Restored: Marc Harris case, seen in 2003

way back

Marc Harris case grows in several directions

by Eric Jackson, largely from other media

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 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 longtime 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- seasoned 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.


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