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Saturday, April 9, 2016

The problem with Panama: It’s all legal



Frank Flannery. Picture: Gareth Chaney

I never cease to be amazed at how good some people are with money. Take Frank Flannery. Twenty years ago when he was working for Rehab, the charity that champions people with disabilities, he bought a house in London for £615,000. This would be the equivalent today of forking out more than €2m for a pad. And you thought those kind of living quarters were the exclusive preserve of wealthy businesspeople, bankers, lawyers, and accountants? No sir, if you watch the pennies, the pounds will take care of themselves.
Frank was moving to London to continue his work with the group and needed a place to live. The Bank of Ireland sorted him out for a large mortgage. Except, as the Panama papers published this week revealed, he also had a mysterious benefactor.
A letter written by the bank refers to further security for the mortgage coming from an offshore company based in Jersey to the amount of £250,000. Frank has reacted to this news with astonishment, saying he is “a stranger to the matter”.

Maybe it was somebody who admired the good work Frank was doing with Rehab, and weighed in ‘on the QT’ to help him find a half-decent place to lay his head.
Or maybe it was somebody who admired the good work Frank had done in Fine Gael. Until recently, he was a major force in the party for the last 35 years. Supporting the democratic process is an admirable pursuit often favoured by shy, rich folk. Maybe somebody thought that sorting out Frank without his knowledge was a nod towards good politics.
Between the cost of the house — located in salubrious Primrose Hill — and the mysterious benefactor, the revelations about Frank’s home affairs once more demonstrate to mere mortals how it is that those with wealth and connections can really live.

The most interesting aspect of Frank’s Panama story — apart from his ignorance of the whole thing — is that it was all perfectly legal. Wealthy individuals can shovel a quarter of a million into an offshore account out of the reach of national agencies. They can set up a myriad of companies and accounts through law firms such as Mossack Fonseca, from which the Panama papers emerged. They can move money around, engaging in major tax avoidance — the legal version of tax evasion. And they are assisted by no shortage of banks, lawyers, and accountants, all taking a generous slice on the pie. It’s their world, we just live in it.
This is all legal, because there is no political will to ensure that wealthy individuals and corporations pay something at least approaching their fair share.

Thomas Piketty, the French economist who has written about global inequality, reckons that up to six trillion dollars could be squirrelled away in a manner that ensures little or no tax is paid on it. That’s six thousand billion dollars.
Hiding money and assets is accommodated mainly because most of those engaged in it are well-connected, particularly to politicians who make the laws.
Why would lawmakers discommode friends who are influential and supportive? Of course, every now and then, the smell becomes a little overpowering and a morsel of law is thrown at the peasants to quieten them.

Even within that context, laws are useless without a willingness to enforce. Back in the 1980s, when this country was on its knees, there was a massive off-shore tax fraud for the middle classes. Bogus non-resident bank accounts were opened up by hundreds of thousands of people who were resident in the State.
The accounts were exempt from Deposit Interest Retention Tax, and beyond the reach of the taxman. So if you shovelled in undeclared money, you won on both counts. Many did, at a cost of hundreds of millions, to an exchequer that was in dire need of money.
In his 1987 budget speech, Minister for Finance Ray McSharry scoffed at the notion that there was some sort of a scam afoot.

“There appears to be some misconception about the tax status of non-resident deposits,” he said. “Let me make the position clear. Such deposits are entirely free of retention tax in our jurisdiction. I can give assurances that we have no intention of changing this arrangement. Non-residents can lodge deposits here in complete confidence.”
Yet a few weeks earlier his department had been warned by the State-owned TSB bank that “a large number of non-resident accounts held in certain commercial banks are not genuine”.
Throughout this period, another scam, this one for those with serious wealth and connections, was taking place through Charlie Haughey’s bagman, Des Traynor.
The Ansbacher accounts facilitated more than 200 individuals with offshore accounts in the Cayman Islands. Considering whom Traynor was, and that he was skimming the accounts to feed Charlie, it’s little wonder that there were no great efforts at the time to investigate.

Charles Haughty
Today, whether it be individuals or corporations, the laws are fashioned to ensure that money can be shifted around the globe in a manner that allows for taxation to be treated as little more than an irritant.
This country is regarded in some quarters as a corporate tax haven. In 2013, Apple confirmed that it paid just 2% tax on two of its Irish subsidiaries.
Imagine that? We, the citizens, offer one of the lowest corporate tax rates in the developed world at 12.5%, yet the tech giant managed to legally pay less than a fifth of that.
Last week, Barack Obama made a rare intervention on behalf of US citizens. A multi-billion dollar deal between pharma giants Pfizers and Allergan would have seen their combined tax bill shrink. The process involved the smaller company being backed into the larger one in a process called “inversion”. Obama blocked this kind of deal by executive order.
It was a small move, but one that reflected a growing anger among the wider population.
History has shown that the political will to take on vested interests only gains momentum when the injustices are too obvious and severe to ignore any longer.

In the aftermath of a major recession across the developed world, the issue of tax injustice is growing larger by the day. This week’s publication of the Panama papers can only add to the growing cacophony for it to be addressed in a coherent and decisive manner.
Meanwhile, Frank Flannery sold his London pile in 2012 for £2.8m. By then, he had left his post in Rehab, but was engaged in consultancy work for the charity which netted him in excess of €350,000 over seven years. Much of this work involved lobbying the politicians whom he had helped elect.

