Spreadsheets list prices paid for an Afghan life, a cow and a car

By Karrie Kehoe and Craig Shaw | First published by Thomson Reuters Foundation on Wed, 16 Jul 2014

LONDON (Thomson Reuters Foundation) – The description in a single box of a spreadsheet is brief and to the point: “We shot into a crowd and killed a lady’s son.”

Next to it stands an amount: $1,000.

The entry from October 2007 detailing an incident in Kabul covers one of hundreds of “condolence payments” paid to Afghans by U.S.-led forces for deaths, injuries and property damage, described in leaked military spreadsheets.

The sheets document some $4 billion in spending on a military-backed scheme, the Commander’s Emergency Response Program, intended to win over ordinary Afghans with reconstruction projects that improve local communities and provide jobs.

The bulk of the money goes on transport and building projects, although the sheets include entries as diverse as $91,000 for riot batons and almost $6,000 for scout uniforms. But commanders also use the fund to pay for harm done by U.S. troops or their allies – from deaths in botched air strikes to crops damaged by military vehicles.

Thomson Reuters Foundation has analysed these condolence payments, which offer a rare, detailed line-by-line insight into a key period of the war, as part of a project to explore how nations and organisations try to put a monetary value on life and limb.

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ANALYSIS: A few thousand dollars – the price of life for civilians killed in war zones

By Crina Boros, Craig Shaw and Karrie Kehoe | First published by Thomson Reuters Foundation – Wed, 16 Jul 2014

LONDON (Thomson Reuters Foundation) – When U.S. soldiers still patrolled the streets of Mosul in northern Iraq, a local man went for a walk to get some ice cream. Gunfire broke out and he was shot dead by U.S. troops.

Documents released by U.S. forces do not say why he was shot but show they gave his wife $2,500 and his child a “condolence gift” of $1,000.

Those payments, following the shooting on May 2, 2005, are among thousands the United States and its allies have made to civilians caught up in the wars in Iraq and Afghanistan in response to deaths, wounds or property damage involving Western forces.

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Duncan Campbell & Geoffrey Robertson QC in Chatham House debate with former GCHQ boss.

PRISM

Investigative journalist Duncan Campbell and human rights lawyer Geoffrey Robertson QC will face off against surveillance state advocate and former GCHQ boss David Omand in Chatham House debate on Wednesday.

The debate, called “Surveillance in an Information Society: Who Watches the Watchers?”, comes at a time of high exposure for Britain’s GCHQ and the United States National Security Agency following the leaking of a tranche of highly sensitive documents to the Guardian and Washington Post by US whistleblower Edward Snowden.  The leaks demonstrate the ubiquitous surveillance operations run by the “Five Eyes” intelligence services.

Revelations so far include GCHQ’s tapping of diplomats and world leaders during the G20 summit in 2009, and the complicity of major communications providers like Microsoft, Google, Facebook and others in secret mass surveillance programmes such as PRISM.

The panelists for the debate are the titans of their respective fields.

Geoffrey Robertson QC

Geoffrey Robertson QC

Duncan Campbell

Duncan Campbell

Duncan Campbell has spent the past 40 years as an investigative journalist exposing secret electronic snooping programmes.  He was the first UK journalist to reveal the existence of GCHQ in a 1976 Time Out story called The Eavesdroppers.  It would lead to his arrest in the ABC Trial in 1978, where he faced charges of breaking the Official Secrets Act.  He was defended in that case by Geoffrey Robertson QC, who is one of the world’s most prominent human rights lawyers.  The pair shared a panel at the recent Centre of Investigative Journalism Summer School with US journalist Sy Hersch, where they discussed the leaks.

Omand

David Omand

David Omand was formerly the boss of GCHQ, the UK government’s electronic spying division.  In a recent Guardian op-ed piece, Omand played down civil rights and personal privacy concerns associated with the kind of blanket surveillance revealed in the leaks, saying that there is a “misunderstanding” about modern intelligence gathering and that “we should not fuss too much about these specific revelations.”

