Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #900 The Panama Papers and the Underground Reich

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. The new dri­ve is a 32-giga­byte dri­ve that is cur­rent as of the pro­grams and arti­cles post­ed by ear­ly win­ter of 2016. The new dri­ve (avail­able for a tax-deductible con­tri­bu­tion of $65.00 or more.)  (The pre­vi­ous flash dri­ve was cur­rent through the end of May of 2012.)

WFMU-FM is pod­cast­ing For The Record–You can sub­scribe to the pod­cast HERE.

You can sub­scribe to e‑mail alerts from Spitfirelist.com HERE

You can sub­scribe to RSS feed from Spitfirelist.com HERE.

You can sub­scribe to the com­ments made on pro­grams and posts–an excel­lent source of infor­ma­tion in, and of, itself HERE.

This pro­gram was record­ed in one, 60-minute seg­ment.

Otto Sko­rzeny

Mar­tin Bor­mann: He helped con­cretize the “off­shore” mech­a­nisms through his flight caital pro­gram.

Intro­duc­tion: This broad­cast revis­its the top­ic of “off­shoring” of wealth, some­thing we have dis­cussed in numer­ous pre­vi­ous broad­casts, notably FTR #‘s 458 and 531, inter­views with the bril­liant Lucy Komis­ar.

News in recent weeks has had much cov­er­age of “The Pana­ma Papers,” a mas­sive leak of doc­u­ments culled from the com­mu­ni­ca­tions of a Pana­ma-based law firm called Mos­sack Fon­se­ca. Spe­cial­iz­ing in set­ting up fronts for the “off­shoring” of great wealth in order to avoid tax­a­tion and, in some cas­es, scruti­ny by gov­ern­men­tal law-enforce­ment author­i­ties, Mos­sack Fon­se­ca’s his­to­ry and oper­a­tions are sug­ges­tive of pos­si­ble involve­ment of the Under­ground Reich in the oper­a­tions of the orga­ni­za­tion.

(This pro­gram descrip­tion will be of greater sig­nif­i­cance than some, due to the lim­i­ta­tions of time. The record­ed infor­ma­tion about Patri­cia Amu­nategui was atten­u­at­ed and will be great­ly sup­ple­ment­ed by the infor­ma­tion in this descrip­tion.)

The very nature of the orga­ni­za­tion would make it use­ful to an intel­li­gence ser­vice. The need for clan­des­tine mov­ing of funds, being able to track major manip­u­la­tions of cap­i­tal and track­ing poten­tial crim­i­nal activ­i­ty are all func­tions of great util­i­ty to a major intel­li­gence ser­vice.

Fur­ther­more, we note the SS back­ground of Erhard Mos­sack (father of Juer­gen Mos­sack, co-founder of the firm) and his prob­a­ble recruit­ment by West­ern intel­li­gence (CIA, Gehlen “Org,” and/or BND).

Begin­ning with analy­sis of Erhard Mos­sack, we high­light his appar­ent work with the Were­wolf orga­ni­za­tion, a guer­ril­la orga­ni­za­tion put togeth­er in the fall of 1944 under the aus­pices of the SS.

” . . . . Accord­ing to the Sued­deutsche [Zeitung], Erhard was cap­tured by the Amer­i­cans in Munich after the war with a list of Nazi ‘Were­wolf’ mem­bers upon him. . . . .”

Osten­si­bly orga­nized with an eye to mil­i­tar­i­ly desta­bi­liz­ing the Allied occu­pa­tion of Ger­many, the Were­wolves actu­al­ly played a role in the gen­e­sis of the Under­ground Reich. Ele­ments of the Were­wolves were uti­lized to facil­i­tate a North­ern escape route for Third Reich alum­ni, and were incor­po­rat­ed into Otto Sko­rzeny’s ODESSA net­work.

. . . . Anoth­er major ratline–“ODESSA North”–stretched through Den­mark, Swe­den and Nor­way, where an under­ground net­work of SS vet­er­ans and Were­wolves smug­gled Nazi rene­gades over land and sea until they were picked up by ships head­ing to Spain and Argenti­na. . . . . They key leg­men on the ground were per­son­nel who had under­gone Were­wolf train­ing toward the end of World War II. Sko­rzeny was instru­men­tal in select­ing and school­ing the Were­wolves, some of whom lat­er resur­faced as ODESSA oper­a­tives in Scan­di­navia while Scar­face orches­trat­ed the escape of Nazis from deten­tion camps. . . .

Fur­ther­more, the Were­wolves were an appar­ent tem­plate for the CIA/Gehen Org for­ma­tion of “stay behind” units, osten­si­bly to com­bat the Sovi­ets in the event of a Sovi­et inva­sion of West­ern Europe or the acces­sion of a West­ern gov­ern­ment deemed not suf­fi­cient­ly opposed to com­mu­nism. Sko­rzeny was a key Gehlen oper­a­tive, at the same time that he was  deeply involved with the machi­na­tions of the Under­ground Reich.

. . . . The Bund Deutsch­er Jugend (BDJ)–an elite CIA-trained para­mil­i­tary cadre com­posed large­ly of Hitler Youth, Wehrma­cht and SS personnel–also set its sights on Adenauer’s domes­tic polit­i­cal oppo­nents. . . . . Back in the 1950s, [Ger­man neo-Nazi Fried­helm Busse] and his fel­low Bundists were sup­posed to remain under­ground and engage in acts of sab­o­tage and resis­tance in the event of a Sovi­et inva­sion, much like Skorzeny’s Were­wolves. But instead of focus­ing on for­eign ene­mies, the lead­ers of Busse’s “stay behind” units pro­ceed­ed to draw up a death list that includ­ed future Chan­cel­lor Willi Brandt and sev­er­al oth­er lead­ing Social Democ­rats (West Germany’s main oppo­si­tion par­ty) who were marked for liq­ui­da­tion in the event of an ill-defined nation­al secu­ri­ty emer­gency. . . .

Did Erhard Mos­sack­’s involve­ment with the Were­wolves lead to his incor­po­ra­tion into the Gehlen “org”/CIA?

. . . . The news­pa­per said it applied to the Ger­man Fed­eral Intel­li­gence Ser­vice, the BND, for infor­ma­tion about him. The BND con­firmed doc­u­ments exist­ed on him but said they would not be released because this could endan­ger ‘the well-being of the Fed­eral Repub­lic of Ger­many or one of its mem­bers’. . . .

We note that the BND recruit­ed from the fam­i­lies of exist­ing operatives–a prac­tice that has helped per­pet­u­ate the SS/Gestapo influ­ence in the agency.

. . . . for many years, the BND delib­er­ately recruit­ed new staff from among the rel­a­tives of exist­ing BND employ­ees. . . .

Next, we high­light the use of Mos­sack Fon­se­ca cre­ations for the off­shoring of monies from the Fer­di­nand Mar­cos for­tune, derived in large mea­sure from Mar­cos’s access­ing some of the vast wealth stashed by the Japan­ese dur­ing World War II. (For more about Oper­a­tion Gold­en Lily, see FTR #‘s 427428446451501509688689, among oth­er pro­grams.)

Not­ing that the work­ing tem­plate for “off­shoring” was honed by the Bor­mann flight cap­i­tal pro­gram and sub­se­quent Bor­mann orga­ni­za­tion.

The Thyssen-Borne­misza fam­i­ly are among those who have availed them­selves of the Mos­sack Fon­se­ca group’s ser­vices. (The Thyssens are major play­ers in the Bor­mann net­work’s oper­a­tions.)

One of Mos­sack Fon­se­ca’s func­tions is the “off­shoring” of valu­able art, shield­ing the own­ers from tax­es and scruti­ny. The Thyssen-Borne­misza fam­i­ly are heav­i­ly involved in the art world. As we have seen in FTR #791, the traf­fick­ing of art­works loot­ed by the Nazis fig­ured promi­nent­ly in the maneu­ver­ing that facil­i­tat­ed the growth of the Under­ground Reich. (FTR #793 fur­ther devel­ops the sto­ry of the mys­te­ri­ous Hilde­brand and Cor­nelius Gurlitt, deeply involved with the traf­fick­ing of post­war Nazi art.)

Much of the con­clu­sion of the broad­cast cen­ters on Patri­cia Amu­nategui, the key employ­ee of MF Cor­po­rate Ser­vices, Mos­sack Fon­se­ca’s impor­tant Neva­da sub­sidiary orga­ni­za­tion. MF Cor­po­rate Ser­vices and MF Neva­da are basi­cal­ly one and the same.

An admir­er of  the Dalai Lama, Augus­to Pinochet, Sarah Palin and Mitt Rom­ney, as well as the Koch broth­ers, Amanategui is heav­i­ly involved with the so-called “New Age.”  In par­tic­u­lar, Amanategui appears deeply enmeshed with the milieu of the Self-Real­iza­tion Foun­da­tion, found­ed by Swa­mi Yoganan­da. Yoganan­da expressed admi­ra­tion for Hitler and Mus­soli­ni dur­ing the 1930s. (The so-called “New Age” is deeply con­nect­ed to fas­cism, as dis­cussed in–among oth­er pro­grams–FTR #‘s 873 and 874.

Pro­gram High­lights Include:

  • Pierre Omid­yar’s First Look medi­a’s refusal to pub­lish Ken Sil­ver­stein’s land­mark writ­ing on Mos­sack Fon­se­ca, and Omid­yar’s insis­tence that a fee should be paid for the sto­ry his orga­ni­za­tion refused to pub­lish.
  • The bat­tle cry of Radio Were­wolf: “Bet­ter Dead than Red.”
  • The use of bear­er bonds by some of the art-off­shoring sub­sidiaries of Mos­sack Fon­se­ca.
  • Peter Mos­sack­’s ser­vice as Pana­ma’s Hon­orary Con­sul to Frank­furt, Ger­many, seat of the Euro­pean Cen­tral Bank.

1a.  The decades of off­shore antics by Mos­sack Fon­seca are no doubt going to keep inves­ti­ga­tors and his­to­ri­ans busy for years to come giv­en the size and nature of the leak. There are just so many ques­tions to ask regard­ing this firm, and plen­ty of poten­tial answers in the data trea­sure-trove. And it turns out we can add a new cat­e­gory to the list of intrigu­ing ques­tions relat­ed to firm: Of what rel­e­vance is the fact that Jur­gen Mossack’s father was a Waf­fen S.S. “deaths head” unit mem­ber who lat­er offered to spy for the CIA and about whom the BND refus­es to release any infor­ma­tion.

Was Erhard part of the Gehlen out­fit? He fits the mold. It’s also worth not­ing that the Inter­a­gency Work­ing Group which was set up in 1999 to find and dis­close infor­ma­tion relat­ed to inves­ti­ga­tions of Nazi and Japan­ese WWII war crimes does con­tain a record for Erhard Mos­sack in the sec­tion for FBI files. There isn’t much infor­ma­tion avail­able, but in the “cat­e­gory” sec­tion for Mos­sack it lists “For­eign Coun­ter­in­tel­li­gence (For­merly Inter­nal Secu­rity, For­eign Intel­li­gence)”. That sure sounds like the US took Mos­sack up on his offer.

So, giv­en the Erhard Mossack’s back­ground as a pos­si­ble unre­pen­tant Nazi and the promi­nent role the Mossack’s have played in Pana­man­ian high-soci­ety, one big ques­tion regard­ing Mos­sack Fon­seca is what role it may have played in the post-war Nazi under­ground’s Bor­mann cap­i­tal net­work as a vehi­cle for hid­ing and mov­ing the vast sums of mon­ey that would have been accrued in the sub­se­quent decades. If Erhard was work­ing for US and/or West Ger­man intel­li­gence in the post-war peri­od, that fact adds to the intrigue. It’s also a reminder that one of the best ways for a Nazi under­ground to stay under­ground is hav­ing a lot of friends in very high places.

Let’s hope all the inves­ti­ga­tors pour­ing over this data ask ques­tions about Mos­sack Fon­seca that go far beyond tax-eva­sion.

“Pana­ma ‘Tax Scam’ Lawyer Is Son of Nazi SS Offi­cer from Dread­ed Death’s Head Divi­sion Who Fled to South Amer­ica then SPIED on Cuba for the CIA, Broth­er Reveals” by Allan Hall, Isabel Hunter and Imo­gen Calder­wood; The Dai­ly Mail; 4/4/2016.

 * Horst Mos­sack is Ger­man half-broth­er of Pana­ma lawyer Jür­gen Mos­sack

* Told MailOn­line unmask­ing of his sib­ling is ‘shock­ing news, astound­ing’

* Father was in the S.S. and after is thought to have been a CIA spy in Cuba

* Horst was treat­ed as shame­ful as a child after being born out of wed­lock

* Last saw half-broth­er Jür­gen 60 years ago and says will nev­er meet again

The man behind a Pana­ma ‘tax scam’ that guards the clan­des­tine wealth of the glob­al elite is the son of a Nazi SS offi­cer from a unit known as the ‘Death’s Head divi­sion’.

Jür­gen Mos­sack is at the heart of the biggest finan­cial data leak in his­tory, and has alleged­ly been help­ing world lead­ers, politi­cians and celebri­ties laun­der mon­ey, dodge sanc­tions and evade tax from his base in Pana­ma.

It has now been revealed that his father, Erhard Mos­sack, was a mem­ber of the Nazi fight­ing unit known as the ‘Death’s Head divi­sion’, a dread­ed force dur­ing the Sec­ond World War.

Today, his half-broth­er Horst, has spo­ken of his ‘shock and bewil­der­ment’ at the news of the unmask­ing of his half-broth­er.

He described the twist­ed fam­ily his­tory that led to the estrange­ment of the sib­lings, both of whom raised by a man who not only fought with the Nazis but lat­er joined the CIA to car­ry out espi­onage on Cuba.

The 68-year-old Horst last saw his sib­ling Jür­gen 60 years ago when he left the town of Fürth in Bavaria bear­ing the name of his father Erhard.

Now liv­ing in the Black For­est region of Ger­many, Horst was born out of wed­lock to a woman called Luisa Her­zog.

‘This was shame­ful in those days so I was put up for adop­tion,’ he told MailOn­line. ‘My moth­er lat­er went on to mar­ry Erhard Mos­sack. I took that name lat­er.

‘What has come out of Pana­ma is shock­ing news, astound­ing, bewil­der­ing even, but I can’t say I feel shame because I have no con­nec­tion in real­ity with him.

‘I left all those years ago and we nev­er had con­tact again. He was just a child, so how can I say what I remem­ber of him? All I know is that I heard that he went to Lon­don and lived there for quite some time.

‘He has a broth­er called Peter and a sis­ter called Mar­ion in Ger­many. Both my moth­er and their father are now dead.

‘I remem­ber that Erhard Mos­sack, their father, was in the S.S. I believe after the war he became a jour­nal­ist.’

Ger­man media have report­ed that Erhard served as a Rot­ten­fuehrer — rough­ly cor­re­spond­ing to a senior cor­po­ral — in the Waf­fen, or fight­ing arm, of the dread­ed S.S.