When issues over Rehab blew up in controversy, Mr Flannery refused to appear before a Dáil committee. He claimed to be victimised by politicians. Right up until last Sunday, he had been a prominent media pundit, expounding on what politicians should do in the national interest.

Now he has been victimised again by this leak about something of which he is entirely ignorant. The world is just so unfair sometimes.

Michael Clifford

Confessions of a political hacker who rigged elections for a decade


Ándres Sepúlveda in the undisclosed maximum-security building of the general attorneys office in Bogotá. Picture: Juan Arredondo

IT WAS just before midnight when Enrique Peña Nieto declared victory as the newly elected president of Mexico. Peña Nieto was a lawyer and a millionaire, from a family of mayors and governors. His wife was a star of a telenovela soap opera.
He beamed as he was showered with red, green, and white confetti at the Mexico City headquarters of the Institutional Revolutionary Party, or PRI, which had ruled for more than 70 years before being forced out in 2000. Returning the party to power on that night in July 2012, Peña Nieto vowed to tame drug violence, fight corruption, and open a more transparent era in Mexican politics.

Two thousand miles away, in an apartment in Bogotá’s upscale Chicó Navarra neighbourhood, Andrés Sepúlveda sat before six computer screens. Sepúlveda is Colombian, bricklike, with a shaved head, goatee, and a tattoo of a QR code containing an encryption key on the back of his head. On his nape are the words “</head>” and “<body>” stacked atop each other, dark riffs on coding. He was watching a live feed of Peña Nieto’s victory party, waiting for an official declaration of the results.

When Peña Nieto won, Sepúlveda began destroying evidence. He drilled holes in flash drives, hard drives, and mobile phones, fried their circuits in a microwave, then broke them to shards with a hammer.
He shredded documents and flushed them down the toilet and erased servers in Russia and Ukraine rented anonymously with Bitcoins. He was dismantling what he says was a secret history of one of the dirtiest Latin American campaigns in recent memory.
For eight years, Sepúlveda, now 31, says he travelled the continent rigging major political campaigns. With a budget of $600,000, the Peña Nieto job was by far his most complex.
He led a team of hackers that stole campaign strategies, manipulated social media to create false waves of enthusiasm and derision, and installed spyware in opposition offices, all to help Peña Nieto, a right-of-centre candidate, eke out a victory.

On that July night, he cracked bottle after bottle of Colón Negra beer in celebration. As usual on election night, he was alone.
Sepúlveda’s career began in 2005, and his first jobs were small — mostly defacing campaign websites and breaking into opponents’ donor databases. Within a few years he was assembling teams that spied, stole, and smeared on behalf of presidential campaigns across Latin America.
He wasn’t cheap, but his services were extensive. For $12,000 a month, a customer hired a crew that could hack smartphones, spoof and clone web pages, and send mass e-mails and texts.
The premium package, at $20,000 a month, also included a full range of digital interception, attack, decryption, and defense. The jobs were carefully laundered through layers of middlemen and consultants. Sepúlveda says many of the candidates he helped might not even have known about his role; he says he met only a few.

His teams worked on presidential elections in Nicaragua, Panama, Honduras, El Salvador, Colombia, Mexico, Costa Rica, Guatemala, and Venezuela. Campaigns mentioned in this story were contacted through former and current spokespeople; none but Mexico’s PRI and the campaign of Guatemala’s National Advancement Party would comment.
As a child, he witnessed the violence of Colombia’s Marxist guerrillas. As an adult, he allied with a right wing emerging across Latin America. He believed his hacking was no more diabolical than the tactics of those he opposed, such as Hugo Chávez and Daniel Ortega.
Many of Sepúlveda’s efforts were unsuccessful, but he has enough wins that he might be able to claim as much influence over the political direction of modern Latin America as anyone in the 21st century.

“My job was to do actions of dirty war and psychological operations, black propaganda, rumours — the whole dark side of politics that nobody knows exists but everyone can see,” he says in Spanish, while sitting at a small plastic table in an outdoor courtyard deep within the heavily fortified offices of Colombia’s attorney general’s office.

He’s serving 10 years in prison for charges including use of malicious software, conspiracy to commit crime, violation of personal data, and espionage, related to hacking during Colombia’s 2014 presidential election. He has agreed to tell his full story for the first time, hoping to convince the public that he’s rehabilitated — and gather support for a reduced sentence.
Usually, he says, he was on the payroll of Juan José Rendón, a Miami-based political consultant who’s been called the Karl Rove of Latin America. Rendón denies using Sepúlveda for anything illegal, and categorically disputes the account Sepúlveda gave of their relationship, but admits knowing him and using him to do website design.

“If I talked to him maybe once or twice, it was in a group session about that, about the web,” he says. “I don’t do illegal stuff at all. There is negative campaigning. They don’t like it — OK. But if it’s legal, I’m gonna do it. I’m not a saint, but I’m not a criminal.”
While Sepúlveda’s policy was to destroy all data at the completion of a job, he left some documents with members of his hacking teams and other trusted third parties as a secret “insurance policy”.
Sepúlveda provided what he says are emails showing conversations between him, Rendón, and Rendón’s consulting firm concerning hacking and the progress of campaign-related cyber attacks.

