"The confiscation of a few yachts is no solution. What if, instead, we shut it all down?"
my pitch to fight kleptocracy, in the @FT
themes taken from AUTOCRACY INC https://t.co/QxurmnycKf— Anne Applebaum (@anneapplebaum) September 1, 2024
It’s hard to extract Anne Applebaum’s articles, because she doesn’t waste words. I didn’t hit a Financial Times paywall when I opened this; hope it works for the rest of you:
Donald Trump opened Trump Tower on Fifth Avenue in 1983 and occupied the penthouse himself. The building was intended to advertise its owner’s wealth, and also to attract other rich tenants — including, ironically, the very secretive rich. Trump would sell 43 condos in Manhattan’s flashiest building to shell companies based in jurisdictions such as Panama, the Cayman Islands and the British Virgin Islands, which conceal corporate records. He sold another six condos, for cash, to corporations based in Delaware, which has historically had the least transparent company laws in the US.
Not that this was anything exceptional: in the four decades that followed, more than a fifth of the sales in Trump-owned and Trump-licensed buildings, more than 1,300 properties, were made to anonymously owned shell companies, for cash, without a mortgage, which meant the purchasers did not have to have any uncomfortable conversations with lenders.
Some of those companies sold those condos again, very quickly, at much higher prices or at much lower prices — usually a sign that money laundering might have been the actual purpose of the purchase. A Trump-licensed building in Florida sold a two-bedroom condo to a shell company on August 12 2010, for example, for $956,768. That shell company sold the condo to another shell company, at a heavy loss, for $525,000 that same day.
All of these transactions were legal and there’s no evidence to suggest that Trump or his companies knew of or were complicit in money laundering schemes. They have been reported and described many times. The examples cited above come from a BuzzFeed investigation published six years ago, in 2018, but it wasn’t the only one. A Financial Times investigation in that same year also found that Russian, Kazakh and other post-Soviet oligarchs had probably been laundering money through Trump-licensed properties…
In the years since Trump’s 2016 election, a lot has been written about his autocratic instincts, about his scorn for ethical norms and about his attempt to retain power after losing the 2020 election. But as illustrated by the story of his real estate company’s reliance on dubious shell companies, Trump was already operating in an alternate ethical universe long before he became president, a world where the rules that most ordinary people live by are easily broken.
Inside this domain, anonymously owned companies and funds based in offshore tax havens hide what could be as much as 10 per cent of the world’s GDP. This is money earned from organised crime or narcotics operations, stolen from legitimate institutions, or simply hidden, legally, with the aim of avoiding taxation, alimony or embarrassment. In this world, theft is rewarded. Taxes are not paid. Law enforcement is impotent and underfunded. Regulation is something to be dodged, not respected. The climate of this alternate reality is so different from the ordinary world that many have sought to find a name for it. The journalist Oliver Bullough called it “Moneyland”, the title of the book he published in 2018. Tom Burgis, then an FT reporter, named it “Kleptopia” in his book of 2020…
Until recently, this alternative universe was considered a kind of nuisance, perhaps a problem for chronically underfunded regulators but not really something that required more political attention. However, since Russia’s full-scale invasion of Ukraine in 2022, more people have begun to understand the ways in which the secret economy now poses a genuine national security threat to the US, to the UK, to Europe and to other democracies.
More to the point, they understand that the confiscation of a few yachts is no solution. What if, instead, we shut it all down? Whatever small advantages secrecy provides to some, businesses cannot compensate for the lethal threat that secretive business practices pose to democracy itself. The banks, financial institutions, law firms and accountants who constructed the opaque world of money laundering and tax havens could now deconstruct it.
Kleptocracy, in its modern form, began in the 1990s. Multiple accounts of Vladimir Putin’s rise to power have shown, for example, how even as deputy mayor of St Petersburg at that time he presided over schemes to steal money from the state, to launder it abroad and then bring it back into Russia, all with the help of European partners. Although Putin has spent his life as a civil servant, he has used his stolen money, and the stolen money hoarded by his inner circle, as a source of power and influence ever since.
Since the 1990s, the kleptocratic model created in Russia has spread much further. From Angola to Zimbabwe, dictators with access to hidden sources of wealth are better able to resist demands for political change. They can hide their families and their property abroad. They can finance bribery and influence operations. The aura of secrecy they build is also part of what keeps them in power. Ordinary Russians, ordinary Chinese or ordinary Venezuelans are not allowed to know why their rulers, and their rulers’ friends and their families, are billionaires, because they’re not meant to have any influence or understanding or knowledge of politics at all. That lack of knowledge creates a sense of helplessness, apathy, even despair.
