According to
press reports from Nicaragua, the United States and Panama, and
further information that has come to The Panama News from other
sources, the scandal and investigation of US-born
“offshore
asset protection guru” Marc Harris, now being held without
bail in Miami awaiting trial on money laundering charges, is
expanding in several directions. Some of the leads could raise
sticky questions for politicians and public servants in several
countries.
On June 10
Harris was arrested in Nicaragua, to which he had fled from
Panama in 2002 after his reputation had been thoroughly trashed
by a variety of unflattering press reports, adverse regulatory
rulings had restricted his ability to run financial services
businesses here, and Panama had become a popular tourist
destination for people who said that Harris had defrauded them
and came here looking for justice. Although at least a dozen
complaints of fraud or theft by conversion had been lodged
against Harris by the time he left Panama, Attorney General
José Antonio Sossa and his subordinates in the Public
Ministry never acted on the complaints to the extent of
restricting his ability to legally flee the country. Harris was
in the process of rebuilding a financial network and seeking
Nicaraguan citizenship when, under pressure from the United
States government, Managua authorities seized him and summarily
expelled him from the country, putting him on a US Department
of
Homeland Security plane that took him to Miami, where he was
formally arrested.
Harris is
charged with 13 counts related to laundering the proceeds of
illegal trafficking in freon, a refrigerant that has been
banned
because of the damage it does to the planet’s ozone layer.
However, it’s the Internal Revenue Service, rather than
the
Environmental Protection Agency (which would be concerned with
environmental crimes) or the FBI (which would have jurisdiction
over fraud and racketeering such as that alleged by clients who
say Harris stole their money), that’s leading the
investigation. The IRS has put out the call to Harris’s
victims to contact the lead investigator, Arthur Vandesande, at
the email address arthur.vandesande@ci.irs.gov or by telephone
at (305) 982-5235.
It’s not
clear how much cooperation the IRS has received. One of the
main
reasons why people did business with Harris in the first place
was to hide money from the IRS. The piling on of charges
against
Harris, which could get him 55 years in prison even though the
two principals in the underlying freon smuggling case were
sentenced to 18 and 30 months respectively, indicates that US
authorities may be pressuring him to turn in his clients so
that
they could be prosecuted for tax offenses.
According long-
time Harris observer and critic David Marchant, however, Harris
isn’t talking. Marchant, who publishes Offshore Alert and
the KYC News website, was once unsuccessfully sued for libel by
companies owned by Harris. A US federal judge’s findings
in
that case more than anything served to destroy Harris’s
reputation in the financial world.
However, if
Harris isn’t talking, some of the records he left behind
in
Managua might be. On July 15 Nicaraguan authorities raided the
house from which Harris ran his businesses, seizing massive
amounts of paper and electronic documents. Leaks and
declarations from Nicaraguan law enforcement sources have made
their way into the Nicaraguan and Panamanian press, and include
a number of interesting, and in some cases politically
explosive, allegations.
For
examples:
• The
Nicaraguan newspaper La Prensa suggests that Harris engaged in
computer hacking. From several sources close to the Harris
operation, The Panama News has long known that Harris was an
information junkie with a powerful sense of recall and
extensive
clipping files. Now it seems that he had found ways to obtain
confidential information on political figures, journalists,
civil servants and business leaders in several countries, some
of this data having apparently been hacked from computer
databases.
• The
Nicaraguan newspaper El Nuevo Diario reports that files seized
in Managua indicate that Harris paid millions of dollars to
relatives of former Latin American presidents, including
several
former presidents of Panama. These politicians were not named.
(The Panama News has heard allegations from a source who used
to
be close to Harris, which we can not confirm, of Harris making
large cash payoffs to top figures in the Moscoso administration
as well.)
• Both El
Nuevo Diario and Nicaragua’s La Prensa report that
prosecutors in Managua discovered records pertaining to
worldwide transactions by which millions of dollars were cycled
through a series of at least seven dummy Nicaraguan
corporations. It would appear that these records will serve to
identify at least some of Harris’s clients, and if shared
with the US Internal Revenue Service may become the basis for
new tax prosecutions.
• The
Nicaraguan La Prensa cites the head of the Managua
government’s anti-money laundering Financial Analysis Unit
as the source of allegations that Harris was a major player on
Nicaragua’s minor stock exchange, using the Bolsa there to
rapidly move money in and out of companies whose shares are
traded there. The implications of this business activity
suggest
a scandal that could end up linking leading Nicaraguan business
figures to Harris’s activities.
