What’s Next for Bernie’s Grassroots Army ? [feedly]

What's Next for Bernie's  Grassroots Army ?
https://talkingunion.wordpress.com/2016/06/05/whats-next-for-bernies-grassroots-army/

What's Next for Bernie Sanders's Grassroots Army?
The campaign may be coming to an end, but its activists plan to keep the revolution alive.
By D.D. Guttenplan

The truth is, nobody knows how this story ends. We know what was supposed to happen: Bernie Sanders was a sideshow act, a relic to entertain the kids. After warming up the crowds and falling amusingly on his face in the primaries, Sanders was supposed to disappear, leaving the audience happy to settle down for four—or eight—more years of grown-up government under the Clintons. Instead, Sanders waged a campaign that stunned both Hillary Clinton and the Democratic Party establishment. Raising in excess of $200 million through more than 7.4 million contributions, he proved that candidates no longer need rich donors or corporate money to compete.

Winning in state after state, Sanders refused to triangulate, instead expanding the American political universe to the left, putting the vision of a social democracy whose fruits have long been taken for granted in much of Europe—state-funded childcare, paid family leave, universal healthcare, free tuition at public colleges and universities—back on the American agenda. On foreign policy, too, he shattered decades-long taboos, denouncing the legacy of "regime change" from Chile to Iran, and even daring to defy the ban on criticizing Israel.

By the time the last primary votes are cast in California, Sanders will have taken his political revolution further than anyone—including Sanders himself—ever imagined possible. And if he's had little impact on Clinton's hawkish stance abroad, on the home front Sanders can claim victories in opposing the Keystone XL pipeline and the Trans-Pacific Partnership, and in supporting a $15 minimum wage and even, as of a few weeks ago, Medicaid expansion. Bernie Sanders has won the battle of ideas, hands down.

But he isn't going to be president. So if Bernie's Army isn't marching to the White House, where is it going? Over the past two weeks, I've spoken with dozens of Sanders supporters, staffers, and volunteers, in states from Vermont to Florida, California to the Carolinas. I heard both anger and acceptance, but very little agreement—although in all of those interviews, I didn't find a single person who said they were going to work just as hard for Hillary Clinton. The closest I came was Charles Chamberlain, executive director of Democracy for America, the group founded by Howard Dean after his candidacy imploded in 2004. Although Dean, who is now a superdelegate, backed Clinton, DFA members voted overwhelmingly to endorse Sanders.

"Of the 88 percent that chose Bernie Sanders, 98 percent of them told us to endorse the nominee," says Chamberlain, who also believes that Sanders should "continue to lead the political revolution. If he needs to set up his own organization to do that, then that's a smart move."

So far, though, Sanders has said nothing about his plans. Although all of the activists I spoke with would welcome his involvement, whatever happens after the primaries, four main groups have already begun to form:

• The Occupy Democrats, who see the Democratic Party as ripe for a takeover.

• Brand New Congress, an effort launched last month to elect a Congress in 2018 that will "enact Bernie's program" regardless of who's in the White House.

• The Working Families Party, which in many states provided the ground troops for the Sanders campaign and is now benefiting from—and struggling to digest—a huge influx of new recruits.

• The People's Summit, an alliance of National Nurses United and People for Bernie—the latter a coalition of activists and online groups like Vets for Bernie and Jews for Bernie—that has called a "gathering of the tribes" in Chicago on June 17–19 and represents more of the "movement" elements of the Sanders campaign.

None of these people want Sanders to drop out before the convention or to run with one hand tied behind his back. But the groups do differ—on strategy, tactics, and most of all on their degree of distance from the Democratic Party. Like many divisions on the left, you can also read that as a contest between pessimism of the intellect and optimism of the will.

* * *

Larry Cohen has long been a paladin in the party of optimism. The former president of the Communications Workers of America founded Labor for Bernie last July and is a close adviser to Sanders and frequent surrogate on the campaign trail. He predicts that "the campaign will be there in force" at the Democratic National Convention in Philadelphia this July, but he also expects the party to unify behind the nominee. "This isn't about being in opposition" to Hillary Clinton or anybody else, he said. "It's about what we stand for."

At the convention, Cohen wants to see changes in the rules regarding superdelegates. "They need to be eliminated, or at least prevented from voting on nominations." He also wants changes that limit the role of big money in the nominating process, such as a pledge from all Democratic candidates to reject absolutely the involvement of super PACs in the primaries. In short, Cohen adds, "the party must move toward populism and away from control by the financial elite."

Cohen also thinks a progressive platform is worth fighting for—an effort bolstered by a recent deal between the campaigns and the party that allowed Sanders to name five out of 15 members of the platform committee. (Sanders chose African-American scholar Cornel West, climate-change activist Bill McKibben, Representative Keith Ellison, Arab American Institute president James Zogby, and Native-American activist Deborah Parker.)

"Platform planks don't just exist on the platform," Cohen points out. "They can send a clear message to Obama and Congress: 'No TPP'—we can stop that slipping through in a lame-duck session. 'We need a living wage of $15 an hour.'"

And though the nomination may be beyond Sanders's grasp, Cohen thinks the Vermont senator is entitled to a considerable say over the direction of the party. "In some states, the Sanders forces already are the dominant structure, and we need to claim it. That's probably going to be true for at least 20 states." Instead of acting as ballot fodder while the party takes its cue from corporate donors, progressives "need to act like the majority. Because we are the majority," Cohen adds—especially if you factor in voters who resisted Sanders's candidacy but respond positively to his message.

