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US and Switzerland among most corrupt nations, statistics show

The Tax Justice Network produces a Financial Secrecy Index, ranking countries for the assistance their legal systems provide, to money-launderers, and to all people who seek to protect corruptly-obtained wealth.

Eric Zuesse

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The higher the score, the more corrupt the government is.

The last time this Index was published, in 2015, Switzerland was rated the world’s most-corrupt country, and Hong Kong was then #2. But now, in its newly released global rankings, “Financial Secrecy Index — 2018 Results”, though Switzerland still holds its #1 (most-corrupt) spot, the U.S. has become #2, and Hong Kong has now fallen to #4, which is immediately below Cayman Islands (which is #3, and which had been #5 in 2015).

The detailed report-card for Switzerland says “the Swiss will exchange information with rich countries if they have to, but will continue offering citizens of poorer countries the opportunity to evade their taxpaying responsibilities. These factors, along with ongoing aggressive pursuit of financial sector whistleblowers (resorting at times to what appear to be non-legal methods) are ongoing reminders of why Switzerland remains the most important secrecy jurisdiction in the world today.”

The detailed report-card for the United States notes America’s rising score, and resulting success in attracting corrupt wealth, as follows:

The rise of the US continues a long term trend, as the country was one of the few to increase their secrecy score in the 2015 index. The continues [intending the word “continued”] rise of the US in the 2018 index comes off the back of a significant change in the US share of the global market for offshore financial services. Between 2015 and 2018 the US increased its market share in offshore financial services by 14%. In total the US accounts for 22.3% of the global market in offshore financial services.

The U.S. report-card asserts that, “Financial secrecy provided by the U.S. has caused untold harm to the ordinary citizens of foreign countries, whose elites have used the United States as a bolt-hole for looted wealth.” Of course, this isn’t the largest such “bolt-hole” — it’s the second-largest. Furthermore, the report-card for Switzerland said:

According to the Swiss Bankers’ Association banks in Switzerland hold CHF 6.65 trillion ($6.5 trillion) in assets under management, of which 48 percent originated from abroad: this made Switzerland the world leader in global cross-border asset management, with a 25 percent share of that market.1 In terms of the narrower wealth management sector, Deloitte estimated that Switzerland was also the world leader with US$2.04 trillion in assets under management in 2014, compared to the $1.65 trillion and $1.43 trillion for the UK and US respectively.2

The “Secretiveness” scores ranged from “100%” meaning total secrecy, to “Moderately secretive” meaning from 31% to 40% secretive; and, so, among the 112 ranked countries, none were unwelcoming of corruptly obtained wealth; all were at least “moderately” welcoming of it.

Furthermore, other factors than “Secretiveness” were also included in the rankings. The 242-page Methodology document says, for example, that “The secrecy score is cubed and the weighting is cube-rooted before being multiplied to produce a Financial Secrecy Index which ranks secrecy jurisdictions according to their degree of secrecy and the scale of their trade in international financial services.” So, countries such as Montserrat,  which ranked at the very bottom, #112, actually had a “Secrecy” score of 77.5% (higher even than Switzerland), but it had extraordinarily good “International Standards and Cooperation” such as with “Anti-Money Laundering” and a 0% score of non-cooperation with “Bilateral Treaties.”

Above all: any country, in which only few wealthy foreigners want to park their money, was ranked among the least-corrupt, in Tax Justice Center’s methodology — and “FSI Share,” or the percentage of the global total wealth that’s stashed offshore within the given country, is by far the dominant factor, in their calculations of ‘Financial Secrecy Index’, so that their methodology is simply absurd. The Methodology document ‘justifies’ this deceptive practice by saying:

The ranking reflects not only information about which are the most secretive jurisdictions, but also the question of scale (i.e. the extent to which a jurisdiction’s secrecy is likely to have global impact). In this way, the Financial Secrecy Index offers an answer to the question: by providing offshore financial services in combination with a lack of transparency, how much damage is each secrecy jurisdiction actually responsible for?

Obviously, any ranking-system that’s ranking countries more according to how big a percentage of the global offshore wealth it’s hosting, than according to how secretive the country is when other countries are seeking its assistance in tracking down assets that are held abroad, is no real ‘Financial Secrecy Index’ at all, and thus should be renamed, perhaps as “International Economic Harm Index” or something else that’s not nearly as misleading as the existing title for it (‘Financial Secrecy Index’) is.

