I'm Charles Davidson, the co-chair with Raymond Baker of this event, and I could step up on the stage, but we have a relatively small room here. This was put together by Raymond, myself, Jack Blum, and Tom Cardamone, and this has been delayed because of COVID. This event could have happened earlier, but it didn't. Here we are, welcome everybody. We're going to start with a short video by Senator Whitehouse, who couldn't be here. There's some retreat. We would have had Senator Cardin, too. This wasn't happening, so we're getting a lot of support. It would appear for these ideas from the Hill. So I may have forgotten one or two things, but we're going to roll right now with Senator Whitehouse. Hello, everyone. I'm Senator Whitehouse, and it is great to be here, at least electronically, with all of you today. First, I want to congratulate Raymond Baker on the release of your book, Invisible Trillions. You shine much-needed light on how the hidden wealth of kleptocrats, criminals, and the ultra-rich is stored in rule of law jurisdictions. You've done great work parsing the economic, political, and social dangers of such secrecy. I'd also like to thank Charles Davidson, Jack Bloom, Tom Cardamone, and Global Financial Integrity for partnering with Raymond to launch the D.C. Forum. Right now, America is engaged in a clash of civilizations. It's a growing clash between rule of law and democracy on one side versus kleptocracy and criminality on the other. In this clash, we allow our adversaries to exploit our own laws and financial system, and we allow our institutions and professions to aid and abet them. Wrongdoers can hide their loot and hide their identities behind rule of law, while they're out there degrading rule of law elsewhere. We must prevent foreign adversaries from hiding their loot within America's borders. And around the world, we need to tighten up laws that allow host nations to prop up kleptocratic regimes like Vladimir Putin's. I am with you in this fight, banging steadily away. My asset seizure for Ukraine Reconstruction Act, co-led by Senators Graham Blumenthal and Bennett, was included in the FY23 omnibus. That amendment allows the United States to send proceeds from the sale of assets forfeited from people sanctioned for Russia's invasion of Ukraine, to foreign assistance to the people of Ukraine. This past is an omnibus amendment on the floor of the Senate by voice vote on a completely bipartisan basis. We will work with European allies to adopt similar legislation to help their justice ministries move quickly against ill-gotten assets and plug sanctions loopholes. Our legislation can help serve as a model. The Treasury Department recently issued a new rule based on my earlier bipartisan legislation requiring reporting of the true beneficial owner behind shell companies. Starting next year, when that rule goes into effect, law enforcement will have a new window into the webs of shell companies that facilitate corruption and hide the bad guy's loot. Treasury is also working on an important proposal to shine much-needed light on the $60 trillion U.S. real estate market, and we are urging them on funding. Last May, I secured $67 million for the Department of Justice's new kleptocapture task force and $22 million for FinCEN in the second Ukraine supplemental package. They now have added resources to meet these new challenges on top of a baseline increase Senator Grassley and I led to boost FinCEN's annual budget by $29 million. Relatedly, Congress provided the IRS new funding to crack down on offshore tax cheats and large multinational corporations that play the line between legal avoidance and tax evasion. While we are making progress, there is much more work to be done. Here are my priorities. First, my Enablers Act, introduced with Senator Wicker, which would strengthen federal due diligence and transparency requirements so that American professionals, such as investment advisors, attorneys and accountants, cannot secretly hide illicit money or facilitate financial crimes. We already require this level of diligence in other industries, like banking, so this measure would help level an existing playing field. We must work with nations across the globe to stamp out global tax avoidance and evasion and fulfill the promise of the Foreign Account Tax Compliance Act to help partner nations combat tax haven abuse aided by the U.S. financial system. Tax cheating is at the heart of the global dark economy. We must also honor the historic Global Minimum Tax Agreement negotiated by Secretary Yellen. My No Tax Breaks for Outsourcing Act would bring us into compliance and it would end the incentive for multinational corporations to hide money and tax havens and ship jobs overseas. Last month, I met with President Zelensky in Ukraine. The people of Ukraine have endured so much in Putin's brutal invasion and they stand as brave reminders of the importance of victory in the clash of civilizations we face with international corruption and kleptocracy. So thank you for your partnership in this fight and keep up this important work. Senator Whitehouse and thank you all for coming and joining us today. We've been looking forward to this gathering and I hope that it will be an impetus to address the kinds of issues that we're talking about. Let me begin by being quite clear what drives me. When I graduated from Harvard Business School in 1960, I had no idea, not in the furthest reaches of my imagination, that capitalism might someday undermine democracy. The preceding 15 years, at least in the United States, had been perhaps the highest level of responsible capitalism ever achieved. Veterans retrained, investment soared, relations between labor and management were generally good. Banks and corporations promoted balanced growth and consumption rose. Every indication was that these favorable trends would continue. But then something happened. Over the last half-century something utterly fundamental has happened in the democratic capitalist system. The original pillars of democracy have not fundamentally changed since their formulation in the late 1700s. Popular vote, rule of law, representative legislatures, protection to minority rights still guide our democratic aspirations. However, the original pillars of capitalism are now radically altered. These pillars, also developed in the late 1700s, were originally formulated around making profits, spreading wealth, and generating public goods. But in recent decades, capitalism has taken on the ulterior motive of masking income, disguising income in the trillions of dollars annually, and wealth in the tens of trillions of dollars cumulatively. Secrecy has become as important as profitability, generating, moving, and sheltering money in ways that are beyond the oversight of the organs of democracy. That is beyond the oversight of regulators and legislators is a recent phenomenon in capitalist operations. In pursuit of this new motivation within capitalism, we have created a financial secrecy system that now facilitates perhaps half of global economic operations. What are the components of this system? There are several. First of all, tax havens and secrecy jurisdictions. These are places where lawyers and bankers and accountants can handle your affairs without identifying you. No one outside this circle can see what is going on. Second component is disguised corporations. In these, no record is kept of who owns these shell companies. And they are in the tens of millions around the world. More of them having been created in the United States than in any other country. A third component is anonymous trust accounts. These let you conduct business without anyone knowing with whom they are doing business. A fourth component is fake foundations. You can donate money to your charitable foundation. You can designate yourself as the beneficiary of the charity of your foundation. And you can avoid paying taxes and avoid accountability every step of the way. A fifth component is a broad range of money laundering techniques as John Kassar has written about for years that handle particular types of financial transactions. Sitting in the middle of this financial secrecy system is the practice of falsified trade. This is trade conducted where invoice prices and real values differ. I have never known a multinational, multi-billion dollar, multi-product corporation that did not use falsified trade in some part of its business around the world. And finally, as part of this system, governments intentionally leave holes in their laws to enable money to move through this financial secrecy system and into our economies. The United States of America is the biggest user of the financial secrecy system. And the best data that we have indicates that more money, more dirty money flowing around the world ends up finally in our economy as compared to any other. Now, many people think in the richer countries that we are the innocent victims of the terrible practices of these kleptocrats and drug dealers and human traffickers and counterfeiters and money launders and terrorist financiers. That is not correct. Every single element of the modern financial secrecy system has been created by us in the richer Western countries. Not a single element of this system was thought up by the people that we like to blame. The reality of this system and its operations means that we face extreme difficulty fighting kleptocracy and crime and corruption and terrorism and more. The reality is that this system and the harms it causes is not something that has been done to us, it is something that has been done by us. We, bluntly speaking, we cannot succeed in the fight against these ills while we at the same time move and shelter the money generated by the bad guys. Even with all these ills, the greatest impact of the financial secrecy system is on inequality, on economic inequality. Without question, this is a huge problem in the 21st century going forward. When I got my MBA in 1960, the ratio of executive pay to workers' wages was 20 to 1. Today, this ratio is more than 350 to 1. Today, we live in a world where the richest 1% have wealth accumulation equal to the remaining 99%. Much of this soaring inequality, not all of it, but much of it, is enabled by the financial secrecy system. This system is designed to help rich make, move and shelter their money through mechanisms that are just simply not available to or visible to the middle class and the poor. Let's take that 20 to 1 ratio that existed in 1960. Had that ratio been maintained through to today, the middle class in America would be better off by 50 trillion dollars. That's trillion with a T. Research shows that tens of millions of Americans believe that they will not be as well off as their parents, not able to enjoy the standard of living up to the level of their parents. This is disheartening for tens of millions of Americans and people in other countries as well. In other words, the angst that exists in the middle class in America and elsewhere has factual roots, has realities that contribute in a major way to political discontent, which brings me to the central point of the D.C. forum. That's D for democracy and C for capitalism. Democratic capitalism is at risk. Severe imbalance now characterizes the way that democracy and capitalism are functioning. For decades, even centuries, we've taken it more or less for granted that these two pillars should generally work in support of each other. These two systems should be working in sync to spread liberty and prosperity. Democracy is expected to offer equal political rights to its citizens. Capitalism is expected to offer fair economic opportunities to its participants. Instead, these two guiding tenets are becoming decoupled, no longer operating in sync. The capitalist side of the equation is running out of control, eroding the social contract, empowering kleptocracy, facilitating crime, fostering corruption, evading obligations, and maximizing income and wealth inequalities. And in these realities, thus jeopardizing democracy. The onus for these outcomes needs to be placed on underperforming capitalism rather than upon a collection of other societal problems. Rebalancing capitalism and democracy is one of the most difficult challenges ahead. As currently practiced, our two systems are not working well together and will not get us satisfactorily through the 21st century. The DC Forum seeks to drive an understanding of this risk into the political consciousness, into the Overton window, if you will. Many of us in this room have been fighting particular aspects of these problems for years. Many of us here and many of us in other organizations. And many of us feel that we are not making the progress that is needed, not getting the traction that is appropriate to the issue. The DC Forum seeks to elevate our particularistic approaches, our particular concerns to a higher level, to an understanding that instead of dealing with a collection of individual problems, we're dealing with a systemic issue, an issue that literally cuts to the heart of the democratic capitalist system. The rationale for the DC Forum draws upon the experience of trying to get the climate change issue into the global consciousness. Scientists and scholars knew in the 1970s and 80s and 90s that global warming was a reality, but they were not successful in getting it into people's thinking. It took Al Gore, with his presentations and films and speeches, to focus repeated attention on these issues. And he, with the support of others, succeeded. Climate change is now widely accepted as a looming threat to prosperity and even peace. We hope that the DC Forum can contribute in a similar way to securing into people's consciousness and understanding that our cherished democratic capitalist system is at risk. Let me again be clear in closing. I believe that democratic capitalism is the best invention within political economy that we have yet devised. But I believe that it is being damaged, terribly damaged, if not destroyed, by ill motivations and ill dealings in one of its components, capitalism, far more so than within its companion component, democracy. Change must come if the hinge of political economy is to pivot toward strengthening both equality and justice. We're dealing with a systemic threat to the continuation of our system. I hope that you will join us in the DC Forum, join us in this key issue, in this very key opportunity to bring about change. Thank you. My name is Jared Ryle, and I'm the director of the International Consortium of Investigative Journalists. Over the past 10 years, we've done some of the biggest journalism collaborations in history, the Panama Papers, the Paradise Papers, and the Pandora Papers. And these projects are really aimed at bringing out a secrecy in the offshore world because we think that the issue of secrecy is one of the biggest issues that the world is facing today. Raymond Baker, of course, has been a pioneer in this work before we even started doing it for many years, and he was one of the first people that I went to when I started investigating this. I'm a real supporter of Raymond's new book, Invisible Trillions. It does go to the heart of one of the biggest issues here, which is that this is attacking democracy, and I think democracy is under threat because of it. I'm also a big supporter of this conference. I'm sorry I can't be there in person, but I hope it goes well. Good morning, everyone. Great to see you all. Welcome to the folks watching at home. I'm going to start my presentation off with a very brief quiz, and if you listened intently to Raymond's remarks, you'll probably get the answer without too much difficulty. And that is, what is the common denominator of corrupt government officials, tax evaders, and transnational criminal organizations? Well, they all wander their money