Chris Covert, who ran the Sanders campaign in South Carolina, points to the appointment of Christale Spain, the campaign's state political director, as executive director of the state party as an example of the way "Bernie-crats" are already making an impact. "Our people are very organized, very determined," says Covert. "We're going to see a lot of young people running for office."

* * *

Stacey Hopkins started pushing back
against the claim that Sanders couldn't connect with black voters last summer. A mainstay of Atlanta for Bernie Sanders, Hopkins tells me: "I refuse to sit back and watch this incredible energy go dormant once again." Her focus, however, isn't on Philadelphia this July, but on 2018. "As far as the Democratic Party is concerned, I had an epiphany: It's their party, and they can do what they want to. But I don't have to attend."

She's decided her activism can be put to better use working for Brand New Congress. "When we talk about parties—especially when we talk about African Americans—there's a machine that will protect their candidates." Doing battle with that machine in Georgia—where Clinton pulled over 70 percent of the vote, and 85 percent of the black vote—gave Hopkins a respect for the machine's strength. But it also showed her a way in: through the widening gap between the interests of the party's corporate funders and its base among working people and the poor.

"We are seeing the rift that the Democratic Party has denied for so long crack wide open," Hopkins says. "At the moment, we don't really have a choice. Their strategy now is 'Vote for us—because look at the other side!' People are getting tired of being told, 'We'll get to you in a minute.'"

Zack Exley
Zack Exley (Lane Hartwell / CC BY-SA 3.0)

Brand New Congress aims to give people a choice—in every district in the country. "Let's run one campaign to replace Congress all at once (except those already on board) that whips up the same enthusiasm, volunteerism and money as Bernie's presidential campaign," says the group's website. Zack Exley, who was the Wikimedia Foundation's chief revenue officer before he started traveling the country to lead "Bernie Barnstorms" that trained thousands of volunteers for the Sanders campaign, is one of the group's founders. They're targeting the 2018 midterms because, Exley told me, "it takes a while to build the infrastructure to win elections—especially against entrenched incumbents." The plan is to "recruit a full slate of candidates from people who are not politicians. People who never considered running for office. The majority will be women. A disproportionate number will be people of color. These will be people who are really good at what they do—nurses, engineers, teachers. People who have chances to sell out—but didn't."

That prompts lots of questions, beginning with how Brand New Congress can possibly win with progressive candidates in deep-red districts. Exley says the strategy is still up for discussion. And while the group may have set a hugely ambitious goal, I've met too many accomplished Sanders organizers in too many states who told me their only contact with campaign headquarters was "a visit from this guy Zack Exley" to dismiss the effort out of hand.

Ramon Ryan, a former organizer for the American Federation of State, County and Municipal Employees who's been working for Sanders in Nashville, said the campaign taught him "how effective we can be organizing ourselves in our own communities." Tennessee was another tough environment for Sanders supporters, and after the primary "a lot of us have been struggling to figure out where we fit in," Ryan says. For him, Brand New Congress—which aims to build on the Sanders network, letting local campaigns run their own show while giving them access to a unified national campaign and national online fund-raising—offers an alternative to surrender or a return to marginality. "We've seen how the nature of presidential campaigns has changed from Dean to Obama to Sanders," Ryan tells me. "We want to take this model and apply it to Congress. I love the simplicity of being able to use one campaign to effect so much change."

* * *

When I last spoke with Billie
McFadden, she was "on the road for Bernie," changing a tire somewhere in California. Before that she was a volunteer shepherding the Sanders delegation at the now-infamous Nevada Democratic Convention, where Sanders supporters became enraged after some of their delegation were excluded and their motions dismissed by Nevada Democratic chairwoman Roberta Lange, who later became the target of sexist abuse. "I'm still confident that this man will be our next president," McFadden told me in mid-May. But that hasn't prevented her and others in the Nevada Sanders campaign from also starting a branch of the Working Families Party.

"We're not abandoning the Democratic Party," says Shirley Schludecker, another Las Vegas Sanderista who's joined the WFP. I ask Shirley's partner, Tazo Schafer, whether the unruly state convention would keep San-
ders voters home on Election Day. "Most people are not going to give up on the possible for the ideal," Schafer replies. "But we will want to hold people accountable."

That yearning for accountability is a key part of the WFP's appeal. "We've attracted a lot of new members in the fallout from the Nevada convention," Schafer says. The idea is to create a vehicle—one both inside and outside the Democratic Party—to wrest power from the hands of the party establishment. In New York, the WFP has been both helped and hindered by its dependence on fusion laws that give it a line on the ballot, but also make its members ineligible to vote in the Democratic primary. Nevada doesn't allow fusion voting, so the WFP is piloting a new strategy aimed at building a large membership base. Without a ballot line, the Nevada WFP functions more like a faction—or a caucus—than a party.

Why build a separate organization? The danger with an inside-only strategy, say WFP leaders, is that without a distinct identity, progressives will get shut out of power—or coopted. The WFP's national director, Dan Cantor, once told me: "You can't occupy the Democratic Party. The Democratic Party will end by occupying you." Or as Waleed Shahid, a talented young organizer I met on the Sanders campaign in Philadelphia, put it: "The biggest lesson to be learned from the Tea Party's playbook is that they don't work for the Republicans ; they make the Republicans work for them."