Be that as it may: among the 112 nations that were ranked,

China was #28 and was 60% secretive (60% “Secrecy Score”).

Russia ranked #29 and was 64% secretive.

Ukraine ranked #43, and was 69% secretive.

By contrast, U.S. was ranked as 60% secretive; so, U.S. is actually in their league and is less corrupt than Ukraine, but is ranked as the 2nd-most-‘Secretive’ of all rated countries. Switzerland was ranked as 76% secretive, which places Switzerland among the 28 most-secretive countries on the list — but it has the highest ‘Financial Secrecy Index’ of any, even though more than two dozen countries received a higher “Secrecy Score.”

The nine highest-scoring nations on their actual “Secrecy Score” were, from the top: (#1) Vanuatu 89%; (#2) Antigua-Barbuda 87%; (tied #s 3-5) UAE, Bahamas, and Brunei, 84%; (tied #s 6-9) Thailand, Kenya, Liberia, and Bolivia, 80%.

So: Those were actually the 9 highest-scored “Secrecy Score” countries.

The 7 lowest-scored “Secrecy Score” ones were: 42% (tied) UK and Slovenia, 44% Belgium, 45% Sweden, 47% Lithuania, 49% Italy, 49% Brazil.

But is Brazil really among the least-corrupt countries? Is it, even, really, among the financially most transparent countries?

Furthermore, the detailed report-card for the U.S. asserts:<

A wealthy Ukrainian, say, sets up a Delaware shell company using a local company formation agent. That Delaware agent will provide nominee officers and directors (typically lawyers) to serve as fronts for the real owners, and their details and photocopies of their passports can be made public but that gets you no closer to who the genuine Ukrainian owner of that company is: if the nominees are lawyers they are bound by attorney-client privilege not to reveal the information (if they even have it: the owner of that shell company may be another secretive shell company or trust somewhere else).

The company can run millions through its bank account but nobody – whether domestic or foreign law enforcement – can crack through that form of secrecy in any efficient or effective way. In the words of Dennis Lormel, the first chief of the FBI’s Terrorist Financing Operations Section and a retired 28-year Bureau veteran, “Terrorists, organized crime groups, and pariah states need access to the international banking system. Shell firms are how they get it.” …

Almost two million corporations and limited liability companies (LLCs) are formed in U.S. states each year, many by foreigners, without the states ever asking for the identity of the ultimate beneficial owners. Some serve legitimate purposes but many, in the words of Senator Carl Levin, “function as conduits for organised crime, money laundering, securities fraud, tax evasion, and other misconduct.”

Nonetheless, the U.S. is granted a modest “Secrecy Score” of only 60% — though the process that’s described there is providing 100% secrecy. Nothing is being said, not even in the Methodology document, about how a country which can provide 100% secrecy, deserves a mere 60% “Secrecy Score.”

The detailed report-card on Switzerland likewise includes considerable text describing a country that seems as corrupt as is indicated in the text describing America. Granting the U.S. a “Secrecy Score” of only 60%, while Switzerland receives a much higher 76% such score, is puzzling; and, again, the Methodology document provides no help to understand what the actual methodology that was used is — much less to justify the methodology.

Perhaps the worst score of all should go to the Tax Justice Network itself.

However, maybe the so-called “International Consortium of Investigative Journalists” deserves an even worse score, because that organization headlined on January 30th, “US, Switzerland singled out for financial secrecy by new index” and reported favorably about this “new index,” which is actually in at least its second edition, since an earlier one was reported in 2015 — so, this isn’t even a ‘new index’ at all, but is at least a three-year-old index.

Isn’t a bit of investigative journalism necessary from a purported professional organization of ‘Investigative Journalists’? Or does mere ‘journalistic’ stenography now qualify, even as ‘investigative’ journalism? Is ‘journalism’ now mere PR, propaganda, public relations? And is ‘investigative’ now mere reading and reciting from a source? What’s the difference between PR versus ‘investigative journalism’?

And: what’s the difference between America’s 60% “Secrecy Score” and Switzerland’s 76% one? Based upon the detailed report-cards, how would it be possible to be ‘more corrupt’ than each of these countries is?

