Recovering looted wealth

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MAY 8, 2009
Singapore Stands Set to Defend Bank Secrecy, to a Point

By COSTAS PARIS



SINGAPORE -- This city-state,which styles itself as Asia's Switzerland for offshore investors,will resist pressure to open its books to Western authorities, say people familiar with the government's thinking.

Amid worries about money laundering and tax evasion, European negotiators are asking Singapore to hand over the names of Europeans who open accounts in Singapore, said a senior European Union official.

Singapore is willing to concede on some demands but is ready to fight moves it thinks would endanger the island's status as a destination for overseas wealth, according to people familiar with early talks.
Willing to Talk

The authorities " will negotiate long and hard " with each country individually, said a person familiar with government thinking.

" Singapore won't scare away its affluent foreigners. "



The government " will be selective about whom it negotiates with and it will in no way give the impression that bank secrecy here will be compromised," this person said. " Bank secrecy is a matter of national interest for financial centers like Singapore. Anyone who expects fast information about a foreigner with a bank account here will be disappointed."

Singapore has declined to give overseas authorities information on foreigners' bank-deposit interest or investment gains on the ground that the government can't gather this information under domestic tax law.

The government this year plans to end this " domestic interest " restriction on the data it can provide, a Finance Ministry spokesman said.

But even then, Singapore will be willing to investigate income that isn't taxed locally only if there are documented suspicions of tax evasion and proof the foreign authority requesting the information can't get it directly from the foreign investor or deposit-holder, according to people familiar with the situation.

The pressure on Singapore comes as U.S. and European authorities are broadening their attack beyond Switzerland, Luxembourg, Liechtenstein and Andorra. The tax regimes in those countries came under intense scrutiny at last month's summit of the Group of 20 industrial and developing powers.

Singapore found itself last month on an Organization for Economic Cooperation and Development " gray list " of 38 countries that have agreed to improve transparency standards but haven't followed through on their promises.

' Work to Do '

A French Finance Ministry official said Paris is focusing first on getting full compliance from European financial centers. But " as soon as that's done, there'll be surely some work to do " with other countries on the gray list, the official said.

To comply with the OECD's new rules, Singapore will need to renegotiate many of its 60 tax-reporting agreements with other countries.



The U.S. must first establish a double-taxation agreement before it can get tax information on its citizens from Singapore -- which doesn't tax capital-gains or bank-account interest, among other things.



Singapore, a military ally of the U.S., is particularly sensitive to pleas from Washington.



" Frankly, Singapore believes it can withstand the pressure from the EU," said the person familiar the Singapore government's thinking. " But pressure from the U.S. is a different matter.Washington can push very hard, the way they did with UBS."

Swiss bank UBS AG, hit by a U.S. tax-fraud investigation into services it offered to hundreds of wealthy American clients, agreed in February to pay a $780 million fine and disclose the identity of some clients.



Hong Kong, another popular Asian destination for private-banking clients, is moving swiftly to avoid such a clash. Government officials said in February they would draw up legislation this year that would make Hong Kong's policies on sharing tax information adhere to international standards.



At least $300 billion of foreign cash is managed in Singapore, and that could double in the next five years, private bankers and wealth managers estimate. The vast majority of the money belongs to wealthy Indonesians, Malaysians, Chineseand other Asians.



Some 40 institutions in Singapore offer private banking, an industry that grew rapidly along with Asian wealth in 2005 and 2006. Singapore encouraged Western banks to expand here, promoting the city-state as a financial center through corporate tax cuts and other business-friendly measures.

Alternate Shelter

For now, Singapore appears to be benefiting as the spotlight on European havens has some investors seeking other shelters.



" At least $13 billion has landed here in the past few months, much more than the average of previous months, and a surprisingly high sum came from Europe," said a private banker in Singapore. " This money could be perfectly legal, but with the climate of fear in Europe many depositors want out. They want peace of mind."



Such inflows to Singapore might not last, however, especially when the U.S. turns its attention to the island's tax practices.



In 2007, then-Sen. Barack Obama cosponsored a bill to clamp down on tax havens, including Singapore, which is on a U.S." blacklist " of 34 " offshore secrecy jurisdictions." The bill failed under the Bush administration, but a stronger version, backed by President Obama's administration, was introduced to Congress in March.



Write to: Costas Paris at costas.paris@dowjones.com

A Trip to Tax Haven Heaven. India dodges.

John Cummings May 8th, 2009

President Obama loves to joke about a certain building in the Cayman Islands which, he says, is claimed by over 12,000 businesses as their headquarters: “Either this is the largest building in the world — or it’s the largest tax scam in the world.”

If you’ve ever wondered what the building looks like, here’s your chance to find out.

The strangely named Ugland House features in this video report on the celebrated Carribbean tax haven from, of all sources, Al Jazeera. The producers gleefully flash the names of some extremely large and well-known corporations across the screen, among them Deloitte, AIG, Lloyd’s TSB, JP Morgan, and KPMG. But if, like me, you’ve never been fortunate enough to visit a Caribbean island, you may find the clip just as interesting for its shots of the Caymanian capital, George Town, and its inhabitants as for its discussion of the Islands’ place in the global tax system.

If Mr. Obama has his way, the Caymans will likely become a less attractive place to keep your money. But they’ll surely still be a great place to go visit it.

http://bigfatfinanceblog.com/2009/05/08/a-trip-to-tax-haven-heaven/

India not keen on black money: Switzerland government

Ashish Mehrishi

New Delhi, May 8, 2009

The Swiss Justice Department on Friday said that the Government of India was dragging its feet on the black money issue.

In a Headlines Today exclusive,the department also said the Indian government had submitted forged documents to Swiss authorities in the $ 8-billion Hassan Ali money laundering case in January 2007. Stud farm owner Hassan Ali had illegally transferred $ 6 billion to UBS accounts and came under the Enforcement Directorate's radar.

Swiss government spokesman Folco Galli told Headlines Today that the Indian government was informed about the fake documents by Swiss authorities in January 2007 itself.Further, the Swiss claimed to have submitted certain queries to the Indian government in April 2007 but New Delhi has not bothered to file a reply even 24 months later.

Since the black money issue became a major election plank for the Lok Sabha polls, the Centre claimed in the Supreme Court that it has been doing what it can to bring back the black money stashed in Swiss banks. The Centre's affidavit in the SC however fails to mention that the Swiss have questioned the authenticity of the documents.

In fact, the Swiss spokesman's answer seems to suggest there has been little or no action from the government's side for the last two years in seriously pursuing the probe against Hassan Ali Khan.

The last sentence in the response of the Swiss is telling. Galli says, " India makes only few requests per year to Switzerland for legal aid in tracking down black money."

Given the black economy is considered much bigger than the Indian economy, the UPA government has a lot to answer for.

The Centre has been claiming that Swiss domestic laws don't allow them to access their bank accounts.

http://indiatoday.intoday.in/content_mail.php?option=com_content&name=print&id=40958

Public loot in tax havens: Hassan Ali, Adnan Khashoggi, 26/11 terror

“Congress shielding heavyweight”

New Delhi: Uttar Pradesh Chief Minister and Bahujan Samaj Party supremo Mayawati on Sunday alleged that the Congress was “covering up” the issue of black money stashed away in foreign banks as a party heavyweight and Minister in the UPA had “unaccounted money” in Swiss banks.

The BSP leader promised to enact the toughest possible law to bring back the unaccounted wealth if the BSP was voted to power at the Centre.

“Around Rs. 60,000 crore to 70,000 crore are lying in Swiss banks. But the Congress is sitting on it as it has to cover up a heavyweight Minister in the UPA whose unaccounted money is lying in Swiss banks,” she alleged.

Her accusations come a day after the government submitted an affidavit in the Supreme Court on the issue stating it had received information about Indian account holders in a German bank but did not reveal the names on grounds of “confidentiality.”

“The government has itself admitted in the affidavit that an amount of Rs. 72,000 crore is deposited in the bank in the name of a tout,” Ms. Mayawati said.

“One accused has been put behind bars and the apprehension that he could be killed to cover up the matter cannot be ruled out.” — PTI

http://www.thehindu.com/2009/05/04/stories/2009050459031000.htm

Elements of an Inside Job in Mumbai Attacks

Terrorism

by Jeremy R. Hammond | December 22, 2008 - 11:14am

Published on The Smirking Chimp (http://www.smirkingchimp.com)

Indian police last week arrested Hassan Ali Khan, who was wanted for investigations into money laundering and other illicit activities, and who is also said to have ties to Dawood Ibrahim, the underworld kingpin who evidence indicates was the mastermind behind the terrorist attacks in Mumbai last month.

Ibrahim is also alleged to have close ties with both Pakistan's Inter-Service Intelligence (ISI) agency and the CIA.

Another character linked to the CIA whose name is now beginning to figure into the web of connections between the Mumbai attacks, criminal organizations, and intelligence agencies is Saudi arms dealer Adnan Khashoggi, of Iran-Contra infamy. Khashoggi has been implicated in arms deals with drug traffickers and terrorist groups, including within India.

Dawood Ibrahim is a known major drug trafficker whom India claims is being protected by Pakistan. As Foreign Policy Journal previously reported [1], there are also some indications that the CIA has a similar interest in preventing Ibrahim from being handed over to India. Ibrahim is wanted by India for the recent Mumbai attacks as well as for bombings that occurred there in 1993.

Ibrahim is a native of India who rose through the ranks of the criminal underworld in Bombay (now Mumbai). According to media reports in India, he got his start as an undercover informant for the police at a young age and thus has an intimate knowledge of Indian law enforcement and intelligence, and is alleged to have fostered close ties with individuals within the political system.

Another known associate of Ibrahim's in Mumbai, Mohammed Ali, is suspected of assisting the terrorists, who were met by an individual

in Uran [2] before continuing on to Mumbai, where inflatable rubber dinghies had been arranged to take them ashore by the same individual. Numerous earlier press accounts indicated that the dinghies, along with other logistical assistance, were provided by an associate of Ibrahim's.

The Times of India, for instance, reported [3] on November 28 that according to police sources the Mumbai attack "was enabled by the Dawood Ibrahim gang", and that "It would not have been possible to carry out a terror operation on this scale without a collaborative local network and this was provided by the D Gang. As the terrorists had entered via the sea, the needle of suspicion is clearly pointing at Mohammed Ali, the new poinstman of Dawood."

Yet Indian news reports indicate that officials have been slow to act against Hassan Ali Khan, and Mohammed Ali continues smuggling operations out of Mumbai for Ibrahim's crime syndicate, D-Company, completely unmolested by Indian investigators and law enforcement.

As the November 28 Times of India article observed, Ali "is known to indulge in smuggling of diesel, petroleum, naptha, drugs and arms with impunity and it appears that the terrorists had used his networks to enter the city by the sea route.... Despite having a detailed dossier on him, the authorities have not taken any action against him. What is more worrying is that Ali is believed to have also penetrated naval intelligence."

A further report [4] from the Times of India on December 4 noted that Dawood Ibrahim is "sitting pretty in Karachi" under the protection of Pakistan and his "hawala channel between Mumbai and Karachi remains busy". "But central agencies question why the Maharashtra government has not taken any action against the D-company here."

"'What's the point of asking Islamabad to hand over Dawood when we're not doing anything to destroy his empire in Mumbai and other places in India?' a senior official asked."

The article observed that Mohammed Ali "continues to operate with impunity.

Again, on December 11, Times of India reported [5] that "Mumbai police has still not called Ali for questioning", adding that "Ali is also known to have the backing of two powerful politicians of south Mumbai and that could be the reason why he is still untouched."

In addition to links to Ibrahim, both men are also alleged, like Ibrahim himself, to have ties to political officials in India, and there are numerous other indications emerging that the attacks were assisted by elements within India being protected by the political establishment.

Hassan Ali Khan

India's Daily News & Analysis reported [6] last week that it appears Hassan Ali Khan "was part of a multi-crore [Indian numerical unit equivalent to ten-millions] hawala syndicate racket and may have joined hands with the organized crime operated by underworld don Dawood Ibrahim. He is also suspected to have funded terror organizations."

India's Enforcement Directorate (ED) "had also told the Bombay High Court that there were indications that Ali was part of a strong international crime syndicate with money flowing in from 'proceeds of heinous crimes like terrorism, arms trade, gun running, corruption and organized forgery'."

A series of news reports from March 2007 in the Times of India revealed that Khan was being investigated for money laundering and other illicit activities. A laptop recovered from his home showed that he had accounts at a Swiss bank. Khan had reportedly tried to take advantage of tax waivers granted on investments originating outside India in countries with double taxation avoidance agreements with India. The funds were also be used to invest in the stock market.

Khan would send funds abroad through illegal channels and re-route them into India through shell companies in countries with such a tax arrangement with India. According to [7] the Times of India, "Khan has no known sources of income in India but owns stud farms and often travels abroad." His wealth is estimated to be in the billions, and he owns property in Mumbai and Pune.

Investigators from the Enforcement Directorate (ED) "had crucial input from the Intelligence Bureau, which was concerned about this unaccounted money having implications for national security."

One of the countries used to route money back into India was Mauritius, an island chain off the east coast of Africa near Madagascar and a former British colony. The UK still maintains a military presence there. It expelled the inhabitants of the island of Diego Garcia in order to turn it into a military base, which has also been used by the US for its own military operations.

According to reports, prior to the terrorist attacks in Mumbai, a team had been sent ahead and checked into the Taj Mahal hotel, one of the key targets of the attacks, and established a control room where they had food, weapons, and other supplies waiting in anticipation of the siege of the hotel by police and special forces. An identification card from Mauritius was used to check into the room.

Hassan Ali Khan has an interest in horse-racing and trades in thoroughbreds. The Times of India reported [8] that "he had attracted attention on the Pune racing turf where he surfaced about five years ago as a small-time punter who suddenly became one of the biggest players. His contacts, by default, were with some of the top industrialists who have an interest in horse-trading."

Last February, the Hindustan Times reported [9] that the Swiss bank involved in the money transfers, USB (United Bank of Switzerland) AG, was reluctant to assist Indian investigators, and the investigation had been stalled as a result. The ED had advised the Indian government not to approve a plan by UBS AG to buy Standard Chartered Bank, an Indian mutual fund business, because of its lack of cooperation in tracking Khan's money transfers. According to the ED, Khan had $8 billion in the bank's accounts.

Adnan Khashoggi

The Hindustan Times also revealed that there was evidence that Saudi arms dealer Adnan Khashoggi of Iran-Contra infamy had transferred $300 million to Khan from a Chase Manhattan bank account in New York. It added that Khashoggi's "arms supplies to Tamil terrorists, the LTTE, were revealed during an investigation into the 1991 assassination of Rajiv Gandhi."

Khashoggi acted as a middle-man during the Iran-Contra affair, brokering an arrangement for Israel to sell US arms from its own stockpiles to Iran. The CIA then channeled money from the sales to the Contras in support of their terrorist war against the democratically-elected government of Nicaragua. The World Court later condemned the United States for the "unlawful use of force" - a euphemism for international terrorism or the even greater crime of a war of aggression.

Investigative journalist Wayne Madsen recently reported [10] that, according to Asian intelligence sources, Khashoggi was also involved with the CIA in an effort to support Bosnian Muslims that "brought [Dawood] Ibrahim and [Osama] Bin Laden into the same big CIA tent, along with Saudi arms dealer Adnan Khashoggi, a key Iran-contra figure in George H. W. Bush's global arms smuggling venture while he served as Vice President under Ronald Reagan. There have been reports that Ibrahim considers Khashoggi to be a hero figure."

In 1991, a Defense Intelligence Agency report [11] listed Khashoggi as "An international arms trafficker who allegedly has sold arms to the Colombian drug traffickers, especially to the Medellin Cartel."

The Global Drug Trade

The DIA report also listed Washington's man in Columbia, Alvaro Uribe Velez, as "A Colombian politician and senator dedicated to collaboration with the Medillin Cartel at high government levels. Uribe was linked to a business involved in narcotics activities in the US.... Uribe has worked for the Medillin Cartel and is a close personal friend of Pablo Escobar Gaviria."

Uribe is now the President of Colombia, which receives enormous amounts of US financing and military support, surpassed perhaps only by US support for Israel, Egypt, and now Iraq.

Manuel Noriega was another infamous narcotics trafficker and CIA asset, as well as a graduate of the School of Americas (SOA), which has since changed its name to the Western Hemisphere Institute for Security Cooperation (WHINSEC). The SOA was responsible for training numerous Latin American dictators and military commanders who were responsible for torturing, murdering, or otherwise "disappearing" countless political opponents and other individuals.

Colombia is also another case where the government has been caught red-handed staging false-flag terrorist attacks. In the late 1970s, a series of bombings, kidnappings, and assassinations against leftist targets was carried out by a terrorist group known as the American Anti-Communist Alliance (AAA or Triple-A). Documents available online [12] at the George Washington University National Security Archives confirm that Triple-A "was secretly created and staffed by members of Colombian military intelligence in a plan authorized by then-army commander Gen. Jorge Robledo Pulido."

John Perkins, author of Confessions of an Economic Hitman, wrote in his follow-up book The Secret History of the American Empire that a second lieutenant in the US army sent to Colombia to establish a "United States-commanded Southern Unified Army" told him, "Everything we do in Colombia just makes it more attractive for the drug business. Why do you think the situation keeps getting worse there? Because we want it to, we're behind the drug trafficking. The CIA is--just like it was in Asia's Golden Triangle."

One might add the "Golden Crescent" to that list. As Foreign Policy Journal previously reported [13], Dawood Ibrahim "is known to be a major drug trafficker responsible for shipping narcotics into the United Kingdom and Western Europe." While most Afghan opium is smuggled to Europe over land through Iran and Turkey, much of the amount that goes to Pakistan seems to be taken either by plane or by ship directly to the Europe, principally the UK.

While Pakistan claims Ibrahim is not even in the country, India insists he has been living in Karachi under the protection of Pakistan's Inter-Services Intelligence (ISI) agency.

The ISI worked closely with the CIA during the Soviet-Afghan war and acted as the CIA's intermediary to provide funding, weapons, and training to the Afghan mujahedeen. The opium trade was used to finance the CIA-backed mujahedeen, and the principle beneficiary of CIA support was Gulbaddin Hekmatyar, who was also a principle drug lord.

And while Western media accounts [14] typically tend to characterize today's opium trade as being under the control of the Taliban, the fact is that the estimated amount of funds going to the Taliban and all other anti-government elements combined is less than 14 percent of the total estimated export value, and US intelligence agencies are aware of the involvement [15] of high-level officials within the Afghanistan government in the drug trade, such as Rashid Abdul Dostum, former Chief of Staff to the Commander-in-Chief of the Afghan Armed Forces. Dostum was also among the warlords of the Northern Alliance the CIA doled out suitcases of cash to during the initial phase of the US war to overthrow the Taliban.

