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Thursday, April 21, 2011


"Tax havens have grown so fast in the era of globalization, since the 1970s, that they are now right at the heart of the global economy and are absolutely huge,"
The USA is a Tax Haven!

As millions of Americans prepare to file their income taxes ahead of Monday's deadline, we look at how corporations and the wealthy use offshore banks and tax havens to avoid paying taxes and other governmental regulations. "Tax havens have grown so fast in the era of globalization, since the 1970s, that they are now right at the heart of the global economy and are absolutely huge," says our guest, British journalist Nicholas Shaxson. "There are anywhere between $10 and $20 trillion sitting offshore at the moment. Half of world trade is processed in one way or another through tax havens." Shaxson is the author of the new book, Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens.

JUAN GONZALEZ: As millions of Americans are preparing to file their income taxes ahead of Monday's deadline, we look today at how corporations and the wealthy are utilizing offshore banks and tax havens to avoid paying taxes and other governmental regulations.

Earlier this year, Democratic Senator Carl Levin introduced two bills to crack down on tax havens. Levin estimates that nearly $100 billion is lost each year by not closing tax loopholes.

Besides Levin's bill, there has been little discussion in Washington on the issue, despite the intense debate over the budget. During President Obama's budget speech on Wednesday, he uttered the words "tax" and "taxes" nearly 40 times. Never once did he mention tax havens.

AMY GOODMAN: Our first guest today is the British journalist Nicholas Shaxson, author of the new book Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens. In the book Shaxson writes, quote, "The offshore system is the secret underpinning for the political and financial power of Wall Street today. It is the fortified refuge of Big Finance." Nicholas Shaxson joins us from Washington, D.C.

Welcome to Democracy Now! Talk about what you're calling "Treasure Islands."

Nicholas Shaxson? We'll go to a music break, and we'll come back to see if we can get the audio of Nicholas Shaxson. Looks like we got it right now. Welcome to Democracy Now!, Nicholas.

NICHOLAS SHAXSON: Thanks. Thank you very much.

AMY GOODMAN: It's good to have you with us. OK, explain what these "Treasure Islands" are.

NICHOLAS SHAXSON: Well, my book is about tax havens, and one of the big themes of my books is—one of the big things in my book is that tax havens are much, much bigger and much more important than almost anybody realizes. Most people think of tax havens as just a bunch of shady places, perhaps out in the Caribbean, Switzerland, a couple of other places, where a few celebrity tax dodgers maybe and some mafiosi and some criminals go and put their money. And they see it as a kind of exotic sideshow to the global economy.

One of the central messages of my book—and I explore the history of this in quite a lot of detail—is that tax havens have grown so fast in the era of globalization, since kind of the 1970s, that they have now become right—they are now right at the heart of the global economy and are absolutely huge. I mean, there are 10—anywhere between 10 and 20 trillion U.S. dollars sitting offshore at the moment. Half of world trade is processed in one way or another through tax havens. It's all around us, and it's absolutely huge.

Part of that—part of that message is that the biggest tax havens in the world are not so much these little islands, but big, rich countries. The United Kingdom, my country, is one of the world's most important tax havens. And right now in Washington, D.C., I'm sitting in one of the world's biggest tax havens, as well: the United States. So, this is something we need to really reappraise, the whole geography of the system, and understand how important it is. And when we're hearing figures of $100-plus billion lost to the U.S. taxpayers, I would argue that is just one aspect of the problem. The problem is much, much bigger. There are many, many other aspects to consider here.

JUAN GONZALEZ: Well, when you say that United Kingdom itself is a tax haven, what do you mean? And how did that develop?

NICHOLAS SHAXSON: Well, there are two aspects to this, really. One is the U.K., the city of London, which is the financial district of the United Kingdom, is itself a tax haven. And I need to explain a little bit what I mean by "tax haven." There's no general agreement worldwide as to what a tax haven is. A lot of people focus on the tax element, but it's much more than that. Tax havens do offer zero or low taxes to people elsewhere, but they also offer secrecy. They offer escape routes from financial regulation. They offer escape routes from criminal laws. The key theme here is escape. If you don't want to do—if you are constrained by democratic rules and curbs at home, you take your money offshore, you take it elsewhere, to a place where they'll let you do what you're not allowed to do at home.

And looking at the history of this, Wall Street, after the Second World War, they were—after the Bretton Woods agreement, 1946, there was a cooperative international order set up where capital was tightly controlled around the world. Wall Street was very firmly put in its place. And, you know, there were very high taxes on the wealthy. And for about a quarter of a century, this system more or less worked out, and capital was quite tightly constrained. It was also an era of very high, broad-based economic growth, not just in the United States, but around the world. What happened during that period, though, was that the banks, Wall Street, in particular, didn't—obviously didn't like these curbs, didn't like the Glass-Steagall Act that was separating commercial from investment banking, didn't like interest rate caps, didn't like these controls. And essentially, they went off to London. And in London, the Bank of England and the city of London said, basically, "You bring your money here, and you can do what you like. You don't—we're not going to worry about Glass-Steagall. We're not going to worry about interest rate caps." And so, what happened is Wall Street piled into London from about the '60s onwards, and that really marked the unraveling of—part of the unraveling of the Bretton Woods arrangements.

And Wall Street was able to grow incredibly fast offshore, much, much faster than it had been before. And this ability to grow offshore, first in London and then in a wider network of tax havens around the world, this has been one of the great reasons why it has been able to grow so fast. And now we have "too big to fail" banks and this offshore system, the ability of banks in the United States to go elsewhere to do things that allow them to grow faster and take more risks, away from the democratic curbs. It's one of the reasons why they've grown so powerful and why we have got such a difficult situation today with Wall Street having such power over the politicians in this country and my country and others.

JUAN GONZALEZ: You talk in your book also about Britain recreating a new empire. You mention all of the Caribbean islands, that most Americans have heard about as vacation spots but really don't pay much attention to: Anguilla, Bermuda, the British Virgin Islands, Turks and Caicos. What role do they play in this exploding situation with tax havens?

NICHOLAS SHAXSON: It's a very curious story. I and my researchers, my co-researchers, went into the archives in the United Kingdom and looked at what they were saying at the time. What we had was a—we have a series of partly British territories spread around the world, notably the overseas—the British Overseas Territories, which include the Cayman Islands, Bermuda, the Turks and Caicos, Gibraltar, Anguilla, and the so-called Crown Dependencies, which are closer to the U.K. That's Jersey, Guernsey and the Isle of Man. And all of these centers were allowed—they're partly controlled by Britain; they do have independent politics, as well. It's a sort of half-in, half-out kind of offshore system. So Britain has this kind of network around the world.

But what this network does is that these places serve as conduits; they serve as channels for business to be passed to the city of London. So there's this kind of network of havens around the world, capturing business. And in the Caribbean, a lot of business captured from the United States, Latin American. And this is licit and illicit business; it's a mixture of the two. And the Crown Dependencies—Jersey, Guernsey and the Isle of Man—capturing business focusing more on Europe, perhaps in Africa and the Middle East. And all this—so they're serving as feeders for the city of London.

