Global Financial Integrity

 

Op-Eds

Letter to the Editor: Further Inquiry and Action Needed on Banks and Tax Havens

Dev Kar

SIR:

As a research and advocacy group that has for years called attention to the murky world of tax havens, we welcome your report (Leaks reveal secrets of the rich who hide cash offshore, 4 April). But you should also have dispelled the myth advocated by some proponents that tax havens promote greater tax efficiency through competition; the evidence in economic literature is scanty at best. What is clear is that this benefit has not been enough to prevent tax havens from going bankrupt.

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Tax Haven Menace Must Be Addressed by Congress

Clark Gascoigne
Raymond Baker

This month’s leak of data on the use of offshore tax havens and anonymous shell companies from the International Consortium of Investigative Journalists emphasizes how massive and truly global the tax haven menace really is.

The files released by the ICIJ, analyzed in collaboration with nearly forty news outlets around the globe, implicate the families of foreign dictators in Nigeria and the Philippines, embroil international arms dealers, entangle conduits of the Iranian nuclear program, incriminate close associates of the current French President, and expose scores of other tax evaders and swindlers in the U.S. and around the world.

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Globalisation, Illicit Financial Flows Widen Inequality

Dev Kar

By now, it is common knowledge that income inequality has been rising in many developed and developing countries across the world. The average layman attributes the factors driving inequality to increasing competition from abroad, globalisation, excessive compensation of company executives, tax breaks to the upper income groups and so on.

There is no question that globalisation impacts income inequality both within and across countries. However, the impact of trade-driven globalisation and financial globalisation need to be considered separately in order to understand the overall impact of closer global links on income inequality. Researchers find that these two aspects of globalisation impact income inequality in opposite directions at least in developing countries.

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Money Laundering and HSBC – How It Affects You

Heather Lowe

The details of the HSBC money laundering case are simultaneously enraging and sickening, as the comedian Jon Stewart reminded us all on The Daily Show this week.  HSBC agreed last month to pay the U.S. government $1.9 billion to settle a probe into widespread money laundering facilitation by the New York branch of Europe’s largest bank.  But, this is not mere money we are talking about; it is the daily gang violence on the streets of our cities and towns, it is the increased likelihood that your children will be offered drugs in their schools, it is the abduction of children and selling them into the sex trade.  Authorities estimate that the average annual income generated from a trafficked child is $200,000 per year. That money has to be laundered somewhere, by someone.

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Illicit Financial Flows: The Scourge of the Developing World

Raymond Baker

For most of my professional life, I owned and operated a number of businesses in Nigeria. My partners and I would find a failing company, buy it out, and rebuild it as an efficient, well-run enterprise that turned a profit. We paid our taxes, refused to participate in bribery or corruption, and created jobs.

I am sad to say that when Nigerians look into the future, they do not see the optimism that I experienced back in the 1960s and ’70s. Their country has been torn apart not just by civil war, but also by the terrible forces of crime, corruption, and tax evasion. After years of seeing the quality of life for so many people in Nigeria decrease, I decided that I was obligated to do something about it. I founded Global Financial integrity, an organization dedicated to curtailing illicit money leaving countries like Nigeria around the world.

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Plundering a Continent

Raymond Baker

In 1961 I arrived in Lagos, Nigeria, to take over the management of a company. One of the early conversations I had was with an “old coaster,” a British gentleman who was managing director of a UK-based trading company that had been active along the west coast of Africa since the late 1800s. I asked him, “How do you do business in Africa?” He looked me skeptically up one side and down the other and wasn’t very forthcoming. I got the distinct impression that he did not like Americans showing up in his former British colony so soon after independence. But I pressed on as is my American manner and asked further, “Well, okay, tell me, how do you price your imported cars and textiles and building materials to sell in the Nigerian market?” He answered, “Price? Price is not a problem. I’m not trying to make a profit.”

Imagine my surprise. I had just finished Harvard Business School learning all about how to make a profit and here in Africa one of the first persons I encounter tells me he’s not trying to make a profit. What could be going on here?

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China: $4 Trillion in Dirty Money Should Worry Us All

Raymond Baker

Global Financial Integrity’s new report on illicit financial flows from China showed some of the worst numbers that we’ve ever estimated. Crime, corruption, and tax evasion cost the world’s largest country and second-largest economy $3.79 trillion from 2000-2011. To make matters even darker, illicit capital flight is intensifying. In 2011 alone, China lost over $600 billion –more than any other single country lost over a ten year period when Global Financial Integrity estimated illicit financial flows from 2000-2009.

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Letter to the Editor: Secretive Shell Corporations

Heather Lowe

TO THE EDITOR:

A French Shift on Africa Strips a Dictator’s Son of His Treasures” (Paris Journal, Aug. 24) highlights the need for Congress to take action to abolish anonymous shell corporations. These secretive entities helped enable President Teodoro Obiang Nguema Mbasogo’s son to launder more than $100 million of ill-gotten gains through American banks to finance his lavish lifestyle while ordinary Equatorial Guineans remain mired in poverty.

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