Nov 142013
 

By J. Iddhis Bing, 99GetSmart

Greeks protest austerity cuts in Syntagma Square, Athens. Photography by Elias Theodoropoulos

Greeks protest austerity cuts in Syntagma Square, Athens. Photography by Elias Theodoropoulos

It’s hard work getting the news from the news these days, especially if you want to know about a country like Greece. Far-away birthplace of democracy, a bit exotic, Mediterranean lifestyle, Zorba, rumored to be different. What does any of that mean? Strange things are happening there but what is going on precisely? The Greeks ran up quite a tab at the bar, or so the financial dailies tell us on a regular basis.

Almost everything we read is filtered through the point of view of the Troika – the IMF, the European Central Bank and the European Commission – or the Greek government. We know that representatives of the Troika – established during the first stage of Greece’s “rescue” in May 2010 – have been in Greece since Tuesday of last week, meeting with the Greek government about the latest round of potential bailouts for that country. Beyond the leaks from either side, the rest, for us at any rate, is guesswork.

As of Tuesday evening, November 12, no decision had been announced. The Troika is typically very business-like with its clients, out with the whip, sign here, see you later – and then the next round of what the press like to call “belt-tightening” begins. The coalition government survived a no-confidence vote on Monday the 11th but that hardly quelled the sense that they are a very fragile edifice indeed. The people are out in the streets on a constant basis. They’re an after-thought, at least as far as the world’s media is concerned.

We do know a few things: that the Troika is a quasi-legal junta, created during the first stage of Greece’s trauma. The IMF was invited to the party at the insistence of Angela Merkel. Readers with long memories may remember that Dominique Strauss-Kahn was on his way to meet Merkel to present his plan to “save Greece,” when he was abruptly detained in New York.

The Troika’s mission is to enforce an austerity program that includes the selling-off of government assets and the decimation of public services, and that even within the IMF, there is dissension over the absurd goal of turning Greece into a productive satellite of Germany. We also know or suspect that any “bailout” of Greece will only impoverish the country yet further. That’s the public record regarding employment, savings, pensions, access to housing and food. You can read it here on Ground Report and find it many other places as well.

Language, meanwhile, gets so knocked around by the pros it throws its hands up in despair. Defeat comes at the price of rational thought: being rescued by the Troika means becoming a pauper in your own country, means your pension has vanished, you are a month or so away from losing the roof over your head and your hand is in the garbage looking for food.

None of the rescues perpetrated by the Troika have successfully rescued their target countries but instead have pitched them ever further into chaos. Bailouts are not a transfusion of money but a way of channeling money from one country (Germany, in this case) to another country (Greece) where the money is then re-routed to banks in, among other places, Germany and France in the form of debt payments.

The conservative government of Prime Minister Antonis Samaras, along with his coalition partner, Socialist Evangelos Venizelos, is said to be desperate not to tamper with what they consider Greece’s “success story,” one which includes massive unemployment and at least 20 percent of the population dependent on soup kitchens for the next meal. His figure is 700 million Euros to meet the debt payment schedule. The Troika is said to be looking for 2.9 billion Euros in savings from the current budget.

That explains the lack of an agreement since last Tuesday at least in part. The Troika is being held hostage. Round One to Greece.

Spectacularly, no one in the government mentions the list of 2,062 Greeks who are holding at least $1.95 billion in secret Swiss bank accounts. A list the government has had in its possession for at least three years without a single prosecution. (Interested readers can learn more here.) Articles in the local press do muse a bit about “tax collection” being a bit in arrears but without much enthusiasm.

Rumblings, such as they are, continue to be at such a low volume they can be hard to hear. Internal documents leaked from the IMF last week reveal that as early as May 2010, more than 40 IMF member states, all outside Europe, were opposed to the aid plan drawn up for Athens. (This in a report from last week’s Wall Street Journal.) The Troika itself is said to be headed for divorce. “The ECB must refrain from intervening in highly political decisions with its advice on taxes or cuts in spending. And yet that is just what it has been doing inside the troika. It must get out of it as soon as possible,” says Paul De Grauwe, a professor at the London School of Economics. In June of this year, a high official at the IMF publicly disagreed with the Troika’s agenda in Greece.

Even the pro-government publication Ekathimerini paints a decidedly gloomy picture: “Unfortunately, what this means in practical terms is that the current political system is not in a position to lead the country any further in terms of reforms. It doesn’t truly believe in these reforms and it does not have the stamina to clash with its traditional clientele,” writes Alexis Papachelas on November 10. Not exactly a ringing endorsement from a pro-government journo.

In other words: it isn’t working, it isn’t working at all, and yet our bedazzled technocrats continue to insist that it does, even if they don’t particularly believe it either. It’s the way the world does its “business.” Consider this: the Financial Times reported last weekend that Stephen King, chief economist at HSBC, “discovered” that nearly all of his bank’s country forecasts stated that the country-in-question planned to export its way to growth. (Ah, growth, endless growth. The Holy Grail, the never-ending rainbow at the end of the road. Line it up next to the other sacred cows, bailouts and rescues, and fire away.) Where they will all export to is the question, with every other country on earth frantically exporting its way to prosperity. Mars and Venus are at the head of the list, and why not? (William Pfaff has more on this.)

Greece lost some 35,000 jobs in October. So much for that success story. My sense is that the Troika’s technocrats simply live too high up in the stratosphere – somewhere near their very own cloud 9 – to be concerned with anything so gritty as jobs or hunger or survival. For them “the people” are an abstraction on the order of heroic rescues and bailouts.

The Washington Consensus is dead. Long Live the Consensus! The world, meanwhile, hangs by a thread. No one believes, fewer and fewer people vote and countries like Greece twist in the wind. Who reaps the advantage? The far right, the angry ones, the xenophobes who see us lined against each other in a global race to the End of the Line. One wonders exactly when Angela Merkel and that ardent enemy of finance François Hollande will get the message. (Before or after the rainbow? Place your bets here.)

The Troika, intent on getting in and out of Greece quickly with as few questions asked as possible, seem to have gotten stuck in transit. On Tuesday night, they were so afraid of angry cleaning ladies demonstrating in front of the Finance Ministry that they crawled on hands and knees out the building’s fire-escape to an underground garage en route to their own private cloud. That might not be, to employ yet another word that’s taken a few body blows, progress, but if a modern-day Aristophanes was anywhere nearby, he can make use of it.

As of Wednesday morning, November 13, no agreement between Greece and the IMF was in sight.When there is one, we’ll take a close look at it to see if there are any changes to the formula that has had such devastating consequences for Greece.

May 032013
 

By Iddhis Bing, 99GetSmart

Jerome Cahuzac, May 2012. Photo: Lionel Bonaventure

Jerome Cahuzac, May 2012. Photo: Lionel Bonaventure

“What bothers me is that I still have an account open with UBS… The only way to close it is to go there? With an account open there I’m fucked, since UBS is not necessarily the most hidden of banks. It stinks. Is any sort of proxy possible?…Above all, so that the holdings somehow stay at UBS and can be managed from here. It’s a word game pure and simple.”

Jerome Cahuzac was, until March 19, Budget Minister in François Hollande’s socialist government, in charge of the enforcement of tax laws during a time of fiscal crisis and high unemployment.

Regarded as one of the more effective ministers in the new government, Cahuzac lost little time before lowering the boom. He grilled members of the new administration about their finances, pointedly asking Marylise Lebranchu if there wasn’t a zero missing from her husband’s tax declaration, and in September 2012, announced a 19.6% levy on plastic surgery, an industry with powerful clients which may have felt untouchable, not least because Cahuzac is a plastic surgeon.

On December 5, 2012, the Mediapart website published the recording transcribed above, claiming it was Cahuzac’s voice speaking to a third party about a secret Swiss bank account.1

Despite his ardent denials over the next three months – first that the voice was not his, and later that the account had been closed in 2010 – Cahuzac’s position became untenable. He resigned his post and made a public apology.

Such are the twists and turns of fate that, in November, 2012, Cahuzac announced a crackdown on tax fraud and on April 2 of this year appeared before anti-corruption judges Renaud Van Ruymbeke and Roger Le Loire to face charges of concealing his UBS account (« blanchiment de fraude fiscale »).