The United States Government routinely characterizes any Government that it seeks to overthrow as being ‘corrupt’. Perhaps that fact, more than any other, shows how corrupt the U.S. Government itself really is.

Throwing stones from glass houses does no one any good. But it does prove — and not merely by some organization’s flawed methodology — that hypocrisy can sometimes signal a threat that could turn out to be even worse than “Financial Secrecy” or “Secrecy Score” or even than real corruption.

When the United States Government called Saddam Hussein, and Muammar Gaddafi, and Viktor Yanukovych, etc., by such terms as “corrupt,” the invasions and coups which were ‘justified’ by means of that U.S. name-calling, perpetrated vastly more harm than any corruption which was, or might have been, perpetrated by those individually blamed persons.

Such “stones from glass houses,” as the U.S. casts, contain bombs; they’re actually warheads; they are weapons of mass destruction, such as extremely corrupt governments employ with the most hypocritical of ‘humanitarian’ ‘concerns’, for the mass-victims, which commonly result from their mass-weapons.

Corruption that’s so heavily armed, is the worst sort of corruption there is — regardless of whether it’s associated with an exceptionally high “Financial Secrecy Index,” or any other type of extraordinary corruption. And, certainly, the U.S. far outdoes Switzerland, on this score. So: Trump is right — “America is Number One”, after all.

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Macron offers crumbs to protestors in bid to save his globalist agenda (Video)

The Duran Quick Take: Episode 36.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Macron’s pathetic display of leadership as he offers protestors little in the way of concessions while at the same time promising to crack down hard on any and all citizens who resort to violence.

Meanwhile France’s economy is set for a deep recession as French output and production grinds to a halt.

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Europe Has A New Problem: Macron’s “Populism” To Blow Out French Budget Deficit Far Beyond Italy’s

Via Zerohedge


As if Brussels didn’t have its hands full already with Italy and the UK, the European Union will soon be forced to rationalize why one of its favorite core members is allowed to pursue populist measures to blow out its budget deficit to ease domestic unrest while another is threatened with fines potentially amounting to billions of euros.

When blaming Russia failed to quell the widespread anger elicited by his policies, French President Emmanuel Macron tried to appease the increasingly violent “yellow vests” protesters who have sacked his capital city by offering massive tax cuts that could blow the French budget out beyond the 3% budget threshold outlined in the bloc’s fiscal rules.

Given the concessions recently offered by Italy’s populists, Macron’s couldn’t have picked a worse time to challenge the bloc’s fiscal conventions. As Bloomberg pointed out, these rules will almost certainly set the Continent’s second largest economy on a collision course with Brussels. To be clear, Macron’s offered cuts come with a price tag of about €11 billion according to Les Echos, and will leave the country with a budget gap of 3.5% of GDP in 2019, with one government official said the deficit may be higher than 3.6%.

By comparison, Italy’s initial projections put its deficit target at 2.4%, a number which Europe has repeatedly refused to consider.

Macron’s promises of fiscal stimulus – which come on top of his government’s decision to delay the planned gas-tax hikes that helped inspire the protests – were part of a broader ‘mea culpa’ offered by Macron in a speech Monday night, where he also planned to hike France’s minimum wage.

Of course, when Brussels inevitably objects, perhaps Macron could just show them this video of French police tossing a wheelchair-bound protester to the ground.

Already, the Italians are complaining.  Speaking on Tuesday, Italian cabinet undersecretary Giancarlo Giorgetti said Italy hasn’t breached the EU deficit limit. “I repeat that from the Italian government there is a reasonable approach, if there is one also from the EU a solution will be found.”

“France has several times breached the 3% deficit. Italy hasn’t done it. They are different situations. There are many indicators to assess.”

Still, as one Guardian columnist pointed out in an op-ed published Tuesday morning, the fact that the gilets jaunes (yellow vest) organizers managed to pressure Macron to cave and grant concessions after just 4 weeks of protests will only embolden them to push for even more radical demands: The collapse of the government of the supremely unpopular Macron.

Then again, with Brussels now facing certain accusations of hypocrisy, the fact that Macron was pressured into the exact same populist measures for which Italy has been slammed, the French fiasco raises the odds that Rome can pass any deficit measure it wants with the EU now forced to quietly look away even as it jawbones all the way from the bank (i.e., the German taxpayers).

