wealth from both the taxmen and the regulators. Whatever gloss you put on it, it’s basically about money-laundering.

And the truth is that much of the wealth never moved at all; it just became invisible. On paper, for example, Cyprus became a huge investor in Russia — much bigger than Germany, whose economy is hundreds of times larger. In reality, of course, this was just “roundtripping” by Russians using the island as a tax shelter.

Unfortunately for the Cypriots, enough real money came in to finance some seriously bad investments, as their banks bought Greek debt and lent into a vast real estate bubble. Sooner or later, things were bound to go wrong. And now they have.

Now what? There are some strong similarities between Cyprus now and Iceland (a similar-size economy) a few years back. Like Cyprus now, Iceland had a huge banking sector, swollen by foreign deposits, that was simply too big to bail out. Iceland’s response was essentially to let its banks go bust, wiping out those foreign investors, while protecting domestic depositors — and the results weren’t too bad. Indeed, Iceland, with a far lower unemployment rate than most of Europe, has weathered the crisis surprisingly well.

Unfortunately, Cyprus’s response to its crisis has been a hopeless muddle. In part, this reflects the fact that it no longer has its own currency, which makes it dependent on decision makers in Brussels and Berlin — decision makers who haven’t been willing to let banks openly fail.

But it also reflects Cyprus’s own reluctance to accept the end of its money-laundering business; its leaders are still trying to limit losses to foreign depositors in the vain hope that business as usual can resume, and they were so anxious to protect the big money that they tried to limit foreigners’ losses by expropriating small domestic depositors. As it turned out, however, ordinary Cypriots were outraged, the plan was rejected, and, at this point, nobody knows what will happen.

My guess is that, in the end, Cyprus will adopt something like the Icelandic solution, but unless it ends up being forced off the euro in the next few days — a real possibility — it may first waste a lot of time and money on half-measures, trying to avoid facing up to reality while running up huge debts to wealthier nations. We’ll see.

But step back for a minute and consider the incredible fact that tax havens like Cyprus, the Cayman Islands, and many more are still operating pretty much the same way that they did before the global financial crisis. Everyone has seen the damage that runaway bankers can inflict, yet much of the world’s financial business is still routed through jurisdictions that let bankers sidestep even the mild regulations we’ve put in place. Everyone is crying about budget deficits, yet corporations and the wealthy are still freely using tax havens to avoid paying taxes like the little people.

So don’t cry for Cyprus; cry for all of us, living in a world whose leaders seem determined not to learn from disaster.

Russians profit from Britain's offshore secrecy

The UK's approach has attracted many post-Soviet billionaires, including some on the run

• David Leigh, Harold Frayman and James Ball
• The Guardian, Tuesday 27 November 2012 18.21 GMT

Ukrainian billionaire Rinat Akhmetov used a BVI company to buy the most expensive flat sold in London, at One Hyde Park. Photograph: Sergei Supinsky/AFP/Getty

Also read HSBC - A case of Discrimination

Britain's friendly regime of offshore secrecy has tempted an extraordinary array of post-Soviet billionaires to descend on London, sometimes to the sound of gunfire.

Vladimir Antonov fled permanently to Britain after his father, Alexander, was gunned down in a Moscow street in 2009. Another associate, German Gorbuntsov, narrowly survived a volley of shots in London last March.

When Antonov bought a luxury yacht in Antibes, the Sea D, he was careful to register its ownership to an anonymous British Virgin Islands (BVI) entity, Danforth Ventures Inc.

He also found funds to try to take over the ailing Swedish car manufacturer Saab, though he did not take control. He did succeed for a while in owning the even more ailing Portsmouth football club.

Antonov is currently on bail in Britain. Lithuanian authorities are trying to extradite him for allegedly looting their collapsed bank Snoras, which he denies.

