Wealth International, Limited

Offshore News Digest for Week of October 20, 2003


A PC World survey reveals that even savvy Web users can do more to safeguard their privacy and data. Take the quiz and find out how vulnerable you are; then use their tips to improve your score.

More on this story here and here.


A bipartisan group of senators is introducing legislation designed to curb the sweeping government surveillance powers authorized by the USA Patriot Act. Under the Security and Freedom Ensured Act (S. 1709), the FBI will be subject to additional judicial oversight in its search procedures.

“I believe the SAFE Act is a measured, reasonable and appropriate response to concerns we have with the USA Patriot Act,” said Senator Larry Craig (R-Idaho) at its introduction. “This legislation intends to ensure the liberties of law-abiding individuals are protected in our nation’s fight against terrorism, without in any way impeding that fight.” Craig and Senator Dick Durbin (D-Illinois) are cosponsoring the bill.

The SAFE Act also reins in some Patriot Act provisions that let the FBI obtain records. For example, the Patriot Act allows the FBI to get a secret court order requiring any organization -- such as libraries, bookstores, hospitals, and ISPs -- to turn over entire databases of personal information to support antiterrorism or counterintelligence efforts. U.S. librarians have protested that provision. The Patriot Act also lets the FBI invoke a national security letter (which works like an administrative subpoena) to allow agents to search records of electronic communications without court orders. Those records include the date and time stamps on e-mail messages, the identities of the sender and recipient, and Internet usage -- including sites visited and when.

Under SAFE, the FBI would have to demonstrate threshold evidence that the person whose records were sought was a suspected terrorist or spy before it could get a court order to access personal and confidential files. The legislation would also prohibit the FBI from using a national security letter to obtain a library computer user’s information without a court order.

More on this story here.

More Patriot Act amendments unveiled.

A bill introduced in the House this week suggests six main amendments to the Act, including oversight of online and telephone surveillance methods adopted by the FBI in the aftermath of the September 11, 2001 terrorist attacks. Called the Security and Freedoms Ensured (SAFE) Act, House Resolution 3352 is nearly identical to one introduced in the Senate last week.

More on this story here


Three powerful U.S. senators are pressuring the Pentagon to reveal more about its role in the JetBlue privacy scandal, pointedly asking whether a key privacy law was violated when a defense contractor acquired 4.9 million passenger itineraries from the airline for a security study without giving notice to the passengers. Governmental Affairs Committee chairwoman Susan Collins (R-Maine), ranking member Joe Lieberman (D-Connecticut) and Armed Services Committee ranking member Carl Levin (D-Michigan) wrote Defense Secretary Donald Rumsfeld, asking whether the Pentagon complied with the Privacy Act, which requires that government agencies and their contractors notify the public when a system of records is created.

The Pentagon’s contractor, Torch Concepts, acquired more than 1 million passenger records from JetBlue and then augmented the data with sensitive information such as Social Security numbers and family size, which it purchased from Acxiom, a mammoth data-aggregation company. Torch then tried to determine if massive amounts of data would allow its technology to distinguish between typical passengers and terrorist profiles.

Privacy and civil liberties advocates hailed the letter, which also asks for specifics about the Torch contract, and hope the Pentagon takes the questions seriously. “The Privacy Act was clearly violated,” said Ari Schwartz, associate director of the Center for Democracy & Technology. “If the government is going to use Social Security numbers in a database, they have to get approval.”

More on this story here.


In a closing statement released on Wednesday by the co-chairs of the OECD’s Ottowa meeting, deputy Prime Minister and Finance Minister of the Cook Islands, Dr. Terepai Maote, and chair of the organization’s Committee on Fiscal Affairs, Gabriel Makhlouf, it emerged that the majority of OECD members believe that a level playing field has not yet been achieved with regard to the combating of tax evasion.

Andrew Quinlan, president of US think-tank, the Center for Freedom and Prosperity, welcomed the obstacles encountered by the OECD, observing on Wednesday that: “The OECD’s tax harmonization effort has hit a brick wall, and this is good news for the global economy. If high-tax nations are worried that jobs and capital are fleeing to low-tax jurisdictions, they should fix their bad tax laws rather than trying to create a global tax cartel.”

More on this story here.


The IRS received a blow in its pursuance of a tax shelter case against big-four accounting firm KPMG last week, when a specially appointed Master recommended to a federal court that the company did not have to hand over all the documents requested by the IRS. Since the IRS went to law last year to enforce 25 summonses that it had sent to KPMG demanding tax sheltering documentation, the firm has handed over hundreds of boxes of paperwork. However, according to the WSJ, KPMG has also withheld many documents, arguing that to lay them open to scrutiny would be to breach client privilege.

More on this story here.


For Wall Street firms Morgan Stanley and Goldman Sachs, the rarefied air at the top of Asia’s brokerage mountain is getting thinner. A boom in the number of hedge funds in the region is driving a feeding frenzy among investment banks to end Goldman and Morgan’s traditional dominance of the market for prime brokerage: a five-star service that provides hedge funds with everything from lending and trade processing to office space.

Hedge funds, which use a wide range of investment strategies to target outsize returns, work very closely with their prime broker. They rely on them for borrowing money, raising money, and managing their account activity. Prime brokers have to be able to adjust to a wider variety of investment styles these days, beyond those that seek to profit from both rises and falls in stock prices.

More on this story here.


Lobbying group the Information Technology Association of America, has been looking into the issue and may be engaged at a cost of $100,000 to $200,000 per company, but there are other options. However, Wired spoke to David Dill, a computer science professor at Stanford University who runs VerifiedVoting.org. He said: “The voting machine industry doesn’t have a PR problem. It has a technology problem. It is impossible to determine whether their machines, in their current form, can be trusted with our elections.”

More on this story here.

“Civil disobedience” campaign targets Diebold.

Students at Swarthmore College in Pennsylvania have initiated what they call a “campaign of civil disobedience” to maintain the right to link to memos leaked from Diebold that seem to highlight weaknesses in their electoral counting systems. The memos they refer to originate from Diebold and seem to indicate certain irregularities with their vote-counting equipment. Why War? member Micah explains: “These memos indicate that Diebold, which counts the votes in 37 states, knowingly created an electronic system which allows anyone with access to the machines to add and delete votes without detection.”

More on this story here.


Microsoft is not a monopoly. The fact that it does a very good job of hooking the technologically clueless makes it an astute competitor, not an antitrust violator. It is, nevertheless, an evil empire, and moreover, one that is antithetical to human freedom. Whereas Microsoft once represented freedom of choice, it now does everything in its power to reduce one’s freedom to choose. It does not give one the ability to choose to update one’s software or not -- you can update now or you can update later, but you VILL UPDATE, HEIN! Security holes and bugs abound, but Microsoft whispers soothing lies and insists that there is nothing to worry about, drop $50 on Norton Anti-Virus and everything will be fine.

Even more disturbing are the routine violations of privacy that Microsoft abets and sometimes demands. Microsoft is paving the easy path, promising more ease-of-use, a calmer, happier computing experience, and all that you need to do in return is turn off your brain, hand over every detail of who you are, what you do and with whom you do it, then slide down the user-friendly interface to Hell.