The Sued­deutsche Zeitung in Munich, one of the pub­li­ca­tions in the glob­al alliance of news­pa­pers which unmasked the activ­i­ties of Jür­gen Mossack’s firm in Pana­ma, said Erhard served in a ‘Death’s Head’ unit of the S.S.

These were the units which ran the con­cen­tra­tion camps. But if he was in the Waf­fen S.S. it prob­a­bly meant he served in the Third Waf­fen S.S. Panz­er Divi­sion Totenkopf.

Most of the division’s ini­tial enlist­ed men were recruit­ed from con­cen­tra­tion camp guards and oth­ers were mem­bers of mili­tias that had com­mit­ted war crimes in Poland.

Due to its insignia, it was some­times referred to as the ‘Death’s Head Divi­sion’. Mem­bers of the divi­sion com­mit­ted war crimes — one of them against British sol­diers.

The Le Par­adis mas­sacre was car­ried out by mem­bers of the 14th Com­pany of the divi­sion.

It took place on May 27 1940, dur­ing the Bat­tle of France, at a time when the British Expe­di­tionary Force was attempt­ing to retreat through the Pas-de-Calais region dur­ing the Bat­tle of Dunkirk.

Sol­diers of the 2nd Bat­tal­ion, the Roy­al Nor­folk Reg­i­ment, had become iso­lated from their reg­i­ment. They occu­pied and defend­ed a farm­house against an attack by Waf­fen S.S. forces in the vil­lage of Le Par­adis. After run­ning out of ammu­ni­tion, the defend­ers sur­ren­dered to the Ger­man troops.

But the Ger­mans machine-gunned the men after sur­ren­der­ing, with sur­vivors killed with bay­o­nets. Two men sur­vived with injuries, and were hid­den by locals until they were cap­tured by Ger­man forces sev­eral days lat­er.

Accord­ing to the Sued­deutsche, Erhard was cap­tured by the Amer­i­cans in Munich after the war with a list of Nazi ‘Were­wolf’ mem­bers upon him.

The Were­wolf units were intend­ed to fight on as a guer­rilla force after the sur­ren­der, but this nev­er hap­pened.

The news­pa­per said it applied to the Ger­man Fed­eral Intel­li­gence Ser­vice, the BND, for infor­ma­tion about him. The BND con­firmed doc­u­ments exist­ed on him but said they would not be released because this could endan­ger ‘the well-being of the Fed­eral Repub­lic of Ger­many or one of its mem­bers’.

In 1948 he left Ger­many with his fam­ily to set­tle in Pana­ma, and lat­er returned to Munich with his wife dur­ing the 70s. He died in the 1990s, his wife fol­lowed five years ago.

Accord­ing to reports, U.S. Army intel­li­gence archives hold a file on him as he alleged­ly offered his ser­vices to the U.S. gov­ern­ment as an infor­mant, claim­ing ‘he was about to join a clan­des­tine organ­i­sa­tion, either of for­mer Nazis now turned Com­mu­nist... or of uncon­verted Nazis cloak­ing them­selves as Com­mu­nists.’

An Army intel­li­gence offi­cer wrote that the offer to spy for the U.S. might sim­ply be ‘a shrewd attempt to get out of an awk­ward sit­u­a­tion’.

Nev­er­the­less, the old intel­li­gence files indi­cate that Mossack’s father lat­er end­ed up in Pana­ma, where he offered to spy, this time for the CIA, on Com­mu­nist activ­ity in near­by Cuba.

The chil­dren Peter and Mar­ion returned to Ger­many in the 1970s; broth­er Peter is the Hon­orary Con­sul for Pana­ma based in Frank­furt.

In 1952 a book by Erhard Mos­sack was pub­lished in Ger­many called The Last Days of Nurem­berg, detail­ing the cap­ture of the city to Amer­i­can forces in 1945.

Horst Mos­sack says he believes the father of Jür­gen was the author.

He added; ‘I don’t expect I will ever see Jür­gen again. If I did I would ask him exact­ly what went on.’

Mean­while, the sec­ond man behind the Pana­ma firm, a lawyer named Ramon Fon­seca Mora, has been revealed to be an award-win­ning nov­el­ist famous for his sala­cious plots.

But the 63-year-old Pana­ma native’s sto­ry­lines may cut clos­er to home than his read­ers realise.

As a young man Fon­seca report­edly want­ed to be a priest, before age and mate­ri­al­ism took over. On join­ing forces with part­ner Mos­sack, he told a jour­nal­ist in 2012, ‘Togeth­er, we have cre­ated a mon­ster.’

In among accounts he fol­lows on Twit­ter are a fair amount of 18+ accounts — at first glance the naked bot­tom of ‘Horny Cher­ry’ sits along­side the offi­cial account of the Pres­i­dent of Argenti­na Mauri­cio Macri. . . .

1b. It’s also worth not­ing that the Inter­a­gency Work­ing Group which was set up in 1999 to find and dis­close infor­ma­tion relat­ed to inves­ti­ga­tions of Nazi and Japan­ese WWII war crimes does con­tain a record for Erhard Mos­sack in the sec­tion for FBI files. There isn’t much infor­ma­tion avail­able, but in the “cat­e­gory” sec­tion for Mos­sack it lists “For­eign Coun­ter­in­tel­li­gence (For­merly Inter­nal Secu­rity, For­eign Intel­li­gence)”. That sure sounds like the US took Mos­sack up on his offer.

1c. We note that Erhard Moss­back was in pos­ses­sion of lists of the per­son­nel of Were­wolf units when cap­tured.

The Dai­ly Mail arti­cle dis­miss­es the Were­wolf units as not hav­ing become oper­a­tional. This is not true. Most of their com­bat activ­i­ties were in Sovi­et-occu­pied areas, but there were some attacks in West­ern Allied zones.

We present an excerpt from AFA #1 (Tak­en from William Steven­son’s book The Bor­mann Broth­er­hood) about the Were­wolves mot­to: “Bet­ter Dead than Red.”

1d. A chron­i­cling of the Were­wolf activ­i­ties is con­tained in a blog about Third Reich mil­i­tary oper­a­tions.

“The Were­wolf Orga­ni­za­tion” by Russ Fol­som; feldgrau.com

The Were­wolf Orga­ni­za­tion’s assas­si­na­tion of the Allied appoint­ed Bur­gomeis­ter of Aachen, Dr.Franz Oppen­hoff in March of 1945, is prob­a­bly the best known and most wide­ly pub­li­cized exploit of this hap­less band of polit­i­cal­ly indoc­tri­nat­ed young­sters who hailed for the most part from the ranks of the Hitler­ju­gend and the Bund Deutsch­er Maedel. Charles Whit­ing (aka Leo Kessler) wrote a book named “Wer­wolf” (recent­ly re-print­ed) which details this very same mis­sion, called “Unternehmen Karneval” (Oper­a­tion Car­ni­val). The leader of the assas­si­na­tion team was a vet­er­an of the Ger­man Army’s famous “Bran­den­burg” infil­tra­tion-spe­cial­ist for­ma­tion, named Her­bert Wen­zel, who had trans­ferred to Otto Sko­rzeny’s “SS-Jagdver­band Frieden­thal” and who, at the time of the oper­a­tion, held the rank of SS-Unter­sturm­fuhrer (2nd Lieu­tenant.)
Accord­ing to a num­ber of sources, the idea for a Were­wolf Orga­ni­za­tion orig­i­nat­ed in the fall of 1944 at a meet­ing attend­ed by Reichs­fuhrer-SS Himm­ler, Artur Axmann (HJ Jugend­fuhrer), SS-Ober­grup­pen­fuhrer Hans-Adolf Prutz­mann, RSHA chief Ernst Kaltenbrun­ner, and Waf­fen-SS Obsturm­ban­n­fuhrer Otto Sko­rzeny. At the meet­ing in Hohen­ly­chen, Himm­ler appoint­ed Prutz­mann as plenipo­ten­tary in charge of the recruit­ing and train­ing of Were­wolf agents from skilled spe­cial­ists in weapons and com­mu­ni­ca­tions from among the armed forces and HJ, who would then be trained beneath the aegis of Sko­rzeny’s SS-Jagdver­band (Hunt­ing-teams).

Once trained in sab­o­tage and vary­ing forms of dead­ly mis­chief, teams of these Were­wolf Kom­man­dos, com­prised most­ly of HJ vol­un­teers, but com­mand­ed by old­er, bat­tle-expe­ri­enced hand-picked cadre from the Ger­man Army and Waf­fen-SS, would oper­ate behind the ene­my lines as guer­ril­las, cre­at­ing dead­ly mishap amongs the occu­py­ing forces, and relay­ing use­ful intel­li­gence to a cen­tral Armed Forces enti­ty (Sup­pos­ed­ly in un-occu­pied ter­ri­to­ry).

Train­ing took place at the Schloss Hulchrath, near the small Rhen­ish town of Erke­lenz. The cas­tle was at the time the HQ of the HSSPF-West, Karl Guten­berg­er. Here Prutz­mann set up his Wer­wolf Staff HQ. The first 200 trainees from the HJ arrived in late Novem­ber and began their Wer­wolf train­ing under the guise of W‑SS vol­un­teers. They were instruct­ed in small-arms and demo­li­tions skills, radio-com­mu­ni­ca­tions, map-read­ing, and sur­vival skills by instruc­tors from Sko­rzeny’s Jagdver­band, experts from the Army, and agents of the SD and Gestapo. They were taught to sab­o­tage vehi­cles and com­mu­ni­ca­tions facil­i­ties, to poi­son wells and food sup­plies — large quan­ti­ties of arsenic were issued to some squads. When recruits from the HJ or BDM arrived, most had already had pre­lim­i­nary train­ing with rifles, pis­tols, and panz­er­faust. Prutz­man­n’s staff set up oth­er train­ing cen­ters in the Berlin sub­urbs, and in the so-called area of the Alpine Redoubt in Bavaria.

Under­ground bunkers or dens in the Eifel and Bavaria were reserved for Were­wolf squads, where food, muni­tions and oth­er logis­tics were to be hid­den before Allied units over­ran them. The Wer­wolf would oper­ate at night, harass­ing and sab­o­tag­ing, and resur­face by day and mix with the civ­il pop­u­la­tion in their area of oper­a­tions pro­tect­ed by false pass­es and papers sup­plied by the Gestapo. This at least, was the plan. What actu­al­ly tran­spired is of course, quite dif­fer­ent.

Despite the fan­ci­ful-mytho­log­i­cal Were­wolf name, at the out­set of this joint SS-HJ under­tak­ing in late 1944, a real spir­it of mil­i­tary orga­ni­za­tion and dis­ci­pline per­me­at­ed the train­ing and oper­a­tional goals of the Were­wolf-orga­ni­za­tion. The Ger­mans knew well from first hand expe­ri­ence, just how much dam­age an orga­nized and effi­cient par­ti­san force could inflict upon an occu­py­ing army. The key fea­ture to suc­cess in this sce­nario would of course, have been a sol­id base of sup­ply and sup­port — (eg. an unoc­cu­pied Ger­many). Fan­tas­tic dreams of an Alpine Redoubt re-con­sid­ered — these Were­wolf squads would have been the long-arm of any logis­ti­cal­ly viable resis­tance under­tak­en by a well defend­ed Ger­man pow­er-base in a moun­tain retreat, or Alpen­fes­tung. Of course, as events tran­spired — there was very lit­tle action toward the estab­lish­ment of an Alpine base of resis­tance by the Ger­mans at this very late date.

And so, beyond the one effi­ca­cious Oper­a­tion under­tak­en by a specif­i­cal­ly-trained Were­wolf hit-team at Aachen in March of 1945, where one might note that the resources of the OKW (A B‑17 of KG-200, the Luft­waffe Spe­cial Oper­a­tions), and the SS-Jagdver­band were promi­nent­ly involved; the lat­er spo­radic killings and instances of resis­tance by so-called Were­wolf units, were not intend­ed Were­wolf oper­a­tions as instruct­ed by a high­er com­mand, but only iso­lat­ed acts of last-ditch fanat­i­cal resisters, and as such can­not real­ly be accred­it­ed to Prutz­man­n’s Were­wolf staff.

To explain the dif­fer­ence between actu­al Wer­wolf orga­nized activ­i­ty and those inci­dents attrib­uted to it by the Allied Mil­i­tary author­i­ties is not always an easy task . When Bur­gomeis­ter Oppen­hof was mur­dered in late March of 1945, Dr. Goebbels and Reich­sleit­er Mar­tin Bor­mann (who were both, it might be not­ed, denizens of the sur­re­al atmos­phere of the Fuhrerbunker), saw it as a great pro­pa­gan­da coup, and took it upon them­selves to pro­claim a nation­wide upris­ing of Ger­man youth against the Allied aggres­sor. Goebbels chris­tened the Were­wolf-sender or Radio Were­wolf with a call to all able-bod­ied Ger­mans in the Reich and it’s occu­pied areas to “strike the ene­my” from behind the lines.

Radio Wer­wolf promised death to trai­tors and a dire­ful fate to the Allied invaders. As a pro­pa­gan­dis­tic ploy, it pan­dered to a fanat­i­cal belief in last-ditch resis­tance — iron­i­cal­ly, it also bol­stered a belief in the exis­tence of an Alpine Redoubt among the Allied forces. Bor­man­n’s role in this farce was that as NSDAP Chief of the Gauleiterung, he believed that he com­mand­ed the activ­i­ties of all Were­wolf units orig­i­nat­ing in any Gau of the Reich. The truth was, in fact, that both Goebbels and Bor­mann had noth­ing at all to do with the train­ing, orga­ni­za­tion, or employ­ment of the Were­wolf. As a crony of Himm­ler, SS-Gen­er­al Preutz­mann had very lit­tle inter­est in tak­ing orders from either Goebbels or Bor­mann. So, as the Allied Armies advanced, and even­tu­al­ly over­ran his Schloss Hul­crath HQ, in April of 1945, he sec­ond­ed him­self to Himm­ler’s Hohen­ly­chen head­quar­ters in Meck­len­berg — at this point, the Were­wolf Orga­ni­za­tion, as a secret behind the lines for­ma­tion, in effect, ceased to exist.

Despite the lack of direc­tion from a high­er head­quar­ters, exam­ples of spu­ri­ous Were­wolf activ­i­ty con­tin­ued well after the ces­sa­tion of hos­til­i­ties:

The for­mer HJ-Gebeits­fuhrer of Mans­feld, now an SS-Sturm­ban­n­fuhrer bare­ly recov­ered from wounds received in the bat­tle of Kharkov, orga­nized 600 HJ boys into Bat­tle-Group Harz (Kampf­gruppe Harz). They col­lect­ed W‑SS vet­er­ans from a mil­i­tary hos­pi­tal, stu­dents from a NAPOLA, remain­ing mem­bers of the Luft­waffe-HJ, and boys from a near­by anti-tank-destruc­tion unit. When the Were­wolf Radio pro­claimed defi­ance on April 1, they went into action against Amer­i­can troops. With­in twen­ty days, sev­en­ty com­bat­ants were left, reduced to fifty short­ly there­after. A des­per­ate attempt to ambush an Amer­i­can sup­plies con­voy was unsuc­cess­ful. Most of these starv­ing boys were wiped out by air-raids, when Amer­i­can patrols could not find them. Heinz Petry, six­teen, and Josef Schomer, sev­en­teen, sur­vived until 5 June, when they were tried as spies by Amer­i­can troops and exe­cut­ed.