the same exact way. They all use the same spaces that are littered throughout the global economy. Anonymous shell companies, real estate, private investment vehicles, free trade zones, and on and on and on. Raymond gave a very good list of what those are like. Of course, we are sitting in the epicenter of global money laundering. According to Janet Yellen, this is the best country in the world to launder money. Certainly a dubious distinction, to be sure. But we do have a long history with this sort of thing. We were one of the first countries to offer a tax dodge with a bill in 1921 that allowed shielded foreign held wealth from taxes here in the US. And we continue to do so today. There are secret trusts in South Dakota, non-charitable foundations in New Hampshire, and of course, high value real estate from coast to coast. But we're not the only ones who do this, of course. Switzerland, Cayman Islands come immediately to mind. But the globe offers a cornucopia of options to any fraudster, cocaine, cartel, corrupt government official, human trafficker, shady businessman who want to move, hide, and launder their money. There are no fewer than 141 jurisdictions that offer some sort of vehicle that enables the laundering of money in the evasion of taxes. Indeed, for the discerning criminal, they have a wide variety of time zones, languages, cuisines, and vacation spots they can pick from if they choose to do so. They fancy warm water and palm trees. BVI is probably the place for golf, beaches, and anonymous shell companies. If they prefer Singapore, excellent food and nightlife, and an almost opaque financial system. The options are almost endless. And what I want to do now is just take a brief minute or two to introduce you to a new component of our website, which is a map of secrecy jurisdictions where you can search on all 141 jurisdictions that offer this type of service for their clients. You can zoom in, and I'm just going to pick a couple just to give you an example of what we're looking at. Well, that one didn't work. I might have lost my internet connection. Let's try that again. There we go. So each one of these 141 countries has about 100 word blurb or so. It gives you a little bit of history behind some of the activity that took place in each jurisdiction. Clickable links so you can find out more about some of the specifics and have some idea on what's actually happening in these jurisdictions. A lot of them have been highlighted by ICIJ's excellent work. And it gives you an idea of what they offer to their clients. We also have a drop-down menu that can be used for any particular country. Let's just pick one at random here. Dominican Republic, let's say. You can go to any one of these and click on a link. See if we get that. There we go. So one of the things the Dominican Republic advertises is their free trade zones and they're very proud of the secrecy that they offer through those. So I encourage you to go to our website. It's gfintegrity.org. Take a look. Works on your mobile phone as well. And this is the last thing I want to say is this is a very sort of dynamic thing. We're going to be updating it regularly. If you see something you think should be added in there, definitely send us a note. We'd love to hear from you. And now I'm going to turn it over to Jim Henry. Thanks very much. Good morning, everybody. Delighted to be here and I'm amazed at the group of extraordinary people who are in the audience. Starting with Raymond, Jack Blum. Many of you are longtime contributors to this area that I've known for literally decades. I'm reminded of Johnny Carson interviewing Howard Hilton on his television show and asking him, well, Howard, is there something that you, very successful, distinguished businessman, worldwide experience would like to say to the American people? And he thought and he paused for a minute and he said, turn to the audience and he said, yes, there is one thing I would like to say to the American people. Put the shower curtain in the bathtub. I have thought long and hard about how to talk about the history of the work that I've done in this area. And when I first started out, I would say, studying the underground economy in the 1970s as a graduate student at Harvard, there were only a handful of economists and activists who were anywhere close to analyzing this. Developmental economics was still the rage. There was a general assumption that capital would be flowing from first world countries to developing countries. We had concepts like illicit financial flows, the demand for big bills, the underground economy itself, global capital flight, the stock of offshore wealth, these were all to be developed. And it was only by a kind of handful of misfits, really, who were kind of in various positions in the world to notice this going on, that we started out to launch this measurement exercise, which has turned into a really fascinating kind of approach. Raymond's book has a whole lot of numbers in it. I won't try to do battle with that, but we have different approaches. I've emphasized more the fact that when all of these flows leave where they're coming from, from the source countries and go elsewhere, capital flight and illicit flows through the trade system, they actually have to go somewhere. Someone has to be involved in managing them. A lot of them get invested offshore and don't come back. They accumulate earnings offshore. And so you have to take into account the stock of value. And you have to understand who's doing it because it's not just a passive activity. It's an activity that's mediated and is profited from by some of the largest financial institutions in the world, some of the most prominent law firms, accounting firms, corporate registries. And it's not just third world tropical islands. As Raymond pointed out, a lot of the industry is based here. We have had some of the most important financial secrecy laws in the world. We've seen tremendous inflows of capital from countries like China and Russia into the United States. And so point number one is I think this is a man-made problem and it can be unmade. And all we have to have is the political will to do that. And that's the important lesson of all of this work beyond all of the particular estimates. It's large, it's growing. My numbers now are about 60 trillion worldwide, 10 to 15% of worldwide wealth. McKinsey's latest estimate for net worth for households, 95% of world wealth is owned ultimately by households, is about 510 trillion, so it's about 10 to 15% of that total. And this has been growing at an explosive rate. That doesn't include the trade discrepancies that Raymond has pointed to and is really the authority on. I've seen a lot of the trade abuses that he's described. In South Africa, we found one of the largest investors in South Africa was a Kazakhstan company that basically acquired possession of the entire chromite industry. It's the largest chromite industry in the world, it's essential to producing stainless steel, parking all of its profits in Malta. The miners' union was upset, we sued, we did the analysis, and there's a big contest going on in South African courts right now to take that company to task. Zambia, if you look at Zambia's copper exports, they report no copper exports to Switzerland. One of the biggest investors in Zambia for the last 20 years was Glencore, a Swiss trading company. Switzerland reported no copper imports. Where were they? Well, they were parked in the BVI. No copper ever physically ran to the BVI, but it all ended up being booked there as a book entry. So I have, being an ex-McKenzie consultant, I've naturally come up with a lot of slides, and I'm going to talk a little bit about this as much as I have time for it, but the topic is the global haven industry. We did notice outside Washington today a spy balloon. We're kind of concerned, but it looks like it's from Germany, so it may be secure. We also noticed some spies, and this one in particular came up last week. It was a concern to me because in 2018 I'd done some work on President Trump's financing. And now who financed Donald Trump? First of all, why was there Vladimir Putin to begin with? What happened to Russia in the 90s? That's a whole subject. But secondly, who was actually lending to this guy at a time when he'd had six bankruptcies in the 1990s and no US bank would lend to him? Well, it turned out that there were several sponsors to that question, but a lot of them had to do with Russian and former Soviet Union oligarchs and a particular bank called Deutsche Bank. This fellow in the middle was the guy I talked to about my information. I had identified Rudy Giuliani and a guy named Felix Seder laundering money from Kazakhstan into the Netherlands, setting up an elaborate network of shell companies. And I innocently gave this information to the New York FBI office. And I was surprised, nothing happened. Now we know. So the global haven industry needs a framework, I think. We need to think carefully about what we mean by offshore if we're going to measure it. And then we can get into the various components and try to estimate those. Panama Papers, ICIJ has done outstanding work, you know, led us to believe that it was kind of an archipelago of individual jurisdictions. Secrecy jurisdictions have individual properties, almost as if they're isolated from each other. But, you know, there was, we saw when the network of jurisdictions we found in that one law firm in Panama, and there are hundreds of law firms in Panama, about 215,000 companies which were located in the BVI. But that's just the tip of the iceberg. We had a lot of leaks and this kind of leak journalism, I think, is one very, well, has positive, pluses and minuses. I mean, I guess I enjoy it when journalists actually go out to the front lines and investigate things and find out the facts themselves and they're not reliant on whistleblowers or leaks or a lot of data dumps. The data dumps are helpful, but they encourage us to believe that havens are these individual entities, many of which are remote. And here's an example, the EU's lists, black lists of havens refers to places like Palau, the Vanuatu, they leave off the list, the largest havens in the world, Switzerland, the United States, the UK, spider net, and that's simply for political reason. That's where the money is ending up. Nobody wants to invest in Palau. Those are conduits to the major locations. So this is not a new problem. These are not just tax havens. It's not just an archipelago of distant to kind of unrelated disconnected secrecy jurisdictions. It certainly isn't, you know, a term that some lawyers will use as well. It's all legal. Dennis Healey, the British chancellor, once said the difference between legal and illegal in the tax areas with the prison wall, you have KPMG saying that any audit practice that they pass, that they believe will pass with 25% probability is legal for them to advise on. So it's kind of a probability distribution. And it's certainly not of modest size. Here's what I saw when I went to Iceland in 2016 in the wake of the Panama papers. I was invited to participate in this study group that looked at offshore assets. And it was literally unauditable, this cross-holdings network. It was a network, not an individual haven. And they were everywhere. And the volumes for the 330,000 people who live in Iceland were extraordinary. Here's what we found when we looked at Chiquita Banana, you know, setting up this elaborate network of interrelated companies, all of which are subsidiaries, to basically pay no taxes on their exports of bananas. The banana is starting in Ecuador, 20 cents a pound. And the Cayman Islands network charges 12 cents a pound for the purchasing network. The Luxembourg subsidiary charges 12 cents a pound. The Ireland subsidiary charges 6 cents for the use of the brand. The Isle of Man subsidiary 6 cents for the insurance. Isle of Jersey charges 6p for management services. Bermuda charges 26 cents a pound for the use of distribution. The finally ends up in the UK. And the only taxes they paid are in Ecuador, on the export tax. So, you know, this is another example of the network nature of this problem that we're facing here. The third idea, as Raymond has emphasized, is just that there is no bright line between offshore and onshore anymore. There's anonymous assets in the United States, and so what we really need to be measuring is anonymous wealth. We have no idea who the owners are, who the beneficiaries are. And this domain I wanted to mention four heroes of mine just in passing who have helped me understand this industry. One is Robert Levinson, who became an authority not only on Panama and Latin America and Russia, but also disappeared in Iran in 2007. To this day, I have no good story for why Robert Levinson was not brought back by his government. He was a great friend of mine, and we worked together on many investigations. David Dirk, lieutenant David Dirk, a circus partner in New York City Police Department, and Sam Jaffe, who is Richard Jaffe, who was the guy who did the Castle Bank and Trust case back in the late 60s, early 70s. One of the first offshore banks of any significance for the United States was the Castle Bank and Trust. And it got shut down. In that case, we found a list of 300 depositors. Norman Casper provided me with that list. It included all kinds of folks, but the Pritzker family, the Gucci Annie penthouse, quite a cast of characters. They were never prosecuted for tax dodging. These were arguably quite illegal trusts. And to show you the long line of historical research, the kind of the long tail it has, just this last October, I finally got the treasure of the Castle Bank and Trust, which is based in Nassau, which we now know has been a haven to FTX and has been a haven ever since. Well, Jack will tell you about the history of Nassau going back to the Civil War. But this fellow had two offshore accounts at the Castle Bank and Trust. And so we're looking into now on the anniversary of Watergate what Richard Nixon did with those accounts and what his brothers did with those accounts, but that's an incredibly disturbing phenomenon because here's the second U.S. president we found deeply involved in the offshore industry. The other big theme that we discovered was when looking at this industry was that the banks were deeply involved. This is a case involving Morgan Stanley in South Africa. You may have heard of Morgan Stanley. They were one of the largest investment banks. Well, they respect the laws in the United States, but when they go to South Africa, they help the wealthiest investor in South Africa evade taxes. And this is a scheme involving 13 offshore companies, foreign Namibia, one in the Cayman Islands, one in Delaware, two in Mauritius, et cetera, et cetera. So complicated that South African revenue authorities could not audit it.  