It is no wonder the bridge is widening ever so much. Spare a thought (and some spare change) for the poor.

Until the next time, cheers.

World's super rich said to be hiding $20 trillion in offshore tax havens

The Guardian, July 23, 2012

Heather Stewart

Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts. 

A GLOBAL super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($20 trillion) of wealth offshore - as much as the American and Japanese GDPs put together - according to research commissioned by the Tax Justice Network.

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited.

He shows that at least £13 trillion - perhaps up to £20 trillion - has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high-net-worth individuals. Their wealth is, as Mr Henry puts it, ''protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy''. According to Mr Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4 trillion in 2010, a sharp rise from £1.5 trillion five years earlier.

The detailed analysis in the report, compiled using data from a range of sources, including the Bank for International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.

Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts instead of being invested at home, the research suggests. Once the returns on investing the hidden assets is included, almost £500 billion has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen £197 billion flood out since the mid-1970s, and Nigeria £196 billion.

''The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments,'' the report says.

The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Mr Henry's calculations, £6.3 trillion of assets is owned by only 92,000 people, or 0.001 per cent of the world's population - a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

Leaders of G20 countries have repeatedly pledged to close down tax havens since the financial crisis of 2008.

GUARDIAN

A real tragedy. Imagine the risk some are willing to take for a better life. We must be thankful for what we have. 

Until the next time, cheers.

Tamils: why we get on the boats

The Sydney Morning Herald, July 21, 2012

Ben Doherty

'Five hundred people have left from this village, from this area, all for Australia' ... Kajan, above in his village, says there is no work and people are desperate. 

ON A remote stretch of Sri Lanka's west coast lies the village that wants to come to Australia.

The homes here are built alike, low and squat, their thatched roofs tightly tied down against the monsoon's rains and wind. And from almost every one, someone has left for Australia.

Some reach Christmas Island, phoning home to say they're safe. Others are caught before they can board a boat, or have their vessel stopped and turned around by Sri Lankan navy ships. Still others leave and are never heard from again.

Sangita and her sister Aahna cry for asylum seekers who have left her village. Her brother was jailed after he tried to leave. Photo: Abeetha Sandish Pathirana

''Five hundred people have left from this village, from this area, all for Australia,'' says Kajan*, waving his arm along the beachfront, a few hundred metres down from a military watchpost over the sea. ''Everybody is going because they see other people reach there and they want that life too.''

His son-in-law and a friend, both fishermen, left a little over a month ago. They reached Christmas Island after three weeks at sea. ''They went for money reasons,'' he says, through an interpreter. ''We cannot make a living here. They went so they could support our family.''

Kajan insists that, three years on from the end of Sri Lanka's brutal separatist civil war, the country still offers Tamils no chance ''to make a good life''. ''No job, no education, we have trouble from the police and army. We are desperate people,'' he says.

This year has seen a massive jump in the number of asylum seekers, overwhelmingly Tamil, fleeing Sri Lanka for Australia. So far, 1541 Sri Lankan asylum seekers have reached Australian territory, more than a 700 per cent increase on the figure for all of last year (211). As well, more than 700 people have been arrested and jailed for trying to leave Sri Lanka, ''irregularly'' seeking passage to Australia. In the past fortnight alone, 334 people have been arrested trying to flee, Navy Commander Kosala Warnakulasuriya says.

The navy, police, army and air force are all deployed patrolling Sri Lanka's coasts and, almost every day, another boatload is intercepted and turned around. Police spokesman Ajith Rohana says the massive jump in numbers was because of a delayed, and weak, monsoon, which had given boats a chance to get across the Indian Ocean. He says Australia was the easiest and the cheapest place for asylum seekers to flee to.

''Ninety-nine per cent of these people are Tamils, almost all of them have some relations in Australia and their relatives tell them to come,'' he tells the Herald.

But Mr Rohana rejects allegations that Tamils still face persecution in Sri Lanka.

''These people are told to give a bad image of Sri Lanka, by the people smugglers who make money taking people across the ocean. They are told to pretend they are being ill-treated and discriminated against. It is not true.''

The Herald has chosen not to name this isolated Tamil-dominated fishing village, its location or the names of those spoken to. The people speak only on condition of anonymity. They fear government reprisals, against them or against their family members.

Every house has an Australian story. Dharuna's 27-year-old son left for Australia 18 days ago. He caught a bus in the middle of the night, then rang to say he'd boarded a boat and was leaving the country. She's not heard from him since.

''Everybody else who left [from here] has reached [Australia and] has called, but he has not called. Every day I am waiting.''

She says her son was following others who'd successfully crossed before him. Still, she resisted letting him go.

''It was difficult, I didn't want [him to go], but I had no choice. I have four children, we need him to support us.''