Bill Lipton, the WFP's state director in New York, warns "there's a lot of danger now for the left in a Clinton candidacy." Reflecting on the New York primary, which saw most white progressives backing Sanders while Clinton took a heavy majority of the black vote, Lipton urges: "Let's not rush into something—and replicate that racial fault line." He's also doubtful about Brand New Congress's reliance on social media. "We've been working on this for almost 20 years," he says. "You need a party—rooted in ideology, with an organic connection to a social base, and with a desire over the long term to systematically recruit people to run for office to contest state power."

* * *

Charles Lenchner
Charles Lenchner

Charles Lenchner is also wary of quick fixes. Back in 2013, he helped to start Ready for Warren, less as a vehicle for the Massachusetts senator and more as "a left power-building project," he says. When Sanders announced, Lenchner cofounded People for Bernie. He argues that "the digital era has created a new basis for politics."

"We used to need political parties to organize ideas—and they, in turn, would sponsor newspapers as a way of spreading their ideas. Now there are alternative methods to make a candidate viable, whether that's through leveraging reality-TV celebrity, as Trump did, or through social media," Lenchner says. "People for Bernie has had 2.5 billion interactions—shares, posts, comments, Facebook likes. There's something out there. My prediction is it will continue."

In a sense, the People's Summit is a holding action. Not because the people involved are waiting for a signal from on high—"Bernie is not really an organization builder," Lenchner notes—but because there is no shortcut to the hard work of building a genuinely diverse movement. "You have to understand that the early adopters for any effort are going to be a relatively privileged cohort," Lenchner says. "That's who can put in the time. So you have to always ask yourself, 'Who are the leaders we want to have? And how is that different from who is in the room right now?'"

Leslie Lee III
Leslie Lee III (YouTube)

"We like Bernie," said Leslie Lee III, the writer who, fed up with way "people used identity politics to keep the left and minorities apart," came up with the Twitter hashtag #BernieMadeMeWhite. "But we don't like like Bernie… we respect him. And we do understand the limitations of Bernie as a politician." For Lee and other millennial activists, the Sanders campaign was a vehicle, not a destination.

Lenchner says he has no idea whether a dozen different groups will show up in Chicago—or a thousand. "The question is: How many will still exist in a year or two? For now our role is to support these groups wherever they are. Whatever position they take on Hillary—or whatever."

* * *

Sanders himself has pledged to support the Democratic nominee—and though he may not do so as fast or as fulsomely as Clinton's supporters would like, he has never shown any desire to play the spoiler. Especially when the alternative is Donald Trump, a candidate he describes as "a pathological liar" who "has promoted hatred and division against Latinos, Muslims, women, and people with disabilities." How quickly, and enthusiastically, Sanders fulfills his pledge will indeed be a test of leadership—for both him and Clinton.

Back in February, I asked Amos Miers, an Occupy Tampa veteran organizing in St. Petersburg, what would happen if Sanders didn't win the nomination. "A third of our people will vote for Hillary, no problem," he said. "Another third will never vote for her. And a third will do whatever Bernie says to do."

"The folks I know will vote Green," says Hugh Espey, executive director of Iowa Citizens for Community Improvement. "I'm sick and tired of the lesser of two evils. I'm a registered Democrat, but they screwed us too many times." He's going to the People's Summit.At the time, I thought his estimate of the Bernie-or-Busters was far too high. But listen to Wendy Sejour, a former secretary of the Miami-Dade Democratic Party still on the board of the Democratic Progressive Caucus of Florida: "I have always believed in the values of the Democratic Party. FDR is one of my heroes. But what's happening now breaks my heart. I am not—not—
supporting Hillary Clinton in any shape or form." Sejour, too, has signed up for Brand New Congress.

Not even the specter of Donald Trump scares David Fredrick, who cofounded Grassroots for Sanders back in 2013. "We didn't decide to support Bernie because we thought that Bernie was going to come in and save the day," he says. "The ultimate goal is to get people away from Bernie Sanders and into going out and doing things. If Trump becomes president, I see a lot of anger; if Hillary wins, I see a lot of people sliding back to apathy." And while Fredrick, a furniture designer from San Jose, might possibly be described as a "bro," that label hardly applies to Espey, who is too old, or to Sejour, an African-American woman.

Nor is it so easy to dismiss Daniela Perdoma, the tech entrepreneur who created FeeltheBern.org. "If the DNC are smart, they'll realize the future is in the Sanders-
Warren wing," she says. "But I'm not sure they are, frankly. Though I am hopeful that at the convention they'll finally [recognize] that no matter who the candidate is, the party's platform has to look more like Bernie's than Hillary's in order to win the White House."

* * *

This doesn't have to all end in tragedy. But it might. Because even if America could survive a Trump presidency—a doubtful proposition—we simply can't afford to throw away the energy, the idealism, the thirst for justice that the Sanders campaign has revealed and revived. In the long run, that probably matters even more than who sits in the Oval Office.

For the Democrats, the road to reconciliation is not obscure. Sanders is right to rail at our rigged system—but if the Democrats win in November thanks in part to his ideas and his voters, he'll be positioned to do something about it, fighting in the Senate alongside Elizabeth Warren and still the leader of a political movement that was always about more than winning the presidency.

If by some miracle he ends up with more votes and more pledged delegates than Clinton, she'll need to step aside gracefully. More likely that will be Sanders's role. Clinton can—and should—do a lot to make that easier, by remembering what it felt like when she came up short in 2008 and dropping the campaign to pre-position Sanders supporters for blame if she loses in November. Heartbreak doesn't have to be fatal.

