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About East Oregonian : E.O. (Pendleton, OR) 1888-current | View Entire Issue (April 7, 2016)
NATION/WORLD Thursday, April 7, 2016 East Oregonian Page 7A 86DWRSKDYHQ Politicians, celebs in spotlight for tax cheats over offshore accounts :$6+,1*721 $3 ² 7KH 86 ODPEDVWHV DQG strong-arms countries that help drug lords and million- aire investors hide their money from tax collectors. Critics say it should look closer to home. America itself is emerging as a top tax haven alongside WKH OLNHV RI 6ZLW]HUODQG WKH Cayman Islands and Panama, those seeking reform of the international tax system say. $QGVWDWHVVXFKDV'HODZDUH 1HYDGD 6RXWK 'DNRWD DQG Wyoming, in particular, are competing with each other to provide foreigners with the secrecy they crave. “There’s a big neon sign VD\LQJ WKH 86 LV RSHQ WR WD[FKHDWV´VD\V-RKQ&KULV- tensen, executive director of the Tax Justice Network. America’s openness to foreign tax evaders is coming under new scrutiny after the leak this week of 11.5 million FRQ¿GHQWLDO GRFXPHQWV IURP D 3DQDPDQLDQ ODZ ¿UP 7KH Panama Papers show how some of the world’s richest people hide assets in shell companies to avoid paying taxes. Christensen’s group, which campaigns for a global crackdown on tax evaders, VD\V WKH 8QLWHG 6WDWHV UDQNV WKLUGLQWKHZRUOGLQ¿QDQFLDO VHFUHF\ EHKLQG 6ZLW]HUODQG and Hong Kong but ahead of notorious tax havens such as the Cayman Islands and Luxembourg. Under a 2010 law, passed after it was learned that the 6ZLVVEDQN8%6KHOSHGWKRX- sands of Americans evade 86 WD[HV WKH 8QLWHG 6WDWHV demands that banks and other ¿QDQFLDO LQVWLWXWLRQV GLVFORVH information on Americans abroad to make sure they pay WKHLU86WD[HV %XWWKH86GRHVQ¶WDXWR- matically return the favor. 0RUH WKDQ FRXQWULHV have signed on to a 2014 infor- mation-sharing agreement set up by the Organization for Economic Cooperation and 'HYHORSPHQW WKH 86 LV among the few that haven’t joined. American banks don’t even collect the kind of information foreign countries would need to identify tax dodgers. “The banking lobby has resisted changes in the law that would allow more VKDULQJ RI GDWD´ VD\V 3HWHU Cotorceanu, a Zurich-based lawyer who specializes in private banking. In a report last year, the Tax Justice Network complained that “Washing- ton’s independent-minded approach risks tearing a giant hole in international efforts to crack down on tax evasion, PRQH\ODXQGHULQJDQG¿QDQ- FLDO FULPH´ ,W VDLG IRUHLJQ elites have “used the United 6WDWHVDVDEROWKROHIRUORRWHG ZHDOWK´ 3DVFDO 6DLQW$PDQV KHDG RIWKH2(&'¶V&HQWHUIRU7D[ Policy and Administration, VD\V WKH 86 RIWHQ PDNHV information available to other countries upon request. But that means countries can get details only on those they already suspect of tax evasion. &KULVWHQVHQ VD\V 6ZLVV banks report that “many of their tax-dodging clients are talking about moving to the 86 <RX JR WR 6ZLW]HUODQG and that’s all they’re talking DERXW´ Individual states, including 1HYDGD:\RPLQJDQG6RXWK 'DNRWD DUH PDNLQJ WKLQJV worse, critics say. They compete with each other to make it easier to set up corporations — few questions asked about who’s behind the business. “We have states that set up corporations where there’s no information DERXW RZQHUVKLS´ VD\V -DFN Blum, a Washington lawyer ZKR VSHFLDOL]HV LQ ¿QDQFLDO crime. “The states make a lot RIPRQH\GRLQJWKDW´ Nevada, for instance, makes it easy to incorporate secretly and charges a $500 annual business license fee for corporations and $200 for other businesses. Lawmakers granted business entities greater protection against lawsuits in 2001, hoping to attract more of them and use LQFRUSRUDWLRQ ¿OLQJ UHYHQXH to raise teacher salaries. “Nevadans will continue to see nefarious business practices like those reported in the Panama Papers if state RI¿FLDOV GRQ¶W FKDQJH WKH ODZV RI LQFRUSRUDWLRQ´ VD\V 5HS 'LQD 7LWXV '1HYDGD “It is time for the state to tighten its disclosure and liability laws and remove the sign from our front yard that VD\V µ6OHD]HEDOOV DQG ULSRII DUWLVWVZHOFRPH´¶ BRIEFLY Allergan, P¿]er call off proposed $160B merger 7RS86GUXJPDNHU 3¿]HUDQG,ULVKULYDO Allergan are charting independent futures after scrapping a record $160 billion deal