And I was talking about how the offshore system has been used to—used by Wall Street to become so big and powerful. Well, the U.K. has its own special version of that, and that's this network, which has really—as well as the U.K. itself being a tax haven, this network feeding business into the city of London is an absolutely colossal reason why the city of London is now, by some measure, the world's biggest financial center. So, it's something that has—you know it is at the period of decolonization, this is when the system really started getting together and started working. And one can make an argument that this is a new kind of financial empire that Britain—you know, a kind of hidden empire that nobody really has really paid much attention to now, but it is of absolutely tremendous importance. And we in the United Kingdom—I just as—we have the banks holding our politicians by the throat, I think, just as much as you do here in the United States.

AMY GOODMAN: I wanted to go to U.S. presidential politics. One of the leading Republican presidential contenders, Mitt Romney, has a history profiting from offshore tax havens. In 2008, the Los Angeles Times exposed how Romney, as head of Bain Capital, utilized shell companies and two offshore tax havens in Bermuda and the Cayman Islands to help eligible investors avoid paying U.S. taxes. The tax-friendly jurisdictions helped attract billions of investment dollars to Bain Capital. Los Angeles Times reporter Bob Drogin spoke to us about this in 2008.

BOB DROGIN: A side light of that was Bain Capital, which today has assets of about $60 billion—that's their—the number that they officially say—and about a third of that comes from these offshore operations that Romney set up when he was still there, in particular, companies that are set up—really, they're just mail drops, they're mailboxes; they don't have any staff, they don't have any operations. The one on Grand Cayman Island is a Post Office Box 60D, I think, on Grand Cayman Island, and the ones in Bermuda are also at a lawyer's office. But they've got them in other places as well. And they bring in somewhere above $25 billion a year.

And again, it's—these are companies—these are operations set up through various systems. They're blocker corporations. They are investment—or rather, equity groups that are set up to attract, for the large part, foreign capital. And the reason these are set up overseas is so that foreign investors in these private companies can avoid paying U.S. taxes. Mitt Romney and his colleagues don't get that advantage. So it's not like they're avoiding taxes through this. It's simply—what happens is, they're helping other people avoid paying U.S. taxes, and as a result they make enormous profits.

AMY GOODMAN: That's Los Angeles Times reporter Bob Drogin speaking to us in 2008. Nicholas Shaxson, your response?

NICHOLAS SHAXSON: Yeah, this is—I mean, there are two things I would respond to this. First of all, there is—a lot of this business is legal. It is. There are two terms: tax avoidance and tax evasion. Avoidance is, by definition, not doing anything illegal, but also, by definition, getting around the spirit of the law; this is not what legislators intended when they set up the legislation. Tax evasion, on the other hand, is, by definition, criminal. It is—you're breaking the law. But in between these two poles of evasion and avoidance is a huge gray area, and often you don't find out which side of the law a company is until there's been, you know, a challenge by the IRS or a court case or something like that. A British—former British Chancellor Denis Healey once said, "The difference between avoidance and evasion is the thickness of a prison wall."

But also, the example of Mitt Romney—I imagine what he was doing was on the avoidance, not on the evasion side—is this issue of intermediaries, people who help others. And we're talking here particularly about accountancy firms, law firms and banks, and also company formation agents. These intermediaries have, for such a long time, seen a very simple calculus. They get—I saw a statistic yesterday that, for the big four accountancy firms on certain kinds of business, the average profit for a client was something like $360. The maximum fine for infringement for assisting a client to do things that have gone wrong is $10,000. So it's a very simple calculation. You know, if you get caught, well, you pay a bit of money, but it will only be a fraction of your profits. And as a result of these kinds of incentives, you've had the complete corruption of the culture of these industries, saying, "We're just going to, you know, help these people. We don't care if they're breaking the law or avoiding taxes or whatever. We'll just help them do what they want to do." And it's a terrible—this corruption of the culture is one of the biggest problems of the whole—the whole issue.

JUAN GONZALEZ: Nicholas Shaxson, I want to ask you about the portion of your book that deals with the impact of these tax havens on the poor countries of the world. You say, at one point in the book, "Nearly every effort to generate large flows of capital to developing countries since the 1980s has ended in crisis because the money has escaped offshore. Towering inequalities in Europe and the United States, not to mention in underdeveloped countries, cannot be understood properly without exploring the role of secrecy jurisdictions. The systematic looting of the former Soviet Union, and the merging of the nuclear-armed country's intelligence apparatus with organized crime, is substantially a story that unfolds in London and its offshore satellites." You also talk about Saddam Hussein's billions and the power of North Korea's Kim Jong-il. Could you explain?

NICHOLAS SHAXSON: Yeah, offshore—if you look at these crises, offshore is always a part of the story. It's never the whole story; you can always point to other factors in, you know, the corruption of a country or economic crisis. But offshore is always a huge part of the story.

And you've had—in these debt crises, you have had huge lending to developing countries. And the rulers in these countries, and the ruling elites, are able to appropriate this money, the money that comes in from borrowing, and they just—they take it offshore. And you have countries left saddled with debts. Recent studies have indicated—in Africa, at least—that the private assets, the assets held by Africans, far outsee the debts of African countries. The difference is that the assets are held in private hands. These are assets offshore in banks overseas. They could easily pay off the debts. The income on those assets could easily pay off, you know, all the debt repayments. But we have this mismatch, and the burden is that the debts are borne by the African people in the form of either higher taxes for themselves or degraded public services and an elite that benefits from complete impunity for what they're doing. The money is offshore. There's nothing that anybody can do about it. And this leads to the corruption of countries and a wholesale subversion of democracy. So it's an absolute scourge on developing countries.

Global Financial Integrity, which is a Washington think tank, in January estimated that illicit financial flows out of developing countries in 2008 added up to $1.2 trillion U.S. dollars into tax havens and rich world economies. A lot of that came here into the United States. A lot of Latin American money comes here. And so, the United States itself is a tax haven. United States has a kind of two-faced problem. One is that it's losing money to foreign tax havens, but also it is itself offering secrecy facilities, offering tax-free treatment to foreigners who bring their money here, and helping foreigners evade taxes and commit crimes. And one of the arguments, great arguments, in my book is that this money that's coming in does not make up for the money being lost. Instead, it causes harm. It further puffs up wasteful property bubbles, further puffs up Wall Street, and has contributed even more to this, you know, "too big to fail" problem and the problem the financial capture of the political process. So we have a double—the inflow problem and the outflow problem both being harmful for the United States, but also for the developing countries.

AMY GOODMAN: So what do you think—how should this change? I mean, you have this enormous emphasis on the deficit in this country. You say that offshore tax evasion has cost the United States $100 billion a year. How can we turn this around?

NICHOLAS SHAXSON: Well, as I said, the $100 billion, I see, is just one part of the picture. I think that there are—there is some legislation that is coming in to try and crack down on this stuff. There was a bill originally co-sponsored by Barack Obama before he was president, and now it has not—it has not yet passed through, but Senator Levin, I believe, is—it's called the Stop Tax Haven Abuse Act—Senator Levin is, I believe, trying to reintroduce this.

There is no magic bullet that is going to solve this problem, but there are a series of different measures that can be and need to be taken. And the first thing that really has to be done is for people to start to see how big and bad this system has become. While people think it's just a few islands out in the Caribbean doing a little bit of tax evasion—I'm not saying $100 billion is just a little bit of tax evasion, but while people still see it as a problem just on that scale, there won't be the political momentum for reform. One of my central arguments is this is so much bigger and so much badder than almost anybody knows. We need to—as a first step for reform, we need to understand that and spread the message.