Viktor Ivanov, the director of Russia's federal anti-narcotics service, said in an interview [16] recently that "The gathered inputs testify that infamous regional drug baron Dawood Ibrahim had provided his logistics network for preparing and carrying out the Mumbai terror attacks by the militants." He added that "The super profits of the narco-mafia through Afghan heroin trafficking have become a powerful source of financing organized crime and terrorist networks, destabilizing the political systems, including in Central Asia and Caucasus."

A Protected Man in India

The $300 million transfer to Hassan Ali Khan from Adnan Khashoggi was "only the tip of the iceberg", an official from ED told the Hindustan Times. There was also evidence of another $290 million, for instance, in two shell companies in the British Virgin Islands. This was among the evidence obtained from the laptop computer seized from Khan's home in Pune.

In addition to the money transfers, the ED was investigating Khan's possession of three Indian passports. He held passports issued from Pune, Patna, and Mumbai, and had also applied for additional passports from Guwahati and Chandigarh. He and his wife had applied for citizenship in Switzerland.

But it wasn't only the Swiss bank's apparent unwillingness to cooperate with Indian investigators that was slowing progress in the inquiry into Khan's dealings. The Times of India reported [17] in February that although the Prevention of Money Laundering Act provided for his arrest, the ED had yet to do so. The ED was "acting cautiously in this case, sources said." The paper added that "It is shocking that Khan could have concealed all that money without Indian agencies getting to know of it."

The report says that "The lack of evidence on the transactions seems to have prevented ED from arresting Khan", while at the same time noting that "The alleged presence of names of Indian politicians also found from Khan's initial questioning by the income tax and ED officials immediately after the raid last year, don't figure anywhere in the submissions made by the ED to the HC [High Court]. The Income tax department has failed to get information from the ED on the sources of the $8 bn, despite asking for it again and again."

In September, the Times of India reported [18] that the intelligence community was "seething with anger for being blamed by politicians for its 'failure' to prevent" a series of bombings across the country. A senior intelligence official responded to the charges by telling the Times of India that it was the politicians who were at fault, and connected Khan to investigations of terrorism.

"Take the case of Hassan Ali, the Pune-based businessman," he said. "He was under the scanner of several Central agencies, including the Intelligence Bureau, Enforcement Directorate, Directorate of Revenue Intelligence and other bodies. Finally it was found that he had handled hawala transactions valued at a mind-numbing Rs 35,000 crore through Swiss banks."

Hawala is an informal money transfer system that is an alternative to formal banking institutions. Often, relatively little money actually exchanges hands between hawala brokers, who operate on an honor system. An amount deposited with one broker is not actually moved to another broker on the receiving end. Rather, that amount is simply taken from the receiving broker's own reserves. The only funds that actually need be transferred are those used to offset imbalances between brokers, and there is no record of the transaction between the sender of the funds and the beneficiary.

The hawala system is thus ideal for moving illicit funds and for money laundering. According to a World Bank report [19], "The bulk of drug-related financial flows within Afghanistan, and also to and from neighboring countries (primarily Pakistan), occur through the ubiquitous hawala (informal financial transfer) system."

The report also notes that "Dubai appears to be a central clearing point for international hawala activities, and various cities in Pakistan also are major transaction centers." Dubai is a central location for the financial operations of Dawood Ibrahim's D-Company.

The September article from the Times of India continued, "The bank accounts were traced and he [Khan] was brought in for interrogation. How was it possible for a businessman to have access to so much cash, was the question on everyone's mind. The probe was stymied midway by vested interests with political clout. Ali has done the vanishing act. His wife and brother-in-law too are missing. 'Why was he allowed to go scot free?' asked an IPS [Indian Police Service] officer.

"Sources said there was no evidence of any concrete link between Ali and terror funds. 'Nevertheless, why was he taken off the hook? In any other country, he would have been put through the grind given the volume of his transactions. But in India he has been treated with kid gloves because of the political backing that he enjoys,' another official said.

"In another case, the Mumbai crime branch had gathered evidence about the alleged links between a famous Pune businessman and Pakistan-based brother of don Dawood Ibrahim, Anees Ibrahim.

"An eyewitness gave a detailed account of the goings-on between the businessman and Hamid Antulay, Dawood's nephew in Dubai, and later between the trader and Anees in Karachi. However, the businessman has not been arrested despite the disclosures made more than a year ago. 'We are expected to fight crime, but politicians do not give us a free hand,' a crime branch officer complained."

Mohammed Ali

The Times of India also noted that "Dawood Ibrahim's key contact person is Mohammed Ali, who is known to control smuggling operations in city docks. 'Any consignment can be taken out or brought into the country by Ali's huge gang. A detailed dossier on his activities, which has serious security implications for the country, has been sent to the Union home department. But there has been no response so far,' an official said."

Mohammed Ali also seems to be a protected person in India. Just days after the Mumbai terrorist attacks, the Times of India stated that Mumbai residents "now know their government has done nothing at all to protect the country's financial capital", and again noted that "The Intelligence Bureau (IB) has sent a detailed dossier about the activities of one Mohammed Ali, who is the uncrowned king of the docks. A close aide of Karachi-based terrorist Dawood Ibrahim, Ali smuggles petrol, diesel, drugs, arms and other contraband with impunity."

"There are strong indications," the Times of India added, "that the D-gang actively collaborated with the terrorists in these attacks. And yet, the government is reluctant to move against Ali and his gang because he enjoys the patronage of a powerful politician, known to be a business partner of Dawood."

The article adds, however, that "Any terror operations needs vast funds, via the hawala route. But the authorities are still to crack down on hawala operators. Recently, they picked up Hasan Ali, a racehorse owner in Pune.

"A joint probe by the IB [Intelligence Bureau], enforcement directorate [ED] and directorate of revenue intelligence revealed that Hasan Ali had handled hawala transactions worth a whopping Rs 35,000 crore, much of it belonging to two Maharashtra politicians."

A police officer told the Times of India at the time, before his recent arrest and while he was still missing, "I will not be surprised if Hasan Ali has been done away with. He is the man who knows too much."

Hemant Karkare and False Flag Terror

Maharashtra Anti Terrorism Squad (ATS) chief Hemant Karkare, who also formerly an officer in India's Research Analysis Wing (RAW) intelligence agency, had been in the spotlight for leading the investigation into a series of bombings in the town of Malegaon that was originally blamed on Pakistani-based Muslim terrorists. But Karkare's probe revealed that the perpetrators were in fact Hindu extremists. Included in the arrests was a serving army officer, Lt. Col. Prasad Shrikant Purohit.

The revelations of false-flag terrorism being carried out by home-grown elements sent shock waves through the political establishment.

As the Independent reported [20] on November 23, just days before the attacks on Mumbai, "Bomb attacks are not uncommon in India - there has been a flurry in recent months - but police usually blame them on Muslim extremists, often said to have links to militant groups based in either Pakistan or Bangladesh. As a result, the recent cracking of the alleged Hindu cell has forced India to face some difficult issues. A country that prides itself on purported religious and cultural toleration - an ambition that in reality often falls short - has been made to ask itself how this cell could operate for so long. India's military, which prides itself on its professionalism, has been forced to order an embarrassing inquiry.

"The near-daily drip of revelations from police has also caused red faces for India's main political opposition, the Hindu nationalist Bharatiya Janata Party (BJP), ahead of state polls and a general election scheduled for early next year. The BJP and its prime ministerial candidate, Lal Krishna Advani, have long accused the Congress Party-led government of being soft on terrorism that involved Muslims. However, the BJP has refused to call for a clampdown on Hindu groups, and last week Mr Advani even criticized the police over the way they questioned one of the alleged cell members..."

Karkare was put under immense political pressure and was heavily criticized by Hindutva (Hindu nationalist) leaders and members of the BJP. He had received a number of death threats as a result of his investigation, including a threatening call just one day prior to the attacks in Mumbai last month.

Karkare was killed during those attacks. Rumors with far-reaching implications began to spread immediately that he had been deliberately targeted.

Images of Karkare putting on an ill-fitted bullet proof vest just before his death were widely shown on Indian television.Indian Express noted [21], "His last visuals as seen on TV showed him working with his men near the VT station [Victoria Terminus, the former name of the Chatrapati Shivaji central train station], the target of one of the attacks, although it is perplexing at this point in time why such a senior officer ended up getting exposed to a brazen terrorist attack. Initially, he was shown wearing a shoddy helmet normally seen used by constables during riots. A little later, a policeman lowers a flimsy bulletproof vest over his shoulders, one that was obviously of little protection when those fatal shots were fired at him."

According to [22] the Pakistan Daily Mail, Karkare and several of his colleagues "had received information that their colleague Sadanand Dutt had been injured in the gunfire at the Cama and Albless Hospital for women and children." As they were driving their truck to the scene, according to the only police officer to survive that attack, Arun Jadhav, "two terrorists stepped out from behind a tree and opened fire with automatic rifles".

The Daily Mail article implicated Hindutva elements and Indian intelligence in terrorist attacks, stating that Bal Thakeray, the leader of Shiv Sena, a Hindu nationalist party, has "publicly pronounced in the past to setup Hindu suicide squads to target Muslims in India and Pakistan", and claiming that "The terrorist activities and training needs of these groups are closely coordinated by the Indian intelligence agencies, particularly RAW", which "trained the Tamil separatists groups of Sri Lanka such as the Liberation Tigers of Tamil Elam (LTTE) to start [a] militant secessionist movement based on terrorism in the Sri Lanka's Jaffna peninsula."

A government investigation into the assassination of Prime Minister Rajiv Gandhi, the Jain Commission, in fact confirmed[23] that "The LTTE was getting its supplies, including arms, ammunition, explosives, fuel and other essential items for its war in northern Sri Lanka against the Indian Peace Keeping Force from Tamil Nadu. That too with the support of the Tamil Nadu government and the connivance of the law enforcement authorities."

As noted previously, the investigation found that Adnan Khoshoggi had dealt arms to the LTTE. The commission's report also noted that LTTE's involvement in arms smuggling and other illicit activities "were tolerated" and that a number of murders demonstrated the "impunity with which the LTTE could operate in India."

Earlier this week, Amin Solkar, a lawyer in Mumbai, pressed the High Court to launch an independent investigation into the circumstances under which Karkare was killed. According to [24] India Today, "The Muslims in Malegaon have always claimed Karkare was killed by Hindutva militants and not by Qasab."

"Qasab" is an alternate spelling for "Kasab", a reference to Azam Amir Kasab, the only terrorist from last month's attacks to be captured alive. A transcript of his confession to interrogators was leaked to the media and contains the following statements: "When we were coming out of the hospital premises, we suddenly saw one police vehicle passing in front of us. Therefore, we took shelter behind a bush.

"Another vehicle passed in front of us and stopped at some distance. One police officer got down from the said vehicle and started firing at us. One bullet hit my hand and my AK-47 dropped down. I bent to pick it up when second bullet hit me on the same hand. I got injured. Ismail opened fire at the officers who were in said vehicle. They got injured and firing from their side stopped." Kasab and his companion, Ismail, then removed the bodies of three dead officers and apprehended the vehicle.

Assuming this incident is the one in which Karakare and his colleagues were killed, this characterization of events seems to cast doubt on the theory that the officials were deliberately targeted for assassination, set up and ambushed. But the Joint Commissioner of Police Rakesh Maria, who is in charge of the investigation into the attacks, Rakesh Maria, has rejected[25] the authenticity of the confession document.

Pakistan's The News reported [26] earlier this week that "A Pakistani lawyer C M Farooque claimed that many people, including Ajmal Kasab, were arrested before 2006 from Kathmandu by the Indian agencies with the help of Nepalese forces." Farooque said he was contacted by Kasab's parents and had filed a petition with the Nepalese Supreme Court with regard to the disappeared individuals last February. "The people arrested in Nepal," the report added, "had gone there on legal visa for business but Indian agencies were in the habit of capturing Pakistanis from Nepal and afterwards implicated them in the Mumbai-like incidents to malign Pakistan."

Kasab is from the Punjab province of Pakistan. Rakesh Maria said [27] last week that "He expressed his desire to write a letter to his parents. He wants to write the letter saying he was misled by the group."

More questions about the death of Hemant Karkare were raised [28] this week by Union Minority Affairs Minister A. R. Antulay, who also implied that he may have been deliberately targeted with the involvement of others. "Superficially speaking they [the terrorists] had no reason to kill Karkare. Whether he was a victim of terrorism or terrorism plus something I do not know," he told reporters.

"Karkare found that there are non-Muslims involved in the acts [of] terrorism during his investigations in some cases. Any person going to the roots of terror has always been the target." He added that "There is more than what meets the eye" with regard to Karkare's killing.

After coming under fire for his remarks, he responded [29] by asking, "How come instead of going to Hotel Taj or Oberai or even the Nariman House, he went to such a place where there was nothing compared to what happened in the three places?" He asked, "Why all the three (Hemant Karakre, Vijay Salaskar and Ashok Kamte) went together. It is beyond my comprehension."

He later defended his remarks further, asking, "Who had sent them to Cama Hospital? What were they told that made them leave for the same spot in the same vehicle?" He added, "I repeat what I had said. I had not said who had killed them but only questioned who had sent them there in that direction."

Rajiv Pratap Rudy, spokesman for the BJP party called the remarks "obnoxious" and called for a "clarification from the Prime Minister" whether this was a private view or one held by his government. Congress spokesman Abhishek Singhvi said, "we do not accept the innuendo and the aspersions cast" by Antulay's remarks. "This should be the end of the matter. The Congress does not agree with Antulay's statement."

Others were more inclined to take the remarks seriously. Union Minister Vilas Paswan noted that Antulay was from Maharashtra and suggested he must therefore have "more information".

Vijay Salaskar, who, as previously noted, was killed along with Karkare, "had closely investigated the entrenched links between a prominent gutka [a betel-nut and tobacco based product] manufacturer and the Dawood gang," The Times of India reported [30] in an editorial piece. "He had unearthed a mass of evidence about the manufacturer's visit to Dubai, where he met Hamid Antulay, a nephew of Dawood, and then went on a false Pakistani passport to Karachi where he met the don and his brother Anees. The purpose of the visit was to settle a business dispute with a rival.

"Salaskar found out that the manufacturer was Dawood's partner in the gutka business, alongside a leading politician who dabbles in real estate development. Despite Salaskar's best efforts, he was never allowed even to summon the manufacturer for questioning."

The editorial continued, "The details of Dawood's vast business transactions and the man fronting it are available with the Central government. But there is inaction. Is it any wonder the security agencies are deeply cynical about enforcing law and order and protecting the country? Is it any wonder the people are enraged?"

On December 6, Maharashtra's former revenue minister Narayan Rane alleged in a press conference that the terrorists who had attacked Mumbai the week before received "logistical and financial" support from a number of politicians. According to[31] the Press Trust of India, Rane also alleged that former chief minister Vilasrao Deshmukh had links with a person connected with fugitive gangster Dawood Ibrahim."

Indians Arrested in Connection with Attacks

Two Indians were also arrested in connection with the recent Mumbai attacks. One of the men, Tauseef Rahman, reportedly bought SIM cards that were used by the terrorists, which were purchased in Calcutta according to a report [32] from theAssociated Press. The other, Mukhtar Ahmed, was an undercover operative of for a special counter-insurgency unit of the Calcutta police force.

Another Indian citizen, Faheem Ansari, was arrested in February and is now being questioned about his possible involvement. According to the AP, he was found "carrying hand-drawn sketches of hotels, the train terminal and other sites that were later attacked". According to lead investigator Rakesh Maria, "Ansari was trained by Lashkar and sent to do reconnaissance."

India's top law enforcement official, Home Minister Palaniappan Chidambaram, apologized for failing to stop the attacks, saying "There have been lapses. I would be less than truthful if I said there had been no lapses."

In fact, as previously reported [33] by Foreign Policy Journal, Indian intelligence had numerous warnings of an imminent attack, both from its own sources and from the US. The warnings were specific, including that it would come from the sea. Mumbai, and even the Taj Mahal hotel, were identified as specific targets.

Additionally, Rakesh Maria said [34] his investigation was looking into the possible involvement of Riyaz Bhatkal, the leader of the Indian Mujahideen (IM), in the attacks. "We are looking at various possibilities about who could have provided vital local support and intelligence. Bhatkal being a local person is known to have links with terror outfits."

In October, Indian Express reported [35] that Bhatkal and a terrorist named "Shahrukh" might be the same individual. "Sources said that since his name was linked to the 1993 Mumbai blasts, Bhatkal may have used the name Shahrukh to protect his identity," the newspaper said. One official said, "For the 1993 blasts, he arranged money from Pakistan through hawala channels. But he could not be arrested." In addition, "Officials also suspect an underworld link to the blasts. 'Since Bhatkal's name came up in the Mumbai blasts, it is evident that he is an important financial link for the underworld,' said a source."

Whitewash of the Attacks

Foreign Policy Journal previously reported [36] on indications that the role of Dawood Ibrahim and his network of organized crime in the attacks in Mumbai last month is being downplayed by both Pakistan and the US and assessed that this was "possibly the result of a deal taking place behind the scenes between the governments of the US, Pakistan, and India, to have others involved in the Mumbai attacks turned over while quietly diverting attention from a man who some say could reveal embarrassing secrets about the CIA's involvement in criminal enterprises."

What's clear now, as further developments have come to light, is that there are also elements within India, both in the criminal underworld and the government, that are perfectly willing to see the role in the Mumbai attacks of an even larger shadowy international criminal network whitewashed; a network with links to numerous moneyed interests, including trafficking in drugs and arms, and to numerous intelligence agencies, including the ISI, the CIA, and India's own RAW.

While Dawood Ibrahim is officially a wanted man in the US and India, and is on Interpol's wanted list, the evidence emerging from last month's terrorist attacks in Mumbai is yet another indication that what is commonly referred to as a "shadow government" or "deep state" extending well beyond national boundaries is really pulling the strings behind the scenes in countries around the world, while the public--such as the residents of Mumbai--and well-intentioned individuals within their democratically-elected governments are left paying the price, often in blood.
_______

About author

Jeremy R. Hammond is the editor of Foreign Policy Journal [37], a website dedicated to providing news, critical analysis, and opinion commentary on U.S. foreign policy from outside of the standard framework offered by government officials and the mainstream corporate media, particularly with regard to the "war on terrorism" and events in the Middle East. He has also written for numerous other online publications. You can contact him by clicking here [38].

http://www.smirkingchimp.com/thread/19352

Hasan Ali located in Pune, summoned to police HQ

11 Mar 2007, 0140 hrs IST, Gitesh Shelke & Siddhartha D Kashyap , TNN

PUNE/HYDERABAD: The Pune police have asked stud farm owner Hasan Ali Khan, suspected to be involved in a massive money transfer racket, to present himself at the police commissioner’s office in the next two days.

