They offer a sobering view of how the world really works. We may once have trusted. Jay was an investigative journalist that broke the Panama Papers. He earned his first field surprise for National Coverage of the financial crisis in 2011. Hes written for the national post, the guardian and has appeared on bbc, nbc, cnn and npr. He was the editor of the texas observer. Lets give a warm welcome. [applause] wow. All right. It is great to be here. It is great to see so many old friends that we havent seen a long time. Thank you so much to books and books and to mitchell kaplan, proprietor of this wonderful bookstore. I dont know if you all know but mitchell now makes movies in addition to selling books in his latest is currently in theaters called the man who invented christmas. My wife and i saw the other day and it was delightful. The secrecy world. What is it . It in compasses an entire shadow economy. It increases tax havens and also places that offer secret Bank Accounts like switzerland and singapore and hong kong and also the intermediaries who service this world. I wish we had invented this phrase but i did not. I came upon it while rummaging through the Panama Papers. There are more than 11. 5 million documents for the pan Panamanian Law Firm and they were plundered by an anonymous source and given to a journalist new source which then shared it with the international consortium. I was part of the team that spent a year digging through those documents and in the documents i found this amazing glossary of offshore terms. It had been written by a junior employee and what made it so fantastic was that a Senior Lawyer had gone through the document and deleted the places where the original author had been a little too candid, a little too truthful with all their plain as day. There was an entry and they removed the phrase uncertain legality and stuff like that. Anyway, toward the end of the document i came across this term circus secrecy world. It encompasses the unregulated market and all those who create and promote secrecy jurisdictions and what they offer. Indeed, while Anonymous Companies can be completely legal and perhaps a shrewd business strategy, one of their greatest values was that they offer concealment. They could also be hiding from government tax collectors or Law Enforcement because you are laundering money, for example. They told many, many stories, these 11. 5 million documents and a stretch back as far as the early 1980s and there were some that went back even further. The secrecy world is not static. It morphs and changes and reacts. The files tell a story of the evolution of this world, the secret world. For long time, particularly in the 1980s and 90s it was the wild west. Those three monkeys, see nothing see nothing, say nothing. That created an anonymous Shell Company. It wasnt necessarily to know who actually owned the company. Once the company was created you put it in a file and forgot about it until it passed he ends up selling his office to the firm and leaving the country in the middle of the night. Before that he had joked with subordinates that he slept with a gun under his pillow. He never renewed it until the client needed it for something. It was highvolume, lowcost, think of nick donalds. They were interviewed hers and they took an island chain known for tourism and drug smuggling, the british version islands were nothing much was happening and turned it into Shell Companies. So many followed their lead and i will read you a little bit about that right now. As they crowded in they look to increase their business elsewhere. The United States pointed the way. Since the 1950s they had registered ships under its own flag but the public registry was never based in africa. Rather the registry resided in new york city. It was created by former u. S. Secretary of state in conjunction with corporate interests like shell oil. They readily assented in return for a cut of the proceeds. If the americans can have a monopoly by running their own public registry, why couldnt they. They sent the recently widowed manager, and american named nancy to the south pacific. Her instructions were to find a friendly country that would allow itself to be used as an exclusive jurisdiction. She disappeared for a week, literally disappeared into ginny. We were worried. We were thought maybe she was working by cannibals. One at the conference she was sitting at the hotel bar and struck up a conversation with the neighbor on the stool beside her. She told him she had been sent out to find a magical land to serve as a new location for offshore companies. Her new friend listened with interest. We can do that. Her barmaid, frank louis was the premier of the island nation. Firstly populated outcrop situated in the middle of nowhere, northeast of new zealand. Its currently 103 square miles in size with rising sea levels threatening to shrink its land mass. They first laid eyes on the place in 1774 when the locals repeatedly prevented captain james cook from landing there prompting him to debit savage island. In 1901 they approved under an Association Agreement in 1974. They received a stipend but the money wasnt enough to make ends meet. The allen leaders were already investigating to create additional income. They traveled and largely copied the bvi law which had been copied from delaware the law allowed Company Names in chinese characters in the russian of that. The company act passed in 1994. Later that term they took him to hong kong to salvage jurisdictions to the chinese. They advertise the island as the jewel in the crown of the selfie. The firm could crank out the company and under an hour in whatever price they determined. Officers around the world have the official seals presigned