Category Archives: Social Engineering

Geopolitics, Social Engineering, Surveillance

How Facebook Became Tool for Censorship and Goldmine for US Intel Services

February 4, 2024 Geopolitics101 Leave a comment

Sunday is the 20th anniversary of Facebook’s* launch. In twenty years, the company has grown into a major tool for manipulation, social engineering and control by the deep state, big business and Western intel agencies. Sputnik reached out to an insider-turned whistleblower for info on the architecture of Facebook’s censorship industrial complex.

Formally launched on February 4, 2004, Mark Zuckerberg’s future empire started out as a modest “directory of information for college students,” with Zuckerberg and several of his Harvard classmates assembling the initial platform in about two weeks, and the company taking just four short years to surpass rival Myspace to become the world’s number one social media platform. Twenty years since its founding, Facebook’s parent company Meta has become a tech giant, with over three billion active monthly users on its flagship service, and a market value of over $1 trillion.

As the 20th anniversary of the company’s founding approached, legacy media began to publish a series of gushing, glowing and wistful reports on Facebook’s past, good times and memories created and shared online, and its ambitious, science fiction-inspired plans for the future, including the creation of artificial general intelligence.

But beneath the surface of these ebullient, heartwarming stories is a darker story of manipulation and social programming, censorship and shameless attempts at narrative control by Western governments, major corporations, and intelligence services.

As Americans, Europeans and others around the world signed up, logged on and voluntarily offered up private information that companies and intel agencies would have paid a fortune to get their hands on just a few short de

cades ago, powerful forces quickly realized the importance of collecting and engineering this new form of online human interaction.

“It is clear that intelligence agencies throughout the world, not only the US, can use Facebook to their advantage,” Ryan Hartwig, Facebook contractor-turned whistleblower and co-author of ‘Behind the Mask of Facebook: A Whistleblower’s Shocking Story of Big Tech Bias and Censorship,’ told Sputnik in an interview.

“The government launders their censorship through various NGOs and institutions on behalf of the US government,” Hartwig said, pointing, for example, to a 2021 report by the Stanford Internet Observatory entitled “Combating Information Manipulation: A Playbook for Elections and Beyond,” which plainly outlines tools the company uses to “remove the spread of malign information” from social media.

Excerpt from Stanford’s Internet Observatory Cyber Policy Center on tools Facebook has at its disposal to censor content.

Self-Appointed Ministry of Truth

In his book, coauthored with attorney Kent Heckenlively, Hartwig documents how, while working as a content moderator for Facebook in the 2010s, he had witnessed the platform’s disturbing transformation after the 2016 US elections into a tool for systematically suppressing conservative viewpoints while elevating liberal ones, and cracking down on some forms of suspected hate speech while amplifying others.

Of course, conservatives aren’t the only ones targeted by the social media giant’s censorship leviathan, with non-liberal left groups, critics of the US military-industrial complex, Big Pharma, Big Tech and other elite forces which run America and much of the world also falling victim. Documented instances of censorship by Facebook include the scrubbing of criticism of US and European immigration policy, climate policies, vaccines and vaccine mandates, criticisms of Facebook itself, and the vagaries of US foreign policy, with posts on these issues occasionally deleted outright, but more often hidden or deranked without users being informed using the platform’s complex, non-open source algorithm.

Internal Facebook list of ‘Dangerous Individuals and Organizations’ whose speech can be censored on company platforms based on their affiliation. © Photo : The Intercept / Facebook

In 2022, Facebook rolled out a special carve-out of exceptions to its anti-hate speech rules to allow users to make explicitly Russophobic posts, issue death threats against Russian officials, use dehumanizing language to refer to Russian troops, and even offer praise for the neo-Nazi Azov** Regiment, despite the social media giant’s ban on content featuring Nazi and neo-Nazi ideology.

“Facebook manipulates public opinion by suppressing unpopular opinions, or allowing newsworthy exceptions for the people they like,” Hartwig explained, noting this extends not just to big name issues, but even extremely minute details bordering on psychopathy.

