Category Archives: Spooks

Big Brother’s panopticon chills online searches


It’s no secret that we’ve long suspected that the revelations of NSA’s panopticon powers would result in self-censorship online, and now we have evidence in the form of an academic study published right here in Berkeley.

Chilling Effects: Online Surveillance and Wikipedia Use [PDF] has just appeared online from the Berkeley Technology Law Journal, and it’s well worth a read.

Reuters sums up:

Internet traffic to Wikipedia pages summarizing knowledge about terror groups and their tools plunged nearly 30 percent after revelations of widespread Web monitoring by the U.S. National Security Agency, suggesting that concerns about government snooping are hurting the ordinary pursuit of information.

A forthcoming paper in the Berkeley Technology Law Journal analyzes the fall in traffic, arguing that it provides the most direct evidence to date of a so-called “chilling effect,” or negative impact on legal conduct, from the intelligence practices disclosed by fugitive former NSA contractor Edward Snowden.

Author Jonathon Penney, a fellow at the University of Toronto’s interdisciplinary Citizen Lab, examined monthly views of Wikipedia articles on 48 topics identified by the U.S. Department of Homeland Security as subjects that they track on social media, including Al Qaeda, dirty bombs and jihad.

In the 16 months prior to the first major Snowden stories in June 2013, the articles drew a variable but an increasing audience, with a low point of about 2.2 million per month rising to 3.0 million just before disclosures of the NSA’s Internet spying programs. Views of the sensitive pages rapidly fell back to 2.2 million a month in the next two months and later dipped under 2.0 million before stabilizing below 2.5 million 14 months later, Penney found.

Here’s a chart from page 37 of the paper dramatically illustrating the decline:

BLOG Terror

More details from Abhimanyu Ghoshal of The Next Web:

In his paper, ‘Chilling Effects: Online Surveillance and Wikipedia Use’, Penney looked at monthly views on Wikipedia pages for 48 topics that the US Department of Homeland Security said it tracks on social media, including ‘Al Qaeda’, ‘terror’, ‘weapons grade’, ‘Abu Sayyaf’, ‘Iran’, ‘extremism’, ‘Nigeria’ and jihad.

He noted that in the 16 months prior to Snowden’s first big reveal, the articles drew between 2.2 million views per month rising to 3 million. After Snowden went public, those figures fell below 2 million before stabilizing at just under 2.5 million 14 months later.

Penney’s paper highlights the ‘chilling effect’ of the government’s snooping programs, which refers to the discouragement of the legitimate exercise of legal rights by the threat of legal sanction – in this case, to seek information and learn about what’s going on around the world.

And the money quote from page 40 of the study itself:

Skepticism among courts, legal scholars, and empirical researchers has persisted about the nature, extent, and even existence of chilling effects due, in large part, to a lack of empirical substantiation. The results in this case study, however, provide empirical evidence consistent with chilling effects on the activities of Internet users due to government surveillance. And, to be clear, the activity here is not only legal—accessing information on Wikipedia—but arguably desirable for a healthy democratic society. It involves Internets users informing themselves about important topics subject to today’s widespread social, political, moral, and public policy debates. The large, statistically significant, and immediate drop in total views for the Wikipedia articles after June 2013 implies a clear and immediate chilling effect. Moreover, the broad and statistically significant shift in the overall trend in the data (e.g. the shift from the second results excluding outliers) suggests any chilling effects observed may be substantial and long-term, rather than weak, temporary, or ephemeral. This study also bolsters support for the existence of the chilling due to the data upon which it relies. It is among the first studies to demonstrate evidence of such a chilling effect using web traffic data (instead of survey responses or search), and the first to do so in relation both to the potential chilling effects on Wikipedia use, and, more broadly, how such government surveillance and other actions impact how people access and obtain information and knowledge online.

We leave the last word to Glenn Greenwald, writing at The Intercept:

The fear that causes self-censorship is well beyond the realm of theory. Ample evidence demonstrates that it’s real – and rational. A study from PEN America writers found that 1 in 6 writers had curbed their content out of fear of surveillance and showed that writers are “not only overwhelmingly worried about government surveillance, but are engaging in self-censorship as a result.” Scholars in Europe have been accused of being terrorist supporters by virtue of possessing research materials on extremist groups, while British libraries refuse to house any material on the Taliban for fear of being prosecuted for material support for terrorism.

