Companies
making use of offshore secrecy include firm that supplied surveillance software
used by repressive regimes
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Bahraini protesters flee teargas. Activists' computers in the country were infected
with Finfisher spying software. Photograph: Mohammed al-Shaikh/AFP/Getty Images |
A number of
nominee directors of companies registered in the British Virgin Islands (BVI)
have connections to military or intelligence activities, an investigation has
revealed.
In the
past, the British arms giant BAE was the most notorious user of offshore
secrecy. The Guardian in 2003 revealed the firm had set up a pair of covert BVI entities. The undeclared subsidiaries were used to distribute hundreds of
millions of pounds in secret payments to get overseas arms contracts.
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| Offshore Secrets |
Today the
investigation by the International Consortium of Investigative Journalists
(ICIJ) and the Guardian uncovers the identities of other offshore operators.
Louthean
Nelson owns the Gamma Group, a controversial computer surveillance firm
employing ex-military personnel. It sells bugging technology to Middle East and
south-east Asian governments. Nelson owns a BVI offshore arm, Gamma Group
International Ltd.
Gamma's
spyware, which can be used against dissidents, has turned up in the hands of
Egyptian and Bahraini state security police, although Nelson's representative
claims this happened inadvertently. He initially denied to us that Nelson was
linked to Gamma, and denied that Nelson owned the anonymous BVI affiliate.
Martin Muench, who has a 15% share in the company's German subsidiary, said he
was the group's sole press spokesman, and told us: "Louthean Nelson is not
associated with any company by the name of Gamma Group International Ltd. If by
chance you are referring to any other Gamma company, then the explanation is
the same for each and every one of them."
After he
was confronted with evidence obtained by the Guardian/ICIJ investigation,
Muench changed his position. He told us: "You are absolutely right,
apparently there is a Gamma Group International Ltd. So in effect I was wrong –
sorry. However I did not say that Louthean Nelson was not associated with any
Gamma company, only the one that I thought did not exist."
Nelson set
up his BVI offshoot in 2007, using an agency, BizCorp Management Pte, located
in Singapore. His spokesman claimed the BVI company was not involved in sales
of Gamma's Finfisher spyware. But he refused to disclose the entity's purpose.
Earlier
this year, computer researchers in California told the New York Times they had
discovered Finfisher being run from servers in Singapore, Indonesia, Brunei,
Mongolia and a government ministry in Turkmenistan. The spying software was
previously proved to have infected the computers of political activists in
Bahrain, which Nelson visited in June 2006.
The
Finfisher programme is marketed as a technique for so-called "IT
intrusion". The code disguises itself as a software update or an email
attachment, which the target victim is unaware will transmit back all his or
her transactions and keystrokes. Gamma calls itself "a government
contractor to state intelligence and law enforcement agencies for … high-quality
surveillance vans" and telephone tapping of all kinds.
Activists'
investigations into Finfisher began in March 2011, after protesters who broke
into Egypt's state security headquarters discovered documents showing the
bugging system was being marketed to the then president Hosni Mubarak's regime,
at a price of $353,000.
Muench said
demonstration copies of the software must have been stolen. He refused to
identify Gamma's customers.
Nelson's
father, Bill Nelson, is described as the CEO of the UK Gamma, which sells a
range of covert surveillance equipment from a modern industrial estate outside
Andover, Hampshire, near the family home in the village of Winterbourne Earls,
Wiltshire.
In
September, the German foreign minister, Guido Westerwelle, called for an
EU-wide ban on the export of such surveillance software to totalitarian states.
"These regimes should not get the technical instruments to spy on their
own citizens," he said. The UK has now agreed that future Finfisher
exports from Andover to questionable regimes will need government permission.
Other types
of anonymous offshore user we have identified in this area include a south
London private detective, Gerry Moore, who operated Swiss bank accounts. He did
not respond to invitations to comment.
Another
private intelligence agency, Ciex, was used as a postbox by the financier
Julian Askin to set up a covert entity registered in the Cook Islands, called
Pastech. He too did not respond to invitations to comment.
An ex-CIA
officer and a South African mercenary soldier, John Walbridge and Mauritz Le
Roux, used London agents to set up a series of BVI-registered companies in
2005, after obtaining bodyguarding contracts in Iraq and Afghanistan. Le Roux
told us one of his reasons was to accommodate "local partnerships" in
foreign countries. Walbridge did not respond.
A former
BAE software engineer from Hull, John Cunningham, says he set up his own
offshore BVI company in the hope of selling helicopter drones for purely
civilian use. Now based in Thailand, he previously designed military avionics
for Britain's Hawk and Typhoon war planes. He told us: "That account was
set up by my 'friend' in Indonesia who does aerial mapping with small UAVs
[unmanned aerial vehicles]. He was going to pay me a commission through that
account … However, this was my first attempt to work in Asia and as I have
found, money tends to be not forthcoming. I have never used that account."
