September 28, 2022
  • September 28, 2022

Offshore financing for beginners – WSJ

By on October 5, 2021 0


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First there were the Panama papers, then the Paradise papers, now the Pandora papers. Launched Sunday by several news outlets, the latest avalanche of private financial records mysteriously “obtained” by the nonprofit International Consortium of Investigative Journalists and its Australia-based leader Gerard Ryle.

A participant, The Washington Post, explained in a “dear reader” note that it spent a year investigating the documents and found “no indication of inaccuracy or that the publication of the documents was directed at any individual or person. government in particular “, not to mention the impossibility of proving such a negative.

One thing the Post and others can’t say is that they didn’t treat the treasure exactly the way their anonymous source, apparently named Aladdin, would have liked it to be, regardless. age of the revelations that followed. Focus on the overseas real estate transactions of King Abdullah of Jordan. For some valuable background, check out a recent podcast discussion by economists Tyler Cowen and Ed Glaeser on the now-entrenched habit of foreign plutocrats of using US property as retirement plans. Of particular note is the rumor that a certain developer named Donald Trump, with so many absent clients, realized he could save money by providing fewer elevators in his buildings.

Separated from the efforts of the ICIJ is the recent campaign by ProPublica, another nonprofit reporting organization, to release apparently stolen IRS data on thousands of U.S. taxpayers. Your data is not safe whether it is in the hands of government agencies or private institutions.

The two cases also illustrate the problem of news organizations letting “news” be framed by their sources. ProPublica at least acknowledges that its stolen data could come from a hostile foreign intelligence service. In the midst of a blizzard of passive verbs, the ICIJ ignores these questions. And yet, obtaining a large volume of confidential information obviously requires skill and effort and involves personal risks. It’s a crime, after all. Criminals generally seek to profit from their thefts rather than giving them away. Intelligence agencies are the actors who take advantage of the free movement of such a “kompromat” to harm a geopolitical adversary.

Does this mean that news outlets should therefore not be reporting Pandora’s revelations? Guess what? It’s entirely up to them.

They don’t work for their sources. They might even decide that a more interesting story than the mostly mundane and legal transactions in Pandora’s documents is the story of who stole the documents and why, although I suspect the ICIJ is demanding that its allies of the media refrain from pursuing such questions.

This congenital servility of reporters to their sources is a problem. A now classic example is the Mother Jones reporter who blew up the Steele case story by deciding that the “news” was a bunch of apocryphal and unsubstantiated claims about Donald Trump rather than the fact that a pair of accomplices identifiable and not apocryphal peddled these assertions. influence a presidential election.

However, the press cannot completely escape its responsibility in such matters. This is undoubtedly the reason the Post felt the need to publish a note to justify its reporting on Pandora news, which it does not do when it reports most of the news. Unfortunately, despite many disclaimers, once the choice is made, a presumption resonates throughout Pandora’s articles that subjects were not up to anything good and did not deserve their privacy when the source’s motives were not. not examined.

A second problem is specific to this kind of “offshore” financial statement. Call it weird prejudices – the acronym stands for Western, Educated, Industrialized, Rich, and Democratic.

In fact, 90% of the world’s population live in countries where Western-style political accountability and rule of law are poorly established or do not exist, and where politics is still synonymous with personal enrichment (the latter unambiguous American case was arguably LBJ, an investigation of transactions which Life magazine rose after the Kennedy assassination).

You might not find a memo saying it, but allowing corrupt Russian capital, a key subject of Pandora, to seek refuge in the West was once de facto American and British policy, a form of stability management aimed at the Russian diet. The testimony is the very fact that after the grab of Crimea by Vladimir Putin, the Western response largely consisted of sanctions targeting Russian oligarchs and their enjoyment of Western assets, including blocking US real estate purchases in cash. or by bank transfer.

In our fallen world, US money laundering laws and foreign anti-corruption laws serve as carrots and sticks in the diplomatic arsenal (recently applied to Chinese oligarchs as well). For an informed reader, the only Pandora recital to savor was the old news that Putin’s frontrunner Gennady Timchenko was forced to sell his Gulfstream jet in a bad mood because sanctions prevented the US automaker from servicing it.

This broader geopolitical context would have made the otherwise tedious accounts of Pandora transactions less tedious. The evolved nature of our international (or “offshore”) asset markets is relevant to more than just bad guys putting one on the good ones.

Best and Worst of the Week by Kim Strassel, Mene Ukueberuwa, Kyle Peterson and Dan Henninger. Photo: Photo AP

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