The Tomorrow’s panel will do away with Chatham House Rule, allowing the event to be fully reported outside the venue.

For more details and to attend the event, click here

Inside Offshore Leaks @ CIJ Summer School

The Centre of Investigative Journalism‘s Summer School 2013 starts in three days.  I will be joining Duncan Campbell and David Leigh to discuss the work involved in producing stories for the International Consortium of Investigative Journalists‘s “Offshore Leaks” project.

INSIDE OFFSHORE LEAKS

David Leigh, Duncan Campbell, Craig Shaw | Sunday 14 July (15:05-16:15)

The 2012-13 Offshore Leaks reporting project of the Washington-based International Consortium of Investigative Journalists (ICIJ) has forced law enforcement authorities in Britain, the US and Australia to admit that they had failed to act on information they held about secret offshore accounts, and to start taking action. The project has helped changed tax policy in the EU and with other international organisations (see www.icij.org/offshore; #offshoreleaks).

The Offshore Leaks reports were prepared from the largest collection of leaked data ever gathered and analysed by any investigative journalism team anywhere. The information analysed totalled 260 gigabytes (GB) of data. This is 162 times larger than the 252,000 US State Department cables leaked to and published by Wikileaks. The leaked data included company and trust documents and instructions, emails, databases, personal identity documents, accounting information and agents’ and companies’ internal papers and reports. The speakers will focus on the successes and failures of work on the project, the lessons learned and experience gained.
* * *
See timetable below, click here to visit CIJ site and find out more about this year’s Summer School.
Friday 12 July
8.20-9.10 Registration, tea and coffee in the Great Hall Foyer
9.10-9.40 Welcome by Gavin MacFadyen, Director of the CIJ in the Great Hall 
Talks: AG07 Talks: AG08 Talks: AG09 Labs: AG34A+B Labs: A308
9.45-10.55 The Secret History of Torture
Ian Cobain
Understanding Company Accounts: How to Get the Most of Companies House Martin Tomkinson and Robert Miller Libel and Privacy Law Justin Walford CAR Intro: Start Here if you are New to CAR (B) David Donald and Alex Plough
11.10-12.20 Understanding Company Accounts: Profits and Losses Raj Bairoliya Interviewing 1: Melanie McFadyean A Web Documentary Primer Kat Cizek Stats for stories with SPSS 1:  Frequencies and Other Descriptives (A) Jennifer LaFleur Excel 1: Power of Data Analysis for Stories (B) hands-on  David Donald and Caelainn Barr
12.20-13.30 Lunch
13.30-14.40 The Savile Panel Discussion with Mark Williams-Thomas, Paul Connew, Gavin Millar QC (chair) and Miles Goslett  in the Great Hall
Talks: AG07 Talks: AG08 Talks: AG09 Lab: AG34A+B Labs: A308
15.00-16.10 Understanding Company Accounts: Assets and Liabilities
Raj Bairoliya
Interviewing 2: Three Types of Interview: Roleplay
Robert Miller and Martin Tomkinson
The Politics of the Internet
Dr Richard Stallman
Stats for Stories with SPSS 2: Cross Tabulations (A) Jennifer LaFleur Excel 2: Finding the Patterns in the Data (B) hands-on David Donald and Caelainn Barr
16.25-17.35 Understanding Company Accounts: The Small Print and Q&A Raj Bairoliya How to Request Documents Under the Freedom of Information Act Brendan Montague and Lucas Amin Introduction to Offshore  John Christensen and Nick Mathiason Stats for Stories with SPSS 3: Linear Regression (A) David Donald Excel 3: Summarising Your data for the Big Picture (B), hands-on Jennifer LaFleur and Aron Pilhofer
17.55-19.05 Jim Nichol will be talking about  The Marikana Tragedy
In the Great Hall
19.05-21.00 Party

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Fraud trail leads to OAP’s tiny flat

A hard-drinking pensioner in Latvia has been revealed as the frontman for a network of scandal-hit companies

By Jon Ungoed-Thomas, Craig Shaw and Kevin Dowling in Riga Published in Sunday Times | 16 June 2013
 
Image

IN A bustling cobbled street in central Riga, an alleyway leads to a modest red-brick and wooden apartment block. It is the last known address of an apparent business colossus — Erik Vanagels.