Rendón says the emails are fake. An analysis by an independent computer security firm said a sample of the emails they examined appeared authentic.
Some of Sepúlveda’s descriptions of his actions match published accounts of events during various election campaigns, but other details couldn’t be independently verified. One person working on the campaign in Mexico, who asked not to be identified out of fear for his safety, substantially confirmed Sepúlveda’s accounts of his and Rendón’s roles in that election.
Sepúlveda says he was offered several political jobs in Spain, which he says he turned down because he was too busy. On the question of whether the US presidential campaign is being tampered with, he is unequivocal. “I’m 100% sure it is,” he says.

Sepúlveda grew up poor in Bucaramanga, eight hours north of Bogotá by car. His mother was a secretary. His father was an activist, helping farmers find better crops to grow than coca plants, and the family moved constantly because of death threats from drug traffickers.
His parents divorced, and by the age of 15, after failing school, he went to live with his father in Bogotá and used a computer for the first time. He later enrolled in a local technology school and, through a friend there, learned to code.

In 2005, Sepúlveda’s older brother, a publicist, was helping with the congressional campaigns of a party aligned with then-Colombian president Alvaro Uribe. Uribe was a hero of the brothers, a US ally who strengthened the military to fight the Revolutionary Armed Forces of Colombia (FARC).

During a visit to party headquarters, Sepúlveda took out his laptop and began scanning the office’s wireless network. He easily tapped into the computer of Rendón, the party’s strategist, and downloaded Uribe’s work schedule and upcoming speeches. Sepúlveda says Rendón was furious — then hired him on the spot. Rendón says this never happened.
For decades, Latin American elections were rigged, not won, and the methods were pretty straightforward. Local fixers would hand out everything from small appliances to cash in exchange for votes. But in the 1990s, electoral reforms swept the region.

Voters were issued tamper-proof ID cards, and nonpartisan institutes ran the elections in several countries. The modern campaign, at least a version North Americans might recognise, had arrived in Latin America.
Rendón had already begun a successful career based partly, according to his critics — and more than one lawsuit — on a mastery of dirty tricks and rumour-mongering.

(In 2014, El Salvador’s then- president Carlos Mauricio Funes accused Rendón of orchestrating dirty war campaigns throughout Latin America. Rendón sued in Florida for defamation, but the court dismissed the case on the grounds that Funes couldn’t be sued for his official acts.)
The son of democracy activists, he studied psychology and worked in advertising before advising presidential candidates in his native Venezuela. After accusing then-President Chávez of vote rigging in 2004, he left and never went back.

SEPÚLVEDA’S first hacking job, he says, was breaking into an Uribe rival’s website, stealing a database of email addresses, and spamming the accounts with disinformation. He was paid $15,000 in cash for a month’s work, five times as much as he made in his previous job designing websites.
Sepúlveda was dazzled by Rendón, who owned a fleet of luxury cars, wore big flashy watches, and spent thousands on tailored coats. Like Sepúlveda, he was a perfectionist. His staff was expected to arrive early and work late. “I was very young,” Sepúlveda says. “I did what I liked, I was paid well and travelled. It was the perfect job.”

But more than anything, their right-wing politics aligned. Sepúlveda says he saw Rendón as a genius and a mentor. A devout Buddhist and practitioner of martial arts, according to his own website, Rendón cultivated an image of mystery and menace, wearing only all-black in public, including the occasional samurai robe.
On his website he calls himself the political consultant who is the “best paid, feared the most, attacked the most, and also the most demanded and most efficient”. Sepúlveda would have a hand in that.

Rendón, says Sepúlveda, saw that hackers could be completely integrated into a modern political operation, running attack ads, researching the opposition, and finding ways to suppress a foe’s turnout. As for Sepúlveda, his insight was to understand that voters trusted what they thought were spontaneous expressions of real people on social media more than they did experts on television and in newspapers.

He knew that accounts could be faked and social media trends fabricated, all relatively cheaply. He wrote a software program, now called Social Media Predator, to manage and direct a virtual army of fake Twitter accounts.

The software let him quickly change names, profile pictures, and biographies to fit any need. Eventually, he discovered, he could manipulate the public debate as easily as moving pieces on a chessboard — or, as he puts it, “When I realised that people believe what the internet says more than reality, I discovered that I had the power to make people believe almost anything.”
According to Sepúlveda, his payments were made in cash, half upfront. When he travelled, he used a fake passport and stayed alone in a hotel, far from campaign staff. No one could bring a smartphone or camera into his room.

Most jobs were initiated in person. Sepúlveda says Rendón would give him a piece of paper with target names, email addresses, and phone numbers. Sepúlveda would take the note to his hotel, enter the data into an encrypted file, then burn the page or flush it down the toilet. If Rendón needed to send an email, he used coded language. To “caress” meant to attack; to “listen to music” meant to intercept a target’s phone calls.
Rendón and Sepúlveda took pains not to be seen together. They communicated over encrypted phones, which they replaced every two months. Sepúlveda says he sent daily progress reports and intelligence briefings from throwaway email accounts to a go-between in Rendón’s consulting firm.

