Money Launderers Discover Their Inner Policemen

In a comic opera turn of events those who run the global money-laundering system are declaring their sudden discovery of the need to oppose themselves.

Prime Minister David Cameron of Britain has written to other European Union leaders, urging that the June G-8 Summit he is hosting initiate "radical" international action to crack down on tax evasion and avoidance.

His Minister for Middle East affairs, Alistair Burt, told the Deutsch Press Agency (DPA) that the British Foreign Office would create a special team to help with the return of stolen assets to the “Arab Spring” countries. (The former dictator of Tunisia is reported to have decamped with about a ton of gold.)

Prime Minister Juliana O’Connor-Connolly of the Cayman Islands (among the most active of offshore tax havens), wrote to her British counterpart pledging support for the initiative on a multilateral automatic exchange of tax information. She called on other national leaders to participate in the system to “ensure efficiencies of cost and resources,” and “avoid the risk of multiple competing standards.” (More plainly, Don't bother investigating the specifics of who actually drained trillions of dollars from developing countries.)

Juergen Fitschen, executive head of Deutsche Bank AG declared on German Radio that there would be "zero tolerance" for tax evasion. "Tax evasion is a criminal offense. That says it all," he said.

The reason for all this righteous zeal?

The secrecy surrounding the payments system of the global black market is falling away under pressure from the American and German governments; also, developing countries, newly aware of their losses, are raising the issue in international forums.

African countries especially, have made it a joint priority to stop the haemorrhage and have established a high-level panel on the matter chaired by former South African President Thabo Mbeki. They have made it a key target of their post-Millennium Development Goals (MDG) development agenda.

Meanwhile, the super-rich around the world have been making their own adjustments to the loss of hideouts. Businessweek reported last week on how a number of Russian and Western European billionaires were running for cover. Reuters carried a story saying wealthy Americans were filing tax returns showing their long-standing secret accounts as if they were newly opened.

But does all this mean the end of money laundering and the Global Black Market?

Not by a long shot.

Last week Indian mass media ignored or reported sotto voce that British telephone giant Vodafone would be partnering with ICICI bank to introduce the “mpesa” in India. The “mpesa” is Vodafone’s system for moving money over mobile telephones, and it can undercut all efforts to make financial institutions responsible for knowing their clients and monitoring suspicious transactions.

Which part of the government authorized the launch of the “mpesa” system in India has not been reported, but the Finance Ministry cannot be without a role.

There should be an investigation to see who specifically was involved.

Did they take into consideration that ICICI bank is currently being probed for money laundering? Or that Vodafone’s massive tax problems with the Income Tax authorities centre on the use of tax haven funds to buy into the Indian mobile market? Or that the company it acquired was a joint venture of ESSAR, which was caught funding the Naxalites, and Hutchinson Whampoa, the Hong Kong conglomerate with close links to the Chinese People’s Liberation Army (PLA)?

The “mpesa” mobile phone currency would make it impossible to track the funding of violent individuals and groups in India.

There are many other ways that money can be laundered and moved, and the government should consider carefully the implications of “economic reforms” that make the country increasingly vulnerable to groups with a long record of international criminality.

Rather than pussy-foot around this issue, perhaps it is time to do some plain speaking to British governmental and corporate leaders.

Moscow Subway's Commuter Dogs

Stray dogs everywhere have amazing survival skills but this lot in Moscow deserve special notice.

According to this story I just came across,  thousands of them board the subway in the outskirts of Moscow each morning, off to begin their daily routine in the city. They use the underground trains to get to places where food scraps are plentiful, and when the day of scavenging and begging is done they hop back on the train and return to the suburbs for the night. The link above has a number of really cute photographs.

On second thought, perhaps this is too cute to be real?

Britain and Hinduism 2: Murder as Policy

Over the centuries religion has been a standard tool of the British imperial elite. In manipulating victim populations ranging from Northern Ireland to the Middle East and India, their modus operandi has been simple: create a sense of grievance or entitlement in a religious group and use the resulting conflicts to serve British interests.

This worked well with Christian and Muslim populations with their well-established collective sense of their faith, but in India the technique came up short because our group identities compound religion with culture, caste, language and province. The extremist proxies the British promoted – the Muslim League under Mohammad Ali Jinnah and the Hindu Mahasabha under Vinayak Damodar Savarkar – had very limited impact until the colonial regime introduced a historically unprecedented element: communal violence.