AMY GOODMAN: Well, I mean, you say it was President Obama who was pushing this as senator, but it's the same President Obama who is trying to raise a billion dollars in 2012. What would you say is the single most powerful force that is stopping any kind of crackdown on this?

NICHOLAS SHAXSON: Well, I think, of course, Wall Street banks and financial institutions, which are huge fans of the offshore system. Multinational corporations are able to use the offshore system through—particularly through tax avoidance, sending their money offshore, not getting taxed on it until they bring the money back home, so they are huge, huge proponents of this system. So, corporate lobbying power is also a huge part of the problem.

Another part of the problem is that there is this kind of self-reinforcing dynamic of the offshore system. When one country cuts its tax rates, its corporation taxes, or it creates a new loophole, others in the game which are tax havens, which have a business model of being tax havens, then feel they have to keep up, and they think, "OK, we've got to create an even better loophole." When one country creates a nicely—a very strong form of secrecy, the other countries will say, "Ah, we've got to create an even stronger form." So you have this kind of race to the bottom.

And one of the big effects from a tax point of view—and this also happens with financial regulation—but from a tax point of view, what you will get is the tax charge on mobile capital, which is very often the form of how wealthy people and corporations receive their income and how they're taxed, the tax charge on mobile capital falls. That means somebody else has to pay for those taxes that aren't being paid by the wealthy people and corporations, so other people have to pick up the slack. So you get a kind of compression of the tax system because of this dynamic. So you get ordinary people having to pay more in order to pay the taxes that the wealthier people are not paying. And this is a kind of impersonal dynamic that is inherent to the offshore system. And one thing that is especially required to deal with that is international cooperation, and I think the United States can take a lead, a global lead, and should take a global lead, on getting cooperation on this kind of problem that is a part of the offshore system.

JUAN GONZALEZ: And isn't part of the problem that any talk of reform has to run up against the fact that the international banking system, to one degree or another, benefits from the entire situation of these tax havens? Because I would assume that the money is always held in banks, whether it's in the United States or in England or in these other countries, and I would assume that the banks that help facilitate this kind of avoidance or evasion end up with bigger fees as a result of their extra assistance to the holders of these accounts, so that, in essence, the banking system doesn't want to see this changed.

NICHOLAS SHAXSON: No, I think that's probably fairly true to say. We should not underestimate also the lobbying power of the accounting firms. They are—that's something that people don't really consider. Of course the banks are huge. The accounting firms, the legal firms that are involved in this are absolutely enormous.

I think one of the things that could be done is to look at ways of having much more severe penalties on people who assist particularly criminal tax evasion and other aspects of it. But we also mustn't lose sight of the financial regulation aspect of this. And when countries like the United Kingdom, but other tax havens like Luxembourg, Ireland, the Netherlands, which are not traditionally regarded as tax havens, but they're huge, huge players in this business, we must increasingly recognize them as engaging in what is nothing short of economic warfare against the United States and other countries. We really need to start recognizing that this is—you know, this is conflict. This is economic conflict. When one country tries to suck tax revenue or illicit flows or whatever out of another country, that is an aggressive act. And we need to start taking much more robust action to defend all of our countries against what's going on in the offshore system.

AMY GOODMAN: Nicholas, very quickly, as we wrap up, the two powers—corporate power and grassroots power. On the corporate side, you have people like Rupert Murdoch, who determines much of the debate in this country with his ownership of media. You call him a "master of offshore gymnastics." And then you've got the grassroots movements, Uncut, both in Britain and the United States, this growing movement that's going after tax avoiders. Talk about both. Start with Rupert Murdoch.

NICHOLAS SHAXSON: OK, Rupert Murdoch. Now he—the last investigation into his tax affairs I'm aware of is one conducted by The Economist in, I think, 1998 or 1999, so we don't have very updated data on him, but he had cut his tax rate down to six percent, when others were paying, you know, much higher rates. A recent Government Accountability Office report in 2008 estimated that News Corporation has 152 offshore subsidiaries, according to their definition of tax havens. So he is certainly a big player in the game. And when you have—you know, he's not the only—obviously not the only media player using offshore tax havens; it's very widespread. But when you have big players in the game defending this, then you have a big problem from the media point of view, as well.

On the grassroots side, this is incredibly heartening, what's been happening. There has been until, I would say, a year ago almost complete radio silence on this issue. Very few people were taking an interest in it. We saw—we have seen the Uncut movement is something that emerges, spontaneous protests against corporate tax avoidance. In my country, in the U.K., where there's big spending cuts happening, people turning around, saying, "How come we're giving these effective subsidies to corporations, these tax subsidies to corporations, and now we're having to cut schools and hospitals?" And people are coming out onto the streets. And this is absolutely new, and this is thrilling to see. And it's happening in the United States. And stories such as General Electric's ability to get away with paying no tax in the United States is, you know, a catalyst for something. So something very new is happening now, and it's tremendously refreshing. And this is, you know, the beginning, I believe, of something much bigger that will, as austerity and deficits continue to bite, will get more people into the streets.

AMY GOODMAN: We have video of the protesters, the Uncut folks in the United States, holding up Treasure Islands, your book. Nicholas Shaxson, we want to thank you very much for being with us—

NICHOLAS SHAXSON: Thanks very much.

AMY GOODMAN:—author of Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens.

See also: List of offshore financial centres and Tax rates around the world

The U.S. National Bureau of Economic Research has suggested that roughly 15% of countries in the world are tax havens, that these countries tend to be small and affluent, and that better governed and regulated countries are more likely to become tax havens, and are more likely to be successful if they become tax havens. In 2010 it was reported that Google uses techniques called the "Double Irish" and "Dutch Sandwich" to reduce its corporate income tax to 2.4%, by funnelling its corporate income through Ireland and from there to a shell in the Netherlands where it can be transferred to Bermuda, which has no corporate income tax.