“For example, they made a specific rule to protect Greta Thunberg from being attacked or called ‘Gretarded’,” the former content moderator recalled, referring to the WEF-promoted climate activist. “Normally, public figures, even young individuals like Greta are allowed to be called retarded. Facebook made an exception to protect her,” Hartwig said.

Image provided by Ryan Hartwig, Facebook contractor-turned whistleblower, showing a company directive instructing content moderators to “remove instances of attacks aimed at Greta Thunberg.”

“This is truly 5th dimensional warfare and by utilizing Facebook, spy agencies can influence public opinion much more easily than ever before,” the whistleblower believes.

Election Manipulation Tool

In 2020, concerned over what he saw as blatant interference in the upcoming US federal elections, Hartwig contacted Project Veritas with hidden camera footage and other information documenting Facebook’s skewed content moderation directives, revealing exactly how posts related to one candidate and his supporters could be removed or manipulated, in direct violation of the company’s policy on protecting political speech.

Hartwig’s observations have been corroborated by other whistleblowers and information leaks throughout the past decade. In 2018, for example, it was revealed that UK-based political consulting firm Cambridge Analytica engaged in the harvesting of tens of millions of Facebook profiles in 2014 to later target them with personalized political ads, including during the 2016 US presidential campaign. Subsequent reports consequently reported that the company engaged in similar harvesting and vote manipulation operations in nations across the globe, from Kenya and Nigeria to Argentina, Venezuela, India, the UK and the Czech Republic.

In a bombshell interview with Joe Rogan in 2022, Mark Zuckerberg explicitly admitted that Facebook had suppressed the biggest news story of the 2020 election cycle – a New York Post article published on the eve of the November vote based on damning files in Hunter Biden’s laptop containing evidence of a pay-to-play corruption scheme by the Biden family. Facebook was ordered to censor the story by the FBI, Zuckerberg said.

“Basically the background here is the FBI I think basically came to us, some folks on our team and was like hey, just so you know, you should be on high alert, there was – we thought that there was a lot of Russian propaganda in the 2016 election, we have it on notice that basically there’s about to be some kind of dump that’s similar to that. So just be vigilant,” Zuckerberg recalled. “If something is reported to us as potentially misinformation, important misinformation, we also [have a] third-party fact-checking program because we don’t want to be deciding what’s true and false. And for the I think it was five or seven days when it was basically being determined whether it was false, the distribution on Facebook was decreased…basically the ranking and newsfeed was a little bit less, so fewer people saw it than would have otherwise.”

BREAKING: Mark Zuckerberg tells Joe Rogan that Facebook algorithmically censored the Hunter Biden laptop story for 7 days based on a general request from the FBI to restrict election misinformation. pic.twitter.com/llTA7IqGa1
— Minds💡 (@minds) August 25, 2022

Similarly blatant practices have been seen elsewhere, with Hartwig pointing to one particularly “egregious example” used against Venezuela, where “there was a call to arms to help defend Nicolas Maduro and Facebook deleted that post because it was [deemed] a ‘call to violence’. Nicolas Maduro was the sitting president and Facebook didn’t allow people to use social media to defend their own country.”

Screenshot by Ryan Hartwig of directive to Facebook content moderators telling them to delete a video from a Maduro ally calling on Venezuelans to “defend the revolution with arms.” © Photo : Courtesy of Ryan Hartwig

Handy Coup-Plotting Assistant

Along with election manipulation, Facebook and other social media resources have long been seen by intelligence services as an ideal tool for fomenting social unrest or even overthrowing governments. Learning from the experiences of the 2011 Arab Spring violence, spy agencies quickly realized the potential of the new technology for advancing their nations’ geopolitical objectives abroad. In 2013, it was a Facebook post by a liberal Ukrainian television journalist-turned activist angered by the Yanukovych government’s decision to scrap Kiev’s plans to sign an association agreement with the EU which ended up triggering the Euromaidan unrest, culminating in the February 2014 overthrow of Ukraine’s democratically elected government.