That's outrageous. Here's the case of HSBC. I'm not connected to it. Let's go back. I'll just tell you about the data. HSBC in South Africa, deeply involved in laundering money for the Guptas and President Zuma. So, you know, this is a disturbing pattern, I think, that we turned up here, repeated time again. I've been investigating kleptocrats in more than 50 countries auditing their debt. In every case, we found banking involved, irresponsible banking. This is a case of Ferdinand Marcos parking $7 trillion that he stole from the Philippine Central Bank in Switzerland. This is a case involving Angola, where KPMG and a bunch of Swiss financial advisors helped the son of the former president of Angola manage his $5 billion sovereign wealth fund. This is the case involving Equatorial Guinea. The patterns go on and on involving offshore institutions. In the case of Russia, we saw 150 state-owned companies being sold to the private sector and some banking institutions for a grand total of $9.7 billion in 1995-96 with the support of some U.S. government institutions. The Lord helps those who help themselves. Let me get to the estimates. Well, first of all, the pattern, in other words, is one of impunity for banks. So if you want to explain why we have the system that we do, you have to take into account the fact that this is one of the most powerful lobbies in the world and that these institutions are not losing their licenses when they commit crimes. The top 22 global banks committed more than 650 felony-scale offenses across 14 different categories from 1998 to 2015. They received a total of about $300 billion of fines ultimately, but all of those fines came at the end of the process. And so the profits were realized up front on a net present value basis. This was a profitable activity for these financial institutions. Nobody went to jail in the 2000s except a few lower-level traders. No one lost their licenses. Right now at the Department of Labor, we're dealing with Credit Suisse's ability to advise U.S. pension funds, to have a status as a qualified pension fund manager. The Department of Labor has the power to say that someone who's been convicted serially of a U.S. felony corporation that's engaged in that can be kicked out of the QPAN system. Make a long story short, in 2014 they were convicted. $2.6 billion fine didn't lose their license. Nobody went to jail. And the DOL gave them a waiver for their QPAN status. The waiver again in 2019, just this year they finally decided because of Credit Suisse getting convicted again with respect to loans to Mozambique that they would be pushed out of the program. But there are dozens of other banks that have been engaged in similar activities around the world that are not losing their status. So this is the global haven industry. It has many parts. And it's like the Star Wars bar scene. You have all of these various actors, the crooks, the kleptocrats, the tax dodgers, the money launders, you know, the people who are stealing trade rights are using these places and the common facilities that they share, the financial secrecy, the weak regulation, the low taxation, but also the sophisticated enablers to continue this. Now, the estimates that we've got, I mean, I'm just going to jump to the chase here. I started estimating stuff back in 1976 with an article on why we have so many hundred dollar bills in the U.S. economy. Nobody could explain why there were four outstanding per capita. Well, you know, the answer was most of it was offshore. And today it's about 2.5 trillion dollars of big bills that are floating around. In addition, we have another, you know, depending on the day of the week, 500 million to a trillion dollars of crypto. All of that is potentially regulated by central banks, especially our central bank, but it has chosen not to do so. I proposed a currency recall back then. And Larry Summers, my friend from Harvard, was finally agreed with that after he was Treasury Secretary in 2014. It was a little late, but he came up, you know, he came to the party at that point adopting this idea. The estimates that we've had for offshore wealth have gotten a lot of attention. We first identified U.S. as a tax haven in 1989, and the price of offshore revisited for TJN was 2012. Missing 20 trillion as of 2010 has since, you know, using our estimates, estimate methods has now increased to more than 50 trillion dollars, 50 to 65 trillion. Again, the traditional capital flight estimation process looked at flows. The trade flows analysis does something similar. I'm suggesting that we need to get at stocks, and there are three different methods to do so. I don't know how much you want to know about penguins, but I will, I'll be happy to tell, to answer any detailed questions about this. But just to give you a very broad overview, first of all, one source of the data are the private banks themselves. They actually publish assets under management every year, much of which most, almost all of which are owned by offshore wealthy individuals. And so, you know, we find them fessing up to a grand total of, you know, at least 12 trillion dollars, top 50, as of 2010. Secondly, you can look at cross-border deposits that are tracked by the Bank for International Settlements. And you can assume that those are a fraction, reasonable fraction, based on surveys that we've done of private investor portfolios. And you can scale up those actual numbers to get an estimate of private cross-border financial wealth. And that's the second basic methodology. By the way, the numbers that we use for that, the OECD in 2020 decided, you know, TJN, you were actually kind of right. You know, they were underestimated because they only included 40 countries. They didn't include domestic deposits between asset managers. The final method was to capitalize capital flight. And there's elaborate models, country by country, that do that. When you do that, you find that the offshore retained earnings that are not brought back are a huge fraction of the total investment. So it's very important to look at the earnings on the offshore flows. You can disaggregate using this method for the developing world and for key countries like China and Russia. You can get quite interesting results. There are all kinds of measurement problems. You have to figure out how much is being repatriated to Hong Kong back into China. But we can do that. We can actually go to the field and interview people and find out what's going on. So when we add all that up, we get an interesting list of key players, source countries in the developing world that are contributing to this global sourcing of capital. And it shows that, you know, countries like non-democratic countries are basically parasitic on our financial institutions because they can come here and they can use the courts. Jack will tell you all about that. But that's an irony here. The biggest investors are usually people from countries that are not democracies. Globally, when you add it up, global flight wealth, I call it, is greater than developing country debt. I mean, it's a huge hidden cost to this industry that when you add up the offshore wealth from developing world and debit out the official reserves and the, you know, the gross external debt that they have, they are actually net creditors of the first world to the tune. This is as of 2014 to the tune of $13 trillion. That's a substantial number. They're also a big source of our billionaires and our inequality problems. The U.S. now accounts for just 28% of billionaires. And China and Russia are closing in. So when we add up the totals as a share of the wealth, we're finding as of 2020 on the order of $60 trillion is a plausible number. Our original estimates left out real estate, which was not important as of 2010. It's become very important. In fact, much of the increase in wealth in the last decade, dramatic increase global wealth, has been in re-evaluation due to Federal Reserve interest rate policy. So if you really wanted to have an impact on inequality, you would talk to the Fed. That would be another important component of this because that's really driven up a lot of the investments that have been going on in real estate. The total then is, I think, reasonable, but we need to do the kind of analysis I did and spent years on for the earlier estimates again. How does that affect inequality? Well, it's not ordinary people who have these enablers. And all of this offshore wealth is owned by a tiny fraction of the world's economy, .001% in this 2010 estimate. Less than 100,000 people accounted for a third of the offshore wealth. I think this is another kind of analysis that we can really refine and go much farther with. But my summary today is, we have all of these sectors of the offshore industry. It's not just about private banking and offshore wealth. It's also about creptocracy, tax dodging, human capital flight, which is another grotesque phenomenon. And I think ultimately it is, as Raymond has said, about who's going to run the show and whether we have a democracy to look forward to in the future. My biggest concern is that all of these wealth estimates are basically numerical. The real wealth that we have to worry about are the expectations of young people, of the next generation, of what kind of world they're living in. And I think if you poll them today, a lot of them have fairly grim outlooks on the future, especially the next decade. I think that's an important source of our wealth estimates, is to understand how people feel about their futures, as opposed to just running the numbers. So thank you very much. Jim has a certain amount of credibility, it would seem, always very impressive. Now we're going to hear from Jack. I hope you appreciate the continuity management, because Jim has dropped what Jack should talk about at least. We'll see what he does talk about. And we're ahead of schedule, which is extraordinary. Maybe we'll keep it that way. Who knows? First, I promise not to go back to the history of the Bahamas and the Civil War. Although I personally investigated it at the time, I don't think you're ready for that discussion this morning. Now this stuff has been going on for a long time, and we've had one investigation after another. I want to say we've made enormous progress. For 150 years, bankers had no responsibility whatsoever under the law for what their clients did. If you were a banker, you were a public utility. So if somebody came in with a bag of cash that was stolen from wherever, you took it, put it in your coffers, and went on about your business. And it wasn't until the Patriot Act that we got to the point of saying you bankers are responsible for what your customers are doing.  We've had tremendous success enforcing information out of the bankers and a little less success in enforcing the law that that information would enable enforcement of. But it's a huge turn in banking law. We've also had disclosure of beneficial ownership, which is an enormous step forward that it'll come into effect. There are new regulations. We'll see how that works. And I think that it's a great tribute to those of you who've worked on it. The Enablers Act was about to become law in the American Bar Association, which by the way fights all these reforms tooth and nail. The American Bar Association put out in the newsletter a couple of weeks ago that one of its major legislative achievements of the past session of Congress was blocking the Enablers Act, which I think is a tribute to the people who were working to put it forward because many of us thought it really wouldn't have had much of a chance. It tells you that we are going in the right direction on some of this, but we're left with a real set of problems. And this is where I think I'd like to make you all focus in and figure out what do we do from here? When I say we have a major set of problems, you just look at the trail of disclosures that have gone on over the last now 30 years about money laundering, offshore, bad behavior. And you've heard the litany, and I want to say that Raymond's book has as devastating a list of all of the things that have been disclosed as you'll find. And the question then that you all have to ask is why isn't disclosure by itself working? We have the idea, and certainly journalists do, that if people know the truth, it'll result in some action that in turn will solve the problem. And what we're confronting is a situation where we've had disclosure to the point of almost exhaustion. You can hear these horror stories one at a time and you say to yourself, my God, were there that many? Well, it isn't working and something is really wrong because a disclosure isn't bringing about change. And what I want to explore this morning is why that's going on and what possibly can be done, if anything, to change it. I'm going to start with what I call my short course in criminology. The short course in criminology is this, the criminal justice system works best if you're dealing with a world where everybody knows everybody else and everybody understands the subject matter of the crime. And really this is a system at least for us that grows out of the common law. And we're talking about 17th century England. Somebody stole my cow. Everybody in the village knows what a cow is. The cow is on the commons. A guy is arrested for having stolen the cow. Now there are 12 jurors who come along and the evidence is presented and everybody can say unanimously he did it, send him to jail, do whatever. In those days he probably would have been hung but whatever, the system works. That is especially true for crimes which are crimes of violence. So every time that somebody murders somebody else, there's a corpse with a knife sticking in it. There's a corpse with a gun. Somebody's got his head bashed in. We've all seen the police procedurals on TV. So it's clear the cops have to do something. There has to be an arrest. You have to clear the cases. If you then take things down the scale and start going into other kinds of crimes, you get crimes of fraud, you get crimes of the financial variety, and they're harder to prove, take a hell of a lot more work, and you suddenly don't have a group of villagers who all understand what the underlying set of facts are that led to the crime. But still there's a will and a willingness, especially if the police have a victim, and if that victim is in the jurisdiction and if the evidence is available, there'll be a prosecution and there's a reasonable chance that somebody will go to jail. The problem with the system that has evolved in the financial world that we've been talking about is that these are crimes of adhesion. All of the people involved in committing the crime, at least at the working level, are happy with the results. The guy who's hiding the money, the people who are managing the money, everybody thinks it's terrific stuff. The crime, the victim in this crime, is society. The victim in the crime is democracy. How do you sell that to a jury to send a specific person to jail beyond a reasonable doubt? And the answer is it's difficult. And if you take that up a notch and say, well, the evidence is scattered all over the world, the laws are, who knows what, in terms of getting evidence from those places. The ability to make a witness come and testify from some other jurisdiction is well-nigh impossible. And the upshot of that is that these crimes rarely get prosecuted. And if they are prosecuted, they're prosecuted in a very narrow way so the case can be won by the prosecutors, but not in a way large enough to create the deterrent effect. And this is where we have to do a little more understanding of criminology, because the ability to control crime is based on deterrence. That is to say, how can we scare enough people with the prospect of going to jail so they stay honest? A professor of mine, Leon Radzenowitz, who ran the Cambridge Institute of Criminology, who was I think one of the most brilliant of the criminologists of certainly the 20th century, said, as an example of the inability to control crime without policing, conviction, sentencing, was the case of Denmark after the Nazi invasion. The Danes arrested the entire Danish, the Nazis arrested the entire Danish police force. And they did it because they thought the Danish police would be disloyal to the Nazis. What happened was in quiet, peaceful, Scandinavian Denmark was an immediate crime wave. And that's because there was no fear of prosecution. And now let's just talk a little bit about fear of prosecution. About, I would say, 50% of the body politic behaves, obeys the law. I like to refer to an old FBI agent friend of mine who grew up in the Bronx. And he said he personally thought God would whack his hand if he ever stole an apple. Half the population is like that. Now there's another 