One week ago, after wrestling with a nasty virus that took down my entire ISP, I had had enough. It was the first virus I had ever encountered despite never using anti-virus software, and it was the last straw as well. It was not just the virus, or the thrice-weekly crashes, or the forced upgrades or even the massive, bloated resource hog that Microsoft Office has become. It was the realization that Microsoft is building the Great Eye That Never Sleeps, which, in combination with your government identification number, will be used to track you, verify you and determine if you are a properly obedient little wage-serf. As Chuck D says, I rebel with a raised fist. And, I might add, a solitary finger.

More on this story here.


Final results in Switzerland’s parliamentary elections show the Swiss People’s Party has won the largest share of the vote -- the party gained an additional 11 seats in the 200-member House of Representatives, taking its total to 55. The party’s share of the popular vote increased to 26.6%, up four per cent from 1999. The People’s Party campaigned strongly in favour of less taxes, tougher asylum rules and against closer ties with the European Union.

Sunday’s vote was a big disappointment for the Centre-right: the Radicals and Christian Democrats each lost seven seats. The Radicals now hold 36 seats in the House of Representatives, with just 28 seats for the Christian Democrats.

More on this story here.

Election confirms polarization of politics.

Sunday’s big win by the People’s Party has confirmed earlier predictions of a polarization of Swiss politics into Left and Right. The center-left Social Democrats held on to second place, but the two main center-right parties suffered significant losses. One of the biggest winners in relative terms was the Green Party, gaining four more seats.

More on this story here.

People’s Party demand threatens consensus politics.

Demands by the People’s Party for a second seat in the cabinet could put Switzerland’s system of consensus at risk. But election analyst Claude Longchamp told swissinfo that the party had a right to a second seat and that the system should be able to deal with the change.

More on this story here.

European press predicts end of “Magic Formula”.

Under a power-sharing arrangement known as the “Magic Formula”, in place since 1959, cabinet seats are shared out between Switzerland’s four main parties. The Christian Democratic, Social Democratic and Radical parties each have two seats in the seven-member cabinet, while the Swiss People’s Party only has one. On Sunday the People’s Party demanded that it be granted a second seat at the expense of one of the other parties to reflect its new status as the strongest political force in Switzerland.

According to much of the press, the People’s Party has a legitimate right to seek a second cabinet seat.

More on this story here.


British officials say they are prepared to encourage any one of its colonies that chooses independence. The officials recently told the UN Fourth Committee on Decolonisation that all of its Caribbean territories have the option to choose independence, according to the Gibraltar Chronicle. But they added that they saw no country that was willing to choose that route.

More on this story here.

British territories targeted by Inland Revenue “hitmen”.

According to a recent report in the London Times, the British Inland Revenue has appointed 64 tax-inspecting “hitmen” as part of a huge offensive aimed at recovering billions of dollars of unpaid tax secreted in companies and trusts in offshore tax havens such as the British Virgin Islands, the Cayman Islands and the Turks & Caicos Islands.

Using a new computer database, the Offshore Arrangements Project has identified 30,000 UK companies whose offshore shareholders are to be the subject of investigation. In addition, the Revenue is targeting suspect property transactions and intends to use new disclosure rules to collect more information about property owners and trustees from the Stamp Taxes Office.

More on this story here.


I have been on Grand Turk Island just two days and already know about a dozen people and several dogs by name. I have met the Turks and Caicos Islands governor, appointed by Her Majesty Queen Elizabeth II, while eating at an outdoor burger joint. I have heard lots of local gossip about total strangers, including one I later happen to meet, and feel a little embarrassed to know what I know.

I knew Turks and Caicos was going to be a friendly, laid- back place the minute I set eyes on it. Uptight people, after all, do not paint their Supreme Court building pink. Maybe we citizens of the United States could all be a little less intense about the controversial issues of the day if we painted our highest court a whimsical pastel color. Make the justices wear polo shirts and straw hats.

And to think that this is the capital of a group of nearly 40 islands and keys just 575 miles off the U.S. coast -- a mere 80-minute plane ride from Miami. It is a miracle -- and some say a tribute to the benevolent incompetence of elected officials -- that these coral-rich islands are not covered with high-rise hotels and time-shares.

More on this story here.


A Virginia-based network of charities and businesses is accused by the government of bankrolling groups considered by the United States as terror organizations and laundering millions of dollars. An affidavit and supporting court papers by a Customs Service special agent were used to justify search warrants.

Customs Service special agent David Kane contends targets of the requested searches moved huge sums through miltilayered financial transactions and to accounts in banks on the Isle of Man, a tax haven in the English Channel. From there, he surmised, the money must have been moved, but the island’s tight bank secrecy laws had thwarted investigators. He said he had probable cause to believe the reason that SAFA Charities existed was to hide the distribution of money to terror groups, principally Palestinian Islamic Jihad and Hamas, the Islamic Resistance movement.

More on this story here.

Terror fund trail leads to Liechtenstein.

A man charged last week on immigration infractions and suspected by prosecutors of financial links to terrorism is seen by government investigators as a possible key to unraveling an alleged terrorism-financing network spanning from Virginia to the secretive kingdom of Liechtenstein. Soliman Biheiri, a native of Egypt, was convicted in a federal court in Virginia on charges of lying on his citizenship application. It is the first conviction to be handed down in a major terrorism investigation involving a cluster of Islamic charities and companies in Virginia.

The prosecution also alleged that Biheiri is linked to a secretive financial network in Switzerland and Liechtenstein called Al Taqwa, which American and European investigators say is a financial backer of the Muslim Brotherhood. The Brotherhood, often depicted as the ideological parent of most radical Islamic groups, recently has come under government scrutiny for its possible direct role in supporting terrorism, most prominently because of Al Taqwa.

More on this story here.


Nearly €4 billion was stashed away in Isle of Man subsidiaries of Irish banks four years ago, a secret document has revealed. The document prepared by accountancy firm KMPG is likely to exacerbate concerns about possible tax evasion by those who lodged the money. The revelation comes in the wake of news that the Revenue Commissioners Offshore Assets Group is currently targeting 3,000 customers of Irish Permanent and intends to move on later to those of Anglo Irish Bank.

More on this story here.


An expected 5% yearly tax on the value of properties held through offshore companies. Details of the tax are still being worked out, with Portuguese officials reported to have lawyers representing ex-pats last week. Unravelling an offshore holding company, however, could expose them to one-off charges of €140-180,000 on a €2 million property in capital gains tax, stamp duty and legal fees.

More on this story here.


For the past five months Barbados’s double taxation treaty with the United States (US) has been under the increasing pressure. As a high-level Barbados team journeyed to Washington D.C. over the weekend for key talks on that long-standing accord, investigations revealed the US Treasury Department had placed the island on a list of four countries whose treaties it did not consider “satisfactory”. Now, that Department and the IRS have said the only way Barbados was likely to find itself off the list was if a new treaty was established or the existing one was amended or re-negotiated.

Offshore industry sources here said by now it was no secret the US was concerned about the fact many of its companies were reincorporating in Barbados, thereby allegedly avoiding paying millions of dollars in US income taxes. This was confirmed in a US Treasury Department analysis released three weeks ago, which said that body was unhappy with the double taxation treaties with Barbados, Bermuda, The Netherlands Antilles, and the former Soviet Republics.