Western intelligence services tried to repeat the process in Iran in late 2022, when violent protests sparked by the death of a young Iranian woman under suspicious circumstances were commandeered by an Iranian-American US-based Voice of America employee and suspected CIA asset who used Facebook, Twitter and Instagram* to organize and radicalize demonstrators to overthrow the government.

Down the Rabbit Hole of Physiological Manipulation

Facebook’s attempts to control and manipulate go beyond censorship and election interference. In 2012, the company carried out a secret mood manipulation experiment targeting nearly 700,000 users and using their news feeds to alter their emotional states. The project, whose existence was only revealed in 2014 after the publication of a scientific article in the Proceedings of the National Academy of Sciences, found that by tweaking users’ news feeds, Facebook could influence the content they would post, lead them to post more negative replies and status messages, and more. The controversial study ultimately found “that emotional states can be transferred to others via emotional contagion, leading people to experience the same emotions without their awareness.”

That was more than a decade ago. Today, with the company incorporating machine learning and other tools on an industrial scale, it can only be imagined what kind of ‘experiments’ Facebook may have in store, especially as Meta continues to dabble with augmented reality technology designed to ensnare users even more deeply online.

Ilya Tsukanov is a Moscow-based correspondent specializing in Eastern European, US and Middle Eastern politics, Cold War history, energy security and military affairs. Member of the Sputnik team since the site’s inception in 2014. Opposed to censorship of all kinds.

Deep State, Mainstream Media, Social Engineering

#TwitterFiles | New Twitter Bombshell

January 5, 2023 Geopolitics101 Leave a comment

Files reveal how the specter of Moscow’s supposed underhand ways was used to subjugate the platform to the US Democratic Party.

In a pair of blockbuster #TwitterFiles threads, this week, journalist Matt Taibbi has blown open, even wider, the media giant’s concerning collusion with the US national security state. The former Rolling Stone writer exposed how political pressure from the US Democratic Party very effectively forced the company to endorse the lie that its platform was extensively weaponized by Russia, with hugely significant consequences.

Find the “Russian trace” at any cost

The first, boldly titled ‘How Twitter Let the Intelligence Community In’, documents how in August 2017, despite dubious allegations that Russian bots and trolls were responsible for the election of Donald Trump in the mainstream media reaching fever pitch, Twitter’s hierarchy knew its platform wasn’t riddled with malign Kremlin-directed actors.

In internal emails, the company’s senior executives and communications professionals almost mocked the idea that it was overrun with Russian bots. They could neither detect “a big correlation” in account activity related to the November 2016 election, nor any “larger patterns” at all. They forecast potentially taking action against less than 25 users. As such, it was decided to simply ignore approaches from the media on the issue.

The next month, Twitter informed the Senate it had suspended 22 possible Russian accounts, and 179 others with “possible links” to those accounts. Senator Mark Warner, a ranking Democrat on the Intelligence Committee, immediately held a high-profile press conference to denounce the social network’s response as “frankly inadequate on every level.”

Such pressure, combined with bitter, twice-failed presidential candidate Hillary Clinton declaring, “It’s time for Twitter to stop dragging its heels and live up to the fact that its platform is being used as a tool for cyber-warfare,” forced the social network to set up a dedicated “Russia task force” to investigate the issue. It did – and found nothing. “No evidence of a coordinated approach” between accounts flagged as potentially Kremlin-run was identified, despite an “exhaustive” internal investigation.

Hillary Clinton © Chip Somodevilla / Getty Images

In all, after manually scouring through the posts of thousands of accounts flagged as “suspicious” by external actors, they found that just 32 were questionable, 17 of which were connected with Russia, and only two had spent any money on advertising – one being RT, which was specifically given favorable marketing offers by Twitter before the election.

Again, senior Democratic party officials were enraged by these results. What followed was a flurry of unhinged, sensationalist news stories, claiming Twitter was either covering up the Kremlin’s dirty work for sinister reasons, either by lying about the issue, or actively deleting reams of incriminating data to cover its own tracks.