Each job ended with a specific, colour-coded destruct sequence. On election day, Sepúlveda would purge all data classified as “red”. Those were files that could send him and his handlers to prison: intercepted phone calls and emails, lists of hacking victims, and confidential briefings he prepared for the campaigns.
All phones, hard drives, flash drives, and computer servers were physically destroyed. Less-sensitive “yellow” data — travel schedules, salary spreadsheets, fundraising plans — were saved to an encrypted thumb drive and given to the campaigns for one final review. A week later it, too, would be destroyed.

For most jobs, Sepúlveda assembled a crew and operated out of rental homes and apartments in Bogotá. He had a rotating group of 7 to 15 hackers brought in from across Latin America, drawing on the various regions’ specialties. Brazilians, in his view, develop the best malware. Venezuelans and Ecuadoreans are superb at scanning systems and software for vulnerabilities. Argentines are mobile intercept artists. Mexicans are masterly hackers in general but talk too much. Sepúlveda used them only in emergencies.

The assignments lasted anywhere from a few days to several months. In Honduras, Sepúlveda defended the communications and computer systems of presidential candidate Porfirio Lobo Sosa from hackers employed by his competitors.
In Guatemala, he digitally eavesdropped on six political and business figures, and says he delivered the data to Rendón on encrypted flash drives at dead drops. (Sepúlveda says it was a small job for a client of Rendón’s who has ties to the right-wing National Advancement Party, or PAN. The PAN says it never hired Rendón and has no knowledge of any of his claimed activities.)

In Nicaragua in 2011, Sepúlveda attacked Ortega, who was running for his third presidential term. In one of the rare jobs in which he was working for a client other than Rendón, he broke into the email account of Rosario Murillo, Ortega’s wife and the government’s chief spokeswoman, and stole a trove of personal and government secrets.

In Venezuela in 2012, the team abandoned its usual caution, animated by disgust with Chávez. With Chávez running for his fourth term, Sepúlveda posted an anonymized YouTube clip of himself rifling through the email of one of the most powerful people in Venezuela, Diosdado Cabello, then president of the National Assembly. He also went outside his tight circle of trusted hackers and rallied Anonymous, the hacktivist group, to attack Chávez’s website.
After Sepúlveda hacked Cabello’s Twitter account, Rendón seemed to congratulate him. “Eres noticia :)” — you’re news — he wrote in a September 9, 2012, email, linking to a story about the breach. (Rendón says he never sent such an email.) Sepúlveda provided screen shots of a dozen emails, and many of the original emails, showing that from November 2011 to September 2012 Sepúlveda sent long lists of government websites he hacked for various campaigns to a senior member of Rendón’s consulting firm, lacing them with hacker slang (“Owned!” read one).
Two weeks before Venezuela’s presidential election, Sepúlveda sent screen shots showing how he’d hacked Chávez’s website and could turn it on and off at will.

Chávez won but died five months later of cancer, triggering an emergency election, won by Nicolás Maduro. The day before Maduro claimed victory, Sepúlveda hacked his Twitter account and posted allegations of election fraud. Blaming “conspiracy hackings from abroad”, the government of Venezuela disabled the internet across the entire country for 20 minutes.
In Mexico, Sepúlveda’s technical mastery and Rendón’s grand vision for a ruthless political machine fully came together, fuelled by the huge resources of the PRI. The years under President Felipe Calderón and the National Action Party (also, as in Partido Acción Nacional, PAN) were plagued by a grinding war against the drug cartels. As 2012 approached, the PRI offered the youthful energy of Peña Nieto, who’d just finished a successful term as governor.
Sepúlveda didn’t like the idea of working in Mexico, a dangerous country for involvement in public life. But Rendón persuaded him to travel there for short trips, starting in 2008, often flying him in on his private jet. Working at one point in Tabasco, on the sweltering Gulf of Mexico, Sepúlveda hacked a political boss who turned out to have connections to a drug cartel. After Rendón’s security team learned of a plan to kill Sepúlveda, he spent a night in an armoured Chevy Suburban before returning to Mexico City.

MEXICO is effectively a three-party system, and Peña Nieto faced opponents from both right and left. On the right, the ruling PAN nominated Josefina Vázquez Mota, its first female presidential candidate. On the left, the Democratic Revolution Party, or PRD, chose Andrés Manuel López Obrador, a former Mexico City mayor.

Early polls showed Peña Nieto 20 points ahead, but his supporters weren’t taking chances. Sepúlveda’s team installed malware in routers in the headquarters of the PRD candidate, which let him tap the phones and computers of anyone using the network, including the candidate.
He took similar steps against PAN’s Vázquez Mota. When the candidates’ teams prepared policy speeches, Sepúlveda had the details as soon as a speechwriter’s fingers hit the keyboard. Sepúlveda saw the opponents’ upcoming meetings and campaign schedules before their own teams did.
Money was no problem. At one point, Sepúlveda spent $50,000 on high-end Russian software that made quick work of tapping Apple, BlackBerry, and Android phones. He also splurged on the very best fake Twitter profiles; they’d been maintained for at least a year, giving them a patina of believability.

