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. The paper
also examined potential but
unproven offshore interests
of Le Pen’s father, Jean-
0DULH/H3HQYLDDIRUPHU
employee.
5K RUN, 5K WALK, 10K RUN, KID'S BUTTE SCOOT
All races begin & end at Hermiston's Butte Park
DRAWINGS • FUN FOR THE WHOLE FAMILY
Online registration & race information at
WWW.BUTTECHALLENGE.COM
REGISTER ONLINE BY APRIL 21ST TO ORDER A
CUSTOM TECHNICAL RACE T-SHIRT
All proceeds benefit THE HERMISTON CROSS COUNTRY PROGRAM
Thank you for your support!