40% of the population. And that chunk of the population includes a large number of my law school classmates, a large number of bankers who take the attitude, well, I'll do it if I can get away with it. If I can get away with it, it's fine. But if I really run the risk of going off to the pokey, maybe not. And here is where deterrents comes in. Because they need to be reminded repeatedly that there's a real threat. They'll spend some time in what we refer to as the gray bar building. The problem here is the system then depends on the bottom 5 to 10% of the population. The sociopaths who the cops can focus in on drag off to jail and uses the examples to scare the 40%. But that system simply does not work when you get to international financial crime and the kinds of models that we're looking at for attempts at prosecution. So now let me sort of take this another step, another step further. Some years ago, I was in Bavaria, and I had a meeting with the Staatsrechtsanwalt, as they call him, the state prosecutor of Bavaria. And in the run-up to the meeting, two investigators for the state prosecutor were telling me about this wonderful global investigation they did of a ring that was stealing computer chips and making a fortune doing it. And they had tracked the ring, they located the guys, they focused in on where the money went, and it was one gem of an investigation. And into the room, after they gave me the story, came the actual elected Attorney General of the state of Bavaria. And he said, why did you guys waste all that time and money on this investigation? I get elected based on my ability to control street crime here in Bavaria. And you've taken all of these resources, and you've gone out and become world travelers and great investigators, and what's that going to do for my effort to get re-elected? So now what we're focused on is who takes responsibility for doing some kind of global investigation. And now you're really up against the wall because a global investigation is one expensive undertaking. It requires traveling. It requires a lot of time. It requires translators, competent translators. It requires documents and multiple languages. And it runs up against all kinds of problems that people don't even think about. So for example, if I'm a prosecutor in New York and I want to have a witness come testify from Portugal, the result will be good luck. Can't do it. Why? Portuguese will not honor a subpoena from a grand jury in New York. Period. End of story. What the prosecutor can do is request a letter rogatory with written questions that a Portuguese judge will then ask someone who is a prospective witness, who then responds with written answers. Now anybody who's done a financial investigation knows that if you can't ask a follow-up question and somebody has the opportunity to fudge a written answer, it's a total waste of time. Not only that, the time involved is stunning because by the time this process of making the request and getting the reply goes on, we probably are beginning to run the statute of limitations. Problems like that make the will to do cross-border prosecution very limited. And the number of prosecutors who have the resources to send the investigators around the world, CBS's FBI International notwithstanding, is close to zero. Now if you take that and then translate that to the tax arena, we're dealing with an internal revenue service that hasn't had the money to open the mail for two years, much less send investigators around the world, much less try to get information from countries that don't want to provide that information because they're financial secrecy countries. Even where there's a tax treaty, there's a reluctance to employ the tax treaty. And I've been on that on both sides, both working as a consultant for IRS and I've worked with the tax authorities of a foreign government. And in both cases, getting anybody to use a tax treaty to actually do a big tax investigation is really next to impossible. Now I'll take you to another scene. This time it's the audit of a major American corporation. Now a major American corporation will file a tax return that's a stack of paper, well actually it'll be done electronically, about YAI. And there'll be all kinds of things in that paper and what happens is IRS assigns a team of four or five or six people to that corporation and they work in that corporation's offices. Usually they get some very uncomfortable folding chairs, we're in a room with marginal air conditioning, and they sit there going through the tax return and periodically picking up the phone and calling the tax contact in the corporation. There always is a designated one and they'll call up some documents and they'll review them. And then we get to the moment of truth. The bosses in Washington call the team and say, why the hell are you guys still working on a five-year-old tax return? We've got to clear it. We need the numbers. Okay. The head of the team says, all right, we'll get down to it. So now they do what you have to do in a tax case, which is reconstruct the taxes that IRS thinks the company owed and then present that to the company to say, do you dispute any of the things we've talked about? And at this point, tax counsel for the company comes in and says, yeah, we dispute all of it. Yeah, you're asking for 400 million. How about one and a half? Okay, we'll settle for two. Bang. Deal closed. Well, it's not anybody's fault that this isn't working. It's rather there's no money, no time. And the way these tax returns are constructed, there is a absolute impossibility of testing the truth of what's in that tax return. And it makes corporate taxes almost a voluntary matter. And all you have to do is look at the number of companies that haven't paid any tax and you'll know how many have volunteered to actually pay their taxes. So what do we do about that one? Well, one idea that I've tossed out boy, it makes people go crazy is to say all tax returns of corporations over a certain size should be public record. They're all secret now. Why isn't that public? There are several other possible ways of coming at this. But it seems to me that the current system is a complete loss. It's it's not working. It can't work. And there is no penalty for faking it. You know, if if somebody puts some bad numbers or something happened on that tax return, who knows how that will ever be caught and who would ever be punished. And that takes me to another problem with this whole business of how do we enforce the law. And that's the question of management responsibility. There's a terrible tendency to push responsibility for any bad acts down to bad apples in some department or other. The boss didn't do it. I was involved working with a cooperative witness in a case involving a large American accounting firm that had been selling tax shelters. The group that was putting together fake tax shelters and they were ultimately judged criminal fraud on tax and selling them to people so they could evade millions and millions of dollars in tax.  And for reasons which I'd rather not explain, I had to review most of those emails if not all of them. There was no communication, zero communication in the emails from the team that sold the tax shelters. Never mind that this team had generated 70 million dollars worth of profit to the accounting firm and never mind that on top of that they had gotten bonuses for their superb performance. No emails between the unit and the management, huh? Right? So there were a couple of mid-level accounting partners who went off to jail and the firm went merrily on. This is the problem. No arrests, no prosecution, no deterrence. And if there isn't senior management responsibility, it's a real loser. And we've been through that time and again. So now we get to one other problem and that's the problem of the democratic institutions and what it says about democratic institutions. The working assumption is that if the people know, the people will vote out the bums who support the bad stuff, vote in people who will do the right thing and that will solve the problem, although it'll take a bit of time. We'll get there. Well, the difficulty I have with that proposition is the voters here will be voting on whose governor of, you name the place, Illinois, Mississippi, wherever. They'll be voting on a president who picks an attorney general, but what do they do about the legislature and the attorney general of Malta? What do they do about the president and the attorney general in Cyprus? What do they do about the president and whatever passes the law enforcement in Panama? That democracy won't help what's going on in those countries. Our efforts to control what other countries are doing to facilitate criminal behavior in the U.S. is really seriously limited. We negotiate treaties, we negotiate conventions, but they're all compromised and they never do seem to produce the results they're supposed to produce and it's happened time and time again. And I sat in the room with people who've done the negotiation and their motivation is to seek a compromise so they can say we have a convention that deals with that. But does the convention work and how are we going to find out if it works or it doesn't work? And here there's a major positive development which is there is a civic society, civil society group that's trying to make at least one of the conventions work properly. But anyway I'm going to wind up by simply saying these are the issues we have to pay attention to and it seems to me that in the discussion there hasn't been enough discussion of can we make law enforcement work? How do we pay for it across borders? How does a prosecutor get evidence and how do we get some top level people who are making all the money out of this system sent off to the pokey where many of them belong? Thank you. Well we were slightly ahead of schedule but interrupting Jack is a very difficult thing. So I think this morning has been kind of interesting because we've had in the same place Raymond Baker, Jim Henry and Jack Blum who are really the three greats of their generation on this subject and I think there are a lot of people in this room who would not disagree with that. So we're going to move on to somewhat different formats with the first panel after the coffee break and sorry that we're three minutes behind but we'll start right at 1040 with the first panel maybe 1038 but certainly 1040. Thank you. Think that the Russia-Ukraine war is due to the financial secrecy system. All right we see just a few hands go up. One more. Another one. Okay all right well that's a little bit the premise of this panel and actually I'm going to grab my notes. So all right so as you may have noticed we're not introducing panelists and people because this is all up on the screens and everything and it saves time and keeps things a little crisper that way. So we're going to look at this question from various perspectives. I mean Nino runs a very important think tank in Tbilisi, Georgia and she's going to bring to us the perspective rather specific perspective from her country. We have with us David Kramer whom a lot of you know who I think could lead off addressing this very simple question that was posed a little bit and then Jennifer Gould is a very eminent journalist from New York City and you may think because she writes the New York Post you know and she actually writes about real estate a lot just about glamorous transactions of rich people and used to do a lot of restaurants but she's also written extraordinary and fearless investigative reporting on kleptocrats and issues associated with offshore wealth or the financial secrecy system as we are calling it. So do you want to kick it off David? You don't want to kick it off now all right. Well then why don't we start Jennifer with your experiences I mean over the years and also Jennifer was in Moscow in the 1990s so she lived through that whole episode and over the years how have you seen this financial secrecy system in action in terms of the very specific reporting that you've done which has been mostly on Russians I guess and Russians in New York City for that matter. Well thank you David thanks everyone I'm really happy to be here I loved hearing the talks earlier this morning you know I started my career I had one year at the Philadelphia Inquirer and then I quit I moved to Moscow to cover the collapse of communism and at that time the West thought it won the Cold War guess what we all know now we didn't win the West did not win Russia changed strategy and I kind of witnessed the beginning of that in the 90s and continued it continued watching it the same people in my reporting over the next three decades. So Moscow 1990s financial secrecy actually went back to the late 1980s I remembered one night at the dacha of one of the last heads of the KGB who helped organize a coup against Gorbachev that real estate had transferred to a young KGB colonel who told me stories about Western Front Company set up in the late 80s the Russians knew their system was failing they knew they'd have to change and not in a friendly way to the West as Raymond talks about this separation between capitalism and democracy we saw it in in action a sort of weaponization of capitalism extracting the democracy strengthening autocracy weakening our democracies I got so you know I saw these young oligarchs at the time would go for dinner with them the first millionaires club the first raves the first big parties a very exciting time in Moscow rigged privatization we've all heard of but it wasn't just rigged privatization it was partnering with Westerners that initial money coming in raw materials going out of the country come back to the to New York late 1990s and that Russian money is already coming in Chelsea market 10 million dollar investment from men who were linked to criminal organizations in Russia you know had created really the Chelsea market the redevelopment of the west side of New York 2018 that property sold for 2.4 billion dollars so that was the first sort of wave in New York of investment and by the time of Putin the 2000s we had the tip of the iceberg coming out which is these oligarchs coming in and they were buying properties and they were buying big properties and my background kicked in I could find out which oligarchs were buying what properties it was a lot of fun to write um but that was really just the tip of the iceberg so you know they would buy in LLCs we didn't have leaked documents so it was really speaking to people going out doing the reporting talking to the brokers and finding out who these people were who were buying the properties and they still have them on that level the same you know so we go from the real estate to Russian investment and everything I would see oligarchs come in uh with a purpose of what they're buying so somebody wouldn't just buy an apartment it would be an apartment owned by a billionaire and the oligarch would then buy that billionaire's business or a billionaire would buy a very politically connected person uh and get access so real estate laundered money it also gave access to Russians who wouldn't have had it otherwise and from there we saw more investment than came the reputation laundering through think tanks universities you know this is this is all things we've seen and we know political donations we're still seeing the results of that enablers coming in um you know helping these oligarchs now evade sanctions but I can tell you that right now uh since the war there has been no uh high stakes Russian investment in New York as far as real estate goes but Russian money is in a lot of the big towers along with Chinese money and other money um that have really grown since 2010 in New York and across the U.S. it wasn't just New York New York isn't as fun as Miami for a lot of oligarchs um but you know the political