torpedoed by QHZ7UHDVXU\'HSDUWPHQW rules meant to block American companies from moving their corporate addresses overseas — on SDSHU²WRDYRLG86WD[HV 7KHUXOHVLVVXHG0RQGD\ aimed at stopping the FRPSDQLHV¶³WD[LQYHUVLRQ´ GHDOZLSHGRXWLWV¿QDQFLDO incentives and rationale for 3¿]HU,QFWKRXJKWKH\KDG no impact on Allergan PLC. 7KDWOHG3¿]HUDQG Allergan to walk away ³E\PXWXDODJUHHPHQW´RQ :HGQHVGD\3¿]HUZKLFK is based in New York, will pay Allergan $150 million as reimbursement for its deal-related expenses. ,WZDV3¿]HU¶VWKLUG and most expensive, failed attempt at an inversion, leaving analysts to speculate 3¿]HUZLOOGURSWKHVWUDWHJ\ for good. The merger would KDYHPRYHG3¿]HU¶VDGGUHVV but not its operations or headquarters, to Ireland, where it would have paid hundreds of millions of GROODUVOHVVLQDQQXDO86 corporate taxes. Tax inversions, in which DELJ86FRPSDQ\EX\V a smaller one in another country with a lower tax rate, and then moves the combined company’s address there on paper, are a hot issue in the presidential race. President Obama on Tuesday called them “one of the most insidious tax ORRSKROHVRXWWKHUH´DGGLQJ that Treasury’s new rules are meant to make wealthy corporations shoulder their tax responsibility like working-class Americans. WHO: Diabetes rises fourfold over last quarter- century *(1(9$$3² Excessive weight, obesity, aging and population growth drove a nearly four-fold increase in worldwide cases of diabetes over the last quarter-century, affecting 422 million people in 2014, the World Health Organization reported Wednesday. In a new report on diabetes, the U.N. health agency called for stepped-up measures to reduce risk factors for diabetes and improve treatment and care that has ballooned in recent years alongside an increase in obesity rates. WHO said 8.5 percent of the world population had diabetes two years ago, up from 108 million, or 4.7 percent, in On Wednesday, WHO 'LUHFWRU*HQHUDO0DUJDUHW Chan said: “We need to rethink our daily lives: to eat healthily, be physically active and avoid excessive weight JDLQ´ The Geneva-based agency blamed growing consumption of food and beverages high in sugar. 'LDEHWHVLQFUHDVHGDURXQG the world but affects lower- and middle-income people more often than wealthier populations. The rates rose PRVWLQ$IULFDWKH0LGGOH East and Asia — with the ³(DVWHUQ0HGLWHUUDQHDQ´ region more than doubling its prevalence to 13.7 percent of the population, the only world region with a double-digit percentage. By FRANK JORDANS and KEN MORITSUGU Associated Press BERLIN — The fallout from a massive leak of records on offshore accounts dragged a growing number of leaders and celebrities into the spotlight Wednesday, with a Bollywood actor, a race car driver and Ukraine’s president among those denying they evaded taxes. The reports center on millions of documents detailing how the rich and powerful use shell compa- nies in low-tax states like Panama or the Cayman Islands, sometimes giving them fanciful names like ³*ROG¿QJHU´RU³6N\)DOO´ The suspicion that such accounts are used to skirt taxes prompted a rush of denials, statements and, in some cases, media black- outs. Ukrainian President Petro Poroshenko was the latest KLJKSUR¿OH SROLWLFLDQ WR face scrutiny over the issue, denying he had meant to evade taxes by putting his candy company offshore. Poroshenko had promised voters he would sell his busi- QHVV ZKHQ KH UDQ IRU RI¿FH in 2014. But according to the reports, he merely moved it secretively offshore. On Wednesday, he said he had done nothing illegal when he created the offshore holding company to put his business in a blind trust when he became president. “This is absolutely QRUPDO SURFHGXUH´ 3RURV- henko said during a visit to Tokyo. “If we have anything to be investigated, I am happy to do that. But this is absolutely transparent from the very beginning. No hidden account, no associated management, no QRWKLQJ´ Ukrainian opposition groups maintained the move could have cost the war-torn country millions of dollars in desperately needed tax revenues. But analysts said the Ukrainian leader does not appear to have broken the law — just suffered a blow to his image. “You can believe the explanations of Poroshenko or not believe them, but from a