“Macron’s spending will encourage Salvini and Di Maio,” said Giovanni Orsina, head of the School of Government at Rome’s Luiss-Guido Carli University. “Macron was supposed to be the spearhead of pro-European forces, if he himself is forced to challenge EU rules, Salvini and Di Maio will jump on that to push their contention that those rules are wrong.”

While we look forward to how Brussels will square this circle, markets are less excited.

Exhausted from lurching from one extreme to another following conflicting headlines, traders are already asking if “France is the new Italy.” The reason: the French OAT curve has bear steepened this morning with 10Y yields rising as much as ~6bp, with the Bund/OAT spread reaching the widest since May 2017 and the French presidential election. Though well below the peaks of last year, further widening would push the gap into levels reserved for heightened political risk.

As Bloomberg macro analyst Michael Read notes this morning, it’s hard to see a specific near-term trigger blowing out the Bund/OAT spread but the trend looks likely to slowly drift higher.

While Macron has to fight on both domestic and European fronts, he’ll need to keep peace at home to stay on top. Remember that we saw the 10Y spread widen to ~80bps around the May ’17 elections as concerns of a move toward the political fringe played out in the markets, and the French President’s popularity ratings already look far from rosy.

And just like that France may have solved the Italian crisis.

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Watch: Democrat Chuck Schumer shows his East Coast elitism on live TV

Amazing moment in which the President exhibits “transparency in government” and shows the world who the Democrat leaders really are.

Seraphim Hanisch

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One of the reasons Donald Trump was elected to the Presidency was because of his pugnacious, “in your face” character he presented – and promised TO present – against Democrat policy decisions and “stupid government” in general.

One of the reasons President Donald Trump is reviled is because of his pugnacious, “in your face” character he presented – and promised TO present – in the American political scene.

In other words, there are two reactions to the same characteristic. On Tuesday, the President did something that probably cheered and delighted a great many Americans who witnessed this.

The Democrats have been unanimous in taking any chance to roast the President, or to call for his impeachment, or to incite violence against him. But Tuesday was President Trump’s turn. He invited the two Democrat leaders, presumptive incoming House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, and then, he turned the cameras on:

As Tucker Carlson notes, the body language from Schumer was fury. The old (something)-eating grin covered up humiliation, embarrassment and probably no small amount of fear, as this whole incident was filmed and broadcast openly and transparently to the American public. Nancy Pelosi was similarly agitated, and she expressed it later after this humiliation on camera, saying, “It’s like a manhood thing for him… As if manhood could ever be associated with him.”

She didn’t stop there. According to a report from the New York Daily News, the Queen Bee took the rhetoric a step below even her sense of dignity:

Pelosi stressed she made clear to Trump there isn’t enough support in Congress for a wall and speculated the President is refusing to back down because he’s scared to run away with his tail between his legs.

“I was trying to be the mom. I can’t explain it to you. It was so wild,” Pelosi said of the Oval Office meet, which was also attended by Vice President Pence and Senate Minority Leader Chuck Schumer (D-N.Y.). “It goes to show you: you get into a tinkle contest with a skunk, you get tinkle all over you.”

This represented the first salvo in a major spin-job for the ultra-liberal San Francisco Democrat. The rhetoric spun by Mrs. Pelosi and Chuck Schumer was desperate as they tried to deflect their humiliation and place it back on the President:

With reporters still present, Trump boasted during the Oval meeting he would be “proud” to shutdown the government if Congress doesn’t earmark cash for his wall before a Dec. 21 spending deadline.

Pelosi told Democrats that Trump’s boisterousness will be beneficial for them.

“The fact is we did get him to say, to fully own that the shutdown was his,” Pelosi said. “That was an accomplishment.”

The press tried to characterize this as a “Trump Tantrum”, saying things like this lede:

While “discussing” a budgetary agreement for the government, President Donald Trump crossed his arms and declared: “we will shut down the government if there is no wall.”

While the Democrats and the mainstream media in the US are sure to largely buy these interpretations of the event, the fact that this matter was televised live shows that the matter was entirely different, and this will be discomfiting to all but those Democrats and Trump-dislikers that will not look at reality.