by the deputy registrar. All he had to do is check with panama to ensure it was available, and get the number, pull up the template and hit print. We can control the process and the quality and the speed. All that control did not prevent it from being used by criminals. The governor of nigerias rich state while Still Holding office using it to buy extensive robbery in london. In 2012 prosecutors in the uk convicted them of fraud and corruption sentencing him to 13 years in prison. They made it appear as if an outside company was buying shares in his investment company. In argentina, a father and son operated a network of offshore companies that u. S. Prosecutors alleged were used to pay bribes in exchange for multimillion dollar television contracts to broadcast soccer matches. The files show that one of these companies, cross trading, purchased the rights for ecuadorian soccer matches for 111,000 and then quickly flipped them to the ecuadorian broadcaster for 311,000. And never equaled the success of the bdi. Despite the ease of incorporation it was always a tough sell to many potential customers. If you think people dont know we are entering where the bdi was, trikes planing to them where this empty spot in the middle of the Pacific Ocean was. Now there were all kinds of dangers that came from selling companies but asking no questions about the owners. At first these were the kind of problems that just afflicted society but not him personally. It didnt stay that way as the story illustrates. Rafael quintero. The founder of the ohara cocktail mightve been the first narcotics billionaire. He owes his fortune to transporting colombian cocaine and growing marijuana and opiates. In 1984 the u. S. Drug Enforcement Administration undercover agent infiltrated his thriving marijuana business. He led the da to a massive pot plantation where they found more than a thousand acres of plans. Mexican soldiers destroyed product likely worth several billion dollars. Consumed by fury and paranoia he lashed out. An american novelist from minneapolis in a dental student from fort worth were among the first to die. In january 1985 the two friends mistakenly walked into the crazy lobster, a restaurant that he owned outside guadalajara. The drug kingpin was having a private party inside. Revelers kidnapped the students who may have suspected as dea agents. They tortured them in the kitchens with knives and ice picks before bearing their bodies in a local park. One of them was still alive when they put him in the ground. The following month they grabbed a man after he left the american consulate in guadalajara. They burned him with cigarettes and beat him with a tire iron for todays in a secret chamber behind one of his mansions. A doctor was on call to keep the dea agent alive during the ordeal. Before mexican authorities discovered his mutilated body he boarded a falcon executive jet and left the country. That march he traveled to costa rica. He did business with jose, a local lawyer with a cricket clientele. A few years earlier when the u. S. Government wanted to serve an indictment on the fugitive robert vasco for leaving a mutual fund for hundreds of thousands of dollars the embassy suggested they deliver the papers to one of the attorneys. In the early days he provided Panamanian Companies and several other associates. On april 4 costa rica and authorities arrested him for criminal acts related to narcotics trafficking. During his time in the Central American nation he alternated between the four properties he owned, dined at the best restaurants and traveled around in limousines. Despite the publicity he managed to stay in the background. About a week after the extradition to mexico he registered the first of two Panamanian Companies on the druglords behalf with jurgen bosak. Wanting maximum secrecy, he paid him to act as a director of the company. He appears not to have known the real identity of the Beneficial Owner in this case. At least one of the companies has a sprawling mansion on the outskirts of the streaking capital. In 1989 a mexican judge sentenced him to 40 years in prison, the countrys then maximum. U. S. Authorities later accused him of continuing his business while behind bars. The Treasury Department sanctioned his friends and relatives for investing his considerable fortune in legitimate businesses. With his client in prison and the properties confiscated, he stopped paying. The companies fell into limbo. He died on Christmas Eve in 2004. A year later, a lawyer sent an email to the partners. The president and the secretary general of the Costa Rican NationalOlympic Committee had visited the office with a thorny problem. Go streaking government had given the committees mansion for its new headquarters but the committee couldnt acquire legal title because the druglords technically still held it to the panamanian company. The Olympic Committee wanted him as a director of the company to donate the property to the committee to avoid a complicated judicial process. Giving away property that still technically belong to one of the worlds most fearsome drug traffickers seemed ill advise. The firm decided the directors would resign her position, go streaking would have to solve the legal issues on their own. Pablo escobar was a child nursing at his mothers breast compared to concerto he explained in spanish in an email, referring to the colombian drug kingpin. I dont want to be among those he will visit after he leaves prison. His instinct for selfpreservation group press event. On august 9, 2013, a judge in guadalajara unexpectedly released him on a technicality with 12 months, 12 years remaining on his sentence. Before the United States could extradite him, he disappeared. As of this writing