Undeclared income transferred to a second country – in this case, Switzerland – in order to avoid taxes in the person’s home country – in this case, France – was and is a crime. As such, the actions Cahuzac confessed to on the phone tape are but a miniscule yet revealing part of the worldwide tax avoidance game which was detailed in the Invisible Money series on this site. The scandal in France is still in its initial stages. Deniability has now been exhausted. More bankers will come under pressure from prosecutors and more information about other tax evaders will leak out.

Cahuzac was able to hold on for more than three months because of support from within the Hollande regime. Pierre Moscovici, Minister of the Economy, cleared Cahuzac of wrong doing on February 5 and publicly embraced him in the Assembly, while Prime Minister Jean-Marc Ayrault stated he had “total confidence” in his Budget Secretary. The position taken by the Socialist government raises many questions about both the veracity of their public statements as well as their competence. People in France, from different parts of the political spectrum, find the assertion that they didn’t know about Cahuzac’s hidden holdings after early December to be stretching credulity past the breaking point.

Part of President François Hollande’s response was the swift passage of the bill requiring his ministers to register their holdings in the public record. They are now available on-line; the entire country can see how much each minister is worth. While not exactly a millionaire’s club, it comes close. Hollande has spent a good deal of his time since Cahuzac’s resignation on trade trips, to Morocco and last week, China.

On April 2, Cahuzac made a public statement to the effect that he had been “trapped in a spiral of lies and went astray,” and that his UBS account, some 600,000 Euros, had not been added to in a dozen years, was closed in 2010 and the monies would be returned to France. With his rugged good looks and forthright manner it was a splendid “modified, limited hang-out,” to steal a phrase from Richard Nixon.

Reality has continued to spiral out of control since then, with more information becoming public. There remain many problems with Cahuzac’s account.

This article, although it breaks no new ground, attempts to review important aspects of the story for English-speaking readers. L’Affaire Cahuzac is much more than the story of a fallen minister: it’s an x-ray of the French class system in which one can observe how one gets ahead these days. Cahuzac’s contacts and alliances among politicians and Important People are legion as are his friendships with those behind the scene.

Tax evasion has become a way of life for those in the upper strata of society, in France as in other countries. People do what they think they can get away with, and Cahuzac’s case provides but one example of how it’s done. French newspapers speak of the “scandals doubtless to come.”

“Shit, Jerome, you’ve got a few contradictions!”

Jerome Cahuzac, 60 years old, has used the rural department of Lot et Garonne as his political base for years. Until March of this year he represented it in the National Assembly. (French law allows politicians to hold multiple positions at the same time; for a few days after he resigned his ministry he publicly toyed with the idea of keeping his elected post.)

Trained as a surgeon, he began his medical career as a cardiologist before changing, in the early ’90s, to the lucrative profession of plastic surgery, where he specialized in hair transplants.

From 1988 to 1991, he worked for the government under Minister of Social Affairs Claude Evin, on policy relating to cigarettes and alcohol as well as pharmacology and medicines. In 1993, while maintaining his plastic surgery practice, he set up Conseil Cahuzac, where he acted as a “purely technical advisor” to the pharmaceutical laboratories. At the Conseil, he worked closely with Daniel Vial, the lobbyist’s lobbyist, the man who knows everyone in the “Paris that counts.”

A member of the Socialist Party since 1977, he first ran for the National Assembly in the Lot et Garonne in 1997, picking up other offices such as regional Counsellor General and Mayor of Villeneuve-sur-Lot along the way. A rebarbative critic of the Sarkozy government’s handling of finances and debt, he was also known as the “hairsplitter” in his position as the president of the Assembly’s Commission of Finances. (In short, make a lot of noise but do little, as Edouard Perrin learned when he tried to interest the Assembly in his findings on tax evasion.) He has, at various times, either worked for or taken Michel Rocard, Lionel Jospin, Dominique Strauss Kahn and François Hollande as his mentors.

He is known to frequent the Cercle de l’Union interalliée, and is a member of the Grand Orient de France, whose ruling counsel has now asked for his suspension.

In 2000, he made the now-fatal phone recording. In June of 2008, Remy Garnier, a pol from the Lot et Garonne, tried to interest Eric Woerth of the UMP (Sarkozy’s party) in allegations that Cahuzac had a Swiss bank account. No takers. Likewise, the far-right National Front has been suspiciously quiet throughout a debacle that should play to their benefit, saying only that they believe in the presumption of innocence. In 2007, Cahuzac was found guilty of paying a Filipina maid 250 Euros a month for 40 hours work off the books. He paid a fine and later helped the woman become legal in France.

So much for the Official Story, which raises a few questions of its own.2 Let’s look at a little more closely at Jerome Cahuzac’s other life.

Although he joined the Socialist Party in 1977, he has maintained long-standing connections to the right and far right through personal relationships. Jean-Pierre Emié is a close friend of thirty four years. Emié has ties to GUD, a far-right student union and was, until 2004, counsellor to the National Front for Paris and its suburbs. It was Emié who introduced Cahuzac to Philippe Peninque, the lawyer who opened Cahuzac’s UBS account. (Peninque and Emié share an office on Rue Marbeuf.) Peninque, a militant ideologue in GUD during his student days, is one of Marine le Pen’s “shadow advisors.”

Gilles August, Cahuzac’s lawyer until earlier this month (April, 2013), is a former member of UNI, a conservative student union. Manuel Valls, Minister of Security in the Hollande government, celebrated his 50th birthday at August’s house last summer, in company with Cahuzac and numerous stars from the firmament: singers Patrick Bruel and Nolwenn Leroy, the Marseille real estate mogul Marc Pietri, TV producer Michel Drucker… Cahuzac is a militant sportif, and one of his bike partners is (or was) Patrick Sayer of Eurazeo Investment Bank, a member of the CAC40, the upper crust of the French Bourse.

Among the many clients at Cahuzac’s plastic surgery practice were former GUD militants, Philippe Peninque, Stephane Fouks of Havas Worldwide Marketing, Socialist Party leader François Patriat, as well as, by Cahuzac’s admission, one Hervé Dreyfus.

Jerome Cahuzac’s younger brother, Antoine, worked at CCF (Crédit Commercial de France) from 1985 to 1988, and again from 1994 to 2000 in a variety of different capacities before taking a senior position at HSBC Bank France.

None of this is grist for the conspiracy mill but it does establish just how deep and wide ranging Cahuzac’s contacts are within French society. When Jean-Pierre Emié complained to Cahuzac that, “Shit, Jerome, you’ve got a lot of contradictions, you’ve got robbery and delinquence in Villeneuve and you support Socialist immigration and security policy!” Cahuzac did not seize on the particulars but replied, like the song says, on a whole other level: “Who doesn’t have contradictions? You, Jean-Pierre, you don’t have any contradictions?” Cahuzac once characterised himself as a “maquisard,” a resistance fighter; a man capable of many disguises and identities. In his case, the war being fought is entirely on behalf of the career of one Jerome Cahuzac.

Reyl & Co.

If Jerome Cahuzac is the fuse that lit the scandal, the dynamite – at least the first stick of dynamite to explode – is definitely the private investment bank Reyl & Co. Or as one of Mediapart’s sources put it, “If there’s one den of thieves that has as its clients French show biz personalities, captains of industry and politicians, it’s Reyl.” 3

The history of Reyl closely parallels what we might call The Golden Age of Tax Evasion, with an explosive growth of revenue in the first decade of this century when cheating on taxes reached the level of a national sport.

Reyl & Co. was founded by Dominique Reyl in 1978 as a private management company in Geneva. For twenty years or so it was indistinguishable from dozens of other financial “boutiques.” With increased pressure from the European Union on big banks like UBS, the unregulated, extremely discreet Reyl & Co. came into its own, converting into a full-fledged bank in 2010. Its modus operandi is to advise clients how they might conceal their money behind unnamed accounts or fictive organizations, giving them the ability to disavow holdings at one of the large banks.