formal point of view, KH GLG QRW YLRODWH WKH ODZ´ VDLG 9RORG\P\U )HVHQNR RI the Penta think-tank in Kiev. The data leaked from the Panama-based law ¿UP 0RVVDFN )RQVHFD ZDV reported on this week by AP Photo/David Keyton People hold banners and protest in front of Parliament building in Reykjavik, Ice- land, Tuesday. The leak of millions of records on offshore accounts claims its first high-profile victim as Iceland’s prime minister Sigmundur David Gunnlaugsson resigns amid outrage over revelations he used such a shell company to conceal a conflict of interest. an international group of media companies with the coordination of the Wash- ington-based International Consortium of Investigative Journalists. The leak has revived a global debate over the use of offshore accounts and companies. When used legally, they can reduce a person or company’s tax bill. A company, for example, might route its revenue from multiple countries to one low-tax base. Critics argue that while that’s not illegal, companies and people should not be allowed to do so, but instead pay taxes where they earn their money. Because offshore accounts can obscure the identity of the owner, they are often used illegally to hide money from the taxman or launder ill-gotten gains. In a case of life imitating art, the leaked data showed a fondness for naming shell companies after James Bond ¿OPV 0RVVDFN )RQVHFD reportedly incorporated companies named Gold- ¿QJHU 6N\)DOO *ROGHQ(\H DQG 0RRQUDNHU DQG ZDV DVNHGWRVHWXSD¿UPFDOOHG Octopussy. The Organized Crime and Corruption Reporting Project, one of the media companies with access to WKH OHDNV VDLG WKH ODZ ¿UP also incorporated companies QDPHG%ORIHOGDQG6SHFWUH after the classic Bond villain and his organization. )RU SROLWLFLDQV XVLQJ offshore accounts even in a strictly legal sense can be problematic because they are expected to be transparent about their interests and contribute to the country’s economy. That’s what fueled outrage against Iceland’s prime minister, who became WKH ¿UVW FDVXDOW\ RI WKH so-called Panama Papers case on Tuesday. 6LJPXQGXU 'DYLG Gunnlaugsson had faced opposition calls to resign over revelations he used a shell company to shelter large sums while Iceland’s economy was in crisis. He denied wrongdoing but after days of street protests he stepped aside, recom- mending that his deputy take over as prime minister for an XQVSHFL¿HGSHULRGRIWLPH$ third day of demonstrations was called Wednesday to demand a new government. Also dragged into the spotlight were: )RUPXOD 2QH GULYHU Nico Rosberg, whose lawyer VDLGDQRIIVKRUH¿UPOLQNHG to him was created solely for liability reasons and to enable him to operate inter- nationally. German public broad- FDVWHU 1'5 UHSRUWHG WKDW 0RVVDFN )RQVHFD VHW XS D company called Ambitious Group Ltd that has a contract ZLWK0HUFHGHVIRU5RVEHUJ¶V ³GULYHUVHUYLFHV´ Rosberg’s lawyer, Chris- WLDQ6FKHUW]VDLG$PELWLRXV Group, which is registered in the British Virgin Islands, wasn’t used for tax avoid- ance. Rosberg, who won 6XQGD\¶V %DKUDLQ *UDQG 3UL[LVUHJLVWHUHGLQ0RQDFR for tax purposes and receives all payments there, he said. • Prominent Bollywood actor Amitabh Bachchan denied reports by The Indian Express newspaper that he was connected to four ship- ping companies registered in tax havens. “It is possible that my name has been PLVXVHG´ %DFKKDQ WZHHWHG late Tuesday, adding that he has paid all the taxes he owed. 6SDQLVKPRYLHGLUHFWRU Pedro Almodovar was reported to have canceled publicity events for his new PRYLH ³-XOLHWD´ IROORZLQJ intense interest in the offshore company he owned with his brother years ago. The Europa Press news agency said Almodovar canceled an appearance at a photo shoot and inter- views ahead of the movie’s SUHPLHUH LQ 0DGULG RQ Wednesday night. )UDQFH¶V IDUULJKW 1DWLRQDO )URQW SDUW\ VDLG LW ZDV ¿OLQJ ODZ VXLWV IRU defamation against media who imply that it or leader 0DULQH /H 3HQ ² ZKR plans to run in the 2017 presidential race — may be implicated in the Panama Papers scandal. The Paris daily Le 0RQGH UHSRUWHG 7XHVGD\ on the offshore dealings of a longtime Le Pen acquain- tance whose company provides publicity for elec- toral campaigns. 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