The rise of kleptocratic autocracies has affected the democratic world too, shaping it in unseen ways. That we don’t know whether any Americans or any foreigners sought to influence the Trump administration using the president’s condo sales is only the beginning of the problem. The very architecture of our cities — London, Miami, New York — has been shaped by people who purchase houses as a secret store of value, who don’t necessarily intend to live in them at all…
ETA: Archive link (thank you, KatKapCC!)
Baud
This is Geminid territory, but Dems have taken initial steps to peel back the layers.
Redshift
I got a “register to read” blocker. Thanks for the excerpt, I really wanted to read that. (Still deciding whether I want to read the whole thing enough to register.)
Trivia Man
Simple start – big tax on any property not owner occupied. Step 2, Maybe make it easier for squatters to establish adverse possession if nobody actually lives in it?
satby
Well, what you’ve selected shows it’s a great article, but I hit a registration page when I went to read it all. I think attention is finally being paid to reining the most egregious behavior in, at least in the European Union, and I hope here too when Harris wins. Long overdue.
satby
@Baud: good.
Kirk
No, or at least not in that simple of a form. That would make it hideously easy for gangs to have yet another income source: seize through adverse possession, sell.
John Revolta
@Redshift: @satby: This is what passes for a gift link nowdays. “We don’t want any money! Just your address which we definitely won’t monetize or use in any way!”
Phylllis
@Baud: Yes. This drills down to HOA boards. For us anyway, we only have to complete a simple form and provide a color copy of ID
Geminid
@Baud: The Corporate Transparency Act was passed in the Lame Duck session following the 2020 election. It was added to the National Defense Authorization Act which was then passed over Trump’s veto. That may have been the only time Congress overrode one of Trump’s vetos.
The CTa requires corporations to disclose their “beneficial,” or true owners.New incorporations were immediately subject to the CTA while existing corporations got two years to comply. The information reported to the Treasury Department’s “FinCen” under the CTA is not a public record, but federal, state, local and tribal investigators can access it.
A reporter for Fortune Magazine described the CTA as the most significant corporate reform legislation in decades. Former Rep. Carolyn Maloney was reported to be its chief sponsor in the House but I don’t know who the Senate sponsors were. They kind of snuck it through, using the Lame Duck session and a must-pass Defense bill. A crafty move.
Gvg
I seem to recall Brexit supposedly happened because London real estate values were inflated for years by foreign secret money and the EU had passed laws that were going to require disclosure. I think it was after the Panama Papers but it may have been an earlier expose’ of foreign influence on EU politics. The rich British investor banking class didn’t want their own offshore accounts revealed and were afraid their investments would tank if the Russian money dried up. So they ginned up Brexit before the law could go into effect.
it was reported. Not sure of the truth, but the Russia and Saudi own London has been stated for a long time.
This would also mean British non rich can’t afford a home because the prices are too high, causing resentment and houses that aren’t lived in when there is a shortage. Now Brexit has fucked their economy and job prospect. I hope it screwed the rich investors too at least.
Baud
@Geminid:
I’m glad Trump can’t claim credit for it.
RandomMonster
I don’t understand why more people didn’t begin to understand the ways of the “secret economy” after Russia pumped money into ratfucking the 2016 election.
KatKapCC
@Redshift: Archive link.
SatanicPanic
@Trivia Man: it wouldn’t be too easy to squat in Trump Tower type of buildings.
Frankensteinbeck
@Gvg:
It’s remarkable how often poor assholes and rich assholes want the same thing.
Sure Lurkalot
Here’s an archive link. Excellent article, thanks for posting, AL
http://archive.today/AeV6h
prostratedragon
@satby: If you’re on firefox, the extension Surmount (Paywalls) should work. Does the archive.ph thing automatically.
Sure Lurkalot
Sorry about duplicating KatKatCC’s link! I tried to delete it….
bbleh
What if, instead, we shut it all down?
That would be a generation-long project, if indeed it even could be started, along the lines of shutting down, say, the KKK, and I think it would be an order of magnitude harder than that.