They did so first with the “Maplah (Muslim) Rebellion” in Kerala immediately in the wake of Gandhi’s first nation-wide Satyagraha in 1920. It succeeded in destroying the Hindu-Muslim amity created by the Khilafat Movement but there was no permanent communal split nationally.

The next stage came in the run-up to the 1937 elections, when “Hindus” suddenly began to make a series of unprovoked and inexplicable attacks on Muslims. The Muslim League blamed the Congress for the attacks in a series of written reports that made no mention of the Hindu Mahasabha (newly under Savarkar). The reports described the assaults with Dickensian bathos: the victims were invariably pious people at prayer or celebrating some happy holiday; the attackers came to their bloody business shouting “Gandhi ki jai!” Suspicion that it was all a British command performance was widespread, and the Viceroy (Linlithgow) only reinforced that with a series of unctuous speeches expressing his “deep conviction that upon [Hindu-Muslim] unity depend the position and prestige of India before the nations, and her capacity to take her due place in the world.”

The violence was meant to scare Muslims into supporting the League but it did not work. Within their reserved vote banks and in the general electorate, Muslims voted overwhelmingly for other parties. The North-West Frontier Province, with a population over 90 per cent Muslim, voted solidly for a close ally of the Congress, the Redshirt Party led by the great Khan Abdul Ghaffar Khan. The Punjab, with a Muslim majority of about 53 per cent, elected the Unionist Party led by Sikander Hyat Khan who had broad Hindu and Sikh support. In Bengal, which also had a thin Muslim majority, a regional party won a plurality with support from all communities. Jinnah could not gain control even of his own native province, Muslim-majority Sind; the local leader, Khan Bahadur Allah Bux, opted to ally himself with the Congress.

Both Hyat Khan and Allah Bux rejected the notion that Hindus and Muslims were different “nations” and they would have been formidable obstacles to Partition. But neither lived to oppose it: Hyat Khan died suddenly of an alleged “heart attack” at the age of 50 and Allah Bux was assassinated. 

Mahatma Gandhi, the most effective foe of British rule, had become the target of deadly assault much earlier. The first attempt on his life was on 25 June 1934, when an unknown assailant threw a bomb at a car in which he was supposed to be travelling. As Tushar Gandhi (the Mahatma’s great-grandson), noted in his 2007 book Let’s Kill Gandhi! the bomb injured several policemen but “surprisingly, there [was] no record of any investigations or arrests.” As he also underlined, the attack took place in Pune, the base of operations for the gang that tried repeatedly to kill Gandhi and finally succeeded on 30 January 1948.

A second attempt on Gandhi’s life was in July 1944 at the small resort of Panchgani near Pune where he was recuperating from the near death experience of his final imprisonment. The assailant, Nathuram Godse, rushed at him with a dagger but was stopped and disarmed. Gandhi invited him to stay and talk but Godse stalked off; no police action followed. In September the same year, Godse tried again, joining a group at the entrance to Sevagram Ashram armed with a dagger; the police confiscated the weapon but once again, failed to take any action.

These incidents occurred well before the massive atrocities at the time of Partition that supposedly enraged Godse into killing Gandhi in 1948. They make clear that Godse's statement prior to his execution expressing outrage at the afflictions of of the Hindu community was pure propaganda. The available facts, especially the scandalous police inaction that extended from 1934 to 1948, point firmly to a long-standing conspiracy supported by the British and centred on Savarkar, Godse and Narayan Apte.

Apte has been generally viewed as little more than Godse's sidekick but he was in fact a key figure. A womanizing part-time recruiter for the Royal Indian Air Force (RIAF), he declined a coveted permanent commission at the height of the Great Depression to continue his marginal existence as Savarkar’s henchman. The only believable explanation for that decision is that he was already employed full-time as an operative of British Intelligence.

A third plotter, Madanlal Pahwa, was a former radio operator in the Navy and probably kept Savarkar in touch with his British controllers. Another factor indicating a wider conspiracy to murder Gandhi is the mystery surrounding the provenance of the murder weapon. It was initially reported stolen from the armory at Nasik; later accounts said it was an almost brand new Beretta automatic brought to India from Italy by a former Army officer.

The 1944 attempts on Gandhi’s life followed his providential escape from death in custody, at a time when British leaders wanted him dead. Winston Churchill responded to news of his 21-day fast in 1943  by sending a “most secret encrypted message” to the Viceroy (Linlithgow) urging him against “any show of leniency.” Linlithgow assured the Prime Minister he would “feel no compunction” in letting Gandhi die. A later cable contained Churchill’s cold query why Gandhi was not dead yet. His survival probably had something to do with the interest Franklin Roosevelt took in the matter; at one point he had the State Department summon the British Ambassador in Washington and tell him flatly “Gandhi must not die in prison.”  

