The major banks and states appear to be preparing for impending crisis, while pretending to the public that the economic situation is improving.
It is interesting that when I first hit on this Forbes article yesterday I had no problem opening it.....and today, the page was inaccessible.
Below you see what has been coming since Obama took office. Since all Obama did was oversee massive movement of money from one place to another to make it look like economic activity was happening while tens of trillions of dollars have been carted out of the US and into off-shore accounts....making the economy starved of cash and stagnant.....China/Europe has been doing the same thing. So, all the Wall Street news about recapitalized banks ready to get on with business is a lie. What is happening is the few families at the top who have the massive wealth are now fighting on how to hide it and/or use it to their benefit while the entire economic system collapses.
REMEMBER, WE NEEDED TO NATIONALIZE THE US BANKS IN 2009 TO DOWNSIZE THEM BY SIMPLY RECOVERING TENS OF TRILLIONS IN CORPORATE FRAUD. EASY PEASY. OBAMA AND NEO-LIBERALS WERE THERE TO MAKE SURE THAT DIDN'T HAPPEN....RATHER, ALL THAT MONEY HAS BEEN MOVED AROUND THE WORLD TO HIDE IT.
China Halts Bank Cash Transfers: Forbes
Sunday, January 26, 2014 15:59
(Before It's News)
According to this breaking story from Forbes.com, China has halted all bank cash transfers as shared in the story below. WHY would China’s central bank ORDER commercial banks to put an end to cash transfers? Is this the next step in the global currency war? Could this lead to WW3 as is now being argued by some? With America already practically ‘owned’ by China and getting more in debt every year, this can’t be a good thing. Video reports on China’s money problems also below.
The People’s Bank of China , the central bank, has just ordered commercial banks to halt cash transfers.
In short, there will be a three-day suspension of domestic renminbi transfers. There will also be a suspension, spanning nine calendar days, of conversions of renminbi to foreign currency.
The specific reason given—“system maintenance” at the central bank—is preposterous. It is not credible that during the highest usage period in the year—the weeklong Lunar New Year holiday beginning January 31—the central bank would schedule an upgrade and shut down cash transfers.
A better explanation is that the country’s banking system is running dry. Yes, there is an increased need for money in the run-up to and during the Lunar New Year holiday, but that is only a small factor. After all, central bank officials knew this spike in demand was coming—it occurs every year at this time—and a core function of central banks is to manage seasonal liquidity fluctuations. Moreover, the holiday has not started yet, and the PBOC, as that institution is known, could have added more liquidity to meet cash needs.
As we see, a US bank crash is coming because all that has happened over these few years is scuffling around of money to prop up the European market and hiding and expanding in a Chinese market all of which having money sucked out of economies.
THIS IS OF COURSE ALL FRAUD AND CORRUPTION THAT YOUR NEO-LIBERAL IS AIDING AND ABETTING BY PASSING LAWS THAT MAKE ONCE ILLEGAL ACTIVITIES NOW LEGAL....OR SO THEY SAY. THE US HAS ANTI-TRUST AND MONOPOLY LAWS THAT ARE SIMPLY BEING IGNORED.
You know I have called for this for three years as US media played the propaganda machine yet again....acting as if something real was being done. There is nothing that can be done to stop this crash.....citizens in Europe will stop the TROIKA sucking of all public wealth and the US citizens are waking to the fact that all their wealth is being sucked up as well in this US Perestroika. Without that sucking of public money the economies will collapse. Not so bad for the few families at the top they say......the plan is to soak the public sector with debt as Rawlings-Blake and O'Malley have done with tons of credit bonds, Wall Street leverage deals, and TIFs, so that when the collapse comes, even more public wealth comes as cities and states default and public property and partnership deals go into the hands of Wall Street and public sector pensions and benefits are dismissed in bankruptcy.
THIS IS THE BAINS CAPITAL GUTTING OF PUBLIC SECTOR WEALTH....SAME THING THAT WAS DONE WITH PRIVATE CORPORATIONS SHEDDING ALL THEIR DEBT AND LABOR CONTRACTS WILL NOW HAPPEN WITH THIS CRASH.
Look at what has happened with HSBC to see the wave of the future in the UK, Europe, and US.....this is the next bank bailout.....it involves simply capturing the people's bank accounts to pay a municipal debt created by mayors and governors across the country all under the guise of 'development and jobs'.