North of Ham­burg, toward the end of April, an entrenched group of Were­wolves and their SS com­man­ders refused to sur­ren­der to two bat­tal­ions of the British Eleventh Armored Divi­sion. When Admi­ral Karl Donitz ordered them to lay down their arms on 1 May, they still per­sist­ed. A unit of the Ger­man 8.Fallshirmjager Divi­sion was final­ly brought in to sub­due them. The Ger­man Paras found main­ly dead bod­ies scat­tered around their for­ti­fied for­est den. On the east­ern side of the Elbe, iso­lat­ed groups of young­sters from the Were­wolf cen­ter at Berlin-Gatow offered fee­ble resis­tance to a swarm of Russ­ian tanks. A few sur­vivors remained hid­den in bunkers and were lat­er turned in by angry and hun­gry civil­ians, whom the Russ­ian troops reward­ed by allow­ing them to plun­der the Were­wolf food dumps.

Donitz final­ly made a procla­ma­tion on 5 May over Radios Copen­hagen, Flens­burg, and Prague: “The fact that at present an armistice reigns means that I must ask every Ger­man man and woman to stop any ille­gal activ­i­ty in the Were­wolf or oth­er such orga­ni­za­tions in those ter­ri­to­ries occu­pied by the West­ern Allies because this can only injure our peo­ple.”

SS-Gen­er­al Hans-Adolf Prutz­mann, who had pre­vi­ous­ly been HSSPF of Riech­skom­mis­ari­at-Ukraine, and could expect no quar­ter from the vic­to­ri­ous Allies, com­mit­ted sui­cide in May of 1945.

 1e. Erhard’s pos­ses­sion of Were­wolf unit ros­ters yield a sug­ges­tive take on his prob­a­ble work for CIA/Gehlen “org”/BND. The Were­wolves, far from being some­thing that “nev­er mate­ri­al­ized,” played a role in the post­war ODESSA net­works and a north­ern ver­sion of the Rat­lines that pro­vid­ed escape routes for Third Reich alum­ni.

The Beast Reawak­ens by Mar­tin A. Lee; Google Books; p. 42.

 . . . . Anoth­er major ratline–“ODESSA North”–stretched through Den­mark, Swe­den and Nor­way, where an under­ground net­work of SS vet­er­ans and Were­wolves smug­gled Nazi rene­gades over land and sea until they were picked up by ships head­ing to Spain and Argenti­na. Accord­ing to Dan­ish jour­nal­ist Hen­rik Kruger, Scan­di­na­vian police offi­cials and Argen­tine diplo­mats were instru­men­tal in facil­i­tat­ing traf­fic along this route. They key leg­men on the ground were per­son­nel who had under­gone Were­wolf train­ing toward the end of World War II. Sko­rzeny was instru­men­tal in select­ing and school­ing the Were­wolves, some of whom lat­er resur­faced as ODESSA oper­a­tives in Scan­di­navia while Scar­face orches­trat­ed the escape of Nazis from deten­tion camps. . . .

1f. The German/CIA “stay behind” units that mor­phed in to the Oper­a­tion Glad­io milieu were essen­tial­ly an adap­ta­tion of the Were­wolf strategem. It is high­ly prob­a­ble that Were­wolf vet­er­ans were an actu­al part of the BDJ/“stay behind” net­works.

The Beast Reawak­ens by Mar­tin A. Lee; Google Books; pp. 55–56.

. . . . The Bund Deutsch­er Jugend (BDJ)–an elite CIA-trained para­mil­i­tary cadre com­posed large­ly of Hitler Youth, Wehrma­cht and SS personnel–also set its sights on Adenauer’s domes­tic polit­i­cal oppo­nents. . . . . Back in the 1950s, [Ger­man neo-Nazi Fried­helm Busse] and his fel­low Bundists were sup­posed to remain under­ground and engage in acts of sab­o­tage and resis­tance in the event of a Sovi­et inva­sion, much like Skorzeny’s Were­wolves. But instead of focus­ing on for­eign ene­mies, the lead­ers of Busse’s “stay behind” units pro­ceed­ed to draw up a death list that includ­ed future Chan­cel­lor Willi Brandt and sev­er­al oth­er lead­ing Social Democ­rats (West Germany’s main oppo­si­tion par­ty) who were marked for liq­ui­da­tion in the event of an ill-defined nation­al secu­ri­ty emer­gency. . . .

The BDJ’s cov­er was blown in Octo­ber of 1952 when the West Ger­man press got wind of the fact that the Unit­ed States was back­ing a neo-Nazi death squad. . . . After a brief media storm, West Ger­man “stay behind” forces regrouped with help from the Gehlen “Org,” which orga­nized sev­er­al Were­wolf-type “sleep­er” nets through­out the Fed­er­al Repub­lic on the CIA’s behalf . . . .

1g. Note that BND makes a prac­tice of recruit­ing from the fam­i­lies of exist­ing mem­bers. This is worth con­tem­plat­ing in terms of Juer­gen Mos­sack­’s activ­i­ties in Pana­ma.

“Obscur­ing the Past: Intel­li­gence Agency Destroyed Files on For­mer SS Mem­bers” by Klaus WiegrefeDer Spiegel; 11/30/2013.

His­to­ri­ans con­duct­ing an inter­nal study of ties between employ­ees of the Ger­man for­eign intel­li­gence agency and the Third Reich have made a shock­ing dis­cov­ery. In 2007, the BND destroyed per­son­nel files of employ­ees who had once been mem­bers of the SS and the Gestapo. . . .

. . . . Now, only one week before Uhrlau’s retire­ment, the com­mis­sion has uncov­ered what is a true his­tor­i­cal scan­dal. The researchers have found that the BND destroyed the per­son­nel files of around 250 BND offi­cials in 2007. The agency has con­firmed that this hap­pened.

The com­mis­sion claims that the destroyed doc­u­ments include papers on peo­ple who were “in sig­nif­i­cant intel­li­gence posi­tions in the SS, the SD (the intel­li­gence agency of the SS and the Nazi Par­ty) or the Gestapo.” They added that some of the indi­vid­u­als had even been inves­ti­gated after 1945 for pos­si­ble war crimes. His­to­rian Klaus-Diet­mar Henke, spokesman for the com­mis­sion, told SPIEGEL ONLINE he was “some­what stunned” by the occur­rence.

Did Agency Employ­ees Seek to Sab­o­tage Inves­ti­ga­tion? . . .

. . . . It is no secret that some peo­ple with­in the BND are unhap­py about Uhrlau’s project. Some employ­ees are fun­da­men­tally opposed to the agency shed­ding light on its own past. Oth­ers are wor­ried about the rep­u­ta­tions of their own fam­i­lies — for many years, the BND delib­er­ately recruit­ed new staff from among the rel­a­tives of exist­ing BND employ­ees. . . .

2a. Although the media have focused–predictably–on asso­ciates of Vladimir Putin and Chi­nese pres­i­dent Xi, oth­er clients of Mos­sack Fon­se­ca include Imee Mar­cos, daugh­ter of the late dic­ta­tor Fer­di­nand Mar­cos and Car­men Thyssen-Borne­misza, daugh­ter of Hein­rich Thyssen-Borne­misza, a major asso­ciate of the remark­able and dead­ly Bor­mann cap­i­tal net­work.

The Mar­cos for­tune has been “off­shored” by Imee through Mos­sack Fon­se­ca. As we have seen in so many of our dis­cus­sions with Ster­ling and Peg­gy Sea­grave (authors of Gold War­riors) the Mar­cos for­tune derived large­ly from the Gold­en Lily loot.

“Off­shore Leaks: Vast Web of Tax Eva­sion Exposed” by Marc Pitzke; Der Spiegel; 4/04/2016.

...The list also includes Imee Mar­cos, the gov­er­nor of the Philip­pines’ Ilo­cos Norte province and the eldest daugh­ter of for­mer dic­ta­tor Fer­di­nand Mar­cos. She is believed to hold secret trusts on the British Vir­gin Islands. ICIJ reports that Fil­ipino author­i­ties now want to inves­ti­gate whether some of the bil­lions in assets Mar­cos is believed to have tak­en out of the coun­try are parked in the tax haven . . . .

....The list of names from Spain includes baroness and art col­lec­tor Car­men Thyssen-Borne­misza, who is iden­ti­fied in the doc­u­ments as using a com­pa­ny based in the Cook Islands to buy art­work through auc­tion hous­es like Sothe­by’s and Christie’s. Accord­ing to ICIJ, her attor­neys acknowl­edged that she gains tax ben­e­fits by hold­ing own­er­ship of her art off­shore, “but stressed that she uses tax havens pri­mar­i­ly because they give her ‘max­i­mum flex­i­bil­i­ty’ when she moves art from coun­try to coun­try . . . .

2b. Still more about the role of Mos­sack Fon­se­ca in “off­shoring” art–particularly stolen art. Note the case of “The Seat­ed Man with a Cane.” Note, also, the use of bear­er bonds (or “bear­er shares”) that were used for one of the shell com­pa­nies cre­at­ed by Mos­sack Fon­se­ca. Bear­er bonds were used lib­er­al­ly by the Bor­mann net­work.

“How the Pana­ma Papers Exposed Secre­cy in the Art Mar­ket” by Jake Bern­stein; Vice News; 4/7/2016.

After a chance dis­cov­ery, the grand­son of a Jew­ish art deal­er learned that a valu­able paint­ing he believed the Nazis had loot­ed from his grand­fa­ther might now be in the hands of one of the art world’s most influ­en­tial fam­i­lies. The dis­cov­ery launched a court case that leads back to the Pana­ma Papers and illus­trates the con­nec­tion between the inter­na­tion­al trade in art and off­shore tax havens.

The trove of more than 11 mil­lion doc­u­ments from the inter­nal files of Mos­sack Fon­se­ca, a Pana­man­ian law firm that spe­cial­izes in build­ing cor­po­rate struc­tures that can be used to con­ceal assets, may be the biggest leak in his­to­ry.

Dat­ing from 1977 through 2015 and impli­cat­ing peo­ple close to many polit­i­cal and busi­ness lead­ers world­wide, the files also include the largest known cache of inside infor­ma­tion on the links between the art mar­ket and the shady world of off­shore cor­po­ra­tions.

The Pana­ma records paint a pic­ture of a thin­ly reg­u­lat­ed indus­try where anonymi­ty is reg­u­lar­ly used to shield all kinds of ques­tion­able behav­ior.

Relat­ed: The VICE News Guide to the Pana­ma Papers

The work at the cen­ter of the con­tro­ver­sy, by Ital­ian artist Amedeo Modigliani, is known as “Seat­ed Man with a Cane.” Modigliani, a young, impov­er­ished alco­holic, died of tuber­cu­lo­sis almost a cen­tu­ry ago; his paint­ings today sell for as much as $170 mil­lion. The por­trait of a dap­per man with a mus­tache perched on a chair, hands rest­ing upon his walk­ing stick, may be worth $25 mil­lion.

Inves­ti­ga­tors traced the paint­ing to a clan of bil­lion­aires that bought the work at auc­tion in 1996. Lawyers work­ing for the grand­son, Philippe Maes­trac­ci, sent a let­ter to the Nah­mad Gallery in New York, stat­ing that the paint­ing belonged to the grand­son, who was enti­tled to its return. They request­ed a meet­ing to dis­cuss the mat­ter. The gallery failed to respond, accord­ing to court doc­u­ments. The grand­son sued. Four years lat­er, the two sides’ lawyers are still fight­ing it out.

The Nah­mads have insist­ed in fed­er­al and state court in New York that the fam­i­ly does not pos­sess the Modigliani. An off­shore com­pa­ny called Inter­na­tion­al Art Cen­ter, reg­is­tered by a lit­tle-known Pana­man­ian law firm, does.

But the Pana­ma Papers — secret records obtained by the Inter­na­tion­al Con­sor­tium of Inves­tiga­tive Jour­nal­ists, the Ger­man news­pa­per Süd­deutsche Zeitung and oth­er media part­ners — sug­gest that the state­ment is a legal sleight of hand designed to obscure the true own­ers of the paint­ing.

The Nah­mad fam­i­ly has con­trolled the Pana­ma-based com­pa­ny, Inter­na­tion­al Art Cen­ter, for more than 20 years, the records show. It is an impor­tant part of the fam­i­ly’s art busi­ness. David Nah­mad, the fam­i­ly leader, has been the com­pa­ny’s sole own­er since Jan­u­ary 2014.

When con­front­ed with doc­u­men­tata­tion that showed the Nah­mads owned Inter­na­tion­al Art Cen­ter, David Nah­mad’s lawyer, Richard Gol­ub, said “who­ev­er owns IAC is irrel­e­vant. The main thing is what are the issues in the case, and can the plain­tiff prove them?”

The cen­tral ques­tion, Gol­ub said, was whether the grand­son can demon­strate this spe­cif­ic paint­ing was stolen from his grand­fa­ther. Despite years of bat­tling in court, it’s an issue that has received scant atten­tion from a judge, since both sides have been fight­ing over who cur­rent­ly owns the paint­ing.

Mos­sack Fon­se­ca not only helped the Nah­mads estab­lish Inter­na­tion­al Art Cen­ter in 1995, it pro­vid­ed many of its oth­er clients with the tools to secret­ly car­ry out high-end art trans­ac­tions world­wide for works by artists such as Van Gogh, Rem­brandt, Cha­gall, Matisse, Basquiat and Warhol.

Oth­er well-known art col­lec­tors with com­pa­nies reg­is­tered through Mos­sack Fon­se­ca include Spain’s Thyssen-Borne­misza clan, Chi­nese enter­tain­ment mag­nate Wang Zhongjun and Picas­so’s grand­daugh­ter, Mari­na Ruiz-Picas­so.

Zhongjun did not respond to a request for com­ment. Ruiz-Picas­so declined to com­ment. Bro­jia Thyssen, through a lawyer, acknowl­edged hav­ing an off­shore com­pa­ny but said it was ful­ly declared with Span­ish tax author­i­ties.

The fir­m’s records men­tion enough art to fill a small muse­um. Along with cru­cial new evi­dence in the legal bat­tle over the Modigliani, there are clues in Mos­sack Fon­se­ca’s files to the mys­tery of the miss­ing mas­ter­pieces of a Greek ship­ping mag­nate and pre­vi­ous­ly unknown details behind one of the 20th cen­tu­ry’s most famous mod­ern art auc­tions.

The doc­u­ments reveal sell­ers and buy­ers of art using the same dark cor­ners of the glob­al finan­cial sys­tem as dic­ta­tors, politi­cians, fraud­sters and oth­ers who ben­e­fit from the anonymi­ty these secre­cy zones offer.