More on this story here and here.


The Republic of Panama will celebrate 100 years of independence in November after breaking away from Colombia in 1903. Panama’s history before and since independence has been interwined (as has much of Latin America’s) with the USA. In the 1880s, France failed in its attempt to repeat the success of the Suez canal by building in Panama a waterway connecting the Atlantic and Pacific oceans. The United States was eager to build such a canal themselves and in 1903 they bought the rights to build one from a newly-independent Panama with construction starting the next year. The immense strategic importance and value of such a waterway at that time, highlighted by the Spanish-American war in 1898, was not lost on the Americans who were also granted complete control of the canal sector in perpetuity (subsequently renounced). Clearly, Panama’s independence and not just its canal were engineered by the United States.

President James Monroe of the United States in 1823 had declared: “The American continents, by the free and independent condition which they have assumed and maintained, are henceforth not to be considered as subjects for colonization by any European powers”. This declaration was part of a policy which became known as the Monroe Doctrine following the collapse of Portuguese and Spanish control throughout Latin America. The doctrine made clear that any Latin American country whose sovereignty was threatened by nations from outside the hemisphere would be helped by the United States and it was viewed by sceptics as a licence for the United States to interfere in, as well as unduly influence, the affairs of its southern neighbors.

More on this story here.


While the Cooks are made up of 15 islands with a total landmass of just 95 square miles (about a quarter of the area of Rhode Island), they are scattered over 770,000 square miles of ocean (an area as large as Western Europe). Our plan is to spend a few days on Rarotonga, then use the airport as a jumping-off spot to other islands. Except we never jump.

More on this story here.


The European Union’s anti-fraud office has confirmed allegations of fraud and financial mismanagement at the EU body that represents local and regional authorities, dealing a further blow to the embattled institution. According to people familiar with the confidential report in which the allegations were confirmed, fraud investigators at Olaf found evidence that some members of the 222-strong Committee of the Regions had made false declarations to claim allowances and expenses they were not entitled to.

They also found “systematic and flagrant incompetence within the committee” and evidence a private company had received contracts from through manipulated bidding procedures. Chris Heaton-Harris, a British Conservative member of the European parliament (MEP), who has read the report, on Sunday cited a passage from the document accusing the body of an “endemic culture of unprofessionalism and improvisation” where opacity was preferred to openness.

The report is certain to weaken the committee’s position in its long-running stand-off with the European parliament, which earlier this year refused to sign off its 2001 accounts after the allegations first surfaced.

More on this story here.


Can discord mean progress? It did this month in Ottawa, where representatives of developed nations converged to compose an orderly and harmonious international tax policy. The aim of the meeting, hosted by the OECD, was to “encourage” tax havens to sign on to a multinational agreement to share information on investors with the governments of the countries in which those investors resided.

This sounds like sweetness and light, but it is actually your classic Big vs. Small conflict. France, Germany, and the US -- at least the US under the Clinton administration -- were pressuring smaller countries and territories. Confronting threats of “defensive counter-measures” that included discriminatory levies on capital flows, the tax havens ran scared. It seemed only a matter of time before they joined the OECD chorus.

But that is not how it turned out. For the European countries, as it evolved, could not even get themselves on the same page in the songbook. In the end, Switzerland, Luxembourg, Austria and Belgium said they would not divulge confidential information about non-resident investors. And if European nations were not going to divulge, then the tax havens were not going to divulge either. Or, as Antigua and Barbuda’s Sir Ronald Sanders said, Europe had managed to arrange things so that the “playing field” was “more uneven than ever”.

And, while we are on the topic of the EU, there is also the issue of its hypocritical Value Added Tax regime for services.

More on this story here.

EU again stands in way of shutting dirty money havens.

Fortress Europe has struck again and this time it is standing in the way of dealing with the global problem of dirty money havens. A closed-door, two-day session involving 40 countries in Ottawa ended without agreement and only a written commitment to try to keep tackling the issue.

More on this story here.


The Senate Finance Committee will hold hearings on tax shelters that will feature testimony that tax cheating continues unabated and that the numerous crackdowns announced over the past two years by the IRS have had almost no impact. The committee’s leaders, Senators Charles E. Grassley, Republican of Iowa, and Max Baucus, Democrat of Montana, have been frustrated by their inability to get Congress to finance a serious assault on tax cheats, aides said yesterday.

This hearing, which will feature a witness hidden behind a screen with his voice altered, is intended, in part, as a kick in that direction. In the aftermath of corporate scandals that emerged two years ago, Congress enacted changes and increased by a third the Securities and Exchange Commission enforcement budget, but it did not pass any laws to attack abusive tax shelters or finance a serious hunt for tax cheats. A consultant’s report, prepared for the IRS, but kept secret by the agency until now, is expected to show that corporate tax cheating in 2000 cost the government $14 billion to $18 billion.

Witnesses will tell how auditors have been driven from their jobs at the big accounting firms for refusing to go along with crooked corporate tax schemes and how some rich individuals were lured into frauds by big accounting firms that sold tax shelters that they promoted as perfectly legal.

More on this story here.

Tax-shelter tale to get U.S airing.

Henry Camferdam Jr. has been lauded for his entrepreneurial skill by accounting firm Ernst & Young. Now he is taking the firm to task for steering him into an offshore tax shelter that became the subject of an IRS probe. While Ernst & Young denies any wrongdoing, the retired Carmel computer wholesaler and his partners have a lawsuit pending against the firm in federal court in New York.

On Sunday, Camferdam is slated to make his case on the national television news show 60 Minutes. He also is on the witness list for a tax shelter hearing scheduled before the Senate Finance Committee.

More on this story here.


Funny how this piece started. It actually began thinking about Rush Limbaugh. The reactions all around the political spectrum concerning his recent revelations. And the utter hypocrisy on both sides in either attacking or defending him. I keep remembering how I felt when I saw those towers collapse on that day. How I realized how much I loved this country and what it stood for. And now I wonder, does it really stand for anything anymore?

The late David Viscott, premier therapist and radio talk show host, once had a depressed caller and his conclusion at the end of the call was, “Well, sometimes being depressed is the right reaction to the world we live in. There is a lot to be depressed about. You just can’t let it get you down.” And I have been rather depressed lately.

It is coming home to me more and more that I am neither liberal nor conservative, Republican nor Democrat. They both stink. Both indulge in the very same hypocrisy and hatred of which they accuse the other side. They are both filled with hate. Both sides want to tell me how to live my life, according to their own rules. This nation is truly at a crossroads and I see no relief from either side of the traditional political spectrum. Neither side is willing to admit that both their viewpoints are flawed. Both are failing to address the real problems that plague this nation.

More on this story here.


“Mr. Speaker: I rise in opposition to this request for nearly $87 billion to continue the occupation and rebuilding of Iraq and Afghanistan. This is money we do not have being shipped away on a foreign welfare program. The burden on our already weakened economy could well be crippling.

“Those who argue that we must vote for this appropriation because ‘we must succeed’ in Iraq are misguided. Those who say this have yet to define what it means -- in concrete terms -- to have ‘success’ in Iraq. What is success in Iraq? How will we achieve success in Iraq? How will we know when we have succeeded in Iraq? About how long will ‘success’ take to achieve and about how much will it cost? These are reasonable questions to have when we are asked to spend billions of taxpayers’ dollars, but thus far we have heard little more than nice-sounding platitudes.