Friends and relatives of the former factory worker claim he has poor sight, is a capacious drinker and disappears for weeks on end.

A leak of offshore documents to the International Consortium of Investigative Journalists (ICIJ) reveals a rather different figure: an apparent tycoon with interests in banking, investment funds, pharmaceuticals and shipping. He is a director or an owner of several hundred companies around the world.

On paper Vanagels is probably a billionaire. In reality the 73-year-old is a corporate cipher used as a veil to conceal the real beneficiaries of companies.

Among the world of investigators and lawyers who unravel complex frauds, Vanagels is an almost mythical figure. His companies have been involved in a series of financial scandals and alleged frauds. These include:

■ The Hermitage Capital fund money laundering scandal in which $230m (£146m) was allegedly looted between December 2007 and February 2008 in a fraud involving the fund’s Russian operations.

■ Technomark Business, a London company, is alleged to have received $43m of stolen Hermitage funds that were wired to a Latvian bank account. Vanagels was a director of Technomark’s parent company.

■ Mukhtar Ablyazov, who has been sued by BTA Bank, for which he worked, for misappropriating billions of dollars using various companies including British-based Loginex Projects. Vanagels was a shareholder and director of the companies that controlled Loginex.

■ A Ponzi scheme that operated in America in 2009 — the Rockford Group — routed more than $500,000 illicit funds to a British company, Intercity Transit, according to court filings by the US Securities and Exchange Commission.

A Cypriot company in which Vanagels was a director was used as a UK corporate director of Intercity Transit.

Vanagels has not just been caught up in complex financial scandals. In September 2008 Somalian pirates hijacked the Faina, a Ukrainian ship which was carrying 33 Soviet-era tanks, rocket-launch systems and anti-aircraft guns bound for Sudan, which was the subject of an arms embargo. It emerged that the ship had been chartered by Marine Energy Trading Company (METC), a UK firm. Vanagels was a shareholder and director of the companies that owned METC.

More recently, in May 2010, the High Court ruled on allegations that a Shell trader, Evgeny Tikhonov, had hidden commissions in an offshore deal. Tikhonov was acquitted, but Shell is still pursuing him for compensation, along with a company that received some of the funds, T Capital Ltd (TCL).

In a High Court judgment in July 2010, Mr Justice Jack identified a familiar figure. His judgment stated: “TCL was incorporated in the British Virgin Islands and Mr Erik Vanagels was the nominee shareholder and director.”

Vanagels has also been named in a financial scandal in Ukraine in which it was alleged that the government was overcharged for pharmaceuticals.

 (PAUL VICENTE/GUY CRITTENDEN) Who is Vanagels? For some years it was considered he might be a useful namesake, the John Doe of the corporate world. It was a suspicion fuelled by the fact that he appears to have two different dates of birth in British company records.

The leak of 2.5m offshore records to ICIJ included British Virgin Islands (BVI) for the first time and revealed the scale of Vanagels’s interests. He has acted as director and shareholder in two key BVI companies, Milltown Corporate Services and Ireland and Overseas Acquisitions, with interests in other companies around the world including Britain, Cyprus and Panama.

Among the documents was a photocopy of Vanagels’s passport and numerous emails testifying to his existence. An April 2007 email from a company agent said Vanagels’s two key companies were involved in “several thousands (mainly UK) companies”.