In recent years, as art prices have grown dra­mat­i­cal­ly, trans­ac­tions are often obscured by the use of off­shore com­pa­nies, front men, free trade zones, manip­u­lat­ed auc­tions and pri­vate sales. While secre­cy may be exploit­ed legal­ly to avoid pub­lic­i­ty, lim­it legal expo­sure or ease oper­a­tions across bor­ders, it can also be employed for nefar­i­ous pur­pos­es, such as evad­ing tax­es and hid­ing shady own­er­ship his­to­ries. Since art is eas­i­ly trans­portable, expen­sive, and poor­ly reg­u­lat­ed, author­i­ties fear that it is often used for mon­ey laun­der­ing.

Boom times
The cur­rent art mar­ket boom — and its con­nec­tion to the secre­cy zones with­in the glob­al finan­cial sys­tem — offers more evi­dence of the spec­tac­u­lar rise of the super rich. Art has become a valu­able asset for a glob­al elite eager to stash their mon­ey in safe and seclud­ed har­bors. In 2015, sales of art exceed­ed $63.8 bil­lion, accord­ing to the trade pub­li­ca­tion Art Mar­ket Report, with top-dol­lar art expe­ri­enc­ing the great­est growth.

The total wealth allo­cat­ed to art by bil­lion­aires world­wide was esti­mat­ed to be $32.6 bil­lion in 2013, accord­ing to data from research firm Wealth‑X

“The sin­gle best dri­ver of the art mar­ket is accu­mu­lat­ed wealth,” says Michael Moses of Beau­ti­ful Asset Advi­sors, which tracks art sales. “If high-end wealth is increas­ing at a faster rate than any oth­er kind of wealth — which it is — these peo­ple have excess mon­ey to spend on art.”

Rough­ly half of art trans­ac­tions are pri­vate, strict­ly between sell­ers and buy­ers, Art Mar­ket Report esti­mates. There is lit­tle pub­lic infor­ma­tion about these sales. The rest are done through pub­lic auc­tions, which pro­vide some trans­paren­cy in regards to price but usu­al­ly still allow buy­ers and sell­ers to remain a mys­tery, Moses says.

When high-dol­lar art changes hands, it often lands in a free trade zone known as a freeport. As long as art is housed in the freeport, own­ers pay no import tax­es or duties. Crit­ics wor­ry the freeport sys­tem can be used to dodge tax­a­tion or laun­der mon­ey, since pre­cise inven­to­ries and trans­ac­tions are not tracked. Accord­ing to the inter­na­tion­al pro­fes­sion­al ser­vices firm Deloitte, 42 per­cent of art col­lec­tors it sur­veyed said they would like­ly use a freeport. The old­est freeport, with the most art stored, is in Gene­va. Its com­plex of stor­age facil­i­ties is said to con­tain enough trea­sure to rival any muse­um in the world.

Nat­ur­al Le Coul­tre, a com­pa­ny owned by Yves Bou­vi­er, rents almost a quar­ter of the space in the Gene­va freeport. Bou­vi­er is also a pri­ma­ry own­er of oth­er freeports in Lux­em­bourg and Sin­ga­pore and a con­sul­tant to a facil­i­ty under con­struc­tion in Bei­jing. These inter­ests have earned him the title “the King of the Freeports.”

But it is Bou­vier’s activ­i­ties as a mid­dle­man in pri­vate deals that have made him the talk of the art world and a tar­get for civ­il suits. Russ­ian bil­lion­aire Dmit­ry Rybolovlev has filed com­plaints against Bou­vi­er in Mona­co, Paris, Hong Kong and Sin­ga­pore, accus­ing him of fraud­u­lent­ly mark­ing up the prices of paint­ings before sell­ing them. After review­ing the claims, a judge in Sin­ga­pore lift­ed a freeze on Bou­vier’s assets and a judge in Hong Kong fol­lowed suit. Bou­vi­er has strong­ly denied the charges.

“It was like a steroid injec­tion to the mar­ket.”

Not sur­pris­ing­ly, giv­en the num­ber of bil­lion­aires and art deal­ers who use Mos­sack Fon­se­ca’s ser­vices, both men are clients of the firm.

The law fir­m’s records show at least five com­pa­nies con­nect­ed to Bou­vi­er, although none appear to be relat­ed to the Rybolovlev case.

Bou­vier’s antag­o­nist, Rybolovlev, has two.

Rybolovlev declined to com­ment. A rep­re­sen­ta­tive for Bou­vi­er said his client used off­shore com­pa­nies for well-estab­lished legal pur­pos­es.

The auc­tion game
Many trace the art mar­ket’s wild enthu­si­asm for mod­ern art to a sale on a Mon­day evening in Novem­ber 1997. Held at Christie’s in New York, the auc­tion of the Vic­tor and Sal­ly Ganz col­lec­tion pro­duced record val­u­a­tions for paint­ings and proved a mile­stone in the trans­for­ma­tion of art into a glob­al com­mod­i­ty.

“All of a sud­den the game was afoot with the Ganz sale in a way that had­n’t hap­pened before,” says Todd Levin, direc­tor of Levin Art Group, a New York-based art advi­so­ry firm. “It was like a steroid injec­tion to the mar­ket.”

The full sto­ry behind the Ganz auc­tion has nev­er been revealed. The leaked doc­u­ments show it involved hid­den inter­ests and one of the art world’s favorite off­shore mid­dle­men, Mos­sack Fon­se­ca.

The Ganzes were col­lec­tors of works by Pablo Picas­so, ear­ly cham­pi­ons of Frank Stel­la, and friends and patrons of Jasper Johns, Robert Rauschen­berg and Eva Hesse. After the cou­ple died, their chil­dren were forced to sell a col­lec­tion that had adorned the walls of their child­hood home.

It had cost the Ganzes about $2 mil­lion over 50 years to assem­ble. In one evening, the col­lec­tion sold for a record $206.5 mil­lion.

Unknown until now is that the Ganz heirs appear to have sold the col­lec­tion months before the auc­tion. The key play­er in the trans­ac­tion was a cor­po­ra­tion based on Niue, a speck of an island in the South Pacif­ic. The com­pa­ny was named Sims­bury Inter­na­tion­al Corp.

Sims­bury Inter­na­tion­al appears to have been cre­at­ed sole­ly for the Ganz trans­ac­tion. It was incor­po­rat­ed in April 1997. A month lat­er it pur­chased the col­lec­tion. Sims­bury’s reg­is­tered agent was Mos­sack Fon­se­ca. Employ­ees of the Pana­man­ian law firm served as Sims­bury Inter­na­tion­al’s “nom­i­nee” direc­tors, stand-ins who con­trolled the com­pa­ny on paper but who exer­cised no real author­i­ty over its activ­i­ties. These paper direc­tors signed agree­ments on the com­pa­ny’s behalf with a bank, an auc­tion house and an art ship­ping com­pa­ny.

Own­er­ship of the com­pa­ny was held through “bear­er shares.” These are sim­ply cer­tifi­cates that allow who­ev­er holds the paper to anony­mous­ly trans­fer or claim their val­ue. Today, they are banned in many coun­tries because of their use­ful­ness to those who want to engage in tax eva­sion and mon­ey laun­der­ing.

In a deal struck on May 2, 1997, Sims­bury Inter­na­tion­al bought the most valu­able Ganz paint­ings for $168 mil­lion from Spink & Son, the Lon­don auc­tion house then owned by Christie’s, accord­ing to the leaked doc­u­ments. The exact nature of the arrange­ment between the Ganz fam­i­ly and Christie’s is not clear from the doc­u­ments.

A rep­re­sen­ta­tive of the Ganz fam­i­ly declined to answer ques­tions from ICIJ about the spe­cif­ic details of the auc­tion trans­ac­tion.

The sale came with a side deal. If the auc­tion for the works brought a high­er price, the own­er of Sims­bury Inter­na­tion­al and Spink & Son would share in the dif­fer­ence.

The man who had pow­er of attor­ney for Sims­bury, and thus exer­cised con­trol over the com­pa­ny and its bank account, was British bil­lion­aire Joseph Lewis. Then the rich­est man in Eng­land, Lewis made his for­tune bet­ting on cur­ren­cy move­ments. He was also Christie’s largest share­hold­er.

The Ganz cat­a­log stat­ed “Christie’s has a direct finan­cial inter­est in all prop­er­ty in this sale,” but the terms of that inter­est were nev­er explained.

Lewis had made a bet that would pay off in mul­ti­ple ways.

The Ganz auc­tion would help turn 1997 into one of Christie’s biggest years for sales up until then. The auc­tion­eer raked in more than $2 bil­lion that year.

Lewis did not respond to a request for com­ment.

One of the most expen­sive paint­ings sold at the Ganz auc­tion was Picas­so’s “Women of Algiers, ver­sion O.” It’s one of a cel­e­brat­ed series of fif­teen paint­ings Picas­so made in the mid-1950s. In addi­tion to “O,” the Ganz auc­tion fea­tured ver­sions “M,” “H,” and “K.”

Bid­ding on the works were mem­bers of the bil­lion­aire Nah­mad clan. David Nah­mad went home with ver­sion “H,” adding it to what is con­sid­ered one of the largest col­lec­tions of Picas­sos in pri­vate hands.

An art dynasty
The Nah­mads began as a bank­ing dynasty of Sephardic Jews from Alep­po, Syr­ia. In 1948, Hil­lel Nah­mad relo­cat­ed his wife and eight chil­dren to Beirut.

Three of his sons — Giuseppe, David and Ezra — even­tu­al­ly moved to Milan and, by the ear­ly 1960s, had become active art deal­ers. Giuseppe, the patri­arch of the fam­i­ly, had a taste for expen­sive sports cars and, accord­ing to his broth­er David, once dat­ed Rita Hay­worth. He also pio­neered treat­ing the art busi­ness like a stock mar­ket, buy­ing and hold­ing paint­ings until exact­ly the right time to sell to max­i­mize prof­it.

He died in 2012. David assumed the man­tle of fam­i­ly leader. He and his old­er broth­er Ezra both named their sons Hil­lel after their grand­fa­ther. Both go by Helly. Togeth­er the four con­tin­ue the fam­i­ly busi­ness.

The two sur­viv­ing broth­ers are worth a com­bined $3.3 bil­lion, accord­ing to Forbes. They live in Mona­co, among oth­er locales. In addi­tion to cur­ren­cy trad­ing and art deal­ing, David Nah­mad is also a cham­pi­onship backgam­mon play­er. Each has a name­sake gallery. Ezra’s son has the Helly Nah­mad Gallery in Lon­don and David’s off­spring, an iden­ti­cal­ly named one in New York.

The Mos­sack Fon­se­ca records indi­cate the Nah­mads were ear­ly adopters of the ben­e­fits of off­shoring art.

Giuseppe Nah­mad reg­is­tered Inter­na­tion­al Art Cen­ter S.A. in 1995 through the Swiss bank UBS and the Gene­va office of Mos­sack Fon­se­ca. It may have exist­ed in anoth­er form pri­or to that date. A doc­u­ment in the Mos­sack Fon­se­ca files men­tions Inter­na­tion­al Art Cen­ter acquir­ing the pas­tel “Danseuses” by Edgar Degas in Octo­ber 1989.

The Nah­mads’ busi­ness, which stretch­es across juris­dic­tions, is tai­lor-made for off­shoring. With the Nah­mad prin­ci­pals based in three coun­tries, gal­leries on oppo­site sides of the Atlantic Ocean and most of the paint­ings stashed in Switzer­land, the fam­i­ly requires the kind of legal silo­ing made pos­si­ble by off­shore com­pa­nies.

Inter­na­tion­al Art Cen­ter is not the fam­i­ly’s only cor­po­rate enti­ty with Mos­sack Fon­se­ca. Giuseppe Nah­mad also cre­at­ed Swin­ton Inter­na­tion­al Ltd., which was reg­is­tered in the British Vir­gin Islands in August 1992.

The off­shore enti­ties are inter­con­nect­ed, their use a fam­i­ly affair. Giuseppe Nah­mad had pow­er of attor­ney over Inter­na­tion­al Art Cen­ter’s UBS bank account as ear­ly as 1995. David and Ezra could also sign for the com­pa­ny’s bank account at UBS. For a com­pa­ny bank account with Citibank two years lat­er, Giuseppe co-signed with his broth­er Ezra Nah­mad, the doc­u­ments show.

In 1995, Swin­ton Inter­na­tion­al autho­rized David Nah­mad to nego­ti­ate the sale of five paint­ings it owned — an oil on pan­el by Picas­so, “Danseuses” by Degas, two oils on can­vas by Hen­ri Matisse and an oil on can­vas by Raoul Dufy. Some of the paint­ings sub­se­quent­ly went on auc­tion at Sothe­by’s, iden­ti­fied as being from a “pri­vate col­lec­tion.” Two of the paint­ings had been the prop­er­ty of Inter­na­tion­al Art Cen­ter.

Inter­na­tion­al Art Cen­ter’s own­er­ship was ini­tial­ly held in bear­er shares, mak­ing it impos­si­ble to tell who actu­al­ly owned it. In 2001, a board res­o­lu­tion by Mos­sack Fon­se­ca nom­i­nee direc­tors cre­at­ed 100 shares in the com­pa­ny and grant­ed them to Guiseppe. In 2008, those hun­dred shares were reas­signed in equal por­tions to David and Ezra Nah­mad. A year lat­er, Ezra split his shares with his son Hil­lel. David did not do the same with his son.

“If they need jus­ti­fi­ca­tion, you know what I mean? You just be like, Oh yeah, I bought a, you know, Picas­so draw­ing or some­thing.”

A hint of ten­sion between David and his son sur­faced in 2007, in a rare pro­file of the fam­i­ly in Forbes. The arti­cle quot­ed David as say­ing, while “frown­ing,” that “My son likes pub­lic­i­ty a lot. I don’t like pub­lic­i­ty.”

His son Helly’s extracur­ric­u­lar activ­i­ties could have made him an unsuit­able share­hold­er of Inter­na­tion­al Art Cen­ter. Like his uncle Giuseppe, Helly had big appetites. The tabloids chart­ed his exploits: mod­els for girl­friends, a floor of mul­ti-mil­lion dol­lar apart­ments in Trump Tow­er, movie star pals and high-stakes gam­bling. None of that was like­ly a prob­lem until the US Attor­ney for the South­ern Dis­trict of New York, Preet Bharara, secured an indict­ment against him in April 2013 for his lead­er­ship role in an alleged $100 mil­lion gam­bling and mon­ey-laun­der­ing ring with ties to Russ­ian gang­sters.

Wire­taps in the case caught him dis­cussing how his fam­i­ly art busi­ness could be used to hide mon­ey. “[S]ometimes a bank needs a jus­ti­fi­ca­tion for a wire, right?” he said, accord­ing to a con­ver­sa­tion from March 2012, quot­ed in the gov­ern­men­t’s sen­tenc­ing mem­o­ran­dum. “We can just say, Ohh, you are buy­ing a paint­ing. If they need jus­ti­fi­ca­tion, you know what I mean? You just be like, Oh yeah, I bought a, you know, Picas­so draw­ing or some­thing.”