Sepúlveda managed thousands of such fake profiles and used the accounts to shape discussion around topics such as Peña Nieto’s plan to end drug violence, priming the social media pump with views that real users would mimic.
For less nuanced work, he had a larger army of 30,000 Twitter bots, automatic posters that could create trends. One conversation he started stoked fear that the more López Obrador rose in the polls, the lower the peso would sink. Sepúlveda knew the currency issue was a major vulnerability; he’d read it in the candidate’s own internal staff memos.
Just about anything the digital dark arts could offer to Peña Nieto’s campaign or important local allies, Sepúlveda and his team provided. On election night, he had computers call tens of thousands of voters with prerecorded phone messages at 3 am in the critical swing state of Jalisco.

The calls appeared to come from the campaign of popular left-wing gubernatorial candidate Enrique Alfaro Ramírez. That angered voters — that was the point — and Alfaro lost by a slim margin. In another governor’s race, in Tabasco, Sepúlveda set up fake Facebook accounts of gay men claiming to back a conservative Catholic candidate representing the PAN, a stunt designed to alienate his base.
“I always suspected something was off,” the candidate, Gerardo Priego, said recently when told how Sepúlveda’s team manipulated social media in the campaign.
In May, Peña Nieto visited Mexico City’s university and was bombarded by angry chants and boos from students. The rattled candidate retreated with his bodyguards into an adjacent building, hiding, according to some social media posts, in a bathroom. The images were a disaster. López Obrador soared.

The PRI was able to recover after one of López Obrador’s consultants was caught on tape asking businessmen for $6m to fund his candidate’s broke campaign, in possible violation of Mexican laws.
Although the hacker says he doesn’t know the origin of that recording, Sepúlveda and his team had been intercepting the communications of the consultant, Luis Costa Bonino, for months. (On Februrary 2, 2012, Rendón appears to have sent him three email addresses and a phone number belonging to Costa Bonino in an email called “Job”.)

Sepúlveda’s team disabled the consultant’s personal website and directed journalists to a clone site. There they posted what looked like a long defense written by Costa Bonino, which casually raised questions about whether his Uruguayan roots violated Mexican restrictions on foreigners in elections. Costa Bonino left the campaign a few days later. He indicated recently that he knew he was being spied on, he just didn’t know how. It goes with the trade in Latin America: “Having a phone hacked by the opposition is not a novelty. When I work on a campaign, the assumption is that everything I talk about on the phone will be heard by the opponents.”
The press office for Peña Nieto declined to comment. A spokesman for the PRI said the party has no knowledge of Rendón working for any PRI campaign. Rendón says he has worked on behalf of PRI candidates in Mexico for 16 years, from August 2000 until today.
In 2012, Colombian president Juan Manuel Santos, Uribe’s successor, unexpectedly restarted peace talks with the FARC, hoping to end a 50-year war. Furious, Uribe, whose father was killed by FARC guerrillas, created a party and backed an alternative candidate, Oscar Iván Zuluaga, who opposed the talks.

Rendón, who was working for Santos, wanted Sepúlveda to join his team, but Sepúlveda turned him down. He considered Rendón’s willingness to work for a candidate supporting peace with the FARC a betrayal and suspected the consultant was going soft, choosing money over principles. Sepúlveda says he was motivated by ideology first and money second, and that if he wanted to get rich he could have made a lot more hacking financial systems than elections. For the first time, he decided to oppose his mentor.
Sepúlveda went to work for the opposition, reporting directly to Zuluaga’s campaign manager, Luis Alfonso Hoyos. (Zuluaga denies any knowledge of hacking; Hoyos couldn’t be reached for comment.) Together, Sepúlveda says, they came up with a plan to discredit the president by showing that the guerrillas continued to traffic in drugs and violence even as they talked about peace.

Within months, Sepúlveda hacked the phones and email accounts of more than 100 militants, including the FARC’s leader, Rodrigo Londoño, also known as Timochenko. After assembling a thick file on the FARC, including evidence of the group’s suppression of peasant votes in the countryside, Sepúlveda agreed to accompany Hoyos to the offices of a Bogotá TV news program and present the evidence.
It may not have been wise to work so doggedly and publicly against a party in power. A month later, Sepúlveda was smoking on the terrace of his Bogotá office when he saw a caravan of police vehicles pull up. Forty black-clad commandos raided the office to arrest him.
Sepúlveda blamed his carelessness at the TV station for the arrest. He believes someone there turned him in. In court, he wore a bulletproof vest and sat surrounded by guards with bomb shields. In the back of the courtroom, men held up pictures of his family, making a slashing gesture across their throats or holding a hand over their mouths — stay silent or else. Abandoned by former allies, he eventually pleaded guilty to espionage, hacking, and other crimes in exchange for a 10-year sentence.

THREE days after arriving at Bogotá’s La Picota prison, he went to the dentist and was ambushed by men with knives and razors, but was saved by guards. A week later, guards woke him and rushed him from his cell, saying they had heard about a plot to shoot him with a silenced pistol.

After national police intercepted phone calls revealing yet another plot, he’s now in solitary confinement at a maximum-security facility in Bogotá. He sleeps with a bulletproof blanket and vest at his bedside, behind bombproof doors. Guards check on him every hour.
As part of his plea deal, he says, he’s turned government witness, helping investigators assess possible cases against the former candidate, Zuluaga, and his strategist, Hoyos. Authorities tried arrest of Hoyos, but according to Colombian press reports, he’s fled to Miami.
When Sepúlveda leaves for meetings with prosecutors at the Bunker, the attorney general’s Bogotá headquarters, he travels in an armed caravan including six motorcycles speeding through the capital at 60mph, jamming cell phone signals as they go to block tracking of his movements or detonation of bombs.

