COLUMN NINETY-FOUR, JULY 1, 2003
(Copyright © 2003 The Blacklisted Journalist)
RUMSFELD STONEWALLS ON OFFSHORE BANKING
It hasn't been reported
in the U.S. press?until here and now?but in Milan, Italy's chief prosecutor
has obtained thousands of documents that show how for more than 20 years Saddam
Hussein used the Western bank and corporate secrecy system to launder bribes
skimmed from oil revenues to pay his security forces and buy Western arms during
The key countries---whose governments openly
allow these money-laundering systems to exist---were Switzerland, Liechtenstein,
Panama and Nassau. Corporate registrations and bank accounts there use
"straw men" and secrecy rules to cover up true owners of companies and
On Tuesday (May 27), Defense Secretary Donald
Rumsfeld was at the Council on Foreign Relations in New York, and I asked him
what the U.S. planned to do about this system that financed and armed
Washington's latest nemesis.
This was the question:
"It's been shown by investigations by the prosecutor of Milan in Italy, which has gotten thousands of documents about banks accounts in Europe, particularly Switzerland and Liechtenstein and then also Panama, that these were the accounts through which Saddam Hussein hid the
Bushie corporate crooks won't foul their nests by challenging offshore banking secrecy
rake-offs he was getting from Western
companies that were buying his oil. That allowed him to get money for weapons
during the "80s and "90s. This bank and corporate secrecy is what allowed
this to happen. I assume the Americans know about this. Are you going to do
anything about this system that allows criminals like Saddam Hussein'this was
during the embargo, of course---are you going to do anything about this system
that allows them to get weapons illegally?"
For the record, Rumsfeld's answer: "The
Department of the Treasury has been working with other countries and attempting
to locate the assets that the Saddam Hussein family and regime have placed in
other countries. They found some, and I'm sure they have not found additional
sums, and I'm sure they're working on it."
Rumsfeld side-stepped the question because
the Bush administration has reversed the Clinton-era policy that attempted at
least minimal reforms of the offshore system. The Bush administration has
blocked European efforts to pierce bank secrecy by allowing tax authorities to
share information on non-residents' bank accounts. It does not want to change
the offshore system because its corporate and wealthy supporters use it to evade
Rumsfeld would know how that works because he
was CEO of G.D. Searle & Co, a worldwide pharmaceutical company, and of
General Instrument Corporation, which deals in broadband technologies.
International corporations routinely use the offshore system for "transfer
pricing"---corporatespeak for the practice of moving bookkeeping entries
around the globe so they can report near-zero profits to the IRS.
He said that when funds are needed in Iraq,
the U.S. "will rely on frozen assets in the U.S. and other countries."
But to be frozen, they have to be found. And to be found, the U.S. will have to
follow the trails set out in the Milan documents---to challenge the bank and
corporate secrecy of friendly allies such as Switzerland, Liechtenstein, Panama
Rumsfeld says that in the new Iraq,
"Market systems will be favored," that the U.S. "will encourage
moves to privatize state-owned enterprises" and that the U.S. is
"developing a plan for the oil industry based on transparency."
The international oil business is notorious
for using secret offshore accounts to move profits and also to bribe government
officials for access to oil fields. Transparency would make that difficult.
Earlier this month, Rep. Henry Waxman (D-Calif.)
released documents showing that Halliburton, while it was headed by
Vice-President Dick Cheney, set up offshore subsidiaries in places such as the
Cayman Islands to hide its dealings with Iraq, Iran, and Libya, which were under
CLICK HERE TO GET TO INDEX OF COLUMN NINETY-FOUR
CLICK HERE TO GET TO INDEX OF COLUMNS
Blacklisted Journalist can be contacted at P.O.Box 964, Elizabeth, NJ 07208-0964
The Blacklisted Journalist's E-Mail Address:
THE BLACKLISTED JOURNALIST IS A SERVICE MARK OF AL ARONOWITZ