It was nev­er proven in court that the behav­ior dis­cussed took place. The con­ver­sa­tion did not fac­tor into the ulti­mate charge and the Nah­mads’ lawyer said in an inter­view it has noth­ing to do with the Modigliani case.

Helly Nah­mad plead­ed guilty to oper­at­ing an ille­gal gam­bling busi­ness in Novem­ber 2013. A judge sen­tenced him to a year and a day in prison. He also agreed to for­feit $6.4 mil­lion and relin­quish rights to a paint­ing by Raoul Dufy. He served five months.

Miss­ing art
The Nah­mads are not the only promi­nent art col­lect­ing clan that has found their off­shore hold­ings embroiled in legal actions.

The Mos­sack Fon­se­ca data pro­vides new insight into a legal dis­pute involv­ing the Goulan­dris fam­i­ly, a Greek ship­ping dynasty that is in the mid­dle of a fight over what hap­pened to 83 miss­ing art mas­ter­pieces.

“All told this is about $3 bil­lion worth of paint­ings,” Ezra Chowai­ki, a gallery own­er who is help­ing to bankroll one of the legal claims, told ICIJ in an inter­view. “It could be the largest col­lec­tion of miss­ing paint­ings in his­to­ry.”

Two law­suits and a crim­i­nal inves­ti­ga­tion are under­way in Lau­sanne, Switzer­land, to try to deter­mine the where­abouts and own­er­ship of the art col­lec­tion. The cas­es fea­ture a sprawl­ing and wealthy fam­i­ly at war with itself, shell com­pa­nies based in Pana­ma, alle­ga­tions of a forged doc­u­ment and muse­um-qual­i­ty paint­ings by the likes of Van Gogh, Matisse and Picas­so.

Some of the paint­ings have been sold. The sell­er did not want the his­to­ry known. In a $20 mil­lion sales agree­ment found in the Mos­sack Fon­se­ca files for one of the Goulan­dris paint­ings, Van Gogh’s “Nature Morte aux Oranges,” there is a sec­tion about con­fi­den­tial­i­ty. It for­bids reveal­ing “the iden­ti­ty of the par­ties to this Agree­ment (includ­ing the iden­ti­ty of the Sell­er’s sole share­hold­er)” and “any infor­ma­tion or doc­u­men­ta­tion per­tain­ing to the Prove­nance of the Work and the chain of title.”

The art once belonged to Greek ship­ping tycoon Basil Goulan­dris. In 1994, Goulan­dris died of Parkin­son’s dis­ease. After his wid­ow, Elise, died in 2000, her heirs learned the cou­ple’s mas­sive art col­lec­tion had changed hands years ear­li­er. A Pana­man­ian com­pa­ny called Wilton Trad­ing S.A. owned the paint­ings.

In 1985, accord­ing to Basil’s nephew Peter J. Goulan­dris, Basil sold the entire col­lec­tion of 83 paint­ings for the extra­or­di­nar­i­ly low price of $31.7 mil­lion dol­lars to Wilton Trad­ing. Despite the sale, the paint­ings nev­er left the cou­ple’s pos­ses­sion. Dur­ing this peri­od, Basil and Elise Goulan­dris lent the art­work to muse­ums and sold pieces to deal­ers with the prove­nance list­ed as if the art­work belonged to them.

Much of what is known about Wilton Trad­ing comes from the court cas­es in Switzer­land. It was cre­at­ed in 1981 but did­n’t have direc­tors until 1995, ten years after the sales agree­ment was sup­pos­ed­ly signed. Accord­ing to a Swiss pros­e­cu­tor, the paper on which the sales agree­ment is inked did­n’t exist in 1985, and no one has been able to prove that any mon­ey changed hands.

Peter J. Goulan­dris told a Swiss court that his late moth­er, Basil’s sis­ter-in-law Maria Goulan­dris, was the own­er of Wilton Trad­ing.

Through his lawyer, Peter Goulan­dris declined to com­ment.

Elise died with­out off­spring. Her niece Aspa­sia Zaimis believes she deserves a share of the 83 paint­ings and is suing the execu­tor of Elise’s will.

In Novem­ber 2004, anony­mous com­pa­nies set up by Mos­sack Fon­se­ca start­ed the process of sell­ing some of the Goulan­dris paint­ings that Wilton Trad­ing had kept.

Ear­ly the next year, at a Sothe­by’s auc­tion in Lon­don, a com­pa­ny called Tri­cornio Hold­ings sold a paint­ing by Pierre Bon­nard called “Dans le cab­i­net de toi­lette.” Anoth­er com­pa­ny, Here­dia Hold­ings, signed an agree­ment with Sothe­by’s to sell a paint­ing by Marc Cha­gall, “Les Comé­di­ens.” A third com­pa­ny, Talara Hold­ings, put up for auc­tion a Cha­gall paint­ing called “Le Vio­loniste Bleu.”

Around the same time, the 1888 Van Gogh depic­tion of a bas­ket of oranges went to Cal­i­for­nia direct mar­ket­ing tycoon Greg Renker and his wife Stacey in a pri­vate sale. The sell­er was a com­pa­ny called Jacob Port­fo­lio Incor­po­rat­ed.

Renker did not respond to a request for com­ment.

All four com­pa­nies were reg­is­tered just before the trans­ac­tions and shut­tered short­ly after­wards, leav­ing no pub­lic trace of who was behind them. The doc­u­ments now reveal that all four shared a mys­te­ri­ous own­er: Marie Voridis.

One of the trans­ac­tions pro­vides a clue to the iden­ti­ty of Marie Voridis. On Octo­ber 22, 2004, Voridis trans­ferred all rights to an oil paint­ing by Pierre-Auguste Renoir known in Eng­lish as “the Seam­stress” to Talara Hold­ings. A few weeks lat­er, Talara Hold­ings trans­ferred the paint­ing back to Voridis.

In Sep­tem­ber 2005, a Greek fash­ion mag­a­zine fea­tured the opu­lent New York apart­ment of a Greek socialite, Doda Voridis, the sis­ter of Basil Goulan­dris. Mas­ter­pieces by well-known artists dec­o­rat­ed the Upper East Side apart­ment of Voridis, who died in Decem­ber 2015. In the gos­sip columns she was always known as Doda but her real name is Marie. Hang­ing above a hand­some armoire in one pho­to was Renoir’s “the Seam­stress.”

War and trea­sure

The con­tro­ver­sy over Modiglian­i’s “Seat­ed Man with a Cane” began in a time when the fog of war pro­vid­ed the kind of con­ceal­ment the off­shore world offers today. Oscar Stet­tin­er, the Jew­ish deal­er who is alleged to have been the orig­i­nal own­er of the paint­ing, fled Paris in 1939, in advance of the Nazis, leav­ing behind his art col­lec­tion.

After the city fell, the Ger­mans seized the col­lec­tion and appoint­ed a French “tem­po­rary admin­is­tra­tor,” who auc­tioned off the paint­ing for the ben­e­fit of the Nazis, accord­ing to legal fil­ings. In Octo­ber 1944, a U.S. mil­i­tary offi­cer bought the Modigliani in a café for 25,000 francs, accord­ing to court doc­u­ments.

In 1946, Stet­tin­er filed a claim in France to begin the process of recov­er­ing the paint­ing, court doc­u­ments filed on behalf of his grand­son say. He died two years lat­er, with his peti­tion still pend­ing.

The Nah­mad’s lawyer Richard Gol­ub dis­putes this nar­ra­tive. He ques­tions whether Stet­tin­er ever owned the paint­ing.

The Modigliani stayed hid­den with­in a pri­vate col­lec­tion where it stayed hid­den until 1996, when Inter­na­tion­al Art Cen­ter bought it at Christie’s in Lon­don for $3.2 mil­lion, accord­ing to doc­u­ments filed in New York courts. The Helly Nah­mad Gallery exhib­it­ed the paint­ing in Lon­don in 1998 and at the Musee d’Art Mod­erne in Paris in 1999. Six years lat­er it was part of a Modigliani exhib­it at the Helly Nah­mad Gallery in New York.

Toron­to-based Mon­dex Corp., a firm that spe­cial­izes in recov­er­ing Nazi-loot­ed art, dis­cov­ered the paint­ing’s alleged prove­nance by acci­dent while look­ing through files in a French min­istry. The com­pa­ny helped ini­ti­ate the legal bat­tle to return it to Philippe Maes­trac­ci, Oscar Stet­tin­er’s grand­son. Mon­dex does not dis­close its fee for this ser­vice.

On Feb. 11, 2015, the Nah­mad’s lawyer in the Maes­trac­ci case in New York, Nehemi­ah Glanc, wrote an email to Inter­na­tion­al Art Cen­ter’s attor­ney in Gene­va. Glanc was on record as the lawyer for IAC, but he need­ed some key facts about the com­pa­ny before he could pro­ceed, the leaked records obtained by ICIJ show.

“Please advise as soon as pos­si­ble as to who is autho­rized to sign on behalf of IAC,” he wrote in an email.

If the Nah­mads had signed the doc­u­ments as the own­ers of Inter­na­tion­al Art Cen­ter, they would have like­ly lost the legal pro­tec­tion the com­pa­ny pro­vid­ed.

The attor­ney in Gene­va put Glanc in touch with Anaïs Di Nar­do Di Maio in Mos­sack Fon­se­ca’s Gene­va office. Di Nar­do could get the sig­na­tures of the Mos­sack Fon­se­ca nom­i­nee direc­tors in Pana­ma as long as Glanc’s clients would pay for it. He agreed.

As the case pro­gressed, emails flew back and forth between Glanc and Mos­sack Fon­se­ca, the leaked doc­u­ments show. Every time a motion came from Inter­na­tion­al Art Cen­ter, the stand-in direc­tors had to sign.

In Sep­tem­ber 2015, in an aus­tere court­room in New York, state Supreme Court Judge Eileen Bransten dis­missed the Maes­trac­ci case. Among her find­ings, the plain­tiffs had failed to prop­er­ly serve the com­plaint on Inter­na­tion­al Art Cen­ter because they had served papers at the Nah­mad Gallery in New York instead of going to Pana­ma. She also ruled that a court-appoint­ed admin­is­tra­tor, not Maes­trac­ci, was the prop­er plain­tiff. Two months lat­er, the admin­is­tra­tor re-filed the case in state Supreme Court in New York as plain­tiff.

The new com­plaint against the Nah­mads made anoth­er effort to link the fam­i­ly to own­er­ship of Inter­na­tion­al Art Cen­ter, which it described as an alter ego of the fam­i­ly enter­prise “in a man­ner so as to con­fuse and con­ceal their iden­ti­ties, and hide rev­enues gen­er­at­ed” from the Nah­mad fam­i­ly’s art deal­ing busi­ness.

As the case con­tin­ues on, Modiglian­i’s 1918 por­trait, “Seat­ed Man with a Cane,” is tucked away in the Gene­va freeport in Switzer­land, anoth­er trea­sure hid­den from view.

3a. It is inter­est­ing and reveal­ing that Ken Sil­ver­stein broke the Mos­sack Fon­se­ca sto­ry while work­ing for First Look Media, Cit­i­zen Olmid­yar’s con­tri­bu­tion to jour­nal­ism. First Look would not pub­lish the inter­view! Nonethe­less, when Sil­ver­stein broke the sto­ry with Vice News Omid­yar demand­ed pay­ment for the sto­ry! Pter­rafractyl has com­ment­ed on this as fol­lows:

Keep in mind that Ken Sil­ver­stein was actu­ally work­ing for Pierre Omidyar’s First Look Media at the time the arti­cle was pub­lished, it was a lit­tle odd for a First Look reporter’s sto­ry to show up in Vice. But now we have a bet­ter idea of why that hap­pened: When Mark Ames raised this wrin­kle to Sil­ver­stein in a tweet, here’s Silverstein’s reply:

Ken Sil­ver­stein ?@KenSilverstein1
@KenSilverstein1

.@MarkAmesExiledFYI @pierre wouldn’t pub sto­ry but demand­ed my fee from VICE. Oh well, at least I’m not in Moscow.

6:46 PM — 3 Apr 2016

So Omid­yar blocked the block­buster sto­ry, the sto­ry gets pub­lished by Sil­ver­stein in Vice any­way, and Sil­ver­stein leaves First Look a cou­ple months lat­er, call­ing it the place where ‘jour­nal­ism goes to die’. There’s no doubt quite a bit hid­ing under that rock too.

3b. Mos­sack Fonseca–appropriately already being jour­nal­is­ti­cal­ly abbre­vi­at­ed as “MF” in the media–performs many of its machi­na­tions through MF Cor­po­rate Ser­vices in Neva­da. The pri­ma­ry oper­a­tive of the orga­ni­za­tion in MF Cor­po­rate Ser­vices is a native Chilean named Patri­cia Amu­nategui. Her Face­book “likes” are indica­tive, num­ber­ing the Dalai Lama, the Tea Par­ty and Chilean dic­ta­tor Augus­to Pinochet (the Pinochet likes are HERE–clear­ly a Pinochet love-fest.

“This Shady Bank Keeps Help­ing Banks and Oli­garchs Laun­der Mon­ey” by Ken Sil­ver­stein; Vice; 3/13/2015.

As I report­ed after an exten­sive inves­ti­ga­tion that includ­ed trips to Pana­ma and Las Vegas—where Mos­sack Fon­se­ca uses a close­ly-linked firm, MF Cor­po­rate Ser­vices, to help its clients set up bogus shell companies—the Pana­man­ian law firm has a long list of shady pri­or clients. . . .

. . . . Inci­den­tal­ly, the main employ­ee of MF Cor­po­rate Ser­vices is Patri­cia Amu­nategui, a native Chilean who pre­vi­ous­ly worked as a casi­no cock­tail wait­ress and, based on her Face­book page, enjoys yoga, spir­i­tu­al­ism, and hik­ing, and admires the Dalai Lama, the Tea Par­ty, and for­mer Chilean dic­ta­tor Augus­to Pinochet. . . .

4. Amu­nategui’s Face­book “likes” include Mitt Rom­ney, Sarah Palin and Amer­i­cans for Pros­per­i­ty, a Koch-broth­ers front orga­ni­za­tion. No sur­prise there.

Anoth­er of Amu­nategui’s Face­book “likes” is Parama­hansa Yoganan­da, the founder of the Self-Real­iza­tion Foun­da­tion. Like so many New-Age gurus, he expressed admi­ra­tion for fas­cism.

“Yoganan­da Prais­ing Fas­cism in the 30s;” The Gold Scales

The aver­age man can­not think clear­ly . . . He needs the mas­ter mind of a Dic­ta­tor in order to think right and do right.” — Yoganan­da. “Inter­view”. East West Mag­a­zine, Feb­ru­ary 1934, p. 25.