his name sits atop the deas list of fugitive. So the highvolume lowcost model, the high cost the highvolume lowcost model was particularly opportune because it came at the beginning of the computer age which made it easy to streamline. It was a time when there was incredible wealth in the developing world, even as countries like russia and china and the u. S. Proved increasingly unwilling to provide welfare for their citizens. The consequences of which can be seen in one heart rendering story that i found in the documents. It involves russia. As putin and his cronies transfer billions of dollars to their children, ordinary russians are struggling to survive. In a country rich in Natural Resources, russia has a gdp. Capita of about 9000. The Economic Situation has forced Many Russians to seek work abroad. People like this 63yearold machinist. In 2011 he joined the crew of the russian cargo ship ss ross. He signed a sixmonth contract that paid him 3000. Month, a small fortune. He was owned by a bvi Company Created in 2004 through an intermediary in the united arab emirates. According to him, according to his files this offshore company and others, through this offshore company and others, for russians owned it in several other ships. They added an additional layer of secrecy by shuffling the registration of their ships among small specific island nations like to blue which required Little Information or regulation for the ships that flew their flags. Instead of economic opportunity, he found himself a prisoner aboard a slave ship. The captain of the ross dripped him and the crewmen of their identification documents for the ship had no air conditioning. Vermin infested the cabin. Food and water were scarce. Soap, nonexistent. The captain physically abused sailors who complained and refused to pay them. At 423 feet it was compact with two large cranes in the middle and three enormous cargo holds below deck. While working on a Diesel Engine in the stern he took a bad fall. Despite docking at several ports the captain denied his request to seek medical care. Instead, he forced him to fulfill his duties including nightwatch. Within a month the machinist was dead. Another crewmate, edward portugal went missing from the ship after complaining to the Russian Seafarers Union about the conditions aboard. His body was never discovered. His wife is convinced her husband was thrown overboard. When the captain refused to pay the rest of the sailors they managed to escape and sought refuge at the russian embassy. Russian Police Issued an arrest warrant for the ship but the owner simply changed its name and continued sailing. The men also owned the ss. [inaudible] this ship may have been abandoned in the philippines stranding a crew including 12 russians, eight indians and one ukrainian without paying for the work. The owners declared bankruptcy and walked away from the company. In may 2012, russian prosecutors filed charges against two of the owners for use of slave labor with the threat of violence and slave labor which entailed the death of a person. The men were detained but to date have avoided trial or present. So, yes, you will say the secrecy world does allow for criminals to longer prey on the innocent but it also services plenty of innocent people, and most american multinational corporations so why does this matter to us . Miami is a great example of why. Foreign nationals bought nearly 6. 1 billion worth of property in south florida in 2015. Miami cash transactions for property has more than doubled the national average. Led by south americans venezuelans, brazilians, argentinians, most of the buying comes from those who distrust their countries and want to invest in the United States. When Anonymous Shell Companies are widely used, it also allows corrupt politicians and criminals to spirit their cash out of their country. If theyre not reporting to the local tax authorities it can deprive already resource for governments of needed revenue. In 2014, developing countries lost between 620,000,000,970,000,000,000 to illicit outflows of capital. At home, this behavior contributes to making miami one of the worst places to be a renter in the country. The United States by one estimate loses 70 billion. Year in tax revenue from shifting corporate profits to tax havens. Republicans perhaps naively hope that some of that money will return home when they lower Corporate Tax rates but there is little incentive to do so. Thats to say nothing of individuals who are avoiding taxes legally or illegally through the secrecy world. What the Panama Papers and other including most recently the Paradise Papers show is a global elite that is no longer bound by the nationstate in the way that most of us are. They live in multiple cities, they travel the world in private jets, and they keep their money offshore. 50 of the wealth held in tax havens belongs to households with more than 50 million in net worth. Today the top 1 of households earn more wealth than the bottom 90 combined. The secrecy world feeds and protects an astounding inequality both here, at home, and abroad and it is getting worse. This world of multimillionaires and billionaires is one present donald trump knows well and is working actively to benefit. Now real estate has long been a frequent user of the secrecy world and trump admitted during his campaign that he had 515 companies, including 378 registered in delaware, one of the leading tax havens of the world, in fact delawares inCorporation Law was used as a template for panama and other tax savings. I found nine of trumps foreign Business Partners mentioned in the Panama Papers. Many more were connected to indicted Campaign ManagerPaul Manafort and summoned jared kushner. Heres the story of on