donations and the connections that these oligarchs made made this you know made it difficult when it came to sanctions some companies the companies sanctioned not the oligarch uh some oligarchs are sanctioned but not their businesses so alpha bank for example there's a lot of high-profile real estate that's still there that people who are not sanctioned still own that they've rented out for a lot of money and that's okay you know so there's it's a lot of issues but really the real estate is just the tip of the iceberg and without this financial secrecy system we wouldn't be in this situation it shouldn't be about people knocking on doors and really trying to figure out who owns what or you know where the money comes from the there should be public registers for journalists or anybody else to to look and and get curious and find out who's investing know who your neighbor is we have situations now where the FBI is in buildings owned by criminal organizations you know that should not be happening so um we're in this situation because of financial secrecy and it's been going on for decades and you know we're obviously nowhere near the end of us so that's my great thank you Jennifer i see david has notes so i'm not going to pose a question but i think the thing what we did know what we just discussed is the whole issue of uh western enablement of corruption kleptocracy and how this has been an issue for russia and for ukraine uh and so why don't why don't we get into that sure well charles thanks it's great to be here thanks for including me and congratulations rayman on the book and it's also great to be with jack and jim here and i've followed for for a long time and with all of you um i i'd start by saying putin well under putin russia's greatest export is corruption but in order to export it we import it and so we need to do a much better job of closing off the opportunities for russians to sash their ill-gotten gains here and to be clear it's not to say that every russian who comes here puts money in the united states uh it comes with ill-gotten gains but there there are certainly those who are doing so it's interesting the timing of this event occurs the same week when putin just signed legislation allowing lawmakers not to disclose the uh sources of their income their expenses their property at the same time that ukraine is moving ahead with anti-corruption investigations dismissing some officials arresting others we'll see how serious that is but it does i think reflect the different trajectories that these two countries are on where ukraine which has been plagued by corruption for sure for many years now i think has a zero tolerance for this kind of activity there are too many people who are losing their lives fighting in this war and the last thing they want to see is oligarchs government officials or anyone else siphon off funds that are intended to help ukraine not only defend itself but to win this war and i think this is finally a an epiphany for many ukranians who have had a high threshold for corruption in their country and yet in russia we see just a kind of sinking in a resignation among many russians even with nabal and these exposés they don't seem to have that great an impact and generating russians to go out in the streets and to demand better from their own officials ukraine i think is also recognized or ukranians have that the corruption that they have allowed in their system for many years left them vulnerable to russian influence and we see this in other countries in the region too and you know i know we'll talk about georgia but in allowing this kind of activity to occur russia takes full advantage of this and that weakens these countries sovereignty their independence and i think there is a growing recognition that in their own self-interest and their ability to maintain their independence and their sovereignty there needs to be a crackdown on on this kind of behavior corruption has been in russia it was part and parcel in the 90s jennifer was just describing some of this when she was there it's been going on obviously in the soviet time although perhaps not as blatantly and not as ostentatiously as we we have seen it um the yeltsin years of course we're no paradise for this the loans for shears deal was arguably one of the worst that occurred that contributed to the corruption in russia and we look the other way and this is where i think we also do have some role in this some complicity in this by winking and nodding and saying well the alternative could be worse if we spoke out or if we did something about this and look at where we are now again it's not to ship responsibility and blame to us but we do have some share in this and it's important to i think to recognize that i think what we have seen in russia is the impoverishment of millions as a result of this kind of activity certainly the standard of living is higher but there's still tremendous impoverishment in russia and the enrichment of a small few and in some countries that leads to popular backlash we'll see if that reaches such a point under prudent of course the oligarch scott the message after the arrest of michael hodakowski in 2003 hodakowski i'd rather prudent doesn't have to go after every oligarch uh to to send the message go after the richest guy and the rest will either learn their lesson or get defenestrated um the more corrupt russia has become particularly under putin the more authoritarian it becomes and it is this connection between corruption and authoritarianism i think that brings us to the russia-ukrainian war where ukraine's efforts to show that it was responsive to popular sentiment whether in 2004 with the orange revolution or 2013 and 14 with the revolution of dignity um or more recently under zelensky where ukraine's efforts to try to demonstrate its independence its determination to determine its own future um those kinds of things pose a threat to the corrupt authoritarian system that putin oversees in russia and so i would argue it is on that basis that putin invaded ukraine so a financial secrecy the way the russian system is operated certainly um but also the very idea that people in ukraine could determine their own future and their leaders would actually follow popular sentiment that's something that putin can't stomach um and so we've also seen one of the development that i would just flag and that is i'm going to make up a word the mercenaryization of russian policy um with in particular the bogner forces operating in various parts of the world in particular i i would argue the damage they're doing in places in africa and this is in pursuit not of russian national interests but in pursuit of corrupt interests trying to take over various assets in these countries i think it explains progosian's pursuit of bakhmut and the area around it for these salt mines not quite sure why russia needs to control these but progosian has a clear interest in it for corrupt reasons and so i think this is a particularly dangerous phenomenon that we're seeing in russia um the there is one good part about corruption in russia which is that it actually weakened the russian military the the siphoning off of funds that were meant to go to modernize the russian military its equipment has actually left it in a much more innovated state than it would have been otherwise and so russia as a result of this is not the formidable military that uh many people played it up to be so um there there is uh an irony that i'll end with which is i do think the russian oligarchs want to protect our capitalist system because they can take advantage of it at the same time that they try to weaken our democracy but not destroy it because if they destroy or help destroy our democracy then the very reason why they use our system which is they don't trust their own system they're afraid of their own system they're afraid of confiscation if they left their funds in russia um they worry the same could happen to them here in the united states so it is a little odd that they want to preserve some of what we have but not necessarily the best parts of it right thank you david that's really and that may not be the capitalism that raymond baker was talking about the russian the russian desire for capitalism in the west is somewhat in conflict with what we're putting forward um so uh nino ebukinidze has a has to live with a horrible case study really of the financial secrecy system in action in her country and she's going to address that i think thank you so much child and i cannot say that i'm happy sitting in this chair today and talking about the very bad stories about my country because all my life i'm doing that i i was promoting my countries because i was very proud of my country since we got the independence after 200 years off like you know the occupation and denunciation from russia were the one of the like front runners in this region to build the democracy and to build the institutions and to be a number one country to defend the to defeat the corruption in the world uh and everything started like to make it short the last 30 years history of georgia uh you know because we were fighting for our freedom and democracy even georgia was three times attacked by and invaded by russia first in early like you know the nineties but no one was talking about this at that time you know and uh there was like a democratic russia and the elzim's regime and no one paid to this but it was like a really ethnic cleaning of the georgian people because the 10 000 civilians died in this world and the 500 000 georgians were to leave their own places and became the like you know the internally displaced people in their own country and the second time you know when the georgia started to making the reforms despite the fact that we were like you know the occupied by russians and so on we lost our territories uh and we were promoting the reforms and we became again the number one country they started the blocking gas you know that there was an energy cut and uh whenever like you know i was few weeks ago in kiv and david was telling me you know there is a energy cut there there is no water or nothing i've told david for 10 years we do not have any energy or any heating or any water but we survived because we were known that we are fighting for our freedom and the next time when in 2008 because the vladimir putin decided no one have to be performed in the region uh they they started to attack the georgia and they invaded the georgia and after the war started with support of the us uh like georgia do not lose like the capital of the city and the government at that time was not cracked down from from their power and you know it's a sad story because it took georgians the 13 years because the russian disinformation and the money and why the these financial secrecy is like is so important the money they were laundering in the western european countries was used to blame georgia that the very tiny 3,500,000 people started the war against the russians you know and that the world buy this even the state like a heads from the different even our partners they were blaming for 13 years the georgians that we provoked the russian we provoked the vladimir putin otherwise he is a very rational guy you know and it took the european court of human rights 13 years to recognize and to make the statement no it was not georgians it was the russia who started the war but at that time and until that we lost everything you know but we do not lost the fate that one day we're gonna like you know the crackdown the devil empire together with our ukrainian friends and what is going right now in georgia that russian uh like after after this like you know this invasion and so and they realized that they cannot uh concord the georgians they they started using the different like instruments to uh to make the mess they started to like exporting the corruption as david mentioned and some other measures you know to to capture the state and if i can say now the 20 percent of georgian territories is like you know occupied by russians and the rest is captured by the russian oligarch vizina ivan ishvili who right now is supporting the russians to avoid the sanctions and avoid the sanctions and also help the russians to win against the ukrainians and why i'm telling this because we have a like a proof of this uh before the war started in ukraine the georgian economy was like a connected with the russian somewhere five or six percent and now it's like you know uh our trade turnover is tripled and unfortunately we are a very small country and we don't have anything to sell in russia even the like you know the products or whatever we are not producing anything like this and i mean all this international media is talking now about that the georgian government is supporting the russian putin's regime to avoid the sanctions and no one pays the attention and we're talking about the victims of the kleptocrats and the victim of the kleptocrats is the ukrainian people who are uh fighting now right now not only for their own homeland but for all of us all around the world and they're sacrificing their lives and uh just like a final final message that uh this this government do not represents the georgian people i i want to underline this because the georgian people 85 percent of the georgian people it's a recent polls and they do not change few few months later that they support the ukraine and saying that the war in ukraine in their war it's their war because we strongly believe that then i just want to bring the data you know and the poll is not going to make me to lie that the 3000 georgians are fighting against the russians in ukraine and we we have a 39 casualties none of other countries after ukraine has such amount of like you know the casualties and again this is a good indicator of statistical information how the georgian people feel and think about this war what is going right now there and the victims after the ukrainian people this is a third president of georgia he looks like this i'm pretty sure you met him several times and he was quite big guy and he looks like nowadays he weighs the same same kilos like i myself right now and i'm very short and it hits like a photos you know and the first time in the georgian history the head of the independent media iqa guaramia is sitting in a jail and there is no response and yesterday just just the final one there was a like a biden speech and he i think that the repeated 11 or 12 times that they finished the job and we as a like you know freedom fighters all around the world and especially the ukrainians and georgians are looking for this to finish this job you know to finish this like a imperialistic like a empire of the russia and all this like oligarchs and their monies is going to be disappear because unfortunately when we're talking about the west west created this system and especially the western europeans to make this economy theory of interdependency of energy infrastructure and some other economic projects and the germany for example for many many years and decades were putting this as a main foreign policy agenda and who was the victims of this agenda and having this interdependency policy with the russia it's georgians and ukrainians and if we not stop the russians right now it's going to be in other doors very soon thank you so much thank you nina jennifer you jennifer wanted to add something briefly to this yeah very very brief but it's really really moving and it reminded me of going back to the 90s and there is this direct line i mean i always looked at it as like the first post-cold war proxy war between the u.s and russia and america's first cia officer post-cold war was assassinated in tbilisi 1993 it kept going into your point of going back to that time and not saying anything and winking and nodding saying elections are