“A mas­ter brain like that of Mus­soli­ni does more good than mil­lions of social orga­ni­za­tions of group intel­li­gence.” — Yoganan­da. “Inter­view, East-West, Feb­ru­ary 1934, p. 3. [◦Down­load]

“What the heart is full of, the mouth over­flows with.” On this page are some Yoganan­da stands from the first half of the 1930s. He was about 40 years old then. He is quot­ed ver­ba­tim from his own mag­a­zine. Learn about lit­tle skele­tons in the clos­et and hot pota­toes for his fel­low­ship. [Empha­sis­es below are added by me. — T.K.]

Hitler is to be admired for leav­ing the League of Nations because peace can nev­er be attained by the vic­tor and van­quished atti­tude, but on a basis of equal­i­ty and broth­er­hood. Instead of pre­vent­ing Hitler from hav­ing equal arma­ment with oth­er nations, the oth­er nations should reduce the arma­ments to the lev­el of Ger­many, then the mil­lions of dol­lars that are thrown away on idle bat­tle­ships could be used for nation­al or inter­na­tion­al pros­per­i­ty. Amer­i­ca, France, and Great Britain should reduce their arma­ments first, and there­by destroy the desire of Japan, Rus­sia, and Ger­many to become equal­ly armed. An insult­ed, snubbed Ger­many, if it gets away from the uplift­ing guid­ance of Hitler, may join Rus­sia and make her a more pow­er­ful ene­my of France and so on. The Allies must reduce their own arma­ments first, and then they will find out that the exam­ple speaks loud­er than words.

[Swa­mi Yoganan­da. “Christ­mas mes­sage to the Nations of the Earth”. East-West Mag­a­zine, Decem­ber, 1933, p. 25]

The next year, when Yoganan­da toured Ger­many, he tried to have an inter­view with Hitler. Hitler declined. Also, Hitler desired to be not just equal­ly armed. And in Yoganan­da’s fel­low­ship they say they find no faults with his guide­lines, and that his wis­dom is flaw­less (!). So do they admire Hitler in pub­lic? No way. Does the fel­low­ship or all sorts of Yoganan­da fol­low­ers adhere to guru dic­ta­tor­ship, call­ing that spade a spade? Maybe, and maybe not. You may hear good tales of black mag­ic like:

[Yoganan­da] said that he even put into Hitler’s mind, lat­er, dur­ing WW II, the thought to invade Rus­sia and thus has­ten his own demise and the end of the war.

[You may ask: “Why end a war by esca­lat­ing it hor­ri­bly? Has some­one gone out of his mind?]

amanda.org/ask/nagayonda-opinions-about-the-quazis/”> [The con­tent on the ref­er­ence page I have got, may get rather embar­rass­ing for the author of it, so I won’t give its address away very eas­i­ly. I have saved a copy of it in case I should need it, though.]

If the tale be true, Yoganan­da murk­i­ly invad­ed Hitler’s mind and vio­lat­ed his free will and caused mas­sacres of mil­lions. It seems like a bet­ter idea of Yoganan­da to put into Hitler’s mind just to end the war — to influ­ence Hitler to make peace, not war. Alter­na­tive­ly, if that did not work, caus­ing one bad guy to kill him­self might be a lot smarter than caus­ing mil­lions of vic­tims to be maimed and killed.

Now we have been told by Yoganan­da’s fol­low­er Kriyanan­da and one more cler­gy­man in Kriyanan­da’s line, that mil­lions could have a good rea­son to grum­ble over Yoganan­da: “He caused Hitler to enlarge the war so that mil­lions got wound­ed and killed if that be true!” Should we then blame Yoganan­da for “the east­ern half of World War 2”?

I won’t tell you what to do; I make do with “One has to hear a lot before one’s ears fall off (Nor­we­gian proverb)”. Tales with­out fair evi­dence is not fac­tu­al evi­dence.

The author­i­tar­i­an­ism of Yoganan­da should not remain hid­den to young and ardent ones today. When we get engulfed by cult think­ing and get human­ism-poor*, it could do almost irre­pairable harm. Bet­ter watch out.

Some Inter­view

In East-West of Feb­ru­ary 1934, Vol­ume 6, No. 4, there is an inter­view with Swa­mi Yoganan­da. [◦Down­load]

. . . Answer: We may stum­ble on the way, we may slip back­ward a lit­tle, but being endowed with Divine Intel­li­gence, men­tal­ly we shall be mov­ing con­stant­ly toward the goal of Truth and under­stand­ing. . . .

Indi­vid­ual nation­al self­ish­ness must be sac­ri­ficed for the greater patri­o­tism of inter­na­tion­al com­mon well-being. Then it will be found that real inter­na­tion­al uplift­ment includes the nation­al uplift­ment.

Ques­tion: Indi­vid­u­al­ism and social­ism are con­flict­ing philoso­phies in the mod­ern world. Which is more like­ly to pre­vail in the future?

Answer: Indi­vid­ual per­fec­tion and social uplift­ment are inter­de­pen­dent. A mas­ter brain like that of Mus­soli­ni does more good than mil­lions of social orga­ni­za­tions of group intel­li­gence. Yet, {p. 3] if many per­sons in a group should devel­op the brain pow­er of a Mus­soli­ni, they would be greater than the indi­vid­ual Mus­soli­ni.

Social­ism, con­sist­ing of evolved indi­vid­u­als, will pre­vail in the end, but as long as peo­ple are not high­ly evolved, indi­vid­u­al­ism will keep com­ing to the sur­face. Indi­vid­u­al­ism exists only for the ush­er­ing in of Spir­i­tu­al social­ism . . .

. . . . [Swa­mi Yoganan­da. “An Inter­view”. East West Mag­a­zine, Feb­ru­ary 1934, Vol 6, p. 3 and 25. Empha­sis added] . . .

 

 

Discussion

One comment for “FTR #900 The Panama Papers and the Underground Reich”

  1. The EU’s offi­cial inves­ti­ga­tion into the ‘Pana­ma Papers’ rev­e­la­tion is get­ting under­way which means it’s time to get ready to pre­tend that this won’t be an under­whelm­ing inves­ti­ga­tion like all the oth­er inves­ti­ga­tions of this nature:

    EurActiv.de

    Pana­ma Papers par­lia­ment com­mit­tee keen to avoid LuxLeaks mis­takes

    By Daniel Mützel | | Trans­lat­ed By Samuel Mor­gan

    Jul 12, 2016 (updat­ed: Jul 12, 2016)

    The ini­tial out­rage pro­voked by the Pana­ma Papers is over. Now that the dust has set­tled, a Euro­pean Par­lia­ment com­mit­tee will exam­ine the case in detail. EurAc­tiv Ger­many reports.

    A few months ago, two and a half ter­abytes of leaked data threat­ened to take down some of the most pow­er­ful com­pa­nies and indi­vid­u­als on the plan­et. The doc­u­ments that were made pub­lic shone a spot­light on the intri­ca­cies of legal and ille­gal trans­ac­tions, made by, among oth­ers, FIFA offi­cials, heads of gov­ern­ment, drug smug­glers and banks, which picked Pana­ma as their hide­away for their finan­cial trans­ac­tions.

    It is one of the biggest finan­cial scan­dals in recent his­to­ry, but now the EU has begun the process of pick­ing apart the evi­dence and trans­lat­ing it into real pol­i­cy. On Tues­day (12 July), the com­mit­tee tasked with car­ry­ing out this task, giv­en the moniker PANA, met for its first meet­ing.

    PANA’s offi­cial man­date is to inves­ti­gate whether EU law was bro­ken by any­one men­tioned in the Pana­ma Papers, includ­ing tax eva­sion, tax avoid­ance and mon­ey laun­der­ing. This will mean a cer­tain amount of self-exam­i­na­tion, as it will have to be firm­ly estab­lished what is and what is not allowed under the EU’s mass of tax law. Addi­tion­al­ly, the com­mit­tee will have to estab­lish which mem­ber states have not trans­posed EU reg­u­la­tions into nation­al law, thus allow­ing tax fugi­tives to car­ry out their illic­it prac­tices.

    The com­mit­tee is com­posed of 65 mem­bers and they have been giv­en 12 months to car­ry out their work. If need­ed, a three month exten­sion can be grant­ed up to two times. In the end, a final report will be pub­lished in order to sum­marise the committee’s find­ings.

    There is con­cern that PANA could ulti­mate­ly end up a tooth­less tiger like its pre­de­ces­sor, the LuxLeaks com­mit­tee. How­ev­er, there seems to be a con­sen­sus among its mem­bers, at least, that the stakes are much high­er this time and the price of fail­ure even greater.

    Freie Demokratis­che MEP Michael Theur­er (ALDE) spoke unusu­al­ly open­ly about the case, before the committee’s work had even start­ed. In his view, there have been “breach­es of law” and “enforce­ment deficits” on the part of the Euro­pean Com­mis­sion and the mem­ber states. This is why Theur­er, a mem­ber of the com­mit­tee, believes it is the best way to approach the mat­ter and con­duct the fight against “tax eva­sion and mon­ey laun­der­ing”.

    Although the Parliament’s com­mit­tee has a nar­row­er man­date than its LuxLeaks fore­bear, it does have more pow­er. It will be able to inspect files relat­ed to the issue and call high-rank­ing mem­bers of the Com­mis­sion and mem­ber state gov­ern­ments to its hear­ings, which will be manda­to­ry, as well as hav­ing access to robust instru­ments. The LuxLeaks com­mit­tee, accord­ing to experts, suf­fered because its ques­tion­ing of con­cerned par­ties was weak.

    Die Linke MEP Fabio de Masi (GUE/NGL), PANA’s deputy chair­man went one step fur­ther than his col­league, Theur­er, say­ing that “it isn’t about Pana­ma, it’s about every­thing from organ­ised crime to ter­ror­ist financ­ing in the heart of the EU”.

    Instead of repeat­ing the mis­takes of the past, De Masi called for the com­mit­tee to put the “thumb­screws” on organ­ised crime. He also called for the com­mit­tee to go beyond just scru­ti­n­is­ing Euro­pean tax law and to hold the “polit­i­cal back­ers of off­shore busi­ness” to account.

    ...

    “PANA’s offi­cial man­date is to inves­ti­gate whether EU law was bro­ken by any­one men­tioned in the Pana­ma Papers, includ­ing tax eva­sion, tax avoid­ance and mon­ey laun­der­ing. This will mean a cer­tain amount of self-exam­i­na­tion, as it will have to be firm­ly estab­lished what is and what is not allowed under the EU’s mass of tax law. Addi­tion­al­ly, the com­mit­tee will have to estab­lish which mem­ber states have not trans­posed EU reg­u­la­tions into nation­al law, thus allow­ing tax fugi­tives to car­ry out their illic­it prac­tices.

    It sounds like the EU’s inves­ti­ga­tors are tasked in part with inves­ti­gat­ing which EU nations may have played a role in facil­i­tat­ing the mon­ey-laun­der­ing activ­i­ties asso­ci­at­ed with Pana­ma Papers by not imple­ment­ing ade­quate EU mon­ey-laun­der­ing. Uh oh. When that’s part of the task at hand, you can see why there might be con­cerns about repeat­ing Luxleaks com­mit­tee:

    EurActiv.fr

    Par­lia­ment despon­dent after fail­ure of Luxleaks com­mit­tee

    By Aline Robert | | Trans­lat­ed By Samuel White

    Feb 11, 2015 (updat­ed: Feb 18, 2015)

    The Euro­pean Parliament’s refusal to launch a com­mit­tee of inquiry on tax eva­sion has been a hard pill to swal­low for many MEPs, who have been left ques­tion­ing the role of their insti­tu­tion along­side the new Com­mis­sion. EurAc­tiv France reports.

    As the lat­est Swissleaks rev­e­la­tions raise the pres­sure to act on tax eva­sion, Mem­bers of the Euro­pean Par­lia­ment are becom­ing increas­ing­ly frus­trat­ed by the institution’s impo­tence.

    Last week, the Par­lia­ment refused to open a com­mit­tee of inquiry into the Luxleaks scan­dal for legal rea­sons. The Con­fer­ence of the Pres­i­dents decid­ed instead that a spe­cial com­mit­tee would have suf­fi­cient pow­er to address the sub­ject. This will be put to a ple­nary vote on Thurs­day 12 Feb­ru­ary.

    Man­fred Weber, the Pres­i­dent of the Euro­pean Parliament’s EPP group, told EurAc­tiv that the spe­cial com­mit­tee was the only option. “You know that the com­mit­tee of inquiry was not pos­si­ble for legal rea­sons, the man­date deliv­ered by the Greens was too flim­sy and vague. No con­crete cas­es of tax eva­sion would have been brought to the table. We want an inquiry that can bring real trans­paren­cy to the tax affairs of Google, Ama­zon, etc.,” the Ger­man MEP explained. He added that it was impor­tant to keep up the pres­sure on mem­ber states, as real pow­er over the sub­ject resides with them.

    But the gen­er­al feel­ing is that this pres­sure will be less effec­tive with a sim­ple spe­cial com­mit­tee, which will not have access to nation­al doc­u­ments, unlike a com­mit­tee of inquiry. Only three com­mit­tees of inquiry have ever been opened since the first leg­is­la­ture of the Euro­pean Par­lia­ment in 1979: on the Com­mu­ni­ty Tran­sit Regime, the Equi­table Life Assur­ance Soci­ety and mad cow dis­ease.

    Abuse of pow­er case against Mar­tin Schulz?

    The refusal of this “fourth” com­mit­tee has added to the frus­tra­tions of the Greens, who ini­ti­at­ed the pro­ce­dure.

    “Every time the Euro­pean Par­lia­ment has a sniff of some real pow­er, it takes a step back! If it’s not tax eva­sion, it’s the bud­get. This turns the Par­lia­ment into a door­mat for the heads of state to wipe their feet on,’ said Philippe Lam­berts, the Pres­i­dent of the Greens in the Euro­pean Par­lia­ment.

    His group is con­sid­er­ing tak­ing Par­lia­ment Pres­i­dent Mar­tin Schulz to the Court of Jus­tice of the EU for abuse of pow­er. “There was no debate over the com­mit­tee of inquiry on tax eva­sion in the Con­fer­ence of the Pres­i­dents. Mar­tin Schulz alone decid­ed that the com­mit­tee of inquiry should not be cre­at­ed for legal rea­sons. We are wit­ness­ing the total sub­mis­sion of the Social­ists to the EPP,” the Bel­gian MEP said.

    The 13 mem­bers of the French Social­ist par­ty del­e­ga­tion in the Euro­pean Par­lia­ment had signed the motion for a com­mit­tee of inquiry. Per­venche Berès, the head of the del­e­ga­tion, said “If the Greens had come to see us about request­ing a com­mit­tee of inquiry, it would almost cer­tain­ly have seen the light of day.”

    A “polit­i­cal­ly irre­spon­si­ble” refusal

    The Parliament’s ret­i­cence on the issue has upset some Social­ists. Eric Andrieu called the refusal “polit­i­cal­ly irre­spon­si­ble”. He said, “I think the Euro­pean Insti­tu­tions should behave in a more mature way in light of what hap­pened in Doubs this week­end.” This remark struck a chord with the Span­ish rad­i­cal left par­ty Podemos, which plans to col­lab­o­rate with Hervé Fal­ciani, the whis­tle-blow­er that hand­ed the HSBC files to the French tax inspec­tors.