A massive sum of money left Switzerland in 2010, the year Jerome Cahuzac “closed” his account. New regulations had come into effect: the Swiss had agreed to furnish information about certain kinds of accounts to the EU. His money did not come back to France; it moved to Singapore, where along with Hong Kong, Reyl had established subsidiaries. From Singapore it moved “off-shore,” to fiscal paradises with names like Wind Charm Corporation, Fame Eagle Corporation, Oceania City International Inc., Sunny Ridge Group Limited, Jade Green Investments Limited, Moonlite Overseas LTD. in the Seychelles – all Reyl subsidiaries. To add yet another layer of secrecy, these transaction are carried out by middlemen like Swiss-Asia Holding Ltd., so that nothing can be traced back to Reyl or its clients.4

Further questions regarding Cahuzac’s accounts are raised by my sources in the banking industry. In his confession the ex-Budget Minister employed the figure of 600,000 Euros to describe his holdings in Switzerland. This is obviously a very strict definition. 600,000 – barely enough, as one joker commented, to buy a modest apartment in Paris – is the kind of figure held in a individual’s name, while a significantly larger amount is hidden behind the bank’s firewall. Is Jerome Cahuzac the beneficiary, either directly or indirectly, of other non-declared accounts in Switzerland? Did he only confess to the one account that could be traced back to him?

Second, Singapore law makes it impossible for non-residents to transfer money into their banks in amounts less than 1,000,000 Euros. If Cahuzac’s Swiss account was closed in 2010, and the money transferred to Singapore, as he has confessed, exactly how much was transferred? This second line of inquiry obviously casts doubt on the veracity of Cahuzac’s “confession” as to just how much money he had in Switzerland in the first place.

Who is the man on the other end of the phone line in that call from 2000? Who was Cahuzac speaking to? Obviously an intimate, at least financially. We may never know for certain but one thing we do know: undeclared money traveling from France to Switzerland does not travel by check or wire or any other traceable route. It crosses the border by suitcase or van. And for that the services of a porter are required. A discreet porter who knows how to keep quiet.

Enter Hervé Dreyfus, according to Le Temps Dominque Reyl’s half-brother, a man who is a senior partner at both Reyl & Co. and Raymond James Asset Management International (“managers for private clientele”) in Paris – an off-shore specialist. A man with a myriad of contacts, who knows how to lay low: there are few photos of him in circulation. A man Jerome Cahuzac claims he met only once – in his office, for a “transplant consultation.” They must have had a lot to talk about: Dreyfus is, or was, as bald as an egg.

If what Cahuzac says is true, Dreyfus, who has advised Nicholas Sarkozy’s ex-wife Cecilia among many others, is one of the few important people in France he doesn’t know.

Dreyfus and Cahuzac’s younger brother Antoine both worked at Credit Commercial de France in the 1990s, where Dreyfus was responsible for “portfolio management for non-resident private citizens” (according to his biography on the Raymond James site) and both men worked in European markets. It’s hard to imagine the two men not knowing each other.

Mediapart and Antoine Peillon, author of The 600 Billion Missing in France, have named Dreyfus as Reyl’s “delivery man for French affairs.” Mediapart went further: on December 10, 2012 the site flatly stated that Dreyfus is Cahuzac’s money manager. Neither Dreyfus nor the younger Cahuzac have spoken publicly since the scandal broke.

This is just the beginning. More names with secret accounts in Switzerland and elsewhere are sure to follow. The French are incensed: Gerard Depardieu at least had the grace to leave the country rather than pay. The other rich stay home, complain endlessly about taxes and hide the loot elsewhere. Cahuzac’s slow motion striptease, a little bit of truth at a time, gave them three extra months to move the money around. It will be interesting to see who flees across the border or to the prosecutor first, Jerome Cahuzac or Hervé Dreyfus. Or, to use a homely metaphor, who serves whom on a platter.

Iddhis Bing

Paris

April 30, 2013

Footnotes

1 The phone conversation was inadvertantly recorded in 2000 by Michel Gonelle, Cahuzac’s rival in the 2001 municipal elections in Villeneuve-sur-Lot (Lot-et-Garonne), on his phone machine. Cahuzac, having spoken to Gonelle, believed he had terminated the call when he began a second conversation about his private finances. Gonelle, for whom the tape was a “heavy weight” he carried for 12 years, furnished the recording to Mediapart in 2012.

2 Questions are now being asked about his privileged relationship with the pharmaceutical companies and whether it affected his work for the government in 1988-1991 and, given his access to health officials, afterward; what exactly was the nature of the “purely technical advice” he gave to Big Pharma at his consulting agency – did it amount to government access?; whether it’s true that many of his hair transplants were done off the books. Finally, what is the real extent of his wealth, and how was it acquired?

3 « S’il y a bien une officine qui avait comme clients français des personnalités du show-biz, des grands capitaines d’industrie, et des hommes politiques, c’est Reyl. » Unnamed sources can say whatever they like. Unlike the average rumor mongers, Mediapart’s sources in L’Affaire Cahuzac have been proven right. Believe what you like.

4 Swiss-Asia is a “booking platform” operating between banks and financial management companies in different countries. Its on-line prospectus says, “Swiss-Asia Holding Pte. Ltd. operates from the core of its investment universe, where proximity and access to investment opportunities make it possible to produce superior returns with a pro-active and efficient risk monitoring. While Swiss-Asia’s mission is to build a sustainable “East meets West” style of Asset Management out of Singapore and Hong Kong, its dedicated team strives itself to provide High Net Worth Individuals, Financial Institutions and Corporate clients with the best-in-class asset-management, advisory and execution services.” Which reads like it was written on Ecstasy on the sundeck of a yacht passing through the Straits of Malacca.

Plenty more Bing here: 

 

Feb 062013
 

 

DRINKING WITH MÉLENCHON

“O my God / am I here all alone?”

Iddhis Bing

Jean-Luc Mélenchon

Jean-Luc Mélenchon

I want to tell you a story. Yes, I know, 99GetSmart is not exactly a story teller’s site – although we could debate that – but I am going to tell it because it illumines a few dark corners that can not only bear the light, but that could be useful to those who are engaged in airing and publicizing what Ed Dorn once called Heavy Business in the White World, while attempting to aide those who are on the receiving end of the World’s Big Stick.

If I do that, I have to pass up the chance to talk about the untold juicy morsels that flew across the desk in the last few days, viz., in cash-strapped, austeritarian Spain, where the priest’s favorite altar boy, Mariano Rajoy, is in power, it has just now been discovered that party of which he is the head, the Partido Popular, keeps two set of organizational books, and in the second and more compelling one, they have parked 22 million Euros in a Swiss bank account. For what purpose? This seems to me worth investigating for any number of reasons (how it got out, the persons involved, how badly it will damage the PP, etc.) Maybe the Partido Popular is just planning ahead and when Austerity collapses, as it inevitably will, the upper echelons will flee to Switzerland and retire on their savings. Plus there is news from Greece, where Blackwater, the security firm close to the Bush mafia, will now be protecting the Greek parliament from the rabble.

But instead I am going to tell you a story, a bit of old news, because I think it reveals a little bit about the current state of things. It’s just too damn good to pass up.

Jean-Luc Mélenchon is a French politician, a long-time Socialist close to François Mitterand, who eventually split with the Socialist Party because he could not tolerate their drift towards the center, and formed the Front de Gauche. The F de G ran seriously for the first time in 2012’s presidential race and then in the legislative elections in June. Mélenchon ended up doing very poorly, scoring 11.4% of the vote (in contrast to Marine le Pen’s 17.3%) for a variety of reasons that if you try to explain it, becomes a kind of Rohrsach Test of your feelings about French politics: it was his first national campaign, the party was new, everyone was sick of Sarkozy so they coalesced around the one candidate who offended almost no one and had a chance to win, François Hollande, and who did. There are many other possibilities, none of which explain the dreaded Le Pen’s 17% share of the electorate.

You could argue that a large swath of the French electorate might say that Mélenchon, his quick verbal repartee and aggressive, unashamed leftwing take on issues appeals to them but they would never actually go into the voting booth and pull the lever for the man.

Now I read what Mélenchon writes and have published a translation of an interview with the man, and I find him smart, energetic, straight-on – even when, during the course of an interview it looks like his eyes are about to pop out of his head. Does he wake up angry in the morning? Is that a problem for you? Maybe we need a few more angry people around. The man engages with individuals when he meets them, he is committed to social revolution (yes, he dares to use the word from time to time), and he has provided the best ongoing criticism of Hollande’s presidency over the last six months. The French elect a monarch and give him five years to prove he deserves the kingdom. If not, off with his head. Mélenchon keeps the blade sharp.