Inspector (crime) Bhanu Pratap Barge, who served a notice to Khan under Section 161 of the Code of Criminal Procedure (CrPC) on Saturday afternoon, said he had met Khan at a "discreet location" in Pune and given him the notice following orders from additional city police commissioner Rajender Singh. "I cannot disclose his whereabouts but he is very much in the city," he said.

Section 161 of the CrPC refers to police examination of witnesses if they are suspected to be acquainted with the facts and circumstances of a case. Khan's lawyer Viraj Kakade said his client was very much within Pune limits and would make an appearance by Sunday or Monday.

"He wanted to issue a statement on Saturday itself in connection with his alleged involvement in the money-laundering case but I restrained him," Kakade added.

The I-T department had served a notice on Khan at his Mumbai residence on Friday. The notice was received by a representative of Anand Darshan building on Peddar Raod since Khan was absent. The contents of the notice are not known.

Officials also said Khan's friend, Switzerland hotelier Philip Anandraj, was suspected to be the man who knew about his foreign transactions. But neither the I-T department nor Enforcement Directorate officials were willing to say if Anandraj's statement had also been recorded after Khan was questioned by them. Anandraj was in Khan's duplex flat when I-T personnel had raided the place in January.

The 53-year-old Khan is under I-T investigation after Swiss bank account details were allegedly recovered from a laptop in his house. The probe was widened after the ED came in and other foreign accounts were also being investigated, officials said.

http://timesofindia.indiatimes.com/articleshow/msid-1746713,prtpage-1.cms

Sent to judicial custody, Hasan Ali files bail plea

Express News Service Posted: Dec 24, 2008 at 0144 hrs

Mumbai Hasan Ali Khan, 56, the Pune-based stud farm owner who was arrested by the Worli police in a case of possessing multiple passports, was on Tuesday remanded to judicial custody till January 6, by the Bhoiwada metropolitan magistrates court.

Khan had been absconding for over a year. He had recently surrendered before the court.

Immediately after being sent to judicial custody, Khan moved a bail application before the court. The bail plea states that prima facie there is no case under the Passports Act against him, as Khan had submitted correct documents to the passport office, said his lawyer Iswariprasad Bagaria.

He said there was no headway in police investigations in the ten days of police custody and thus no further custodial interrogation was required.

The bail plea also states that Khan does not have anything further to disclose, as the Worli police and Enforcement Directorate (ED) probing his role for having huge funds in his international accounts had already seized all documents. Thus, no more seizures need to be made, the plea said.

The court has directed the prosecution to file its reply on Wednesday when the matter will come up for hearing. Meanwhile, the ED also moved an application before the court stating that if Khan is granted bail then he should be directed to attend its office as and when required for questioning.

ED has been probing Khan’s role under the Prevention of Money Laundering Act and Foreign Exchange Management Act. He is wanted by the ED for allegedly holding unaccounted money to the tune of US$ 8 billion in his Swiss bank accounts and some undisclosed accounts in the UAE. Authorities are investigating his financial transactions within and outside the country, including monetary dealings with international arms dealer Adnan Khashoggi.

Medication for Khan
The court has directed the jail authorities to allow Hassan Ali Khan to take medicines inside the prison. Khan is suffering from diabetes and chest pain and has to be on a regular medication.

http://www.expressindia.com/latest-news/sent-to-judicial-custody-hasan-ali-files-bail-plea/402246/

Downfall of NDA due to Swiss UBS, Hasan Ali and………

By - Premendra Agrawal (7 Feb. 2008)

It is now suspected in the political circles that there would be a conspiracy of Anti-NDA politicians, Swiss bank account holders’ economic offenders and underworld terrorists behind the downfall means defeat of NDA government.

The Securities and Exchange Board of India (SEBI) alleged that UBS had played a role in the 2004 Black Monday stock market crash which followed the National Democratic Alliance government’s defeat in the general elections. SEBI's ruling of May 17, 2005 barred UBS from issuing or renewing participatory notes for a period of one year. The ban was later lifted on appeal, as a result of a government tribunal ruling on September 9, 2005.

NDTV reports on Jan 31: Saudi links traced to Hasan Ali

Another report of NDTV on Jan 30: Hassan Ali likely to have terror links

Bofors villain Quattrocchi and Hawala Hasan Ali had/have Swiss accounts and they have link with the politicians as alleged.

Seized laptop of Hasan Ali is hided about the hawala transaction of minimum 30 politicians of various parties besides eight companies

After combining all these facts, what is probable outcome?

Now UPA govt itself reports that former Deputy PM at the time of NDA govt L K Advani have life threat from the underworld Daud and others.

India blocks licence for UBS amid allegations of money-laundering

Swiss UBS

In June the ministry’s enforcement directorate registered a case against Mr Hasal Ali Khan under India’s Prevention of Money Laundering Act.

Investigators claimed to have uncovered documents showing that Mr Khan, a man of apparently relatively modest means, held as much as $8 billion in illicit cash in accounts purportedly registered at a Zurich branch of UBS. Officials said that they had sought confirmation — or “direct evidence” — from UBS by writing to the Swiss authorities, a request at odds with Switzerland’s banking privacy laws. A spokesman for UBS said it was co-operating fully with the Indian authorities.

Mr Hasan Ali Khan, who could not be contacted on Feb 6, is said to have denied that he held a Swiss account.

India blocks license for UBS amid allegations of money-laundering

Hasan Ali shows our economic progress and Afzal denotes the security of minority-ism. MF Hussain is a symbol of the freedom of expression. Is Advani not communal to attack Congress on Afzal issue?

Hassan Ali likely to have terror links

NDTV reported on Jan 31 that the Hasan Ali story just got murkier with the Enforcement Directorate investigating Pune's billionaire horse breeder making a claim that he could have terror links.

These charges were leveled in an affidavit filed in the Bombay High Court by the Enforcement Directorate.

The charges follow the discovery of $8 billion stashed away by Ali in Swiss Bank accounts - money that is the centre of the country's biggest tax evasion scam.

It's a scam, which ironically started as an investigation into a case of customs duty evasion amounting to a paltry in March last year.

But who exactly is Hasan Ali?

HAWALA HASAN ON THE RUN

Hasan Ali is uptill now safe. He is behind leaders as Arjun behind Shikhandi and Army of Hindu king’s enemy behind cows! Politicians-Eco bandits in laptop of Ali; Ganga dying, corrupt flooded; Bharatratna in future to Afzal…

When it comes to protecting foreign investment through Participatory Notes (PNs), even national security takes a back seat. These derivative instruments allow those who are otherwise ineligible to invest in the Indian stock market. The National Security Advisor recently claimed that terrorist groups were profiting from India’s powerful Bull Run by investing through non-transparent Participatory Notes (PNs). A little later, we were told of the stupendous wealth more than Rs 35,000 crores of Hasan Ali Khan, an alleged hawala operator based in Pune who had managed to fly under the evasion detection techniques of the tax department for several years.

Rat cat run is going on

Later, former BJP parliamentarian Kirit Somaiya alleged that Hasan Ali Khan was linked to two Union ministers. But BJP, too, seems reluctant to follow up on this sensational allegation and has moved on to more routine protests against Special Economic Zones.

Runners of Italian instructed government are shrewd. They did one sin. Opposition makes sound against it. Then government makes other sin quickly and thus this rat cat run is going on. Why Media IT ED silent on Hawala Hasan Ali

Aswamegh Yagya: Rs 35000 cr of Pune’s Racehorse owner Hasan Ali is frozen in Swiss Bank; Swiss is heaven for Eco-criminals. Bil Clinton pardoned Bandit Mark Rich who was sentenced to 325 years. Hasan Ali of Rs 350 million in Swiss: Dung on wall? How did cow climb?

Recall the Quattrocchi a best friend of ’10 Jan Path’. Q is gift of Sonia Gandhi to India

Q ke saath, Congress ka haath

Instead of Rajiv Murder Secrets, PM seeks Swiss support for Nuke deal?

After studying Quattrocchi, Hasan Ali and so many other scams, who can say that our country had never been a ‘Sone ki chidiya’? But Chidamberam say like that. Burns Glorious Past of India: FM Chidambaram

TOI on Congress to FM: Take care of 'aam-aadmi'

E-mail: agrawapremendra@hotmail.com

http://www.newsanalysisindia.com/207022008.htm

Businessman Hasan Ali arrested in Mumbai in fake passport case

December 15th, 2008 - 10:01 pm ICT by IANS Mumbai, Dec 15 (IANS) Multi-millionaire Pune businessman and stud farm owner Hasan Ali was arrested and sent to jail till Dec 19 in connection with a fake passport case, the police said.An official of the Worli police station told IANS that Ali, who was declared a “proclaimed offender” by the Bhoiwada court in May this year, has been nabbed for holding three fake passports which were acquired from Mumbai, Hyderabad and Patna.

He had applied for two more passports from Chandigarh and Guwahati, following which a case was registered early 2008, the official said.

Shortly thereafter, Ali applied for anticipatory bail, which was rejected by the Bombay High Court.

Thereafter, he neither moved the Supreme Court nor surrendered, prompting the Worli police to approach Bhoiwada court to declare him a proclaimed offender, which would enable the police to seize his property after the court’s permission.

To avoid this, the proclaimed offender must surrender to the police and face the charges.

Ali (55) was also on the watch-list of the Enforcement Directorate (ED) for alleged involvement in a Rs.100 billion ‘hawala’ (illicit money transfer) scam. It registered a case against Ali in January 2007.

Ali was also under the scanner of the Mumbai Police, Income Tax department, Securities & Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and Ministry of External Affairs (MEA) through its passport offices in different cities.

http://www.thaindian.com/newsportal/uncategorized/businessman-hasan-ali-arrested-in-mumbai-in-fake-passport-case_100131306.html

Hyderabad police distance themselves from Hasan Ali

Syed Amin Jafri of Hyderabad | March 13, 2007 | 15:43 IST

The Hyderabad police seem to have washed their hands of Syed Hasan Ali Khan alias Hasan Ali, the 53-year-old stud farm owner allegedly involved in a mega-crore money-laundering scam, by claiming that all the seven criminal cases pertaining to him have been disposed of by the courts.

Hyderabad Police Commissioner Balwinder Singh and Additional Commissioner of Police (Crimes) told newsmen on Monday that two cases of bank fraud, four cases of cheating and a case of acid attack on a doctor were lodged against Hasan Ali in various police stations.

"No case is pending against him as all the previous cases were disposed of by the courts," they pointed out.

According to senior police officials, in 1990, the manager of State Bank of India, Charminar branch, had lodged a complaint stating that Hasan Ali had fraudulently withdrawn a total of Rs 26 lakh on three occasions against cheques that later bounced. A similar case was lodged for defrauding the Grindlays Bank.

In September 1991, the central government had announced an amnesty scheme wherein it allowed Indian citizens to get foreign exchange from outside. Subsequently at least four persons approached Hasan Ali, who promised them demand drafts in dollars.

He had allegedly collected Rs 10.35 lakh from Suresh Mehta, Rs 6.29 lakh from Rajesh Gupta, Rs 36 lakh from T Ramnath and Rs 18.22 lakh from P Rama Koteswara Rao.

He then produced 'international money orders' and handed over demand drafts to them to encash the dollars. However, the customers found the DDs to be fake and lodged complaints with the police in 1992.

The Hyderabad City police had arrested Hasan Ali twice between 1991 and 1992, once for allegedly cheating the State Bank of Hyderabad and the next time for duping private persons.

The city police had caught him in 1991 with the help of Interpol and the Canadian police for cheating the SBH. On the pretext that his mother was ill in Toronto, he had fled to Canada after a case was registered against him.

The Hyderabad police had alerted Interpol about Hasan Ali and they informed the Toronto police who arrested him and brought him to Mumbai, after which he was taken to Hyderabad. Subsequently, he was acquitted.

He is said to have been picked up by the police from Mumbai again in 1992, brought to Hyderabad and remanded to judicial custody in one of these cheating cases. The police had seized four cars, including a Mercedes, from him. He went free, however, since the victims did not come forward to pursue the cases against him.

The oldest case against Hasan Ali pertained to an acid attack on a doctor, his neighbour, in 1984. Dr P Niranjan Rao's face was disfigured and he had to undergo 30 surgeries. Since the police could not trace the records relating to the case, it is not clear whether Hasan Ali was arrested and acquitted in this case.

Hailing from a Hyderabadi family based at Musheerabad, Hasan Ali has a brother and four sisters. He married Mahboobunnissa Begum in 1985 but divorced her in 1999. Mahboobunnissa now lives with her two sons at Banjara Hills in Hyderabad.

http://www.rediff.com///news/2007/mar/13ali.htm

UPA has failed to provide critical information to the Supreme Court on public loot in tax havens

Why was this critical fact hidden from the affidavit submitted to Supreme Court, that UPA Govt. had sent forged documents to Switzerland?

Something is rotten in the state.

Kalyanaraman

“No response to Swiss request”

Vinay Kumar (The Hindu, 8 May 2005)

NEW DELHI: Swiss authorities have told an Indian news magazine that Indian authorities submitted in the case of Pune-based stud farm owner Hassan Ali Khan, who has a Swiss bank account, a request in January 2007 for legal assistance to the Federal Office of Justice. Swiss authorities, upon domestic inquiry, found that the banking information provided with the request for legal assistance contained “forged documents.”

Last week, the Centre, in an affidavit to the Supreme Court, had detailed the action it had taken against Hassan Ali Khan, his wife Rheema and Kolkata-based businessman, Kashi Nath Tapuria, who allegedly were holding about $ 8 billion in an UBS account in Switzerland.

In a communication from Folco Galli, Information Chief of the Swiss Department of Justice and Police, Berne, the magazine Hardnews was informed that the Indian authorities had submitted “forged” documents to seek assistance in the Hassan Ali Khan case. In its May issue, the magazine said the Swiss sought more information.

“Swiss authorities want to provide further assistance in that case if the Indian authorities could satisfy the Swiss government’s demand to establish dual criminality – what is crime in India is a crime in Switzerland. The Swiss also wanted to know whether the offence was an object of Indian money laundering. Since April 2007, the Indian government has not responded.”

http://www.thehindu.com/2009/05/08/stories/2009050861061300.htm

It’s the Bofors ghost, again

By Seema Mustafa
06 May 2009 03:27:00 AM IST

(New Indian Express)

Bofors is a story that will just not go away. It cannot for reasons that Congress president Sonia Gandhi cannot fathom. And the reasons are many. It was the first case where kickbacks in a defence deal were confirmed. It was the first case that the Indian media pursued in great detail, and with tremendous enthusiasm.
It was the first case that actually established a trail between middlemen, high flying ‘foreign’ connections and the Nehru- Gandhi First Family of India. It was the first case that brought down a government, that astounded not just the middle class but also the villagers, and that assumed a dynamics of its own that is still able to generate heat during an Indian election.
It is a story where the middlemen might be dead but the Italian businessman Ottavio Quattrocchi, a close friend of Sonia Gandhi, is alive and kicking. During his days in Delhi he told this columnist on more than one occasion that he was not really such a good friend of Sonia Gandhi, at a time when his was one of the few names to have been cleared for free entry into then Prime Minister Rajiv Gandhi’s residence. Quattrocchi has subsequently changed his tune, and now when he is actually not such a good friend of Sonia Gandhi, he makes it clear to any reporter who manages to meet him abroad that they are great friends, and know each other extremely well. Obviously, in saying so the wily Italian businessman has managed to make it clear that he knows a lot more than he is saying, and that if the Indian government does manage to get his head into the noose, he will talk. And talk happily.
Quattrocchi was the representative of Snamprogetti in India before Rajiv Gandhi became prime minister. He used to operate from a one-room office, where this columnist met him a couple of times. He was not particularly a happening person in Delhi, but fortunes changed for him when they changed for Rajiv and Sonia Gandhi. The coincidence can be tracked, and actually was tracked at the time by us in various sections of the media. Quattrocchi’s business bloomed, he moved into a posh office, he put on weight, light weight suits, and was recognised in Delhi’s exclusive circles as a happening man, with access and clout.
His area of influence extended outside his company, and covered many deals that are now only whispered about.
In an extensive interview with this columnist in 2004 Sten Lindstrom, the Swedish police officer who had doggedly pursued the Bofors case until time made him close the file because of strict Swedish laws, made it clear that Mr Q was a recipient of a certain amount of money from the Bofors deal. He said that this was not large enough to merit suspicion that Quattrocchi had a direct hand in this particular transaction, but appeared to be a fee being paid through Bofors for other favours done. He said that during his investigation the Italian businessman’s name cropped up only towards the end, and after questioning the Bofors officials concerned, Lindstrom reached the conclusion that Quattrocchi was a recipient because of his powerful connections. He spoke of the businessman’s accounts in London, having gone there himself to pursue these and establish the trail back to the Bofors kickbacks.
Lindstrom had made significant progress, and was surprised that the Indian authorities were not particularly interested in any of the details, and had just allowed the matter to lapse. He felt that the trail was strong enough to get the surviving beneficiaries of the Bofors kickbacks, and was amazed at the lack of enthusiasm from Delhi. Lindstrom gave specific details about the deal, but such was the atmosphere when the serialised story was broken by us that the Congress, Left and their supporters in and out of government united to try and shoot the messenger rather than take the powerful message coming out of Stockholm, with amazing details, on board.
The result is that in the intervening years the CBI was unable to collect evidence, although it is available in plenty, to pin Quattrocchi down in courts abroad; he himself evaded the law and the supposedly vigilant Indian machinery to get back to Italy; his accounts in London that had been frozen as these could establish the trail to the kickbacks were released as the Indian government sat back and deliberately let the reminders lapse; the money was withdrawn by him almost immediately; and then when he was arrested by Argentina under an Interpol notice issued at the time of the Bofors case, the government ensured that the case was completely botched up and Quattrocchi was able to walk out a free man. And now to complete the circle, on the eve of the elections the CBI, under instructions, has withdrawn the Interpol notice against him and the Italian friend of Sonia Gandhi is a free man. This has been done during the elections, after it has become increasingly clear that the Congress might not be able to form the government.
And everyone knows that in case a government here is able to get Mr Q to justice he will squeal. And that could be worrisome for some.
The BJP has made some valiant noises on the deal but has not been able to explain why it did not pursue the case with the same vigour as the V P Singh government had. The Congress has been defending the decision on the record, but privately Congressmen tell critical reporters, “what do you expect us to do, we have to defend this or we will lose our job”. Of course Priyanka Vadra and Rahul Gandhi do not see what the fuss is about, but obviously they know the answer for if there is no need to fuss, there was no need to prime the CBI to save the Italian businessman. It has been a shameful deed, a gross violation of the law, and while there is sufficient information to damn the CBI, the fingers are now pointing very directly at those who are in power and in control. Prime Minister Manmohan Singh is amongst those responsible. He makes a penchant of honesty; this is the time for him to explain these murky developments.
Clearly there are problems, and Bofors will not go away from media memory just because the Nehru-Gandhi family wishes it so. They should also realise that by misusing the official machinery to save Quattrocchi from the long arm of the law, over and over again, guilt and not innocence has been established. And in the public perception this is enough to keep the Bofors ghost alive. And the favourite pastime of ghosts, as we know, is to haunt.
About the author:
Seema Mustafa is a commentator on political affairs

http://www.expressbuzz.com/edition/print.aspx?artid=dNwmL1d0wiI=

Black money: Why was UPA Govt keeping mum all these years?