“We have established a troubling precedent that no matter how ill-conceived an intervention, we must continue to become more deeply involved because “we must succeed.” That is one reason we see unrelated funding in this supplemental for places like Liberia and Sudan...

“While we expend American blood and treasure occupying a country that was not involved in the attack on the US, those who were responsible for the attack most likely are hiding out in Pakistan -- a military dictatorship we are now allied with and to which this supplemental sends some $200 million in loan guarantees...”

Complete speech here.


A recent study shows that from 1994 to 2002, when the U.S. stock marked cycled through significant bull and bear markets, the Credit Suisse First Boston/Tremont Hedge Fund Index gained 10.8% per annum with a 9% annualized standard deviation (a standard measure of volatility), while the S&P 500 Index gained 8.1% per annum with a standard deviation of 15.8% per annum -- i.e., hedge funds outperformed the S&P 500 over the time period of the study and did so while imposing notably less volatility on a theoretical investor.

However, the aggregation subsumed under the general term “hedge funds” encompasses a wide variety of strategies -- analogous to the way blue chips and high-tech IPOs are both “stocks” -- from conservative market neutral (long and short holdings, i.e., truly hedged in some sense) to aggressively leveraged. The funds that pursue the less risky strategies are worthy of any investor’s consideration, so how does one gather the information necessary to make an informed decision?

Hedge Fund News® is a quarterly newsletter created to keep professional hedge fund managers, investors and service providers up-to-date on what is happening in the hedge fund world. The site also provides access to their funds directory and database, among other resources. HedgeIndex provides a comprehensive source for information on the CSFB/Tremont Hedge Fund Index, the CSFB/Tremont Investable Hedge Fund Index, and corresponding Sub-Indices. Managed Account Reports publishes a wide range of newsletters and directories covering the global alternative investment marketplace.


Following the conclusion of last week’s OECD meeting in Ottawa, STEP welcomed the organization’s decision to continue with dialogue on the creation of a level playing field over tax between OECD members and non-members, but expressed concern at the increasing number of “blacklists” being created and used against offshore centers.

In a recently released statement, the Society expressed concern that discriminatory tax “blacklists” are being drawn up by more and more OECD member states, despite the fact that “offshore” centers and practices within the OECD escape censure. “For example, a new law introduced by the Portuguese government discriminates against traditional offshore companies but explicitly gives exemptions to those in booming OECD “offshore” centers like Delaware,” STEP observed.

More on this story here.


American investigators have evidence that $3 billion that belonged to Saddam Hussein’s government is being held in Syrian-controlled banks in Syria and Lebanon, Bush administration officials say. A delegation led by the Treasury Department has spent nearly two weeks in Damascus trying to win access to accounts established by the former Iraqi government or its confederates, the officials said last week. Syria has promised to cooperate, but has so far failed to do so, the officials said.

The officials said the $3 billion was by far the largest American discovery to date of Iraqi money outside Iraq.

More on this story here.


Negotiations continued with Switzerland on the accession of the ten new member states to the EU-Switzerland agreement on free movement of persons. The third round of the negotiations (launched last July) took place on Monday, 20 October in Brussels. The main issue at stake concerns the Swiss request for additional transition periods as Switzerland wants to maintain existing restrictions for nationals of the new member states during an additional transition period of seven years. The EU cannot accept any discrimination between old and new member states and deems sufficient the transitional arrangements of the 1999 agreement, which are based on annual quotas for short and long-term work permits. In case of massive influxes Switzerland can maintain quantitative restrictions until 2014.

More on this story here and here.


Bahamas Trade and Industry Minister Leslie Miller said that Minister of State for Finance, James Smith was meeting with the IMF to develop a system whereby taxes would be related to individual incomes. “Our stamp tax is really not a fair tax,” he said. “When the l’il fellow in Bain Town pays the same taxes in the country as the good gentlemen in Lyford Cay or the Eastern road, our whole tax system needs to change.” The Minister’s disclosure came as he discussed benefits to The Bahamas of joining the World Trade Organization and the Free Trade Agreement of the Americas on a radio talk show.

“It is not fair that the average Bahamian pays the same to run his country, even though he makes probably ten percent less than some of us, but he carries the same burden,” Mr. Miller, said, noting that the United States had one of the best taxation systems in the world. [We are not making this up!]

More on this story here and here.


In a joint statement yesterday Environment Minister Pete Hodgson and Agriculture Minister Jim Sutton said a new research plan put forward by an agricultural industry group should be sufficient to avoid the need for a statutory levy on farmers.

More on this story here.


Last week a succession of big US corporate names reported strong earnings growth. Among the mix of factors driving this growth in earnings and stock prices, one in particular is not getting the credit it deserves: the slide in the value of the US dollar against the currencies of the US’s main trading partners. Some chief executives have acknowledged the role of a weakening dollar in the conversion of profits from their overseas affiliates, but the rebound in the US economy is seen as the main reason why earnings are growing so fast.

The S&P 500 index has risen by 31% since its low point in mid-March, and by nearly 19% since the start of the year. In the same periods, the dollar’s value according to a trade-weighted index against a basket of currencies has declined by 6% and 9.6% respectively. A euro cost $1.05 at the end of 2002, $1.19 at the end of May, and $1.17 this week.

The proportion of profits earned by US companies outside the US has varied sharply in the past three years. Joseph Quinlan, chief market strategist at Bank of America’s capital management arm, estimates that US companies have 23,000 overseas affiliates, and that about 30% of the profits of S&P 500 companies comes from abroad. The three most important overseas markets for US companies’ earnings are the UK, Canada and Japan, in that order. This means that the dollar/euro exchange rate has much less impact on earnings or on the value of stocks than the dollar/sterling or dollar/yen rates.

The dollar’s slide may eventually force a rise in US interest rates -- which are at their lowest levels in two generations and have played a crucial role in the revival of the US economy.

More on this story here.


While they may never have officially said goodbye to their financial advisor, for many of the so-called “ultra” high net worth, households with $5 million or more in investable assets, the recent bear market was a time of pull-back from their relationship with their advisor. Today, however, about half of these wealthy households say that they rely on a financial advisor more today than several years ago, according to a new study conducted by Phoenix Marketing International, a leading marketing services and consulting firm.

This new data comes from the Phoenix Affluent Marketing Service (AMS), a state-of-the-art market research program that continuously tracks attitudinal and behavioral trends, and targets sales opportunities, in the affluent and wealth markets.

More on this story here.


Sixteen years ago today, the Dow Jones industrial average fell 22.6%, its worst one-day percentage decline since its creation in 1896. Many investors are now inclined to dismiss the drop as an aberration. But new research has found that one-day price swings as big as the one in 1987 are not extraordinary. While they are rare, their average frequency over long periods is predictable.

The frequency of huge daily gains and losses in the stock market has presented a perennial challenge to historians because these big moves are more frequent than would be expected if the market adhered to what is known as a normal, or Gaussian, distribution. In such a statistical pattern, sometimes also referred to as a bell curve, outliers -- percentage changes that deviate significantly from the average -- are extremely rare. For several years some researchers have suspected that the markets follow another pattern -- a power law distribution, which predicts more outliers than a normal distribution. Power law distributions are widely recognized outside the investment arena. Earthquakes follow them, for example.

