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tv   Quadriga - The International Talk Show  LINKTV  April 10, 2016 2:30pm-3:01pm PDT

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♪ peter: hello, and a very warm welcome indeed to this latest edition of "quadriga," coming to you from the heart of the german capital, berlin. this week, we are looking at those stunning revelations coming out of panama, documents initially leaked to a german newspaper, "suddeutsche zeitung," which gave unprecedented insights into how and where the world's rich and powerful stash their cash. as i said, panama is the focus of the latest revelations, and one panama-based company is at the heart of the scandal, mossack fonseca. it is called and stands accused of offering tax evasasion and money launundering facilities to tens of thousands of clients. they apparently include members
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of the global political elite,e, the rich, and the superrich. there are sports stars, too. and there are criminals, including arms traders, drug barons, and terrorists. so on the show today, we will be discussing the question the panama papers, how dirty is the hidden money? to answer that question, i am joined by three excellent observers and journalists. i like to introduce them to you, beginning with max heywood, from transparency international, who sasays, "we have heardrd too may empty promises before. governments now have to take real action and make the ownership of all companies public." also with us is malte lehming from berlin's "tagesspiegel" newspaper. welcome, malte. he agrees with max. "we need to know the real and proper name of the owners of every company in the world." but that is easier said then done. business journalist ursula weidenfeld points out, "as long
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as it can't be proven that money from shell companies is being used for illegal purposes, we must presume that the people holding those accounts are innocent." max heywood, i would like to begin with you, if i can. i mentioned that you represent the berlin-based organization, transparency international. the name pretty much speaks for itself. it is your job to cast light into shady dealings. what have you learned this past week you didn't know before? max: well, what we have learned is above all, the names of people attached to this, and it has given us a better idea of the size of the system. we had indications, for an example, in excess of $7 -- estimates of $7 trillionn being stashed inin these places. but now it has given us a better peek at a smalall amount of what is actctually hidden out theher, and it's once again emphasized for us how much needs still to be done to actually crackdown on this practice. peter: when you say how much needs to be done, i wonder whether it is going to make your work at transparency international easier or more difficult, because obviously, the people who have money to hide, and secrets to hide, they will be working even harder to do so.
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mamax: well, what we hope is tht the space for them is going to keep getting smaller and smaller, so this agenda hahas really moved forward, and not in the last two or three years. -- a lot in the last two or three years. no one w was talkiking about ths three or four r years ago. this week, it has really been a massivive boost for the issue. there's a lot more public awareness. peter: you call it a big breakthrough. max: absolutely. peter: ok. malte, as the law-abiding and taxpaying citizen that i believe you to be, what is your reaction to what you have heard here in panama? malte: actually, it is -- it hasn't been proved that there were illegal things going on, yet. we just another. -- we just don't know that. we have a huge amount of information, 2.6 terabytes of infoformation. that is really huge. i think it is a breakthrough. it is not that we didn't know anything about it. we knew a lot about how shell bank accounts and companies work, and where they are located, a and things like that. but sometimes it is like, you already know things about it, but then comes something like
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this, the panama papers. and it really gives you a picture about what is going on. i think there is -- there may be something like the right of being anonymous in certain business, but on the other hand, there is a whole system of secret bank accounts, companies that brings more damage to the whole world, than if we were to just skip the right of being anonymous. peter: i'm interested in what you would have to say, ursula. the right to be anonymous. i've got a quote from the company. an interesting line of defense. "privacy is a fundamental human right eating eroded more and more in the human world." they are setting themselves up as the human rights
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organization. but that is close to the quote you have at the beginning g of e show. where do you s stand? that hidingree crimiminal things should not be defended. but on the other hand, we don't criminal things were in there. we assume there has been criminality and money laundering, but we don't know anything about criminal things going on. it,ong as we don't know everybody has the presumption of being innocent. that seems to me to be a very high goal that should be defended at all times. we live in highly developed countries. even t the u.s. seems to be a tx --en when it comes to
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england is one, for the britishh virgin islands. as long as we don't knonow there has been criminal things within their, we shouldn't -- within there, we shouldn't be quick to judge all the shell companies as --ng not legal, as beingng not as being not legal. in individual cases, absolutely there is a presumption of innocence and authorities will decide. i can reasonably be confident in saying there will be cases where criminal activity will be found. given what we have seen, undoubtedly there will be cases found where it is confirmed by court. the main argument is about the system. this international global system, of which this is just a small example. there are many other jurisdictions, absolutely delaware. the argument that everybody else is doing it doesn't make it better. ursula: b but is that an argumet against shell companies, or
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against the internationalal community that isn't able or willing to go for a criminal things, to go for money-laundering, or terrorism or things like that. the interernational community should crackdown. they had committeded to do that. in 2 2014, the g20 companies -- countries committed. they said, we have a 10 point plan, precisely to prevent these kinds. the implementation is missing. malte: if i may add to this, i think the system you described, there can't be any doubt that it makes tax evasion easier. it makes money-laundering easier, terror financing easier, it makes circumventing u.n. sanctions systems easier, so there are clearly huge disadvantages of the system. what is the clear advantage of having shell comompanies and bak accounts, but there are clear