free and fair when they weren't and watching this corruption happen the provocations of war it's the same thread the same playbook and yeah and even the president sarkashvili is shevardnadze the second president of georgia was attacked three times by the russians by terrorist attacks you know and the killing this fbi guy in georgia was one of the part of the russian special operation because at that time we are making the decisions that the georgia is going to get this pakut bilisi jhan pipeline project and it was not going into the russia's interest having this kind of like a politics georgia and the rest of the region connected with the west and share the same values and the same like you know the dedication for freedom and democracy right but what we see also in georgia right now is that the political control uh is completely obscured by the financial secrecy system so you've got this economic opacity with a guy who made his fortune in russia during a certain period of history where we know there's only one way to do that uh in terms of how you position yourself politically and uh david touched on uh the uh how we enable all of this and i mean just setting setting up paul nobody raised their hand at the question i posed trying to get people in from the coffee break but one no i'm sorry elena over here raised your hand about that but i i think this enabling system which others touched on especially david obviously has made uh the kleptocrats of that region extraordinarily arrogant and so what i was was sort of tilting at is just the notion of what uh what attitude what this has done in terms of the attitude towards towards the west uh and thinking that they could get away with anything i mean is we're we're servicing their yachts bending over backwards to help them hide their money in the system that was described so eloquently this morning by our three great experts uh so that is i think it is a much bigger factor than than people are giving credence to and paul who breezed in after that probably agrees uh somewhat yeah and and and let me you know first things first apologize for uh arriving late to my own panel a very palmasaral move i suppose um i was talking to ukranians this morning who are on the front i talk to ukranians almost every single day these days um and i guess i also want to point out that for all the reforms and everything that we need to do the most effective anti-corruption tool on the planet right now is weapons for ukraine i mean getting ukraine hymers getting ukraine javelins getting ukraine tanks whatever it is that is by far the number one priority for all of us it has to be um and i guess i i i i take on board and agree with everything david said i think it's a great analysis i might go a step further and say that actually yeah they do want to destroy capitalism i might i might say that you know when i when i look at the last year i think we misunderstood something here i think we were i think we were right that corruption is the mo of russia but i think we missed the deeper ideological imperial aspects of russia and i mean i think that when one looks at this war right it's long since stopped making economic sense i mean if it was just an economic thing if this was just corruption or anything like that they would be gone no it's genocide this is about wiping the ukrainians off the face of the earth and further than that beyond just colonizing ukraine it's about wiping us off the face of the earth this whole thing is about the destruction of the west so when they pump their money into our systems they're trying to destroy us that's their goal they're not trying to preserve capitalism they're not trying to take advantage of it they don't want crony capitalism they want no capitalism at all they want the end of the entire system they want tyranny and totalitarianism and that's russia and that's china but i mean this is this is a big i guess it is the the the elephant we missed and i think we missed it in part because we didn't listen all that closely to ukrainians we didn't listen all that closely to the polls we didn't listen all that closely to the Baltic states and so on and so forth many people in this town listened a lot to the russians listened a lot to to moscow talked almost exclusively with moscow and when one speaks with ukrainians they say this they say this very clearly they're like yeah of course they want to destroy you they want to destroy us they want to destroy everything they have for you know centuries this is the same imperial state that was the soviet union that was the czarist regime it's the same thing it's just never reformed now we did have an opportunity to reform it and we failed i think that that's very true um but at this point we're in a much much worse situation than that they're their their money's here they want to take us down which makes i think the urgency around these reforms so much more important i mean this isn't we're not just losing out on the reform of these countries we are under siege we are this is a this is a threat for our entire system and i think we see this every day in this town i think we see this in our politics in the way that foreign interference has become just a extremely normal thing to see on the news i mean i see i think we see this in the way that all our former politicians work for foreign regimes i mean of course you know i mean we could talk about garard shrewder or france afion or whatever in the in you know the top dogs but of course the level down from the top dogs it's massive everybody does it you know i mean it's this this this town is filled with mercenary lobbying firms that are stock full of former officials who lobby for the chinese who lobby for russian oligarchs who lobby and they have pushed us into destroying ourselves you know so when it comes to this enabling of i mean of course i mean they they view us with absolute disdain i mean our adversaries have have discovered that yeah you can't beat us on the battlefield but all you have to do is offer half a million dollars a year and they'll do whatever you want they'll do the whole jig i mean it's it's crazy how cheaply we sell ourselves it's it's it's truly unbelievable so yeah we are complicit in this we caused it and it's much much much much worse than we believed it to be this is not just potentially you know the very obvious failure of democracy in russia or the possible now loss of democracy in ukraine this was very much russia's idea of finally destroying the west the invasion of ukraine was the beginning it was going to be ukraine she was going to go after taiwan there would be some kind of incursion in nato and that would be it i mean we we got saved by the skin of our teeth thanks to the bravery of ukrainians and i want us to really sort of recognize that now i can talk a little bit about the reforms if we just one thing i can't see the schedule from where i am how we have until when 11 30 okay great so yeah why don't you talk a little bit about that i mean i was i was gonna ask uh is the situation you're talking about goosing enthusiasm for these reforms in any way and then if you can keep that pretty short we'll have time for a few questions it is it is boosting enthusiasm i think that's demonstrated by the fact that last congress as many of you know we got very very very close to the enablers act i mean i describe what the enablers act is of course would finally mandate due diligence for lawyers accountants you know company formation agents company and trust formation agents so on and so forth we're going to give that another shot we were defeated ultimately by now retired senator pat to me so he's no longer there it's very nice uh when you're defeated by a retired senator new senator um but but you know we'll see we'll see where that goes another big initiative is on this authoritarian revolving door stuff some of you have heard of the the shame act that stop helping adversaries manipulate everything act which would prevent anybody anybody from accepting compensation for lobbying for our sort of countries of concern our adversaries china russia north korea syria venezuela and iran we'd like to extend it beyond that obviously this should also be applied to frenemies eventually of course that's a tougher sell with the national security establishment um there was in the last ndaa i think it kind of went undercover but for those that don't know there was a provision that is now law that will ban former secretaries of state former deputy secretary some ever consulting or advising or or working in any capacity for a foreign country i mean it was it's not an it's not an amendment to far it's not amendment to the lobbying disclosure act it just bans it all together uh senate confirmed officials now have a three-year cooling off period for any country and are permanently banned from those six countries i name the country's of concern we want to you know expand it from there that is law now so we want to we want to get it to defense obviously not a week goes by when we don't see a retired general who's working for you know a foreign state uh we want to expand it to intelligence officials we want to expand it to treasury and so on and so forth i mean it's just you know the it's an embarrassment of riches right charles i mean it's like it's unbelievable how much we how much we left this corrupt enabling environment to fester so we have to close both the professional enablers with the enablers act of lawyers and in account maybe to close the political enablers that is all these former officials and also those that really never were former officials they're just professional lobbyists wonderful well not wonderful uh david uh jennifer nino any very quick comment before we go uh to questions or anything come on well too quick thanks i couldn't agree more paul about um the way to deal with this is to help the ukranians win not just defend themselves that is far too insufficient um it is to help them win and win means driving every single russian invading and occupying troop troop from ukrainian soil including Crimea it's a shame we have to add that since Crimea is part of Ukraine but that's true um we will take the i think we do have a slight disagreement about Putin's and and the oligarch's aims i actually don't think it's to destroy us it's to exploit us and to use us um and we may self destruct in the process if we're not careful um but i think they actually want they certainly want to weaken us no question about it but i actually think they almost need us because they don't trust their own system their own leadership and they need some safe place to stash their ill-gotten gains and and they like the freedom that we have um so they're beholden to their leaders um but they also like what we have to offer the only the only danger there is will the oligarchs and kleptocrats of this world have the wisdom as they infiltrate us will they know where to stop in terms of where they've pushed well the only thing i would say i don't know you want to Jennifer but um look it is insufficient to freeze assets we have to seize the assets so these ill-gotten gains never go back whether it's to oligarchs or to the russian state we have three over 300 billion dollars and on hard currency reserves and those should never be returned to russia well and can i add that the the authority we passed last congress to allow those assets to be transferred we got the first transfer 5.4 million from maliceus and hopefully a lot more is going to come down the line 5.4 million not a billion but hopefully a lot more start okay jennifer very quickly and then we're going to take a question you know very quickly this idea of whether oligarchs want to be part of our system or not they definitely want to weaken it what we have seen are oligarchs going back because they're forced to go back to russia they don't want to be there but that's where their money is the other thing are the children you know you've got the foreign minister's daughter people trained ivy league universities here oxford cambridge and they're not participating as westerners they're back in russia and that's the biggest problem that's thing in the 90s everyone was talking about robber barons the russians were going to be the exact same as american robber barons and it did not happen and we thought i'd take that into account yeah great so uh i think that over there i can't i can't see everyone uh john john herbs question actually for paul but for anyone all russian russian state assets you referred to the mala fave oligarch assets um are a very important resource to help ukraine sustain its economy now as the russians have crushed about 50 of it and then to rebuild i know there's interest in parts of all congress to pass a law enabling us not just to freeze those assets which already happened but then to transform to ukraine what's the status of that sure so so i think you're absolutely right it's it's it's the treasure load essentially right i mean i you know i just said 5.4 million from mala fave this is 350 billion so i mean this is this is this is some serious serious dough um i would not all in the united states about 60 about 60 30 60 again these these are all from like this peterson institute report and then he's an oligarch okay but just say two cents more uh a bad oligarch he's a bad other any other he's a he's a he's a bad very no this is this is different money so get the 2.4 yeah okay ever since since before yes that's right um so this money is different so this money is state assets okay so this is one of the issues we ran into with the oligarch assets from the beginning is it's understood to be private money in our legal system so it has to be forfeited under a due process procedure which of course we thought was ridiculous because obviously oligarchs are holding state assets but under our this is part of the problem we face in kleptocracy right is that they they don't have a public private differentiation we do um but getting to this state assets the nice thing about state assets is they are public assets very obviously under us law so in fact they don't enjoy due process so a judge needs to be no part of this there's no due process protections for state assets um under my interpretation of this and some lawyers i've spoken with i mean there's there's agreement on this that the president could already do this i mean the only thing stopping them is foreign sovereign immunity but that could be waived under reciprocity under the notion that like look i mean russia's broken every single aspect of international law just take it but this administration is very very very hesitant to go down that course for essentially reasons that that have to do with the supremacy of the us dollar and how this could make china feel to seize sovereign reserves how could make our allies feel who hold an enormous amount of dollars in the united states and so on and so forth so we we really want to do this with allies i think this could be sold to g7 also because as david pointed out the majority of this is held in europe not in the united states so so a lot of it's held in european central bank so it really should be done in a g7 fashion now would there need to be new law again i don't think there would need to be with this administration it always helps to give them an explicit authority that they can do it so that they have sort of the political cover to do it and and yes i i i think in the next month or so there will be a bill which will hopefully move that will allow this to proceed will give an explicit authority to allow it to proceed again the problem though is one of a political debate not a legal debate this is different than the private assets where you really needed legal authorities okay we're gonna take charles can i know you're gonna go to ilia and others but i'm real quick when when we talk about sanctions