    * Andorra – No personal income tax.
    * Anguilla – A British Overseas Territory and offshore banking centre
    * Antigua and Barbuda
    * Aruba
    * The Bahamas levies neither personal income nor capital gains tax, nor are there inheritance taxes.
    * Barbados – A 'Low-tax regime' not 'Tax haven'. – The government of Barbados sent off a high level note to members of the United States Congress recently in protest of the label "Tax Haven" stating it has the potential to undermine or override the Barbados/United States double taxation agreement. Since appearing on the 2009 OECD/G-20 white-list, the Barbados government began an international ad-campaign to market the country as the only Caribbean country to be included on the white-list.
    * Belize – No capital gains tax.
    * Bermuda does not levy income tax on foreign earnings, and allows foreign companies to incorporate there under an "exempt" status. Companies are "exempt" from the local 60/40 ownership laws, and are not offered any special tax status. Exempt companies are also limited from doing local trade and may not hold real estate in Bermuda, nor may they be involved in banking, insurance, assurance, reinsurance, fund management or similar business, such as investment advice, without a license. The island also maintains a stable, clean reputation in the business world. At present, there are no benefits for individuals. In fact, for a non-Bermudian to own a house on the island, they would have to pay a foreign ownership tax of 25% of the purchase value, and minimum of $15,000 a year in land tax alone. They also can only purchase homes of a specific type and high value (over $4 million), so the tax is generally greater than $1 million.
    * Bosnia and Herzegovina – 10% corporate income tax, 10% income tax, 10% capital gain tax
    * British Virgin Islands: the 2000 KPMG report to the United Kingdom government indicated that the British Virgin Islands was the domicile for approximately 41% of the world's offshore companies, making it by some distance the largest offshore jurisdiction in the world by volume of incorporations. The British Virgin Islands has, so far, avoided the scandals which have tainted less well regulated offshore jurisdictions.
    * Bulgaria – 10% corporate income tax, 10% income tax, 10% capital gain tax
    * Campione d'Italia an Italian enclave within Switzerland
    * Cayman Islands
    * In the Channel Islands, no tax is paid by corporations or individuals on foreign income and gains. Non-residents are not taxed on local income. Local taxation is at a fixed rate of 20% in Jersey, Guernsey, & Alderney and 0% in Sark.
    * Cook Islands
    * Cyprus: this jurisdiction has grown recently in popularity and anticipates further future growth. As a jurisdiction Cyprus is in a position to exploit its unusual position as an offshore jurisdiction which is within the EU. 10% corporate tax (0% for shipping companies), 20 - 30% income tax, 20% CGT
    * Delaware, a state in the USA which charges no income tax on corporations not operating within the state,
    * Egypt – 20% corporate income tax, 20% income tax, No capital gain tax
    * Gibraltar is no longer considered a non-cooperative tax haven since 30 June 2006. No new Exempt Company certificates are being issued from that date. All previous Exempt Company certificates will be ineffective from 2010.
    * Hong Kong's tax rates are low (16.5%) enough that it can be considered a tax haven. Hong Kong does not levy tax on capital gain as well. However, it contains a highly vibrant service economy and its low taxes were not designed to make Hong Kong a tax haven. Hong Kong itself has usually rejected the label. The former financial secretary, Nicholas Haddon-Cave has asserted: "In Hong Kong we rely on our low tax structure and free movements across exchanges to encourage investment, and not on the usual gimmicks of tax holidays and quick write-offs found in tax havens."
    * Ireland
    * The Isle of Man does not charge corporation tax, capital gains tax, inheritance tax or wealth tax. Personal income tax is levied at 10–20% on the worldwide income of Isle of Man residents, up to a maximum tax liability of £115,000 (as of April 2010). Banking income tax is levied on the profits of Isle of Man based banks at 10% and income from the rent of Isle of Man property is levied at the same rate.
    * Labuan, a Malaysian island off Borneo
    * Liberia, a flat annual tax for nonresident corporations of $450. No annual tax on income.
    * Liechtenstein is the country with the lowest taxes whithin Europe (except Andorra which has no personal income tax).
    * Kuwait
    * Macau - Corporate tax rates between 9-12%. Personal Income tax rates between 5-12%. No capital gains tax. No tax for companies operating "off shore". The overwhelming majority of the Macanese gov't taxes are derived from a hefty casino tax of 39%. All Macanese Residents (Temporary and Permanent) are entitled to an annual cash handout from the gov't of MOP3600 or MOP6000 (Approx. $450 USD/ $750USD).
    * Mauritius – based front companies of foreign investors are used to avoid paying taxes in India utilising loopholes in the bilateral agreement on double taxation between the two countries, with the tacit support of the Indian government, who are keen to improve figures relating to inward investment. The use of Mauritius as a gateway to funnel foreign investments into India has always been controversial. Mauritius's financial regime has a number of the key characteristics of a tax haven, which has helped to facilitate this.
    * Republic of Macedonia – corporate taxes 10%, income taxes 10%, tax on reinvestment profit 0%
    * Monaco does not levy a personal income tax.
    * Nauru – No taxes. Only tax in country is an airport departure tax.
    * Netherlands Antilles – In October 2008 the State Secretary of Finance announced that the Netherlands Antilles along with the Isle of Man would begin to seek ways to combat the 'Tax Haven ' label that has been placed on their territory by some governments. The leaders hinted they would welcome a more level playing field in terms of the international financial services industry.
    * Nevis
    * New Zealand does not tax foreign income derived by NZ trusts settled by foreigners of which foreign residents are the beneficiaries. Nor does it tax the foreign income of new residents for four years. No capital gains tax.
    * Norfolk Island – no personal income tax.
    * Panama 'Offshore' entities are not prohibited from carrying on business activities in Panama, other than banks with International or Representation Licenses (see Offshore Business Sectors) but will be taxed on income arising from domestic trading, and will need to segregate such trading in their accounts.
    * Russia – 13% personal income tax
    * Samoa
    * San Marino
    * Saudi Arabia
    * Serbia – 10% corporate income tax
    * Seychelles
    * St Kitts and Nevis
    * St Vincent and the Grenadines
    * Switzerland is a tax haven for foreigners who become resident after negotiating the amount of their income subject to taxation with most of the cantons of Switzerland in which they intend to live. Typically taxable income is assumed to be five times the accommodation rental paid. French-speaking Vaud is the most popular canton for this scheme, thus it is usually called "forfait fiscal". For businesses, the canton of Zug is popular, with over 6000 holding companies.
    * Turks and Caicos Islands The attraction of the Exempt Company lies in a combination of its tax exempt status and minimal disclosure and administrative requirements. In order to obtain tax exempt status the subscribers must at the time of incorporation lodge at the Companies Registry a signed declaration stating that the business of the company will be mainly carried on outside the Turks and Caicos Islands. The subscribers are not required to inform the Registrar of the identity of the beneficial owners. An exempt company must nominate a representative resident in the Islands for the purpose of service of legal process. There are more than 15,000 International Business Companies registered in the Turks and Caicos Islands.
    * Ukraine – 15% income tax
    * United Arab Emirates for individuals and Jebel Ali Free Zone for companies.
    * United States Virgin Islands offers a 90% exemption from U.S. income taxes and 100% exemption from all other taxes and customs duties to certain qualified taxpayers.
    * United Kingdom no Capital Gains Tax for non-residents or foreign corporations or overseas Trusts, no worldwide taxation for non domiciles resident in the UK. The latter has however been eroded slightly by introduction of the Remittance Basis Charge (RBC), requiring non-domiciles resident in the UK for at least 7 of the last 9 tax years whom have offshore income greater than £2,000 per annum to pay a charge of £30,000 to continue having the benefit of the remittance basis.
    * Vanuatu's Financial Services commissioner announced in May 2008 that his country would reform its laws so as to cease being a tax haven. "We've been associated with this stigma for a long time and we now aim to get away from being a tax haven."

Some tax havens including some of the ones listed above do charge income tax as well as other taxes such as capital gains, inheritance tax, and so forth. Criteria distinguishing a taxpayer from a non-taxpayer can include citizenship and residency and source of income.

TURKEY does what the fascist Western Countries can't

Turkey may yet punish state crimes.

No western "democracy" has even investigated, much less prosecuted,
or even punished STATE CRIMES.

May Day to put unsolved political murders under spotlight


This year's May Day will be marked with a different call as the celebrations sponsored by the Confederation of Revolutionary Workers' Unions (DİSK) will be held with an emphasis on discovering those behind unsolved politically motivated murders.