“Were Twitter a contractor for the FSB … they could not have built a more effective disinformation platform,” professor Thomas Rid, an adviser to the Intelligence Committee, remarked to Politico at the time.

Surrender to politics

None of this was true. But it provided the Democrats with ammunition to threaten regulations on Twitter’s political advertising, which could’ve been extremely costly to the company’s revenue. This sent senior staffers into a panic, which was only intensified by the timely leak of a database of thousands of alleged Russian bots and trolls to major media outlets by the Intelligence Committee. This resulted in a flood of aggressive queries from journalists.

Realizing the pressure would only keep mounting – as media outlets and politicians had decided this absolutely was a major scandal, irrespective of the available evidence, and were going to keep pushing until they got what they wanted – Twitter kowtowed, and publicly declared bots and trolls were in fact a massive issue on its platform, and it would be proactive in rooting out such activity in future.

Internally, Twitter executives settled on an informal, secret policy for dealing with rogue actors on the network. Publicly, they would stick to the line content was removed and users were banned “at our sole discretion,” while privately they would “off-board” anything and everything “identified by the US intelligence community as a state-sponsored entity conducting cyber-operations,” without argument.

Twitter had actively invited US spies to run its moderation process, without anyone knowing, and on the explicit internal understanding they would not be leaving. That sinister penetration widened substantially when Covid-19 arrived in the US, and again the bogeyman of Kremlin “disinformation” was the battering ram.

In February 2020, US State Department intelligence wing the Global Engagement Center published a report, “Russian Disinformation Apparatus Taking Advantage of Coronavirus Concerns.” It claimed that a vast network of bots and trolls controlled by Moscow and amplified by China and Iran was pumping endless propaganda “describing the Coronavirus as an engineered bioweapon.”

The report’s criteria for determining if an account was a bot or troll was, unbelievably, whether the user followed “two or more” Chinese diplomats. The 250,000-strong network included Western government officials, and media outlets, including CNN. Such a weak evidentiary foundation did not deter mainstream journalists publishing countless stories endorsing the report’s findings.

Twitter staff, likely due to past experience at this point, could see what the Center was up to – namely, attempting to “insert themselves” into the “content moderation club” through which Google, Twitter and Facebook were controlled by the FBI, DHS, and other US government agencies. Executives at these tech giants were unanimously opposed to the Center’s inclusion, not least due to its “mandate for offensive” information operations to “promote American interests.”

Hell under the heel

After years of bending over backwards to placate the Democratic establishment, Twitter attempted to push back. Over a series of internal emails, various executives spelled out deep concerns about allowing the Center any influence over the platform, and initially rejected an FBI request for the organization to be included in the moderation club’s regular ‘industry call’. It was felt the Center’s involvement would pose “major risks … especially as the election heats up.”

Eventually, the FBI offered a compromise – the CIA, NSA, and Global Engagement Center would be able to simply listen to the industry calls, but wouldn’t be active participants. Twitter relented, a decision its higher-ups seem to have quickly come to regret. Before long, the social network was being bombarded with requests to censor content and ban users from every US government body under the sun.

This extended to US government officials asking for users to be banned because they didn’t personally like an individual in question. Notorious House Intelligence Committee chief Adam Schiff, a Democrat, once asked Twitter to ban journalist Paul Sperry, due to his critical reporting on the Committee’s work. After initially refusing, Sperry was later suspended.

Almost every other request was granted immediately, even those from the Global Engagement Center. This included demands to ban independent media outlets falsely claimed to be “GRU-controlled” and linked “to the Russian government.” In one email, a former CIA staffer remarked that Twitter would soon be unable to deny a single request. “Our window on that is closing,” they said.

In the weeks before the 2020 Presidential election, Twitter was flooded with demands from so many officials, departments and agencies, they were confused and overworked. If action wasn’t taken promptly, followup emails quickly appeared, asking if action had yet been taken, and if not, why, and when it would be.

