Monday, November 17, 2008

Radio France series on tax havens

For those of you who speak French: Radio France has produced an important series on tax havens. Here are a number of relevant sections.

A first short section features Renaud Van Ruymbeke, the Paris-based investigating magistrate and one of seven to have made the Geneva Declaration in 1996 (alongside courageous others: Spain's Baltasar Garzon and Real Carlos Jimenez Villarejo; Switzerland's Bernard Bertossa, Italy's Edmundo Bruti Liberati and Gherardo Colombo, and the Belgian Benoît Dejemeppe.) These are people who have seen the problems close up, and grappled with powerful and dangerous mafias, all of which make extensive use of tax havens.

In an article in 2001 entitled "Why the democracies are vulnerable", van Ruymbeke describes how criminal networks use "offshore structures which let them pursue their activities in impunity and in great opacity, thanks to the modern tools that the market economy offers them."

In the latest series, van Ruymbeke laments that "we are swimming in hypocrisy. There has been no serious political will to stamp out tax havens." Europe, he says, should first "clean out its own rubbish" and tackle the secrecy jurisdictions in its own back yard. While the term "ultra-liberalism" and "neo-liberal" are common terms in French political discourse, Ruymbeke notes that "liberalism" implies "respect for the rules of the game" and urges the setting up of a real European judicial space, no longer punctured by the secrecy jurisdiction barriers that, like semi-permeable membranes, let the crooks and their dirty money through, but keep out the forces of law and order. Finally, van Ruymbeke laments that "we always bump up against the same obstacles. The enquiries do not reach their conclusion, most of the time."

Bertrand Bertossa, the crime-fighting Swiss magistrate (now retired), adds his opinion, casting some doubt on the sincerity of recent declarations by French President Nicolas Sarkozy and his Prime Minister François Fillon about abolishing tax havens. Bertossa points the finger to the City of London, in particular. He, like van Ruymbeke, argues for the creation of "supra-national" judicial institutions to deal with the problem. He also points out that it is not only Swiss bank secrecy that is the problem: he says Austria, Luxembourg, Belgium, and Liechtenstein that must follow suit. Bertossa made an important point in an interview in 2002:

"I cannot comprehend how we have got to the point where nation states have so utterly trivialised tax evasion."

Not long before that, writing shortly after the September 11, 2001 attacks in the United States, he added this:

"Unfortunately once the emotion has passed, it is doubtful that our national and international legislators will have the courage and the will to undertake the necessary reforms."

The series carries other interviews. This time, they interview Bertrand de Costa, a former employee of the oil services company Acergy, registered in Luxembourg, based in London, and listed in New York and Oslo, and which works with all the world's major oil companies. He describes being fired in 2006 for blowing the whistle on a "system of total concealment to escape taxes," notably using tax havens. Acergy vigorously denies his accusations. Look at this copy of a remarkable e-mail he got from his superiors (with an amusing final sentence.) See the rest on the main Radio France web page.

There is much more on this Radio France site. There is Pascal Saint-Amans of the OECD arguing that "you cannot build a new financial system while preserving these pockets of opacity." There is an important interview with Daniel Lebegue of Transparency International, a former top banker, who has witnessed over the years "the growth of clandestine finance, a form of phantom-virtual finance, which has developed a considerable relationship with the real economy.

It also quotes Denis Robert, a journalist who looked into the Luxembourg-based clearing house Clearstream, and received so many libel suits that he was forced to capitulate. Read his article, "The Predators have Won," in Libération newspaper recently. A very sorry state of affairs all round.

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