There are also numerous psychological studies demonstrating that people who believe they are being watched engage in behavior far more compliant, conformist and submissive than those who believe they are acting without monitoring. That same realization served centuries ago as the foundation of Jeremy Bentham’s Panopticon: that behaviors of large groups of people can be effectively controlled through architectural structures that make it possible for them to be watched at any given movement even though they can never know if they are, in fact, being monitored, thus forcing them to act as if they always are being watched. This same self-censorsing, chilling effect of the potential of being surveilled was also the crux of the tyranny about which Orwell warned in 1984:

There was of course no way of knowing whether you were being watched at any given moment. How often, or on what system, the Thought Police plugged in on any individual wire was guesswork. It was even conceivable that they watched everybody all the time. But at any rate they could plug in your wire whenever they wanted to. You have to live – did live, from habit that became instinct – in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized.

Well, not quite the last word. Undoubtedly, the net beneficiaries of the reluctance of the populace to look deeper into issues of terrorism serves the interests of a government with a vested interest in keeping secret many of its operations and deepest political motives. . .

Mexican gov’t stonewalls Ayotzinapa probers


BLOG Ayotz

The Mexican government has derailed an international panel of forensic experts assigned to investigate the 26 September 2014 disappearances of 43 young students from the Raúl Isidro Burgos Rural Teachers’ College [previously], an action only now receiving attention north of the border.

It took until this morning for the story to make the front page of this country’s de facto paper of record.

From the New York Times:

An international panel of experts brought to Mexico to investigate the haunting disappearance of 43 students that ignited a global outcry say they cannot solve the case because of a sustained campaign of harassment, stonewalling and intimidation against them.

The investigators say they have endured carefully orchestrated attacks in the Mexican news media, a refusal by the government to turn over documents or grant interviews with essential figures, and even a retaliatory criminal investigation into one of the officials who appointed them.

For some, the inevitable conclusion is that the government simply does not want the experts to solve the case.

“The conditions to conduct our work don’t exist,” said Claudia Paz y Paz, a panel member who earned international recognition for prosecuting a former Guatemalan dictator on charges of genocide. “And in Mexico, the proof is that the government opposed the extension of our mandate, isn’t it?”

More from Univision, including the sordid details on the Mexican government’s deplorable efforts to derail the panel before today’s final action:

Mexico’s Attorney General’s Office allegedly used sexual torture and offered millions of dollars in bribes to manipulate the investigation into the disappearance of 43 students in 2014 from a rural teachers’ college in the state of Guerrero, according to legal documents and letters by some of those accused of involvement in the atrocity that remains shrouded in mystery.

The accusers identified the highest ranking abusers as former Attorney General Jesús Murillo Karam; the head of the organized crime section of the prosecutor’s office (SEIDO, Gustavo Salas Chávez, and Tomás Zeron de Lucio, director of the office’s Criminal Investigation Agency.

They were directly involved in alleged irregularities designed to prop up the official results of the investigation, known as the “historic truth,” in order to close the notorious case of the missing Ayotzinapa students, according to the documents obtained by Univision.

The allegations have surfaced at a crucial juncture in the case, days before a group of independent experts are due to release on Sunday the findings of a year-long investigation by the Inter-American Commission on Human Rights, a branch of the Organization of American States (OAS). The investigation by the group of experts, which was agreed to by the Mexican government in November 2014, highlighted irregularities in the official investigation in a preliminary report last September.

And as the New Yorker’s Francisco Goldman reported Saturday, the decision will be greeted with despair by the families of the disappeared:

The Ayotzinapa family members and many others, especially in the human-rights community, pleaded for GIEI’s six-month mandate to be extended until the mystery of the whereabouts of the forty-three students could finally be solved. But government spokesmen made it clear that GIEI’s stay in Mexico would end on April 30th. In an interview on April 18th with the powerful television journalist Joaquín López-Dóriga, Interior Minister Miguel Ángel Osorio Chong repeated his puzzling declarations that “GIEI and the P.G.R. coincided” in their conclusions, and that there were no “new elements that lead us to a different circumstance about what occurred in that place. We only have the evidence that the more than one hundred people detained in the case have provided due to the Attorney General’s Office of the Republic.”