M.V.KAMATH (Free Press Journal, 8 May 2009)

[ Why has the UPA government been keeping quiet all these years? It would seem that throughout the Nehruvian socialistic period, underinvoicing of exports and overinvoicing of imports was very common and the monies thus illegally raised was put in safe custodies of banks in Antigua, Switzerland, Bahamas, Lichtenstein, Isle of Man, St. Kitts etc. ]

For some weeks now, L.K Advani has been proclaiming that if the BJP-led NDA coalition comes back to power, it would facilitate the recovery of black money stashed by many Indians in tax free havens abroad, hopefully within a hundred days.

According to one estimate, the illegal money secreted abroad in tax havens varies between $ 500 million to $ 1.4 trillion! That is equivalent to Rs 70 lakh crore which is more than India’s national income of around Rs 50 lakh crore! Who are these people who have been cheating India for years now?

They include importers and exporters, industrialists, people who have received kickbacks from major defence and civilian contracts, and even cinema and sports stars. According toR.Vaidyanathan, Professor of Finance and Control, Indian Institute of Management, Bangalore whose report in the April issue of Eternal India is an eye-opener, India should join hands with different world bodies, including the G-20, to recover the money. It can be done according to one source easily.

Apparently the German Government has announced that it would share information on accounts held in tax havens, with any government that wanted it.

Mr. Vaidyanathan, who can be contacted at vaidya@iimb.ernet.in

quotes the spokesman for the German Finance Ministry, Thorsten Albig, as indicating that they would respond to such requests without charging any fees for the information.

Why has the UPA government been keeping quiet all these years? It would seem that throughout the Nehruvian socialistic period, underinvoicing of exports and overinvoicing of imports was very common and the monies thus illegally raised was put in safe custodies of banks in Antigua, Switzerland, Bahamas, Lichtenstein, Isle of Man, St. Kitts etc.

Foreign tax havens can be forced to reveal the origins and nature of illegal accounts they have been holding. It would seem that under pressure from the U.S.Federal authorities, a wellknown Swiss bank, known as UBS, has closed down hidden offshore accounts of its well heeled American clients, potentially allowing their secrets to spill out into the open. UBS will be shutting down 19,000 accounts that prosecutors suspect have gone undeclared to Americas Internal Revenue Service.

Incidentally, the UBS reportedly paid a penalty of over $ 800 million to the U.S., disclosing the secret accounts of three hundred American depositors.Writes Vaidyanathan: “ But in India, the same UBS paid a paltry penalty of a few lakh rupees to the Securities & Exchange Board of India (SBI) for not disclosing the names of secret P.N. holders whose funds it had invested, and settled the case just a couple of weeks back”. P.N.stands forParticipatory Notes.

The PNs are preferred instruments of investment. The money invested in India through PNs between 1994 and 2004 was of the order of Rs 3,53,484 crores by August 2007, an increase by over 11 times in 40 months.

The investors are all nameless.

They participate in our markets invest and disinvest stocks worth billions of dollars and make and repatriate profits. And no questions asked.Indeed, according to Vaidyanathan, India has shown marked disinclination to lay its hands on the data pertaining to illicit money kept by Indian nationals in secret bank accounts, and to strive to get back the Indian wealth hoarded in Swiss and other banks. Vaidyanathan makes the charge that while things are moving fast and the very western nations which once encouraged the Swiss Bank’s secrecy are now against secret banking, `the Indian representative at the G-20 preparatory meeting in Berlin did not utter any word of support for the move.’

Prime Minister Dr. Manmohan Singh owes an explanation to the Indian people. Vaidyanathan adds: “If India joins hands with the Organisation for Economic Cooperation and Development (OECD) and G-20 nations and a deal comes through between the G-20 and different tax havens, particularly Switzerland, the process to recover Indian monies can be much shorter and hugely successful.”

And if it becomes successful, Indian Foreign Exchange Reserves will get a tremendous boost; India can then really compete with China whose reserves are ten times that ofIndia. But more importantly, the money will facilitate infrastructural development.

According to Mr. Pranab Mukherjee, it is not true that the UPA government has not given thought to the issue. According to him, the government has been mounting pressure on the Financial Action Task Force (FATF) and other similar regional bodies under its umbrella like Asia Pacific Group on Money-Laundering and Counter-Financing of terrorism.

He also said that after amendments to the Prevention of Money Laundering Act were passed by Parliament last February, the matter was taken up at the FATF plenary held in Paris, where they have agreed to mutual evaluation which was pre-requisite for granting Indian membership of the body.

Mukherjee hopes that India would get the Membership soon, after which it would be easier to handle tax evaders.

What is surprising is that though tax evasion had started during the Nehru era, it has taken the Congress Party six decades to wake up. It doesn’t speak highly of the Congress. Was it lethargy, was it forgetfulness or was it deliberate? What is shocking to learn is the casual way in which Indians at many economic levels and from various segments of lifehave been making free use of Swiss banks for stashing money. Vaidyanathan estimates that `at least’60,000 Indians visit Switzerland and not all going there to learn ski-ing.

Interestingly, Zurich in Switzerland is the only European city with trams sporting Hindi slogans on their sides! That says something about the Swiss desire to pander to Indian tax evaders who probably outnumber similar people from otherespecially developingcountries.

Asia as a whole apparently accounts for approximately 50 percent of overall illicit financial flows from all developing nations.

The average money taken away from India annually during 2002 to 2006 is supposed to be around $ 27.3 billion. Which means in those five years the amount stashed away equalled $136.5 billion or about half of India’s Foreign Exchange Reserves. It is something to ponder over.

Instead of constantly talking about secularism, our political parties can talk about money stashed abroad and how to get it back.

L.K. Advani has made a good start. He needs the support of all decent-minded voters in India.

http://www.freepressjournal.in

Congress made lives of 'aam aadmi' difficult, says Modi

May 06, 2009 15:44 IST

On the issue of the black money stashed in foreign banks, Modi cited former Prime Minister Rajiv Gandhi's [Images] statement that out of every rupees spent by Centre for the poor, only 10 paise reaches to them.

"The remaining 85 paise which went to the corrupt officers and leaders during the last 60 years are lying in foreign banks. If it comes back to the country, it can change the lives of crores of people," he claimed.

http://election.rediff.com/report/2009/may/06/loksabhapoll-cong-responsible-for-aam-aadmi-woes-modi.htm

Shy Rao, shameless Singh

By S Gurumurthy
05 May 2009 01:42:00 AM IST(New Indian Express)

The Quattrocchi case is an embarrassment for the Government of India... The court says we do not have a strong case”. It is not Antonia Maino (aka Sonia) Gandhi defending her Italian friend. It is Prime Minister Manmohan Singh as if she had appointed him as the advocate to plead for Q. “It’s not a good reflection on the Indian legal system,” says the PM moved by compassion for Q, “that we harass people while the world says we have no case.” Singh, who was with the South Commission on a comfortable salary and perks when the Bofors scam rocked the country, seems totally unaware of the facts of the Bofors scam. Here is a short trailer of the scam.
The Bofors scam — pay-off for India’s gun purchase deal with Sweden — broke out in 1987. A third of the Indians living today were not yet born then; and a fourth of the Indians living then are no more alive today. So some history needs to be recalled here. First, the Bofors payoff was exposed by the media and the Rajiv government went all out to suppress the exposure. Including the payoff of $36.5 million to Q, the Bofors deal contemplated three streams of payoff totalling $250 million. Persistent investigations by the media and the CBI brought out the involvement of Q in the gun deal.
The closeness of Q and his wife Maria to Sonia family was always well known.
The Sonia and Maria families spent their weekends and annual holidays together.
They left one’s children in the custody of the other when going out of station. So intense was their relationship. The media found that some $7.3 million from Bofors AB had found its way into Q’s secret bank accounts. Facts began to tumble out testifying that it was fee to Q for swinging the $1.2 billion gun deal for the Swedish gun maker.
Here is how Q got the deal for Bofors.
The Rajiv Gandhi government could not decide for a long time what gun to buy — the British, Austrian or Swedish. The two brokers engaged by Bofors could not expedite the deal. Suddenly, in the second half of 1985, AE Services (AES), a shell company, entered the deal with this offer to Bofors: “Look. If we get you the deal by March 31, 1986, give us a fee of three per cent. If not, don’t pay.” Bofors accepted the offer and signed up with the AES shell on October 15, 1985. Unless Bofors knew that the man behind AES had had the clout to get it done from the Rajiv government, it would never have signed with a shell company.
And AES shell did get the Rajiv government to sign the contract with Bofors on March 22, 1986 — seven days ahead of the target date of March 31, 1986. Within six months, AES got the first tranche of its fee of $7.3 million. Proof emerged slowly that this money finally went to Q, showing he was the man behind the shell.
■ Bofors remitted on September 3, 1986, $7.3 million into AES account number 18051-53 in Nordfinanz Bank, Zurich.
This equalled 20 per cent of the three per cent bribe of $36.5 millions due to AES.
■ Two weeks later (on September 16, 1986) AES delivered $7 million into account number 254.561.60W in the same bank in the name of Colbar Investments — a company controlled by Q and Maria.
■ In April 1987, the Swedish Radio broke the news of bribes in Bofors deal with India. Later, in June 1988, the media published authoritative documents seized by the Swedish police which established the payoff. By now, Bofors scam had become a huge national issue.
■ Forthwith Q and Maria hurriedly shifted their loot, grown with interest, from Geneva to Channel Islands, to New York to Austria. First, on July 25, 1988 $7.9 million moved from Colbar to account number 488.320.60X of Wetelsen Overseas SA, in UBS, Geneva. Next, on May 21, 1990, $9.2 million moved from Wetelson to account number 123983 of IIDCL, Ansbacher, St Peter Port, Guernsey (Channel Islands). Later, on June 5, 1990, $2.4 million channelled into code-named account ‘Robusta’ in Banque Karfinco SA from Swiss Bank Corp, New York. Afterwards, on June 12, 1990, $5.3 million was transferred to code-named accounts ‘Arabica’, ‘Robusta’ and ‘Luxor’ in Austria from Swiss Bank accounts in Geneva.
■ Within six days of the Swiss government giving these details to India in 1993, Q slipped out of India and turned a fugitive, thanks to the Narasimha Rao government helping him to run away.
■ Later, in June 2003, Interpol found that Q and Maria had two accounts, bearing numbers 5A5151516L and 5A5151516M in the London branch of the Swiss bank BSI AG with Euros three million and $1 million.
They were frozen on CBI’s request.
British courts later repeatedly turned down Quattrocchi’s several appeals to de-freeze the accounts.
■ But, on December 22, 2005, the Congressled UPA government U-turned. H R Bharadwaj, the law minister, got the additional solicitor general of India, B Dutta, to go to London to do the dirty job of releasing the amounts.
Can anyone say now that Q is innocent and he just received some charity of $7.3 million from Bofors? Yet the Sonia-led government allowed Q to smuggle the bribe from the frozen accounts. All that the CBI asks of Q is this: Come to India and answer these questions — why Bofors paid him the money; did it relate to the gun deal; what is his relation with Sonia family, AE Services, Colbar Investments and the coded and numbered bank accounts through which the payoff has finally reached him.
Why not Sonia Gandhi just ask him to appear before the court and prove his innocence? Why does she, on the contrary, abet his refusal to present himself before courts in India? It is clear that she will not ask him. Why? Here is the answer: unless Sonia protects Q here, he will not protect her outside. The stakes seem to be too high.
QED: Manmohan Singh today does what Sonia wants like Narasimha Rao did then what she wanted. Yet, there is a difference between how the two obliged her. Rao felt shy to do what she wanted. So he did it stealthily. Singh does what she wants openly and shamelessly. Even, a Sonia family retainer like H R Bharadwaj feels shy to own up the shameless withdrawal of the Red Corner Notice on Q; but the PM owns it proudly. Singh is shameless about what Rao used to feel shy. Why? Unlike Rao, Singh is not an elected prime minister but a nominated one; he is not chosen by democratic process, but selected by the dynasty; he is not backed by the people, but backed by the family. So the shift from shyness to shamelessness, from Rao to Singh
comment@gurumurthy.net
About the author:
S Gurumurthy is a well-known commentator on political and economic issues

http://www.expressbuzz.com/edition/print.aspx?artid=FvmryIR06eM=

Obama Calls for New Curbs on Offshore Tax Havens

By JACKIE CALMES and EDMUND L. ANDREWS

(NYTimes May 5, 2009)

WASHINGTON — President Obama on Monday called for curbing offshore tax havens and corporate tax breaks to collect billions of dollars more from multinational companies and wealthy individuals.

The move would appeal to growing populist anger among taxpayers but is likely to open an epic battle with some major powers in American commerce.

With the proposals he outlined at the White House, the president sought to make good on his often repeated campaign promise to end tax breaks “for companies that ship jobs overseas.”

He estimated the changes would raise $210 billion over the next decade and help offset tax cuts for middle-income taxpayers as well as a permanent tax credit for companies’ research and development costs.

The changes, if enacted, would not take effect until 2011, when administration officials presume the economy will have recovered from the recession. But business groups were quick to condemn the White House for proposing tax increases amid a global downturn.

“This plan will reduce the ability of U.S. companies to compete in foreign markets, which will not only reduce jobs, but will also cripple economic growth here in the United States. It couldn’t come at a worse time,” said John J. Castellani, president of the Business Roundtable, a trade association of major businesses.

The proposals would especially hit pharmaceutical, technology, financial and consumer goods companies — among themGoldman Sachs, Microsoft, Pfizer and Procter & Gamble — that have major overseas operations or subsidiaries in tax havens like the Cayman Islands.

They also have some of the mightiest lobbying armies in Washington, as well as influential patrons in Congress. That combination will test Mr. Obama’s ability to stand up to powerful interests and marshal support among lawmakers at the same time that he is trying to win passage of major health and energy measures.

At issue are tax laws that were originally intended to prevent multinational corporations from being double-taxed, by the United States and by foreign countries, by allowing companies to defer reporting their foreign income to the Internal Revenue Service and to get tax credits in the United States for foreign taxes paid.

Economists are divided over whether higher taxes would give corporations incentives to move jobs overseas or impair economic growth at home. In the coming debate, both Mr. Obama and the business lobby will claim that their way will save jobs.

The top corporate tax rate is 35 percent, but the Treasury Department estimated that in 2004, the most recent year for which data is available, American multinationals paid $16 billion in taxes on $700 billion in foreign income — an effective rate of 2.3 percent.

Mr. Obama’s tax-raising initiative comes amid government bailouts for major financial institutions, auto companies and insurance giants, and polls show growing opposition. In February, a Senate proposal to give multinational companies a big tax cut if they brought profits back to the United States was defeated by a surprisingly large margin.

The president, in his remarks, reflected the public’s restlessness in some of his most populist language to date.

Mr. Obama said most Americans paid taxes as “an obligation of citizenship,” but some businesses and rich people were “shirking” their duties, “aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals.”

“It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It’s a tax code that makes it all too easy for a number — a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all,” the president said. “And it’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.”

The Democratic chairmen of the House and Senate tax-writing committees, Representative Charles B. Rangel of New York and Senator Max Baucus of Montana, said in statements that some of Mr. Obama’s proposals reflect ideas from their panels. But Mr. Baucus also kept his distance, saying “further study is needed to assess the impact of this plan on U.S. business.”

Congressional Republicans, usually quick to condemn any tax increase proposals, were relatively quiet, perhaps reflecting wariness about appearing to defend tax shelters. Senator Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee and a frequent critic of tax schemes, said the president could “count on my support” to crack down on abuses. “But if he’s using tax shelters as a stalking horse to raise taxes on corporations at the cost of U.S. jobs, he’ll lose me,” Mr. Grassley added.

Business groups had feared Mr. Obama would seek repeal of the tax-deferral law but he stopped short of that. Instead, one of his proposals would prohibit companies from taking deductions in the United States for expenses on overseas investments until they have paid domestic taxes on the profits from those investments. Treasury estimated this proposal alone would raise $60.1 billion from 2011 through 2019.

General Electric has deferred American taxes on $75 billion in foreign profits by keeping them outside the United States, according to its annual report for 2008, and said it has no plan to ever repatriate that money. Citigroup, which has received $45 billion in bailout assistance, has deferred taxes on $22.8 billion in foreign income.

The administration would raise $86.5 billion by changing so-called check-the-box rules to end the practice in which some companies create foreign subsidiaries to shift income in ways that avoid taxes.

The Government Accountability Office has found that 83 of the 100 largest American companies have subsidiaries in tax havens; it counted 83 subsidiaries for Procter & Gamble alone, including in Bermuda, the Cayman Islands and Liechtenstein. Financial services companies had even more, with Citigroup showing 427 and Morgan Stanley, 273.

Another proposal would close a loophole that allows companies to inflate the credits they claim for foreign taxes to the I.R.S., for an estimated $43 billion in new revenues. Separate steps to crack down on wealthy individuals would raise nearly $9 billion.

Tax experts, including some with Democratic leanings, caution that the proposals could put American corporations at a competitive disadvantage. The United States is part of a dwindling minority of industrialized countries that tries to tax corporate profits on a global basis. Most European governments tax corporations on the basis of their profits within their borders. “If other countries are adopting systems that are friendlier to multinational corporations, then companies will have an incentive to locate their corporate headquarters outside the United States,” said Alan Auerbach, a professor of economics at the University of California, Berkeley, who advised Senator John Kerry during his 2004 presidential campaign.

James Hines, an economics professor at the University of Michigan, suggested the president’s proposals could be seen as creating unfair trade advantages for domestic goods and services.

http://www.nytimes.com/2009/05/05/business/05tax.html?_r=1&hp=&pagewanted=print

Obama Takes Aim at Offshore Tax Havens

By JEFF ZELENY MAY 4, 2009, 8:05 AM (NYTimes)

Updated
President Obama will present a set of proposals on Monday aimed at changing international tax policy, calling for the elimination of benefits for companies and wealthy individuals that harbor their cash in offshore accounts.

