An Indian-born oligarch who purchased M.C. Hammer’s former mansion in California may have followed the previous owner into decadence and bankruptcy, but, unlike the bejeweled and balloon-panted rapper, this flamboyant figure appears to have benefited from the relaxed laws of an island nation to keep his assets out of the hands of his creditors.

Once the owner of an estimated $3 billion business empire, largely founded on India’s telecom industry, Chinnakannan Sivasankaran, or Siva as his friends call him, filed for bankruptcy in August 2014 in Seychelles, following his loss, in British High Court, of a civil case brought against him by an erstwhile partner, a subsidiary of the Bahrain Telecommunications Company, or Batelco.

It was decided that Siva and his Bermuda-registered company Siva Limited should pay the Gulf-based company $212 million by June 26, 2014.

However, even before the trial began, the oligarch used his Seychellois citizenship to arrange a swift legal split from his wife, to whom he then transferred at least $95 million in assets—39 plots of land, one island and numerous corporate holdings registered in Seychelles and the British Virgin Islands, including those that owned even more real estate—as part of the divorce settlement.  Not that bankruptcy would have necessarily hurt Batelco’s chances of recovering their money under Seychelles’ prior law on insolvency. But about a year after Siva lost his case in Britain, the island nation “reformed” its bankruptcy statute.

The story highlights the role of questionable offshore tax shelters, of which Seychelles is a small but hyper-caffeinated example, in allowing an international elite to transcend borders and sovereign jurisdictions in order to safeguard their assets.

The 59-year-old Siva first rose to prominence in India’s southern state of Tamil Nadu in the mid-1980s after he acquired Sterling Computers and sold cut-rate PCs in a burgeoning subcontinental tech industry, transforming the company into one of India’s top three in its field. Frequently adorned with gold Rolexes and known for his obsession with health food and personal fitness, Siva formerly lived and worked out of presidential suites at the Ritz Carlton and Pan Pacific hotels in Singapore.

Over the past four decades, he’s had a hand in all sorts of things: engineering, shipping, commodities trading, and alternative energy. According to NGO Grain, an international nonprofit that supports small farmers, his Siva Group gobbled up about “a million hectares of land in the Americas, Africa and Asia, primarily for oil palm plantations,” making him “one of the world’s largest farmland holders.”

Siva aimed to set up a new U.S. operation by relocating to Fremont, California, in 1996, buying M.C. Hammer’s mansion following the latter’s own loss of fortune, but by the mid-2000s, he opted to move to Seychelles and became a full citizen. This decision was followed almost immediately by his nomination as ambassador-at-large.

In a 2008 U.S. State Department cable alleged that Siva was part of a Seychellois “business mafia” that was buying land from the Seychelles government at the expense of a battered and hopelessly corrupt national economy—this, as the nation was seeking bailouts from the International Monetary Fund and World Bank.

Designed by Rachel Gold

In the US, money flows freely into the political arena.   Citizens who object to this river work to overcome a Supreme Court decision that corporations are people.  It seems to the editors of this website that we would be better off shortening the political season and making politics open to all comers.  Newton Minow, who was head of the FCC, suggested free media time   Shortening the season would also help.  Turns out currently 158 families are contributing astronomical sums, most of them to Republican candidates.

Nicholas Confessore, Saran Cohen and Karen Yourishoct write:  Donors are overwhelmingly white, rich, older and male, in a nation that is being remade by the young, by women, and by black and brown voters. Across a sprawling country, they reside in an archipelago of wealth, exclusive neighborhoods dotting a handful of cities and towns. And in an economy that has minted billionaires in a dizzying array of industries, most made their fortunes in just two: finance and energy.

Now they are deploying their vast wealth in the political arena, providing almost half of all the seed money raised to support Democratic and Republican presidential candidates. Just 158 families, along with companies they own or control, contributed $176 million in the first phase of the campaign, a New York Times investigation found. Not since before Watergate have so few people and businesses provided so much early money in a campaign, most of it through channels legalized by the Supreme Court’s Citizens United decision five years ago.

These donors’ fortunes reflect the shifting composition of the country’s economic elite. Relatively few work in the traditional ranks of corporate America, or hail from dynasties of inherited wealth. Most built their own businesses, parlaying talent and an appetite for risk into huge wealth: They founded hedge funds in New York, bought up undervalued oil leases in Texas, made blockbusters in Hollywood. More than a dozen of the elite donors were born outside the United States, immigrating from countries like Cuba, the old Soviet Union, Pakistan, India and Israel.

But regardless of industry, the families investing the most in presidential politics overwhelmingly lean right, contributing tens of millions of dollars to support Republican candidates who have pledged to pare regulations; cut taxes on income, capital gains and inheritances; and shrink entitlement programs. While such measures would help protect their own wealth, the donors describe their embrace of them more broadly, as the surest means of promoting economic growth and preserving a system that would allow others to prosper, too.

Mega donors to US politicians

Is this the end of the people’s car?

Bernhard Rieger writes:  The US  Environmental Protection Agency’s announcement on September 18 that Volkswagen had manipulated diesel engines during emissions tests sent shockwaves around the Western world. Facing hefty fines in the United States and elsewhere, the corporation soon revealed that no fewer than 11 million of its vehicles were powered by an engine that it had previously praised as ecologically friendly and now revealed as a generator of hazardous exhaust. The company’s stock took a dive, CEO Martin Winterkorn had to resign, and drivers on both sides of the Atlantic filed class action lawsuits. German engineering, once a catchword for excellence, has now gained a set of decidedly undesirable connotations.

Beyond anger, the international response to Volkwagen’s fraud has been tinged with disbelief. Politicians, experts, and ordinary citizens alike have struggled to comprehend why Volkswagen, of all companies, engaged in systematic cheating. Observers were not only flabbergasted that a high-profile car manufacturer had risked sizeable fines from regulators as well as claims for damages by consumers, stockholders, and dealers. They were also stunned at the reputational risk. For Volkswagen, as a U.S.-marketing expert pointed out, being caught cheating was “significantly damaging” because “this is such an iconic brand.” In Germany, the business-friendly Frankfurter Allgemeine Zeitung simply declared that Volkswagen had lost its “honor”—a concept rarely evoked in the context of global corporate giants.

Volkswagen thus finds itself at the center not just of an economic disaster, but a moral scandal of international reach.

Now, by manipulating emissions data for years, Volkswagen did more than cheat regulators and customers. Given its extraordinarily rich and long-standing reputation for quality and dependability, Volkswagen committed a cardinal sin against its own identity. It blemished its “corporate soul,” as historian Roland Marchand called the intangible aura surrounding those enterprises that manage to project themselves in the public sphere as socially and economically responsible agents. To regain customers’ trust, public penance will not be enough. Rather, it will need to undertake demonstrable reforms to assure the public that there are robust internal procedures to prevent fraud. Only then will Volkswagen be in a position to build anew.  The End of the Beetle