There appears to be a twofold accomplishment for the President in this confrontation:

  1. The President revealed to his support base the real nature of the conversation with the Democrat leadership, because anyone watching this broadcast (and later, video clip) saw it unedited with their own eyes. They witnessed the pettiness of both Democrats and they witnessed a President completely comfortable and confident about the situation.
  2. President Trump probably made many of his supporters cheer with the commitment to shut down the government if he doesn’t get his border wall funding. This cheering is for both the strength shown about getting the wall finished and the promise to shut the government down, and further, Mr. Trump’s assertion that he would be “proud” to shut the government down, taking complete ownership willingly, reflects a sentiment that many of his supporters share.

The usual pattern is for the media, Democrats and even some Republicans to create a “scare” narrative about government shutdowns, about how doing this is a sure-fire path to chaos and suffering for the United States.

But the educated understanding of how shutdowns work reveals something completely different. Vital services never close. However, National Parks can close partly or completely, and some non-essential government agencies are shuttered. While this is an inconvenience for the employees furloughed during the shutdown, they eventually are re-compensated for the time lost, and are likely to receive help during the shutdown period if they need it. The impact on the nation is minimal, aside from the fact that the government stops spending money at the same frenetic pace as usual.

President Trump’s expression of willingness to do this action and his singling out of the Dem leadership gives the Democrats a real problem. Now the entire country sees their nature. As President Trump is a populist, this visceral display of Democrat opposition and pettiness will make at least some impact on the population, even that group of people who are not Trump fans.

The media reaction and that of the Democrats here show, amazingly, that after three years-plus of Donald Trump being a thorn in their side, they still do not understand how he works, and they also cannot match it against their expected “norms” of establishment behavior.

This may be a brilliant masterstroke, and it also may be followed up by more. The President relishes head-to-head conflict. The reactions of these congress members showed who they really are.

Let the games begin.

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French opposition rejects Macron’s concessions to Yellow Vests, some demand ‘citizen revolution’

Mélenchon: “I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.”

RT

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Via RT…


Macron’s concessions to the Yellow Vests has failed to appease protesters and opposition politicians, such as Jean-Luc Mélenchon, who called for “citizen’s revolution” to continue until a fair distribution of wealth is achieved.

Immediately after French President Macron declared a “social and economic state of emergency” in response to large-scale protests by members of the Yellow Vest movement, promising a range of concessions to address their grievances, left-wing opposition politician Mélenchon called on the grassroots campaign to continue their revolution next Saturday.

I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.

Macron’s promise of a €100 minimum wage increase, tax-free overtime pay and end-of-year bonuses, Mélenchon argued, will not affect any “considerable part” of the French population. Yet the leader of La France Insoumise stressed that the “decision” to rise up rests with “those who are in action.”

“We expect a real redistribution of wealth,” Benoît Hamon, a former presidential candidate and the founder of the Mouvement Génération, told BFM TV, accusing Macron’s package of measures that benefit the rich.

The Socialist Party’s first secretary, Olivier Faure, also slammed Macron’s financial concessions to struggling workers, noting that his general “course has not changed.”

Although welcoming certain tax measures, Marine Le Pen, president of the National Rally (previously National Front), accused the president’s “model” of governance based on “wild globalization, financialization of the economy, unfair competition,” of failing to address the social and cultural consequences of the Yellow Vest movement.

Macron’s speech was a “great comedy,”according to Debout la France chairman, Nicolas Dupont-Aignan, who accused the French President of “hypocrisy.”

Yet many found Melanchon’s calls to rise up against the government unreasonable, accusing the 67-year-old opposition politician of being an “opportunist” and “populist,” who is trying to hijack the social protest movement for his own gain.

Furthermore, some 54 percent of French believe the Yellow Vests achieved their goals and want rallies to stop, OpinionWay survey showed. While half of the survey respondents considered Macron’s anti-crisis measures unconvincing, another 49 percent found the president to be successful in addressing the demands of the protesters. Some 68 percent of those polled following Macron’s speech on Monday especially welcomed the increase in the minimum wage, while 78 percent favored tax cuts.

The Yellow Vest protests against pension cuts and fuel tax hikes last month were organized and kept strong via social media, without help from France’s powerful labor unions or official political parties. Some noted that such a mass mobilization of all levels of society managed to achieve unprecedented concessions from the government, which the unions failed to negotiate over the last three decades.

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