In one request, an FBI official even apologized “in advance for your workload.” Once, a no doubt exhausted senior attorney at the social network complained internally, “my inbox is really f***ed up at this point.”

Previous #TwitterFiles threads exposed how the FBI paid the social network $3 million to process its requests. Based on the most recent disclosures, it’s clear the company and its staff were significantly underpaid for their efforts. Future releases promise yet further bombshell revelations, but the long-hidden truths divulged so far should prompt every Twitter user to reflect how the site for many years in secret operated as an effective wing of the US intelligence – and may well still do so.

Felix Livshitz for Russia Today.

Social Engineering, White House

A False Flag is Biden’s Only Chance to Win

September 5, 2020 Geopolitics101 1 Comment

The Black Revolution is in full swing in the U.S. Over the next sixty days we will be treated to the greatest political show on Earth as the Democrats and their handlers in The Davos Crowd pursue the biggest lie since Climate Change.

The events of 2020 are lining up for a climax to this story that ends with only one outcome, a contested election which fuels a coup attempt after the election results come in on November 3^rd.

And because of this now obvious plan, setting up a false flag around the election is the most likely means to produce election results close enough to support this course of action.

I’m not the only one thinking in these terms at this point. Joaquin Flores, writing for Fort Russ, mused similarly last week. As the polls shift towards Donald Trump and the Democrats run around concocting fairy tales after allowing Joe Biden out of his gimp cellar long enough for people to see how far he has fallen mentally, I’m nearly convinced this is likely.

Color revolutions unfold in predictable stages. The first stage is destroying the local economy. Usually this means the Federal Reserve and the U.S. Treasury pull back on available dollars through tight monetary policy and sanctions to create mass unemployment in the target nation.

Then foment violence from the youth who are disproportionately affected by the economic destruction after NGO’s lay the ideological foundation for revolution. Use the most convenient pretext. In the U.S. it means stoking racism and hatred of ‘the rich.’

Pick a color under which to unite them, in this case black and blame the leader for every single bad thing that happens, which is usually the work of agent provocateurs who amplify the organic frustration into targeted attacks which are then amped up by the media into a news story.

If the leader is stupid he acts like any garden-variety paranoid dictator by clamping down on the violence making him easy prey for the media to brand him a dictator.

Then bringing a mob to the capital is easy, because now there are too many people to be effectively policed and the potential for violence to boil the whole thing into a coup is very real.

All of this works if the oligarchs who run the political system of the target country are on board with this. In the U.S., it’s obvious from the response from all major corporations they approve this message. Note how it failed in Belarus recently for lack of this corporate sponsorship.

Looking at the way the Democrats have positioned themselves for this election it is clear that they are preparing the field for this outcome after election day.

They used the lockdowns to create an army of ready-made protestors with nothing else to do and little hope for the future.

They structured all aid to the middle class the run out during the height of the election campaign while blocking any further assistance even though the Treasury Dept. raised nearly $2 trillion to deploy as support and stimulus.

The media endlessly stoked fear over COVID-19 to push as many voters to consider mailing their votes in (or create the illusion that is what will happen) to delay certification of the election on election night.

But to his credit, President Trump hasn’t acted the way he was supposed to. He has governed this chaos exactly the way a majority of Americans want him to, as a Federalist. Even though he has the authority to do so, he’s refrained from sending Federal troops into rioting cities, laying bare just how much local authorities are aiding the violence.

He didn’t institute national lockdowns and draconian restrictions due to COVID-19, instead offering aid and allowing the data to eventually vindicate him to the point where even the CDC is now backtracking on how dangerous the virus actually is.

And his opponents in New York, for example, now look like out-of-touch, lying grandma murderers.

Eventually crisis fatigue sets in, people adjust to the new circumstances and the worst parts of their fear abates. And even if they don’t look at the new data, they realize enough costs have been born and it’s time to move on with our lives.

That’s what is now showing up in the polling data, even though it is still highly suspect. And this puts Trump in the driver’s seat for the election on November 3^rd. As of today, the election looks like it is his to lose.