It is not likely that GIEI will agree with that opinion when it releases its final report, at a press conference in Mexico City, on Sunday. It has been publishing a steady stream of tweets in advance of that conference: “It was a massive attack. There were more than 180 direct victims, the majority youths and minors”; “The dimensions of the attack haven’t been taken into account in order to form a deep analysis of what occurred”; “The attack against the normalistas raised huge questions: How was such a massive attack possible? Why did it happen?”; “Because the truth hurts but helps heal wounds, this April 24, #InformeGIEI.”

In late February, in Mexico City, one of the five GIEI experts, the Spanish social psychologist Carlos Beristain, told me how he understood the group’s mission. “We’re like a vaccination against impunity,” he said. “We stimulate investigations, antibodies, against impunity. An institutional or social reaction to cover up or isolate or reject us keeps up from having an impact in the organism.” There seems little doubt that, in its report, GIEI will accuse the Mexican government of having obstructed or rejected its investigation. But what it has to say on Sunday about the fate of the forty-three Ayotzinapa normalistas, and about their experience in Mexico, will enter the bloodstream of the country in a way that will not easily be isolated, ignored, or rejected.

Six days earlier, Latin Times reported on a new break in the case, one certain to have heightened the government’s anxieties:

Now, after over 18 months of speculation and pieced information from Mexican officials, a new witness has come forward offering his version of the incident. Identified as G.J.R. he was the driver of one of the buses the students were on, and narrated the series of events that confirm the government’s involvement in the young men’s disappearance. “With teary, blurred eyes from the pepper spray, I was able to see from the police car how they were bringing down each student, when one of the policemen said, ‘we can fit any more of them in the car,’ and another said, ‘that’s fine, here come the ones from Huitzuco.’ At that moment I could perceive more police cars pulling in; they were white and blue and they I saw them drive directed to Huitzuco,” he declared.

In addition, the driver also stated that afterwards, the police also turned the students over to a criminal leader they were referring to as “El Patrón.”

This comes as a big twist in the investigation, as the driver’s initial testimony didn’t mention the involvement of the police. On the contrary, G.J.R. had said the students had forced him to take them and that he’d been attacked during the brawl; beaten, sprayed and threatened before they let him go.

More details came in a Friday story from teleSUR English:

Once again Mexico’s federal government “truth” regarding the fate of the forcibly disappeared 43 Ayotzinapa students has been shot down by Argentine Team of Anthropological Forensic experts, who made their report public revealing there is no way the students were incinerated at garbage dump in Cocula, Guerrero.

The Argentine team, also known by their acronym EAAF, decided to make an exception to their very strict rule of not revealing a full report carried out by them by making public the conclusions of their investigation which are presented in a 351-page document.

In lamest terms, the EAAF’s conclusions conclusively reject the federal government’s truth by saying there is no way that the students were incinerated at the Cocula dump.

Their conclusions are based on an investigation that began at the Cocula dump exactly one month after the students were attacked and forcibly disappeared the night of Sept. 26, 2014 and the following morning.

Even before the latest twists, one presidential candidate north of the border sought to reap some political advantage appearing in an interview with La Opinión, a Spanish-language newspaper in Los Angeles, reports the Latin Times:

“It is indignant. If I was working with the Mexican government, I would not rest until we found out what happened to those 42 people,” the presidential hopeful said during an interview with a Mexican publication. “Their kidnapping was a terrible law violation.”

With her statement, the 68-year-old former Secretary of State suggested that Enrique Peña Nieto’s administration is clearly not doing enough to provide answers for the families of the missing students, which is no surprise for the Mexican people.

During the interview, Clinton added that if she were voted the next President of The United of America, she would work towards strengthening the relationship between both countries, and join the investigation in order to get to the bottom of things.

“It is something that everyone in Mexico should be fighting for, in order to find answers,” she told La Opinión. “If there’s something that America could do to help, I would be the first one to offer that help.”

But Clinton’s zeal, which appeared on the same day as the crucial New York primary, drew fire from the father of one of the missing students.