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disadvantages. ursula: i think it is the nature of money to be anonymous that is the nature of money. . peter: please explain. ursula: if it comes to cash, if i give you 100 euros, are a thousand dollars, nobody knows where it has been before, and nobody would know where it would go. money is not a personal thing. it is just trust, which is handled over from one end to the other. that is the nature of money. , money traded within these circles you described, or money in shell c companies is illegal money -- malte: i never said that. ursula: i understood that. malte: no, the system is legal as it is, but that's the
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problem. it is too legal. in other times, we would have said diplomacy is anonymous in nature, or telephone calls. and after scandals, like wikileaks, and things like this, in the digital age, money is not anonymous. you can follow the money if you have the tools, and if it is legal to track the money. to make it illegal or create a system that relies upon the anonymous nature of the money, that is the problem. ursula: if you have money which way, anded in a proper you have p paid your taxes, and you did everything anyone could expect from you in terms of taxation, it is your right to do money,u want to with the and not to be overseen in doing that. what is t the advantage for
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having a system that allows anonymous bank accounts? why do people hit? what is the -- why do people need it, what is the good reason? ursula: if you are in the international shipping business, you would need shell companies to process the money to ships and crews. if you are a wealthy person who inherited -- an inheritance, you probably would go for something like that. if you are prominent and want to buy a fancy house or whatever, you probably would prefer to be not known by the seller. there are some reasons. can i give you a statistics? the u.k.agues in looked at houses and crusted against corruption cases. they found over 70% of corruption cases where money went into real estate was
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through shell companies. we find d this again and -- and again. they are used to enable money-laundering, because the issues of the ownership being anonymous, it is impossisible to tellll the difference between legal anand illegal. it is because it is secret. the assumption that this is legal, which is an interesting defense -- the best defense i have heard i is that it is lege. if that is the best argument, this is not really a defensible factor in my view. peter: we will come back to that line of thought in a second. a lot of questions clearly in the past week or so being asked in the media about what is going on in panama. another question, what do ordinary people think? we haven't idea -- have an idea where people are protesting. the icelandic leader has had to step down. >> the icecelandic prime minist, taken by surprise. >> what can you tell me about the company mr. banister -- mr.
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prime mininister? -- ifll -- it's a company i recall correctlyly, which is associated with one of the companies that i was on the board of. and it had an account, which as -- on thed, has been tax account, since it was established. now i am starting to feel a bit strange about these questions, because it is like you are accusing me of something. >> and icelandic colleague who had evaluated the panama papers joint the discussion, but the two journalists did not met -- get much further. the prime minister broke off the interview. angry protesters hit the streets in iceland. the political backlash has been severe.
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and with other politicians in the panama papers, he will not be the only one affected. peter: max haywood, let ordinary people on the streets in iceland. we see the same thing happening in argentina and other countries as well. i want to introduce a quote from a german journalist, who has been leading the probe. he says, not one single scandal there has nots, been one single scandal in recent years where there has been no connection to the panama papers. do you expect there to be more public anger and wrath about what we are seeing, or is there going to be one great t big international shrug, and people are going to say, that is just what they do? max: that's one of the big changes. if these things hahad been known among people who work on these issues, like financial journalists, this has been a turning point. people realizing and connecting
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the dots between problems at home, corrupuption, and lack of infrastructure, and obscure shell companies. the dots has been joined in a dramatically. probably, public anger will continue, unless something is done immediately. peter: political journalist ming, a journalist came out and said, the revelations are not entirely surprising. [laughter] that they are not going to be a charge to the status quo. malte: they are not surprising. everything was known in 74 about soviet brutality, systems, siberia, the slave labor camps. but the book itself just brought so many documents, and named people, that it changed a lot. it changed the whole atmosphere
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in the west towards the soviet union and towards communism, and makes it much more harder for defenders of communism. so it makes it much more harder for defenders of the secret money global system to defend it. as soon as you see what is done with the money ursula: i have not so sure whether we are at a real turning point right now. leagues,ad switched and now we have a bigger lead. -- league . it really makes a difference. about whether we are at a turning point, if you think about the international community willing to take action, i'm not sure whether they will go for it. we have tax havens in new york -- more developed countries. e agreements, and nothing worked properly. on the other hand, the real
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turning point when it comes to the question of freedom or more people looking at money and bank accounts, and that is a real turning period we are in. malte: it is a turning point i would say, just becaususe the pupublic now knows that keeping secrets is so much more difficult than it used to be. as i said before, with wikileaks, and the snowden papers, now the panama papers, in very short time limits we see that it is almost impossible to keep secrets really secret in the digital age. that is the turning point that the panama papers really contribute to. you talk about keeping secrets and the attitude the public has, and how these things are explained -- max, let's talk