    “We will work with Mr. Fal­ciani on tax havens. We are all being robbed and we must act against this attack on democ­ra­cy,” said the leader of Podemos, Pablo Igle­sias, cur­rent­ly cam­paign­ing for the Span­ish elec­tions in May.

    A “pup­pet” par­lia­ment?

    The evi­dent dis­com­fort of the elect­ed rep­re­sen­ta­tives over the issue of the com­mit­tee of inquiry reflects a more gen­er­al feel­ing that the Par­lia­ment is being side­lined by the new Com­mis­sion.

    One MEP said “As a for­mer Prime Min­is­ter, Jean-Claude Junck­er is inclined to give greater pow­er to the Euro­pean Coun­cil.”

    Mem­bers have com­plained that their pow­ers are under­mined by the cur­rent unof­fi­cial, unde­mo­c­ra­t­ic struc­ture of gov­er­nance, which takes the form of a week­ly meet­ing between Jean-Claude Junck­er, Mar­tin Schulz, Man­fred Weber, Guy Ver­hostadt and Gian­ni Pitel­la.

    ...

    “His group is con­sid­er­ing tak­ing Par­lia­ment Pres­i­dent Mar­tin Schulz to the Court of Jus­tice of the EU for abuse of pow­er. “There was no debate over the com­mit­tee of inquiry on tax eva­sion in the Con­fer­ence of the Pres­i­dents. Mar­tin Schulz alone decid­ed that the com­mit­tee of inquiry should not be cre­at­ed for legal rea­sons. We are wit­ness­ing the total sub­mis­sion of the Social­ists to the EPP,” the Bel­gian MEP said.”

    That’s how the Bel­gian Green MEP saw the deci­sion to use a weak­er inves­ti­ga­tion with few­er inquiry pow­ers for the Luxleaks tax-eva­sion inves­ti­ga­tion: “We are wit­ness­ing the total sub­mis­sion of the Social­ists to the EPP”. And don’t for­get that EU Com­mis­sion Pres­i­dent Jean-Claude Junck­er was pres­i­dent of Lux­em­bourg dur­ing when the nation turned itself into an inter­na­tion­al finan­cial haven.

    So when an MEP charges the Social­ists with sub­mit­ting to the right-wing EPP, keep in mind that the water­ing down of the Luxleaks inves­ti­ga­tion into a tooth­less inquiry was, in part, an attempt to pro­tect the new­ly elect­ed right-wing Euro­pean Com­mis­sion Pres­i­dent. And as was made clear in Sep­tem­ber, when Junck­er’s office pub­lished a “miss­ing page” from a 1997 Lux­em­bourg gov­ern­ment report made short­ly after Junck­er took office on the poten­tial con­se­quences that made it clear that tax author­i­ties were to play a role in arrang­ing “sweet­heart” tax deals with multi­na­tion­al cor­po­ra­tions, Junck­er was going to need all the pro­tec­tion he could get:

    The Tele­graph

    EU’s Junck­er releas­es secret ‘Luxleaks’ tax advice
    Secret Lux­em­bourg doc­u­ment dis­cussed risks of spe­cial tax deals, but Jean-Claude Junck­er says he can­not remem­ber dis­cussing it with its author

    By Matthew Hole­house, in Brus­sels, and Hen­ry Samuel in Paris

    8:22PM BST 30 Sep 2015

    The pres­i­dent of the Euro­pean Com­mis­sion faces fresh ques­tions about his role in design­ing Luxembourg’s con­tro­ver­sial sys­tem of “sweet­heart” tax deals after he released an 18-year old doc­u­ment that urged his gov­ern­ment to mon­i­tor the sys­tem more close­ly.

    Jean-Claude Junck­er has pub­lished a miss­ing page of a report pub­lished in 1997 by a gov­ern­ment advis­er that high­light­ed the poten­tial con­se­quences of Lux­em­bourg, a coun­try Mr Junck­er ran for two decades, enter­ing into bespoke tax deals with major cor­po­ra­tions.

    Just two weeks ago Mr Junck­er told MEPs he did not know the page exist­ed. Its author, mean­while, has claimed Mr Junck­er was giv­en a copy at the time.

    Today he insist­ed he could not remem­ber dis­cussing the report with its author in 1997, but nonethe­less insist­ed he did not ask for the page to be with­held from the pub­lic.

    Mr Junck­er has always denied any role in the “sweet­heart” tax deals, which are said to have helped hun­dreds of major multi­na­tion­al com­pa­nies to cut bil­lions from their tax bills by set­ting up small offices in the tiny state.

    The tax rul­ings, which saw some busi­ness­es pay less than one per cent tax in the Grand Duchy, were entire­ly legal but have angered politi­cians from oth­er Euro­pean states who argue they deprived them of sig­nif­i­cant tax rev­enues.

    The ‘Luxleaks’ dis­clo­sures — a set of accoun­tants’ papers out­lin­ing the deals — led to calls for Mr Junck­er to resign last year.

    The page released today was omit­ted from a 239-page tax inquiry com­mis­sioned by Mr Junck­er and pub­lished a few months after he start­ed his 18-year peri­od as Prime Min­is­ter. Its release was high­ly antic­i­pat­ed by MEPs inves­ti­gat­ing the affair, who likened it to a “state secret”.

    The page gives advice on enter­ing into tax com­pe­ti­tion with oth­er states through bespoke tax rul­ings, and urges the gov­ern­ment to mon­i­tor the deals close­ly to ensure they are in com­pli­ance with the government’s broad­er pol­i­cy.

    The miss­ing page, released by Mr Juncker’s office, notes the “dia­logue” between the tax author­i­ties and com­pa­nies. It acknowl­edges that they gave com­pa­nies cer­tain­ty, but also high­lights that it put Lux­em­bourg in “fis­cal com­pe­ti­tion” with oth­er states.

    The doc­u­ment, writ­ten in French, warns that infor­mal tax rul­ings do not “exist in our fis­cal leg­is­la­tion” and may not be “con­sis­tent with the government’s poli­cies.”

    “To decide in advance the legit­i­mate nature of an oper­a­tion, means that the admin­is­tra­tion enters into fis­cal com­pe­ti­tion with oth­er Euro­pean coun­tries in which the prac­tice of ‘rul­ing’ is wide­spread.”

    “In a Europe where com­pe­ti­tion on a tax lev­el reigns, the neg­a­tive effect of off­shoring is thus rein­forced.

    “With this in mind, it is appro­pri­ate to cite the Nether­lands, a pilot coun­try in the prac­tice of ‘rul­ing’, which recent­ly intro­duced inno­v­a­tive types of financ­ing for groups to improve the fis­cal cli­mate for invest­ment and to com­pete against attrac­tive tax regimes on offer out­side of the Nether­lands.

    “The rap­por­teur can see the prag­mat­ic approach cho­sen by the tax bureau. It is rec­om­mend­ed that the rel­e­vant min­is­ters fol­lows rather more close­ly the exist­ing accords. From the moment that the gov­ern­ment is clear­ly aware of these prac­tices, it can inter­vene if the infor­mal rules applied are no longer in accor­dance with gov­ern­ment pol­i­cy.”

    The author, a for­mer Lux­em­bourg MP named Jean­not Krecke, has said he Mr Junck­er one of only three unredact­ed copies of the report. He said he gave Mr Junck­er a fresh copy this year as MEPs inves­ti­gat­ed the so-called “Luxleaks” scan­dal.

    Mr Krecke has said he did not release the page orig­i­nal­ly as he deemed it too sen­si­tive for pub­lic dis­clo­sure. “My deci­sion was based on the fact that I did not find it appro­pri­ate to launch an inter­na­tion­al dis­cus­sion on tax rul­ings dur­ing our pres­i­den­cy,” he has told MEPs.

    Mr Junck­er today said his rec­ol­lec­tion of his dis­cus­sions with Mr Krecke was hazy, but denied mis­lead­ing the Euro­pean Par­lia­ment — hav­ing recent­ly told MEPs he had no knowl­edge of the miss­ing page.

    In a let­ter to MEPs, he also insist­ed he did not ask Mr Krecke to remove the “secret” page, and said this was con­firmed in a recent phone call.

    “Mr Krecke, who I always esteemed high­ly both as report­ing Mem­ber of Par­lia­ment and lat­er as Min­is­ter of Eco­nom­ic Affairs, explained in sev­er­al inter­views that he would have dis­cussed the mat­ter with me in 1997, albeit briefly as he makes clear,” he said. “This process has not remained in my mem­o­ry.”

    “After 18 years, I can­not remem­ber all relat­ed events that hap­pened in this con­text in 1997. I know that mem­o­ry laps­es are often a com­fort­able eva­sive excuse. How­ev­er, I reject the reproach that I have delib­er­ate­ly spo­ken untruth­ful­ly to the Com­mit­tee of the Euro­pean Par­lia­ment.”

    In an appear­ance before MEPs ear­li­er this month, Mr Junck­er denied any role in cre­at­ing Luxembourg’s tax regime, and denied knowl­edge of the page.

    “I did­n’t know this page exist­ed. It is an inter­est­ing area to dis­cuss, but I was­n’t aware of it,” he told MEPs inves­ti­gat­ing the affair.

    “Actu­al­ly, I don’t have that doc­u­men­ta­tion in my cel­lar and I’m also not going to go in my cel­lar with you to go and look for it.”

    He also told MEPs it would “exag­ger­ate my polit­i­cal tal­ent” to link him to Luxembourg’s posi­tion as a tax haven, say­ing he “nev­er, nev­er, nev­er” instruct­ed offi­cials “to set in place any tax sys­tem”.

    “I nev­er gave instruc­tions to Lux­em­bourg tax author­i­ties,” he told a hear­ing of MEPs. “I did not set up any sys­tem in Lux­em­bourg in order to ensure there was avoid­ance in order to dis­crim­i­nate against oth­er mem­ber states. I have always been against it, this idea. You exag­ger­ate my polit­i­cal tal­ent in that respect.”

    “I have been in no way been in sup­port of a tax admin­is­tra­tion in Lux­em­bourg that would be of neg­a­tive impact to oth­er Euro­pean coun­tries.”

    Crit­ics point­ed out Mr Junck­er had boast­ed in speech­es in the 2000s of hav­ing lured Sil­i­con Val­ley giants to the coun­try.

    Fabio De Masi, an MEP inves­ti­gat­ing the affair, called for a full inquiry by the Euro­pean Par­lia­ment into the affair.

    “The miss­ing page, while not rev­o­lu­tion­ary, makes clear that the Lux­em­bourg sys­tem of attract­ing com­pa­nies’ prof­its via a gen­er­ous rul­ing prac­tice has been in place since at least the 90s.

    “The gov­ern­ment, with Junck­er at the top, has been warned about the con­se­quences, and did noth­ing to pre­vent the excess­es from going on.”

    The Euro­pean Com­mis­sion – which Mr Junck­er runs – is exam­in­ing the deals as part of a broad­er inquiry into whether tax­poli­cies broke state aid rules.

    ...

    “The miss­ing page, while not rev­o­lu­tion­ary, makes clear that the Lux­em­bourg sys­tem of attract­ing com­pa­nies’ prof­its via a gen­er­ous rul­ing prac­tice has been in place since at least the 90s.”

    That’s had to be awk­ward for Junck­er. Espe­cial­ly since...

    ...

    The author, a for­mer Lux­em­bourg MP named Jean­not Krecke, has said he Mr Junck­er one of only three unredact­ed copies of the report. He said he gave Mr Junck­er a fresh copy this year as MEPs inves­ti­gat­ed the so-called “Luxleaks” scan­dal.

    Mr Krecke has said he did not release the page orig­i­nal­ly as he deemed it too sen­si­tive for pub­lic dis­clo­sure. “My deci­sion was based on the fact that I did not find it appro­pri­ate to launch an inter­na­tion­al dis­cus­sion on tax rul­ings dur­ing our pres­i­den­cy,” he has told MEPs.

    Mr Junck­er today said his rec­ol­lec­tion of his dis­cus­sions with Mr Krecke was hazy, but denied mis­lead­ing the Euro­pean Par­lia­ment — hav­ing recent­ly told MEPs he had no knowl­edge of the miss­ing page.

    In a let­ter to MEPs, he also insist­ed he did not ask Mr Krecke to remove the “secret” page, and said this was con­firmed in a recent phone call.

    ...

    In an appear­ance before MEPs ear­li­er this month, Mr Junck­er denied any role in cre­at­ing Luxembourg’s tax regime, and denied knowl­edge of the page.

    ...

    He also told MEPs it would “exag­ger­ate my polit­i­cal tal­ent” to link him to Luxembourg’s posi­tion as a tax haven, say­ing he “nev­er, nev­er, nev­er” instruct­ed offi­cials “to set in place any tax sys­tem”.

    “I nev­er gave instruc­tions to Lux­em­bourg tax author­i­ties,” he told a hear­ing of MEPs. “I did not set up any sys­tem in Lux­em­bourg in order to ensure there was avoid­ance in order to dis­crim­i­nate against oth­er mem­ber states. I have always been against it, this idea. You exag­ger­ate my polit­i­cal tal­ent in that respect.”

    ...
    Crit­ics point­ed out Mr Junck­er had boast­ed in speech­es in the 2000s of hav­ing lured Sil­i­con Val­ley giants to the coun­try.

    ...

    So Junck­er appar­ent­ly had one of only three unredact­ed copies of the 239 report but did­n’t have any­thing to do with the removal of the “miss­ing page” that demon­strat­ed that, sur­prise sur­prise, his gov­ern­ment had an pol­i­cy of attract­ing inter­na­tion­al com­pa­nies with offers of real­ly low tax rates.

    Instead, he “nev­er, nev­er, nev­er” instruct­ed offi­cials “to set in place any tax sys­tem”. Although he did lat­er boast about lur­ing Sil­i­con Val­ley giants to the coun­try. It rais­es the ques­tion of what exact­ly he did to lure these giants if it did­n’t involve real­ly low tax rates. For­tu­nate­ly, one of the nice things about the inter­na­tion­al nature of the tax eva­sion regimes Lux­em­bourg set up is that even if the EU inves­ti­ga­tions into these kinds of activ­i­ties fail the com­pa­nies that move to Lux­em­bourg might still be inves­ti­gat­ed in their home coun­tries. So, for instance, if the IRS is inves­ti­gat­ing Ama­zon in the US over its Lux­em­bourg cor­po­rate shells, we might get to learn more about how Junck­er lured Sil­i­con Val­ley giants to Lux­em­bourg:

    Newsweek

    Ama­zon: How the World’s Largest Retail­er Keeps Tax Col­lec­tors at Bay

    By Simon Marks On 7/13/16 at 5:10 AM

    When Jef­frey Bezos was decid­ing where to base his new e‑commerce busi­ness in 1995, Seat­tle was not his first choice. Instead, the CEO of Ama­zon, now the world’s largest online store, eyed an Indi­an reser­va­tion near San Fran­cis­co that would have con­sid­er­ably low­ered his tax bill.