there are two that people talk about there are visa sanctions and there are asset sanctions visa sanctions are discretionary no one can challenge that in a court of law a state department official can deny someone a visa when you seize someone's assets you have to be able to have that stand up in a court of law so it is a a higher threshold an evidentiary threshold that treasury has to be okay we're we're essentially out of time so we're actually just going to be able to take one question i'm afraid over alina she raised her hand at the beginning of the session so she gets thank you so much i will ask one question what can we do i think it's very convenient for us to keep on putting the door the dirt at the somebody else's doorstep yes there are problems with Saudi Arabia Egypt Egyptian military russians you know there are plenty of problems out there but the issues as you pointed out russians changed tactics they started learning from the best and we have a part of our economy finance trade which gives them a wonderful space in the basement or in the attic to have their field party and i think it's extremely as david and others have pointed out it's extremely important to acknowledge the dirt is also in our house so what can we do next and it's very good that you asked the question about russian reserves of 300 billion the 100 billion number comes from the russian authorities we haven't seen confirmation from our banks as in look i'm holding this much of russian reserves i'm happy to put it forward we haven't had the confirmation from our authorities about what what is where so what can we do one point from each panelist if you may all right it's gonna have to be one sentence okay well i mean obviously we got a bunch of federal reforms to do but i also find it funny that like so many of these issues are at the state level right i mean like go become a resident of south dakota and tell them to stop with their trust industry you know i mean there's there's a bajillion different reforms that we need in the united states so i've already named a few but i mean it goes so far beyond that too we need to close the revolving door we need to limit professionals and force them to do due diligence and also stop the states from constantly engaging in this race to the bottom david transparency disclosure and sourcing jennifer i would say the same thing corporate transparency any journalist any citizen should be able to go onto a database and find out who owns what and who's getting what government money anything should all be open you know i think the transparency and accountability is the most important part of this and also the showing the like you know that the uh us stands for their values and their you know because they were always a leader of the free world and we all from the like countries toward just small countries and very vulnerable countries always looking for the our beacon of democracy united states and when you see in the signs that the this kind of crazy stuff is going and the same time the US government is financing like gongos in georgia it makes me very sad and i don't understand why it's going what kind of stuff is what the hell is going here okay great so uh we need to mic dan a priest and the fourth state now thank you very much i'm so happy to be here um i have to say that palmezaro whenever he speaks i feel like i have to record it and then turn it turn it down to very slow rpm because there's so much i'm very stirred up right now paul wherever you are uh this is the media panel and since we're talking about transparency we're an integral part of that uh i'm taking jack blum's suggestion that we not just talk about our problems that we also talk about uh what is it that we've written about on corruption or other types of corruption that really actually promoted reform what's the combination of reporting and political will which we really don't have anything to do with that has uh prompted reforms of systems that have been in place for a long time but i also want those up here who have dealt with uh collaborative journalism to talk about the difficulties of that i had my first foray into that recently with forbidden stories and spyware um nso group working with uh 12 different countries and and a couple dozen journalists and it was really fun but frustrating and uh difficult as well so um we have fergus especially up here who's represents probably the most experienced uh group of journalists to have done this uh before i start questions i i'm going to take the prerogative and just point out two things one is i i have done some stories in my life that have made a difference and i think that one of the things that i've heard here uh relates to one of them which is i did a uh series then a book called top secret america after 9 11 in which really we we just counted the number of organizations that had grown up after 9 11 to suck out the money that the congress was throwing at the government to try to deal with counterterrorism and in the physical world it is possible to count things that in the real world we can't actually get behind the door because they were classified so we literally counted the buildings in washington dc and discovered the clusters throughout the country of other um other clusters of buildings mainly contractor buildings that lo and behold grew up around different huge intelligence agencies to serve them and looking at tom cardamon's map you know and listening to other people talk about the system that exists i think visualizing that system could be a very powerful a very powerful tool and then secondly i did a series about walter read medical center when it was not caring for its veterans who came back to be rehabilitated from the wars in afghanistan and iraq and that uh i remember my colleagues and others saying well you know the military has never really treated its veterans very well well first of all as a journalist ignore that that doesn't mean it's good but what made that story work is the human beings inside of that the human beings who we could whose lives we could talk about so you can do scope but you have to do human beings in my view in order to make it relate to people who were reading it and maybe compel it you know off the front page and into some other uh forum and jennifer we're going to start with jennifer because she's done i was just reading your last um real estate uh you know buying and selling your columns and you just take a dozen of them and you say you know they're tens of millions of dollars who are these people what's going on so i'll give you one example that i wasn't going to give when you ask this question but i thought about it a little bit more so in 2009 i was the first journalist really to write about joe low he was the so-called architect of the one mdb scandal you know billions of dollars stolen from the sovereign wealth fund in malaysia and um the way it started was through real estate you know all of a sudden a broker would call me hey this guy just bought you know not just one apartment but 10 in a certain building for all his friends and you know p diddy at that time was living in the building and he had a bunch of escalates but then this young kid had more escalates you know clogging the front of this building bergdorf goodman shopping bags coming in so you know who was this guy and um in the first story um i i did my columns where i wrote about some of the properties he was buying but the first time we outed his name i wrote it with uh another reporter who was working the club scene you know who was this guy sending $10,000 bottles to paris hilton so we put the two together we named this guy but one of my favorite quotes came from this one uh broker who off the record said you know nobody spends their own money like this you just don't you don't spend this crazy way um charter planes and see two two new year's eaves in one night hire the best of western celebrities to come seeing and and models who are now married to billionaires give them apartments give them Birkenbags give them diamonds you know a lot of that they have this guy had to give back at the end thanks to the justice department um but that line you know no one spends their own money like this i was told later helped investigators start looking you know at this guy who was he who was this guy spending all of this money so that's why real estate it really is like a chip of an iceberg there's so much underneath but you know that can be a little little way in so did you find yourself um taking advantage of some of the of the justice department folks who are investigating or did you feel like you had to compete with them and it's a good question uh my sources were fantastic but they were they you know like with every reporter you know the the sources aren't who you would think they would be you know they would come it could be someone who was an ex-poly who was terrified for their lives you know it all over the place real estate enablers working it could run the gamut of of who who they were but you know that that ended up there were investigations around the world several international investigations before something actually happened yeah that's fantastic and it reminds me of how important lawsuits are because even lawsuits that seem obscure can give journalists the the clue more and more clues that might lead them somewhere um so i'm a big proponent of lawsuits for that reason uh fergus okay if you don't know icij you're probably not in this room but um every you know a dozen leaks i wish they were a more um elegant term for that but they are important and uh your organization has really made such a name for itself and and helped uncover this so how do you can you explain a little bit of how that works and uh what you need and how you how you get people to is it just randomly or sure no problem um so uh when um Charles asked me to come to speak here today i was thinking about what we do and what we do at icij icij is a tiny organization there's only about 35 of us were scattered across the world we have been responsible in the last four years for the two biggest in journalism projects in history uh the pandora papers had more than 600 in journalists in more than 170 in countries uh fincan files had had more than 400 journalists in more than 100 countries what icij is about is the truth what we um our ambition is to uncover the truth that's what we were about uncovering the truth is extremely difficult but it's vitally important it's more important than ever there's a tsunami of fake news out there and we are at the forefront of trying to resist it we're at the forefront of trying to resist it because we believe we believe in our hearts and our souls that democracy depends on the truth without the truth there's no democracy and without democracy there's no journalism so we're fighting for our existence how we do this is we uh bring journalists from around the world to focus on a particular topic to uncover complex financial arrangements order and cover how the chinese set up the zinjiang camps it depends on the topic but i'll just name two characters in three projects and then i'll try to explain so two characters one isabel da santas who many of you may know was heralded by the west as a champion of uh female business leadership in africa and silamen kerimov one of the richest men in uh russia who made his money through gas gold oil etc so we go to isabel we did a project called luanda leagues we were given 400 000 uh uh sort of 700 000 documents uh from a guy called rui pinto we didn't know at the time rui pinto is in the news if you if you like soccer you will know that manchester city the football club is in big trouble they're in big trouble because of financial miss uh financial payments which were allegedly um corrupt anyway rui gave us a whole lot of documents and we were able to uncover by working with reporters in 20 countries that isabel da santas had got billions of dollars because her father was the autocrat in angola as a consequence of that uh isabel has had her assets frozen uh companies have have gone out of business isabel has been sanctioned by the us people that worked with her by have been sanctioned so there's one character isabel da santas once africa's richest woman second silamen kerimov silamen kerimov came up again with isabel in the pandora pavers and the finse and the files the finse and files was where we were a tiny number of documents only about 2000 and as a result of those 2000 documents suspicious activity reports we were able to show more than two trillion dollars trillion dollars of dark money flowing through western banks and amongst the people that were sending the money through the western banks were isabel da santas and silamen kerimov and now the last project pandora papers the biggest one in history who should pop up again isabel da santas silamen kerimov and so what you can see here is this huge system it's a system that will do anything for short-sighted commercial considerations it is a system of western banks western lawyers western accountants western governments who enable the destruction of democracy in other countries and what happened to kerimov after this was yeah so kerimov is now in trouble he's been sanctioned some of the people who were saying this is an amazing story about kerimov this is one of my favorite stories so kerimov moved 700 million bucks that we could see in the finse and files and the pandora papers kerimov has worked 30 billion so 700 million is not a lot to him but what was very amusing if this amused us greatly was one of the ways he moved the money was 300 million bucks he moved to a tattoo artist in switzerland the tattoo artist was a friend of a guy called alexander stutthalter who is a accountant in switzerland he lived in the same village as him and you will see him if you go looking for him you will see him on his mountain bike covered in tattoos and he moved 300 million bucks and as a result partly of what we've done stutthalter has been sanctioned kerimov is sanctioned soon you know it is a crazy world yeah and if you're following corruption you're going to run into these characters and so part of I think the the challenge is to find the ones that can tell that can symbolize the story they don't have to you know you can get into a story in so many different ways and through people is probably the most effective even though it's the system that you're really pointing to yeah okay uh diane francis has been at this for an awfully long time so can you tell us what you've learned about or how you see the trend in journalism right now and how difficult or easy or uh welcoming these kind of corruption anti-corruption investigations are yeah just briefly a bit about my career I hate to admit it but I've been nearly 50 years a journalist and uh I was the editor-in-chief of the equivalent of the wall street journal the financial post in Canada when I emigrated there many years ago was a it was a dirty little place uh it has a clean reputation it's still one of the biggest most powerful secrecy haven places in the world in fact the entire skyline of Toronto and Vancouver are built with dirty money and nothing gets done about it so that aside everybody's got the problem but I've also written 10 books four about white color crime ran a newspaper doing financial stuff and was an investigative journalist so I'm just going to give you some of the horror stories that have occurred not just to me but just are out there and I really fear that off jack's point that not only are prosecutors and legal systems incapable of preventing or deterring crime but the fourth estate is also also in that situation and it's for there's five issues involved here number one with the exception of the washington post the new york times and a handful of others the business model for traditional newspapers and networks