OK, since I am not a Protestant and believe neither in purity of motive nor even in the desirability of a pure outcome, I find the following story vastly instructive and even infuriating – but not for the reasons you think. Revealing, certainly, because it tells us a little bit about our current politicians and about us.

It’s a true story, I have it direct from the horse’s mouth, that is to say, one of the participants – the man who found himself with Melénchon’s hands aimed at his throat. The story had a little play in the French press but never a whisper of it among the English speakers so, you read it here first. The photojournalist is Guillaume Binet and the journalist who accompanied him is Marion Mourgue. The story is old and it’s still good.

My friend works in politics, knows Mélenchon, has photographed and spoken with him on several occasions. And he also knows that Mélenchon had, in 2010, characterized the UMP politico and then-Minister of the Interior Brice Hortefeux in the following words: “C’est sa tête qui est un terrain vague, à cet homme-là. Il n’y a rien dedans: des mauvaises herbes, des pensées névrosées, la peur de l’étranger, la haine de tout le monde. Pour dire autant de bêtises et s’y prendre aussi mal.”

To wit: “The man’s head is a vacant lot. There’s nothing inside it except weeds, neurotic thoughts, fear of foreigners, hatred for everyone. Just talking about it is bad for you.”

Strasbourg. The European Parliament building, the 26th of October. 1:30 in the afternoon, after a vote on the budget. Binet is passing through with Mourgue and in crossing the ground floor, takes a short cut through the bar.

And there at the bar, sharing a glass of champagne with none other than Brice Hortefeux on a beautiful autumn day in Strasbourg, is Jean-Luc Mélenchon. The only customers at that hour.

Binet walks on. He does not take out his camera, he does not play the paparazzi, he does not do anything more than gently poke his friend in the ribs with his elbow.

This is an interesting scene. From my own, limited point of view, I’m not sure I want politicians to talk to each other. Every time they communicate it’s a conspiracy against the people. Maybe they should be kept in isolation, or some sort of public pillory. Of course, I also believe in the moderate application of the guillotine for pols. (Every other week?) But there’s no law against talking.

And what happens next? Mélenchon charges my friend, who let it be observed, enjoys a rather strong height advantage over Jean-Luc, as well being twenty years younger. But – ah, champagne, the great equalizer. Mélenchon decides to go for broke and screaming that he knows this piece of shit journalist is going to make a story out of the fact that he, the one and only Jean-Luc Mélenchon, is drinking with a prominent right wing pol in the Parliament bar. He charges Binet, yelling “Mais racontez-le donc, hein ! Jean-Luc Mélenchon et Brice Hortefeux qui discutent ensemble, ah ça vous plaît, hein, ça vous amuse !” (“Go ahead and tell the story, so what! Jean-Luc Mélenchon and Brice Hortefeux talking together, you really like it, ha! You think it’s amusing!”) Clearly, Mélenchon shares my opinion of what happens when politicians get together for a chat.

He gets his hands up around my friend’s neck and maybe he starts to squeeze but Mr. Vacant Lot Hortefeux comes to the rescue and slipping his arms around Mélenchon, pulls him off. Upshot? A brief media flurry and for the next several months Mélenchon regards the photo-journalist – who did not do his job, that is to say, took no photos before, during or after, they did not tweet the incident – with a withering contempt and a refusal to talk.

A rich scene, no? Maybe not Shakespeare but still compelling. In a perverse way I admire Mélenchon for being so explicit about his relation to the press, for making the point irrefutably clear that the press and the politicians have completely different interests. If M. makes it to the Palais Elysée one day, maybe he’ll put a boxing ring in the back yard.

I told this story last night to a mixed crowd of French and Americans and the response was, stupefaction on the part of the Americans, who hardly know who Mélenchon is and disbelief on the part of the French – that takes some doing. A few denied that it was even possible. “Never! Mélenchon hates Hortefuex, he would never drink champagne with him….!” Hence, this scene, which can be viewed from so many angles, becomes the Rohrsach test mentioned earlier.

I want to argue that this incident, based on your knowledge of Melénchon and your partiality or aversion to left-wing politics, reveals your regard for politicians as a class.

Because that is what they are – a class with a specific function. In the U.S. it is obligatory to believe in a politician, to believe that this or that self-motivated hustler is going to fix things. He is going to change things – even when it is obvious that the politician, as a member of a class, has absolutely no interest in the vague wave of change that he constantly alludes to in his speeches. His goal, if he has one, is to readjust the status quo ever so slightly in favor of his pals. But that doesn’t stop large numbers of people from falling in love with a politician, and the true believer stays in love after all evidence of infidelity is in. One stays in love with a politician after they have betrayed – by necessity – everything they said to get elected, and go on betraying until their last day in office. (I can’t help but remember Clinton’s pardon of Marc Rich on his very last day as president. But that boyo offers such rich, copious evidence of betrayal, one hardly knows where to begin.) Reagan, Clinton, Obama – recent American history offers such splendid examples of betrayal. The great advantage possessed by the Bush dynasty is that they never betrayed anyone – they simply and brazenly acted on the interests of their monied class, and never apologized for it.

This is the moment when you, dear reader, leap out of your chair and accuse me of being a cynic. Maybe you even hurl your glass at me – because I have dared to tell you that most love is not love, and in any case, the mere act of believing in a politician of whatever stripe is tantamount to asking to be betrayed.  Don’t worry, you’re in good company. Most journalists make the same mistake, and are, in effect, in one camp or another. Melénchon knew this – he simply chose the wrong target, and made an enemy when he didn’t have to. Which may help explain his 11.4% of the vote.

Politicians occupy a very small portion of the political bandwidth, and the untiring obsession with what they are doing or saying obscures a simple fact: their power derives, not wholly but substantially, from the people from whom they stole it. If people really and truly stopped waiting for politicians to deliver a fraction of what they say they will… the jig would be up. The obsession with politicians makes it endlessly easy for us to avoid looking closely at what the people are doing and making a critique of that. It is the blind trance of our love affair, the demise of a republic.

Meanwhile, Greece, whose government is as close to a protection racket as can be imagined, has just announced a deal with the notorious American firm Blackwater, to provide “security” – from the people. Drones will in all likelihood be patrolling the skies over the Parthenon very soon. But if the Greeks stopped paying attention to their governors, if they stopped waiting to see how Syriza does in the next election, if they decided to take back a bit of the power they have so recklessly given away… ?

None of which should be construed as that lowly seconal, advice, to the Greek people but taken for exactly what it is: the description of a predicament. Criticism never solves anything. It isn’t meant to. It’s meant to break the silence about an intolerable situation. That’s enough, but it will have a tough time with Americans, who want instant solutions to intractable problems. And meanwhile half of Paris dreams of living in New York and the world pines for American solutions that after 200 years have yet to arrive.

The politicians have their hands around all of our throats, while we, ever patient, persist in believing that this is their tortured form of love, and if we just wait awhile, they will come to their senses and set things aright. Who is the cynic in this equation?

Iddhis Bing

Dec 292012
 

 An Interview with Luc Frieden, Finance Minister of Luxembourg

By Iddhis Bing, 99GetSmart

Luxembourg Finance Minister Luc Frieden

Luxembourg Finance Minister Luc Frieden

Of great wealth there is no real use, except in its distribution, the rest is just conceit. Francis Bacon

Tax havens and fiscal paradises, what they are and how they work, are the subject of the Invisible Money series. Some 67 trillion USD moves in and out of what is now called the “shadow banking system,” a staggering amount, enough to put EU or US budgets back in surplus if it were properly accounted for. (As if, you sigh.) The series has taken a close look at Luxembourg, a notorious tax haven, and how it manages to operate within the structure of European Union governance. Switzerland gets the bad press and deservedly so – but it is not a member of the EU. Luxembourg is, and so, beyond the dubious legality of its tax regime, questions concerning exchange of information and cooperation between EU states are unavoidable, as well as its membership in international bodies like the OECD.  (Ireland and Liechtenstein also come to mind as a kind of Premiere League of EU tax havens.)