The president and Treasury Secretary Timothy F. Geithner will announce their plans during a late-morning appearance at the White House. The proposed overhaul in the tax code, which will be fully unveiled in the administration’s budget later this week, could help raise $210 billion in revenues over the next 10 years.

One of the key proposed changes would restrict companies from deferring the payment of taxes on profits earned overseas. Administration officials said the plan also would keep firms from taking deductions against their taxes by inflating the amount of foreign taxes they paid.

Mr. Obama raised the idea frequently during his presidential campaign. In a speech to Congress in February, as he outlined his priorities for the year, he pledged to make the tax code more equitable by “finally ending the tax breaks for corporations that ship our jobs overseas.”

The White House said that Mr. Obama would seek to crack down on overseas tax havens in an attempt to “close the international tax gap.” The president is aiming to take away the competitive advantage for companies that invest and create jobs overseas, working to replace their tax advantages with incentives to produce jobs in the U.S.

Several large businesses have opposed the proposal, telling Congressional leaders in March that the provisions would make U.S. companies less competitive. About 200 companies and trade associations, including Microsoft Corp., General Electric Co. and the U.S. Chamber of Commerce, signed a letter stating that the proposed changes to the tax code would put them at a disadvantage with their rivals.

While Democrats have a strong majority in the House and Senate, the administration’s proposals are still expected to face considerable opposition.

In his presidential campaign last year, Mr. Obama often criticized provisions in the tax code that allowed American firms with overseas operations to defer paying taxes on corporate profits, providing that they placed the money back into their foreign subsidiaries.

In his speech on Monday, the president will call for an end to that practice, as well as seeking to close the loopholes that allow companies and individuals to legally avoid paying billions in taxes through hidden accounts.

The White House said that Mr. Obama also will call for a crackdown on the abuse of tax havens by wealthy individuals. Officials said the president will propose making it more difficult for financial institutions and wealthy Americans to evade their taxes.

The speech is scheduled for 11:05 a.m. in the Grand Foyer of the White House

http://thecaucus.blogs.nytimes.com/2009/05/04/obama-takes-aim-at-offshore-tax-havens/?hp

UPA questions SC authority to review public loot in tax havens

It is unfortunate that the media does not provide a copy of the affidavit filed by UPA government in SC. One has to glean the truth from many reports.

One thing is clear. The government also pointed out that the issue of retrieving black money stashed abroad is in the realm of international law and diplomacy and beyond the ambit of judicial review.

Did SC ask for this?

Kalyanaraman

Germany has given tax evaders’ details to India: Government (Second Lead)

May 2nd, 2009 - 8:54 pm ICT by IANS -

New Delhi, May 2 (IANS) Assuring the Supreme Court that it was trying to retrieve black money stashed in tax havens abroad, the government Saturday said it has already received information from Germany on Indian money in a tax haven and income-tax sleuths were following up the matter.
The finance ministry revealed this in a 27-page affidavit submitted to the apex court in response to a lawsuit accusing the Congress-led government of doing precious little to retrieve Indian black money stashed abroad, worth an estimated Rs.70 trillion.

In its affidavit, the government also told the court that after persistent efforts in collaboration with international community Switzerland agreed to make its secretive banking laws and norms more transparent in tune with the global standards.

Priya V.K. Singh, director of the department of revenue under the finance ministry, told the court that following its repeated efforts since Feb 27 last year, the government got the information on Indians having with secret accounts in LGT Bank in Liechtenstein March 18 this year.

The government, however, added in its affidavit that the information procured cannot be made public owing to the condition of strict confidentiality under which it was procured.

“On account of persistent follow-up by the government, the German government provided the information (about Indians having secret bank accounts) on March 18, 2009,” said the affidavit.

The move followed a media report in February 2008 that a former employee of the bank in Liechtenstein had sold data on about 1,400 account holders to tax authorities across the world.

“The said information, however, was made available on the condition of strict confidentiality of contents under the Double Taxation Avoidance Agreement,” it added.

“The information received from the German authorities has been forwarded to various taxation authorities concerned for action” under the tax laws and tax authorities have initiated action, said the affidavit.

Responding to the allegation in the lawsuit that the government had done nothing to retrieve “black money” of Pune resident Hasan Ali Khan and his associate Kashinath Tapuria stashed in UBS Bank of Switzerland, the affidavit said the government has already approached Swiss authorities for information.

The affidavit said though the Swiss authorities have already acceded to the international community’s plea for greater transparency in banking operations there, they are yet to implement it through changes in their internal laws.

As a result, India is yet to procure any significant information from Swiss authorities about Khan’s accounts.

The affidavit said that the income tax department, on the basis of evidence gathered during its probe, has raised a demand of tax worth over Rs.718 billion against Khan, his wife and their associates.

The government said that the Enforcement Directorate is also proceeding independently against them for flouting the financial laws.

Questioning the timing and notice behind the filing of the lawsuit, the government affidavit sought its dismissal saying that it was politically motivated as it came during elections and had been filed by people either close to or belonging to the main opposition Bharatiya Janata Party (BJP).

The lawsuit was filed by former law minister Ram Jethmalani, former Lok Sabha general secretary Subhash C. Kashyap and former Punjab police chief K.P.S. Gill.

The government also pointed out that the issue of retrieving black money stashed abroad is in the realm of international law and diplomacy and beyond the ambit of judicial review.

http://www.thaindian.com/newsportal/business/germany-has-given-tax-evaders-details-to-india-government-second-lead_100187498.html

P-Notes in country’s larger interest: Centre tells SC
4 May 2009, 0233 hrs IST, Sanjay K Singh, ET Bureau

NEW DELHI: The Centre has told the Supreme Court that investments through the issuance of participatory notes (P-Notes) are in the larger

economic interest of the country.

In an affidavit filed in the apex court on Saturday, the government said, “The expert group on encouraging FII flows and checking the vulnerability of capital markets to speculative flows (the Lahiri committee) discussed by various concerns arising out of P-Notes issued by FIIs. The central government has decided the continuation of issuance of P-Notes is in the larger economic interests of the country”.

The affidavit is in response to a PIL filed by former Union law minister Ram Jethmalani and others contending that P-Notes were undesirable instruments since they did not disclose the true identity of investors. The PIL has been listed for hearing on Monday.

Significantly, the government said in its affidavit that it is “unable to subscribe to the position that evidence exists with Sebi that anonymous entities are misusing P-Notes in the Indian markets”.

It also said that Sebi is empowered to obtain information about the final holder/beneficiary or of any holder at any point of time in case of an investigation or inquiry. FIIs are now obliged to provide the requisite information to the markets regulator, the Centre said.

“The central government was duly informed by Sebi that the Sebi (FII) Regulations, 1995, as amended, already provided for disclosure of full information regarding P-Notes issued by the FIIs/sub-accounts/affiliates, as and when in such form as the Sebi may require,” the affidavit said.

The Centre said the monthly reporting format for FIIs requires them to provide “details of outsourcing ODIs”. It said Sebi is “adequately equipped” to call for any information regarding P-Notes both under provisions of the Sebi Act, 1992, and Regulation 20A of the Sebi (FII) Regulations, 1995.

“A FII in India is subject to money laundering and KYC requirements. Therefore ... the nature of fund flow would be reflected in the accounts opened by FIIs with banks which in turn are under mandatory obligation to comply with the provisions of KYC and Prevention of Money Laundering Act,” said affidavit filed by Priya VK Singh, director in the department of revenue.

http://economictimes.indiatimes.com/Market-News/P-Notes-in-countrys-larger-interest/articleshow/4480311.cms

Centre assures SC of prompt action on black money

Prabhakar Rao Voruganti

First Published : 03 May 2009 02:14:00 AM IST

Last Updated : 03 May 2009 11:36:48 AM IST

NEW DELHI: The Union of India on Saturday filed an affidavit in the Supreme Court, saying there was no inaction on the part of the government in trying to get to the bottom of the Rs 70,000 crore money stashed away in foreign banks.

The affidavit was filed in response to a petition filed in public interest by Citizens of India, comprising eminent Indians, including former Union Law Minister Ram Jethmalani and former DGP K P S Gill, alleging that an estimated $1.4 billion, roughly Rs 70,00,000 crore, was siphoned off from India and stashed away in undisclosed foreign bank accounts.

Priya V K Singh, Director, Department of Revenue, in her affidavit averred that after becoming aware on February 27, 2008 that the German government was willing to share information available with it in respect of account holders in LGT Bank, Liechtenstein, a letter was addressed to them seeking information. The German government replied on March 17, 2008, saying that it was not in a position to provide the information sought, but would give the information as soon as they had detailed findings about whether and to what extent Indian taxpayers were involved.

After this, the Central Government followed it up with a series of reminders, telephonic requests and e-mail from May to December 2008, then in February and March 2009. Finally, the German government made available the information on March 18, 2009, but on the condition of strict confidentiality of contents under the Double Taxation Avoidance Agreement.

In fact, many citizens filed applications under the Right to Information Act and sought the information about the action taken by the government.

The petitioners did not undertake any such exercise, but chose to make wild, reckless and baseless allegations against the government, the affidavit averred.

Consequent to the information received from the German authorities, the same was forwarded to tax authorities for action and the authorities initiated the process of reopening the assessments, Priya submitted.

On the issue of Hassan Ali Khan and his associates, the Income Tax Department, on the basis of the seized documents, had raised a total demand of Rs 71,848.59 crore from Ali Khan, his wife Rheema and other associates, the affidavit said.

With regard to Kashinath Tapuria and his wife, existence of overseas bank accounts came to light and their passports are under the possession of the Enforcement Directorate and they were last questioned on February 9, 23 and 24, the affidavit disclosed.

The affidavit went on to say that the petitioners relied on an article written by one Raja Vaidynathan in ‘Eternal India’. Vaidyanathan is a member of the Task Force constituted by the BJP on the issue of stashed funds. The Task Force includes S Gurumurthy and Mahesh Jethmalani.

On the allegation that huge amounts of money were deposited in foreign banks, especially in Switzerland, the government stated that there are no authentic figures about the amount of money in those bank accounts.

The government has approached the Swiss government for renegotiation of the Article relating to exchange of information. Under the circumstances, the Central government acted with utmost urgency in the matter and as per existing standards, and unless specific information about the depositors is made available, a fishing or roving enquiry is not permissible, Priya said. With these averments, she sought dismissal of the petition.

http://www.expressbuzz.com/edition/story.aspx?Title=Centre+assures+SC+of+prompt+action+on+black+money&artid=annlzJMLXWs=&SectionID=b7ziAYMenjw=&MainSectionID=b7ziAYMenjw=&SEO=Department+of+Revenue&SectionName=pWehHe7IsSU=

Govt says it’s on black money trail

Gives SC Names Of 3 Indians Who Parked $8bn In Secret Accounts

Dhananjay Mahapatra | TNN

New Delhi: The Centre indicated to the Supreme Court on Saturday that Indians may be among those said to have parked large amounts of illicit money with LGT Bank in the tax haven of Lichenstein. The government said it was trying to retrieve the cash.
    The hint that Indian nationals may be among those with secret LGT deposits was in the muchawaited affidavit the government filed in response to a PIL that sought recovery of the money.
    Wary of disclosing much at this initial stage of investigation, the UPA government said it has already activated income and wealth tax sleuths to study the data and take appropriate action.
    On March 18, the German authorities gave a list of LGT accountholders to India. That Indians were part of this list was indicated by the Department of Revenue’s assertion that “the said authorities had initiated the process of reopening the assessments under the Income Tax Act, 1961, and Wealth Tax Act, 1957.”
    The issue of illicit money parked abroad has taken on serious dimensions because of a new worldwide mood favouring an end to “secret banking”.
    But here, the issue acquired partisan overtones during the election campaign after the BJP embraced it with vigour, causing Congress to attack it as exaggerating the scale.
    In its affidavit, the Centre specifically referred to huge deposits abroad by Pune-based Hasan Ali Khan and his associate, Kashinath Tapuria. Coordinated efforts of the I-T department and Enforcement Directorate (ED) “led to detection of account with the UBS Bank in the name of Rheema Khan, wife of Hasan AliKhan..”, said the Centre’s affidavit filed by additional solicitor general Gopal Subramaniam.
    The ED has issued a show cause notice to Hasan Ali Khan for contravention of provisions of the Foreign Exchange Management Act, 1999, for “unauthorizedly dealing of $8 billion”, the Centre said. It added that the I-T department, on the basis of seized documents and other materials gathered during investigations, “have raised a total demand of Rs 71,848.59 crore against Ali Khan, his wife Rheema and other associates”.
    It said, “The investigations carried out till date in respect of Kashinath Tapuria and his wife reveal existence of certain overseas bank accounts. The government is in the process of obtaining details of the said accounts and ED has seized their passports”.

http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=CAP/2009/05/03&PageLabel=1&EntityId=Ar00100&ViewMode=HTML&GZ=T

‘No authentic figure on black money abroad’

Dhananjay Mahapatra | TNN

New Delhi: In its affidavit to the SC, the Centre made specific references to huge deposits abroad by Pune-based Hasan Ali Khan and his associate, Kashinath Tapuria.
    The response came far too late than the self-imposed 48-hour deadline that the Centre had given itself in the Supreme Court on April 22 to make the Bench headed by Chief Justice K G Balakrishnan withhold issuance of notice on a PIL filed by renowned lawyer Ram Jethmalani and others, who had accused the UPA of being lethargic in retrieving a possible Rs 70 lakh crore worth of black money stashed in foreign banks.
    The UPA felt that the figure of Rs 70 lakh crore as black money bordered on fantasy and said: “There are no authentic figures about the amount of money lying in those bank accounts.” It said: “The present petition presumably pertains to money lying in foreign accounts which are exclusive of lawful and legitimate deposits which can be made by both Indian residents and NRIs.” After trashing the charge of inaction to retrieve the black money, Centre said it saw a close link between the PIL, its timing and the opposition BJP.
    It said the entire PIL was based solely on an article written by one Raja Vaidyananthan in a Magazine, ‘Eternal India’. The Congress-led UPA government said Vaidyananthan is a member of BJP’s Task Force on strategies to bring back ‘stashed funds’.
    The Centre also tried to draw an indirect link between Jethmalani and BJP through his son Mahesh Jethmalani, who is contesting on the BJP ticket from Mumbai.

http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=CAP/2009/05/03&PageLabel=7&EntityId=Ar00704&ViewMode=HTML&GZ=T

PIL on black money politically motivated: Centre

Legal Correspondent

New Delhi: The Union government has described as ‘misconceived’ and ‘politically motivated’ the petition filed by the former Union Law Minister, Ram Jethmalani, and five others for a direction to bring back Rs.70,00,000 crore illegally hoarded in Swiss and other foreign banks.

The affidavit, filed by Priya V.K. Singh, Director in the Department of Revenue, said: “There are no authentic figures for the amount of monies lying in those bank accounts. The petition presumably pertains to monies lying in foreign accounts, which are exclusive of lawful and legitimate deposits which can be made by both Indian residents and non-resident Indians.”

However, with regard to the money allegedly lying in various foreign banks, the Centre was constantly alive to the need to be able to retrieve information and, towards this end, initiatives had been taken continuously by Prime Minister Manmohan Singh during the G-20 summit, the affidavit said.

The Centre said the issues raised in the petition pertained to policy, regulation, economic affairs, international cooperation and political leadership and did not qualify for examination by standards of judicial review.

Referring to an article, by Raja Vaidyanathan in ‘Eternal India’, relied on by the petitioners, the Centre said: “Mr. Vaidyanathan is a member of the Task Force constituted by the Bharatiya Janata Party, which was asked to submit an interim report on “steps to be taken by the Indian Government” to bring back ‘stashed funds’.

The Task Force of four members includes R. Gurumurthy and Mahesh Jethmalani, presently contesting the elections on behalf of the BJP.”

Under a Double Taxation Avoidance Agreement (DTAA) India had with the Swiss Confederation, information could be exchanged but “the contracting states are not under an obligation to carry out administrative measures at variance with their regulations or supply particulars not procurable under their legislation,” the Centre said.

In the past, the competent Swiss authority consistently refused to share bank particulars on the ground that information on deposits of Indian residents was not necessary for the application of the DTAA but was required only for the enforcement of Indian internal tax laws and that such information was not at its disposal under Swiss laws in the normal course of tax administration.

The government of India already approached the Swiss government seeking renegotiation of Article on exchange of information under the DTAA. Under the circumstances, the Centre acted with the utmost expedition, the affidavit said.

The case will come up for hearing on Monday.

http://www.hindu.com/2009/05/03/stories/2009050361202200.htm

India seeks to renegotiate Swiss DTAA
3 May 2009, 0341 hrs IST, Sanjay K Singh, ET Bureau

NEW DELHI: The Centre has told the Supreme Court that it has approached the Swiss government seeking renegotiation of the Double Taxation

Avoidance Agreement (DTAA) pertaining to exchange of information on the bank accounts of Indians. The Swiss Confederation has also informed the OECD that it was willing to withdraw its reservation on the disclosure of information due to rule of bank secrecy, said government in its affidavit filed in the apex court on Saturday.

The government, however, ruled out any sort of fishing or roving enquiry unless specific information about depositors becomes available. “The Government of India has already approached the Swiss government seeking renegotiation of Article concerning exchange of information in DTAA with them”, said Priya V K Singh, the director in the department of revenue in the affidavit.

The Centre said, “it was only in March 2009 that the Swiss Confederation informed OECD that it intended to adopt the OECD standards as per Article 26 of the OECD Model Tax Convention and withdraw the corresponding reservation and enter into negotiations for revising its Double Taxation Agreements”.

The OECD standards on exchange of information as contained in Article 26 of the OECD Model Tax Convention provides for exchange of information even if there is only domestic interest of the requesting state i. e. enforcement of tax laws of the requesting state and no provision DTAA is to be applied.

As per the OECD standards, the limitation of information not being at the disposal of tax administration because of bank secrecy cannot be used to prevent exchange of information held by the banks. The Swiss Confederation had entered reservations on these OECD standards. In accordance with Article 26 of the DTAA, the competent authorities in India and Swiss Confederation can exchange information, being information at their disposal under their respective taxation laws in the normal course of administration, as is necessary for carrying out the provisions of the DTAA in relation to taxes.

In the past, the Swiss competent authority has consistently refused to share bank information on the grounds that information regarding bank deposits of Indian residents is not necessary for the application of the DTAA but is required only for the enforcement of Indian internal tax laws and that such information was not at their disposal under Swiss laws in the normal course of tax administration, said government.