Gandhi fasted in prison to protest the "man-made famine" in Bengal with which the colonial regime responded to the Quit India movement. That punitive intent is clear in the fact that as some 3 million people starved to death, Churchill turned down requests to divert any of the numerous supply ships passing within hours of Calcutta carrying food from New Zealand to Britain. British diplomats also declined a Canadian offer of free grain.

Another object of Gandhi's protest was the brutal repression of the leaderless Quit India Movement. The colonial police and Army routinely beat, machine-gunned and bombed nonviolent demonstrators; torture and custodial death were common. Sushila Nayar's diary recorded that Indian sources within the government estimated the civilian death toll at some 50,000; she noted that the actual toll was higher.

Not all murders the regime committed were open and violent. There were also many quiet deaths  supposedly from natural causes. Three of Gandhi’s closest aides were eliminated in that manner. His nephew Maganlal, who founded and ran Sabarmati Ashram, the person the Mahatma considered his political “heir,” died inexplicably in 1928; that was when consultations were beginning for the declaration of Purna Swaraj the next year.

The next to go was the formidable business magnate Jamanlal Bajaj, who founded Sevagram Ashram in Wardha, where Gandhi moved in 1930. He dropped dead of a supposed brain haemorrhage in February 1942, as Congress was gearing up for what became the Quit India movement. It was reported to be a "staggering loss" to Gandhi, the most serious blow he had suffered since Maganlal's death.

Less than six months later, Mahadev Desai, Gandhi’s private secretary, the only person who knew all of the Mahatma’s vast network of contacts and correspondents, dropped dead in prison. The three deaths not only affected Gandhi’s capacity for action at crucial times, they eliminated those most capable of carrying on his legacy.

Gandhi did not consider the deaths of his primary aides to be natural. On 2 March 1944 Sushila Nayar’s diary noted that he told her: “One after the other, you may all be taken away and I may be left alone. That will be a pathetic state.”

The death of his wife in prison also weighed heavily on Gandhi. In a rare personal complaint, he wrote to Viceroy (Wavell) disputing the regime’s public claim that Kasturba had been provided the best medical care and pointing out the many “pinpricks” the old couple had endured in prison. British “historians” have continued to repeat the canard that Kasturba’s death resulted from Gandhi’s refusal to permit the use of penicillin. Nayar’s diary makes clear that she (as the doctor in attendance), had asked the prison authorities for penicillin but was told it was unavailable.

All the foregoing pales in the light of the mass murders the British engineered in the final two years of their control of India. To understand why they did that we have to appreciate the global context.

World War II had pauperized Britain. Its main creditor, the United States, was pressing hard for an end to its Empire. Churchill’s hopes that Britain would have room to manoeuver by using the Soviet Union to counterbalance American power came to an abrupt end in 1945 when the United States became the world’s only nuclear Power. Without hope of holding India in the face of its massive nationalist mobilization and increasingly mutinous army. British strategists headed by Churchill decided that India had to be split.

David Monteath, the Permanent Under-Secretary at the British Foreign Office, summed up their rationale in a note for the file. “If India falls apart we may, I suppose, expect the Muslims to try and enlist British support by offering us all sorts of military and political facilities, to commit ourselves to what would be in effect the defence of one Indian state against another.”

To make India “fall apart” became the British objective from mid-1946, and the first step towards that goal was the "Great Calcutta Killing" initiated by the Muslim League on its “Direct Action Day,” 16 August. Jinnah was then secretly getting political advice from Churchill, who had arranged for letters to be routed through his private secretary, Miss E.A. Gilliat, at 6 Westminster Gardens in London.
The idea of using mass murder for political gain probably originated in that correspondence, for Jinnah was too fastidiously lawyerly to have come up with such an egregiously criminal plan on his own.

Whatever the origin of the plan, there is no doubt that the British actively facilitated the killings. The police did nothing as a crowd of Muslim League "hooligans" (as The Statesman described them), dispersed after Friday prayers on the Maidan and went on a spree of murder and arson, targeting Hindus and Sikhs. The Army, which had withdrawn all its outposts in the city the previous day, remained firmly ensconced in Fort William as thousands of people were beaten, hacked and burned to death over the next 72 hours. Retaliatory killings of Muslims did not get under way in the city until, on the third day of murder and arson, a group of Marwari businessmen assembled a band of hardened criminals and announced a bounty. Whether they did so under instructions from the British is a question that needs to be asked because without retaliation their whole project would have stalled.