As noted elsewhere in the series, Luc Frieden is public point man for Luxembourg’s ingenious interpretation of European law. Frieden is the heir apparent in Luxembourg and he, not Vice-Premier and Foreign Minister Jean Asselborn, takes the lead in the tricky business of fending off attacks on Luxembourg’s status quo. He is on record as saying, “Our financial approach is totally European and applies all laws in the struggle against financial criminality.” But what goes on in Luxembourg, stays in Luxembourg.

Readers of Nicholas Shaxson’s Treasure Islands will remember more than one instance of the rebuffs inquiring reporters got when asking around about who’s who and how things work. Things can even get lethal in places like the Cayman Islands or at the very least, damn unpleasant if you ask too many questions on the isle of Jersey. Hence, getting the top dog to answer questions is a bit of a coup.

Although there is no “gotcha” moment in the interview, it is instructive to watch a member of what used to be called the permanent government bob and weave, fending off attacks and keeping the truth at a comfortable remove. Governors of fiscal paradises only rarely make a public defense of their actions. This short transcript serves as an open window into a closed house.

The interview with Luc Frieden is part of Edouard Perrin’s documentary. It can be seen in full here

Elise Lucet is the interviewer for the Cash Investigations series. Lucas Frieden is the Minister of Finance in Luxembourg’s Juncker/Asselborn government and is the man in charge of their extremely laissez faire fiscal regime, which, one is inclined to believe, he knows something about.

*

Cash Investigations: We’ve seen a lot of those documents. They cover Liechtenstein, the Caymen Islands and… Luxembourg. If we’re talking about tax havens, we find you, Luxembourg, in the middle of those schemes.

Lucas Frieden: We abide by European law, which is not the case with all the countries you just mentioned. We should be compared to the UK and the Netherlands.

CI: So you reject the term tax haven?

LF: Absolutely. It’s an insult to my country because Luxembourg abides by every single OECD convention and we work in close cooperation with every single EU state. You cannot prove that Luxembourg does not adhere to EU law.

CI: But we’ve seen all the [tax haven] schemes and you’re in league with those countries. You say it’s an insult to your country to be called a tax haven but you are always mentioned with those other countries. So, according to you, are Liechtenstein and the Caymens fiscal paradises?

LF: I’m not sufficiently versed in the tax laws of those countries or regions to be able to judge.

CI: You’re kicking off-side.

LF: No, I don’t want to judge in a superficial manner.

CI: If a large French company makes use of a subsidiary in Luxembourg, a non-active subsidiary, and succeeds in avoiding taxes in France, what happens?

LF: If it’s contrary to European law, and if the French mention it to us, I will take care to make sure it doesn’t happen.

CI: You won’t bring it up yourself?

LF: I would only be aware of it if the French tell me there’s a problem.

CI: You can guess that this presents a problem –

LF: You suppose that it’s always that way but you never raise a question about whether a contrary might exist. When laws are not the same in every single country, it is highly possible that a company in another country reduces their taxes somewhere else through a subsidiary. It’s not against the law. If there are abuses, I will make sure they are stopped because I don’t want to live off another country, to which we owe so much and with which we enjoy excellent relations.

CI: So you will stay with this approach?

LF: Absolutely.

CI: If you pledge that in the future there will be contact between your country and other countries and say, here we are, we are going to sign these agreements, would that not be to the detriment of the services you offer?

LF: I could imagine that that could be one way of doing things. Once again, with respect to European law, to enhance cooperation between European countries –

CI: So, according to you it’s a bit shocking –

LF: The way you present things, yes, because it suggests that people escape their own legislation.

CI: That’s the impression we got. Frankly, we looked at the activity of those companies, British and French, in your country, and they are not strikingly active here in Luxembourg. What is striking is the absence of real activity here in your country.

LF: I am not an expert regarding shell companies but one does not need to have many employees to be able to say it’s a real company. There are rules, European and OECD rules, regarding a stable company.

CI: When a French company has an office which it shares along with 31 other subsidiaries and where, quite blatantly, nothing goes on except for financial movement, for you as Finance Minister in Luxembourg, is this something you find shocking? I need to know your real position on this.

LF: Yes. If the description you made is accurate, I find it unacceptable.

CI: When the ATAs allow GlaxoSmithKline, for example, to avoid paying 40 million in taxes in their country, it’s a problem, isn’t it?

LF: Yes, I agree.

CI: By the way, it created problems with Revenue in the UK.

LF: Yes. I fully understand that but we have to know what the solution to such problems would be because creating subsidiaries is not illegal per se.

CI: If they are void of any real substance, it raises serious questions.

LF: Yes.

*

Apart from his sterling manners, Frieden’s defense essentially reduces to I have no way of knowing and when pushed, prove we’re breaking the rules – all of which beggars belief coming from the mouth of a government minister. It hardly seems enough – but it’s working. Interestingly, Frieden points his finger – correctly – at the UK, by which he means the City of London, certainly the greatest facilitator of illegal cash flows in the world today. (We’re just small fry around here.)

And as we shall surely see sooner rather than later, everyone is involved, from pop stars to budget ministers. Does that mean Luc Frieden again ? No, Jérôme Cahuzac in France. When Perrin’s documentary won the Louise Wiese Award, the French journalist Paul Moreira said in dismay, “Edouard Perrin’s stunning investigation wins the Louise Weiss Prize and the Budget Ministry completely fails to react… We’re not talking about peanuts but tens of billions of Euros. It could give the Budget Ministry a few ideas.” In early December the website Mediapart published an inadvertant phone recording of Budget Minister Cahuzac discussing his secret Swiss account. (Not enough to cost him his position, so the experts say. Even Copé has rushed to his defense.) Pardon the Minister if he doesn’t get too tough on Luxembourg. He understands the need for secrecy, for putting a little aside for a rainy day. And dammit, if he had just hung up the phone correctly, none of this would be public. The Cahuzac interlude is a portrait, in miniature, of the way the system survives and flourishes.

Interestingly, in November, Avinash Persaud, no small fry himself (Chairman of Intelligence Capital Limited, Senior Fellow with the Caribbean Policy Research Institute and Co-Chair of the OECD Emerging Market Network) speculated that when push comes to shove, countries like Luxembourg would go along with a reform that puts the places like the Cayman Islands out of business. “The large financial centres are going to try, and have been trying, to strangle the Caribbean banking sectors,” Persaud stated. A bit like a declaration of war.

Where does that leave us ? Is it nearly High Noon among the warring Secrecy and Acquisition Clans ? Every system has the limitations particular to it built in, and it’s no surprise to learn that capitalists despise each other and will, under pressure, turn other members of their class out. So, please, enough of the polite manners. For the next act, the crocadiles, under the increasingly watchful eyes of the crowd, will tear each other to pieces. Stand back, ladies and gentlemen. The show is just getting under way.

 

Iddhis Bing

For the full text of Invisible Money 5, see elsewhere on this site or Ground Report/Iddhis Bing.

————

Invisible Money Series by Iddhis Bing:

– Invisible Money 1: How It Gets That Way: http://99getsmart.com/?p=4736

– Invisible Money 2: Voyage to Luxembourg: http://99getsmart.com/?p=4914

– Invisible Money 3: http://99getsmart.com/?p=5319

– Invisible Money 4: Of Luxembourg, London and Paris, and a Lady Named Merkiavelli: http://99getsmart.com/?p=5411

– Invisible Money 5: The cloud Factory Revisited Up The Ladder, Marius Kohl to Luc Frieden: http://99getsmart.com/invisible-money-5-the-cloud-factory-revisited-up-the-ladder-marius-kohl-to-luc-frieden/

Dec 272012
 

Many thanks to GreyDog for posting my article from the Invisible Money series.

For those who can bear it, all my political pieces are archived at GroundReport (http://www.groundreport.com/JIBing) and I write about art and culture for NY Arts, but as their site is in some sort of hazy-maybe reconstruction, good luck!

In a day or so I will post the full transcript of the ElistLucet/Cash Investigation Luc Frieden one-on-one from Perrin’s film. Nothing precisely revelatory but it is a rare occasion when one of the honchos at a tax haven lets himself be grilled by the press, and the Logic of Avoidance is on full display.