However, government stated that as per the OECD standards, unless specific information about the depositors becomes available, fishing or roving enquiry is not permissible. The Centre also claimed that because of its continuos efforts with the German government, it has gathered information about Indian account holders in the LGT Bank Liechtenstein. “On account of persistent follow up by the Central government, the German government on March 16, 2009, informed that they were in a position to provide the information and said information was made available to the Central government on March 18, 2009,” said affidavit.

However, ruling out to divulge the details, the government said, “the information was made available on the condition of strict confidentiality of contents under the Double Taxation Avoidance Agreement”. The affidavit has been filed in response to a PIL seeking direction to the government to take steps to retrieve the hege amount of unaccounted money lying in various foreign banks and financial institutions. Former union law minister Ram Jethmalani and others had moved the apex court.

http://economictimes.indiatimes.com/PoliticsNation/Govt-seeks-details-of-Indian-acs/articleshow/4477407.cms

‘Swiss authorities refused to share data on stashed funds’

No slackening of efforts on our part: Govt’s affidavit in SC.

Our Bureau

Centre denies slackness in hunt for ‘stashed funds’ in Swiss and other foreign banks

Cites Swiss authorities’ consistent refusal to share bank information under DTAA

Swiss confederation decided to adopt OECD standards only in March 2009-05-04

Renogitiation sought on Indo-Swiss DTAA article on information exchange

Germna Govt. shared info with India in March 2009; Indian tax authorities initiatite reopening of assessments

New Delhi, May 2 The Centre has refuted allegations that it was slack in its efforts to bring back into India the funds stashed by Indian citizens in foreign banks, especially the Swiss banks.

In its affidavit in reply to a public interest litigation filed in the Supreme Court, the revenue department has said that it was the Swiss authorities, citing DTAA provisions, who had “consistently refused to share bank information” and that the Centre had acted with “utmost expedition” in the matter.

The revenue department affidavit said that the Swiss authorities had taken a stance that the information on bank deposits of Indian residents was not necessary for the application of the double taxation avoidance agreement (DTAA). The Swiss authorities felt that such information was required only for the enforcement of Indian internal tax laws and that it (such information) was not at their disposal under Swiss laws in the normal course of tax administration.

This stance was in variance to the OECD Model Tax Convention, which required States to exchange information even if there is only domestic interest of the requesting State, i.e., enforcement of tax laws of the requesting State, and no provision of DTAA is to be applied.

OECD standards

As per the Organisation for Economic Co-operation and Development (OECD) standards, the limitation of information not being at the disposal of the tax administration because of bank secrecy cannot be used to prevent exchange of information held by banks.

While the Swiss Confederation had entered reservations on these standards, it was only in March 2009 that it decided to adopt the OECD standards and withdraw the corresponding reservation and enter into negotiations for revising its double taxation agreements.

Accordingly, the Union Government has approached the Swiss Government for renegotiation of the Article concerning exchange of information in the DTAA, the apex court was informed.

India’s DTAA with Switzerland was notified in April 1995 and amended through a Protocol on February 7, 2001.

Meanwhile, on the issue of obtaining information from the German Government with respect to Indian account holders in the LGT Bank, Liechtenstein, the revenue department affidavit said that the information was made available on March 18, 2009. However, the said information was made available on the condition of strict confidentiality of contents under the DTAA.It was submitted to the apex court that this information has been forwarded to various tax authorities for action under the Indian Income-Tax law. The Indian tax authorities have now initiated the process of reopening the assessments under the Income-Tax Act 1961 and Wealth Tax Act, 1957.

The affidavit also said that the Centre was unable to subscribe to the position that evidence exists with the SEBI that anonymous entities are misusing Participatory Notes in the Indian markets.

The Centre also refuted the allegation of the petitioners that grant of licence to UBS Bank AG to open a retail branch in Mumbai was to enable acquisition of Standard Chartered Mutual Fund, stating that it was “incorrect”.

http://www.thehindubusinessline.com/2009/05/03/stories/2009050351230100.htm

Black money trail: Swiss ready to revise treaty

4 May 2009, 0044 hrs IST, TNN

NEW DELHI: The government has approached Swiss authorities to renegotiate its Double Taxation Avoidance Agreement (DTAA), a tax treaty between the two countries in force since 1995, to obtain details of bank accounts maintained by Indians in Switzerland.

The Swiss government has in the past refused to share bank information pertaining to Indians with New Delhi on the ground that such details were not necessary for application of the DTAA. Swiss authorities had expressed inability to provide details, citing their own laws, since India's requests were related to enforcement of its internal tax laws.

However, after the G-20 nations adopted a tough posture at their recently held London summit, seeking to bring tax havens and non-cooperating jurisdictions under close scrutiny, Swiss authorities expressed willingness to cooperate.

Just before the London summit, the Swiss confederation had told the Organisation for Economic Cooperation and Development (OECD) -- a Paris-based group with 30 member countries including the US, UK and many European nations -- that it was ready to withdraw its earlier reservation on sharing information and renegotiate its tax treaty with other governments.

But how effective the revised tax treaty will be is quite clear from a rider provided by the Centre in the affidavit it submitted before the Supreme Court on the subject last week. The affidavit said, ``Even as per the OECD standards, unless specific information about the depositors becomes available, fishing or roving enquiry is not permissible.''

India is part of the task force constituted by the G-20 at its London summit to formulate a ``global plan for recovery and reform which promises to take action against non-cooperative jurisdictions, including tax havens and also to deploy sanctions to protect public finances and financial systems''.

On alleged role of Swiss banks in the 2004 stock market crash, the affidavit said that Securities and Exchange Board of India had in 2005 barred Swiss financial institution UBS Asia from issuing and renewing any participatory notes for a year. But this was following its refusal to disclose information relating to an investigation carried out by Sebi, not for its role in the market crash.

http://timesofindia.indiatimes.com/Black-money-trail-Switzerland-ready-to-revise-treaty/articleshow/4480130.cms

Centre 'alive' on black money in foreign banks

New Delhi, dhns:May 3, 2009 Deccan herald

The Centre has been constantly alive to the need to be able to retrieve information about the money which is lying deposited in foreign accounts.

The Centre on Saturday filed an affidavit in the Supreme Court saying that it was yet to make any breakthrough to bring the black money stashed away in foreign banks back to the country, despite working relentlessly on identifying it for the past four years.

“The Centre has been constantly alive to the need to be able to retrieve information about the money which is lying deposited in foreign accounts. Further, towards this end, initiatives have been taken on continuous basis,” said the affidavit filed by the government in response to a PIL filed by former Union Law Minister Ram Jethmalani, former Punjab DGP K P S Gill and others.

“In fact, the Central government led by Prime Minister Manmohan Singh played a major role in the G-20 Summit seeking exchange of information and to persuade countries which were not falling in line to review their position,” said Priya V K Singh, Director in the Department of Revenue.

The government said that the Supreme Court does not have the authority to hear the petition as it pertains to the issues of policy, regulation, economic affairs, international cooperation and political leadership. “Therefore, (the SC) does not qualify for examination by standards of judicial review,” the government said. The apex court was urged to dismiss the petition as its contents were based on an article ‘Steps to be taken by the Indian government’ to bring back “stashed funds”, written by Vaidyanathan, a member of the task force constituted by the BJP.

http://www.deccanherald.com/Content/May32009/scroll20090503133964.asp?section=updatenews

---------- Forwarded message ----------
From: Prabhakar Pennathur <psprab@gmail.com>
Date: Sat, May 2, 2009 at 7:25 AM
Subject: Help the return of the public loot stashed in tax havens
To: berlin.centre@oecd.org

Sirs,

We, the ordinary citizens of India, understand, with great consternation and deep concern, that large sums of illegally and surreptitiously looted money are allegedly stashed away by hundreds and thousands of unscrupulous, corrupt, knavish politicians, civil servants, industrialists, businessmen, judges, drug mafia and several others, in tax havens. You would please agree that the said money gas been plundered from the poor people of the country to whom it must rightfully be returned.

If the guesstimates are to be believed, $1.5 trillion of Indian money is so stashed away, and it means that 750 million Indians have been impoverished at the rate of Rs.100,000 each (which is equivalent of an entire life earnings for most Indians.).

It is the moral responsibility of G-7 nations to get the tax havens to declare the moneys of poor countries held and compel the financial institutions of these tax havens to return the money to the poor countries forthwith.

Kindly enlighten the citizens of India on what Germany proposes to do to make this return of poor peoples' monies a reality.

Thanking you for your consideration & hoping for a kind reply,

P.S.Prabhakar
Chartered Accountant

--
P.S.PRABHAKAR,
Partner
Rajagopal & Badrinarayanan
Chartered Accountants
Chennai 600 004

Ph: 98400 50586

European Parliament Call For Tax Havens To Be Abolished

by Ulrika Lomas, Tax-News.com, Brussels

Wednesday, April 29, 2009

Members of the European Parliament have called on the Group of 20 nations to agree on coordinated and concrete action to “ close down all tax and regulatory havens ” and shut onshore tax and regulatory loopholes which permit " widespread tax avoidance " in major financial centres.

The European Parliament has adopted a resolution on the outcome of the G20 Summit pledge to reform remuneration schemes in a more sustainable way as part of the financial regulatory review. However, this resolution also called on the next G20 Summit to go much further than it did earlier in April when the leading nations threatened to “deploy sanctions” against offshore and low tax jurisdictions to “protect public finances and financial systems.”

“Parliament welcomes and fully supports the request made by the EUROLAT Parliamentary Assembly on April 8, 2009 to the EU-LAC (Latin American and Caribbean) countries 'to act at once to abolish all tax havens on their territory and to work at international level for the abolition of the rest and for sanctions against companies and individuals resorting to their services,'” said a press statement issued by the European Parliament on April 24.

While the European Parliament stated that it welcomes the G20’s declaration that the “era of banking secrecy is over” and supports automatic exchange of information as the most effective tool to tackle tax avoidance, MEPs recommend that the EU should adopt at its own level “an appropriate legislative framework regarding tax havens” and called on its international partners to do the same.

Most offshore financial centres won something of a reprieve from the G20 after being accused of virtually bringing the world to its knees by allowing major global financial institutions to conduct risky business outside of the glare of onshore regulators. Only four territories – Costa Rica, Malaysia (Labuan), the Philippines and Uruguay – were named on the new OECD ‘blacklist’ and these have since been removed following commitments to adhere to minimum standards in tax transparency.

However, opponents of the G20/OECD campaign believe that the offshore territories are merely being made the scapegoats for regulatory failings in the major economies.

In a Strategic Memorandum released by the Center for Freedom and Prosperity on March 30, Daniel J. Mitchell of the Cato Institute argued that the collective actions of the 'high tax' states, such as the United States and the 'old' member states of the European Union, and multilateral bodies such as the OECD, will deal a blow to those who support international tax competition and financial privacy.

" These so-called havens are being assaulted by international bureaucracies such as the OECD ” he observed. " These events do not bode well for supporters of fiscal sovereignty and financial privacy."

http://www.tax-news.com/asp/story/European_Parliament_Call_For_Tax_Havens_To_Be_Abolished_xxxx36449.html

Fwd: Please write to berlin.centre@oecd.org on public loot in tax havens

---------- Forwarded message ----------
From: S. Kalyanaraman <kalyan97@gmail.com>
Date: Fri, May 1, 2009 at 8:55 PM
Subject: Public loot in tax havens
To: berlin.centre@oecd.org

Sirs,

It is a matter of grave concern for the citizens of the world, in particular those living in poor countries like India, that large sums of money are allegedly stashed away in tax havens. If $1.5 trillion of Indian money is so stashed away, it means that 750 million Indians have been impoverished at the rate of Rs.100,000 each (which is equivalent of an entire life earnings for most Indians.).

Kindly enlighten the citizens of India on what Germany proposes to do to make this return of poor peoples' monies a reality.

Thanking you for your consideration,

S. Kalyanaraman

Sarasvati Research Centre, kalyan97@gmail.com

Who will probe first family’s billions?

S. Gurumurthy (New Indian Express, 30 April 2009, page 9)

When it comes to the topic of funny money stashed in foreign banks, why has the Congress party observed a studied silence over the years, almost always ignoring charges levelled against the Gandhi family?

Mrs Antonia Maino (aka Sonia) Gandhi has finally broken her silence on the Indian slush money abroad. She told her party workers in Mangalore on April 27, 2009 that "the Congress was taking steps to address the issue of untaxed Indian money in Swiss banks". The delayed response of the first family of the Congress party, troubled by the issue from the word go, is understandable. But, the Swiss money has already become an electoral issue. That is what has finally forced the family to speak so that the party is not any further seen as being in denial and cynical about the Indian slush funds abroad. It is the family's silence, and the party's denial, that turned the issue into an election agenda. Shorn of the allegations normal in election time, all that L K Advani had said on March 29 was this: 'Mr Prime Minister, vigorously take up the issue of Swiss type secret banking and tax havens in the G20 meeting of April 2'. Had the PM told Advani that that was precisely what he was intending to do, that would have been the end of the BJP effort to make an issue of it. A Congress party, unburdened by its first family's anxieties, would have done precisely that, particularly when elections are round the corner. But neither the PM nor the party officials would dare do that. Why? Read on for the underlying drives.

The first family has other, perhaps bigger, reasons to worry, apart from about the Bofors slush money. Two more stunning exposures — but not as well-known as the Bofors scam — make the first family a target for investigation on slush money. Now on to the heart of the story which has three limbs. FIRST: $2.2 BILLIONS IN RAJIV'S SECRET ACCOUNTS, SAYS SWISS MAGAZINE The shocking exposure came from Switzerland itself. The most popular magazine of Switzerland, Schweizer Illustrierte, [dated November 11, 1991] did an expose of 14 politicians of developing nations who, it said, had stashed their bribes in Swiss banks. The title of the expose in German read “Fluchgelder — Die Schweizer Konten der Dictatoren”. In English it meant, “Curse of money — The Swiss bank accounts of the Dictators”. Rajiv Gandhi figured in the expose as one with slush funds in secret accounts. Schweizer Illustrierte is not some rag. It is the Number One Swiss magazine and sells some 2,10,000 copies. Its readership is 9,18,000 — some 15 per cent of Swiss adults. The magazine had mentioned specific amounts in secret Swiss accounts of different leaders with their pictures alongside.

The report under the picture of Rajiv Gandhi, translated into English, read: "2.5 billion francs on the Indian secret accounts in Switzerland" of "Rajiv Gandhi, Indian". Today the amount of 2.5 billion Swiss Francs equals 2.2 billion US Dollars. But as Rajiv was no more by then, it must become the family inheritance. The other leaders captured by the magazine were: Suharto of Indonesia (25.5 billion), Haile Selassie of Ethiopia (22.5 billion), Mobutu of Zaire (6 billion), Shah Pehlvi of Iran (5.7 billion), Saddam Hussein of Iraq (800 million), and Nicolas Ceausescu of Romania (500 million). The figures of slush money mentioned were in milliarden (meaning ‘billions’) units of Swiss Francs. Had Rajiv been alive then, the expose would have caused a political tsunami in India.

The box item above shows the pictures and the amounts of the leaders as appearing in the magazine.

More than the slush money charge it is the family's silence about it, which is baffling. The number one magazine in Switzerland had made the damning charge that Rajiv Gandhi had left behind slush funds of $2.2 billion and yet the family has kept mum for 18 years now. How could any honest person tolerate such a serious charge? Well, one could say that the family might not have challenged it because it was published in far away Switzerland. But Dr Subramanian Swamy had included the Schweizer Illustrierte expose in his write-up “Do You know your Sonia?” in his party, the Janata Party, website, seven years ago, in 2002. It is still on the Party's website. Photocopies of the expose in the Swiss magazine are shown at pages 51 to 53 of Dr Swamy's write-up; also an e-mail from the magazine addressed to Dr Swamy on February 22, 2002 at page 50. The e-mail confirms what the magazine had reported. The e-mail reads: “Dear sir, We refer to your e-mail of April 4, regarding an article in our magazine Schweizer Illustrierte of November 11, 1991. In this article — Fluchgelder - Die Schweizer Konten der Dictatoren — is Rajiv Gandhi named with tot 2.5 Milliarden CHF on secret accounts. If you want the magazine please indicate the exact address.

Yours faithfully, Ringer Ltd.

Margot Todisco”.

The fax and telephone numbers of Margot Todisco are also given in the mail. The e-mail is in box alongside here. Yet no one from the Congress or from the family has sued Dr Swamy till date, nor challenged him. The Swiss expose also prominently figured in the advertisement that some NRIs had put out in the New York Times to protest against Sonia Gandhi when she visited the US in the year 2007. The Indian National Overseas Congress (INOC) filed a defamation case against the ad, expressly "not to defend itself, but Sonia Gandhi". The New York Supreme Court dismissed the case holding that only Sonia Gandhi, not the INOC, had the locus to sue. But she would not dare sue. Thus, neither in Switzerland where Schweizer Illustrierte exposed Rajiv's secret account with billions 18 years ago in 1991, nor in India where Dr Swamy had put it on his party's website seven years ago in 2002, or in the US where the NRIs had boldly advertised the expose two years ago in 2007, would the Gandhi family challenge the expose. In criminal law the conduct of the accused is an important piece of evidence. What does the family's conduct show here excepting that it has something to hide. SECOND: FAMILY BENEFITED FROM KGB, SAYS BOOK The second expose, Rajiv Gandhi figuring again, is that the first family of the Congress accepted political payoffs from the Russian spy outfit, the KGB. In a highly acclaimed book The State Within a State: The KGB and Its Hold on Russia-Past, Present, and Future by Yevgenia Albats, a journalist on Moscow News and Izvestia, the author writes: “A letter signed by Victor Chebrikov, who replaced Andropov as the KGB head in 1982, noted: the USSR KGB maintains contact with the son of the Premier Minister Rajiv Gandhi (of India). R Gandhi expresses deep gratitude for the benefits accruing to the prime minister's family from the commercial dealings of the firm he controls in co-operation with the Soviet Foreign trade organisations. R Gandhi reports confidentially that a substantial portion of the funds obtained through this channel are used to support the party of R Gandhi.” (p223) The author also cites the KGB letter and file reference. In Dr Swamy's write-up on Sonia, KGB’s letter in Russian is attached at page 45 and its English translation at pages 43 and 44.

The letter says that Rajiv Gandhi himself has admitted that “benefits” accrued to “the prime minister’s family” from commercial dealings through Russian co-operation. All major newspapers, The Hindu and Times of India included, had carried the expose on KGB payments. The book State within a State on KGB was published in 1994.

Yet, no one from the Gandhi family has challenged it for 15 years now. Dr Swamy had included it in his expose on Sonia on his party's website since 2002. Yet the family has not challenged him or sued him for seven years. It was again made part of the NRI advertisement in New York Times in 2007 when Sonia Gandhi visited the US.