HSBC is simply the British version of Wall Street banks like Bank of America and Citigroup.....that spent these few years expanding all over the world with the free money the FED gave them and now all of them are exposed to these global economic calamities. So, Obama and neo-liberals......ALL MARYLAND POLS ARE NEO-LIBERALS....were not deadlocked these few years. They were working on TPP and international marketing and growth while allowing the US economy to be starved. That was their job. So, US banks have been operating under the wild west of no regulation as they expanded overseas and our economy is now tied ten times more to this TOO BIG TO FAIL. Only this time the Federal government has been tapped and it will be your bank account and mine that banks seize to keep them afloat. Add to that all kinds of public infrastructure like roads, bridges, water and sewer infrastructure and you betcha......PERESTROIKA'S NEXT STEP IN THE NEW ECONOMY!
It is valuable to record all of this....I for example print all FACEBOOK and website entries because I know they could disappear any time.....please do the same. Documenting that all of this was known beforehand allows for legal retribution when the people reinstate Rule of Law and bring back all those tens of trillions of dollars.....remember, when a government suspends Rule of Law, it suspends Statutes of Limitation!
A Closer Look at China and HSBC – Are they Running Out of Cash?
January 26, 2014
Fears are growing that HSBC bank is insolvent, after the Bank refused cash withdrawals and has an $80bn blackhole in their balance sheet. Last night,Forbes and a variety of sources including Max Keiser, and FXstreet (Forex) reported a Bank of China announcement suspending all cash transfers for the next several days. So what’s really going on?
HSBC is scrambling to manage a seemingly terminal liquidity crisis (a lack of hard cash) that could see the bank become the next Northern Rock – and trigger a bank crash. The analyst’s advice is for shareholders to sell HSBC investments, and customers to move their accounts elsewhere before the crash.
This from the Telegraph:
Forensic Asia on Tuesday began its coverage of Britain’s largest banking group with a ‘sell’ recommendation, warning the lender had between $63.6bn (£38.7bn) and $92.3bn of “questionable assets” on its balance sheet, ranging from loan loss reserves and accrued interest to deferred tax assets, defined benefit pension schemes and opaque Level 3 assets.
According a report by the BBC’s MoneyBox Programme, HSBC customers have gone to withdraw cash from their accounts, only to find HSBC would not release the funds. Customers were told to make a bank transfer instead, unless they provided documentation proving the intended use of the money. Stephen Cotton attempted a withdrawal and told the programme:
“When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved.”
Mr Cotton says the staff refused to tell him how much he could have: “So I wrote out a few slips. I said, ‘Can I have £5,000?’ They said no. I said, ‘Can I have £4,000?’ They said no. And then I wrote one out for £3,000 and they said, ‘OK, we’ll give you that.’ “
He asked if he could return later that day to withdraw another £3,000, but he was told he could not do the same thing twice in one day.
As this was not a change to the Terms and Conditions of your bank account we had no need to pre-notify customers of the change”
He wrote to complain to HSBC about the new rules and also that he had not been informed of any change.
The bank said it did not have to tell him. “As this was not a change to the Terms and Conditions of your bank account, we had no need to pre-notify customers of the change,” HSBC wrote.
Mr Cotton is not alone, with other customers seeking to withdraw cash amounts over £3,000 facing the same obstacles. While HSBC argue there is comes customer security interest here, the story simply doesn’t add up. Customer identification is required for large withdrawals, not customer intentions – a person’s cash is theirs to withdraw and place wherever they so wish. Instead, HSBC has been found to have a capitalization black hole (gap between actual cash and obligations) of $80bn. The message is simple, get your money out now.
The Gold Rush
The major banks and states appear to be preparing for impending crisis, while pretending to the public that the economic situation is improving.
There is a gold rush underway, with Banks and States frantically buying up as much gold reserve as they can, stoking fears that confidence in currency is at an all-time low. In recent months and weeks, banks like HSBC and JP Morgan, and states such as the US, Germany and China have joined the gold rush, making vast purchases of stocks.
Investment analysts at Seeking Alpha have been monitoring the strange activity on the COMEX, stating:
“keeping track of COMEX inventories is something that is recommended for all serious investors who own physical gold and the gold ETFs (SPDR Gold Shares (GLD), PHYS, and CEF) because any abnormal inventory declines may signify extraordinary events behind the scenes.”
Another Bank Crash? Why?