First, the Republican Party — VERY much including its leadership in Congress AND its increasing dominance of Federal courts at ALL levels — is, and for generations has been, DEDICATED to maintaining and increasing the power of organized wealth. They presently have a bit of a problem with the Frankenstein Monsters they’ve created — the Religiostic Right and the grievance-fueled MAGAt mob — but make no mistake, their LEGISLATIVE and LEGAL agenda going forward, no matter who is elected President, will be to advance that agenda. And that’s gonna make even enforcement of EXISTING rules, much less new ones, problematic at best.
And second, they now have as their allies BOTH pretty much the entirety of the major media, who now are owned by the plutocracy and increasingly openly toe their line, AND said grievance-fueled mob, who tend to be pretty damn gullible and whom they have convinced not only that they should aspire to wealth above all but that they SHOULD be wealthy and WOULD be except for those damn sociamalist Democrats, and therefore that they should support the policies and power of the plutocracy as deserving members of it, if not quite, ah, actual members yet, hahahaha, sigh.
So sure, shut it all down. But in the meantime maybe also spend time trying to CURB it and prevent its worst excesses. And if that’s all we can accomplish, call it a victory nevertheless.
Also btw Get Out The Damn Vote.
BR
https://apnews.com/article/harris-small-business-tax-plan-new-hampshire-12f34210263458ddb1b02fbd846d2be5
I think this can be a good pitch to a lot of folks, especially given that the idea of working in one place for your whole life is pretty much a thing of the past.
What I’m a little surprised by is that she’s going to go to New Hampshire to announce it. I mean I get that maybe she wants to visit every swing-ish state once just to check the box. I hope it’s not that the campaign thinks that there’s any serious need to campaign there.
Trivia Man
@Kirk: [] <—- the box —> my thinking
Idle speculation is my hobby. Id like to hear some creative ideas.
Trivia Man
@SatanicPanic: but think of the payoff!
1) pick a vacant penthouse
2) steal underpants or something, idk
3) PROFIT!!
prostratedragon
@RandomMonster: Enough of this was known in 2016 to have pieced together some sharp questions to Donald Trump. Especially after he srarted in on the “crooked Hilary” stuff. You’d have thought some ambitious reporter would have got on to it.
Sure Lurkalot
In the US, a foreign seller of real estate has to fill out a certificate so that taxes are withheld unless an exemption applies but there is no form for a foreign buyer who can pretty much use any source of funds (as the article describes) with no scrutiny.
This is more than “there’s a club and you’re not in it” territory, this is theft, fraud and tax evasion. It sickens me when these people brag about their supposed work ethic and how they earned their money the hard way. It’s all bullshit.
Trivia Man
@BR: My position is that Medicare for all will ignite small business creation. How many people have a dream… but cant risk it because health insurance.
BR
@Trivia Man:
I actually think Obamacare sort of solved that, from a practical standpoint. I know that medicare for all would plug all the holes, but today anyone can start a business and then immediately buy insurance on the exchange and the cost of it is actually relatively low. So I don’t think that that barrier exists any longer. (I say this from personal experience, because I set up this exact thing for a small company that I was one of the first employees at a few years ago.)
Jay
Speaking of kleptopia and democracy,………
https://www.bbc.com/news/articles/c6281zgjjneo
WaterGirl
@Sure Lurkalot: Never apologize for that. Sometimes we miss the first one!
Like I did. :-)
WaterGirl
@Jay: I’m beginning to think Hochul wasn’t our best hire.
KatKapCC
@Jay:
Anything worth doing is worth doing right, I guess…
Trivia Man
@BR: glad to hear that barrier is dropping
Baud
Via reddit, DeSantis trying to help us out in November.
kindness
A Applebaum’s article is great. A little depressing, but right.
Jay
@WaterGirl:
The rot goes back to Cuomo, the Hochul Admin “caught” on that there was something rotten happening a year into office and brought in the Feds.
KatKapCC
@Baud: He wants to pave paradise and put up something even worse than a parking lot
(Not that anything in Florida is paradise. But you know.)
Jeffro
I recently attended a presentation by one of the FBI’s top financial crimes folks on fraud (mostly, online fraud scams) and the scale of this stuff is just unreal.
It’s pretty low-hanging fruit as a campaign issue from now until, oh, the end of time: “Let’s double the budget for the watchdogs, so that we can cut this stuff in half.”
3Sice
Just waiting for that other shoe….