"If he doesn't want to spend the fall saying nice things about Hillary, he can do issue events instead," says Steve Cobble, cofounder of Progressive Democrats of America. "Besides, he doesn't have to say Hillary is a goddess to point out that Donald Trump is a fraud."

Sanders could also make good on his slogan "Not Me. US." by supporting the wave of Berniecrats that his campaign has inspired to run for office—people like Dimitri Cherny, a former CEO turned truck driver running against Mark Sanford in South Carolina, or Jamie Raskin (who's also joined Brand New Congress) in Maryland. Indeed, the Sanders campaign has already endorsed and raised money for Pramila Jayapal in Washington, Lucy Flores in Nevada, and Zephyr Teachout in New York, as well as for a slate of eight statehouse candidates from South Carolina to California. (Though a welcome move, Sanders's recent endorsement of Tim Canova in Florida had a strong element of payback for DNC chair Debbie Wasserman Schultz's latest scolding.)

What Sanders himself decides to do with the power he has acquired is enormously important. Ultimately, though, what his people—Bernie's Army—do with their power is even more important. And that might take some time to figure out.

"Movements are messy," Larry Cohen points out. "That's a good thing about movements: People have to try different things to figure out what works."

"We have to be connected and stay in touch with each other," says Leslie Lee III. Like everyone else I interviewed, Lee has no intention of giving up the fight—or the power he's discovered these past few months. "Liberals were afraid of using their power. We have to get over that." But he, too, understands that real change takes time—and is seldom smooth.

"Everybody might have to stay in their lanes for a while, fight their fights," he says. "And it does not come together like a Voltron at the end. It's not going to come together neatly."

http://www.thenation.com/article/whats-next-for-bernie-sanderss-grassroots-army/
Reposted from Labor for Bernie

 -- via my feedly newsfeed

Panama Papers Show How Rich United States Clients Hid Millions Abroad [feedly]

Panama Papers Show How Rich United States Clients Hid Millions Abroad
http://www.nytimes.com/2016/06/06/us/panama-papers.html

Over the years, William R. Ponsoldt had earned tens of millions of dollars building a string of successful companies. He had renovated apartment buildings in the New York City area. Bred Arabian horses. Run a yacht club in the Bahamas, a rock quarry in Michigan, an auto-parts company in Canada, even a multibillion-dollar hedge fund.

Now, as he neared retirement, Mr. Ponsoldt, of Jensen Beach, Fla., had a special request for Mossack Fonseca, a Panama-based law firm well placed in the world of offshore finance: How could he confidentially shift his money into overseas bank accounts and use them to buy real estate and move funds to his children?

"He is the manager of one of the richest hedge funds in the world," a lawyer at Mossack Fonseca wrote when the firm was introduced to Mr. Ponsoldt in 2004. "Primary objective is to maintain the utmost confidentiality and ideally to open bank accounts without disclosing his name as a private person."

In summary, the firm explained: "He needs asset protection schemes, which we are trying to sell him."

Thus began a relationship that would last at least through 2015 as Mossack Fonseca managed eight shell companies and a foundation on the family's behalf, moving at least $134 million through seven banks in six countries — little of which could be traced directly to Mr. Ponsoldt or his children.

These transactions and others like them for a stable of wealthy clients from the United States are outlined in extraordinary detail in the trove of internal Mossack Fonseca documents known as the Panama Papers. The materials were obtained by the German newspaper Süddeutsche Zeitung and theInternational Consortium of Investigative Journalists, and have now been shared with The New York Times.

How Mossack Fonseca Helped Clients Skirt Or Break U.S. Tax Laws With Offshore Accounts

How the Panama-based law firm set up offshore corporations, foundations and bank accounts for wealthy clients.

In recent weeks, the papers' revelations about Mossack Fonseca's international clientele have shaken the financial world. The Times's examination of the files found that Mossack Fonseca also had at least 2,400 United States-based clients over the past decade, and set up at least 2,800 companies on their behalf in the British Virgin Islands, Panama, the Seychelles and other jurisdictions that specialize in helping hide wealth.

Many of these transactions were legal; there are legitimate reasons to create offshore accounts, particularly when setting up a business overseas or buying real estate in a foreign country.

But the documents — confidential emails, copies of passports, ledgers of bank transactions and even the various code names used to refer to clients — show that the firm did much more than simply create offshore shell companies and accounts. For many of its American clients, Mossack Fonseca offered a how-to guide of sorts on skirting or evading United States tax and financial disclosure laws.

If the compliance department at one foreign bank contacted by Mossack Fonseca on behalf of its clients started to ask too many questions about who owned the account, the firm simply turned to other, less inquisitive banks.These included locating an individual from a "tax-convenient" jurisdiction to be the straw man owner of an offshore account, concealing the true American owner, or encouraging one client it knew was a United States resident to use his foreign passports to open accounts offshore, again to avoid scrutiny from regulators, the documents show.

And even though the law firm said publicly that it would not work with clients convicted of crimes or whose financial activities raised "red flags," several individuals in the United States with criminal records were able to turn to Mossack Fonseca to open new companies offshore, the documents show.

Federal law allows United States citizens to transfer money overseas, but these foreign holdings must be declared to the Treasury Department, and any taxes on capital gains, interest or dividends must be paid — just as if the money had been invested domestically. Federal officials estimate that the government loses between $40 billion and $70 billion a year in unpaid taxes on offshore holdings.