From the Semillas Collective:

Ayotzinapa Dad Responds to Hilary Clinton’s Statement

Program notes:

Father of missing Ayotzinapa student, Antonio Tizpa-Responds to Hilary Clinton after she recently gave a statement on Ayotzinapa, in which she mistakenly cites 42 students missing instead of 43. Tizapa asks her: “Are you with the Mexican people or with the Mexican government?” He urges her to end Plan Merida : An initiative Clinton helped implement and expand during the Obama administration, which has only increased violence in Mexico (state committed crime). He also asks her to tell the Mexican government, to allow the investigation by the GIEI, The group who discovered that there was no scientific evidence to support the Mexican governments account of what happened to the 43, To stay in Mexico & continue their investigation until the 43 missing students are found. The Mexican government has ordered the GIEI to leave by April 30th. Learn more/Sign Petition go to: www.change.org/staygiei43

The Mérida Initiative was launched in the last half of the final year of the George W. Bush presidency, and continued under Clinton’s tenure at the State Department, where she gave it her enthusiastic support.

The program provided arms and training for Mexican military and police forces. One program funded by the plan provided training in torture techniques by an American security contractor. Another program funded arms that wound up in the hands of drug cartels.

The initiative was announced on 22 October 2007 and signed into law on June 30, 2008. From FY2008 to FY2015, Congress appropriated nearly $2.5 billion for Mexico under the Mérida Initiative, including 22 aircraft.

As noted in a 2014 report on Plan Merida by Alexander Main for the North American Congress on Latin America:

In a letter sent to Obama and the region’s other presidents last year [2013], over 145 civil society organizations called out U.S. policies that “promote militarization to address organized crime.” These policies, the letter states, have only resulted in a “dramatic surge in violent crime, often reportedly perpetrated by security forces themselves. Human rights abuses against our families and communities are, in many cases, directly attributable to failed and counterproductive security policies that have militarized our societies in the name of the ‘war on drugs.’”

The latest round in the ramping up of U.S. security assistance to Mexico and Central America began during President George W. Bush’s second term in office. Funding allocated to the region’s police and military forces climbed steadily upward to levels unseen since the U.S.-backed “dirty wars” of the 1980s. As narco-trafficking operations shifted increasingly from the Caribbean to the Central American corridor, the United States worked with regional governments to stage a heavily militarized war on drugs in an area that had yet to fully recover from nearly two decades of war.

In 2008 the Bush Administration launched the Mérida Initiative, a cooperation agreement that provides training, equipment, and intelligence to Mexican and Central American security forces. A key model for these agreements is Plan Colombia, an $8 billion program launched in 1999 that saw the mass deployment of military troops and militarized police forces to both interdict illegal drugs and counter left-wing guerrilla groups. Plan Colombia is frequently touted as a glowing success by U.S. officials who point to statistics indicating that drug production and violence has dropped while rebel groups’ size and territorial reach have significantly receded. Human rights groups, however, have documented the program’s widespread “collateral damage,” which includes the forced displacement of an estimated 5.7 million Colombians, thousands of extrajudicial killings, and continued attacks and killings targeting community activists, labor leaders, and journalists.

Under President Obama, the U.S. government has renewed and expanded Mérida and, in 2011, created the Central American Regional Security Initiative (CARSI). From 2008 to 2013, these programs have received over $2 billion and $574 million respectively, according to a 2014 report by the Igarapé Institute. Though administration spokespeople emphasize investments made in judicial reform and drug prevention programs, most funds have been spent on supporting increasingly warlike drug interdiction and law enforcement.

And in a report issued last year on a drive by seven human rights organizations calling on the Obama Administration to end the plan’s funding of Mexican security forces, the Washington Office on Latin America noted:

“Our research and documentation, as well as the work done by the UN Special Rapporteur on Torture and the U.N. Committee on Enforced Disappearances, illustrate that the Mexican government has failed to make sufficient progress on the human rights priorities identified by Congress in its assistance to Mexico,” the eight co-signing groups affirm. In addition to WOLA, these include Amnesty International; the Miguel Agustin Pro Juarez Human Rights Center (Centro PRODH); the Tlachinollan Human Rights Center; Citizens in Support of Human Rights A.C. (CADHAC); Fundar, Center for Analysis and Research; the Latin America Working Group (LAWG) and Robert F. Kennedy Human Rights.

“In general, providing Mexican security forces with more training and equipment while corruption and abuses continue unchecked does little to improve security in Mexico, and is likely to continue to exacerbate an already dire human rights situation.” the memo reads. “We reiterate that the path to citizen security for Mexico is not that of a logic of war, but rather that of respecting human rights, strengthening civilian institutions, enacting true police and judicial reform, punishing corruption, and consolidating the rule of law and a representative and accountable democracy.”