The workers will demand that the authorities shed light on the murder of 34 workers who were shot dead in İstanbul's Taksim Square on May 1, 1977. The incident, also referred to as

Bloody May Day, also resulted in 136 others being injured after unknown assailants opened fire on the crowd from the Marmara Hotel in Taksim Square. After announcing the main theme of the May Day events, DİSK held a march from the neighborhoods of Şişli to Taksim in İstanbul on Wednesday. The workers unfurled a banner that read, "To demand resolution for [the unsolved] political murders on May 1 in Taksim," as they chanted slogans against the murderers. The group was led by Neşe Bulut, whose husband, Necdet Bulut, was assassinated in 1978; Nilgün Soydan, whose workers' union leader father Kemal Türkler was killed in 1980; and Arat Dink, son of murdered Turkish-Armenian journalist Hrant Dink.

"Our main goal is to continue working relentlessly so that light may be shed on all [unsolved] political murders, not only the May 1 massacre," DİSK Vice Chairman İsmail Yurtseven said in his remarks at the tram stop in Taksim. "For Turkey to have a brighter future, we must first cast light on unsolved murders," he said, adding, "It is not possible to talk about either democracy, human rights or freedoms without shedding light on the murders carried out by what you may call the deep state, Gladio, Ergenekon, contra-guerilla, or whatever and without the perpetrators of those crimes being called to account for what has been done."

Yurtseven called for 1 million people come to Taksim Square to demand the resolution of unsolved politically motivated murders on May 1.

Addressing the crowd, Soydan noted that 34 years have passed since Bloody May Day, but also said, "Even if 34 more years pass, those behind the murders can still be caught." Highlighting the importance of 1 million people voicing this demand, she continued: "A common demand voiced by 1 million people in Taksim on May 1 will pave the way for the assailants to be revealed. It is a requirement of democracy and human rights that the voices of that many people are heeded."

Until last year's May Day, Taksim Square was the site of skirmishes between demonstrators and security forces on May 1 because it was closed to rallies after May Day 1977, when the holiday became a source of tension in Turkey. But the government decided to declare May Day an official holiday in 2009 and open Taksim Square up to celebrations. Three decades after Bloody May Day, Taksim Square became the venue of peaceful celebrations last year.

UN report confirms Sri Lankan government war crimes -

An Expert Panel found that tens of thousands of civilians were killed in the final months of the Sri Lankan civil war, mainly by deliberate government shelling, including of hospitals and aid centres.


Sri Lanka .. routinely bomb its own citizens

By Sarath Kumara
21 April 2011

The Expert Panel appointed by the UN Secretary General Ban Ki-moon to advise on human rights violations in Sri Lanka found "credible allegations" that the Colombo government committed a "wide range of serious violations" of international law, some of which "would amount to war crimes and crimes against humanity."

The three-member panel was belatedly appointed in March 2010, after widespread accounts of atrocities carried out by the Sri Lankan military in the final months of its long-running war against the separatist Liberation Tigers of Tamil Eelam (LTTE) that ended in May 2009.

The full 196-page report is yet to be officially released, but the executive summary was leaked to the media last Saturday. It rebuts the claims made by President Mahinda Rajapakse and other Sri Lankan politicians that the military was engaged in a "humanitarian rescue operation" with a policy of "zero civilian casualties."

The report, which covers the period from September 2008 to May 2009, concludes that the military campaign into the LTTE-held Vanni region used "large-scale and widespread shelling causing large numbers of civilian deaths. This campaign constituted persecution of the population of the Vanni. Around 330,000 civilians were trapped into an ever-decreasing area, fleeing the shelling but kept hostage by the LTTE. The government sought to intimidate and silence the media and other critics of the war through a variety of threats and actions, including the use of white vans to abduct and to make people disappear."

The persecution of the Tamil population underlines the communal character of the civil war. Successive Colombo governments fought the war to entrench the dominance of the Sinhala elite that has used communal violence and systematic discrimination against the Tamil minority for decades to divide working people to maintain its rule.

The executive summary also accuses the LTTE of refusing to allow civilians to leave its territory—in the final months shooting those who attempted to leave—and forcibly recruiting children as young as 14. Such practices make clear that the LTTE's defeat was primarily political, not military. Confronted with a concerted government offensive, the LTTE was unable to mobilise any significant active political support from the Tamil population, let alone more broadly from the working class in Sri Lanka and internationally.

However, as the report stated, "most civilian casualties in the final phases of the war were caused by government shelling." The military bombarded its own "no-fire zones" where it had encouraged civilians to congregate and assured them of protection. Despite being informed of their locations, the government shelled the "United Nations hub, food distribution lines and near the International Committee of the Red Cross (ICRC) ships that were coming to pick up the wounded and their relatives from the beaches."

The government also shelled designated hospitals, some repeatedly, and "systematically deprived people in the conflict zone of humanitarian aid, in the form of food and medical supplies, particularly surgical supplies, adding to their suffering".

The government and military deliberately underestimated the number of civilians trapped in the LTTE-held zone in order to cover up the number of dead and wounded that resulted from its shelling. The UN report estimated that "tens of thousands lost their lives from January to May 2009, many of whom died anonymously in the carnage of the final few days." The figure is significantly higher than the previous UN estimate of 7,000.

Following the LTTE's military collapse, around 280,000 civilians—men, women and children—were forcibly and illegally detained in so-called welfare camps run by the military. "Massive overcrowding led to terrible conditions, breaching the basic social and economic rights of the detainees, and many lives were lost unnecessarily," the report stated. Some of those singled out as "LTTE suspects" were tortured and summarily executed and the remainder sent to secret prisons.

Nearly two years after the LTTE's defeat, the pervasive role of the military and the government's anti-democratic measures continue. As well as the ongoing use of emergency powers and the Prevention of Terrorism Act, the report drew attention to "the continued militarisation of the former conflict zone and the use of paramilitary proxies, all of which perpetuate a climate of fear, intimidation and violence."

Despite the seriousness of these crimes, the Expert Panel's recommendations effectively let those responsible off the hook. The report was scathing on the lack of accountability through the Sri Lankan court system and described the government's Lessons Learnt and Reconciliation Commission (LLRC) as lacking "independence and impartiality" and compromised by the "deep-seated conflicts of interests of some of its members."

However, the report's main recommendation leaves the investigation of the war crimes to the Sri Lankan government—that is, in the hands of the criminals themselves. It calls for the Rajapakse regime to immediately commence "genuine investigations" into the "credible allegations" of international law identified by the panel. A separate international mechanism is proposed to monitor and assist the Sri Lankan government.

The Rajapakse administration immediately dismissed the UN report with contempt. In a brief statement, the External Affairs Ministry declared that "the UN report is fundamentally flawed in many respects." It went on: "Among other deficiencies, the report is based on patently biased material which is presented without any verification."

The response is hardly surprising. President Rajapakse was hostile to the UN Panel from the outset and refused to allow its members to visit the country or interview civilian or military officials. In other words, the government actively blocked evidence gathering, in the same way that it prevented the media and most aid organisations from the war zone in the final months of the war. It continues to deny responsibility for any civilian deaths.