Across the unsealed street, Gadin appears thin, tired and drawn. He is two days out of jail. He was caught on board a boat bound for Australia two months ago, which was stopped by a navy ship. He was interrogated for two days by the Sri Lankan police and then jailed for more than a month, he said.

''It was very hard, we slept chest to back, all packed in like sardines. I could not sleep and there was hardly any food,'' he says.

His sisters got him out. His freedom cost tens of thousands of rupees, they tearfully explain, but decline to go into detail of whom they paid and for what. If he flees again, his family will suffer.

Economic opportunity, real or perceived, is the major driver that puts people from this village onto leaky boats bound for the other side of the ocean. But some leave here because they face serious, systematic and sometimes terrifying persecution.

The ''white van'' abductions - where people are grabbed from the street by plain-clothed men driving unmarked vehicles, to disappear for days, weeks or sometimes forever - are less common this far from the big cities. But people are regularly hauled in by police and face prolonged, sometimes violent, interrogation.

The latest United Nations report on Sri Lanka says it is ''seriously concerned about the continued and consistent allegations of the widespread use of torture and other cruel, inhuman and degrading treatment of suspects''.

People say this village never supported the terrorist Liberation Tigers of Tamil Eelam, better known as the Tamil Tigers. They claim they are targeted simply because they are Tamil.

''It doesn't matter if you did nothing, if you don't know anything, you are under suspicion always,'' Gadin says.

The men here are fishermen, regularly plying their trade in the north and east of the country. During the war, that brought them into contact with the rebel Tigers, often unwillingly.

In the uneasy peace that exists now in postwar Sri Lanka, a line can be drawn to almost every Tamil.

''Anyone can be accused,'' Gadin says, ''we are all guilty to them.'' But leaving often makes the situation worse for those left behind. Police arrive unannounced at people's homes, demanding to know why they left and who took them.

People in this village have been interrogated for days, threatened and beaten. Ajith Rohana says allegations of torture or maltreatment at the hands of police are untrue.

''Generally, as a practice, torture never takes place in Lankan police stations.''

Despite the current exodus of asylum claimants, in this coastal village, understanding of Australia's process for assessing asylum seekers is poor. Many are told, and believe, asylum seekers will be granted citizenship on arrival, or that their claims are guaranteed to be accepted if they reach Christmas Island. Others say it is a matter of weeks before their relatives will be working, earning Australian dollars and sending them home.

For all the risk, the threat of jail and the uncertainty of the other side, there is no shortage of young men here willing to chance the perilous crossing. But Gadin, having tried and failed once to go to Australia, won't try again.

''I had my one chance to go, I have lost that,'' he says. ''But others will try in my place.''

* Names have been changed.

Follow Ben Doherty on Twitter @SouthAsiaCorro

Inside the US, Israel cyberattack on Iran

This is really like the spy novels that we have been reading....

Until the next time, cheers. 

Inside the US, Israel cyberattack on Iran

Ellen Nakashima

Washington Post, June 20, 2012

 

Sabotage ... the Iranian President, Mahmoud Ahmadinejad, examines gas centrifuge cascades at the Natanz nuclear facility. Photo: Official Office of Iran's Presid

WASHINGTON: The United States and Israel jointly developed a sophisticated computer virus nicknamed Flame that collected critical intelligence in preparation for cyber-sabotage attacks aimed at slowing Iran's ability to develop a nuclear weapon, according to Western officials with knowledge of the effort.

The massive piece of malware was designed to secretly map Iran's computer networks and monitor the computers of Iranian officials, sending back a steady stream of intelligence used to enable an ongoing cyberwarfare campaign, according to the officials.

The effort, involving the National Security Agency, the CIA and Israel's military, has included the use of destructive software such as the so-called Stuxnet virus to cause malfunctions in Iran's nuclear enrichment equipment.

Under attack ... an anti-aircraft gun at the Natanz nuclear facility. Photo: AP

The emerging details about Flame provide new clues about what is believed to be the first sustained campaign of cyber-sabotage against an adversary of the United States.

"This is about preparing the battlefield for another type of covert action," said one former high-ranking US intelligence official, who added that Flame and Stuxnet were elements of a broader assault that continues today. "Cyber collection against the Iranian program is way further down the road than this."

Flame came to light last month after Iran detected a series of cyberattacks on its oil industry. The disruption was directed by Israel in a unilateral operation that apparently caught its US partners off guard, according to several US and Western officials, speaking on the condition of anonymity.

There had been speculation that the United States had a role in developing Flame, but the collaboration on the virus between Washington and Israel has not been previously confirmed. Commercial security researchers last week reported that Flame contained some of the same code as Stuxnet. Experts described the overlap as DNA-like evidence that the two sets of malware were parallel projects run by the same entity.