Experts in federal tax law, money laundering and offshore accounts — asked by The Times to examine certain documents or at least to identify legal issues raised by the money management techniques that Mossack Fonseca advocated — said the law firm at times had come up with creative, but apparently legal, strategies to save clients money. A common tactic: selling real estate as a shift of corporate assets, instead of as a piece of property subject to transfer taxes.

While the experts were reluctant to declare that the law firm or its clients had broken any laws given that no charges have been filed, they said they were surprised at how explicitly Mossack Fonseca had offered advice that appeared carefully crafted to help its clients evade United States tax laws.

Photo

"The more correspondence that you have between a U.S. person and a bank or law firm discussing tax issues and efforts at concealment, the stronger the government will see it as a potential case worth prosecuting," said Kevin M. Downing, the lead Justice Department prosecutor in the UBS offshore banking and tax evasion cases, now at the Washington law firm Miller & Chevalier.

Mossack Fonseca has said repeatedly in recent weeks that its lawyers and staff members have honored international tax and banking laws, and that it is the victim in this case of an illegal hacking attack.

But presented with summaries of several cases by The Times, Mossack Fonseca did not try to explain its actions. It simply said that its standards had improved in recent years, as rules internationally had tightened.

"Our significantly expanded compliance office today not only evaluates new client candidates, but also existing accounts, and especially those that were established prior to the new international regulatory regime coming into effect," a spokeswoman said in a written statement, referring to a 2010 law passed by Congress. "It wasn't always this way."

The firm's American client list does not appear to include the sort of high-profile political figures who have emerged from reporting on the Panama Papers in many other countries around the world.

But the services offered by Mossack Fonseca, with 500 employees in more than 30 offices worldwide, were in high demand by the rich and famous in the United States.

In 2001, Sanford I. Weill, then the chief of Citigroup, set up an offshore account called April Fool for his yacht. Alfonso Soriano, a former Major League Baseball All-Star player with the Yankees and other teams, had a Panamanian corporation created for him. John E. Akridge III, a leading real estate developer in Washington, flew to Panama to meet with Mossack Fonseca lawyers, who in 2011 created the Cyclops Family Foundation in Panama, along with a related bank account.

A spokesman for Mr. Weill said the accounts were used for legitimate purposes, and "appropriate disclosures were filed." Mr. Akridge and Mr. Soriano did not respond to repeated requests for comment.

Document: William Ponsoldt and Mossack Fonseca

For its best customers, like the Ponsoldts, who declined repeated requests to discuss their work with Mossack Fonseca, the firm's ministrations went far beyond legal services and banking. It acted as a concierge for "all details regarding your properties and worldwide business affairs," for example, helping the family confidentially purchase (and dispose of) luxury condominiums at resort destinations and even arranging repairs for a car stored at a vacation home and hiring a contractor to fix broken poolside tiles, the documents show.

"You deserve the best Mr. Ponsoldt, and we will try to help you the most we can," the firm explained in an email.

The firm's American clients often expressed disbelief at how much they could lighten their tax burden by using the techniques advocated by Mossack Fonseca.

"At hearing that he can make nearly $8 million per year just on tax savings," a client from Pennsylvania "was now wide awaken," a Mossack Fonseca staff member wrote. "I could even detect sweats coming down from his forehead and his cheeks were beginning to blush with crimson excitement. Noticing his interest, I went in for the kill."

Black Hole for Assets

In 2006, using a secret email account set up by Mossack Fonseca so his correspondence would not be traced by the authorities, a businessman from Washington State asked a common question among the firm's potential American clients:

"How does a US citizen legally get funds to Panama without the knowledge of the US government and how can those funds be profitably invested without the US government knowing about them?"

The reply came from Ramsés Owens, then a partner who helped run the firm's trust division, offering clients "effective solutions to enhance your privacy, protect your wealth." Mr. Owens laid out a basic menu of services: a package deal setting up an offshore company in what he promised would be a relatively cheap and quick transaction.

"We have right now a special offer by which we create a Private Foundation/company combination for a flat fee of US$4,500.00," Mr. Owens said. "It includes Charter Documents, Regulations, nominee officers and directors, bank account and management of funds, provision of authorized signatories, neutral phone and fax numbers and mail forwarding services for both the private foundation and its underlying company."

With this legal structure in place, Mr. Owens went on to explain, any money placed in these accounts would essentially go into a black hole.

"If we create a Private Foundation and the underlying company for you, the funds become completely private (US cannot know) as soon as the funds are deposited under a bank account or investment account in the name of the underlying company or the private foundation," he wrote.

The benefits of such an arrangement were numerous, he added, detailing how the client could effectively evade United States tax laws while protecting himself — and the firm.

"You can take the money in cash, you can do a bad investment; you can purchase something and not receive anything (an expensive piano, an expensive software)," Mr. Owens wrote. "You can receive an invoice from Panama or any other location and that would justify some of the outgoing moneys. You can also declare everything to the tax administration.

"Any decision you make, please be aware that you will have to sign a 'disclaimer' to us. We can only 'suggest,' but the final decision to take the money out of the country is fully yours, and under the professional opinion of someone in USA."

This was the sort of menu sold to the Ponsoldt family — in a very big way.

Photo

William R. Ponsoldt in 1986. Mossack Fonseca managed eight shell companies and a foundation on his family's behalf. Creditvia Arabian Horse World

William Ponsoldt, now 74, had come to Mossack Fonseca with hundreds of millions of dollars in assets, the firm's staff estimated in "due diligence" memos that also laid out how he had become so wealthy.