The events in Calcutta set off a murderous rampage in the Muslim-majority area of Noakhali now in Bangladesh, and that led to mayhem in Bihar, and across North India. Descriptions of this process have commonly used the phrase “communal madness,” as if it were a natural contagion; but that distorts what actually happened. Those who witnessed the 1946-1947 riots up close have invariably reported that the killings were organized, and that goondas, criminals without any tint of faith, were always in the forefront of action.

Peace activist Muriel Smith who ran a relief centre at Noakhali made an additional important point when she wrote: “Perhaps the only thing that can be quite positively asserted about this orgy of arson and violence is that it was not a spontaneous uprising of the villagers. However many goondas may live in Bengal, they are incapable of organizing this campaign on their own initiative. Houses have been sprayed with petrol and burnt. Who supplied this rationed fuel? … Who supplied the weapons? The goondas seem to think that they really are the rulers of this beautiful area of Bengal. One sees no sign of fear [or] anxiety as to future punishment ….” Only the colonial authorities could have offered them impunity.

The tale of Partition has been told many times, but no historian has tried as yet to identify the Indians who helped organize the events that led to the murder of a million of their compatriots and rendered 14 million homeless in their own ancient lands. It is important to do that if only to see what role they have continued to play in the post-colonial evolution of Indian politics.

It is also necessary to bring into post-colonial perspective the evolution of the poisonous concept of "Hindutva" the British injected into Indian politics to dismember the country. That will be the focus of Part 3 of this essay.

Bitcoin Augurs Global Rule of Organized Crime

 The Internet currency Bitcoin was supposedly invented by the pseudonymous Satoshi Nakamoto in January 2009.

It is not issued by any central bank or authority but is based on an algorithm and has come into increasing use to make electronic payments for all kinds of goods and services; it is also traded against the US$ on the Gox exchange based in California.

What makes Bitcoin more than a curiosity is that it seems to be seeding a new incarnation of the global money laundering system that Britain built as its Empire dwindled in the second half of the 20th Century.

That system, centered on London and run through some 70 “tax havens” strung around the world, has been under increasing pressure from regulators in the United States and Germany. The leak last week of an enormous trove of data on some 250,000 secret accounts held in tax havens is the latest sign that it cannot survive.

However, with an estimated $30 trillion in assets belonging to elite and criminal groups in countries around the world, the global black market is unlikely to disappear. Any vanishing act will be into the vaporous realm of the Bitcoin, and the effects will be dire indeed.

Just for starters, there is the prospect that the Bitcoin as the currency of the global underground will unseat the US$ as the repository of national reserves. That process would accelerate to light-speed if an opportune "leak" were to reveal that "Satoshi Nakamoto" is a high placed British Darth Vader masterminding an Empire Strikes Back scenario. Pointing in that direction is the debut of Bitcoin just as the United States Federal Reserve led Western central bankers into the massive "monetary easing" that staved off immediate disaster in 2009 but undermined the long term viability of the $ as the world's reserve currency.

Governments can try fighting such a disastrous progression of events with new rules and regulations or by subverting the Gox exchange, but given the range of elite groups invested in the underground economy nothing less than closing down the Internet is likely to work.

The only other alternative will be for the 99% to organize at the community level to insulate their families and homes from the Criminals Without Borders regime augured by the onset of what will, at some point, probably be dubbed the Britcoin.

Resolving the Novartis Issue

The Indian Supreme Court ruling denying patent protection to an expensive cancer drug developed by Swiss pharmaceutical giant Novartis has been universally reported as an issue of corporate profit versus human need.

In that face-off it is impossible to avoid a wide range of negative effects. The most obvious are that many lifesaving drugs are priced beyond the reach of many who need it, and in affluent countries that has made health care systems absurdly expensive. In addition, corporations have been traditionally disinterested in creating new drugs to treat the diseases afflicting many millions in poor countries.

However, as the fastest growing markets are in emerging economies, Western corporations have shifted ground in recent years and have been pressing successfully to make stiffer patent protection an intergovernmental issue. India’s 2005 patent law reducing the space for generics was adopted under such pressure, and the prices of the next generation of new drugs will reflect the change.

The issue of profit versus public need has been debated for decades without any attempt to bring the conflicting interests to a generally acceptable resolution.