Spokespersons for the CIA, the NSA and the Office of the Director of National Intelligence, as well as the Israeli Embassy in Washington, declined to comment.

The virus is among the most sophisticated and subversive pieces of malware exposed to date. Experts said the program was designed to replicate across even highly secure networks, then control everyday computer functions to send a flow of secrets back to its creators. The code could activate computer microphones and cameras, log keyboard strokes, take computer screen shots, extract geolocation data from images and send and receive commands and data through Bluetooth wireless technology.

Flame was designed to do all this while masquerading as a routine Microsoft software update, evading detection for several years by using a sophisticated program to crack an encryption algorithm.

"This is not something that most security researchers have the skills or resources to do," said Tom Parker, chief technology officer for Fusion X, a security firm specialising in simulating state-sponsored cyberattacks, who does not know who was behind the virus. "You'd expect that of only the most advanced cryptomathematicians, such as those working at NSA."

Flame was developed at least five years ago as part of a classified effort code-named Olympic Games, according to officials familiar with US cyber operations and experts who have scrutinised its code. The US-Israeli collaboration was intended to slow Iran's nuclear program, reduce the pressure for a conventional military attack and extend the timetable for diplomacy and sanctions.

The cyberattacks augmented conventional sabotage efforts by both countries, which included inserting flawed centrifuge parts and other components in Iran's nuclear supply chain.

The best-known cyberweapon set loose on Iran was Stuxnet, a name coined by researchers in the antivirus industry who discovered the virus two years ago. It infected a specific type of industrial controller at Iran's uranium enrichment plant in Natanz, causing almost 1000 centrifuges to spin out of control. The damage occurred gradually, over months, and Iranian officials initially thought it was the result of incompetence.

The scale of the espionage and sabotage effort "is proportionate to the problem that's trying to be resolved," the former intelligence official said, referring to the Iranian nuclear program. Although Stuxnet and Flame infections can be countered, "it doesn't mean that other tools aren't in play or performing effectively," he said.

To develop these tools, the United States relies on two of its elite spy agencies. The NSA, known mainly for its electronic eavesdropping and code-breaking capabilities, has extensive expertise in developing malicious code that can be aimed at US adversaries, including Iran. The CIA lacks the NSA's level of sophistication in building malware, but is deeply involved in the cyber campaign.

The agency's Information Operations Centre is second only to the CIA's Counterterrorism Centre in size. The IOC, as it is known, performs an array of espionage functions, including extracting data from laptops seized in counterterrorism raids. But the centre specialises in computer penetrations that require closer contact with the target, such as using spies or unwitting contractors to spread a contagion on a thumb drive.

Both agencies analyse the intelligence obtained through malware such as Flame, and have continued to develop new weapons even as recent attacks have been exposed.

Flame's discovery shows the important role of mapping networks and collecting intelligence on targets as the prelude to an attack, especially in closed computer networks. Officials say gaining and keeping access to a network is 99 per cent of the challenge.

"It is far more difficult to penetrate a network, learn about it, reside on it forever and extract information from it without being detected than it is to go in and stomp around inside the network causing damage," said Michael Hayden, a former NSA director and CIA director who left office in 2009. He declined to discuss any operations he was involved with during his time in government.

The effort to delay Iran's nuclear program using cyber-techniques began in the mid-2000s, when President George W. Bush was in his second term. At that point it consisted mainly of intelligence gathering to identify potential targets and develop tools to disrupt them. In 2008, the program went operational and shifted from military to CIA control, former officials said.

Despite their collaboration on developing the malicious code, the United States and Israel have not always co-ordinated attacks. Israel's April assaults on Iran's Oil Ministry and oil export facilities caused only minor disruptions. The episode led Iran to investigate and ultimately discover Flame.

"The virus penetrated some fields - one of them was the oil sector," Gholam Reza Jalali, an Iranian military cyber official, told Iranian state radio in May. "Fortunately, we detected and controlled this single incident."

Some US intelligence officials were dismayed that Israel's unilateral incursion led to the discovery of the virus, prompting countermeasures.

The disruptions led Iran to ask a Russian security firm and a Hungarian cyber lab for help, according to US and international officials familiar with the incident.

Last week, researchers with the Kaspersky Labs, the Russian security firm, reported their conclusion that Flame - a name they came up with - was created by the same group or groups that built Stuxnet. Kaspersky declined to comment on whether it was approached by Iran.

"We are now 100 per cent sure that the Stuxnet and Flame groups worked together," said Roel Schouwenberg, a Boston-based senior researcher with Kaspersky Labs.

Kaspersky also determined that the Flame malware predates Stuxnet. "It looks like the Flame platform was used as a kickstarter of sorts to get the Stuxnet project going," Schouwenberg said.

Washington Post