"He has started off in the 70ties purchasing run-down apartment buildings in New York, in order to refurbish and sell them off," noted one memo from 2007, shortly after the firm had started to handle the family's investment accounts. "Having done this for a while he spread out to various businesses and his CV is the typical profile of a serial entrepreneur." The memo went on to list nine businesses he had created, taken over or helped run, including Glas Aire Industries Group, an automotive parts supplier; Zeus Energy Resources, a Texas oil-drilling company; Regency Affiliates, which owned a Michigan rock mine; and Pegasus Ranch, one of the country's largest Arabian-horse-breeding operations.

Few American clients, the records show, demanded and received as much attention as Mr. Ponsoldt and two of his children, Tracey and Christopher, each of whom was assigned a secret email account and a code name — "father," "daughter" and "son." Mossack Fonseca's "V.I.P. service" consisted of everything from securing lunch reservations at a popular French bistro in Panama City to pressing the government to make an exception and grant Mr. Ponsoldt and his wife Panamanian passports.

Over the years, tens of millions of dollars flowed into a series of shell companies — Escutcheon Investment, with its money at the Banca Privadain the Pyrenees principality of Andorra; Probity Investments, with deposits at Andbanc Grup Agricol, also in Andorra; Royal Pacific Investments, with deposits at Balboa Securities in Panama; and Valdano Investments Group, with deposits at Berenberg Bank in Switzerland, among others, the bank records and other documents show.

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An email from ​Christopher​ Ponsoldt​, code-named "son,"​ to a Mossack Fonseca lawyer. Employees of the Panama law firm were named as officers of shell companies created to conceal any links between the assets and the Ponsoldt family.

Mossack Fonseca employees were named as the companies' officers, avoiding whenever possible any link to the Ponsoldt family. The firm even asked a Hong Kong branch of Barclays, the international bank, to override its rules for proof of the so-called beneficial owners of the accounts.

"This is a very special client of ours," a Mossack Fonseca lawyer wrote, conceding that the firm had intentionally created such a maze of companies so it "leaves us in the position to legally argue that our client is NOT the owner of the structure." It was not clear if the bank complied.

The most important part of this elaborate structure was an entity called the Edenstone Foundation.

Panama has long specialized in creating unusual foundations like Edenstone that are neither subject to Panamanian taxes nor required to support charitable causes. They do, however, allow the investors who "contribute" their financing to shield themselves from legal claims in the United States.

In secret meetings documented in the Panama Papers, Mossack Fonseca named the Ponsoldt family as the beneficiary, through the foundation, of the money placed in bank accounts around the world.

Among the early requests: confidentially transfer $800,000 from "father" to "son," meaning moving the money to yet another offshore account — called LBFH of Panama — which Mossack Fonseca had set up on Christopher Ponsoldt's behalf with bank accounts in Andorra and Panama.

One motivation for Christopher Ponsoldt to stash money overseas in accounts not traceable to him: He owned a dirt racetrack in Florida, and he was concerned racers "may get hurt and might then try to sue him for damages," the law firm notes on his case file said.

"Please notify me when the money is deposited in American dollars,"Christopher Ponsoldt wrote to the law firm a few months after his father's accounts had been set up and $800,000 was in the process of being transferred to another offshore account Christopher Ponsoldt controlled via the firm. "I want to have U.S. dollars, Australian Dollars, Indian Real's and some kind of China index, to be determined."

Mossack Fonseca agreed to "prepare a service agreement" between two of the legal entities it managed for the family, to make it look as if there were an actual expenditure of money for a business purpose.

"After receiving the money, we will explain to them the nature of this transaction without giving details of your name," the firm explained to William Ponsoldt, regarding the Caribbean bank through which the money was moving to his son. "Please let us know if you agree with this and if you will instruct the relevant parties to execute the wire transfer."

"This is one way in which people with a lot of money step away from being average," Mr. Blum said after reviewing the documents.Federal law generally limits such tax-free transfers between family members to $14,000 a year. But for this transfer, described as a "pre-inheritance distribution," the documents give no indication that any United States gift taxes were paid, as would most likely have been required, said Jack Blum, a lawyer and expert in international tax evasion who served for more than a decade as a consultant to the Internal Revenue Service.

Christopher Ponsoldt declined to comment. "I am sorry, I can't help you," he said before hanging up.

Tracey Ponsoldt Powers, William Ponsoldt's daughter, approached the firm in October 2008 with an urgent request for help in secretly moving some of her family's money to Panama and then into gold coins. She feared political developments at home.

"I feel VERY unsettled with this election and how the media is censoring information and spinning the American Public to vote Obama," she wrote to Mr. Owens at Mossack Fonseca. "It is so obvious to me, that they are setting us up with a Socialist — but most people can't see it happening before their eyes! It's like propaganda that is brainwashing Americans to forget the Principles of Hard Work, Ingenuity, Risk and Boundless Success!"

Mr. Owens suggested shifting the money into a "charity" account, controlled by the firm on the family's behalf, in increments of less than $100,000, so it would not be detected.

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Tracey Ponsoldt Powers, code-named "daughter," approached Mossack Fonseca in October 2008 because she was concerned about the potential election of Barack Obama as president.​ Around then, William Ponsoldt had the firm move $100,000 to a Swiss account for his daughter.