The crash is in some ways a replay of the last one. The US dollar is a fiat currency (as is the pound sterling, the euro and most other major currencies). This means, it is monopoly money. There is no gold reserve that its values are pegged to. It is simply made up. So how does money get made? A private, for profit central bank prints it and lends it to the government (or other banks) at an interest rate. So the Central Bank prints $100, and gives it to the government on the basis that it returns $101. You may have already spotted the first flaw in this process. The additional $1 can only ever come from the Central Bank. There is never enough money. The second issue is that all money is debt.
This used to be the way pretty much all of the money in circulation came to be. That is, until Investment and Retail Banks got tired of this monopoly on debt based currency, and kicked off the commercial money supply. You might assume that when you take out a loan or other form of credit, a bank gives you that money from its reserves, and you then pay back that loan to the Bank at a given interest rate – the Bank making its profit on the interest rate. You would be wrong. The Bank simply creates that loan on a computer screen. Let’s say you are granted a loan for $100,000. The moment that loan is approved and $100k is entered on the computer – that promise from you to the bank creates $100k for the bank, in that instant. This ledger entry alone creates the $100k, from nothing. Today, over 97% of all money that exists, is made this way.
This is what drove the dodgy lending practises that created the last crisis. But since then, the failure to regulate the markets means that while bailouts hit public services and the real economy – banks were free to continue the same behaviour, bringing the next crash.
The world’s second richest man, Warren Buffet warned us in 2003 that the derivatives market was ‘devised by madmen’ and a ‘weapon of mass destruction’ and we have only seen the first blast in this debt apocalypse.
The news that should have us all worried is: the derivatives market contains $700trn of these debts yet to implode.
Global GDP stands at $69.4trn a year. This means that (primarily) Wall Street and the City of London have run up phantom paper debts of more than ten times of the annual earnings of the entire planet.
Not only can the Bankers not pay it back, the combined earning power of the earth could not pay it back in less than ten years if every last cent of our productive power went solely to pay off this debt.
This is why answering the issues with our currencies, our banking practices and economic system are not theoretical or academic – they are a most practical matter of keen urgency.
Below you see what is about to happen in the UK, Europe, and the US. When this happened in Cyprus there was all kinds of discussion as to how this could be legal, but what happens when a government allows itself to be called bankrupt and tied to the IMF is that all sovereignty is lost. This is what they are doing to the southern European nations and they know that banks will do the same thing in Italy, Spain, Portugal, Ireland, and Greece as was done in Cyprus.
For the US and Americans.....remember the first thing neo-liberals did when the last collapse came was to raise the FDIC insurance of bank accounts to $250,000 per bank, protecting the affluent from losses. The wealthy no longer have much wealth tied to these accounts and just as Congress voted to raise the FDIC.....it can lower/eliminate it because.....it will not be able to afford to pay the protection....it will default on you and me.
ARE MY DEPOSITS INSURED?
FDIC insurance covers all deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
Cyprus banks remain closed to avert run on deposits
By Michele Kambas and Karolina Tagaris
NICOSIA Mon Mar 25, 2013 7:44pm EDT
People sit at a cafeteria as Cyprus' President Nicos Anastasiades addresses the nation in Nicosia March 25, 2013. REUTERS-Yorgos Karahalis
Anti-Troika protesters hold a 'Hands off Cyprus' banner during a demonstration outside the EU offices in Nicosia March 24, 2013. REUTERS-Yannis Behrakis
(Reuters) - The president of Cyprus assured his people a bailout deal he struck with the European Union was in their best interests, but banks will remain closed until Thursday - and even then subject to capital controls to prevent a run on deposits.
Returned from fraught negotiations in Brussels, President Nicos Anastasiades said late on Monday the 10-billion euro ($13 billion) rescue plan agreed there in the early hours of the morning was "painful" but essential to avoid economic meltdown.
He agreed to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian, after Cyprus's outsize financial sector ran into trouble when its investments in neighboring Greece went sour.
European leaders said a chaotic national bankruptcy that might have forced Cyprus from the euro and upset Europe's economy was averted - though investors in other European banks are alarmed by the precedent of losses for depositors in Cyprus.
"The agreement we reached is difficult but, under the circumstances, the best that we could achieve," Anastasiades said in a televised address to the nation on Monday evening.
"We leave behind the uncertainty and anxiety that we all lived through over the last few months and we look forward now to the future with optimism," he told compatriots who face an immediate, deep recession and years of hardship unlikely to be milder than those experienced by Irish, Greeks and Portuguese.