Even then only a proxy case was filed to defend Sonia Gandhi's reputation which was promptly saying only Sonia could defend her honour, which she would not.

THIRD: BOFORS SLUSH PAYOFF TO ‘Q’ Ottavio Quottrocchi, the star actor in the Bofors scam, is indistinguishable from Sonia’s family. His association with the family is as old as Sonia’s.

Even Sonia Gandhi cannot dispute that Q got the first instalment of $7.3 million out of the total bribe of $36.5 million (Three per cent of the contract value of $1.2 billion) due to his front company for swinging the gun deal for Bofors. The slush money of $7.3 million was traced to Q’s account by the CBI which got it frozen some 20 years ago. But when the law was closing in on Q in early 1990s, the Congress government stealthily allowed him to escape from India. He turned fugitive, but his slush money had continued to remain frozen.

Sten Lindstorm, the Swedish police official who investigated the Bofors case for 18 years, wrote an article in 2004, saying that Sonia should be interrogated in the Bofors case, particularly on her family's relations with Q, on who introduced Q to Bofors and why did Bofors pay him for deal with India. This article had appeared in several media in India. Subsequently, the CBI, obviously under pressure, quietly allowed Q to smuggle away his slush money from the frozen account.

The UPA was in power then, with Sonia Gandhi as chairperson of the National Advisory Council and also of the UPA. Could this happen unless she had wanted it? She owes an answer to the nation. But, far from answering any question, she asked the media, as early as in 1999, to show evidence against Q, when the most clinching evidence, the loot caught in Q's frozen account, had fixed him conclusively. Yet, she defended him even after the Swiss court once, the Delhi High court twice and the Supreme Court finally held him part of the Bofor's fraud. And now, in the final days of its rule, her government has shamelessly let Q off the hook by removing his name from global red alert. Because of the red alert he was always in danger of being caught and sent to India. Now that's off. This move to free Q seems to be linked to the slush money issue rising in crescendo in this election. It seems to be in the larger interests of the family — she has to protect 'Q', if he has to protect the family. Otherwise just before elections no government will take the unpopular decision of freeing Q from India's legal net abroad.

QED: It does not need a seer to say that the first family of the Congress party is a suspect; a target for probe.

Who will probe its billions? Rahul Gandhi has told an election rally in Hyderabad, “elect us, we will investigate”. If that happens, the suspects will probe themselves!

EMAIL
comment@gurumurthy.net

http://epaper.expressbuzz.com/NE/NE/2009/04/30/Photographs/009/30_04_2009_009_002_020.jpg Die Schweizer Konten der Diktatoren (Schweizer illustriete, in its November 11, 1991 issue exposed Rajiv Gandhi (bottom row, second from right) among 14 politicians from developing nations around the world.)

http://epaper.expressbuzz.com/NE/NE/2009/04/30/photographs/009/30_04_2009_009_002_019.jpg

http://epaper.expressbuzz.com/NE/NE/2009/04/30/photographs/009/30_04_2009_009_002_018.jpg

original message

from Todisco Margot (tod), ZO KKC (mailto:tod@ringier.ch)

Sent: Thursday, April 05, 2001 3:14 PM

To: swamy@fas.harvard.edu

Subject: Rajiv Gandhi

Dear sir,

We refer to your E-mail of April 4, regarding an article in our magazine Schweizer illustrierte of November 11, 1991. In this article – Fluchtgelder – Die Scbhweizer Konten der Diktatoren – is Rajiv Gandhi named with tot. 2.5 Milliarden CHF on secret accounts. If you want this magazine, please indicate your exact address.

Yours faithfully

Ringer Ltd.

Margot Todisco

Margot Todisco / KKC 1 phone¨+41 62 746 3831

Ringier AG fax: +41 62 746 35 71

Bruhlstrasse 5 <mailto:margot.todisco@ringier.ch>

CH-4800 Zofingen <http://www.ringier.ch>

http://epaper.expressbuzz.com/NE/NE/2009/04/30/ArticleHtmls/30_04_2009_009_002.shtml?Mode=1

Why It's Not Just About 5A5151516L & 5A5151516M
04-05-2009 (S.Gurumurthy)

The ''Q'' accounts aren''t the target. The world is against secret stashing.

When L.K. Advani sent across what looked like a googly at the Congress on the issue of Indian black money in Swiss banks on March 29 just three days before the prime minister was to attend the G-20 meeting in London on April 2nd he would only have intended to put the party on the backfoot on an issue on which the Congress looked vulnerable. How his calculation has more than paid off and how the BJP has now on hand a powerful issue that may fix the Congress is the story ahead.

Advani did offer enough evidence on that day to demonstrate that the UPA government had shown perceivable disinclination to get at the Indian moneys abroad. Yet, he boldly counselled the prime minister, who was attending the G-20 meeting, to press the issue vigorously at the meeting, failing which, he warned, the BJP would make it an election issue. Imagine that the prime minister had rung up Advani that evening, told him that was precisely what he was intending to do at the G-20 meet and thanked Advani for drumming up public support for that! He would have hit the Advani googly out of the electoral arena. But Advani obviously knew that nothing of that sort would happen. The reason: the ruling dynasty. This issue, as everyone in the party knew, touched the First Family and its friends. The family's alleged involvement with Bofors kickbacks and Ottavio Quattrocchi and the way the UPA dispensation allowed 'Q' to get off the hook and also to snatch back the Bofors kickbacks held in frozen accounts point to more than just suspicion. Result? The Congress went so far back in defence that it crashed on its own stumps. Read on.

The usual, unprepared spokesmen pressed to take on Advani messed up the case even more. Manish Tiwari, a party spokesman, asked Advani not knowing that Advani had taken up the issue with the prime minister last year itself why raise it now, at the time of the elections? Advani had last year asked the prime minister to write to the German government to avail of its offer to give the names of non-German nationals who had secret accounts in LGT Bank to get the names of some Indians believed to have deposits in the bank. Abhishek Singhvi stepped in next. He said that G-20 was not the forum to raise the issue of secret money in Swiss banks and tax havens, totally unaware that in the preparatory G-20 meet held in Berlin in February, France and Germany had decided to raise the issue in the London meet.

Then came Jairam Ramesh. He questioned Advani's maths, which estimated loot from India into secret bank accounts abroad at between Rs 25 lakh crore and Rs 70 lakh crore. "You are a liar," he wrote to Advani, without knowing that the Swiss ambassador to India had himself confessed to NDTV Profit last year (on March 15, 2008) that a "lot of Indian black money flowed into Swiss banks". Also, the party manager did not read the correct version of the study of Global Financial Integrity, the organisation that had estimated the illicit Indian wealth stashed away abroad in just five years, 2002 to 2006 at some Rs 6.88 lakh crore. The organisation's study had validated the BJP's estimate of the loot.

Pranab Mukherjee and Kapil Sibal then stepped in and counter-charged that the NDA government had messed it all up by replacing the Foreign Exchange Regulation Act (FERA) with the Foreign Exchange Management Act (FEMA), which, they alleged, had increased the flow of illicit money from India. The BJP shocked them by reading out an article authored by P. Chidambaram in The Indian Express (in 2002), in which he welcomed the replacement of FERA with FEMA.

The BJP also cited the media report which said that instead of pressing the Germans for the names of Indians in LGT Bank's secret accounts list, the UPA government was advising the Indian ambassador in Berlin not to take the initiative and pester the Germans for details!

Somewhere in between, the prime minister counselled the people of India to read an article by a former advisor to the government in a Calcutta daily as a counter to the BJP challenge! There was more fun. Despite his family's enviable record in stifling the Bofors read the Quattrocchi case, Rahul Gandhi promised full investigation into Indian monies stashed abroad. When the Congress theatre was looking so disparate, desperate and comical, the other parties the CPI(M), the AIADMK, the Samajwadi Party and the BSP seemed more serious about the issue. They vowed in their manifestos, like the BJP did, to bring back Indian monies abroad, leaving the Congress in splendid isolation.

But the BJP seemed to have done perfect homework before raising the issue. As must have been planned earlier, Advani appointed a task force consisting of four persons Ajit Doval, a security expert; R. Vaidyanathan, an academic with specialisation in finance; Mahesh Jethmalani, a lawyer; and me, a chartered accountant with investigative experience to prepare the roadmap to recover the loot and advise the BJP. Advani released the task force's report in Mumbai on April 16. The constitution of the task force itself was a strategic move. On the dispute over how big is the loot, the task force silenced the sceptics thus: "...the maths of the loot may be disputed but the fact of the loot cannot be." Yet, the report was no partisan political document. It captured how the global situation has taken a U-turn after the economic crisis; how the West, which was celebrating financial secrecy as a sacred part of individual privacy, has started seeing it as evil; how western nations themselves now feel threatened by secret banking and tax havens; how they are determined to dismantle both; how no government in India, of any party, could have done much in the past; how the time is ideal for India now to join the global effort to track illicit monies; how India has been missing its opportunities and has given the impression that it was not keen on getting at Indian wealth stashed abroad; what India as a nation should do, and so on. The report also unveiled the global as well as the national strategy for India not for the BJP as such.

The principal advice of the task force was that the BJP must work for national consensus on the issue or build powerful opinion in the country. In line with its advice, Advani appealed to all to take up the issue as a national agenda. The BJP leader seems to have succeeded in raising the issue beyond electoral limits.

The media, too, seems to view it more as a national issue, though raised by the BJP. The Hindu, not a great friend to the BJP, has in an editorial titled 'A Major Issue on the Agenda', commented: "The recommendations of a task force appointed by the BJP's senior leader L.K. Advani on the steps to be taken to bring back funds illegally stashed away in tax havens by resident Indians are timely." It also seemed to endorse the task force on the volume of Indian wealth stashed abroad; also on how, despite a benign tax regime, the outflow of illicit monies has risen. Commending as "unexceptionable" some recommendations of the task force, the editorial concluded that "...bringing back the money stashed abroad will be an enormously time-consuming task but it needs to be attempted. Mr Advani has done well to highlight a key challenge that should be addressed by the new government that is to take office."

The financial daily Hindu Business Line, too, has in its editorial commented, "Whatever the outcome of the elections, the BJP will be remembered in history books as the first party to discover an issue to galvanise opinion not just across caste and community lines but also globally.Mr L.K. Advani's call for greater action against money stashed in Swiss banks and other tax havens, theoretically at least, raises the bar of the poll campaign and sets it in tune with the global attempts to collar countries that allow unaccounted money into a common course of action." The media undoubtedly sees potential in the issue.

The BJP, too, is playing the issue in a big way. For example, Narendra Modi, one of the principal architects of the Swiss money strategy, has conducted a novel poll among the electorate in Gujarat on the issue of Indian money in Swiss banks. Some 26 lakh people are reported to have voted in the poll, with 97 per cent supporting the move. Has the Swiss money issue turned into a major issue in this poll, which was seen as an issueless one? And has the BJP fixed the Congress on the foreign money issue, which the family-led party is vulnerable on? The BJP appears to have succeeded in both.

http://www.gurumurthy.net/articledisplay.pl?2009-05-04

http://news.yahoo.com/s/nm/20090427/bs_nm/us_tax_usa_irs/print;_ylt=Ao4VLU5oiBrW5UYvzZ1A4TKb.HQA;_ylu=X3oDMTB1MjgxN2UzBHBvcwMxNARzZWMDdG9vbHMtdG9wBHNsawNwcmludA--

IRS says set to pursue "other banks" on tax evasion
By Tom Brown

Mon Apr 27, 2009
MIAMI (Reuters) – The U.S. Internal Revenue Service (IRS) is preparing to pursue other foreign banks for allegedly facilitating tax evasion by wealthy Americans following its high-profile case against Switzerland's UBS AG (UBSN.VX) (UBS.N), an IRS official said on Monday.
UBS, Switzerland's largest bank, in February acknowledged that it helped U.S. clients conceal assets from the U.S. government. It agreed to pay a $780 million fine and identify some of its American clients.
But U.S. authorities are still going after the Swiss bank, seeking to access the data of another 52,000 Americans they say are hiding about $14.8 billion in Swiss bank accounts.
" We are developing John Doe summonses on other banks," Daniel Reeves, an agent with the IRS' Offshore Compliance division, told Reuters on the sidelines of a conference in Miami on offshore finance.
He was referring to the kind of subpoena filed by the IRS against UBS seeking to force the bank to turn over the names of clients suspected of evading U.S. taxes.
Reeves declined to say which, or how many, other banks could face cases filed by the IRS, but he confirmed the entities being investigated were foreign-based like UBS.
" We have identified other offshore banks that are engaged in similar activities," he earlier told the conference.
On April 2, U.S. authorities arrested and charged an accountant in Florida in the first of what they said could be a series of tax evasion prosecutions of American clients of UBS.
Almost two weeks later, a wealthy Florida yacht broker pleaded guilty to using an account with UBS to hide more than $3 million in assets from the U.S. government.
$100 BILLION EACH YEAR
The IRS has pushed ahead with the prosecutions at a time when political leaders both in the United States and elsewhere are calling for a crackdown on tax havens and offshore centers where individuals and companies can hide away funds.
" In the U.S., we're losing about $100 billion a year, because of tax evasion and other abusive practices," Robert Roach, counsel and chief investigator for the U.S. Senate Permanent Subcommittee on Investigations, said at the Miami conference.
This Senate subcommittee has been lobbying for more aggressive official action against tax havens and tax evasion, which Roach described as a " rats' nest of problems".
Switzerland, which is seeking to defend its long-standing tradition of strict bank secrecy, asked the United States at the weekend to drop the case against UBS in return for a new tax accord the two countries are about to negotiate.
Swiss President Hans-Rudolf Merz said the request was made to U.S. Treasury Secretary Timothy Geithner on the sidelines of the International Monetary Fund's semi-annual meetings in Washington.
(Reporting by Tom Brown, Writing by Pascal Fletcher; Editing by Kenneth Barry)

India’s curse of ‘black money’

By Raymond Baker

Published: April 23 2009 (Financial Times)

India’s opposition party leader L.K. Advanisparked a political conflagration with pre-election campaign remarks that India was losing tens of billions of dollars each year in illicit financial outflows, or “black money”. He asserted that the National Democratic Alliance would vigorously pursue recovery of these lost assets if voted into power. With the rolling election now in progress, the issue of India’s missing billions has grown progressively thornier, as both sides vie to take the moral high ground.

Whatever the outcome of the election, India’s problem has broader implications both for the developing world and for efforts by the Group of 20 developed and developing nations to craft an effective post-crisis economic plan for the global financial system.

In his discussion of black money, Mr Advani cited our estimates of illicit capital flight,which suggest total illicit outflows from the developing world of $1,000bn (€766bn, £684bn) a year. India ranked fifth highest at $22bn-$27bn a year, coming in behind Russia ($32bn- $38bn), Mexico ($41bn-$46bn), Saudi Arabia ($54bn-$55bn) and China ($233bn-$289bn).

Mainland China’s massive outflows were predominantly the result of trade mispricing – a common practice whereby multinational corporations manipulate figures on commerce and earnings to minimise tax liabilities. A popular means of tax evasion for companies, trade mispricing is the driving force behind most of the illicit capital exiting developing countries.

Second-ranked Saudi Arabia and fourth-ranked Russia were exceptions to the trade mispricing rule because of their status as oil exporters, oil being difficult to misprice.

The proceeds of criminal activity, corruption and corporate tax evasion, these flows are clandestine in nature and usually end up in financial centres featuring low regulation and high secrecy. This makes it tricky to study illicit financial flows.

India is the latest of several nations to raise the alarm about illicit capital flight.Following high-profile scandals involvingLiechtenstein and Switzerland, the Group of 20 nations has demanded greater co-operation in tackling the shadow financial system. Made up of tax havens, jurisdictions allowing secrecy, disguised corporations, anonymous trust accounts, fake foundations and assorted money-laundering mechanisms, it is designed to move money and obscure its sources.

What have thus far remained absent are the concrete reforms needed to dismantle this shadowy network and enforce greater transparency and accountability in the global financial system. The G20 is poised to accept the Organisation for Economic Co-operation and Development standard for exchange of tax information, a well-meaning but weak approach to the problem. While the much-publicised post-G20 arrangements by several havens to sign tax information exchange agreements are welcomed, these agreements are extraordinarily cumbersome. The onus remains on the requesting nation to prove that the information sought is “foreseeably relevant” to suspected crime or tax evasion.

Furthermore, havens and jurisdictions supporting secrecy are not required to provide information they do not normally collect. Under the OECD standard, all elements of the global shadow financial system can remain in place.

What needs to happen now is for the G20 to broaden its dialogue on information exchange agreements, inter national co-operation and international financial protocols. Most effective in curtailing the massive illicit outflows from developing countries would be a requirement for automatic cross-border exchange of tax information on personal and business accounts and country-by-country reporting of sales, profits and taxes paid by multinationals.

As world leaders and high-level stakeholders meet this weekend in Washington, the question of India’s black money should be considered as a sign of what lies ahead. The global recession is expected to have a severe impact on developing economies and undo years of poverty alleviation efforts and economic gains.The desire to offset this predicted impact is sincere. But until efforts are made to dismantle the shadow financial system and mandate more co-operative and rigorous reporting, success will remain as elusive as India’s missing black money.

India has shown that this issue resonates with voters. Politicians in other developing country democracies would be wise to take note.

The writer is director of Global Financial Integrity

http://www.ft.com/cms/s/0/1fdc10ac-303c-11de-88e3-00144feabdc0.html?nclick_check=1

Rs 70 lakh crore black hole

Aditya Sinha

First Published : 25 Apr 2009 02:06:00 AM IST

Last Updated : 25 Apr 2009 07:49:27 AM IST (New Indian Express, April 27, 2009)

"Mystification” is how the additional solicitor general felt about a petition in the Supreme Court, filed by several eminent Indians, seeking recovery of perhaps Rs 70 lakh crore of black money in secret Swiss bank accounts. Gopal Subramaniam was mystified by the petition’s timing; he perhaps sees BJP prime ministerial candidate L K Advani’s promise of a 100-day plan to retrieve that black money as being an election gimmick.

His suspicions were echoed by the Congress party’s candidate for Leader of Opposition, Rahul Gandhi, who promised voters in Hyderabad an enquiry. “The BJP would forget their promises of unlocking the money from Swiss bank accounts because they know there was no such money anywhere,” young Rahul thundered, mystifying listeners about what exactly would be enquired — the very fact of black money or the BJP’s sincerity. In any case he did not promise to bring back any money from abroad.

Congress strategist Jairam Ramesh has gone from blue-eyed to cross-eyed over the amount that Advani claims was salted away between 2002 and 2006. Research by Advani’s task force suggests it could be Rs 70 lakh crore, the higher end of estimates in the Global Financial Integrity report of the Washington-based Centre for International Policy; Jairam cites the lower end of those estimates, about Rs 14 lakh crore. That still seems like a hell of a lot of money.