The allegation that oligarchs exploit Britain's offshore secrecy regime to shift assets out of their own countries is not an uncommon one. One refugee from the law is the Kazakh billionaire Mukhtar Ablyazov, who was allegedly last seen in February heading out of London on a coach to France. Ablyazov has been sentenced to 22 months in jail for contempt of court as the BTA Bank in Kazakhstan attempts to pursue his maze of offshore assets. The bank's lawyers claim Ablyazov has made off with £4bn using BVI and Seychelles companies, nominee directors and layers of front men. Ablyazov denies it.

These billionaires justify their use of British-controlled secrecy jurisdictions because they say they must protect themselves from corporate predators and political enemies in their home countries.

Another fleeing oligarch, the Georgian Badri Patarkatsishvili – a partner of fellow exile Boris Berezovsky– was found dead in 2008 in his Surrey mansion. Patarkatsishvili's business manager, Eugene Jaffe, managed £500m of the Georgian's assets from a central London office through a BVI company, Salford Capital Partners. Jaffe's company was owned in turn by an opaque BVI trust he set up called Montana River.

The wild-west financial landscape of post-Soviet Russia has attracted at least one entrepreneur from the British Isles to exploit the possibilities of the BVI secrecy regime. We have traced BVI entities used in Russia by the man once known as the richest in Ireland, the property developer Seán Quinn. He expanded into schemes for shopping malls in Moscow and Kiev.

He has now declared himself bankrupt and has received an Irish jail sentence for contempt, as the now state-owned Anglo Irish Bank seeks to recover what it says is a missing £2bn.

Other post-Soviet financiers have used Britain's secret offshore facilities for widely different purposes. The London-based Latvian oil trader Evgeny Tikhonov set up an entity in the BVI to hide a total of $2.4m (£1.5m) that his employer, Shell, subsequently convinced a British civil court he was wrongly skimming off from fuel deals. He was, however, acquitted of criminal charges over this.

The fund manager Igor Tsukanov, another arrival in the fashionable west London area of Notting Hill, kept funds in the BVI that will have apparently legally sheltered them from Russian taxes.

Dimitry Sergeev, a mobile phone games entrepreneur from Novosibirsk, whose firm was BVI-registered, faced a potentially costly dispute with a small Manchester supplier over some allegedly unpaid invoices. A source there said: "We decided it was too difficult to bring a legal action in the BVI." Sergeev did not comment.

Undoubtedly the most flamboyant post-Soviet beneficiary of Britain's offshore secrecy regime is Rinat Akhmetov, the richest man in the Ukraine. From a base in the coal-mining Donetsk region, he has personally acquired industrial assets estimated to be worth £11bn. He shifted £136m out of the former Soviet republic in 2007, in order to buy the most expensive flat sold in London, at One Hyde Park.

Asked why he hid behind a BVI company, his company spokesman in the Ukraine said it was "for internal structuring reasons". He added: "Water Property Holdings Limited fully paid all taxes and charges … as required by applicable laws in the UK. This includes payment in February 2011 of stamp duty land tax (SDLT) at a rate of 4% which amounted to £5.467m."

Legal use of BVI entities to disguise Russian movement of funds into British companies, also appears to be widespread. In one example we have unearthed, a British-registered firm, Pennard Chemicals Ltd, with an address at rental offices in Cannon St in the City of London, has had declared revenue over the last 3 years of more than 100 million euros, described as commission on unspecified Russian deals. Pennard Chemicals named director, The Hon Andrew Moray Stuart, with an address in Mauritius, is one of the sham nominees the Guardian/ICIJ research has identified. The shareholder, Imex Executive Ltd, is a BVI entity set up by a Moscow incorporation agency. In turn, its sham nominee directors include Jesse Hester in Mauritius and a sham nominee shareholder, Brenda Cocksedge. These nominees sell their names, without exercising genuine control or ownership. The real owner, according to company records we have seen, is named as Ivan Kovlachuk.

German tax dodgers with money hidden in Swiss banks can sleep easy tonight.