In their study, the researchers not only confirm that the stock market adheres to a power law distribution but also derive a formula that predicts how often a particular percentage change is likely to occur. They have tested the formula in global stock and currency markets of varying sizes. Their findings imply that crashes are an inherent feature of markets and that investors are fooling themselves if they believe that another crash of 1987’s magnitude will never occur.

More on this story here.


A legal opinion commissioned by Privacy International suggests that a draft European framework directive on the retention of communications data is unlawful because it breaches the Convention on Human Rights. The comments also affect similar legislation that the UK recently laid before Parliament. Communications data is limited to data that describes the caller and the means of communication (e.g., subscriber details, billing data, e-mail logs, personal details of customers and records showing the location where mobile phone calls were made) but not the content of the communications.

The EU is developing a framework directive, known as the “Draft Framework Decision on the Retention of Traffic Data and Access to this Data in Connection with Criminal Investigations and Prosecutions.” According to the Opinion, “The data retention regime envisaged by the Framework Decision, and now appearing in various forms at the Member State level, is unlawful.”

More on this story here.


The European Union took its first step yesterday towards the creation of an EU-wide health identity card able to store a range of biometric and personal data on a microchip by 2008. Approved by Union ministers in Luxembourg, the plastic disk will slide into the credit-card pouch of a wallet or purse. The European Health Insurance Card is intended to end the bureaucratic misery of E111 forms currently used by travelers who fall ill in other EU countries. Eventually it will replace a plethora of other complex forms needed for longer stays.

But civil liberties groups said it was the start of a scheme for a harmonized data chip that would quickly evolve into an EU “identity card” containing intrusive information off all kinds that could be read by a computer.

More on this story here.


By any name, electronic surveillance has been called law enforcement’s most effective -- and intrusive -- tool. And, 35 years after a federal law authorized using electronic surveillance, its role in criminal investigations remains poorly understood by the public. For starters, an affidavit seeking its use often runs 25 pages or more. Some people are quick to attribute political motives for its use but national experts in electronic surveillance offer a different view.

Despite Attorney General John Ashcroft’s low reputation among civil libertarians, Patricia L. Bellia, a Notre Dame Law School professor and coauthor of the book Law of Electronic Surveillance, said the Justice officials who usually approve electronic surveillance are “careerists, not political appointees.”

Bellia said applications for electronic surveillance are much more detailed than search warrants and the “legal standards” much tougher. “Think of it as a search warrant on steroids,” said Clifford S. Fishman, a Catholic University law professor and former Manhattan prosecutor and author of Wiretapping and Eavesdropping. “If for a search warrant you submit three or four pages, the affidavit for electronic surveillance might run 25 to 30 pages.”

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Five law lords yesterday rejected an attempt to establish that a right exists under English law to sue for invasion of privacy. The ruling, which had been keenly awaited by lawyers, establishes that there is no “freestanding” right to privacy in English law. Instead, those seeking damages when their privacy is invaded -- including celebrities such as Catherine Zeta-Jones and Michael Douglas -- will have to bring their cases under other, well-established types of action, such as breach of confidence.

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A Scottish computer company which stands to profit from so-called Big Brother technology has warned that it could be used for spying, unless legislation is put in place to protect privacy. Jim Lee, the managing director of Campbell Lee Plc, said that within two years most cars will be fitted with cheap black boxes which will relinquish control of vital systems, as well as communicating driver habits. Campbell Lee will host vast amounts of data from cars and lorries, ranging from insurance details to the location of the car, and even the driver’s preferred radio station.

Mr Lee, 56, warned that existing legislation does not provide adequate protection. He added: “Suddenly, there is almost limitless information and limitless control from these black boxes. As well as knowing where you are, how many miles you’ve travelled, and how much fuel you’ve consumed, the outbound controls can limit speed or even disable the car if it is reported as stolen. “My primary concern is that there isn’t any legislation to control the use of this data. I find it scary, and it’s not tomorrow’s world, it’s here today.”

Civil liberties groups are concerned that British citizens are already among the most closely watched in the Western world. On the roads, more than 4,500 speed cameras catch a million drivers a year and net £66 million in fines.

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Sensitive personal financial information belonging to Massachusetts Governor Mitt Romney recently ended up on sale online for $125, exposing the inner workings of a credit reporting network that operates largely on an honor system and is rarely policed. As part of a story on the vulnerability of personal financial data, The Boston Globe purchased Romney’s TransUnion credit report -- listing his credit card accounts, credit card numbers, credit limits, and payment history -- from a Colorado company calling itself Goldshield Inc.

It was not hard to do. On its website, Goldshield asked: “What are you looking for?” On sale were Social Security numbers ($30), unlisted telephone numbers ($85), telephone billing information ($95), vehicle information ($65), credit reports ($125), and credit card billing statements ($125). Everything a thief would need to steal an identity. All the information was sold with no questions asked. John Strange, who identified himself as the president of Goldshield, said he could obtain a person’s credit report or a credit card billing statement without anyone knowing about it.

Mary Culnan, a professor of management at Bentley College in Waltham, Massachusetts who specializes in privacy issues, said the Goldshield incident illustrates the pass-the-buck mentality of the credit reporting industry. She said the industry is dominated by three national credit bureaus -- TransUnion, Equifax, and Experian -- but has a soft underbelly of resellers. When one link in the credit reporting distribution chain fails to fulfill its responsibilities, critics say, the entire system collapses.

More on this story here.


Spooks, suits, generals and geeks gathered in New Orleans this week to discuss a common goal: an all-seeing, omnipresent set of eyes in the sky to keep an unblinking view of the entire world at once. Representatives from the military, spy agencies and the defense industry met to find ways to put a new generation of spy satellites in orbit to aid in war, homeland security and spy craft. But talking about Big Brother vision in a hotel ballroom is proving to be a whole lot easier than executing it in orbit. Several of the satellite systems are wrapped in controversy, cost overruns or long delays.

More on this story here.


On November 5, 1720, the first letter from Cato (pseudonym for John Trenchard and Thomas Gordon, honoring Cato the Younger, whose dedication to principles of liberty led him to oppose Julius Caesar) appeared in the London Journal. Many more followed, reflecting the ideas of John Locke, soon making it England’s most influential newspaper, and leading to collections of Cato’s Letters that were, according to Clinton Rossiter “the most popular, quotable, esteemed source of political ideas in the colonial period.”

As one of the letters said, “it is and has been the great design of this paper to maintain and expose the glorious principles of liberty, and to expose the arts of those who would darken or destroy them...” That theme was what made it so important to our heritage as Americans.

According to Ronald Hamowy, “From its first publication in the 1720s through the revolutionary era that ended the century, its impact on both sides of the Atlantic was enormous. Its arguments against oppressive government and in support of the splendors of freedom were quoted constantly and its authors were regarded as the country’s most eloquent opponents of despotism...[and] frequently served as the basis of the American response to the whole range of depradations under which the colonies suffered.” It is worth revisiting Cato’s Letters’ devotion to liberty, its central theme, which so powerfully influenced our founding as a nation.