So, we made it though the End of the World. Next up, end of the year. End of Time?

 

 

Dec 112012
 

This Is Your Future 2

Doctor Kosmopoulos & The Destruction Of Greek Medicine

Iddhis Bing, 99GetSmart

Giogos Kosmopoulos, the surgeon who was profiled in the first article in this series, is one of the founders of Stop Cartel tv, by means of which he tirelessly alerts the world to what is going on in Greece. After taking early retirement this year from Agios Savas hospital in Athens, he received pension benefits for six months, when they suddenly stopped. He then opened a private practice, which proved impossible to sustain. Attempting to be reinstated within the Greek healthcare system, he has so far only been offered one post, in a rural area in the western Peloponnese, which he refused. He and his family now face eminent eviction from their home of 14 years.

As of Tuesday morning, December 11, the eviction is scheduled to proceed. The Kosmopoulos family have locked themselves in their apartment on Delphon Street, in Glyfada, refusing to allow access to bailiffs or police. Supporters are present in front of his building to try to stop the eviction with non-violent civil disobedience. Doctor Kosmopoulos has begun live streaming. You can watch events as they unfold on Stop Cartel.

If the eviction proceeds, the only present option for Doctor Kosmopoulos and his wife is a squat in Exarchia. Kosmopoulos has said that this is a last resort to keep his family off the streets.

Perhaps the most devastating critique of what is happening in Greece today was delivered by Dimitris Christoulas, a 77-year-old pensioner.

“I see no other solution than this dignified end to my life so I don’t find myself fishing through garbage cans for sustenance,” the retired pharmacist wrote on April 4.

Christoulas then walked from his home to Syntagma Square in Central Athens and blew his brains out with a revolver.

The media, if it covered the story at all, used the words quoted above. But was that all he wrote? Here is the full text:

“The Tsolakoglou has annihilated all traces for my survival, which was based on a very dignified pension that I alone paid for 35 years with no help from the state. And since my advanced age does not allow me a way of dynamically reacting (although if a fellow Greek were to grab a Kalashnikov, I would be right behind him), I see no other solution than this dignified end to my life, so I don’t find myself fishing through garbage cans for sustenance. I believe that young people with no future will one day take up arms and hang the traitors of this country at Syntagma square, just like Italians did to Mussolini in 1945.″

The Tsolakoglou was the Greek collaborationist government during World War II.

Christoulas was hardly a lonely old pensioner in reduced circumstances.

In Greece, whose suicide rates have historically been among the world’s lowest, Christoulas has become a symbol of the pain the country is suffering at the hands of the Troika.

At the end of 2011, according to statistics, the act of taking one’s life increased an astounding 40%.1 It has continued unabated this year and has in all likelihood got worse.

On Monday, April 30, a 38-year-old geology lecturer hanged himself from a lamp post in the capital, and on the same day a 35-year-old priest jumped to his death off his balcony in northern Greece. On Wednesday, May 2, a 23-year-old student shot himself in the head. This was four days before the country’s national elections on May 6.2

Partial statistics for July 16 are no less grim: a businessman and father of three hanged himself in his shop on the island of Crete; a 49-year-old man from Patras was found by his son, also hanged. On July 25, a 79-year-old man in the southern Peloponnese hanged himself with a cable tied to an olive tree. On August 3, a 31-year-old man shot himself to death at his home near Olympia. On August 5, a 15-year-old boy hanged himself in Pieria. On August 6, a 60-year-old former footballer set himself on fire in Chalcis, and died. And so the lonely list goes on and on.

The truly efficient modern army no longer invades its weakest neighbor but creates the conditions whereby the people in that country take their own lives. In Greece, people are getting the hint. Some of them, pushed too close to the edge, don’t plan on sticking around to see what else the Troika has in mind for them.

The Greek healthcare system is being hollowed out from within. Earlier this month (December, 2012) Benoît Vitkine published an article in France’s Le Monde, from which the following quotes are taken.4

“In Thessaloniki’s 13 hospitals, doctors are ‘playing God,’ according to Leta Zotaki, director of radiology at Kilkis Hospital. ‘When we start running out of x-ray films, we have to decide who needs to be examined first; we trade with other hospitals or ask the patients to pay for the film,’ the trade unionist explains. Zotaki saw her 4,000 euro monthly salary cut in half. Her night shift hours have not been paid since May.”

“There is a shortage of everything at hospitals: latex gloves, cold pads, reagents for blood tests and catheters. […] Doctors who are leaving – who have either retired, or left for private hospitals or abroad – are not being replaced: in Kilkis, the number of doctors has gone from 160 to 125.”

“Since 2009, public spending allocated to the healthcare system has seen a 32% drop. […] As the unemployment rate has increased (+25% in November) the number of contributors has fallen,” inevitably putting further strains on hospitals ability to deliver both care and medicine.

According to the article in Le Monde, “Public healthcare, which had already undergone a 40% budget cut between 2007 and 2009, entered the crisis in a very fragile state. In order to balance its budget, patients were asked to pay a new five-euro fee for every consultation (raised to 25 euros in the new budget), and a variable financial contribution to medical fees. On top of which Greeks sometimes have to pay a fakelaki, a bribe that goes in the doctor’s pocket and allows them to jump the queue.”

“Unemployed persons lose medical coverage a year after their job ends, and then must pay medical expenses themselves. In most cases, they don’t go to the doctor. They wait for the situation to worsen so they can go directly to an emergency room at the public hospital. ER admissions have tripled. Intensive care units are also overwhelmed: between 30 and 40 people are denied access to these units every day, according to trade unions.”

“Despina Ioanidou, 48, who has been unemployed for eight years, often goes to the local chapter of Doctors of the World to get drugs for her back pain and depression. ‘I have just enough money to pay for electricity and food, so how could I afford to see a doctor or even go to hospital?’ she asks.”

“Doctors at this makeshift clinic are seeing new diseases, some of them due to child malnutrition. Everywhere in the country, old diseases, such as malaria and tuberculosis, are making a comeback.”

These conditions are being found in Greece, a full member of the EU, and not in a war-torn country in what is called the Third World. Or to put it another way, the Troika, in their great benevolence, is replicating the Third World within its own borders. Vitkine goes on to report that “According to the Pan-Hellenic Pharmaceutical Association (PFS), 300 prescription drugs have become nearly impossible to get – a particularly worrying situation for heart disease and cancer patients. Pharmaceutical companies are threatening to stop supplying the drugs altogether. In November, Merck announced it would stop supplying anti-cancer drug Erbitux to hospitals behind on payment.” Merck’s profits in 2011 were 6.272 billion in U.S. dollars.5

I leave the last word to a doctor cited in Vitkine’s article. Stavros Baroutis is an administrator at Agios-Dimitrious in downtown Thessaloniki. “The cuts are so violent; the purge is done in such a way that we are killing the system without reforming it.”

Iddhis Bing

Sources:
1 http://www.guardian.co.uk/world/2011/dec/18/greek-woes-suicide-rate-highest

2 http://www.reuters.com/article/2012/04/28/us-greece-election-suicide-idUSBRE83R08N20120428

3 http://www.spiegel.de/international/europe/economic-crisis-triggers-wave-of-suicides-in-greece-a-850129.html

4 See translated version here: http://www.worldcrunch.com/culture-society/postcard-from-the-edge-inside-the-dramatic-collapse-of-greece-039-s-heathcare-system/thessaloniki-medical-drugs-hospitals-god/c3s10308/

5 Merck’s revenue for 2011 was 48.047 bn USD, with a net income of 6.272 bn USD. Source: Merck’s 10-K filing with the IRS.

———

Part 1: THIS IS YOUR FUTURE – Fast track evictions rampant in Greece: http://99getsmart.com/this-is-your-future/

Dec 032012
 

TERRORS AND IDYLLS OF THE EXILE

Iddhis Bing

This is NOT a political piece like many of the worthy and informative articles on 99 GetSmart. Every once in a while the present writer gets out and into trouble of a different kind. 