is imploding that's the internet it's imploding and that's where all the really that's where enough money was was was secured by journalistic organizations that could in go after and do extensive investigative work nobody can afford this anymore as I say the newspapers are we're burning our furniture to stay alive the networks the major networks have also done some very good investigative things they're going to be in trouble in 10 years because 60 of the american networks for instance their revenues are based on covering live sporting events and all the teams are going to have their own streaming channels so no more normal money there and the eyeballs are now on social media and the internet and they don't do investigative reportage and far worse they print anything they publish anything that that comes to their heads or that they've been fed by the russians or whoever so the business model is imploding in those institutions private sector or public sector journalistic institutions that we were relying on and did some really fabulous work over the years the second problem is the weaponization and globalization of legal liability so it doesn't matter where you publish but if it's on the internet I can say it was published in my country and I can take you to court in my my banana republic and I can see you there uh first case I came across was oh my god I don't know I don't know how many years ago but I think it was NBC did a piece on the dirty money in the Bahamas and they sideswiped general west marland don't know why maybe he was a director on a bank or whatever so he sued he sued in the US court and you know he didn't sorry he didn't bother to sue in the US court because he was a public official and they were fair game but not in canada and because canadian eyeballs watched us tv NBC tv he jurisdiction shop found a judge where we have very strict libel laws like the british do and public public uh there's no exemption for public officials so he sued NBC in toronto and got a settlement out of court and this is going on of course everywhere I think that was the first one to innovate that way but now as we all know many many cases end up in the british courts where libel laws are very tough and so the russian oligarchs that's their favorite place to drag you and they can drag you there even if you're not a british newspaper publication or website just because some eyeballs in britain saw them and there you go so that's a huge problem for for uncovering the truth and and investigative journalism the third problem is all of this means that you know liability insurance is exorbitant for newspapers that's another problem it's out of reach for individual investigative journalists I have a friend who was an author wrote a book in canada big publisher they abandoned her and she lost everything because she wrote a very hard hitting book about some crooks in canada and so you know there's no insurance for this and it becomes ruinous personally I'm talking about white collar crime now you know if you're writing about real criminals like the russians you can get killed but I'm talking about white collar crime and they they use that that power of that money to weaponize the legal system that's most friendly to their case or they bought I think that the other the other the fifth issue is that if you do as jack said if you do investigative journalism even the times or whoever my goodness the cost the cost of curation the cost of curation period is is exorbitant as well as the lawyering there were a couple of years when I was attacking the vancouver stock exchange which was a sewer until we closed it I was attacking that regularly as the editor financial post and our legal counsel got paid more to read my stuff than I got paid to write it it's it's expensive it's a big overhead so so these are the things now solutions that's what we need and that's what we want first of all I think the work you do is part of the answer you have to be internationally placed that many nodes you have to have financial backing you have to put yourself in offshore jurisdiction make yourself judgment proof and you have to rely on other newspapers to amplify it and you need lots of bodies to do all the legwork and the readings seven hundred thousand documents and it's horrible so this is what we need we need more of these and this is this is one of the answers the other thing we need is in the united states get rid of section 230 they have ruined not only political discourse but allowed hate and libel and threats and disinformation from the russians to proliferate and swamp eyeballs because section 230 bill clinton thank you exempted them from having to curate they were exempted from liability for the content and their argument was then and still is now we're not publishers we're platforms well they're platforms who publish and so nobody nobody has been policing this there's no responsibility to police themselves and there's no liability and that has to go immediately and that has to go globally and so the result is social media just takes up everybody's minutes and time and headspace with garbage and no curation required so those are those are the two solutions I don't mean to sound you know even more depressing that we're already hearing today but I think that our days are numbered of having having reliance that works on a fourth estate as we now know it so we have to come up with other models there are other of course sneaky ways to do it I used to be frustrated sometimes my lawyers wouldn't let me do something in print because you know we had to chase down documents we didn't have time and so on but it was timely and so what I would do which you can do in the parliamentary system in Canada is like the internet in the United States parliamentarians have complete immunity if they say something in the house so I would leak to a member of parliament the scurrilous allegation I couldn't write about but everybody in the press could report on once and they would do it because a they thought it was right or b they got attention so you have to find your other ways to get out the news and that's that's a pretty pathetic thing to have to do and and there was no curation necessarily involved so that's my sad tale I think we have to come up with new not-for-profit models I think that a lot of good journalism is done by foundations and some think tanks is depends on who they take their money from and this sort of thing and I think that's very important okay thank you uh so obviously she's just made a grand pitch for not-for-profit news and for funding of that so all of you who represent corporate foundations here I'm sure you paid attention to that it is it is the future and the in the legal issue we found that in our investigation of Pegasus spyware that it did help our partners in who were operating in shaky democracies and even a couple authoritarian states to have these same stories published in the u.s because we gave them somewhat of a shield and so far we've been lucky in terms of lawsuits so I have a another question is can you can you describe how you how you pitch a story to an editor and what you need and I'm asking you this because sometimes people who are not in the media really don't quite get why you have to ask certain questions and and why you need certain details that may seem ridiculous to pull out and I'm doing this because as sources it's really good it's very effective if you can understand what we need because you're often closer to the material and can think about who is this per you know how can I personalize this how can I give you information how can I give you names of the little people involved in this problem but how what do you need to convince an editor to let you go forward with the story that's a great question for a long time so it's not much you know I have this idea great go for it but another way of looking at that question is there will be people who will you know I'll get pitches I have a great story for you a great story I'm like okay send me three sentences on it you know and if I get a page and a half I know there's no story there you know it's a mess but if there's something that you can you know break down and it's so specific then you kind of know that that's the story that's very different from a source coming up hey you know this is happening you might want to look into this and you look in then you go back to the source but you know it's really trust so if someone's new with this and starting out they better have you know everything down I think before they go to an editor and when you've been in business for a long time then it's really fun it can be a collaboration if you're lucky enough to have a good editor you'll you'll have someone get you to ask questions you didn't think about asking and make something better and um Fergus you're pitching to about a dozen editors at the same time so what ingredients do you need to win them over yes so what we do is first of all we consider an idea then we conceptualize it and then we retail it it's very simple so we we sell an idea to hundreds of news organizations around the world and try to engage them in that that idea if they buy into the idea they will give us reporters and then our team of reporters and editors will build that story and that story we will give to everyone for free and they will use it to influence their own reporting so where our bar is really quite high so first thing we look at hardly any reporters look at this I don't know why it's a trick so if you're a reporter here here's the trick you look for a broken system there's a broken system you almost always have a story okay but almost no reporters look for the broken system right that it's a really it should be a simple thing but they don't they don't look for it so you don't look for if somebody has it buys a broken car you know through one of the websites the cars aren't working they have an issue that's personal but if if that website is selling thousands of cars that aren't working that are being refurbished after storms then you have a story if those cars are being sold sold across the world you have a better story so this is how we work so what we do is we look for a broken system a broken system that crosses borders if we have a broken system that crosses borders we're almost there has to be in the public interest that's a very difficult test and the last thing that's really vital is there has to be a victim if there's no victim there's no point in doing the story excellent Diane well I I'm pitch free it has to be an elevator pitch it has to be three graphs it has to grab them right away has to be something none of their staff are doing and they have to have space for it if it's investigative nobody's going to take it on because of all the things I mentioned as far as my own journalism I mean I brightest indicated column across Canada I have a sub stack newsletter it's a shameless promotion and that allows me to write about a lot of different things that I'm interested in and not have to deal with copy editors who are very often even in the major papers now people that you're dealing with first on copy editors who who are under 30 and think history was the last website they visited could not recognize Reagan in a lineup so you know this is what you're dealing with so it's it's very tricky as it as it shrinks and deteriorates it's very gloomy but but there are as I say a lot of us writing on sub-stack I supplement it to what else I do and the book business is also hard book publishers are very low to take on something about the mafia or Russian it's it's a problem one just as a Canadian as a Torontonian I totally agree with the problems and the landscape the real estate there but two things about stories you really need to build trust as a journalist with an editor and if you have that you can really still run with a story saying that there are issues with oligarchs different people threats I'm very lucky to work for a newspaper where we have really been disdainful of certain threats that was literally harassment I've had publicists at one point working for an oligarch calling literally one day every hour until my furious editor said this was harassment and my communication stopped and everything was referred to an editor who then referred it to the top editor and you know it's really great to have that support I'm sure you felt that and it's a great thing the other thing I wanted to say is that you can be you know I was fortunate enough to be on this the first panel maybe that was a zoom panel for DC forum when I think somebody asked a question you know if you're not part of a great network like ICIJ you don't have access you're not working with you know journalists around the country what can you do and one example came to mind was a blogger who lived in Brooklyn and walked by a house and it was covered in garbage there was you know construction everywhere it was just a disaster no respect for neighbors no respect like construction that started and stopped so this young blogger did some digging well the owner was Paul Manafort and you know this was right during 2015 you know right before an election he was very much in the public eye I wrote about it I picked it up in the blogger he called me on the very very interesting conversation but you know you can be anywhere and right see something that looks funny and all you have to do is start asking questions you know even if there are LLCs and you know there's still ways sometimes there aren't but sometimes there are ways to find out what's really going on so you're making me think of a a haven for LLCs and offshore money which is the state of Delaware and why is it do you think that given that we have a former senator from Delaware as our president now that we haven't paid more attention to Delaware and what or what he hasn't done to stop that if he cares about money laundering and question the superstar of course is South Dakota right but Delaware has been at it for so long about a few years ago they passed this law for trust anonymous trust and tax free and they've gone from zero dollars to half a trillion dollars under management there yeah half a billion sorry Fergus have you ever looked at South Dakota we did a whole project on it around us so as part of Pandora one of the stories we looked at was trusts and we looked at trusts in Delaware and trusts in South Dakota and Alaska and yeah trust sorry a huge problem a massive problem because again it goes to that question of short-term uh commercial interest against the interests of the world and so the promise of trust for place states like South Dakota and Delaware and Alaska is that it will give you jobs so that's the promise that they when when it comes in when one lawyer conceptualize the South Dakota industry when and the promise was we will we will we will create wealth in beyond cattle in your in your state and you will get a job and you will have lawyers and accountants and they will they will make a lot of money and the state will get more prosperous the reality is the state hasn't got more prosperous the reality is has been a huge disappointment and I think in part the answer to trust is um is a public relations campaign to say look the price you're paying here is just far too high here you've sold your souls for um little return um but it also goes to the enablers act which in part flowed from some of the work we did and really um we have to tackle lawyers and accountants you just you know I know the American Bar Association is fighting to the nail to stop um any sort of um responsibility in this area but unless you tackle lawyers and accountants you cannot stop it I mean Isabel de Santos moved money to 400 companies through 49 offshore and jurisdictions billions of dollars that were stolen from the Angolan people some of the poorest people on the planet and