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By now there is a slew of books about 9/11 and the so-called war on terrorism. Only a certified news junkie will try to read them all. If you are going to read only one, make it James Bovard’s Terrorism and Tyranny: Trampling Freedom, Justice, and Peace to Rid the World of Evil. Bovard is an investigative journalist (that should be a redundancy) nonpareil. You will not find speculative flights into unsupported conspiracy theories, only hard reporting of documented facts gained through indefatigable legwork. The result is less than flattering to the current administration or recent previous ones.

When you read about the bungling that occurred for years up to 9/11, you won’t believe it. But Bovard’s got the goods. If you have been suspicious about the size of the “national security” tab the American people have been hit with for years, you will find those suspicions amply confirmed. Suffice it to say here that the Bush administration’s repeated claims that the attack was “out of the blue” are hard to credit.

Bovard also demonstrates, again through old-fashioned reporting, that the new laws enacted post-9/11 -- most infamously the USA Patriot Act -- have nothing to do with fighting terrorism and everything to do with government aggrandizement at the expense of life, liberty, and property. The chapter on the second Iraq war will make your blood boil. There is much else in this volume that is worth mentioning, but space and time do not allow it. The only thing to be said is: Read the book!

More on this story here and here.


So you think those wacky Nigerians who promise you compensation for assistance in moving funds from foreign countries to banks in Europe, are operating from scruffy cyber-cafes in Lagos? Think again. Regrettably, victims fork over enough money to sustain an industry that ranks in Nigeria’s Top five. Officials estimate that Britons alone lose £150 million a year to such frauds. Globally, experts put the annual take at a staggering $1.5 billion, money that is often used to finance heroin smuggling and other criminal activities.

Nigerian scammers used to operate from the UK, but combined police efforts have driven them to continental Europe, in particular to the Netherlands, which not only has a liberal immigration policy and a large African community, but also offers easy Internet access.

Along with Interpol, Cees Schep of the Dutch National Criminal Intelligence Department is now looking for new ways to fight the scams. “Throwing these people in jail won’t help a lot,” he says. “They will be replaced by others in no time. We need to cripple their means of communications. Shut down their mobile phones and email boxes relentlessly.” Schep has collected over 950 mobile phone numbers to do just that.

More on this story here.


The privately-held company plans to hire 60 to 70 staff there annually for the next three years, with the possibility of moving support staff in as well later. According to ASG president, CEO and owner Art Allen, the move reflects an industry trend away from outsourcing. “I believe we’re going to see more organizations set up their own operations abroad rather than outsource,” he says.

“We also looked at China, India, Brazil and South Africa, and chose Nothern Ireland for a variety of reasons,” Allen adds. “There’s technical talent, it’s a 30 minute flight from London, and the government there made it real cost effective for us. On paper the other places looked cheaper, but in reality when you add the cost of rework, different languages and timezones, they lose the advantage.”

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US think tank, the Center for Freedom and Prosperity announced this week that bipartisan opposition to the proposed Internal Revenue Service (IRS) interest reporting regulation (REG 133254-02) is still strong. The CFP revealed that in a letter sent to Treasury Secretary John Snow last month, ten members of the Senate Banking Committee urged Mr Snow to withdraw the regulation, and to ensure that the US position on this issue is known to other OECD member states.

The Senators warned that the proposed regulation is likely to drive foreign investment from the United States, that it violates the intent of Congress “which has consistently voted in the past to reject the taxation of interest income on foreign investment or reporting of such income”, and that it violates the Regulatory Flexibility Act.

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Delegates recently gathered at a conference in the Port of Spain, Trinidad & Tobago, to discuss ways in which greater harmonization could be achieved between capital and equity markets in the region with a view to establishing a single Caribbean trading exchange.

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It has emerged that the European Union is preparing to impose $4 billion of trade sanctions on the United States on a gradual basis, in an effort to avoid an all-out trade war between the two economic blocs.

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A senior Treasury official said that the Treasury Department was willing to consider the elimination of the credit line it extends to Fannie Mae and Freddie Mac, the two largest players in the mortgage lending industry, as part of the effort in Congress to overhaul regulation of the two companies. The announcement briefly shook the stock prices and bond yields of the two companies. It also prompted other officials to emphasize that the administration was not making the proposal but was willing to consider it if proposed by a lawmaker.

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Sen. Charles Grassley, chairman of the Senate Finance Committee says he wants to crack down on tax shelters that let U.S. and European cities raise quick cash by leasing public facilities to companies, enabling them to get significant federal tax breaks. The companies play no role in managing or operating the facilities they lease, but they get to deduct depreciation on the properties from federal taxes, a leasing industry executive, who wanted his identity kept secret, told Grassley’s committee on Tuesday.

In a typical transaction, a corporation would pay an upfront fee to a city to lease a major public facility, such as a bridge or a subway system, the executive told the Senate panel. In the paper transaction, the infrastructure is leased back to the public authority, and the corporation earns depreciation-related tax deductions that are significantly larger than the amount paid to cities.

More on this story here.

Who fears the IRS? Not rich cheaters.

Corporations and rich tax cheats do not fear the IRS and are finding new ways to shelter tens of billions of taxes a year, Congress was told yesterday. “I actually don’t think that corporations and accounting firms are afraid of the IRS,” said Thomas Walsh, a former tax officer for Levi Strauss, who lost his job when he questioned the accounting for a Levi Strauss factory in Brazil. The firm, which says it has corrected any accounting problems, has sued him for providing information to the IRS.

More on this story here.


Senator Jon Kyl, an Arizona Republican and a leading opponent of America’s estate tax has proposed modifications to the law that will lower the tax rate and raise exemption levels, in a proposal that breaks from the traditional Republican stance of an outright ban on the death duty. According to various media reports, internal emails have revealed that Mr. Kyl favors a bill that would raise estate tax exemption for couples to $30 million and for individuals to $15 million, whilst lowering the duty paid above these thresholds to 15% -- the same rate as for capital gains and dividends.

Kyl’s efforts indicate the depth of concern among estate tax opponents that, because of surging budget deficits and rising public opposition to President Bush’s economic policies, they might not prevail. One business lobbyist said that repeal proponents still lack the votes to get any measure eliminating the tax through the Senate. If a Democrat were to be elected president next year, that would end all hopes even for significant cuts to the estate tax. “In the ideal world, it would be great to get full repeal,” said the lobbyist, speaking on the condition of anonymity. “But if Bush isn’t reelected, we’ll never get any more movement on the death tax.”

More on this story here and here.


All the parties in government, with the exception of the Christian Democrats, say they are ready to discuss the idea of a second cabinet seat for the rightwing People’s Party. Ahead of December’s cabinet nominations, the most likely option is for the weakest of the major parties, the Christian Democrats -- which won only 14.4% of the vote -- to give up one of their seats. We are clearly targeting the Christian Democrats’ seat,” said party spokesman Yves Bichsel.

Following the electoral success of the People’s Party, bilateral negotiations between Switzerland and the European Union are expected to become tougher. The main bones of contention are the Schengen-Dublin accords on crime and asylum, and the extension of an agreement on the free movement of people. “Negotiations on a possible EU membership have to stop immediately and the bilateral agreements have to be reviewed,” said Hans Fehr of the Zurich wing of the People’s Party, and head of the campaign for an “Independent and Neutral Switzerland”.