Separately, that same month, William Ponsoldt moved $100,000 from a company Mossack Fonseca controlled on his behalf into the name of his daughter. This was confirmed in an email from Mossack Fonseca to the code name "daughter." "The USD 100.000 is deposited as call Money with high liquidity at Berenberg Bank Schweiz, Zürich," said the email, which added: "Your Father initiated this process as you know. We will treat you with the same esteem and conditions and service as the family is used to."

The subsequent series of complicated transfers — money from the account would eventually be used by Mossack Fonseca in 2013 at Ms. Powers's request to buy real estate — would be a challenge for American enforcement authorities, Mr. Blum said.

"Simply by constructing all this in such a complex way, they make it extremely hard for enforcement officials to ever have resources to reconstruct what taxes should have been paid," he said. "What this is all about is obscuring the trail."

Ms. Powers did not respond to a series of calls and emails, and then declined to answer questions when reached on a cellphone.

"I have no idea what you are talking about," she said before hanging up.

'Live This Potential Risk'

Across the United States, Mossack Fonseca picked up clients who had similarly urgent and delicate demands.

For more than 30 years as the founder of Boston Capital Ventures, Harald Joachim von der Goltz has built a reputation as a savvy investor in emerging companies.

What few know, however, is that over roughly that same span of time and with the help of Mossack Fonseca, Mr. von der Goltz has also come to command a vast offshore empire: interconnected corporations, foundations and bank accounts with about $70 million in assets, according to internal emails.

Document: Harald Joachim von Der Goltz and Mossack Fonseca

A lawyer for Mr. von der Goltz said the beneficial owner of all of the trusts and accounts is Mr. von der Goltz's 100-year-old mother, who resides in Guatemala. One document also suggests that the tens of millions of dollars in the accounts originally came from businesses operated by Mr. von der Goltz's father.

But numerous other documents prepared by Mossack Fonseca and signed by Mr. von der Goltz list him as the founder, manager and "first beneficiary" of the foundation that controls most of the family's wealth. Mr. von der Goltz also put assets from companies he helped operate into the accounts, documents show.

Most important, Mossack Fonseca registered Mr. von der Goltz as a resident of Guatemala, which tax experts said could help him protect the family money from certain United States tax obligations.

"MF Trust has registered Harald Joachim von der Goltz as a client of Guatemala. However, we know he lives in Miami; and makes his residence for 5 months of the year in Boston," Mr. Owens, the Mossack Fonseca partner, wrote in an email in 2009 to top executives at the firm.

The firm recognized that claiming the Guatemala residency represented a risk, but considered it a risk worth taking, given Mr. von der Goltz's importance to the firm.

"My suggestion: Leave everything as it is with von der Goltz, i.e. stay and live this potential risk, we might prefer to send money orders and cashier's checks, which have a slightly lower risk than bank transfers. It's all well done, customer understands well and accepts it as is," Mr. Owens wrote.

"I agree with your suggestion on my part," responded Ramón Fonseca, one of the firm's founders.

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Money was frequently transferred from several of the offshore accounts to accounts in the United States to fund investments at Mr. von der Goltz's firm, the documents show. A foundation paid for his daughter's education, as well as his granddaughter's high school tuition.

In a 2008 email, Mr. von der Goltz's Boston-based accountant asked executives at Mossack Fonseca to wire money from Mr. von der Goltz's mother, Erika.

"Erika would like to make a gift to Tica of $100,000 for his birthday. She hadn't given him anything," the email said, providing an account for Mr. von der Goltz at Espírito Santo Bank in Miami.

"Ohh, yes, I know ERIKA wants it to be done quickly, we will proceed," Mr. Owens responded before confirming that the money should be moved as requested.

Legal experts consulted by The Times said it was difficult to determine definitively if the arrangements related to Mr. von der Goltz violated United States laws. But they said such moves were commonly used by investors seeking to hide their assets and evade federal taxes.

"There is reason to question if she was really directing that shift of money," Mr. Blum said, referring to Mr. von der Goltz's mother.

"There has never been any illegal activity associated with these companies," the statement said.In a statement, Mr. von der Goltz said the companies were established for legal purposes, and that both he and the companies were compliant with United States tax and reporting requirements.

Other case files examined by The Times show how Mossack Fonseca may have turned a blind eye in the vetting process while helping Kjell Gunnar Finstad, a Texas resident, set up an oil company offshore in 2013.

Mossack Fonseca has long maintained that it will not work for individuals with criminal records or whose conduct raises "red flags" during its due-diligence process. But the firm somehow either missed or overlooked Mr. Finstad's past when it conducted a background search of potential directors for the new offshore oil company, OK Terra Energy, which was run out of Houston but registered in the British Virgin Islands.

Three years earlier, Mr. Finstad, the company's controlling partner and lead investor, had been convicted in Norway for various breaches of securities and accounting laws involving a company called Norex Group. The case was major news in Norway.

The records examined by The Times show that Mossack Fonseca collected a copy of Mr. Finstad's passport, and conducted a basic internet search and a cursory background check. But there is no mention of the fraud case, and no discussion of whether to proceed with setting up the new company, in light of Mr. Finstad's involvement.

Reached at his office in Texas and asked about the Panama Papers, Mr. Finstad said only, "I don't want to talk about that."

For another client, Mossack Fonseca offered a special service for a premium price.

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Marianna Olszewski, the New York City-based author of "Live It, Love It, Earn It: A Woman's Guide to Financial Freedom," wanted to shift $1 million held by HSBC in Guernsey to a new overseas account. The catch? She did not want her name to appear anywhere near the transaction.

Mr. Owens, the Mossack Fonseca lawyer, again offered a solution.