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about the role of the german banks. the newspaper at the heart of this story reported this week, the figures are staggering. thoseman banks used services. at least 14 banks set up a total of more than 1200 shell companies. that does not sound l like peope are beginning to cotton on that this is nonot the realm of legality. max: absolutely. the other thing is the scale of the system. largest things in the world, leading law firms all over the world, offering services. until a few years ago, there were circles in which this is perfectly is seen as a question of individual rights. the question is that the balance has to be with the e social goo. i think ththat is where the keyf the discussion is, around social interest and the interest of the global community as a whole, and citizens having to pay more tax because wealthy people are
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avoiding t their tax, and corruption, which also takakes away from ordidinary citizens, which is part of the system. interesting, that the talking points we are hearing from the industry are also -- always about privacy and individual rights, and ignoring the social process. ursula: i agree with you that we do have to find the balance between individual freedom and the interest of the social intererest, but when it comes to individual rights, you have the right, and you should defend the right of your own money, when it is taxed, and when it is legally earned, to do with it what you want to do. of markets the core economies and even of social market economies. away, begin to take that
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, youill shrink competition will minimize competition within the societies, but even between end, its -- and in the would make the economies lower. it would demolish growth, and it and morelead to growth wealth of society. peter: ok, let's move on. the question about whether people are behaving legitimately, legally, or illegally, and putting their cash and shell companies, that is an open discussion. one thing we do know is that people who have been doing this in panama has been keeping very bad company. it's like a rogues gallery. >> funding for the assads. civil war has been ragining in syria for five years, and bashar
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al-assad has made headlines using barrel bombs against his own people. the syrian leader isn't in the panama papers, but his cousin is. he's one of the most powerful businessman in the country. has the war been personally financed through p panamanian accounts? and the shell company had other dubious customers. cash for weapons. years, he has been an associate of robert moog of a, a dictator who has used terror, and driven zimbabwe to economic ruin. they also say he played a key work in applying arms to the war-torn democratic republic of congo in the 1990's. money for the drug trade. raphael quintero was one of mosto's mustst powerful -- popowerful drug baronsns. released in 2013 after decades behind bars, he is once again i theed man, and he is in
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panama papers. if they serve this kind of clientele, shouldn't tax havens be banned completely? peter: i suppose that is the question. ursula, i would like to go back to where we were. my personal concern is when you see that practices of the people we just saw in that clip, it leads to a huge erosion of trust. in society, in the economy. if societies and economies don't have trust, they don't work. ursula: you are completely work. i think nobodydy would defend criminal things, not even if they are presidents or whoever. senseseut if i have the that my y local tax authorities know everything about my financial standing, right down to the last euro, but they don't know about the other guys, then i'm going to start cheating too. look ati think if you
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developed countries, most people pay their taxes properly, a and most people behave correctly. we do have some people who don't, and probably in some parts of the world, they are more than in europe or wherever. but when it comes to tax havens, what is a tax havens? it is only the difference between a high tax country and a lower tax country. from the perspective of a high-tech country, you would say, this is a tax havens there, and people who try to bring their money to the low tax country -- max: i want to jump in there. we called tax havens jurisdictions. the key attraction is the secrecy. the tax benefits are nice, but
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the secrecy is what they are selling. ursula: so competition is a good thing, and even tax competition is legal. max: y you mean tax competition between countries? absolutely not. nationstates should not be continued -- competing based on taxes. great investment comes from better roads, better education, highly qualified task forces, all of which are paid for by taxes. -- is aargue tax as price of realization. that i is a quote from a u.s. supreme court justice. point. max, you are an expert from transparency international. everyone is calling for a global transparency initiative. now you have 30 seconds. tell me what that t could be lie and whether it couldld happen.n. bee, essentially
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everybody should have a national public registry of who owns companies, just knowing the ultimate o owner, which would be aggregated into a global register. it would only allow people to find who is the is a simple technical fix . governments have to do it. peter: is it going to happen? ursula: max:max: yes it will, in time. 10 years from now, this will be like smoking there are. [laughter] peter: what is the moral of the story we have been talking about today? malte: i think that you have to make judgment. you have to make judgment between keeping the right of privacy, for the benefit of rich and superrich to keep money field from the public and to keep aies, system alive and functioning, which makes it easier to tax evasion, terrorist financing, money laundering. this is an adjustment we have to
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make, and i think it is obvious what judgment you have to make. ursula: i respect there is a risk, and i accept that, but i think it is more important to go forward -- for real criminal things, organized crime, and that would be the most important thing. max: the days of secrecy are counted, it is very clear. thank you very much indeed for joining us here on the latest edition of "quadriga." i hope we have given you plenty of food for thought. get in touch with us by mail, social media, and here on the show. it has been a great pleasure. thank you very much, goodbye. ♪
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announcer: this is a production of china central television america. mike: overcoming life's challenges is part of the shared human experience, but some individuals not only overcome what seem like insurmountable challenges, they turn those obstacles into a source of inspiration for all of us. this week, lessons on living life beyond limits. i'm mike walter in los angeles. let's take it "full frame."


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