By tapping into voters’ fears about tax, pensions and asylum, the rightwing Swiss People’s Party has become the largest party in Switzerland, according to Oscar Mazzoleni, author of a recent study on the People’s Party. Mazzoleni says that the People’s Party is unique in Europe for having become more radical while also being a party in government.

The success of the People’s Party in Sunday’s parliamentary elections has invited comparisons with far-right movements in Europe. But political scientists say the People’s Party is a different animal. Pascal Sciarini of the Swiss Graduate School of Public Administration says there are similarities between the People’s Party and far-right movements in Europe “in their nationalist, isolationist, anti-European, anti-immigration and anti-asylum policies. But one of the main differences is that Blocher and his entourage have never been attacked for being racist or anti-Semitic.”

More on this story here, here, here, and here.

Swiss cabinet says it is not willing to lift banking secrecy.

In its negotiations with the European Union on a second set of bilateral treaties, officials said there were options to resolve remaining problems about tax fraud and money laundering, but banking secrecy was not negotiable.

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For all intents and purposes, the OECD’s attempt to undermine tax competition has collapsed. Many low-tax jurisdictions had made “commitments” to weaken their attractive tax and privacy laws after being threatened by the OECD with financial protectionism -- but explicitly stated that those commitments were binding only if all OECD nations agreed to the same flawed rules (the famous “level playing field” requirement). The EU’s Savings Tax Directive might have satisfied that condition, but that tax harmonization scheme collapsed when the US, UK, Switzerland, and Luxembourg refused to agree to share confidential information about nonresident investors with foreign tax authorities.

This is a positive development for the world economy. Tax competition is a liberalizing force in the world economy. Fiscal rivalry helps lower tax rates and helps reduce discriminatory taxes on income that is saved and invested, and even OECD economists have widely written that lower tax rates and neutral treatment of capital are important contributors to economic growth.

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Israel’s Supreme Court is expected to hold a hearing November 6 on a complaint filed against several of Israel’s top financial authorities that accuses them of failing to investigate a multimillion-dollar scam by the Swiss subsidiary of Bank Leumi, Israel’s second-largest bank. Two foundations representing Israeli and French citizens are citing the supervisor of banks, the finance minister and the governor of the central bank for their refusal to look into an embezzlement scheme that defrauded dozens of clients of the Zurich branch of Bank Leumi during the 1990s.

Yona Fogel, first executive vice president of Bank Leumi in Israel, said the legal actions were motivated by greed. “They are trying to pressure us by damaging the image of the bank, but we won’t surrender,” he said in a telephone interview. “We did all we could to compensate the victims when we discovered the embezzlement.”

Bank Leumi has acknowledged the irregularities, has fired the main culprit and is cooperating with an ongoing Swiss criminal investigation into his actions led by Zurich District Attorney Nathan Landshut. It has also proposed to compensate its abused clients. But while most have agreed to settle out of court, several have decided to take legal action, both in Israel and in Switzerland.

More on this story here.


Ireland’s Justice Minister, Michael McDowell issued a warning to bank officials who facilitated their clients’ tax evasion via offshore schemes, revealing that they too will be investigated and prosecuted.

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The heavy flow of investment to India via Mauritius is likely to swell after India’s Supreme Court this month upheld tax exemptions for firms based on the island that invest in India, an industry group said on Tuesday. Foreign investors channel billions of dollars each year through Mauritius to India, taking advantage of an agreement on avoidance of double taxation which exempts investors from paying capital gains tax on investments made in India. India’s Supreme Court on October 7 endorsed the legitimacy of the agreement, which had been challenged in India’s courts for the last three years.

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The Cayman Islands Cabinet was scheduled to approve another large batch of Caymanian Status (belongership) grants by special dispensation in its meeting on Tuesday, according a senior Government official. Estimates of the number of expected grants of Status vary from another 200 to 2,000 persons.

These grants come on top of more than 1,900 such grants of Status last month, in addition to the 200-person 2003 Status quota on which the Cayman Islands Immigration Board is now deliberating, plus the approximately 110 persons who will receive Caymanian citizenship from the Immigration Board through the naturalization requirement. The special dispensation Status grants by the Governor in Cabinet have come under sharp criticism from the Opposition Party, as well as many private citizens.

More on this story here.


The general director of a Russian defense contractor which conducted an investigation into the embezzlement of tens of billions of dollars from arms sales to Greece and his closest associate in that inquiry were assassinated on the same day in Moscow. The $73 million in offsets that the Russian contractors were due to send to Greece still had not been received after four years. No one expressed any concern over the delay. The Russian in charge of the offset appeared to have placed $45 billion in a bank in Montenegro, $16 million in a Moscow bank and another $16 million in offshore banks on the Cayman Islands, a tax haven, and was placed under house arrest by a Moscow prosecutor. We are once again faced with a murky case concerning Greek arms procurements.

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The stock markets of the United Arab Emirates, which include the Dubai Financial Market, closed up over 1,615 points by the end of September, up 29% on the previous year, the Khaleej Times reports. According to a report by the Emirates Securities and Commodities Authority (ECSA), market capitalization has jumped significantly in the same period to reach a level of Dh4.5 billion ($1.23 billion), up 17% and Abdullah Salim Al Turifi, Executive Director of the ESCA attributes much of the growth to the end of the war in Iraq, creating a much more stable economic environment.

More on this story here.


Despite the SARS outbreak earlier this year and the difficult economic environment both locally and internationally, Hong Kong has remained the location of choice for global corporations with an Asian presence, according to recent government statistics. As of June 2, 2003, there were 966 regional headquarters in Hong Kong of companies incorporated outside the jurisdiction, according to results of the 2003 Annual Survey of Regional Offices Representing Overseas Companies in Hong Kong, which was conducted by the Census and Statistics Department. The corresponding figure for June 1, 2002 was 948 regional headquarters.

Among the factors affecting the choice of location for the establishment of regional headquarters and regional offices, a low and simple tax system was considered as the most important. Other important factors included free flow of information, political stability and security, corruption-free government, and rule of law and independent judiciary. All of these aspects were rated by more than half of the companies questioned as favorable in Hong Kong.

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Investigators are trying to determine if a girlfriend of an imprisoned former stockbroker wired $3.3 million to an offshore bank just before the fraud case broke. Frank Gruttadauria, 46, who is serving a seven-year sentence at a federal prison in Morgantown, West Virginia, for bilking investors out of $125 million, has said he acted alone. But prosecutors have alleged in court records that just days before his scheme collapsed, his girlfriend, Sarah Emamy, 32, of Gates Mills, transferred money to a British Virgin Islands account.

More on this story here.


Tax revenues fell as a percentage of wealth amongst OECD countries for a second consecutive year according to the Organization’s latest revenue statistics, due mainly to tax cutting policies and economic weakness. According to the figures, tax burdens fell in 16 of the 27 members of the OECD where data was accessible. Most of these were concentrated in the European Union, where tax revenues accounted for 40.5% of GDP, down from a level of 41% in 2001, marking two straight years of declines after a five year period of increases.

More on this story here.