Graham Stack, a journalist based in Kiev, Ukraine, has previously tried to track down Vanagels and reported many of the scandals connected to his network. Stack said Vanagels was in a network of Latvian nominee directors recruited as the country emerged from communism.

In the late 1990s the British government cracked down on the scandal of some residents on the tiny Channel island of Sark offering their services as nominee directors to disguise company ownership. Enterprising company agents were already enlisting recruits elsewhere and Latvia proved promising territory.

Vanagels, who was first appointed a BVI director in 2000, was willing to provide identity documents and for his name to be used in companies around the world. He would have been paid at least £1,000 a month for the use of his identity but would not have been aware of the companies’ alleged involvement in unlawful activities.

One of Vanagels’s sidekicks in the corporate structures was a fellow Latvian, Stan Gorin, who worked in a Latvian office which helped to construct the companies. He lives with his wife in a small fourth-floor flat near the centre of Riga. He said last week that he had allowed his name to be used in the past as a nominee director, but said he now works exclusively as an insurance broker.

“My name was used but I did not do any operations with these companies,” he said.

Philip Burwell, a company agent who works from a house in Dublin, told The Sunday Times that he had set up companies with Vanagels, Gorin and other Latvians as nominee directors or shareholders. He said he was always acting on client instructions and was never aware that any of the companies might be used for unlawful activities.

One of the British addresses used by some of the companies set up by Burwell was a London law firm, Pearson Lowe. James Pearson, a lawyer at Pearson Lowe, said last week that his company provided legitimate services as a registered office for companies, but he was not aware of any unlawful activities involving any of them.

■ The ICIJ this weekend launched the offshore leaks database, which allows users to search details of more than 100,000 offshore companies, trusts and funds. See offshoreleaks.icij.org.

Intercepting diplomatic messages is a lot older than GCHQ

The Doughnut – GCHQ’s Cheltenham base.

The Guardian has today revealed that the Government Communications Headquarters (GCHQ) spied on UK allies during the 2009 G20 conference in London.

The interception of diplomatic communications is older than GCHQ and just as outwith international law.  It has been this way for decades,  despite the Vienna Conventions.  In NSA stations of old, the conventions were pinned to the wall as a joke sheet, sources told Duncan Campbell back in the 1970s.

Campbell revealed the practice of spying on allied diplomats in the first ever article on GCHQ in 1976, called The Eavesdroppers.  This triggered a Foreign Officer Legal Department investigation that concluded that what GCHQ did, even then, was a “dubious practice.”  The ’76 Time Out  piece was the trigger that led the arrest of Campbell, former sigint officer John Berry and the late journalist, Crispin Aubrey and the two year legal case known as the ‘ABC trial

The internal Foreign Office reaction to the Eavesdroppers came out when historian Richard Aldrich cited found papers in his book, ‘GCHQ: the Uncensored Story of Britain’s Most Secret Intelligence Agency’, (Harper Press, £30) indicating that the trial provoked the Foreign Office legal adviser to:

“look into whether the interception of communications between diplomatic missions in London and their home capitals was legal. He concluded that, ‘It now seems clear that it is at least a dubious practice.'”

A copy of Aldrich’s chapter is online, with permission, here. The quote is on page 360.

Red Cross and Greenpeace sucked into tax black hole

Charities are unwittingly being used to hide the identities of tax avoiders in schemes involving millions of pounds

Jon Ungoed-Tomas, Duncan Campbell and Craig Shaw | Published in Sunday Times  28 April 2013
Yacht moored next to tropical beach
The British Virgin Islands is one of the world’s most secretive tax havens (Jean-Pierre De Mann)

A FEW minutes’ walk from Buckingham Palace lies one of London’s most exclusive terraces. Apartments in the imposing grade II listed buildings that line Grosvenor Crescent, prestigious even for Belgravia, sell for as much as £50m.