At the same time, the government is mounting a crude anti-Western propaganda campaign, claiming that the country faces a vast international conspiracy. Rajapakse has called on his Sri Lankan Freedom Party to organise a May Day rally as a "show of strength" against the UN Panel report and any calls for war crimes investigations.

Rajapakse accused Western countries of conducting a campaign to punish Sri Lanka for defeating the LTTE. The claim is ludicrous. Right up until the final months of the war, the US and European powers had quietly backed Rajapakse's renewed war against the LTTE, the military's open breaches of the 2002 ceasefire and its shelling of civilians, abductions and extrajudicial killings.

The US and its European allies only began to raise concerns about the Sri Lankan military's actions in the final months of the war when the scale of the savagery became apparent and was generating international outrage. Even then, the main purpose of the limited criticisms of Western powers was not to prevent the slaughter under way, but rather to boost their political influence in Colombo.

The US in particular was deeply concerned that rival China had exploited the conflict to forge close ties with the Rajapakse government by providing military, financial and political support. China had already been granted the contract to build a sophisticated modern port at Hambantota in the south of the island. The port is part of a broader Chinese plan to build harbours adjacent to key shipping routes from Africa and the Middle East to North East Asia.

The US Assistant Secretary of State for South and Central Asian Affairs, Robert Blake, underscored Washington's vital interests in Sri Lanka in comments on April 5 to the House Foreign Affairs Committee. "Positioned directly on the shipping routes that carry petroleum products and other trade from the Gulf to East Asia, Sri Lanka remains of strategic interest to the US," he explained.

While the government's record on human rights and the weakening of democratic institutions was "worrisome," Blake declared, "Sri Lanka stands poised to be a capable and willing partner to effectively combat violent extremism, trafficking and piracy, and thereby help to ensure the maritime security of the region." Since late 2009, Washington has further played down "human rights", as it has sought other means to establish the Rajapakse government as a reliable US partner.

Even the UN report was compelled to acknowledge that the UN Security Council and other UN bodies "failed to take actions," including in the final months of the war, to protect civilians. The "failure" simply demonstrates that lack of any real interest in the plight of hundreds of thousands of civilians on the part of all the major powers as each sought to exploit the issue for its own political ends. The same considerations will determine the fate of the Expert Panel report itself.

Friday, April 08, 2011

The trouble with Billionaires

Billionaires have taken over the financial system, the political system, and social discourse. It's an unannounced coup.

Although some of these speeches are about Canada, most examples of billionaires, and studies of what people really want, are American. You'll hear plenty about Wall Street, the greedy Hedge Funders, and why Bill Gates doesn't deserve his exaggerated fortune.

It's the same disease of atrophied Capitalism all over the world.

Our financial system has distorted a former Democracy into a Plutocracy. And the economy does WORSE when all the money goes to the top. Examples of better times, and better places, with ideas of what we can do.

Professor Neil Brooks has taught tax law at the University of Toronto, Osgoode Hall, for 35 years.


Neil Brooks has been teaching tax law at the Osgood Hall school, part of the University of Toronto, for the past 35 years. In the speech, he begins admitting the book is another failure in a long string of failures. Brooks has been trying to get the Canadian government to introduce a more just society by taxing the wealthy more. Instead, the government has reduced taxes on the wealthy, and got rid of the estate tax, otherwise known as the Death Tax, altogether. This favors the concentration of wealth at the top.

Ironically, much of what Brooks teaches enables lawyers to go out and get even more tax breaks for big corporations. Neil says that at least one third of the wealth by the top 1 percent is never taxes or even calculated, as it moves through various loop-holes and off-shore tax havens. His book has a remedy for that.

In the radio segment, Brooks gives a quick overview of the general health of our society since the 1920's. That was the gilded age, when "Robber Barons" were well known. The 1930's Depression, followed by World War II, reduced the overwhelming fortunes of the very rich, and brought about a larger Middle Class. That balance stayed until around 1980's - when the return of Neo-liberalism, Reganism, and the alleged "trickle down effect" got money trickling upwards, and then rushing upward, into the very top one percent of the population. Poverty returned to more people, especially in America.

Actual experience, in North America and in other countries shows that taxing the wealthy less ends up creating a less just, and a poorer society overall. The economy suffers when wealth concentrates. There is much more to it, some of it shocking, but you need to listen to the Radio Program.

The second speaker was co-author Linda McQuaig, the long-time business columnist, author of a string of Canadian best-sellers, and social critic. She questions why Bill Gates, or any billionaire, should have money worth many lifetimes of work by the average person. And why have the rich taken over since the 1980's? Isn't it a coup?

In the radio program, we cut in as McQuaig talks about the former media baron Conrad Black, who once suggested Linda should be, quote, "horsewhipped." Black later hired McQuaig as a financial journalist at his newspaper the National Post. She currently writes for The Toronto Star.

That is the thorn in the side of wealthy, journalist and author Linda McQuaig. She was speaking at the Vancouver Public Library, with tax Professor Neil Brooks to announce her new book "The Trouble with Billionaires, Why Too Much Money at the Top Is Bad for Everyone." McQuaig is feisty, lively, and one of the best informed about the wealthy.

There is much more detail in the book, with names named. I could say the author's suggestions for higher taxes for the rich are spot on, but just a part of the solution. (No, tar and feathering is not the other part...)

Just look at the social disruption caused by Meg Whitman's pouring $143 million of her own money into the election for California Governor. Democracy bought out. Or the multi-billionaire Koch brothers pushing their right-wing agenda, and the Tea Party, in the U.S. While fighting off any action to limit climate disruption. Billionaires are a much great threat than we know. And we don't know, because they control the mass media.

Monday, April 04, 2011

Yemen’s Useful Tyranny - UK phone bugs - Gladio

April 04, 2011


Yemen's Useful Tyranny – The Forgotten History of Britain's 'Dirty War': Part 2

Using declassified government files, historian Mark Curtis has exposed Britain's 'dirty war' in Yemen in the 1960s, which he describes as one of the 'least known aspects of recent British history'. The war lasted almost a decade under both Tory and Labour governments, and cost around 200,000 lives.

Even today, Curtis notes, the files are heavily censored: 'probably more so than in any other foreign-policy episode I have looked at.' The official reason for the secrecy is 'national security'. The actual reason is to protect the reputations of 'the people with blood on their hands': the leading politicians of the day, including Harold Wilson, Denis Healey, Alec Douglas-Home and numerous other officials. (Mark Curtis, 'Unpeople', Chapter 16: 'Arabians: Dirty Wars', Vintage, 2004)

Curtis describes how, in September 1962, the Imam of North Yemen was overthrown in a popular coup. Until then, 80 per cent of the population had lived as peasants under a feudal system of government, with control maintained by graft, a coercive tax system, and a policy of divide and rule. The coup was led by Arab nationalists within the Yemeni military who supported Egypt's reformist president Gamal Abdel Nasser. In turn, Nasser sent troops to bolster the new Republican government. Royalist forces supporting the deposed Imam fled to the hills and began an insurgency backed by Saudi Arabia and Jordan.

Curtis notes that Britain 'soon resorted to covert action to undermine the new Republican regime, in alliance with the Saudis and Jordanis'. British officials privately recognised that they were thus supporting a 'monopoly of [royal] power' that was 'much resented' by the Yemenis. But the Foreign Office's 'pragmatic' concern was that the nationalist uprising might spread to neighbouring Aden, then a UK colony, where Britain was 'supporting similarly feudal elements against strong popular, nationalist feeling.'   