The memo refers to several emblematic cases, including the enforced disappearance of the 43 students of Ayotzinapa and the massacre in Tlatlaya. It also provides examples of the Mexican government’s failure to investigate and punish officials for human rights violations, enforce prohibitions on the use of torture, and search for victims of enforced disappearance, all of which clearly demonstrate why the State Department should not issue a favorable report to Congress in order to obligate the withheld funds.

We conclude with a statement by Berkeley journalist Steve Fisher, one of the few U.S. reporters to conduct groundbreaking research on the Ayotzinapa crisis, during a January 2015 interview by Christy Thornton for the North American Congress on Latin America:

I think that there can be justice. But I don’t think at the moment it comes from the hands of the Mexican government. The Mexican government has not shown to us, and Anabel Hernández and myself have seen very directly how the Mexican government has chosen to lead this investigation. It’s clear that while they have a lot of very important information, they’ve chosen not to act on it and not to investigate the federal police and the military. And we haven’t heard any indication that they were going to investigate, because for the last three months they haven’t done so, when there’s so much proof that they were involved. You know that alone shows that they’re not being diligent at the very least, and I think that the fact that they’re basing the majority of their investigation on tortured witnesses cuts off at the knees this entire investigation, and shows the Mexican government’s incompetence to actually get to any sort of justice for these students.

I believe that if justice is going to happen, it’s going to come through additional investigative reporting, it’s going to come through the parents demanding that something happen, and not letting up, and bringing this story international as they have been doing, bringing it to the public. As far as the future of the investigation, I think that from what we’ve seen, the Mexican government needs to go back and do some very strong investigations of the military and the federal police. For example, the day after this event happened, after the attack on the students, the Guerrero state government demanded that investigators be allowed into the military space in Iguala, the military refused. Nothing came of that! That should have been a red flag in and of itself. They didn’t allow them to review the premises. So there are many many many avenues that the Mexican government could be taking to shed some light on exactly what happened, but in turn, instead, the very institutions that were directly involved that night, the Mexican military at least being complicit, and the federal police being on the scene, those institutions are in charge of looking for these students and are, in many ways, in charge of investigating.

Quote of the day: Hillary Clinton, in Nixon’s image


From a Mark Landler New York Times profile of Clinton as the most hawkish candidate in the field:

As Hillary Clinton makes another run for president, it can be tempting to view her hard-edged rhetoric about the world less as deeply felt core principle than as calculated political maneuver. But Clinton’s foreign-policy instincts are bred in the bone — grounded in cold realism about human nature and what one aide calls “a textbook view of American exceptionalism.” It set her apart from her rival-turned-boss, Barack Obama, who avoided military entanglements and tried to reconcile Americans to a world in which the United States was no longer the undisputed hegemon. And it will likely set her apart from the Republican candidate she meets in the general election. For all their bluster about bombing the Islamic State into oblivion, neither Donald J. Trump nor Senator Ted Cruz of Texas have demonstrated anywhere near the appetite for military engagement abroad that Clinton has.

“Hillary is very much a member of the traditional American foreign-policy establishment,” says Vali Nasr, a foreign-policy strategist who advised her on Pakistan and Afghanistan at the State Department. “She believes, like presidents going back to the Reagan or Kennedy years, in the importance of the military — in solving terrorism, in asserting American influence. The shift with Obama is that he went from reliance on the military to the intelligence agencies. Their position was, ‘All you need to deal with terrorism is N.S.A. and C.I.A., drones and special ops.’ So the C.I.A. gave Obama an angle, if you will, to be simultaneously hawkish and shun using the military.”

Unlike other recent presidents — Obama, George W. Bush or her husband, Bill Clinton — Hillary Clinton would assume the office with a long record on national security. There are many ways to examine that record, but one of the most revealing is to explore her decades-long cultivation of the military — not just civilian leaders like Gates, but also its high-ranking commanders, the men with the medals. Her affinity for the armed forces is rooted in a lifelong belief that the calculated use of military power is vital to defending national interests, that American intervention does more good than harm and that the writ of the United States properly reaches, as Bush once put it, into “any dark corner of the world.” Unexpectedly, in the bombastic, testosterone-fueled presidential election of 2016, Hillary Clinton is the last true hawk left in the race.