Yet Grosvenor Crescent has had a troubled history in recent years. It is a story that leads more than 4,000 miles to the offshore tax haven of the British Virgin Islands and to a mysterious charitable trust of which even the charities it was supposedly set up to benefit have never heard.

Five years ago, an ambitious entrepreneur, Raheem Brennerman, then 29, unveiled plans for a development of part of the crescent. Residents would have their own in-house chef, use of a yacht and a Rolls-Royce Phantom to ferry them to shops or restaurants.

The Royal Bank of Scotland (RBS) was impressed, lending £146.5m to the scheme for the “trophy” apartments in June 2007. It was a part of the ill- considered spending and lending splurge that led to the bank announcing the biggest losses in British corporate history the following year.

In June 2009, RBS asked for the return of a large portion of its money — £118m — as the Grosvenor Crescent development was hit by tumbling property prices. In a letter sent to the British Virgin Islands (BVI), a group of islands in the Caribbean where the company behind the scheme was based, a lawyer asked hopefully for the cash to be paid back “within one hour”.

It was, however, a complicated money trail and RBS is still waiting to get all its cash back. The initial loan had been made to Zegna III Holdings, incorporated in the BVI — a British overseas territory that has become notorious as one of the world’s most secretive tax havens. It was controlled by a Seychelles company Nuevitas International Holdings.

The actor Paul Hogan, seen with his wife Linda Kozlowski, is taking legal action against a trust based in the British Virgin Islands

The actor Paul Hogan, seen with his wife Linda Kozlowski, is taking legal action against a trust based in the British Virgin Islands (Lucas Dawson)

Brennerman, who is originally from Nigeria, and Nuevitas International Holdings in turn controlled a BVI trust — the Trigon Trust — which could be used to bank the profits from property deals and buy “yachts, boats, motor vehicles [and] works of art”.

Trust documents seen by The Sunday Times reveal the unlikely beneficiaries supposed to enjoy such trappings of huge wealth: Cancer Research UK, the National Society for the Prevention of Cruelty to Children, the National Trust and a diabetes charity.

Last week, the charities involved said they had never given permission for their names to be used and had not received any money from the Trigon Trust.

The London firm Bloomsbury Management Services, which helped create the trust, said it had advised its clients that the charities should be informed about the Trigon Trust. According to the charities, that never happened.

Brennerman insists Trigon was formed in good faith and it was initially intended that the charities would benefit. In the event, a source close to Brennerman says no money was distributed.

Whatever the intention of the Trigon Trust, experts say tens of thousands of similar charity-fronted trusts have been quietly formed in tax havens. They say such structures are used to conceal the ultimate beneficiaries.

Naming a charity as the main beneficiary of a trust reduces the requirements for identity and anti-money-laundering checks and they can be removed from trust documents shortly before any funds are distributed without the charity knowing anything about it.

Robert Peach, a trust recovery law specialist at Coffin Mew solicitors in Portsmouth, said: “We call [these trusts] ‘black holes’ because you never normally know who is really intended to benefit.

“They are mainly offshore, taking advantage of lax laws. Billions [of dollars] could be out there.”

A leak of 2.5m records relating to more than 120,000 offshore companies and trusts to the International Consortium of Investigative Journalists (ICIJ) has lifted the lid on this practice. Hundreds list charities and campaign groups as beneficiaries of tax haven trusts, including Greenpeace, Amnesty International and the British Red Cross.

Last week charities and campaign groups expressed their anger at the way they had been exploited. John Sauven, executive director of Greenpeace, which has been named as a beneficiary of a trust in the Cook Islands in the south Pacific, said: “It looks like our name has been exploited by somebody operating from an island notorious for facilitating tax avoidance.

The Red Cross was unaware it was being used by tax avoiders

The Red Cross was unaware it was being used by tax avoiders (Ben Gurr)

“Global tax loopholes are costing governments trillions, setting back the fight against poverty and environmental destruction. The fact that tax avoiders may be using the names of campaign groups to pull it off is a distasteful irony.”