Many Cypriots say they felt anything but reassured by the bailout deal, however, and are expected to besiege banks as soon as they reopen after a shutdown that began over a week ago.
Reversing a previous decision to start reopening at least some banks on Tuesday, the central bank said late on Monday that they would all now stay shut until Thursday to ensure the "smooth functioning of the whole banking system".
Little is known about the restrictions on transactions that Anastasiades said the central bank would impose, but he told Cypriots: "I want to assure you that this will be a very temporary measure that will gradually be relaxed."
Capital controls, preventing people moving funds out of the country, are at odds with the European Union's ideals of a common market but the government may fear an ebb tide of panic that would cause even more disruption to the local economy.
Without an agreement by the end of Monday, Cyprus had faced certain banking collapse and risked becoming the first country to be pushed out of the European single currency - a fate that Germany and other northern creditors seemed willing to inflict on a nation that accounts for just a tiny fraction of the euro economy and whose banks they felt had overreached themselves.
Backed by euro zone finance ministers, the plan will wind down the largely state-owned Cyprus Popular Bank, known as Laiki, and shift deposits under 100,000 euros to the Bank of Cyprus to create a "good bank", leaving problems behind in, effectively, a "bad bank".
Deposits above 100,000 euros in both banks, which are not guaranteed by the state under EU law, will be frozen and used to resolve Laiki's debts and recapitalize the Bank of Cyprus, the island's biggest, through a deposit/equity conversion.
The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros of the 5.8 billion euros the EU and IMF had told Cyprus to raise as a contribution to the bailout, Dutch Finance Minister Jeroen Dijsselbloem said.
Cyprus government spokesman Christos Stylianides said losses for uninsured depositors would be "under or around 30 percent".
Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution - setting a precedent for the euro zone.
Comments by Dijsselbloem on the need for lenders to banks to accept the potential risks of their failure had a knock-on effect in the euro zone, raising the cost of insuring holdings of bonds issued by other banks, notably in Italy and Spain.
Global equity markets and the euro retreated on his comment that the Cyprus bailout could be a template for solving other problems, by shifting more risk to depositors and stakeholders:
"What we've done last night is what I call pushing back the risks," Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times.
A first attempt at a deal 10 days ago had collapsed when the Cypriot parliament rejected a proposed levy on all deposits, large and small. That proposal outraged ordinary Cypriots, leading to queues at bank cash machines.
The central bank has imposed a 100-euro daily limit on withdrawals from ATMs at the two biggest banks to avert a run.
Russia signaled it would back the bailout even though it would impose big losses on Russian depositors, who by some estimates may hold a third of all deposits in Cypriot banks.
President Vladimir Putin ordered officials to restructure a loan Moscow granted to Cyprus in 2011 - having rejected Nicosia's request for easier terms in crisis talks last week.
Among Cypriots sipping coffee in warm sunshine, there was a mood of wariness about the deal: "How long will it last?" asked Georgia Xenophontos, 23, a hotel receptionist in Nicosia.
"Why should anyone believe anything this government says?"
In the morning, a public holiday, residents of the capital lined the streets to watch a parade by soldiers and students to mark Greek Independence Day, waving the Greek and Cypriot flags.
"On this day I'm proud to be Greek, but at the same time I feel humiliated," said Marios Charalambous, 56, a print-shop owner. "I'm worried what will happen when the banks reopen."
Cyprus' tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an nation of 860,000 people that could never sustain such a big financial system on its own.
The U.S. Treasury, noting the importance to the United States of financial stability in Europe, its largest trading partner, said it was now up to Cypriots to rebuild their economy: "It is critical to lay the foundation for a return to financial stability and growth in Cyprus," the Treasury said.
China's Epic Offshore Wealth Revealed: How Chinese Oligarchs Quietly Parked Up To $4 Trillion In The Caribbean
Submitted by Tyler Durden on 01/21/2014 20:02 -0500
The last time the International Consortium of Investigative Journalists made a splash in the financial media was in April of last year year when it disclosed a trove of secret documents revealing a massive treasury of offshore wealth parked away from taxation-happy host governments. The context was clear: in the aftermath of the Cyprus deposit confiscation, public opinion had to turn against those who were exploiting offshore tax loophole in order to avoid a panic that the same "bail in" could happen to the common man.