Mossack Fonseca would locate what he called a "natural person nominee" in a "tax-convenient" jurisdiction to stand in for Ms. Olszewski as the owner of the account.

"The Natural Person Trustee is a service which is very sensitive," Mr. Owens wrote. "We need to hire the Natural Person Nominee, pay him, make him sign lots of documents to cover us, make him sign resignations, make him get some proofs evidencing that he has the economic capacity to place such amount of moneys, letters of reference, proof of domicile, etc., etc." The process, he suggested, would cost her at least $17,500.

Ms. Olszewski approved the maneuver — only to see the firm, at one point, accidentally disclose her name to the banks involved.

"Ramses, Please call me ASAP!! This is important!!!!" she wrote to Mr. Owens. "HSBC said someone said marianna olszewski is the principal / beneficary! Who has done this!! I need you to call me immediately and tell them hsbc that was a mistake!!!!!!!!!! This is not good and I asked you NOT to do this! this is why we have this structure."

Mr. Owens sought to calm her down, saying that Mossack Fonseca could tell the bank that the natural person nominee actually controlled the account. "This can be solved," he wrote.

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Ramsés Owens, ​then ​a lawyer with Mossack Fonseca, explained the concept of a "natural person trustee" to Marianna Olszewski in an email.Photo

Ms. Olszewski sent a panicky email to Mr. Owens upon discovering that her name had been disclosed to a​ bank involved in a transfer of her assets.

Mr. Owens did not tell his client the identity of the natural person nominee,saying simply, "We would appoint a UK citizen residing in Panama since 50 years ago, engineer, entrepreneur," as they needed someone who would be expected to have such a large amount of money available to transfer.

Twelve days later, Mr. Owens sent HSBC a copy of a passport for a man named Edmund James Ward.

"Kindly please find hereto attached the due diligence documents of the beneficial owner," said the email sent to HSBC, noting that "the documents duly correct."

The $1 million from Ms. Olszewski was then transferred to the new accounts, with an assurance that she need not worry.

The use of a stand-in to hide the true ownership of an account is one of the remaining illegal ploys favored by Americans today as international banks, under pressure from the United States, demand proof of account ownership, said Jeffrey Neiman, a former federal prosecutor from Miami who specialized in criminal tax offenses, adding that he could not comment directly on this case. "The fact that a law firm was willing to do this legitimizes the process for their clients," he said."If for any reason something happens, please also bear in mind that Mossfon is covered by insurance policies for US$10 Million (per event)," Mr. Owens wrote. "We have never used our insurance policy to cover a 'fraud,' or something like this."

A Firm's Inner Doubts

Many of the client files — like those for Mr. Weill, the banker; Mr. Soriano, the ballplayer; and Mr. Akridge, the developer — contain little information on the purpose of the offshore accounts, or how they were used after they were set up, making it impossible, based on the records available, to assess whether they were used legitimately.

But the experts who reviewed some of the documents related to the Ponsoldts, Mr. von der Goltz and Ms. Olszewski said that the firm itself seemed to realize it was taking risks.

"They were not always sure themselves which side of the line they were on at any given moment," said Ross S. Delston, a former federal banking regulator who now specializes in combating money-laundering efforts. "It is apparent that members of the firm were aware they were treading very close to the line."

In fact, the files contain instances, beginning before the Panama Papers came to light, of Mossack Fonseca lawyers second-guessing their actions. (In recent weeks, the firm has shut down many of its operations in Nevada, as well as British locations in Jersey and the Isle of Man, and is closing the asset-management division that served many of its United States clients.)

Records show that Mossack Fonseca had been paid at least $102,000 over nine years to help Ms. Olszewski handle various transactions.In 2013, Mossack Fonseca advised Ms. Olszewski to seek outside counsel and consider reporting herself to the I.R.S., warning of possible "severe" repercussions if she did not. The warning came in the wake of a Justice Department investigation of the role that certain Swiss banks had played in helping United States citizens evade federal taxes.

Ms. Olszewski took the firm's advice, and belatedly disclosed her accounts to the I.R.S., the documents show. And by 2014, she asked Mossack Fonseca to shut down her accounts and offshore entities, which collectively held at least $1.7 million.

"I'm in complete compliance with all my U.S. tax and reporting requirements," Ms. Olszewski said in an emailed statement when The Times asked about the accounts.

In a second statement, she said she had relied on the advice of legal counsel to establish a trust for her family while living abroad. "I am confident that I have acted properly," she added, "and any insinuation otherwise is false."

Reached by telephone in late May, Mr. Owens, who is no longer with the law firm, said only, "Regretfully, I cannot speak about individual clients or my time at Mossack Fonseca."

Mossack Fonseca sent a series of similar and increasingly dire warnings to the Ponsoldts in 2013 and 2014, telling them that they had to provide a Swiss bank with documentation that they had paid all required United States taxes — or face possible investigation.

"Neither your ex Trustees nor us would like to be involved into any measure the US Department of Justice might try to enforce," the firm wrote. "In this regard, again we strongly urge you to take the necessary steps to avoid any negative consequences for you as well as us."

The records examined by The Times give no indication whether the Ponsoldts complied, and family members would not say when asked.

"I don't know what you are talking about," Christopher Ponsoldt said in a second brief conversation before he again hung up.

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Human activity is dramatically shaping all of Earth's natural systems, producing unprecedented challenges for people and nature. Climate disruption, altered hydrology, and ecosystem degradation re...Read more
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