The immorality of ‘the rich and shameless’ and ‘Het Tientje van Lieftinck’

Last week, a story has been brought to the surface that you could easily call the ‘Wikileaks’ of the Century. Or you could call it ‘the Hall of Shame’

The International Consortium of Investigative Journalists (ICIJ) in Washington worked in cooperation with reporters from The Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post, the Canadian Broadcasting Corporation (CBC), the Dutch newspaper Trouw and 30 other media partners around the world. 

They collected the leaked e-mails and documents from two important trust offices, Portcullis Trustnet and Commonwealth Trust Limited, and disclosed some of the data in it. These trust offices have been (ab)used to hide private and/or fraudulently acquired public capitals, away from the needy citizens in poor and not-so-rich countries and the all-seeing eyes of the tax agencies in the richer ones.

From the contents of these emails, it became clear that ‘the rich and shameless’ have stashed away between $21 and $32 TRILLION(!!!!!) in trust funds at notorious tax-havens, like The Virgin Islands, The Cayman islands and other nice places with lots of sun, sea and 50 bank branches per official inhabitant.

Who these ‘rich and shameless’ are? You must think of people, like the Indonesian billionaires family Katuari, the daughter of former Phillippine president Marcos, the campaign treasurer of French President François Hollande, Jean Jacques Augier, and the president of Azerbaijan, Ilham Aliyev. And of numerous other European, American, Asian and Australian millionaires and billionaires too. Because they were worth it...

As I don’t know all the juicy details to this story yet and as it is too big to print integrally on these pages, I gladly refer to the must-read findings of the ICIJ for the whole story: now and in the coming weeks. Just like with the slogan in the infamous Batman series from the late sixties, “the worst is yet to come” here!

And before I forget, there is also a Dutch link…

Already in November, 2012, I wrote about these tax-havens in the Carribean and the fact that the Dutch ‘big three’ banks ING Groep NV ($INGA), ABN Amro and Rabobank used them to help their customers to avoid (evade(?)) taxes.

The Dutch newspaper Trouw fortunately got their hand on this “Virgin-gate” list and did some research into the Dutch connection of it. Also in their findings, the names of ING and ABN Amro popped up:

The Dutch banks ING and ABN Amro appear in a leaked data file with sensitive information upon tax-havens – internationally known as ‘offshore-leaks’ [I hereby claim the name “Virgin-gate” – EL]. These banks registered dozens of private limiteds on a.o. the British Virgin Islands, the Cook Islands and the Malaysian island Labuan.

Also the names and private details of 21 previous and current members of the ING board of directors appear in these data, according to the bank ‘due to local regulation’.

Trouw found the information in leaked documents and e-mails from two trust offices, Portcullis Trustnet and Commonwealth Trust Limited. These offices are specialized in the founding and management of private limiteds in tax-havens, for internationally operating companies and wealthy private citizens. 

Through these fiscal constructs, these people and legal entities avoid higher taxes in their countries of origin. ABN Amro, just like ING, states that it never cooperated in tax-evasion. ABN Amro: these private limiteds have been founded for international customers and always obey local and international laws”.

It became clear, from the investigation by Trouw, that in many of the private limiteds founded by ABN Amro and ING, the involved persons have been covered with the help of so-called ‘nominee’ companies. These are offices that operate as director or shareholders of such a private limited, while the real owners remain in the background. It is not clear whether these constructs are used to avoid or evade taxes or not. ING stated that these limiteds have been founded by subsidiaries of the company, which have been sold in the meantime. The bank could therefore not disclose more information at this moment.

It is remarkable that ING also operates as nominee director and nominee shareholder, according to the leaked database. A number of private limiteds is registered at Portcullis, where ING (Jersey) is mentioned as shareholder and ING employees have been registered as managing director. Yesterday, ING couldn’t tell why it had chosen for such a construct at these limiteds and who were the ultimate ‘men in charge’.

As I can’t prove this and would not like to risk a lawsuit, I will not state that the aforementioned private limiteds with their nominee directors and nominee shareholders have been used for tax-evasion. Still, I have my thoughts upon these kinds of fiscal constructs and these are not happy thoughts.

I am also very curious why the names of 21 high-ranked ING officials popped up in the database of Portcullis and I’m not ready yet to believe that these names have been only mentioned there in order ‘to help the customers’. 

What is further troubling me, is the amnesia that struck the ING officials when it came to the meaning and purpose of the nominee-ships for their customers. I truly hope that a valid and honest explanation by the current top-management of ING will shed some light upon this case. 

In the meantime, I wonder what the due taxes on this bedazzling amount of $32 trillion could do for the world. Not even to speak about the share of this money, which has been fraudulently disguised from its legal owners: the citizens in the countries where it came from.

One of the myths of capitalism is: when in a orthodox, capitalistic country people get the chance to get rich, a substantial part of their money pours down to the middle-class and underclasses through taxes, labour, investments and charity. This happens in a much more effective and efficient ways than in socialistic and social-democrat countries.

I am afraid that with 'Virgin-gate', this myth has now been debunked for eternity: if the governments in all countries over the world don’t fight for their fair share of tax-money, the rich certainly won’t hand it out to them.

This whole 'Virgin-gate' story reminds me of a small Dutch hero in the first years after the second World War: Pieter Lieftinck.

In those days of stolen and/or fraudulently acquired, black money, Dutch Finance Minister Pieter Lieftinck took the bold step of freezing all official bank accounts and expropriating all cash money in The Netherlands. The government handed out a newly designed and freshly printed ten guilder-note (would be about $50 today) to every family in The Netherlands, on which these families had to live for a week: Het Tientje van Lieftinck (i.e. the Ten Bucks of Lieftinck).

In the meantime, a large money cleansing operation took place: people got back their white and honestly earned money, while the black and stolen money remained in the hands of the Dutch government.

What an operation it would be, to do the same with the current American dollars and all near-cash money in bank accounts, nominated in dollars. 

All white and honestly acquired money in official American and foreign bank accounts would be returned to the legal owners after the largest money cleansing action in human history, while all black money would either be confiscated by the governments involved or be declared worthless.

Of course, such an operation will never happen. But it is nice to dream about it, for someone who fairly pays all his taxes.