The
military and intelligence register
Gerry Moore
Company: GM
Property Developments, LHM Property Holdings Story: south London private
detective sets up BVI companies with Swiss bank accounts Details: Moore founded
"Thames Investigation Services", later "Thames Associates",
in Blackheath, south London. He opened a Swiss bank account with UBS Basel in
1998. In 2007, he sought to open another account with Credit Suisse, Zurich,
for his newly registered BVI entity GM Property Developments. He sought to
register a second offshore company, LHM Property Holdings, using his wife
Linda's initials.
Intermediary:
Netincorp. BVI (Damien Fong)
Comment: No
response. Thames Associates website taken down after Guardian approaches.
John
Walbridge and Mauritz le Roux
Companies:
Overseas Security & Strategic Information Ltd, Remington Resources
(Walbridge), Safenet UXO, Sparenberg, Gladeaway, Maplethorpe, Hawksbourne (Le
Roux)
Story:
former CIA officer and South African ex-mercenary provide guards in Iraq and
Afghanistan Details: John H Walbridge Jr says he served with US special forces
in Vietnam and then with the CIA in Brazil. His Miami-based private military
company OSSI Inc teamed up with the South African ex-soldier and Executive
Outcomes mercenary Mauritz le Roux to win contracts in Kabul in 2005. Walbridge
set up his two BVI entities with his wife, Cassandra, via a London agency in
June and August 2005, and Le Roux incorporated five parallel BVI companies.
Intermediary:
Alpha Offshore, London Comment: Le Roux told us some of his offshore entities
were kept available "in case we need to start up operations in a country
where we would need to have local partnerships". His joint venture with
OSSI was based offshore in Dubai, he said, but used BVI entities "to
operate within a legal framework under British law, rather than the legal
framework of the UAE". Walbridge did not respond to invitations to
comment.
Julian
Askin
Company:
Pastech Story: exiled businessman used a private intelligence agency to set up
covert offshore entity in the Cook Islands Details: Askin was a British
football pools entrepreneur. He alleged Afrikaner conspiracies against him in
South Africa, when his Tollgate transport group there collapsed. The apartheid
regime failed to have him extradited, alleging fraud. He hired the Ciex agency
to report on ABSA, the South African bank which foreclosed on him. Ciex was
founded by the ex-MI6 senior officer Michael Oatley along with ex-MI6 officer Hamilton
Macmillan. In May 2000, they were used to help set up Pastech for their client
in the obscure Pacific offshore location of Rarotonga, in the Cook Islands,
with anonymous nominee directors and shareholders. Askin now lives in Semer,
Suffolk.
Intermediary:
Ciex, Buckingham Gate, London Comment: he did not respond to invitations to
comment.
Louthean
Nelson
Company:
Gamma Group International Story: Gamma sells Finfisher around the world, spying
software which infects a target's computer.
Details:
Nelson set up a UK company in 2007 on an Andover industrial estate to make and
sell Finfisher – a so-called Trojan which can remotely spy on a victim's
computer by pretending to be a routine software update. He set up a parallel,
more covert company with a similar name, registered in the BVI, via an agency
in Singapore, using his father's address at Winterbourne Earls, near Andover.
He also sells to the Middle East via premises in Beirut. He ran into
controversy last year when secret police in Egypt and Bahrain were alleged to
have obtained Finfisher, which he denies knowingly supplying to them.
Intermediary:
Bizcorp Management Pte Ltd, Singapore Comment: his spokesman declines to say
what was the purpose of the group's BVI entity.
John
Cunningham
Company: Aurilla
International Story: military avionics software engineer from Hull with
separate UK company launches civilian venture in Indonesia Details: Cunningham
set up a BVI entity in 2007. His small UK company, On-Target Software Solutions
Ltd, has worked on "black boxes" for BAE Hawk and Typhoon war planes,
and does foreign consultancy. He also has interests in Thailand in a drone
helicopter control system.
Intermediary:
Allen & Bryans tax consultants, Singapore Comment: Cunningham says the
offshore account was never activated. "I actually make systems for
civilian small UAVs (unmanned aerial vehicles). I have never sold to the
military. That account was set up by my 'friend' in Indonesia who does aerial
mapping with small UAVs. He was going to pay me a commission through that
account."
--------------------------
Offshore
secrets
Guardian
team: David Leigh, Harold Frayman and James Ball.
The project
is a collaboration between the Guardian and the International Consortium of Investigative Journalists (ICIJ) headed by Gerard Ryle in Washington DC. The
Guardian's investigations editor, David Leigh, is a member of the ICIJ, a
global network of reporters in more than 60 countries who collaborate on
in-depth investigative stories that cross national boundaries. The ICIJ was
founded in 1997 as a project of the Center for Public Integrity, a Washington
DC-based non-profit.
