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Comment: Who’s who on the ICIJ list of tax evaders?

By
June 14, 2013 03:05

Which Israelis are taking shelter in tax havens? Starting Sunday, the answer is just one click away.

International Consortium of Investigative Journalists

International Consortium of Investigative Journalists 370. (photo credit:Courtesy)

Beginning on Sunday, 400 Israeli individuals and companies will be exposed to the public for what may or not be a crime: stashing their fortunes in overseas tax havens.

Among them are a senior executive of one of the largest holding companies in Israel, a former senior IDF officer who offered security consulting services in Africa, a soccer agent, a deputy minister who died a few years ago, lawyers, accountants, and a host of people whom the general public have never heard of.



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Barring any last minute developments, the list will be available online to the general public starting this Sunday on the website of the International Consortium of Investigative Journalists.

The ICIJ is an active global network of 112 reporters in more than 60 countries who collaborate on in-depth investigative stories. Founded in 1997 under the auspices of an American NGO, the ICIJ’s aim is to increase government transparency and fight cross-border crime and corruption.

Based in Washington, DC, the ICIJ has published investigations of worldwide organized crime syndicates, arms dealers, cigarette smugglers, illegal fishing, private military cartels, asbestos companies and climate change lobbyists.

The most significant investigation they have been involved in recently is into tax havens. The investigation, which has been nicknamed “Offshore Leaks,” has had an enormous international impact. Its findings were discussed at the G8 Leaders Summit and world leaders including UK Prime Minister David Cameron have publicly referred to the ICIJ report.

Due to the publication of these discoveries, bankers, ministers and senior officials around the world have come under pressure, including the deputy speaker of the Mongolian Parliament, relatives of the prime minister of Belgium, the two daughters of Azerbaijani President Ilham Aliyev, the French president’s campaign manager, Jean- Jacques Augier, and the daughter of the tyrant Ferdinand Marcos, who ruled the Philippines until the 1990s.

EU Commissioner Algirdas Semeta, who is responsible for taxes, customs and economic fraud, said that the investigation will change tax policy throughout the world and that “there is no doubt that the political will to enhance the fight against tax evasion is there.”

Tax authorities around the globe have opened investigations against people who are suspected of tax evasion and have created committees to fight to reduce its occurrence.

In addition to well-known individuals, the list includes American doctors, Greek farmers, Russian, Indonesian and Thai billionaires, EU bankers, international arms dealers and mafia members.

In short, it’s a list of people who don’t want to pay taxes.

The list includes about 250,000 names of people or companies from all over the world who put money in tax havens in 2007 or 2008. There are more than 10 off-shore tax havens such as the British Virgin Islands, Hong Kong, Singapore, Malaysia, the Cayman Islands, the English Channel Islands and Cyprus (where MK Avigdor Liberman allegedly registered his companies).

The investigation revealed this is a worldwide phenomenon that is not restricted to companies looking to maintain secrecy and avoid paying taxes. It also includes lawyers and accountants who represent these companies, as well as large banks who cover up for their clients or turn a blind eye, such as the German Deutsche Bank and the Swiss UBS.

About two years ago, an extremely large computer file made its way to the ICIJ from an anonymous source, holding the details of 2.5 million entities. The file included copies of email messages and related documents, which contained information from which the ICIJ learned who were the shareholders of companies that kept money in tax havens, who were the managers, who was listed as their representative on the accounts, as well as their address, nationality and country of residence.

After a lengthy analysis of the leaked material, the journalists cooperated with leading media outlets around the world, such as The Washington Post, The Guardian, Le Monde, Der Spiegel and the BBC.

It is worthy to note, however, that in most countries the mere registration of a company in a tax haven is not against the law – including in Israel. People are allowed to list companies directly or indirectly anywhere they want, provided they report this to the tax authorities.

However, it is clear that the intention of people who choose to keep their wealth in tax havens or other complex corporate structures is often to hide their actions and to reduce or completely avoid their tax liability.

For some reason, in Israel this issue has almost never been brought to the public’s attention. A number of local media have quoted international publications and a few journalists have tried, albeit with limited effort, to ascertain whether or not any Israelis appear on this list.

On the one hand, the indifference Israelis have displayed toward the issue is strange.

Unlike the clear attitude of leaders around the world, no one in Israel has made any public announcements about the investigation; not Prime Minister Binyamin Netanyahu, Finance Minister Yair Lapid or outgoing Bank of Israel Gov.

Stanley Fischer. One would expect some sort of comment, especially following the government’s recent decision to make budget cuts, reduce the deficit, raise taxes and impose economic decrees, which would mainly affect salaried employees.

Yet, on the other hand, the Israeli government adopted the policy of “ugly capitalism” many years ago; it’s designed to facilitate the wealthy and to be harsh for salaried workers and the middle class. The government offers tax benefits and turns a blind eye when loopholes and other complex methods for tax evasion are implemented.

The government is paying lip service to the fight against the black market. But in actuality, no intelligence or operations agents have been hired to search for such funds. The Tax Authority is lazy and for the most part suffices in mistreating small fry while at the same time ingratiating itself with the wealthy.

Moreover, Israel has even encouraged wealthy Jews to make aliya and then use Israel as a tax haven. To this end, the Israeli banking system opened up branches around the world, such as in South Africa during the apartheid years, and in South America during the 1980s when many countries were ruled by tyrants. Israeli banks aided Jews smuggling their money out of these countries so that they could invest in Israeli real estate.

This phenomenon has been in effect until just recently.

Bank Leumi in France was involved in efforts to aid French Jews to smuggle out or launder their money. And just a few years ago, the Tel Aviv Yarkon branch of Bank Hapoalim was caught with secret bank accounts that belonged to oligarchs and senior officials in Russia, Ukraine, and other former soviet republics.

The “star” of this affair was Arcadi Gaydamak, known for his masterful feats in transferring funds to different countries and listing companies in tax havens.

With such a record, it’s no surprise that the “Offshore Leaks” affair has not stimulated much dialogue in Israel.

Translated by Hannah Hochner.
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