• The
Nicaraguan La Prensa also cites a Managua prosecutor to the
effect that two employees of Nicaragua’s Electoral
Tribunal
are the subject of a criminal investigation for allegedly
illegally issuing Harris’s US-born partner, Larry
Gandolfi,
a Nicaraguan cedula.
• The
Nicaraguan La Prensa also reports a Customs investigation about
how Harris managed to move his computer network and databases
into the country without any record of their importation.
Meanwhile,
Harris is fighting back over the Internet, albeit quixotically.
On a website called “Temple of the Screaming
Electron”
a long and poorly written article under the byline of one Paul
Collin blasts the “Marc M. Harris Executive
Kidnapping,” weaves a strange conspiracy theory out of
loose innuendoes and appeals for funds for the “Free Marc
Harris Legal Defense Fund Committee.” (Send US Postal
Money
Orders only to Marc M. Harris-Bosma, prisoner number 69874-004
at the Miami Federal Detention Center, and he will
“remember you in his prayers.”)
Besides the
expected venom reserved for Marchant, Collin’s article
mentions, on the faintest scintilla of evidence, retired US
Army
Major General John Singlaub as one of the people who was out to
get Harris. The conspiracy theory starts with the allegation
that in the days before his arrest someone was disrupting
Harris’s computer system from without. It went on as
follows: “The Harris operation was typical of Private
Military Companies (PMCs) that work hand-in-hand with
government
officials by creating headaches for their targets in disrupting
computer communications and more. Circulating amongst more well-
seasonded risk engineers and members of the law enforcement
community, two groups became the topic of their discussions.
Perhaps, working in concert the names of both Miami, Florida-
based Kroll Associates, Inc. came up and another group that was
formerly known as the ‘Free Militia,’ The Jedburgh
Group, Inc. also out of Florida and elsewhere. A cursory view
at
‘The Jeds,’ which they like to call themselves, many
paramilitary operations have been born from the Alexandria,
Virginia home of former Major General John K. Singlaub who is
the Chairman of The Jeds and a principal of several more groups
in that netwrok. None of the members of The Jedburgh Group,
E.R.A.S.E. of North Carolina, Ltd., Carver Holdings, Ltd.
(Virginia, Washington D.C. and California) or, Kroll cared to
comment.” (Sic.)
The Singlaub
allegation may be noteworthy because of Harris’s
documented
and alleged US political history and connections. Some of the
claims that were made, but which The Panama News could
previously only trace back to Harris himself, have since been
independently verified, while other interesting but as-yet
unconfirmed stories have come to our attention, and these might
tie in with Singlaub and the old Iran-Contra network in which
the retired major general played a part.
It has been
confirmed, for example, that Marc Harris was indeed the Florida
manager of former US Army General, National Security Advisor
and
White House Chief of Staff Alexander Haig’s 1988
presidential campaign.
It is also
alleged by a source that was close to Harris that Larry
Gandolfi
worked for the CIA’s mercenary airline, Air America, in
Southeast Asia during the time of conflicts in Vietnam, Laos
and
Cambodia. Air America became infamous for smuggling opium for
Laotian warlords allied with the United States and later
changed
its name to Evergreen Air of Alaska. (That latter company
currently works in Panama, running Plan Colombia logistical
support flights out of Tocumen.) In any case, if Gandolfi
indeed
has US secret operations in his past, that would make the
Singlaub allegation more interesting.
That same
source
has it, also without confirmation, that Marc Harris learned to
launder money as a part of the Iran-Contra network in the
1980s.
That might explain the tie to Haig and suggest some more direct
past nexus with Singlaub.
The Haig
connection and the Harris camp’s apparent preoccupation
with Singlaub could be merely the stuff of which Marc Harris
weaves diversionary ruses. But if there is more to it than just
that, then Marc Harris’s alleged corruption of governments
may not be limited to Latin America. In which case the Bush
administration’s decision to limit the Harris case to a
tax
investigation would beg another round of
questions.
Also in this
section:
Business & Economy Briefs
Lawyers ponder OECD
assault on tax, ship registry competition
Marc Harris investigation
grows in several directions