Why? For longstanding reasons of 'national interest'. Curtis explains:

'The military base at Aden was the cornerstone of British military policy in the Gulf region, in which Britain was then the major power, directly controlling the sheikhdoms of the Persian Gulf and with huge oil interests in Kuwait and elsewhere.'

Aden was surrounded by a 'protectorate', the Federation of South Arabia: feudal fiefdoms controlled by autocratic leaders like the overthrown Yemeni Imam, and all 'kept sweet by British bribes.' Britain feared that a progressive, republican, Arab nationalist Yemen would act as an inspiring example and so threaten other feudal sheikdoms in the region and throughout the wider Middle East. British ministers feared 'a collapse in the morale of the pro-British rulers of the protectorate,' putting 'the whole British position in the area ... in jeopardy.' The rulers of oil-rich Saudi Arabia were similarly concerned about the possible domino effect of neighbouring monarchies being overthrown by Arab nationalist forces.

Early in 1963, working with the Saudis, Jordan and Israel, Britain began covertly arming and supplying the Yemeni royalist forces against the new Yemen Republican government. A British mercenary operation was set up, funded by the Yemeni royalist foreign minister, the Saudi prince Sultan, the British Foreign Office and the Ministry of Defence. SAS volunteers were given temporary leave from official duties and French mercenaries were also recruited.

In early 1964, SAS forces undertook their first clandestine air-drop of arms and ammunition, with the discreet backing of MI6 and the CIA. UK Defence Secretary Peter Thorneycroft spoke of the need to organise 'tribal revolts' in the frontier areas and to initiate 'deniable action ... to sabotage [pro-Yemeni Republican] intelligence centres and kill personnel engaged in anti-British activities.'

Curtis adds that a top-secret document in the government files went even further. Entitled 'Yemen: The range of possible courses of action open to us,' it considered 'assassination or other action against key personnel' involved in subversion in the federation. As these options were being debated in private, Prime Minister Douglas-Home lied to parliament on 14 May 1964:

'Our policy towards the Yemen is one of non-intervention in the affairs of that country. It is not therefore our policy to supply arms to the Royalists in the Yemen.'

Curtis notes that the election of Harold Wilson's Labour government in October 1964 'seems not to have upset the covert operation.'

Secret RAF bombing took place in retaliation for Egyptian attacks on camel trains supplying weapons to French and British mercenaries. As part of an arms deal with Saudi Arabia, Britain agreed a £26 million contract with a private company, Airwork Services, for the training of Saudi pilots and ground crew. Airwork also recruited former RAF pilots as mercenaries on missions against Egyptian and Yemeni targets along the Yemeni border. And by 1965, MI6 had a secret agreement with Israel to use its territory for launching attacks against the Yemeni Republicans.

Following Egypt's defeat by Israel in the 1967 war, Nasser withdrew his troops from Yemen. In November, Britain withdrew from Aden. Then, in March 1969, the Saudis cut off supplies to the Yemeni Royalists. A treaty was signed, and hostilities ceased. As mentioned, a total of around 200,000 people had died.

As far as current reporting on Yemen is concerned, none of this exists. On March 29, we conducted searches using the LexisNexis newspaper database for mentions of 'Yemen' in UK national newspapers since the start of the Yemeni protests in January. We found 898 articles. Apart from two reviews of a new book from an imperialist perspective (see next section), not one of these articles contained any mention of the key names from this grim episode of British history. Nor was there any mention of Mark Curtis. The war has been effectively erased from the record.

It is the same phenomenon of media blindness and adherence to state ideology that would have us believe that Iran's history began with the Islamic Revolution in 1979. This also neatly and conveniently omits the UK-US role in the 1953 overthrow of the democratically-elected leader Mossadeq after he nationalised Iran's Western-controlled oil industry. History is reduced to an elite-friendly script that minimises public understanding of the background to current events.


An Exchange With The BBC's Sarah Montague

A segment of the Radio 4 Today programme on February 16, 2011 was a rare exception in even referring to this shameful history of British involvement in Yemen. But its cavalier treatment of the events was telling, as the exchange below reveals.

The radio piece comprised a discussion between Today presenter Sarah Montague, author Duff Hart-Davis and the former British mercenary Kerry Stone. It was conducted in an almost light-hearted tone of 'look at the scrapes these old boys got into back in the days of empire.'

We emailed Montague the same day:


Dear Sarah Montague,

I listened to your interview with author Duff Hart-Davis and the former mercenary Kerry Stone this morning about Britain's 'secret war' in Yemen in the 1960s.

You said to Stone: 'And was it an adventure because I mean it sounds exciting?'

Duff Hart-Davis's biased account is summed up in the subtitle of the book ['The War That Never Was'] he was promoting: 'The heroic true story of Britain's greatest secret victory'. He told us that British colonel Jim Johnson ran the [mercenary] operation from a basement in Sloane Street.  And then you indicated to listeners that this secret war took place:

'Purely because he [Johnson] looked across [to the Gulf] and didn't like the loss of empire.'

This assertion, and your ill-advised use of 'adventure' and 'exciting', is a misleading description of a war which was motivated by longstanding UK 'national interests' in the region. It was not merely the personal mission of a few disgruntled imperialists or greedy mercenaries.

There was no mention in the Today piece of the realpolitik that natural resources in the region were a prime motivation, and that profits were being made in arms deals. The serious diplomatic historian Mark Curtis has presented the evidence of all of this from previously secret government files (see pp. 288-301 of 'Unpeople', Vintage, 2004). As Curtis notes, the war cost up to 200,000 lives with British complicity in those deaths.

There was surely time in the 4 min : 30 sec piece to provide some serious account of these crucial facts and thus proper balance?

Perhaps you could invite Mark Curtis on to the Today programme to provide the balance that was so lacking this morning?


There was no response for a few days, so we nudged her gently on February 22 and she then responded that day:


Apologies for not replying sooner.

You may very well have a point. It occurred to me during the interview that I may have been making too light of it.  I shall have a word with our planning editor and forward your email, but he may judge that given the way the story was told and the time elapsed since it happened it was not too serious an error.  

I am on holiday at the moment  but shall follow it up when I get back next week.

Thank you for the email.


Despite a couple of gentle nudges in the month since then, we have not heard back from Montague, her editor or anyone else on the Today programme.

Curtis notes in 'Unpeople' that Yemen and the other case studies he examined in declassified government files illustrate the three basic principles that guide British foreign policy.

The first is the systematic deception of the public by British ministers, which is 'deeply embedded in British policy-making.' (Curtis, 'Unpeople', p. 3). Blair's lies about Iraq fit comfortably as part of this trend.