As far as I can see, that is mainly because all stakeholders have been so busy protecting their own turf they have not addressed the basic issue: how best to motivate innovation and ensure cheap drugs.

That issue has a quite simple solution: delink Research and Development from Production and Marketing. In other words, there would be no expensive brand name drugs: new medicines would pass directly from R&D to generic production.

Governments could get the new system going by arranging to reward innovation, scaling pay-offs to the popularity of the product. This could be done either from general tax revenues or dedicated funds linked to sales taxes.

The immediate benefits would be plummeting health care costs in affluent countries and a shifting of R&D priorities towards creating drugs most in need.

Taxpayers would have little cause for complaint, for reduced health care costs and improved access to drugs will translate into massive savings.

Rethinking the National Counter Terrorism Centre

Those opposed to an unconstitutional National Counter-Terrorism Centre (NCTC) with a dangerous combination of Intelligence and Police powers should propose an alternative: a National Intelligence Centre (NIC) with statutory powers over all other civilian agencies and a Director reporting directly to the Prime Minister.

This will result in the entire Intelligence establishment being brought within a constitutional framework and made accountable to Parliament. It will also ensure that reforms necessary for coherence and efficiency will get continuing attention at the highest level.

The legislation on the matter should:

• Provide for reform: Parliament should mandate the NIC to carry out a thorough review and appraisal of existing Intelligence agencies and arrangements and recommend comprehensive changes to improve their coherence and effectiveness. Changes should aim to create dedicated capacities to monitor the full range of strategic developments in economic, social and political sectors within the country and outside, with the NIC integrating information flows and making overall analyses. That broad approach will throw into high relief the motivations and means driving significant trends and point to countries, groups and individuals that merit special attention. This process should also make clear the requirements in terms of personnel, training, technical development and budgeting for the continuous improvement of Intelligence activities. In sum, the reforms will build capacity for pro-active policy and action.

• Require public reporting by the NIC: In an open democracy public understanding is critically important to counter domestic anti-national forces and foreign subversion. Parliament must mandate that relevant portions of the analytical work of the NIC be made public in regular and special reports. These must be subject to debate by central and state legislators and in the media.

• Require cooperation with civil society: No Intelligence agency can be effective without cooperation from members of the public. At present such cooperation is ad hoc, and can depend on anything from a general fear of officialdom to intimidation and blackmail, Parliament should mandate the NIC to create a regular, structured relationship with civil society, especially in gathering information on communal issues. On other matters affecting national security such as corruption in defence procurement and financing of violent groups within the country the NIC should have a mandate to inform and educate the media so that reporters know basic facts and policy parameters and cannot be manipulated by “leaks” from interested parties. The NIC should also work with other statutory bodies such as the National Press Council to call public attention to issues of systemic anti-national bias.

• Create an Appeals Mechanism: If Intelligence operatives infringe on the rights, liberties and lives of Indian citizens there should be a mechanism to address problems without public disclosures harmful to national security. Parliament should create an easily accessed and responsive Grievance Mechanism providing for appeals up to a Parliamentary Standing Committee with confidential procedures that could, when necessary, bring matters to the attention of the Prime Minister and President. Use of this mechanism should not preclude legal options for affected parties.

• Promote understanding of India’s strategic interests: Intelligence agencies can only be effective within a clear strategic framework. Most developed countries, especially those with global interests, have such frameworks but few spell it out. Britain, for instance, has its famous “permanent interests” that are unspecified but boil down to the benefit it can draw from any situation. The United States is unique in publicly defining its overall national strategy as the promotion of democracy globally. That reflects the country’s anti-colonial foundation and its evolution on the basis of a set of inalienable values. The Indian constitution draws heavily on the American and so the global expansion of democracy is also its fundamental strategic interest; but it is not the only one. Equally important is increased social equity as the country's diverse communities move ponderously from many different stages of development into a shared economic and political system. So is the maintenance of India's traditional values at a time when the verities of Western "progress" must be overwritten in the interests of a liveable planet. The strategic picture is further complicated by the existence of many foreign proxies within India, an unavoidable legacy of colonial rule. Under these conditions a primary national imperative is broad public awareness of what is necessary for the country's continued evolution according to its own best lights. Parliament must make provision for these issues to be debated nationally in a continuing and constructive process that draws in educational and training institutions, including those that shape government officials and Intelligence operatives.

 With these parameters the NIC can be more than an effective guard against foreign and domestic enemies; it can be a powerful support for India's vast transition to a new age.