Headline of the day II: Big Brother, Tweet miner


From the Intercept:

The CIA Is Investing in Firms That Mine Your Tweets and Instagram Photos

  • Soft robots that can grasp delicate objects, computer algorithms designed to spot an “insider threat,” and artificial intelligence that will sift through large data sets — these are just a few of the technologies being pursued by companies with investment from In-Q-Tel, the CIA’s venture capital firm, according to a document obtained by The Intercept.
  • Yet among the 38 previously undisclosed companies receiving In-Q-Tel funding, the research focus that stands out is social media mining and surveillance; the portfolio document lists several tech companies pursuing work in this area, including Dataminr, Geofeedia, PATHAR, and TransVoyant.

Mossack Fonseca: A case of business as usual


We’re somewhat amused at the revelations coming out of the Mossack Fonseca leak, given that for the last four decades or so we’ve been following the world of offshore banks and secret tax havens.

Any journalist looking into real estate development quickly discovers that the source of money pouring into major projects often traces back to the opaque world of offshore funding.

Back when we entered the world of daily newspaper journalism, the city where we launched our career, Las Vegas, was the center of a major offshore banking operation, with the mafia running illegal cash skimmed off the casinos of the Strip and Glitter Gulch into the black world of Caribbean banks — a money machine created by Meyer Lanksy, the “little Man,” whose late partner, Benjamin “Bugsy” Siegel, had built the Flamingo, the first great star-studded Strip gambling palace.

As Chris Eshelman wrote back in 2012 in a review in the Journal of International Affairs:

For decades, criminals of all stripes—from gunrunners to money launderers—have stashed their accounting books in a murky, global, offshore library. For example, mob boss Meyer Lansky used banks in Switzerland, Cuba, and the Bahamas to hide mafia money. The Colombian Medellin cartel used the Cayman Islands’ confidentiality rules to protect its cocaine trade. Such offshore sandboxes are preferred by wealthy elites and even some too-big-to-fail banks for similar reasons: low taxes and strong secrecy rights.

Thanks the reporting of the late Jonathan Kwitny, we followed the mysterious doings of Nugan Hand, the bank used by arms merchants, the CIA, and a host of other players to enshroud their financial deeds/misdeeds.

And as veteran journalist Don Bauder wrote in San Diego Reader in that same year, offshore banking also benefitted a certain President of the United States:

According to reliable reports — not widely publicized — Nixon had a bundle of money in a now-defunct Swiss bank with smelly clients, particularly in San Diego.

The bank, which closed in 1974, was based in Zurich, but it had a branch in Nassau, the Bahamas, and its law firm and some operations were in New York City. It was named the Cosmos Bank. (Full disclosure: I began investigating Cosmos in 1970 and provided much information on it to Business Week magazine and Forbes magazine.)

Researchers have found that Cosmos was deeply involved with mobbed-up casino operations in the Bahamas and so was Nixon, often with his friend Bebe Rebozo. After Fidel Castro drove the Mafia out of Cuba, mob moneybags Meyer Lansky looked to the Bahamas for a casino haven.

Huntington Hartford, heir to a grocery fortune, set up a casino in the Bahamas and initially wanted it free of mob influence. But that was not to be, and Hartford eventually sold most of his holdings. Hartford told Dan E. Moldea, author of several organized-crime books, that Nixon made three deposits totaling $35,883,070 in the Cosmos Bank between October 21, 1971, and June 11, 1972.

What the Mossack Fonseca scandal has made apparent is the vast scale of the offshore banking and corporate tax evasion industries.

But let’s also not forget that the U.S. itself offers a wide range of virtual offshoring in the form of a growing number of states that, thanks often to Republican legislatures, have created their own laws to shroud actual corporate ownership and control.

Let us quote from an article that we wrote for the Berkeley Daily Planet, published 6 May 2005:

When is the sale of a building not a sale, at least for property tax reasons?

The question arose during last week’s heated discussion at the Zoning Adjustments Board over The Old Grove—the massive new housing-over-commercial project planned for University Avenue and Martin Luther King Jr. Way.