And yet the Democrats insist that the election will not be resolved on election day. In fact, it’s obvious they are prepping the narrative that Trump will only appear to win on election night but, in fact, the torrent of mail-in ballots will change the outcome of the election over the next few days.

Of course, this would fly in the face of decades of electoral statistics where the outcome of the election is almost certainly decided by the time 25% of the votes have been counted and a run-rate to completion can be calculated.

A report from Axios outlines what we can expect.

A top Democratic data and analytics firm told “Axios on HBO” it’s highly likely that President Trump will appear to have won — potentially in a landslide — on election night, even if he ultimately loses when all the votes are counted.

Why this matters: Way more Democrats will vote by mail than Republicans, due to fears of the coronavirus, and it will take days if not weeks to tally these. This means Trump, thanks to Republicans doing almost all of their voting in person, could hold big electoral college and popular vote leads on election night….
… By the numbers: Under one of the group’s modeling scenarios, Trump could hold a projected lead of 408-130 electoral votes on election night, if only 15% of the vote by mail (VBM) ballots had been counted.
And that’s what concerns me most. Because if all of this prep work has failed and Trump clearly wins an electoral college victory, but they are planning to harvest votes for days afterwards, how do they shift the dynamic back in Biden’s favor between now and then to keep the election close enough for them to steal?

More violence is how.

We are two weeks away from White House Siege beginning on September 17^th. Organized by Adbusters, which is a front for George Soros’ partner in crime, David Brock and Media Matters For America, White House Siege is a planned 50-day protest in Lafayette Square in Washington D.C., ostensibly to protest President Trump ‘stealing the election.’

This is a ready-made recipe for a Maidan-like orgy of violence in the nation’s capital to create a false flag event which reflects badly on Trump. Think snipers on rooftops shooting both protestors and cops similar to what happened on the Maidan square in Kiev in 2014.

D.C. is not a state. It’s not governed by the same rules as the states, where the Governors are in charge.

Trump can, and in my mind should, as a matter of strategy, take control over D.C. to keep to possibility of violence to a minimum. D.C. mayor Muriel Bowser is trying to walk back her support of the protests after the violence after the Republican National Convention by urging U.S. Attorneys in D.C. to charge the people the police arrest.

This is Bowser trying to publicly keep Trump from doing exactly what I just said he should do. Because with cities looted and burned, with Democrat politicians losing the respect of their constituencies they have no political legs left to stand on.

Governor Andrew Cuomo in New York said in a press conference Trump better bring an army if he plans to set foot in his state. This is tantamount to sedition, for which a case can be made by nearly every major Democrat for statements made in the past six months.

“He better have an army if he thinks he’s gonna walk down the street in New York. New Yorkers don’t want to have anything to do with him,” the Democrat said, all but threatening the commander-in-chief.

Meanwhile Cuomo is now the target of a Dept. of Justice investigation into his handling of the COVID-19 crisis while Trump withholds Federal funds from the state, which prompted Cuomo’s bravado.

Between this and Speaker Nancy Pelosi calling Republicans “domestic enemies of the state” is the kind of language you don’t come back from. The Democrats and the U.S. Deep State are all in on removing Trump from office by any means necessary.

I don’t think the worst of the violence is behind us after Kenosha. I think the worst is still in front of us.

Tom Luongo is an independent political and economic analyst based in North Florida, USA.

Corporatocracy / Fascism, Social Engineering

7 Charts That Show How The Rich Hide Their Cash

October 15, 2017 Geopolitics101 8 Comments

Who avoids the most tax and what does that mean for inequality?
These were the questions asked by two National Bureau of Economic Research working papers submitted this month (Tax Evasion and Inequality and Who Owns the Wealth in Tax Havens?). Both papers are available publicly here.
The research was based on a variety of data, including ICIJ’s Swiss Leaks and Panama Papers investigations, and prove for interesting reading. Here are seven highlights from the reports.