It could be nothing more than a freak of geography, wherein God’s Creatures are tossed around the globe like so many storm-tossed mariners but even taking that into account, the sheer strangeness of the occasion is worth musing on for a minute or two: a small circle of Americans, none of them church-going, most of them strangers to one another, sitting around a cocktail table in the night club of a corporate hotel, where water was unthinkable and a glass of wine 29 Euros; the platonic, pre-fabricated cocktail table itself, the same in every dive the world over: there might be one factory on the whole planet, in Chicago, Cuzco or Mandalay that makes every single one of them; three quarters of us strangers to each other, black and white, who would never so much as look in the hotel door or even go down that block in our day to day, our knees knocking against the lip of the table (which may be the reason for the explosion later on), sitting in an environment faux to the max, everything “pre-designed” and meant to signify a certain easy complacency with the ways of the world; all of us there for one purpose beyond the unspoken one of sitting in a small circle with unknown others who may or may not have shared our reasons for exile, or even our taste – because we were all Americans in Europe, and however often that sort of gathering ends up a real disaster, we were willing to chance it. That purpose being to hear a small group of gospel singers, who were willing to sing for us sinners in an environment that shouted hoshannas to easy money from every corner.  We were grouped around the table for the simple reason that we came from the same wilderness, the forest of America, a country now so far away we might not even be able to find it on a map.

We came to hear the Baptist-Methodist delivery of Sweet Jesus, who no matter how endlessly he procrastinates over his return – and where actually would he go to be received hospitably? A certain irreducible number of Americans are sure it must be the U.S.A. but, by God, we’d have that socialist hanging from a tree before the sun went down – delivers musically.

The waiter was, like the song says, very kind. No matter how many times we said “pas encore” when he came for our order, he smiled and deferred. A Kabuki drama, full of deference and hidden motives. We were playing a role, that of indigent Americans on foreign soil, no less than he, who isn’t a waiter when he’s at home. We had snuck in the side door, so to speak: one of our party was related to the oldest and most venerable of the singers, Elsa Harris, who has joined the Victory Singers for a brief tour of the Continent. And there we were, not buying drinks, getting to know each other, and listening. I don’t know how often black and white sit down together in the States these days, but it isn’t often; and less so here. What did I have to do with the religious message of Jesus this and Jesus that? Absolutely nothing. But tonight at least, Jesus wasn’t going to be denied, here on the home ground of the cults that made his name. (To compress two thousand years of history into a single sentence, if Paul hadn’t ventured to Greece and Peter to Rome, no would even know who the troublemaker from Galilee is.)

So there we sat, thirsty in a temple of Mammon, listening not to some dumb hotel jazz but voices: heavenly, ardent, righteous. We watched in a kind of open-eyed stupor.

Someone someday should do a full-length study about the way the Godless French flock to gospel performances, the price of the ticket, the way they sit there agog as if they were, finally, after a weary week of the worst despotism imaginable – the ordinary – at an authentic happening, and how, within twenty minutes or less, they are smiling, clapping and flapping their arms like the rawest yokels at the county fair. Well, the French are notoriously ever in search of a new exotic flavor – but surely they do not believe. So they are once again playing a role. And yet… What sounds to me like the worst pandering to Jesus, emblematic of just how primitive religion is in my country, they applaud more fervently than they ever did the Belgian priest LeMaitre’s announcement that the universe is expanding infinitely in all directions. When we come over, the Euros like to see us primitive, in bear skins if possible, chanting a noisome litany of pseudo-sacred truths. It reassures them.

It is for that reason among many others that I cannot completely convince myself that Europe is so very done with God just yet. He is, I suspect, waiting in the wings somewhere, fidgeting, eager to try on a new outfit of shiny, theatrical garb. Where and when are the questions. Make of that what you will.

The Victory Singers are a small group, five ladies and two men, one piano, and not one of those enormous choirs decked out in flowing robes whose posters adorn public walls in city after city here on the Continent, leading one to the suspicion that there are many wise black folk who have decided that singing for their supper in Europe is a far better deal than heading home to be an unemployment statistic and member of a race that some 47.3% of my countrymen will never truly accept as Americans at all. (“So happy to be here among the real people,” the pols whistle when they land in rural Kansas or South Carolina.)

(I know: Obama won reëlection resoundingly despite the fact that he is a savage, tom-tom beating African bent on hauling America against its will to a socialist paradise. It must have happened because… because an influential and odious character named Withers, who happens to be a cartoon, came out for Romney, and that gave America pause to think. Stranger things have happened. In any case, America is not to be understood – it kills those who try; it can only be accepted as is, contradictions intact.

What was it like for a white Christian in the South to go into the voting booth and, against pressure from his preacher and his boss, vote for a man they are taught to despise? That interests me. Of course they routinely vote for men who cannot be trusted with either their dollars or their daughter…)

And so there they were on stage in jeans, eloquent testimony to the Poor Church which, no matter the indignities of the week, gets up early Sunday to testify that God is with them each step of the way, a claim I find absurd but not laughable, utterly unproven but worthy, for a host of reasons, of respect.

And what did they sing? Our Homeric Hymns, the originals lost, replaced by a multitude of versions derived from the first template, variants comingling in the spirit, each telling a different story depending on who steps up to sing it. No one should be shocked to hear lines in Tell ’em I’m a Child of God appear to very different ends in Don’t Think Twice, It’s All Alright. Or perhaps the singer in the Detroit church where Child of God was recorded listened to Dylan… – nothing out of the ordinary there. But if you trace the song back, you will end up not with a modern day believer singing for Jesus but a fugitive, an escaped slave, rain-soaked and shivering, who had no name to give him or herself and nothing more than A Child of God as a password and a desperate hope of shelter. An exile, in short, in his or her own country. That may or may not fit your definition of political but it is the human context in which many gospel songs were born.

I don’t know if I have conveyed the full strangeness of the evening, which seems to me now to have taken place in a hall of mirrors that would beggar Versailles. What were the Victory Singers doing at Le Méridien Etoile, an American chain of businessman’s hotels near Porte Maillot? There they were, five robust ladies testifying to the power of the name Jesus on the small stage of the imaginatively named Jazz Club (no Sluggos or Five Spot for the corporate set) and there we were in the front row, stranded until one of our party gave in and confessed, “Ah, hell, my husband died. I ain’t poor these days. I’ll go a round.”  (How often do Methodists or Baptists or Seventh Day Adventists play for the cocktail crowd?) And there they were, the French making up the majority of the audience, there because they were staying in the hotel and it beat a Friday night watching television, or because even with the lowest rate of church attendance in Europe, their magnificent cathedrals empty of believers, they wanted to hear evidence of those who do believe. Vicarious thrills. And like I say, they put on, in their awkward way, just like mountain folk who come down from the hills to see some two-headed miracle.

Fiery condemnation will get you nowhere except a pulpit and, in any case, the occasion was too strange and sublimely discordant for such judgments. The only thing that could have topped the proceedings was if they announced that a production of Leroi Jones’s Dutchman would follow the second set. I wonder if the small crowd would have gone for that.

As it was, we had to content ourselves with the lady a few feet away who got a little too into it, kneeing the cocktail table and sending her tall, 50 Euro phizz flying into the air. It promptly landed and gave her a nice bath in Coco-Schnapps or whatever she was drinking. Uproar. Catastrophe. Something for the waiters to do – at last. They leapt into action with napkins and condolences. The singers kept belting it out the whole time.

The Victory ladies were a bit agog themselves. They had been to the Eiffel Tour earlier in the day for the first time in their lives. The piano player sighed wearily, “I stayed in bed. I’ve already done it three times,” (you can interpret that any way you like) but the ladies were beaming. Not a cathedral – the Eiffel Tower, which no Parisian goes near.                                    Iddhis Bing December 3, 2012

Nov 192012
 

By Iddhis Bing, 99GetSmart

A GIGANTIC FUNNEL IN LUXEMBOURG

Invisible Money 4

At the end of Invisible Money 3, the ink was drying on the latest tax evasion scheme in Marius Kohl’s office at 18, rue du Fort Wedell in Luxembourg’s capital. Kohl, head of the tax bureau at Sociétés 6, was formalizing the tax deal for the world’s third largest pharmaceutical company, GlaxoSmithKline. He and the Bureau d’Impots are happy to provide fast service for an untold number of companies – Amazon, Google, The Guardian (yes, that Guardian, through the Eden Company), iTunes, Procter & Gamble among them. His is a busy trade and still very much ongoing in luxurious Luxembourg, which profits from loopholes in antiquated European tax law. 40,000 pages of such instances give some hint of how widespread the tax avoidance business is.