The second principle is that policy-makers are typically open and frank about their real goals in secret documents. The glaring gap between state realpolitik and government claims of benevolence is rooted in a fundamental contempt for the general population. As Curtis says:

'The foreign-policy decision-making system is so secretive, elitist and unaccountable that policy-makers know they can get away with almost anything, and they will deploy whatever arguments are needed to do this.' (Ibid., p .3)

The third basic principle is that humanitarian concerns do not feature in the rationale for foreign policy. Curtis observes bluntly:

'In the thousands of government files I have looked through for this and other books, I have barely seen any reference to human rights at all. Where such concerns are evoked, they are only for public-relations purposes.' (Ibid., p .3)

When such concerns are not evoked for PR purposes, it is because a focus on human rights would throw an unwelcome light on the West's support for oppression. Saudi Arabia is a classic example, of course - as is modern-day Yemen, where Saleh's thirty-year record of oppression has been facilitated by Western 'defence' companies and soft-pedaled by Western diplomats. As noted in Part 1, Saleh has been a 'useful tyrant' for the West. He, or an acceptable replacement, will remain a favoured figure – unless democratic forces become uncontainable, both in Yemen and in the West.

The framework for understanding Britain's war in Yemen in the 1960s, then, remains valid for the situation there today as it does for much of the world: namely, that control and geostrategic dominance - routinely sold to the public as 'humanitarian intervention' and maintenance of global 'security' - continue to be the key concerns guiding Western policy.


The goal of Media Lens is to promote rationality, compassion and respect for others. If you do write to journalists, we strongly urge you to maintain a polite, non-aggressive and non-abusive tone.

Write to:

Sarah Montague, BBC Today presenter,


Copy to:

Alan Rusbridger, Guardian editor



Please blind-copy us in on any exchanges or forward them to us later at:

MI5 bugged leading intellectuals and journalists in 1950s, files show

Dr Jacob Bronowski and editor Cyril Connolly were among those whose political views were suspected by the secret services

Dr Jacob Bronowski

Dr Jacob Bronowski, whose series The Ascent of Man was a TV milestone, was one of MI5's high-profile targets. Photograph: David Newell Smith

Richard Norton-Taylor

The Guardian, Monday 4 April 2011

MI5 bugged the phones of leftwing journalists and writers in an intensive but unsuccessful attempt to discover more about the Cambridge spy ring, according to newly released, hitherto top-secret files.

It also drew up voluminous reports on scientist Dr Jacob Bronowski, who became a popular broadcaster, in surveillance operations described by his daughter as "shocking ... just like a Stasi file".

Files released by the National Archives include transcripts from phonetaps from the London flat of journalist and author Philip Toynbee, made shortly after his friend Donald Maclean fled to Moscow with Guy Burgess, a fellow member of the notorious Cambridge spy ring.

The files, from the early 1950s, suggest MI5 was mainly interested in Cyril Connolly, editor of the literary magazine Horizon, who lived in Toynbee's Paddington flat at the time.

MI5 recorded conversations in which poet Stephen Spender, publisher George (later Lord) Weidenfeld, poet WH Auden, painter Lucian Freud and philosopher Sir Isaiah Berlin were all talked about.

MI5 was most keen to discover what Connolly and his friends knew about Burgess and Maclean.

It carefully annotated newspaper articles that Connolly had written about his former acquaintances.

The files show that MI5 identified the art historian Anthony Blunt and journalist and academic Goronwy Rees as being among Burgess's friends in October 1952, 12 years before Blunt confessed to spying for the Russians.

"We are, for your own information, still making active enquiries in the Burgess circle, which, of course, included Rees, Blunt and many others," an MI5 officer wrote to the British embassy in Washington.

He added: "We do not wish to encourage the FBI to direct a lot of questions at us about our progress in this peculiarly British field of counter-espionage."

Although Blunt, the official surveyor of the Queen's pictures, confessed in 1964, a hugely embarrassed establishment covered the matter up until he was exposed in a deathbed tipoff from Rees in 1979.

The FBI was particularly interested in the Cambridge spy ring, as both Burgess and Maclean had worked at the UK's Washington embassy.

The papers show how MI5 built up a large file on Bronowski, a mathematician and scientist who became a successful broadcaster and household name through his 1970s BBC documentary series, The Ascent of Man. He first came to MI5's notice in October 1939 when a "casual informant" in Hull, where Bronowski was a university lecturer, claimed he held "extreme left and anti-British opinions".

A year later, a Hull police officer told MI5: "I am well acquainted with the members of the local Communist party and at no time have I ever known him to be associated with them."

A series of subsequent police reports warned MI5 that Bronowski had spoken at a Left Book Club meeting about the "alarming growth of fascism". One report described him as a "skilful speaker and agitator of the 'communist intellectual' type", another as a "red intellectual". Yet another misinterpreted a satirical poem.

But his mathematical talents and expertise on the impact of bombing led the government to give him, in 1943, a job in the research and experiments department of the Ministry of Home Security.

He was later appointed a member of an official investigation into the effects of the atom bomb dropped on Hiroshima.

The files show the BBC told MI5 it had "abandoned" a series of planned broadcasts by Bronowski on atomic power.

His daughter, Professor Lisa Jardine, director of the Centre for Editing Lives and Letters at Queen Mary, University of London, told the Guardian: "I can't tell you how shocking it is for me ... It's just like a Stasi file. It's scary." Members of his family were Communist party members, but her father "took the decision very early on never to have an official association with politics", she said.

He turned down the offer of a post in Harold Wilson's Labour government and later emigrated to the US, because he could not get a senior post in Britain, Jardine said. But he never suspected that MI5 had a file on him.Harmonica player Larry Adler, who performed with Elton John and Sting, was investigated by MI5 over concerns about his alleged communist sympathies, the files confirm.

US-born Adler moved to Britain after being labelled a communist and blacklisted in America, but the files make it clear that MI5 did not consider him a subversive, the files make clear.
Nazis' nasty surprises

German spies were supplied with poisoned products – including chocolate, sugar, pills that looked like aspirin and doctored Nescafé – as well as cigarette lighters that gave off lethal fumes when ignited, to kill prominent individuals among the allies after the Nazis' defeat in the second world war, the MI5 files reveal. Female agents were supplied with "microbe" weapons hidden in handbag mirrors.

The Nazi leadership also planned to plant sleeper agents around the world after the war to provoke global unrest and create a "Fourth Reich", the files disclose.

Olivier Mordrelle, a leader of a separatist nationalist movement in Brittany, told his interrogators after he was captured that "ample funds" had been transferred to South America and "trustworthy key men" had been sent to live in Spain and Switzerland.

Mordrelle said he attended a meeting in Deisenhofen, near Munich, in April 1945 at which German postwar resistance plans were discussed.

He said he was told by a senior SS officer that underground agents were to lie low after the war ended until they were told to organise anti-Bolshevik movements in their countries in order to "stir up unrest culminating in civil war".

The allies also set up a secret network of agents and arms dumps, called Gladio, in the event of communist-led uprisings in western Europe, it has already been revealed.

AND THAT IS THE END.   GLADIO... and "already revealed" .. finished, hush hush. DANGEROUS TERRITORY!

The guardian CAN NOT GO THERE...  they can not say the truth, that the CIA was bombing, murdering, maming innocent citizens and blame it on communists, terrorists, muslim, whatever... in order to get right-wing "law and order" parties elected.

Please read the wikipedia article  (which ALSO can NOT say it outright)

But the CIA (in connection with MAFIA etc) did these crimes. Planned, executed AND COVERED UP.

You can often tell the CIA's involvement, namely because the actual perpetrators are never found, or mysteriously committed suicide or were immediately killed on a manhunt or other causes.  DEAD PATSIES DO NOT TALK.