Many foreign charities are also on the list. Some are now investigating whether they can take legal action to stake a claim on these hidden offshore assets.

One of the financial advisers who has honed the use of trusts for tax avoidance is Philip Egglishaw, known at “the Bowler Hat Englishman”. He is subject of an international arrest warrant after allegedly masterminding one of Australia’s biggest tax evasion schemes. He denies wrongdoing.

In November 2003, investigators in Operation Wickenby, Australia’s biggest tax evasion crackdown, found documents Egglishaw had unwittingly left behind at the Sheraton On the Park hotel in Sydney.

The documents revealed how trusts could be set up without disclosing any link between the trustees and beneficiaries. The documents stated: “Trusts are typically used to avoid the following forms of taxation: income tax; capital gains tax; death duties; gift taxes; wealth taxes.”

Egglishaw helped devise a trust scheme for Paul Hogan, the Crocodile Dundee actor who has been investigated in Australia for unpaid tax. Hogan, who moved to America, has since settled his case with the tax authorities.

Egglishaw formed the Carthage Trust, which was run from the British Virgin Islands. About $34m was kept in the Corner Bank in Lausanne, Switzerland, for the benefit of the trust. The trust documents, however, listed the beneficiary as the British Red Cross.

A legal action was filed on Hogan’s behalf in a Californian court last year, revealing that this trust structure was bogus and that the British charity was never the intended beneficiary.

“The sole intended beneficiary of the Carthage Trust is Hogan, and this structure was adopted to maintain his privacy,” the documents say.

The action states Hogan had correctly declared his interest in the Carthage Trust to the US authorities. Hogan now accuses Egglishaw of stealing the money that he was meant to stash in a tax haven.

“The British Red Cross has no record of ever being a beneficiary of the Carthage Trust and we have never received any funds,” the charity said.

Grosvenor Crescent, which a British Virgin Islands trust hoped to redevelop

The leaked documents revealed that a London legal firm, Pearson Lowe, helped administer a number of trusts that appear to have been established for three wealthy Italian families.

Three Italian charities caring for blind people, mistreated children and Aids sufferers were named as the beneficiaries of the SICC Trust set up in the Cook Islands in January 2002.

All three charities — Lega Italiana per Lotta Aids, Unione Italiana Ciechi and Centro Bambino Maltrattato — have said they had no knowledge of this trust and never received any donations. They are now considering legal action to see if they can claim any of the funds sheltered in the trusts.

Trust experts say the use of charities to front trusts without their permission or knowledge has been going on for years. The International Red Cross has legitimately been used as a “reserve” beneficiary in some trusts, but the practice expanded to using charities as the main beneficiaries to conceal the ultimate destination of the funds.

Many of the trusts are “discretionary”, which in effect means the assets do not have to be distributed to the main beneficiaries. Financial experts say more rigorous compliance checks are required to stamp out the practice.

They warn the trust industry, however, that charities might now have a legitimate claims over the hidden funds. L Burke Files, an international trust agent and recovery expert, said charities could apply to take over the fund if courts rule that the trusts were shams to conceal the identity of true beneficiary.

Glimpse into secret world

The leaking of 2.5m documents, mainly from the offshore tax haven of the British Virgin Islands, has lifted the lid on the secretive world of offshore finance, writes Peter Newlands.
The material comes from two finance firms that specialise in offshore trusts: Commonwealth Trust Limited, based in the BVI, and Portcullis Trustnet, which has offices in many tax havens, including the BVI and the Cook Islands.

The material reveals how business leaders, politicians and other prominent figures around the world have benefited from moving money into offshore trusts.

Although the documents detail 122,000 offshore entities, most of the BVI’s 600,000 companies are still cloaked in secrecy and about 5,000 more are registered each month.

In a statement Portcullis Trustnet Group said it considered the leaked information to have been stolen: “We are taking this theft . . . very seriously.”

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