By Alex Plough February 13, 2015
Geneva, Switzerland. (Wikimedia commons.)
Dirty Money
Corrupt Kenyan and Maltese officials, alleged cocaine smugglers and drug runners, blood diamond traders and money launderers: these are among the many individuals facing charges of serious wrongdoing who have apparently been relying on the Swiss branch of UK bank HSBC to conceal large bundles of their money.
The International Consortium of Investigative Journalists (ICIJ), along with media partners from 45 countries, published a damning five-part report this week on the financial misdeeds of the Swiss branch of HSBC using files leaked by a former employee of the bank. HSBC has a legal obligation to place extra scrutiny on high-risk customers—a requirement imposed in 1998.
The ICJI investigation also revealed HSBC’s role in helping regular wealthy people dodge taxes. In some cases, the Swiss branch of the bank actively helped its clients set up accounts built to hide assets from tax authorities across the world. It also marketed products that aggressively exploited a loophole in new European regulations to combat tax dodging.
The report further named some Western politicians who are either linked directly to HSBC Swiss accounts or who have accepted money from account holders—the implication being that they are bankrolled by dirty money. Hillary Clinton and her family received as much as $81 million from wealthy international donors who were clients of the HSBC Swiss branch, for example.
In Britain, both the ruling Conservative party and the opposition Labour party received cash and loans from wealthy individuals who held accounts at the Swiss bank. With a UK general election just months away, these revelations have already lead to fierce debate in the British parliament.
For an accessible entry into the complex issue of tax dodging, watch BBC investigative news program Panorama or explore the UK Guardian’s data-rich interactive to get the whole story.
Apple Courts Solar
Hugely profitable consumer electronics maker Apple announced an $850 million agreement to buy solar power from First Solar, the biggest U.S. developer of solar farms, in what Apple CEO Tim Cook called the company’s “biggest, boldest and most ambitious project ever.” The Apple deal is the biggest solar deal ever done.
Apple headquarters in Cupertino, California. (Wikimedia commons)
Last year, Cook faced down an anti-climate-change agitator at the company’s annual shareholder meeting, telling the audience of investors they should “get out of the stock” if they were only after profits.
Apple’s 25-year deal with First Solar will bring the company 130 megawatts of energy, produced by California Flats Solar Project in southeast Monterey County. Reuters points out that a looming change to a tax incentive for solar power investments is likely to trigger a stampede of similar deals. Companies have just two years to invest before a cherished solar tax credit drops from 30% to 10%.
Power-hungry tech firms have poured enormous amounts of money into renewable energy projects in recent years. Last month Google teamed up with Norwegian power company Scatec Solar to build Utah’s largest solar power plant.
solar panel. (wikimedia commons)
Along with Prudential Capital Group, the two firms are investing about $188 million in the Utah Red Hills Renewable Energy Park. It is Google’s eighteenth renewable energy investment and the online giant has invested over $1.5 billion in solar and wind projects across three continents.
Growing efficiencies in solar panel technology have cut the cost of solar energy so dramatically that it will soon undercut even the cheapest fossil fuels, coal and natural gas. The International Energy Agency predicts that by 2050, solar could be the world’s biggest single source of electricity.
Tesla’s Grand Ambitions
Even the cheapest oil prices in six years cannot dampen the ambition of Tesla CEO and modern day ‘Tony Stark’, Elon Musk, who predicts his electric car manufacturer could take its market capitalization to $700 billion by 2025.
Robotic manufacturing of the Model S at a Tesla factory in Fremont, California. (Wikimedia commons)
Musk told analysts that Tesla’s revenue this year could grow to $6 billion, from $3.2 billion in 2014. His 2025 market-cap prediction assumes 50 percent annual revenue growth and a price-to-equity ratio for the stock of 20. This could prove harder than Musk anticipates if Tesla’s first foray into China is anything to go by. The company’s performance in the world’s largest vehicle market was a sore spot in the latest financial results.
According to the New York Times, a lack of power charging stations is proving to be a major issue for China’s well-connected Tesla owners, who use social messaging platforms to arrange to charge their cars at one another’s homes. The US firm also faces intense competition from Chinese carmakers, which are supported by a combination of central and local government subsidies.
Elon Musk. (Wikimedia commons)
What trick does Musk have up his sleeve? A major breakthrough in battery technology would instantly make electric vehicles more desirable. So investors took note on Thursday’s conference call when Musk revealed that Tesla was working on battery that can power your home. He said that the device, due to be unveiled “in the next month or two,” could also be used by large-scale utilities to store power off the grid.
Zuckerberg’s Bedroom
Facebook founder Mark Zuckerberg apparently values his privacy. In 2012 the 30-year-old CEO wanted to stop a nosey neighbour from being able to see inside his Californian home—the owner Mircea Voskerician was threatening to tear down the current house on his property and build one that would have a view directly into Zuckerberg’s bedroom. So Zuckerberg offered the land’s owner Mircea Voskerician about $250,000 to buy the property rights.
Mark Zuckerberg. ©JD Lasica
Voskerician, a real estate developer, turned Zuckerberg down and lined up a $4.3 million deal with another developer. Before accepting the second offer, he met with Zuckerberg one more time and that is when things got messy.
At the meeting, Voskerician claims he offered the Facebook CEO a discount on the condition that Zuckerberg introduce him to the Silicon Valley elite. He says he agreed to sell for $1.7 million, “plus (Zuckerberg’s) promises of personal referrals and business promotion activities,” which then failed to appear.
Unsurprisingly, Zuckerberg disagreed and hit back that the developer was using ‘extortive’ tactics. In one critical email, Voskerician wrote that if “Mark plans to live there long term” he has “one shot to ensure his privacy is where it needs to be.” He goes on to say the new home would be built “overlooking his backyard/Master Bedroom.”
Such a public airing of dirty laundry may well reveal more details of Zuckerberg’s private life. This has a name: the ‘Streisand Effect.’ When celebrities (and yes, Zuckerberg is one of those) attempt to reclaim their privacy, it often backfires.
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Alex Plough is a freelance business journalist based in New York. Originally from London, England, he has a background in data-driven investigative reporting and has worked on a number of agenda-setting projects such as the award winning Iraq War Logs for the Bureau of Investigative Journalism. More recently he graduated from Columbia Journalism School’s masters program, business and economics reporting concentration, as well as Columbia’s Lede Program – a three month course designed to apply the tools of computer science to journalism. He is particularly interested in the overlapping fields of finance, technology and how young people are shaping the new American economy.