The European Union’s elite are determined to destroy Europe’s Christian heritage, Umberto Bossi said yesterday. He described the elite as “filthy pigs” who wanted to “make paedophilia as easy as possible”. Mr. Bossi, leader of the Northern League, said Brussels was “transforming vices into virtues” and “advancing the cause of atheism every day”. He denounced the European arrest warrant as a step towards “dictatorship, deportation, and terror, instilling fear in the people, a crime in itself”. It would lead to a Stalinist regime “multiplied by 25”.

One day Italian citizens would be locked up on the orders of Turkish judges, he told Il Giornale newspaper, which is owned by the family of the Italian prime minister, Silvio Berlusconi. He added that the euro was a “total flop”, its inflationary effects costing ordinary people “a fortune” in lost purchasing power. The outburst was a public relations disaster for Mr. Berlusconi, who was at the European Parliament in Strasbourg for the first time since his calamitous debut as EU president in July.

More on this story here.


What would Martians make of Delaware? The corporate laws of this tiny state, home to just one third of one per cent of Americans, govern more than half of all publicly owned companies in America. Its expert judges, handpicked by the state’s governor, give the nation’s most important and closely watched rulings on corporate policy. Incorporating business in the state, moreover, is a franchise which Delaware has dominated for nearly a century.

America’s recent corporate scandals have wreaked havoc with other institutions empowered to regulate the nation’s errant businessmen: the Securities and Exchange Commission (SEC) lost a chairman, as did the New York Stock Exchange -- and both have lost plenty of prestige. Yet Delaware has escaped, once again, untouched. Even as Americans choke with disgust at monstrous executive pay, corporate looting and spineless boards, no one in power suggests that supposedly business-friendly Delaware should be stripped of its authority. This particular pygmy, it seems, plays a very fine game indeed.

As it must. More than one-quarter of state revenues come from its corporate franchise tax -- about $3,000 a year for every household. Revenues from shareholder litigation and all those rich resident lawyers concentrate minds further. The legislature, Delaware’s powerful state bar association and its judiciary are all hypersensitive to anything that might damage the state’s attractiveness to companies. One explanation for Delaware’s success is that its power is, in reality, something of an illusion; that America’s federal authorities, either directly or by threatening action, in effect set policy; and that Delaware has learned to toe the line.

More on this story here.


On October 17th 1973, Saudi Arabia and several of its oil-rich neighbours voted to cut off oil supplies to America. Two days later, Libya said it would also cut supplies to America and raise the price of oil to other countries from $4.90 a barrel to $8.25 a barrel. Arab frustration at Israel’s military victory that month came to a peak on October 21st when Dubai, Qatar, Bahrain and Kuwait cut off supplies too. OPEC, founded in Iraq in 1960 to promote the interests of producer nations, had finally found its muscle.

The Arab embargo has become a symbol of the political chaos and economic troubles endured by the West during the oil shocks of the 1970s. A casual observer of the energy business today might find little changed from that tumultuous autumn of 30 years ago. Once again there is talk of scarcity and crisis. The Middle East is again on the brink of chaos, not only because of Arab countries’resentment over America’s support for Israel, but also because of its military occupation of Iraq. And, after years of weakness in the 1990s, OPEC has sprung back to life. Although oil prices have remained around $30 a barrel for some time, and western economies are anaemic at best, the cartel shocked the market last month by voting to cut its output even further.

If so many things remain unchanged, is the power of OPEC to bring western economies to their knees one of them? The answer to that is complicated: OPEC’s power was enhanced by stupid policies pursued by western governments, then reduced by wiser policies of energy conservation, and now is making an alarming comeback.

More on this story here.


“More money or more time?” That is what a pollster working for American Express asked a worldwide sampling of affluent consumers -- and 49% of those questioned chose more money, while 46% chose more time. When asked what two or three factors were most important for buying consumer goods, 73% said price, while 72% said quality.

At the individual country level, however, results varied considerably. On the “more time vs. more money” question: Mexico led the countries favoring time over money by a wide margin, with 77% of Mexican affluents wanted more time vs. 23% more money -- a spread of 54%. Other countries favoring time -- Australia, France, and the UK-- showed a maximum spread of 8%. “Mexicans love life and consider time with friends and family to be critically important to their well-being,” says Mario SanMiguel, head of American Express Mexico.

Hong Kong weighed in in the opposite direction: 57% favored money vs. 37% time. Other countries favoring money included Brazil, Germany, Japan and the US.

More on this story here.


Canadian intelligence experts say that country’s immigration policies are a disaster. Twenty years ago, Canada admitted 500 refugees from around the world, but last year, 40,000 people were allowed in. Terrorism experts say it is not just how many illegal immigrants are being allowed in, but who is entering the country that is a concern.

After the 9-11 terror attacks, the United States tightened security measures and set up an immigration registration system. Rather than registering, many Middle Eastern men went to Canada where laws allow refugees to enter with little scrutiny and stay indefinitely.

More on this story here.


Even as some members of the Senate Judiciary Committee said they want to see elements of the Patriot Act modified, others contended that some of the attacks on the anti-terrorism legislation have been unfair. The act, they said, has been inaccurately cited for harsh treatment of detainees in the months after the 9-11 attacks and President Bush’s designation of some terrorism suspects as enemy combatants. Senators Joseph R. Biden Jr. (D-Delaware), Dianne Feinstein (D-California), and Orrin G. Hatch (R-Utah) are among the act’s defenders.

Feinstein said that her office has received 21,434 letters opposing the act, but more than half cite provisions that have not been enacted or sent to Congress by the Bush administration. The rest, she said, largely concern security measures governing items mailed to the United States from abroad -- not provisions of the Patriot Act. Sen. Richard J. Durbin (Illinois) said Congress overwhelmingly passed the Patriot Act in “a moment of fear”, and that while Feinstein is “probably right” that it has not been used to erode civil liberties, it is the government’s “burden to prove” that it has not gone too far.

Russell Feingold (D-Wisconsin), the only member of the Senate to vote against the Patriot Act, said he supports “90 percent” of its provisions and believes the rest are “fixable”. He, Durbin and other Senate liberals have joined forces with conservatives, including Sen. Larry E. Craig (R-Idaho), in promoting modest changes to several provisions of the law.

More on this story here.


Conservative e-journal The Federalist recently released a position paper on the USA PATRIOT Act. Agree or disagree with their premises and reasoning, it is worth reading. It concludes:

Clearly, as is any case of federal expansion, the threat to liberty is an inherent problem. Furthermore, even if the Patriot Act is not abused by its inceptors in the present administration, could the Act be abused by subsequent governments? This is no small question, and points to the central danger posed by this legislation: A broad interpretation of the Patriot Act could, in some instances, exceed the law’s mandate to combat terrorism. If it is to continue to exist as a useful, constitutional tool of law enforcement and national security, the Patriot Act must constantly be subjected to meaningful scrutiny and refined in ways that maximize its effectiveness while minimizing its potential for abuse. That said, the 2001 USA Patriot Act is a bold and timely piece of legislation, in keeping with the constitutional values of our nation’s history, and essential to our nation’s future. It is hoped that the proposed 2003 national security legislation will follow in this same vein, and further refine existing law to combat the war on terror while preserving the liberty for which we fight.

More on this story here.
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