In July 2015, Sepúlveda sat in the small courtyard of the Bunker, poured himself a cup of coffee from a thermos, and took out a pack of Marlboro cigarettes. He says he wants to tell his story because the public doesn’t grasp the power hackers exert over modern elections, or the skills needed to stop them.

“I worked with presidents, public figures with great power, and did many things with absolutely no regrets because I did it with full conviction and under a clear objective, to end dictatorship and socialist governments in Latin America,” he says.
“I have always said that there are two types of politics — what people see and what really makes things happen. I worked in politics that are not seen.”
Sepúlveda says he’s allowed a computer and a monitored internet connection as part of an agreement to help the attorney general’s office disrupt drug cartels.
The government will not confirm or deny that he has access to a computer, or what he’s using it for. He says he has modified Social Media Predator to counteract the kind of sabotage he used to specialise in, including jamming candidates’ Facebook walls and Twitter feeds. He’s used it to scan 700,000 tweets from pro-Islamic State accounts to learn what makes a good terror recruiter.

Sepúlveda says the program has been able to identify ISIS recruiters minutes after they create Twitter accounts and start posting, and he hopes to share the information with the US or other countries fighting the Islamist group. Samples of Sepúlveda’s code evaluated by an independent company found it authentic and substantially original.

Sepúlveda’s contention that operations like his happen on every continent is plausible, says David Maynor, who runs a security testing company in Atlanta called Errata Security. Maynor says he occasionally gets inquiries for campaign-related jobs. His company has been asked to obtain emails and other documents from candidates’ computers and phones, though the ultimate client is never disclosed. “Those activities do happen in the US, and they happen all the time,” he says.

In one case, Maynor was asked to steal data as a security test, but the individual couldn’t show an actual connection to the campaign whose security he wanted to test. In another, a potential client asked for a briefing on how a candidate’s movements could be tracked by swapping the user’s iPhone for a bugged clone. “For obvious reasons, we always turned them down,” says Maynor.

Three weeks before Sepúlveda’s arrest, Rendón was forced to resign from Santos’s campaign amid allegations in the press that he took $12m from drug traffickers and passed part of it on to the candidate, something he denies.
According to Rendón, Colombian officials interviewed him shortly afterward in Miami. Rendón says that Colombian investigators asked him about Sepúlveda and that he told them Sepúlveda’s role was limited to web development.

Rendón denies working with Sepúlveda in any meaningful capacity. “He says he worked with me in 20 places, and the truth is he didn’t,” Rendón says. “I never paid Andrés Sepúlveda a peso.”
Last year, based on anonymous sources, the Colombian media reported that Rendón was working for Donald Trump’s presidential campaign. Rendón calls the reports untrue. The campaign did approach him, he says, but he turned them down because he dislikes Trump.
“To my knowledge we are not familiar with this individual,” says Trump’s spokeswoman, Hope Hicks. “I have never heard of him, and the same goes for other senior staff members.”
But Rendón says he’s in talks with another leading US presidential campaign — he wouldn’t say which — to begin working for it once the primaries wrap up and the general election begins.

DIRTY WORK
Colombia
Supported re-election of Alvaro Uribe for president, 2006; congressional elections, 2006; failed campaign of Oscar Iván Zuluaga for president, 2014
Honduras
Supported Porfirio Lobo Sosa, elected president 2009

Against Daniel Ortega, 2011
Mexico

Venezuela
Against Hugo Chávez and Maduro in 2012 and 2013

Costa Rica
Supported Johnny Araya, failed presidential candidate for centre-left National Liberation Party, 2014 election
Panama

Supported Juan Carlos Navarro, presidental candidate for the centre-left Democratic Revolutionary Party, 2014 election
By Carlos Manuel Rodríguez and Matthew Bristow

Thursday, April 7, 2016

Ivan Yates to shelve media work and leave Ireland


Ivan and Deirdre Yates: The High Court ruled in February that AIB was entitled to a judgment of €1.6m against Ms Yates. It demanded repayment from her, a primary school teacher, in June 2014. Photograph: Gareth Chaney/Collins


Broadcaster and former minister Ivan Yates is to resign from his media commitments and is to leave Ireland for a second time. He has denied that the move was prompted by his family’s legal battle with AIB. 

Mr Yates will depart his role as co-presenter of Newstalk Breakfast on July 1st. He will also step down as host of TV3’s Sunday AM and stop writing a column for the Irish Independent, it is understood.

A statement on behalf of Mr Yates said he had informed Newstalk of his decision to leave in March 2015, more than a year ago. He denied suggestions that he was returning to live in Wales. “It is not true that myself or Deirdre are going to Wales. We are taking a year’s sabbatical. Our plans after that are unclear at this point,” it said.
AIB pursued his wife for monies arising from guarantees she signed on loans used to expand the Celtic Bookmakers chain, which was run by Mr Yates and collapsed in 2011.
The High Court ruled in February that AIB was entitled to a judgment of €1.6 million against Ms Yates. The bank demanded the repayment from Ms Yates, a primary school teacher, in June 2014.