Needless to say, the circumstances surrounding the release then were rather curious: one day thousands of files - revealing the names behind covert companies used by people from American doctors to Russian executives and international arms dealers - just happened to turn up at a source's house.
Well, the ICIJ is back in the spotlight once again, this time revealing "nearly 22,000 tax haven clients from Hong Kong and mainland China. Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals."
Once again, the source of this treasure trove of data is secret, although we feel the recent Bloomberg cover up (and suspension and termination of Michael Forsyth) regarding a certain investigation into Chinese tycoons' connections with Communist party leaders may have something to do with it. All ICIJ says on the matter is that "In November, a mainland Chinese news organization that was working with ICIJ to analyze the offshore data withdrew from the reporting partnership, explaining that authorities had warned it not to publish anything about the material. ICIJ is keeping the identity of the news outlet confidential to protect journalists from government retaliation." But where the data comes from is largely irrelevant.
What is relevant is that once again the two largest Swiss banks are about to be embroiled in yet another money laundering scandal, this time involving the parking of wealth belonging to China's aristocracy - including its princelings - in various Caribbean, and mostly British Virgin Island, tax havens.
From the ICJC's findings:
PricewaterhouseCoopers, UBS and other Western banks and accounting firms play a key role as middlemen in helping Chinese clients set up trusts and companies in the British Virgin Islands, Samoa and other offshore centers usually associated with hidden wealth, the records show. For instance, Swiss financial giant Credit Suisse helped Wen Jiabao’s son create his BVI company while his father was leading the country.
The files come from two offshore firms — Singapore-based Portcullis TrustNet and BVI-based Commonwealth Trust Limited — that help clients create offshore companies, trusts and bank accounts. They are part of a cache of 2.5 million leaked files that ICIJ has sifted through with help from more than 50 reporting partners in Europe, North America, Asia and other regions.
Since last April, ICIJ’s stories have triggered official inquiries, high-profile resignations and policy changes around the world.
Until now, the details on China and Hong Kong had not been disclosed.
What is notable, if not unexpected, is just how pervasive the parking of offshore capital has been, and confirms that it is not inflow of money that the PBOC has to be afraid of when its internationalizes the Yuan, it is the outflow that will be far more worrisome.
The data illustrates the outsized dependency of the world’s second largest economy on tiny islands thousands of miles away. As the country has moved from an insular communist system to a socialist/capitalist hybrid, China has become a leading market for offshore havens that peddle secrecy, tax shelters and streamlined international deal making.
Every corner of China’s economy, from oil to green energy and from mining to arms trading, appears in the ICIJ data.
But the biggest stunner is the sheer size of the wealth transfer: according to ICIJ estimate, up to $4 trillion in "untraced assets" may have left China since 2000.
Chinese officials aren’t required to disclose their assets publicly and until now citizens have remained largely in the dark about the parallel economy that can allow the powerful and well-connected to avoid taxes and keep their dealings secret. By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000.
And while the parking of capital abroad is not illegal, it does contribute to concerns about vast corruption in China, which is also why the current Politburo has been scrambling to cut down on superficial among China's higher echelons. At least optically... And certainly not going to the very top, where it appears the bulk of the corruption resides as the initial data dump discloses.
To be sure, this is just the start of peeling away the layers of China's offshore wealth: the ICIJ provides this teaser: "Along with the China and Hong Kong names, ICIJ’s files also include the names of roughly 16,000 offshore clients from Taiwan. ICIJ will continue to publish stories with its partners in the next few days and will release the Greater China names on its Offshore Leaks Database on Jan. 23."
In the meantime, the ICIJ has disclosed select key individuals that suddenly may have a lot of explaining to do, considering China's very theatrical crackdown on corruption and all that.
The key players, whose life is about to get a whole lot more difficult, are without doubt China's princelings.
China's Politburo Standing Committee is the all-powerful group of seven (formerly nine) men who run the Communist Party and the country. The records obtained by ICIJ show that relatives of at least five current or former members of this small circle have incorporated companies in the Cook Islands or British Virgin Islands.
China’s “red nobility” — elites tied by blood or marriage to the current leadership or Party elders — are also popularly known as “princelings.” Ordinary Chinese have grown increasingly angry over their vast wealth and what many see as the hypocrisy of officials who tout “people-first” ideals but look the other way while their families peddle power and influence for personal gain.