Germany has set back the fight against tax evasion

Those who squirrel away undeclared wealth in Switzerland will be pleased by this deal. What's worse, the UK may follow suit

• 
• • David McNair
  • guardian.co.uk, Friday 12 August 2011 08.00 BST
  • larger | smaller

'Germany is setting back years of work towards the global prize of ending banking secrecy in the world's most pervasive tax haven.' Photograph: Arnd Wiegmann/Reuters/Corbis
 
 
 German tax dodgers with money hidden in Swiss banks can sleep easy tonight. For the German government this week initialled a beggar-thy-neighbour deal that undermines years of diplomatic work to penetrate Switzerland's globally corrosive banking secrecy. The agreement, which is due to be signed by both governments over the next few weeks, sees Germany accepting a paltry $2.8bn upfront from the Swiss banks said to hold some $276bn of Germans' undeclared wealth . In addition, the deal says that Germans will in future be taxed at 26% on the income from their Alpine accounts – money the Swiss authorities will then hand over to Germany. But the Germans with secret accounts will not be forced to tell the taxman that they are hiding their wealth abroad. Their identities will remain secret, allowing Swiss bankers to keep their boasts about "privacy" and "confidentiality".  Both governments are spinning their agreement as a huge success for international co-operation and the fight against tax evasion. In fact, Germany is setting back years of work towards the global prize of ending banking secrecy in the world's most pervasive tax haven. It has dealt a serious blow to prospects for automatic, multilateral exchange of tax-related information between governments, which is the gold standard for deterring tax dodging. German Tax Justice Campaigners are hoping the deal with Switzerland can be repealed. But what about the scores of countries without the economic and political clout to negotiate such agreements with Switzerland? How are they to capture some of the billions they are haemorrhaging as a result of tax dodging and corruption? They are reliant on the kind on international co-operation that NGOs including Christian Aid are fighting for, in order to End Tax Haven Secrecy. There may be worse to come. Here in the UK, HM Treasury is negotiating a similar agreement with Switzerland. It has simply been biding its time to see what kind of deal Germany gets. With the UK government pursuing such a self-interested and myopic policy, it is no surprise that senior UK diplomats appear distinctly disinterested in playing ball at the G20, where a truly global deal to end tax haven secrecy could be brokered. A former senior US Treasury official, who used to negotiate tax treaties for the US, recently told me of his fury about how these dirty deals are undoing a whole career's worth of work against financial secrecy. Such is the scourge of tax havens that the Tax Justice Network estimate assets held offshore total $11.5tn – which if taxed could yield revenues in excess of $225bn. This is money that could be paying for schools, hospitals, university fees and so on – not only in the developed world but also in developing countries. It is $11.5tn that could be used productively in the global economy rather than stashed away in an Alpine tax haven for private gain. Meanwhile, the real Swiss economy doesn't seem to be benefiting too much from the influx of dodgy capital. Its government this week met for a third unscheduled session to grapple with curbing the surging value of the Swiss franc, which is damaging Swiss exports and sending the economy down a precarious path. Yet again, it is vested interests who are winning out over the real economy and the everyday citizens who are being deprived of essential services, whether in Basel, Berlin or Bamako.

• © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved.

Medical Errors - Eighth Leading Cause of Death in the US

According to the Institute of Medicine, between 690,000 and 748,000 patients are affected by medical errors in the US every year and between 44,000 and 98,000 die from them. Even this low ball estimate makes medical mistakes the eighth leading cause of death worse than breast cancer, AIDS and motor vehicles accidents. It also makes medicine far more error prone than high-risk fields. For commercial aviation to take the same toll in the US as medical errors do, a full-up 747 would have to crash every three days, killing everyone on board.

More troubling is the medical profession's traditional response to these disturbing statistics, which has largely involved evasion, obfuscation, minimisation, defensiveness and denial....

"Observing more senior physicians, students learn that their mentors and supervisors believe in, practice and reward the concealment of errors. They learn to talk about unanticipated outcomes until a mistake morphs into a complication. Above all they learn not to tell the patient anything."  - Nancy Berlinger in After Harm.

Extracted from Being Wrong by Kathryn Schulz