Marius Kohl is the head of a department in a small government apparatus dedicated to tax affairs. But he is not the man who sets the policy. He has bosses above him who do that, persons readers will soon know more about. If Marius Kohl ever deviated from considered policy, if his actions were at variance from his superiors’ dictats, Marius Kohl would be gone at the end of the day, whether he had set a whole new raft of origami organizations afloat or not.

Let’s freeze Marius Kohl with his pen an inch away from flourishing that marvelous signature of his. Leave him right where he is, while we turn around to take a quick look at the landscape in which Luxembourg operates, a landscape which makes the financial funnel in Luxembourg possible.

It has been a busy month or so in politics and on the tax/debt front. Are the two inextricably linked? Of course they are. “The fact that many men are occupied in making clothes for one individual is the reason so many others go without.” Does that make sense?

In Athens in October, protesters greeted Angela Merkel with a banner in front of Parliament that read “Angela weine nicht. Da ist nichts im Shrank, was zu holen wäre” – “Don’t cry, Angela. There’s nothing left in the cupboard for you to take.” The line is originally Bertolt Brecht’s.

Is Chancellor Merkel the uncrowned Queen of Europe? Europeans might be forgiven for thinking she is. So when Ulrich Beck, a German sociologist, published an article last week depicting Merkel as a devoted student of Machiavelli, it was widely read across the continent and gave rise to a new moniker for Germany’s leader: Merkiavelli. The empress has a new set of clothes.

Beck argues that Merkel must walk the fine line between being loved at home – enough, anyway, to be reëlected – and loathed outside Germany – but not so loathed as to be detested and lose her preëminence. “Merkiavelli’s power rests upon the desire to do nothing, her penchant for avoiding action, acting later, hesitating. This art of selective delay, a mixture of indifference, a refusal of Europe and European engagement, is the source of Germany’s powerful position in a continent stumbling through the crisis.”

“Madame Merkel prefers – and this is the full Machiavellian irony of her position – to make the willingness of Germany to provide assistance to indebted countries dependent upon their acceptance of the German policy of stability.”

“Politically, inside Germany the Chancellor reassures Germans, who fear for their retirement, their little house and their economic miracle, and with a very Protestant rigor she defends the politics of No in measured doses, all so that she gives the appearance of being the one instructor at school capable of teaching Europe a lesson.”

“The more Germans become critical with respect to Europe, the more they feel encircled by countries peopled with debtors who only want to get their hands into German wallets, the more difficult it will be to maintain her two positions.”

None of it is really working. It is worth pointing out that of the ‘bailout’ loans Germany sends to a country like Greece, not a penny goes to the people but is instead “paid into an ‘escrow’ account and is used exclusively to repay past loans and to re-capitalise near bankrupt private banks.” This is the essence of the message that Alex Tsipras delivered to Merkel upon her arrival in Athens in October. One has to assume that every current head of state knows this, and yet none of them says a word. Why? It’s a modern version of omerta: be very careful what you say and above all, do nothing, because if you take action, the great financial powers will invoke their often employed, quasi-mystical “crisis of confidence,” and that government will soon be on its knees. This is the fine line Merkel treads.

But, Beck argues, it cannot go on forever. “It is nevertheless possible that la méthode Merkiavel is little by little hitting its limits, if only because it must be confessed that the politics of German austerity has yet to record a single success. To the contrary, the debt crisis is now threatening Spain, Italy and perhaps very soon even France.”

They put on a good show in Parliament in the UK last week. The Public Accounts Committee held hearings, and Committee chair Margaret Hodge put executives from Amazon, Google and Starbucks through the ringer. Amazon grossed £3.3bn in UK sales last year and yet somehow – need I whisper the name of a certain Duchy to you? – it paid not so much as a pound in corporate tax. The government’s chief auditor, Amyas Morse, found the evidence submitted by the Big Three Friendlies “insulting.” The suit from Amazon was dismissed like a junior staffer who’d shown up in the wrong hearing room./ like a subaltern who’d moseyed into the sacristy by mistake.

Coalition leaders and in Labour’s shadow government say they are angry, even furious with the multinationals. The English, who know something about tongue lashings and moral tirade, will, in the persons of Cameron or Osborne or Cable, deliver jolly, blistering speeches and nothing will come of it. Were they completely out of the loop until now? Doubtful. They are afraid of omerta.

The best was saved for last in those hearings. On video, the committee heard a few words from Prince Phillip, taking a break from driving his buggy around the royal estates. “All money nowadays seems to be produced with a natural homing instinct for the Treasury,” he opined. Well said by a man who has lived his entire life on the public dole, or as Polly Toynbee put it neatly in the Guardian, straight from the Treasury to his trouser pockets.

Even tiny Antigua – hereditary ruler, one Queen Elizabeth II, also known as Phillip’s wife – is getting shivers that it may be “game over” for their brand of off-shore banking. “The large financial centres are going to try, and have been trying, to strangle the Caribbean banking sectors,” said Barbados-based investment guru Avinash Persaud in early November. “They are imposing regulation that is risk intolerant, that is size intolerant and therefore we have to invest as much in anti-money laundering as large centres. They are going to make it expensive to operate in the Caribbean.” Persaud argued that since most money laundering takes place in the largest financial sectors, they, and not the Caribbean, should be investing more in regulation.

Antigua, Barbados and the Caymans now realize they might be offered up as sacrifices on a platter if the Big Boys to the north become desperate enough to preserve their fiscal paradises. Au diable avec vous les Noirs!

And meanwhile back in France, with strong majorities in his favor in both regional and national legislatures, François Hollande – the same François Hollande who campaigned as an enemy of the world of finance – has proposed a budget as austere as anything Nicholas Sarkozy ever hustled into law.

Several possibilities loom on the horizon, and not so far away that one can’t make out their shapes in the haze.

Just as, once upon a time, the crowned heads of Europe did roll down the hill, the current crop of leaders from Norway to Greece, incapable of an honest discussion about the financial crisis out of fear of retribution, will roll down the hill and into the obscurity of historical abyss, a footnote at the bottom of the page. Cameron in the UK, Mario Monti in Italy, Mariano Rajoy in Spain, Antonis Samaras in Greece, President Hollande and Chancellor Merkel – no one will remember a single thing about them. There is a good chance they will be replaced by far right nationalists or spineless “centrists” but the drift will be the same: A ‘new’ Europe based on “cheap labor, deregulation of the labor market, low public spending and tax exemptions for capital.” Those are Alex Tsipras’s words, and he ought to know, living in the country where it is already being put into practice. Take a look at what is happening in Hungary and Spain.

We are nearing critical mass with fiscal paradises, a first plateau in a long hike. Word is getting out. Politicians, habitually used to funking an issue beyond the endurance of mere mortals, are feeling a bit of heat. No concrete measures, for sure. Those are still a long ways off. But hearings, a few scattered speeches – a kind of smoke signal. All the elements of real drama are in place: indefensible greed, outrageous circumstance, secret manouevres, nations at odds, corporate disarray. The moment awaits one brave man or woman in office to seize the issue and run with it, to lead the charge.

The U.S. has made some initial moves towards demanding transparency from the oil companies on a country by country basis but nothing is really happening yet in Europe. In France the Senate spent several months investigating tax fraud this year. They contacted Ed Perrin to see what he knew. And when they were done they advocated prosecuting VAT-evaders and cigarette smugglers riding donkeys over the Pyrannees from Andorra. Meanwhile billions go missing from the ledgers of wealthy corporations and governments mired in feckless austerity.

For Invisible Money 5 we unfreeze Marius Kohl in his office on rue Fort du Wedell and snoop around for his superiors. Stay tuned.

Iddhis Bing writes about politics and culture from Paris.

“…Many men are occupied in making clothes…”: Montesquieu.

Beck’s essay appeared as Angela Merkel, nouveau Machiavel, in Le Monde, November 13, 2012.