Mr Yates previously moved to Swansea in Wales without his wife in 2012 in a case of so-called bankruptcy tourism.
He was declared bankrupt by a Welsh court in August 2012, qualifying for Britain’s more relaxed bankruptcy laws.

He emerged from bankruptcy in August 2013 and returned to Ireland where he resumed his role on Newstalk Breakfast that September. The show now has 171,000 listeners, making it the station’s most popular show.

Newstalk said it wanted to wish Mr Yates “the very best” and thank him for his contribution to the station.
Laura Slattery

Wednesday, April 6, 2016

You don’t have to go to Panama to find those avoiding duty to pay tax

 You don’t have to go to Panama to find those avoiding duty to pay tax



A security guard sits outside the Mossack Fonseca law firm in Panama City last Sunday.

THERE is not a lot of difference between the carry-on revealed in the Panama Papers and what passes for business-as-usual in Irish politics.
No, I am not referring to the shrouded shenanigans of a political elite. I am thinking of the political choices we routinely make.
It seems, that a lot of what was being facilitated by the firm of Mossack Fonseca may have been barely legal.

All the choices we make, probably are too.
The scale and complexity of what is revealed in Panama is astounding, but not surprising. If the details are eye-watering and the facts bring home what was suspected, it doesn’t diminish the scale and complexity of what’s involved.
Such scale is the privilege of an elite alone. There is likely wholescale kleptocracy involved as authoritarian regimes put resources beyond reach in preparation for the day when those lucky enough to get out, leave in a hurry.
The image of that last helicopter taking off from the roof of the US embassy in Saigon comes to mind, or the shah’s last flight out of Tehran.
Those flights ultimately brought their passengers to safety and, in the shah’s case, to the comfort of vast wealth he had stashed abroad. Others who used the services of the Panama law firm were possibly involved in blatant illegality, and money laundering illegal income from sight.
Are ordinary people involved in that sort of thing? Hardly. But if the scale and complexity is totally different, some of the moral equivalence comes uncomfortably close. It is very likely for example that a lot of the activity detailed in these leaked documents, was barely legal and possibly above board. Whether it is moral, is another matter.
Underlying public outrage is anger fuelled by the fact that some, but only some, can put their money beyond reach while the rest remained trapped in the tax net. There is the humiliation in being lumped in with the chumps who are taken for a ride.


Thousands of Icelanders protested outside parliament

There is too a righteous anger that special needs children go without necessary resources in schools or homeless families are piled into hotel rooms for months, even years. Yet a privileged few cruise at an altitude above taxpaying.
It is genuinely outrageous, but not as entirely different as we would wish to believe.
What is as outrageous, so much so it can be barely countenanced in the public conversation, is that on issue after issue swathes of us routinely make essentially the same moral choices as the rich and powerful.
It not new, either. We have in Ireland, a remote and previously not prosperous island, a rich tradition, if I can call it that, of the overseas account. A reverse of the immigrant’s remittance which kept so many alive, the non-resident account repaid the compliment in kind.
Butchers, bakers, and builders piled in, facilitated by local bank managers, in the day not long ago when relationship banking extended to ordinary punters.
I recall that Milltown Malbay and Roscrea, neither known for their cosmopolitan character, were particularly active centres for global banking.
It is odd that during our recent and magnificent commemoration of the Rising, scant mention was made of the fact the largest number of combatants around Dublin’s O’Connell St were neither rebels nor British soldiers, but looters.
No monument has ever been erected to them either.


Prime Minister Sigmundur David Gunnlaugsson is stepping down

Our own choices eerily mimic those of the assorted clients of Mossack Fonseca. Reducing property tax by up to the maximum 15% allowed became a blood sport across most of the country.
Only the Greens abstained entirely; and Labour, in a typical fashion that mixed moral superiority with mealy-mouthedness, would only commit the venial sin of supporting half the allowed reduction.
Otherwise, left, right, and centre piled in. Feck the homeless who relied on the local authority services funded by the charge. Forget too a central lesson of the economic crash which was that we had narrowed the tax base too far.

No this is what we demanded and what we got. We didn’t require the services of a Panama company, we just gave it to them in the neck, on the door-step. Water charges are a continuum of avoidance of the same responsibility.
It’s about a view that ultimately it is all for somebody else to pay. We offload responsibility.
For those whose activity via Panama was legal, as distinct from moral, our equivalence is much greater than any difference we might claim.

The debate about abolishing USC in the last election was part of the same conversation. Only the incompetence of the salesmen sent out to make the case saved the day.
Now as the shards of our once modular political system are with difficulty fashioned into a government of some sort, the conversation continues today in the Dáil around themes that are remarkably similar to the ones Mossack Fonseca might have had with many of its clients.
This is how you shelter from responsibility and this is how you can be rewarded in return. It all depends on whether you think scale or essence is more important. If the latter counts, few of us are qualified to pick up the first stone.

Legality is increasingly key to successful tax avoidance. Panama is an isolated outlier now. Next year, an unprecedented transfer of tax information begins, allowing authorities access to previously secret offshore accounts.
Panama is one of just four countires — with Bahrain, Nauru, and Vanuatu — refusing to sign up. Switzerland used to be a mainstay until the US threatened to throttle the cuckoo in the cuckoo clock.