Jeffro
Btw this all ties into crypto too, of course. Another very low-hanging campaign issue that resonates with actual voters (as opposed to tech bros)
lowtechcyclist
I’m still getting used to the notion of Anne Applebaum having something worthwhile to say. I stopped reading her in 2004 – her column just before the election said that who won mattered less than a repeat of the extended 2000 election night. Before then, she’d been largely kinda ‘meh.’
Elizabelle
@Gvg: Londongrad.
zhena gogolia
Why is the whole last thread crossed out?
Baud
@zhena gogolia:
Whoa.
Steve LaBonne
The next step for people like Applebaum is to understand that kleptocracy can’t be tackled successfully without tackling “honest” extreme wealth inequality. It’s not just the kleptocracy, it’s the plutocracy.
zhena gogolia
@Baud: I thought maybe ev–r or c–ti came back (I kind of miss them).
Baud
@zhena gogolia:
You need help.
Captain C
@zhena gogolia: It seems to go down several posts.
Jay
@zhena gogolia:
Everything is lined through, sidebar, tabs, comments.
Manyakitty
@zhena gogolia: oh, good. It’s not just me. It was fine, I refreshed it, then it was all strikethrough.
Gloria DryGarden
Ok now. But a minute ago, last thread, struck out. Server problems?
Ken
I think it’s the title of “Double Angel Match for Four Directions Montana <s>6x $25 donations while it lasts/s>”, where the closing strikethrough is missing the <.
@Watergirl….
Jay
@Gloria DryGarden:
Probably a WP glitch with code in the script.
CaseyL
Was just email chatting with a friend, who noted that one of the guys working on Project 2025 was also involved with 23andMe. I vaguely remember that being mentioned – here? on social media? – and it’s just another example of how the fascists and oligarchs are not only working together, but so intertwined in so many products/goods/services that people use without thinking about it.
The insanely filthy rich are a genuine cancer on humanity, and the world. Confiscatory wealth taxes should be the LEAST that happens to them.
Starfish
@Trivia Man: Even bigger tax on blighted properties.
I am okay with not taxing responsible landlords as much as we tax jerks with buildings that are falling into ruins.
I am also good with having much more regulation on the landlords that are controlling the most units.
ktron
@prostratedragon:
perhaps most reporters were too tied up in the bs of horse race reporting?
or the horse they were quietly backing had similar “investments”?
or (most likely) most “reporters” can’t be bothered to look for anything that doesn’t magically appear in their “in box” replete with all necessary references to assuage their editors and legal departments?
it really is odd that one of the most profound disconnects of recent American elections circles around the repeated failures of media to report relevantly and accurately – and it is extremely ironic that the creature that has focused part of their platform on attacking the shoddy media is the one who has benefitted the most from these failures
@prostratedragon:
Gin & Tonic
Oh, duck.
Steve in the ATL
@zhena gogolia: cancel culture out of control?
ktron
@Steve LaBonne:
maybe we can convince the plutocrats that the only way to obscure their excesses is by selling out the kleptocrats?
at least temporarily?
it could be a start . . . divide and conquer et al . . .
Dan B
The North Carolina GOP candidate for governor, a horrible man, has been accused by six employees of porn sites of going to “private” rooms five days a week. He’s born again conservative Christianist, of course.
Jackie
@Dan B: I read that and LOLed.
He denies it 😂
WaterGirl
@Jay: ah, okay, thanks, it looks like I need to retract my blame and place it where it belongs.
WaterGirl
@zhena gogolia: @Baud:
Door #1, I got mad because people weren’t jumping on the 6x double-angel match,
or
Door #2, I was in a hurry to edit the post to make clear that the double-angel match was over, so no one would donate thinking they were going to be double-angel matched, and then not be. And I left off the “<” to close the strikeout.
You decide!
WaterGirl
@Dan B:
Oh, thank god for this guy imploding.
frosty
@KatKapCC: Florida State Parks are as close to paradise as you can get in that state. I’ve camped in a lot of them.
I hope firing the whistleblower sinks DeSantis for good.
kalakal
@Dan B: Is he the one that declared “some people need killing?”
What a vile scrote
kalakal
@frosty: The backlash was tremendous, a genuinely bipartisan reaction. We Floridians love our state parks
sab
So disheartened by Ohio, but all the kids I know here are okay.
PatrickG
@WaterGirl:
I guess that would make for easier cleanup in the booth than exploding?
Betty
I can confirm that the kleptocracy has pretty much destroyed democracy in Dominica, probably Antigua as well. Money from the sale of passports is simply never accounted for. Elections are a joke.