The leaked offshore records include details of a BVI company 50 percent owned by President Xi’s brother-in-law Deng Jiagui. The husband of Xi’s older sister, Deng is a multimillionaire real estate developer and an investor in metals used in cell phones and other electronics. The records show the other half of Excellence Effort Property Development was owned by yet another BVI company belonging to Li Wa and Li Xiaoping, property tycoons who made news in July by winning a $2 billion bid to purchase commercial real estate in Shenzhen.
Since taking over as the Communist Party’s top official in 2012, Xi has sought to burnish his image with an aggressive anti-graft campaign, promising to go after official corruption involving both low-level “flies” and high-level “tigers.” Yet he has crushed a grassroots movement that called for government officials to publicly declare their assets. Wen Jiabao, who stepped down as premier in 2013 after a decade-long tenure, also styled himself as a reformer, cultivating an image of grandfatherly concern for China’s poor.
The ICIJ offshore files reveal that Wen’s son Wen Yunsong set up a BVI-registered company, Trend Gold Consultants, with help from the Hong Kong office of Credit Suisse in 2006. Wen Yunsong was the lone director and shareholder of the firm, which appears to have been dissolved in 2008.
Bare-bones company structures are often created to open bank accounts in the offshore firm’s name, helping obscure the relationship to the real account owner. It isn’t immediately clear from the documents what Trend Gold Consultants was used for. A U.S.-educated venture capitalist, Wen Yunsong co-founded a China-focused private equity firm and in 2012 became chairman of China’s Satellite Communications Co., a state-owned firm that aspires to be Asia’s largest satellite operator.
ICIJ made repeated attempts to reach Wen Yunsong and other individuals named in this story. Only a few responded. Wen was among those who did not. Citing confidentiality rules, a Credit Suisse spokesman said the bank is “unable to comment on this matter.”
The ICIJ files also shed light on the BVI’s previously unreported role in a burgeoning scandal involving Wen Jiabao’s daughter, Wen Ruchun, also known as Lily Chang. The New York Times has reported that JPMorgan Chase & Co. paid a firm that she ran, Fullmark Consultants, $1.8 million in consulting fees. U.S. securities regulators are investigating the relationship as part of a probe into the bank’s alleged use of princelings to increase its influence in China.
Fullmark Consultants appears to have been set up in a manner that obscured Wen Ruchun’s relationship to the firm, the ICIJ files indicate. Her name does not show up in any of the incorporation documents in the ICIJ data, though a 'Lily Chang' is CC’d in one August, 2009 email correspondence about the company. Her husband Liu Chunhang, a former Morgan Stanley finance guru, created Fullmark Consultants in the BVI in 2004 and was the sole director and shareholder of the firm until 2006, the same year he took a government job at the agency that regulates China’s banking industry.
Liu transferred control of the company, the ICIJ files show, to a Wen family friend, Zhang Yuhong, a wealthy businesswoman and colleague of Wen Jiabao’s brother. The Times reported that Zhang also helped control other Wen family assets including diamond and jewelry ventures.
The ICIJ files show that offshore provider Portcullis TrustNet billed UBS AG for a certificate of good standing for Fullmark Consultants in October 2005, indicating a business relationship between Fullmark and the Swiss bank. In response to ICIJ’s questions, UBS issued a statement saying its “know-your-client” policies as well as procedures to deal with politically-sensitive clients are among “the strictest in the industry.” Liu and Zhang did not respond to ICIJ's requests for comment.
A 2007 U.S. Department of State cable passed along a source’s tip that Premier Wen was “disgusted with his family’s activities,” and that “Wen’s wife and children all have a reputation as people who can ‘get things done’ for the right price.” The cable, part of the Wikileaks document dump, reported that Wen’s kin “did not necessarily take bribes, [but] they are amenable to receiving exorbitant ‘consulting fees.’ ”
The records also include incorporations by relatives of Deng Xiaoping, former Premier Li Peng, and former President Hu Jintao.
China experts say that the growing wealth and business interests of the princelings, including offshore holdings, are a dangerous liability for the ruling Communist Party but that people in leadership positions are too involved to stop it.
“What’s the point of running the Communist Party if you can’t get a couple billion for your family?” said Steve Dickinson, a China-based American lawyer who has investigated fraud cases involving BVI companies. “The issue is enormous and has tremendous significance for China, and the fact that everybody dances around it and doesn’t want to talk about it is understandable but scandalous.”
Perhaps now, finally, the dancing will stop. Because for the first time, key players are named. First the "Red Nobility" (full list here)