Where once money-laundering could be conducted in the most respectable places, now it’s confined to sweaty dank counties you do not want to be seen in. The essence of course hasn’t changed.
What is required is a solid but preferably complicated legal basis, for tax evasion. It is style not substance that’s changed.
We know that because we are masterful at it. This is not subjective musing but a cold analysis of the choices we freely make. It is continuing in our name today as the Dáil reconvenes and likely fails once more to elect a government.
Those political timelines others worry about do not concern me, but substance does. As a country we need a broad tax base to be more resilient in a downturn. This must include water charges and a property tax.

The other part of that equation is a requirement to robustly withstand an onslaught on the public purse by public servants.
Leaving the blatant illegality of tax evasion aside, what’s is happening via Panama is tax avoidance on a gargantuan, global scale.
The policy choices we require in our name here are petty, almost trivial, in every respect except its essentials.

We are as keen on the avoidance of responsibility in our own personal affairs are we are outraged about others elsewhere.
Gerard Howling

1888 diary reveals how hurlers absconded in New York


More than half the athletes on the 1888 GAA ‘junket’ to the US failed to return to Ireland

More than half the hurlers and athletes who participated in the GAA’s first “junket” to America absconded in New York and failed to return to Ireland.
New information about the famous Gaelic Athletic Association’s “American Invasion Tour” of 1888 has emerged after 128 years in the original diary kept by one of the participants that has come to light.


Pat Davin, a renowned Tipperary athlete from Carrick-on-Suir and brother of Maurice Davin (co-founder and first president of the GAA) – kept the diary during the month-long tour of US cities. The trip was planned to showcase the prowess of Irish athletes and hurlers and to raise funds for a planned revival of the ancient Tailteann Games.
Rare books specialists Fonsie Mealy Auctioneers said Davin’s unpublished diary – written on loose sheets of paper including scraps of American hotel stationery – has been consigned to an auction of historical memorabilia by a family descendant of Davin’s and will go under the hammer in Dublin on April 23rd. It is expected to sell for up to €6,000. Historic document The diary, described as “a document of the first importance in GAA history”, records that the party of hurlers, athletes, officials, a doctor and a priest left Queenstown(now Cobh) aboard the Wisconsin on Sept 16th, 1888, for the nine-day Atlantic crossing.

But, Davin records, when the party boarded the ship City of Rome at New York harbour for the return journey five weeks later, on October 31st, it “sailed away at 2.30 today bearing home the sad remnant of the 53 hurlers and athletes who landed on American soil just five weeks yesterday. Only 24 men returned.”
The men’s decision to stay in America is not surprising given the taste of the New World they had experienced during the tour, as vividly chronicled by Davin.
The absconders may also have dreaded the prospect of the return journey across the ocean given Davin’s description of the outward journey when, due to rough weather, “steerage passengers [were] thrown about the deck like dead dogs, men, women and children in heaps together. The hurlers all as sick as blazes with only a few exceptions”.
Among the other passengers aboard were “Germans, Russians, Swedes and an Australian – besides several Yanks – and a girl named Kennedy from Carrick-on-Suir”.

Banquets
Davin provides descriptions of the exhibition hurling matches played in cities including New York, Boston, Philadelphia, and Lowell (Massachusetts] during the month-long tour. The group were treated like VIPs to parades accompanied by bands, photoshoots and a series of banquets.
They were hosted by various Irish-American emigrant groups and by US officials including a sheriff and New York’s police chief. One of the highlights was “A Grand Reception and Concert” at New York’s Tammany Hall where the entertainment was provided by “Bayne’s 69th Reg’t Band” who played God Save Ireland, The Wearing of the Green and a Virginia Reel (dedicated to the hurlers).

Wicked match
After arriving in America, Davin noted that the first of the hurling exhibition matches took place in New York on Saturday Sept 30th, 1888: “First exhibition of hurling on the Manhattan Grounds – about 2,000 people present. Exhibition very good. Wicked match – about 12 hurleys broken”.
Among other highlights in the diary were one dated New York, September 28th: “Hurlers all went to a dance at Gaelic Society in the evening . . . There were over 50 young ladies, very plain-looking ones too – God be with ould Carrick [-on-Suir] and the sky over it . . . the dancing was kept up till 3 in the morning . . . Irish jigs, reels & doubles were freely indulged in . . . many of the ladies were very good at dancing (step-dancing). Their proficiency at this amusement was enough to make one overlook their shortcomings in the matter of good looks.”
Another entry for Lowell [Massachusetts] on October 8th, 1888, noted this was “a city as large as Dublin . . . escorted to Polo grounds by band . . . exhibited in a few athletic events and a hurling match won by the ‘Yellow Bellies’ . . . Fair crowd . . . 150 dollars taken. Day bitterly cold many of the lads complained very much of it . . . the goals were almost frozen . . .

“In evening were given a banquet by the Clan-na- Gael society of the place. It was a dry affair no drink except water being visible, though over a score of toasts were proposed – It seems intoxicating liquor of all kinds is forbidden to be sold here or in Lawrence, speech-making very good though the subjects were not interesting to the hurlers . . . to bed at 12-30 swearing legions against attending banquets in future.”

Michael Parsons