Jairam also coyly proposes that the negative flow in India’s capital account suggests a reversal of capital flight — meaning that people are stashing their black money in India. So that’s why we had participatory notes for foreigninvestors! Now it all makes sense. The UPA was trying to turn India into a nuclear-powered Swiss bank. Thank God for the global economic slowdown.

Even the man behind the PNs, P Chidambaram, whose IQ is higher than the Sensex (in contrast to those politicians whose IQs are lower than the current dollar price of crude oil per barrel) is mystified. He wondered in Sivaganga whether Advani’s 100- day action plan was a smokescreen: “I wonder whether he is unwittingly alerting those who have deposits abroad to re-arrange their affairs in the next four weeks before a new government is sworn in.” So Chidambaram is accusing Advani of both deliberation (by fiendishly setting up a smokescreen) and inadvertence (by unwittingly alerting those with foreign piles). He is like a sophist on steroids. Also, he should be careful lest someone alert his boss Sonia Gandhi that he is going around openly declaring that these are the Congress party’s last four weeks in power, and that the UPA will be handing the reins of government to someone else.

Congress spokesperson Kapil Sibal is another brainy guy, but he refuses to succumb to mystification. Rather, he scoffs at Advani’s plan as he believes that Advani does not know the legal procedure for getting black money back from Swiss banks.

That’s like saying that Advani cannot file his tax returns because he does not know how to fill out the form. It also appears to ignore one minor event in London at the beginning of this month: the G20 meeting.

You may recall that the G20 decided to crackdown on tax havens by agreeing to fix the loopholes that currently exist around hedge funds and tax havens. This has come shortly after America’s threats to UBS of Switzerland to reveal the estimated 52,000 accounts held by Americans. The US said that about $15 billion dollars of untaxed money were held in the Swiss bank.

Our tax laws may differ from the USA’s, but it appears that there is a new global political will to end this convenience for the fabulously wealthy, and that there will be concerted legal action to do so. Even if India does not have the requisite legal tools, formulating new ones will not be difficult in the new global environment.

What is common to all the statements by this galaxy of Congressmen is the accusation that the BJP is looking to derive political mileage from the promise of a 100- day action plan; that the NDA government did nothing about recovering black money during its tenure; and that the retrieval of black money is a minor derivative issue, meant to detract from weightier issues that confront the nation.

It may well be that talk of recovery of such monies will not generate the wave of votes that can propel the BJP into power.

It appears that most voters, and even those who are paying attention, do not comprehend the enormity of the sum involved; eve n i f we see the number 7,00,00,00,00,00,000, we do not understand it. If they do not understand it, how can it become an emotive issue for them? Yet the reason that Advani has mooted it, and why Rahul is dismissive, is that for their parties these elections are a neck-andneck race. Every incremental gain is unquantifiable but necessary if the final tally of each party is to be pushed up, piecemeal, to 150 seats or more. Hence emotive or not, each issue is a worthwhile pursuit. The argument that it is politically motivated is nonsensical, because all policy initiatives in a democracy must be politically motivated.

Elections are the best time to test a policy proposal; it is when you have people’s attention, and when the politician’s patience with voters is inexhaustible. The world’s most successful politician currently is Barack Obama, and it was during his gruelling campaign that he fine-tuned or fleshed out many of his ideas and policy proposals. In this context, any accusation of gimmickry sounds more like “sour grapes”.

It is equally misguided to say that the BJP will drop its proposal on May 14, the day after the last round of polling, or to wonder why nothing happened during the tenure of A B Vajpayee. If the BJP does forget this promise, it will not be the first party in India or abroad to do so, but that seems unlikely given the kind of research already put in by Advani’s task force. As to why nothing happened during the Vajpayee tenure is tantamount to wondering why Vajpayee did not solve the Kashmir issue.

Whatever be the many reasons, does it mean Advani should not try to resolve it? Certainly there are weightier issues confronting the nation, but it appears that all parties have made their broad ideologies clear in these elections, and what remains are their details of proposed governance.

The BJP has promised to honour the nuclear deal with the USA, another issue that carries no emotional weight with voters (as evidenced by the Congress party’s campaign amnesia on Manmohan Singh’s single achievement in five years), but it is another detail that sharpens the image of the party in the voter’s mind. Congressmen may suffer mystification, but it is certain that the Indian voter does not

editorchief@epmltd.com

About The Author:

Aditya Sinha is the Editor-in-Chief of The New Indian Express and is based in Chennai.

reading the lying lips of chidambaram; loot in tax havens

Interview with ht:

April 25, 2009-04-25

Chidambaram detailed the measures the UPA has already taken to rubbish the BJP’s promise of bringing back Indian wealth stashed in foreign banks. “I challenge Mr Advani to name one step the NDA took between 1998 and 2004 when it was in power to bring back black money. They did not do anything,” he said. During his stewardship of the Finance Ministry, the UPA made “substantial progress” towards unearthing Indian wealth in secret foreign accounts, he claimed.

“Read my lips. We’ve made substantial progress…I am not at liberty to disclose details as some procedural formalities are still underway,” he said.

http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=HomePage&id=eaa79f0b-6cd7-4c2e-93b0-503dfdce2dde&Headline=China+is+fishing+in+troubled+waters+in+Lanka:+Chidambaram

Guwahati, april 25, 2009 (Bhaskar roy, TNN)

There is a lot of noise about a massive amount of black money stashed away abroad.

Manmohan; Let me say that black money has to be brought back through a well-coordinated programme. But if you are advertising before taking any step, it gives black marketeers an opportunity to stash away, re-arrange their portfolios in a manner that it will make it difficult to unearth black money. I am not denying the existence of such black money abroad. How much in Swiss banks, how much in tax havens, its magnitude — no one knows about it. We will take definite steps within 100 days (of the new government) to recover this black money. We argued within a group of friendly countries to find a way out. As far as the government of India is concerned, we talked to some other countries for absolute transparency within the banking system, for an international agreement to share information between tax authorities. We will follow it up, for us it is a priority to find out if portfolios have been maintained by dubious players.

http://timesofindia.indiatimes.com/India/Ill-revive-economy-in-100-days-PM/articleshow/msid-4446319,curpg-2.cms

By R Guhambika
24 Apr 2009 02:26:00 AM IST (new indian express)

congress leaders amassing wealth in swiss banks using participatory route.

‘Only BJP-led govt can solve Lankan problem’

CHENNAI: Speakers at an election rally, organised by the BJP-led front here on Thursday, asserted that only a government headed by L K Advani would be able to find a solution to the Sri Lankan Tamils’ problem. Parties like the DMK and AIADMK could merely issue appeals to the Centre on the issue, they said.
Appealing to the large gathering to vote for BJP candidates, State unit president L Ganesan (South Chennai) and Dr Tamilisai Soundarajan (North Chennai), the party’s election in-charge for southern states, M Venkaiah Naidu, said scores of Sri Lankan Tamils were being massacred and Chief Minister M Karunanidhi, who was helpless on the issue, was sending telegram after telegram to the Centre.
On the bandh call given by the DMK government, Naidu wanted to know whether it was directed against Prime Minister Manmohan Singh or the United Progressive Alliance, in which the DMK was a member.
Janata Party president Subramanian Swamy alleged that several Congress leaders had amassed huge funds in Swiss banks using the ‘participatory note’ route. On the Ram Sethu issue, he said his party was not against the Sethusamudram project but only sought realignment of the proposed canal.
BJP’s Ramanathapuram candidate S Thirunavukkarasar said among all leaders only Advani had a firm grasp of the myriad problems facing India and the capacity to solve them.
Refuting the charge that the BJP was a communal party, All India Samathuva Makkal Katchi president Sarath Kumar said the Dravidian parties in the State had used the saffron outfit whenever it suited them. Both the AIADMK and the DMK were at one time aligned with the BJP.
All India Nadulum Makkal Katchi president Karthik said while there were several contenders for the PM’s post in other fronts, the NDA was united under Advani’s leadership.
P T Kumar of Dravida Vizhipunarchi Kazhagam, Rajasheker of Janata Dal (United), Nagaimugan of Bharatiya Forward Bloc and Suba Sethuram of Communist Leninist Party were among those who spoke. http://tinyurl.com/cmh6dd

‘Good time to get back black money’

Mail Today Bureau

New Delhi, April 14, 2009

The global financial meltdown has presented India with an unprecedented opportunity to track and bring back some of the estimated Rs 75 lakh crore ($ 1.5 trillion) illegally salted away by Indians in Swiss banks over the years.
R. Vaidyanathan, who has tracked illegal funds flow out of India, said this on Monday.
This needed political will which appeared to be lacking, said the finance and control professor at the Indian Institute of Management- Bangalore (IIM- B). He is considered to be an authority on global funds flow and sits on several official committees.
The Organisation for Economic Cooperation and Development (OECD) has estimated that more than Rs 750 lakh crore was parked in tax havens. This is eleven times the total amount committed by the G- 20 leaders to revive the global economy.
Vaidyanathan said the current situation was ideal for India to “seriously pursue” unaccounted wealth parked abroad by Indian nationals and companies. He was delivering a lecture on ‘Tax havens and illegal funds of India’ at the Vivekananda Institute here. “The financial situation is grim even for some developed countries. So, they have been putting pressure on Switzerland and other tax havens to disclose details of accounts held secretly there,” he said. “The US loses an estimated $100 billion (Rs 5 lakh crore) through unaccounted funds flow every year. In normal times, that would be ‘pocket money’ for the US government. But now, they are serious about tracking this down,” he added.
The global crackdown on terror has also been a factor. With terror financing using the same routes and tax shelters, governments are “much more willing” to cooperate with law-enforcement and tax authorities, he said. Why Switzerland, out of the 74 tax havens identified by tax and law enforcement authorities worldwide? “India has a traditional affinity for Switzerland. Besides, it offers profound secrecy and strict privacy laws.” said Vaidyanathan, who has been tracking black money flows in and out of the country since the mid-1990s.
He estimates that over a third of illegal funds parked abroad by Indians is still in Swiss banks. With Swiss authorities now coming under pressure from the US and other OECD nations like Germany, France and a “reluctant” UK, India can easily prevail on Swiss authorities to disclose the names and details of account holders there, he said.
For instance, Swiss conglomerate UBS has, as a result of recent pressure, decided not to ask its executives to travel to other countries for “wealth management” services. But, UBS — recently fined Rs 55 lakh by Securities and Exchange Board of India for not disclosing details of its participatory note members — has a full- fledged set- up in India. “Britain is both accuser and culprit. It has several tax havens under its jurisdiction. Almost all of their judicial systems are based on British common law,” the professor said.
The list of tax havens runs from Andorra to Vanuatu. Significantly, India never figured on any list as a tax haven, he said.
Vaidyanathan said he has shared all these details with various government agencies in India over the years. But “nobody did anything with it.” Instead of investigating, the usual response has been to demand details. “I am only an academic,” he said.
Vaidyanathan was one of the “experts” who had been tapped by BJP leader L. K. Advani while raising the issue of getting back Indian money in Swiss banks.
The major routes used were under- invoicing / over- invoicing of exports and imports and getting the balance stored abroad.
Kickbacks from major defence / civilian contracts, smuggling of gold and currency, and hawala funds were other sources.

Money earned by artists and athletes abroad was another source, he added.

http://businesstoday.intoday.in/index.php?option=com_content&task=view&id=10942&sectionid=4&issueid=54&Itemid=1

India’s silence over tax havens, a concern

By By Olga Tellis

Apr 08 2009

THERE HAS been a lot of excitement generated by the G-20s’ pledge to take action on the tax havens.

The US and Germany were in the forefront making this demand. Germany had earlier got the names of 1,400 clients of the Liechtenstein-based LTG bank, who had parked their monies with the bank. The money in tax havens is money that is basically sent out to evade taxes.

Of these 1,400 names, about 600 were Germans. One does not know what Germany did with this information but that such information can be had is interesting. India could get the Indian names in that list if it wants.

India and tax havens

India has been conspicuously quiet on this issue.

Perhaps, she does not have much of a leg to stand on because this ‘black wealth’ is permitted officially to come in through the Mauritius route, tax free of course.

It is also permitted through participatory notes (PNotes), and that’s why there was a tremendous uproar in powerful circles when there was a curb put on PNotes by the Securities and Exchange Board of India.

The money in Swiss banks has always been a concern in the country but it has now got muscle because of the G20 stand.

In India, the BJP has taken up the issue in its election manifesto.

It has said that if it comes to power it will try and bring back the Indian money lying in the Swiss banks.

As a measure of its seriousness, it said it would form a task force that would include Prof. R Vaidyanathan, professor of finance at the Indian Institute of Management, Bengaluru.

Colossal flight

Mr Vaidyanathan has done a lot of work on this subject. Quoting from the Global Financial Integrity study, he said in an interview to Rediff that the average amount stashed away from India annually during 2002-06 is $27.3 billion (about Rs 136,466 crore).

It means that during the five-year period the amount stashed away is 27.3x5=136.5 billion (about Rs 692,328 crore).

Around $45 billion out of this is in Swiss banks.

What does this astronomical amount stashed away in Swiss bank accounts mean for the Indian economy?

One did a back of the envelope calculation and gathered that this amount could have become Rs 2,60,000 crore in 2009.

Had this money been available to India, the taxman could have collected around
Rs 86,697 crore with minimum tax.

This revenue could have financed 27 per cent of the country’s fiscal deficit, which is Rs 3,26,515 crore.

The amount in tax havens also amounts to 5.2 per cent of the country’s GDP which is around Rs 50 lakh crore.

http://www.deccanchronicle.com/dc-comment/india’s-silence-over-tax-havens,-concern-721

India's politicos dangle US$1 trillion hope

By Raja Murthy (Asia times, 24 april 2009)

MUMBAI - India's general election, which runs from April 16 through to the middle of May, is bringing out a streak of political self-righteousness that is exposing more than the hypocrisy that pervades a ruling elite whose position of power is dependent on the poverty-stricken masses.

The battle for votes is shedding light on wealth spirited out of the country and tucked away in Swiss banks and similar secretive hideaways. Businessmen, politicians and others living in India, the world's biggest democracy and home to one of the fastest-growing economies, have stashed away over the years a staggering US$1.3 trillion, according to a public interest petition filed this week before the Supreme Court. The petitioners sought judicial intervention to direct the government to seize the overseas loot.

Chief Justice K G Balakrishnan headed a Supreme Court bench that heard the petition on April 22, the first time such a lawsuit has reached the country's top court.

If this money is brought back, each Indian village could get $2.3 million for development, opposition politicians say. That might be rather optimistic - the petitioners' $1 trillion-plus figure represents dirty money accumulated over four decades. Even so, the Washington-based Global Financial Integrity Project says India suffers from the illegal outflows of $22 billion to $27 billion every year.

Global Financial Integrity (GFI) was launched in September 2006 "to promote national and multilateral policies, safeguards and agreements aimed at curtailing the cross-border flow of illegal money", according to the project's website.

India is not alone in suffering from such outflows. According to GFI, for every $1 poor nations receive in foreign aid, $10 in dirty money flows illicitly abroad. It says terrorist groups and drug cartels are the biggest beneficiaries of this dark economy. Efforts to counter the outflows are having little impact.

"Global corruption has not diminished despite 10 years of effort," a GFI report notes. [1] "Assets now stashed in tax havens around the globe are estimated at $11.5 trillion, and non-bank cash deposits outside the country of origin are rising."

Asia accounts for about 50% of illicit financial flows from developing economies, according to Professor R Vaidyanathan, a finance faculty member at the Indian Institute of Management,Bangalore, and a visiting Fulbright Scholar in Corporate Finance at the University of Illinois in the United States.

India's political classes are suspected to account for much of the black money, some of it tucked away to avoid tax, and so far a cynical general public appears unimpressed by the efforts of politicians to pose as concerned retrievers of this cash.

The petitioners pleading to the Supreme Court are led by former Indian law minister Ram Jethmalani. Already a controversial lawyer and still a politician, Jethmalani suffers credibility problems after having had as his clients India's biggest stock market scamsters, Harshad Mehta and Ketan Parekh.

Respondents to the petition include India's central government, the Reserve Bank of India, stock exchange regulator the Securities and Exchange Board of India, the Directorate of Enforcement - whose functions include enforcement of laws such as the Foreign Exchange Management Act 1999 and Prevention of Money Laundering Act 2002 - and the chairman of the Central Board of Direct Taxes.

While the sight of politicians falling over each other vowing to get back the loot if voted to power is possibly more mind-boggling than the unconfirmed, gigantic quantity of the muddy money they are chasing, of more immediate interest to the Indian electorate is who stashed away the funds in the first place.

Money and elections are as inseparable as pizza and cheese, but unlike in, for example, the US where electoral funding rules are detailed, the process for funding Indian elections is dangerously hazy and unspecified. While candidates are required to divulge their wealth and assets to India's Election Commission, how they first acquired this wealth is not necessarily made clear.

Rich individuals, the source of their wealth often swathed in mystery, appear all over the Indian political landscape. The second phase of general election voting, starting on April 23, fields 288 candidates considered to be crorepati the sub-continental equivalent of millionaire, the name derived from one crore, or ten million, rupees - about US$197,500.

The first phase of voting, on April 16, featured 198 crorepatis, according to election watchdogs such as the New Delhi-based National Election Watch (NEW), a nationwide campaign involving 1,200 non-governmental organizations pushing for electoral reforms. NEW says it studies information that candidates provide to the Election Commission.

Past governmental efforts at tracking black wealth have been half-hearted at best. "Given facilities such as online banking, hiding black money these days is much more difficult," says Ramesh Kumar [2], an accountant with 19 years of experience in various companies. "If governments are serious, it should be a relatively easy matter to track down black money. The problem is that corruption reaches from top to bottom, as when a single bribe is shared among many in the ladder."

Successive Indian governments have been part of the problem of not pursuing illegal money hoarders. The German government last year offered to reveal names of slush-money account holders in Liechtenstein, a tax haven in Western Europe. Germany's overseas intelligence agency, the Bundes Nachrichten Dienst, or BND, acquired a compact disc with names of 800 secret account holders in LTG, a Liechtenstein bank. The incriminating disc fell into BND hands during an undercover operation to unearth German tax evaders.

Countries such as the US, Britain, Canada, Italy, Norway, Sweden, Finland and Ireland reportedly took up the German government offer. Critics said the Indian government declined to react because powerful people including politicians, media barons, corporate chieftains and leading stockbrokers, are in the dirty-money list the German government discovered.

The Indian government's approach to black money contrasts starkly with the US, Vaidyanathan, of the Indian Institute of Management, said. For instance, the Swiss wealth management

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