The ultra-rich avoid the most tax

The ultra-rich, people whose net worth is more than $45 million, are ten times more likely to evade taxes than the average citizen, according to the research.
That means the ultra-rich have worked out how to avoid paying about 30 percent of their personal income and wealth taxes.
And it probably doesn’t stop there, with the authors suggesting that “evasion among the wealthy may be even higher” because their research was based on Scandinavian countries where social trust is high, corruption low and respect for the rule of law strong.

The research also found that offshore wealth increases the “top 0.1 percent wealth share from 8 percent to 10 percent” when looking at Norway specifically. And for top 0.01 percent “taking tax evasion into account increases their wealth by a third.”

The ultra-rich are more likely to use offshore accounts

The likelihood of Scandinavians in the bottom 99 per cent of wealth share hiding their assets in HSBC accounts was “negligible,” according to research based on ICIJ’s Swiss Leaks.
But the probability rises to 1 percent among the richest 0.01 percent.
This chart shows the probability of owning an unreported HSBC account by wealth groups. (The first group [P90-P95] represents households worth less than $900,000 and the last the top 0.01 percent who are worth $44.5 million.)
“The gradient is notable too: top 0.01 percent households are 13 times more likely to hide assets at HSBC than households in the bottom half of the top 1 percent,” they wrote.

Hardly anyone except the ultra-rich use offshore accounts

The use of offshore accounts “steeply rises with wealth,” according to research based on ICIJ’s Panama Papers.
This charts shows the probability of owning a Mossack Fonseca offshore shell company significantly increased for the top 0.01 percent of Norway and Sweden’s population.
“The use of tax havens appears more concentrated in the Panama Papers than in the HSBC leak,” the authors wrote.

The researchers also suggested one reason very few households outside the 0.01 percent in the Panama Papers used shell companies to conceal wealth is because it is a “more sophisticated” strategy than owning offshore bank accounts.
“Both techniques are often combined, but the wealthiest tax evaders might be more likely to combine offshore accounts with shell companies, when less wealthy tax evaders may be relatively more likely to own offshore accounts directly in their own names.”

Tax havens hold 10 percent of global GDP

In the second study, the authors analyzed the global amount of wealth in tax havens.
“We find that while about 10 percent of world GDP is held in tax havens globally, this average masks a great deal of heterogeneity.”
For example, Russia (60 percent), Europe (15 percent) and other nations hold a significant chunk of their GDP offshore, whereas Scandinavian countries own just a few percent of GDP.

Offshore wealth is shifting from Switzerland to Asia

The research found the size of this wealth was “not easily explained by tax or institutional factors” but instead correlated more closely with a country’s proximity to Switzerland, the presence of natural resources and political/economic instability.
However, the times might be changing, with the research also discovering wealth was growing in tax havens based in Asia – and mainly in Hong Kong – with offshore accounts held in Switzerland declining since the 2008 financial crisis.
The authors predicted offshore assets in Hong Kong have grown six-fold between 2007 and 2015 with the country now ranked second behind Switzerland for tax havens.

Countries with more offshore wealth also use more tax havens

The next chart shows the number of unique owners of shell companies created by Mossack Fonseca in each country before 2006 and active in 2007, using Panama Papers data.
“There are strong similarities between the amount of offshore wealth we estimate and the use of tax havens as revealed by the Panama Papers,” the authors said.
Russia is one such country with a total of 2071 unique shells. The authors also highlighted that China is over-represented in the data given estimates of how much Chinese wealth is offshore. They suggest this could be because estimates of China’s offshore wealth are low, or that Chinese use shell companies for purposes other than concealing wealth.

Offshore wealth can substantially increase inequality

So what does that all mean for equality?
Including offshore assets generally increased the 0.01 percent’s wealth share substantially (even in the law abiding Scandinavian countries).
The effect in some countries is much worse than others. In the United Kingdom, Spain and France offshores assets accounted for between 30 to 40 percent of the 0.01 percent’s wealth. In Scandinavia, however, their share of wealth only increases by about 1 percent.

Read more about the impact from ICIJ’s investigations, and find out how you can support ICIJ’s work