    The state of Cal­i­for­nia quashed that scheme, but Bezos’s zeal for tax avoid­ance did not stop there. Through­out much of Amazon’s more than 20-year his­to­ry, he has carved out com­pet­i­tive tax posi­tions for the com­pa­ny as it expand­ed glob­al­ly. His busi­ness acu­men in that regard has even attract­ed the wrath of pre­sump­tive Repub­li­can pres­i­den­tial can­di­date Don­ald Trump, who ear­li­er this year accused Bezos of buy­ing The Wash­ing­ton Post to gain polit­i­cal influ­ence and avoid tax­es. Dur­ing a speech in Texas, Trump said, “If I become pres­i­dent, oh do they have prob­lems. They’re going to have such prob­lems.”

    New­ly revealed doc­u­ments seen by Newsweek from a land­mark court case in Seat­tle between Ama­zon and the IRS reveal how the com­pa­ny has attained glob­al dom­i­nance over com­peti­tors in part by mov­ing its glob­al head­quar­ters to the small, land­locked state of Lux­em­bourg. While Amazon’s cor­po­rate struc­ture there has been well-doc­u­ment­ed, the court doc­u­ments from Seat­tle shed new light on alle­ga­tions of tax avoid­ance. They also raise ques­tions about how and why Lux­em­bourg hand­ed one of the world’s largest com­pa­nies a tax deal that pri­vate cit­i­zens can only dream of.

    At the heart of Amazon’s arrange­ment with Lux­em­bourg is Jean-Claude Junck­er, who was that country’s prime min­is­ter between 1995 and 2013 and is now pres­i­dent of the Euro­pean Com­mis­sion, the Euro­pean Union’s exec­u­tive branch.

    Fol­low­ing the “LuxLeaks” rev­e­la­tions in 2014, which exposed many of Luxembourg’s cozy tax deals with multi­na­tion­als, Juncker’s posi­tion at the EU came under intense scruti­ny, with some in the Euro­pean Par­lia­ment call­ing for his res­ig­na­tion. Through it all, Junck­er has dis­tanced him­self from the tax­a­tion deals made by his gov­ern­ment. “It’s the tax author­i­ties that devel­op the spe­cif­ic rules that are applied,” he said last Sep­tem­ber dur­ing a hear­ing of the Euro­pean Par­lia­ment. “I haven’t tak­en a posi­tion on indi­vid­ual tax dossiers because that also isn’t my role. The Lux­em­bourg tax author­i­ties are very aller­gic to the idea of min­is­te­r­i­al inter­fer­ence.”

    But doc­u­ments from the Seat­tle court case show a very dif­fer­ent ver­sion of events. In a brief to the tax court in Seat­tle, the IRS says Junck­er met with four senior Ama­zon tax offi­cials between Sep­tem­ber 9 and 12, 2003. The offi­cials includ­ed Bob Com­fort, a key play­er in set­ting up Amazon’s Euro­pean tax struc­ture; Joce­lyn Krabben­schmidt, who served as Amazon’s direc­tor of glob­al direct tax from 1999 until 2012; and Jeroen Pit, Amazon’s head of EU VAT (val­ue-added tax). “Ama­zon tax exec­u­tives met with the Lux­em­bourg prime min­is­ter,” the doc­u­ments state.

    This evi­dence of a meet­ing between Junck­er and Amazon’s top tax offi­cials at a key moment in the company’s nego­ti­a­tions with Lux­em­bourg could has­ten the work already under­way by the Euro­pean Parliament’s Spe­cial Com­mit­tee on Tax Rul­ings, which has ques­tioned Junck­er and a host of multi­na­tion­al companies—including McDonald’s, Google and Apple—about how they cal­cu­late their tax­able rev­enues.

    Sven Giegold, a Ger­man law­mak­er in the Euro­pean Par­lia­ment who has chal­lenged Junck­er in the past over his role in Luxembourg’s tax­a­tion poli­cies, says the rev­e­la­tions con­cern­ing Juncker’s meet­ing with key Ama­zon offi­cials were extreme­ly wor­ry­ing. “Giv­en that Junck­er met senior Ama­zon tax offi­cials, it is beyond belief that tax ques­tions weren’t dis­cussed in these meet­ings,” he tells Newsweek.

    Alex Cob­ham, direc­tor of research at the Tax Jus­tice Net­work, an inter­na­tion­al net­work of orga­ni­za­tions fight­ing tax avoid­ance, says there were four main actors in the LuxLeaks scan­dal: the multi­na­tion­als, some of which are hav­ing their tax-plan­ning prac­tices inves­ti­gat­ed; whistle­blow­ers Antoine Del­tour and Raphael Halet, who were hand­ed sus­pend­ed sen­tences and fines by a Lux­em­bourg court for theft and break­ing strict pro­fes­sion­al-secre­cy laws; the tax advis­ers at sev­er­al glob­al account­ing com­pa­nies; and the politi­cians who approved the deals.

    But at no point in time since rev­e­la­tions appeared about Luxembourg’s sweet­heart deals has Junck­er, or any oth­er politi­cian in his home coun­try, been held to account for what is the biggest dis­tor­tion of cor­po­rate tax col­lec­tion to ever be pub­licly exposed, Cob­ham says. He adds that “if this [meet­ing between Junck­er and Amazon’s tax offi­cials] shows a direct involve­ment in effec­tive­ly mar­ket­ing Lux­em­bourg for this pur­pose, you have to think his posi­tion [as Euro­pean Com­mis­sion pres­i­dent] is unten­able.”

    A spokesper­son for Junck­er tells Newsweek that “it [was] entire­ly nor­mal” for Junck­er to have met with rep­re­sen­ta­tives of com­pa­nies seek­ing to invest in the coun­try and that “any deci­sions relat­ed to the tax arrange­ments of large com­pa­nies dur­ing his time in office were...strictly a mat­ter for the tax admin­is­tra­tion.”

    His defend­ers also point out that as the Euro­pean Commission’s pres­i­dent, Junck­er has pushed for laws to cur­tail aggres­sive tax plan­ning. In Jan­u­ary, the com­mis­sion pre­sent­ed its anti-tax-avoid­ance pack­age, which mem­ber states for­mal­ly backed last month. The pack­age attempts to block the most com­mon meth­ods used by com­pa­nies to avoid pay­ing tax­es, such as the arti­fi­cial shift­ing of prof­its to low-tax juris­dic­tions. Juncker’s com­mis­sion has also pushed a pro­pos­al that would oblige multi­na­tion­als to dis­close prof­its earned and tax­es paid in each of the EU’s 28 mem­ber states and oth­er fis­cal havens.

    Still, Junck­er is hav­ing to answer ques­tions about his role in the LuxLeaks affair. In a 2014 inter­view with d’Lëtzebuerger Land, a Lux­em­bourg news­pa­per, Amazon’s Com­fort revealed that dur­ing a meet­ing with state offi­cials, Junck­er report­ed­ly told Ama­zon he would try to help if the com­pa­ny encoun­tered any prob­lems in set­ting up its Lux­em­bourg oper­a­tions. Com­fort, who was made an hon­orary con­sul for Lux­em­bourg in 2011, also says offi­cials promised to expe­dite visas and help facil­i­tate school­ing for Ama­zon employ­ees’ chil­dren.

    In an email, Giegold says that Juncker’s response to ques­tions over his role in Luxembourg’s tax­a­tion regime for multi­na­tion­als was to make the pub­lic believe that, as prime min­is­ter, he only met with “future-ori­en­tat­ed com­pa­nies” to diver­si­fy the struc­ture of Luxembourg’s econ­o­my. “In fact, dur­ing his term of office, Junck­er made tax dump­ing the new busi­ness mod­el of the Grand Duchy.”

    Project Gold­crest

    Amazon’s IRS case in the U.S., which could force it to pay more than $1.5 bil­lion in unpaid tax­es, has revealed some find­ings that are, at best, awk­ward for the com­pa­ny. Accord­ing to court doc­u­ments, Ama­zon hired an econ­o­mist from the glob­al finan­cial advi­so­ry com­pa­ny Deloitte in 2001 to review the var­i­ous approach­es that could be adopt­ed to reduce its tax­es.

    As Amazon’s direc­tor of glob­al direct tax, Krabben­schmidt was respon­si­ble for esti­mat­ing the cost ben­e­fits of estab­lish­ing the company’s head­quar­ters in Lux­em­bourg and imple­ment­ing a new tax regime through a labyrinth of sub­sidiaries designed to shift prof­its into Lux­em­bourg. Ama­zon dubbed the tax-plan­ning ini­tia­tive Project Gold­crest, a title wor­thy of a James Bond thriller.

    Project Gold­crest, which is still in place, uses a series of com­plex inter­com­pa­ny con­tracts to trans­fer intan­gi­ble assets—vital soft­ware, trade­marks and oth­er intel­lec­tu­al prop­er­ty (IP)—to one of Amazon’s Lux­em­bourg com­pa­nies, Ama­zon Europe Hold­ing Tech­nolo­gies. A sep­a­rate sub­sidiary, Ama­zon EU Sarl, then pays AEHT huge sums every year in roy­al­ty fees, reduc­ing the amount of tax­able income with­in the com­pa­ny.

    In return for con­trol­ling the Euro­pean licens­ing rights, AEHT makes pay­ments to one of Amazon’s U.S. com­pa­nies. U.S. author­i­ties believe these pay­ments are too low, which is why the case has gone to court. Ama­zon has large­ly avoid­ed fed­er­al tax­a­tion by man­ag­ing its books to avoid report­ing any mean­ing­ful prof­its over the past 20 years. In the last quar­ter of 2015, for exam­ple, Ama­zon paid just $73 mil­lion in tax­es on $35.7 bil­lion in rev­enues.

    After it audit­ed Amazon’s 2005 and 2006 tax fil­ings, the IRS ques­tioned the amount of tax­es the com­pa­ny was pay­ing into U.S. state cof­fers. Doc­u­ments out­lin­ing the IRS find­ings show that Ama­zon hid key data from the IRS dur­ing an audit of the company’s tax arrange­ments in Lux­em­bourg. It did this by hid­ing part of its mod­el pro­ject­ing tax ben­e­fits from Project Gold­crest, not pro­vid­ing the IRS with part of the mod­el titled “S Team Meet­ing,” a senior lead­er­ship out­fit that reports direct­ly to Bezos. The court doc­u­ments also show that Amazon’s chief finan­cial offi­cer, Tom Szku­tak, “was briefed on the pro­ject­ed tax ben­e­fits” from Project Gold­crest before its imple­men­ta­tion in 2006.

    Queried about the miss­ing data, an Ama­zon spokesper­son says, “Ama­zon pays all the tax­es we are required to pay in every coun­try where we oper­ate.”

    The spokesper­son explained that Amazon’s cor­po­rate tax pay­ments are based only on prof­its and not rev­enues, and prof­its have remained low for much of the past 20 years because of Amazon’s heavy invest­ments in spe­cial­ized staff and projects such as data cen­ters. Ama­zon also says its prof­its are low because it is in a “high­ly com­pet­i­tive, low-mar­gin busi­ness.”

    Tax jus­tice cam­paign­ers are out­raged by the evi­dence sug­gest­ing Ama­zon with­held key infor­ma­tion from the IRS. “We always tend to give the ben­e­fit of the doubt to multi­na­tion­als and talk about avoid­ance rather than eva­sion. But hid­ing rel­e­vant mate­r­i­al does sug­gest the cross­ing of that line,” says the Tax Jus­tice Network’s Cob­ham.

    The IRS also presents a com­pelling case that Ama­zon con­duct­ed an improp­er val­u­a­tion of the IP assets it trans­ferred to Lux­em­bourg in order to under­val­ue them.

    Since 2014, the Euro­pean Commission’s com­pe­ti­tion ser­vices have embarked on a sim­i­lar inquiry due to sus­pi­cions that Ama­zon has inflat­ed roy­al­ty pay­ments for the use of IP rights paid to one of its sub­sidiaries in Lux­em­bourg. Mar­grethe Vestager, the EU com­pe­ti­tion com­mis­sion­er, who is con­duct­ing the inves­ti­ga­tion, is expect­ed to report back soon with a ver­dict on whether the deal with Lux­em­bourg amount­ed to ille­gal state aid.

    Jack Blum, a lead­ing white-col­lar defense attor­ney in the U.S. spe­cial­iz­ing in mon­ey laun­der­ing, tells Newsweek there is no doubt about the pre­med­i­tat­ed nature of Amazon’s aggres­sive tax plan­ning. “It’s a sys­tem that is beyond the capac­i­ty of gov­ern­ments, or for that mat­ter the pub­lic, to real­ly under­stand, and it allows the cor­po­ra­tions tremen­dous abil­i­ty to play games and in a way that negates the effec­tive­ness of nation­al tax sys­tems,” he says. “For the most part, this is stuff that is kept in the deep­est, dark­est recess­es of tax courts and cor­po­rate vaults, pro­tect­ed by secre­cy pro­vi­sions.”

    ...

    “New­ly revealed doc­u­ments seen by Newsweek from a land­mark court case in Seat­tle between Ama­zon and the IRS reveal how the com­pa­ny has attained glob­al dom­i­nance over com­peti­tors in part by mov­ing its glob­al head­quar­ters to the small, land­locked state of Lux­em­bourg. While Amazon’s cor­po­rate struc­ture there has been well-doc­u­ment­ed, the court doc­u­ments from Seat­tle shed new light on alle­ga­tions of tax avoid­ance. They also raise ques­tions about how and why Lux­em­bourg hand­ed one of the world’s largest com­pa­nies a tax deal that pri­vate cit­i­zens can only dream of.

    Ama­zon paid $73 mil­lion in tax­es on $35.7 bil­lion in rev­enues and we can thank Jean-Claude Junck­er, in part, for that gen­er­ous tax rate. Or, rather, Ama­zon can thank him. Every­one else should be kind of pissed.

    So that’s the kind of can of worms that the Luxleaks opened up...it threat­ened the EU Com­mis­sion Pres­i­dent. And this is with the defanged inves­ti­ga­tion. It’s the kind of expe­ri­ence that rais­es a lot of ques­tions about the prospects of a suc­cess­ful EU inves­ti­ga­tion into the Pana­ma Papers. Or an inves­ti­ga­tion any­where into the Pana­ma Papers since the scan­dal pre­sum­ably impacts pow­er­ful peo­ple all over the world.

    We’ll see how the Pana­ma Papers inves­ti­ga­tion pro­ceeds and whether or not it impacts Junck­er. And, of course, we’ll also see how the inves­ti­ga­tion’s poten­tial impact on Junck­er impacts the inves­ti­ga­tion. Or maybe we won’t see it. It depends on the qual­i­ty of the cov­er up.

    But one thing is increas­ing­ly clear: no mat­ter what hap­pens, we’re prob­a­bly going to see more Junck­er.

    Posted by Pterrafractyl | July 14, 2016, 1:42 pm

Post a comment