At one point during the discussion, Tom Hunt, a neighbor of the project, complained that the building would never be reassessed if sold in the future because it’s owned by a limited liability corporation (LLC).

If true, an LLC would be an effective tool for avoiding any future reassessments.

In an era when cash-starved local governments are laying off workers and cutting back services, cities and counties desperately need the increased revenues that come when property is reevaluated at the time of sale.

When a reporter posed the question of whether a LLC provides an escape from reassessment to a representative of the State Board of Equalization (BOE), the answer was: “Depends.”

Read the rest for a look at a relatively new form of American tax dodge, one controlling ever larger blocs of property and businesses in California and other states.

All of which is by way of a preface to this 26-minute Al Jazeera English report on the unfolding scandal, including a look at the U.S.’s own laws:

Counting the Cost – Panama Papers: Inside the shady world of tax havens

Program notes:

The Panama Papers shocked the world this week when a massive leak of 11.5 million tax documents exposed the secret dealings of hundreds of thousands of people, including world leaders and celebrities, and how they use shady financial mechanisms to avoid paying taxes and hide their wealth.Linking at least 12 current and former heads of state and 143 politicians to illicit financial transactions, the documents revealed how Mossack Fonseca, a Panama-based law firm, allegedly used banks, law firms and offshore shell companies, from 1977 to the end of 2015, to help hide its clients assets.

While the disclosures have since led to the resignation of one world leader, Sigmundur Davio Gunnlaugsson, the Icelandic prime minister; the problem goes beyond mere individuals.

The Panama Papers have exposed that most of the work Mossack Fonseca and the rest of the wealth-management industry do is perfectly legal.On this special edition of Counting the Cost, we take a closer look at tax havens and the legality behind them.

Alex Cobham, a director of research at the Tax Justice Network, joins the programme to discuss the loopholes that allow tax-dodging.

Stewart Patton, a US tax attorney based in Belize City, discusses the possible fallout for tax havens following the release of the Panama Papers.

We also speak to James S Henry, a senior fellow at Columbia University’s Center for Sustainable Investment, about the absence of American billionaires and companies on the leaked list and how the US, the world’s biggest economy, is surprisingly a top tax haven.

And now for a touch of the absurd from Wall Street On Parade, prompted bny a joint letter from Senators Elizabeth Warren and Sherrod Brown asking for the country’s Secretary of the Treasury to look into the scandal:

Senators Warren and Brown appear to have short memories. Otherwise, U.S. Treasury Secretary Jack Lew would be the last person that comes to mind to conduct an investigation to protect “the integrity of the U.S. financial system.” How Lew was confirmed by the U.S. Senate for U.S. Treasury Secretary remains an open mystery at Wall Street On Parade.

Lew had previously worked as an executive for the very division of Citigroup that blew up the bank during the 2008 financial crisis and cost taxpayers the largest bank bailout in U.S. history.

When Lew left his executive position at Citigroup at the end of 2008 and joined Hillary Clinton’s State Department as Deputy Secretary of State, he retained an investment in Citigroup Venture Capital International (CVCI), a $7 billion private equity fund which was housed in the Cayman Islands at the infamous Ugland House. According to a previous Government Accountability Office (GAO) report, Ugland House is home to 18,857 corporations. In 2009, President Obama called it either “the largest building in the world or the largest tax scam in the world.”

According to Lew’s January 11, 2009 financial disclosure report, his CVCI account at that point had a value of between $100,000 and $250,000. During Lew’s confirmation hearing for U.S. Treasury Secretary, he said he had sold the position at a loss.

But Ugland House was not Lew’s only Citigroup problem during his confirmation hearing. Senators challenged Lew on the fact that he had accepted a $940,000 bonus from Citigroup in early 2009, even though the insolvent bank was subsisting solely on taxpayer bailout funds at that time.

Maybe they’re operating on the “takes one to know principle”?

Headline of the day: Speaking of the dark arts


From BBC News:

Harry Potter: GCHQ ‘intervened over Half-Blood Prince leak’

GCHQ, the UK’s surveillance agency, intervened to help prevent the sixth Harry Potter instalment leaking online, the book’s publisher has said.

Headline of the day: And they’re hyped by Oprah


From the Intercept:

Beauty Secrets of the Spies

CIA’s Venture Capital Arm is Funding Skin Care Products that Collect DNA

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