Wealth International, Limited

Offshore News Digest for Week of February 2, 2004

Note:  Investing and economics-related items now have their own pages. This week’s may be found here.

Offshore Business Taxes Asset Protection Privacy Law Opinion & Analysis



Italian Economy Minister Giulio Tremonti will seek to bring the G7 countries on board with a plan to tighten the laws governing companies’ offshore units. Tremonti, now trying to reform Italy’s watchdogs, has said forcing companies to comply with home country laws even in offshore havens would solve part of the regulatory problem. Parmalat’s string of offshore financing units -- from the Isle of Man to the Cayman Islands -- were at the heart of the food group’s crisis.

More on this story here.

Parmalat administrator in dispute with Cayman firms.

According to recent media reports, Parmalat’s special administrator Enrico Bondi is gearing up for a titanic contest with Ernst & Young in Cayman, who reportedly have refused to hand over accounting records. It has also emerged that Bondi has dropped long-time Parmalat legal adviser Maples and Calder and replaced them with two-partner Cayman firm Turner & Roulstone.

More on this story here.


The South African Revenue Service has announced that the Exchange Control Amnesty, designed to encourage taxpayers to declare offshore funds and unpaid taxes will be extended to cover other taxes such as PAYE (Pay As You Earn) and Value Added Tax (VAT).

More on this story here.


Supporters of a measure to force corporations to pay million of dollars in taxes when they relocate offshore failed to win the necessary two-thirds majority in the state Senate last Wednesday.

More on this story here.


Chairman of the Caribbean Financial Action Task Force, Sir Ronald Sanders, believes the Caribbean’s financial services sector remains under serious threat and has sought to warn the region that the recent fight waged against the OECD and its harmful tax competition initiative is far from over. He is further cautioning the region that the work of another international agency, set up by G7 countries to fight money laundering and counter terrorism, presents a “real and present danger” to the development of the region’s financial services sector.

The caution comes in the wake of a December 2-4 meeting in Washington of a working group set up by the Paris-based Financial Action Task Force (FATF), which focused on the current round of negotiations on new Anti-Money Laundering/Counter Financing of Terrorism Methodology. Sir Ronald has accused the FATF of a “blatant disregard” of the views of the CFATF team, which attended the meeting.

More on this story here.


The US had 291 million residents on July 1, 2003, and is projected to have 300 million by 2007. Nevada was the fastest-growing state in 2002-03, adding 74,000 people or 3.4% to its population. California had 35.5 million people in 2003; Texas, 22.1 million; and New York, 19.2 million.

The US had 33 million foreign-born residents in 2002; the foreign-born were 27% of California residents; 21% of New York residents; 19% of New Jersey residents; and 18% of residents in Florida and Hawaii. Miami-Dade county had the highest percentage of foreign-born residents, 51%. Large US cities with the highest shares of foreign-born residents include Miami and Glendale, California, with an estimated 60% and 54% of residents born abroad. The US Hispanic population is expected to reach 60 million by 2020, largely because of immigration, which would bring the Hispanic labor force to 29 million.

More on this story here.


Compliance with international guidelines to promote environmentally sustainable development requires funding and other resources being made available, delegates from 43 Small Island Developing States (SIDS) meeting at a conference have agreed. The group also agreed that special international consideration needed to be given to small states whose resources were being severely taxed by: AIDS/HIV; compliance with new international trade and other initiatives; terrorism, and the need for improved communications.

More on this story here.


The Barbados International Business Association chief, Henserson Holmes, was scathing about attitudes towards the jurisdiction’s offshore sector last week, arguing that the vitally important pillar of the nation’s economy was being treated with “as though it is an invisible sector”.

More on this story here.


The Swiss foreign minister, Micheline Calmy-Rey, has refused to give ground on a second round of bilateral negotiations with the EU. But the EC also says it will not make any more concessions to Switzerland on the main sticking points. Switzerland is insisting that the second set of ten bilaterals is dealt with as one package, while the EU is in favour of a dossier-by-dossier approach.

Calmy-Rey said Bern had given ground over the taxation of EU residents’ savings held in Swiss bank accounts and was now waiting for Brussels to reciprocate. “We are being generous and now we expect them to do the same,” she said. Bern has yet to sign the agreement on taxing savings of EU residents in Switzerland, but Patten said he hoped this would be ratified by the end of the year.

More on this story here.


Companies could be forced to rotate their audit firm or switch the audit partner in charge of their accounts under new rules being considered by the EC in response to the Parmalat scandal. The proposals would mean that all listed companies in the EU would either have to rotate their audit firm every seven years or change the senior partner in charge of the audit every five years. The Commission is also thinking of requiring non-EU auditors to register with national authorities if they work for companies listed in the 15-nation bloc -- a response to similar measures in the US Sarbanes-Oxley laws. Despite an outline agreement with Washington on the “extra-territorial” Sarbanes-Oxley regime last year, Brussels is still worried by “open-ended” US rules on inspecting EU auditors.

More on this story here.

Swiss auditors want more state intervention.

Switzerland’s big auditing firms want the government to introduce tighter controls similar to those already in place in the United States.

More on this story here.


Allowing the Bahamas International Securities Exchange to fail could lead to serious repercussions for the country globally, BISX chairman said Tuesday. In an interview with The Guardian, Ian Fair said that BISX is more than simply a stock exchange for The Bahamas; it is also a development of the country’s capital market.

More on this story here and here.


Chennai, Hong Kong is wooing Indian investors, projecting itself as the jump off point for trade and business relations with China. A know-Hong Kong program “Insight”, launched by an investment promotion agency, displayed its wares to Indian business leaders, inviting investment to the territory. “Every country hoping to deal with post WTO China must have a foot in Hong Kong,” Mike Rowse, director general of the investment agency InvestHK told reporters, “Especially India, as it looks at greater trade and business relations with mainland China.”

More on this story here and here.


Expats in Moscow are asking for an expanding range of personal financial services, according to the city’s financial advisers. People working outside their home countries tend to be more tuned in to issues such as pension and tax planning, and often have more disposable cash to spend on managing their assets, they say. And with growth areas including mortgages and long-term savings plans, more expatriates are looking for new ways to boost their existing investments. Most expats have fewer debt payments and earn more than they would in their native country, said a partner in a local advisory firm.

More on this story here.


Secretary General of the Council of the Bars and Law Societies of the European Union (CCBE), Jonathon Goldsmith warned that despite extensive preparation, acceding to the European Union is likely to prove a great shock for lawyers in the 10 countries waiting to do so. “It requires lawyers to take account of not just national laws but about EU laws too. We are trying to ensure accession bars realise that they need to be observing this. This is our role,” he said.

More on this story here.


The Gibraltar opposition parties have highlighted a recent statement by the Spanish tax department that Spain intends to clamp down on tax abuses in “offshore places like Gibraltar”. In particular, the Opposition is concerned about the effect of new legislation which allows the Spanish authorities to request information from the Gibraltar government though the United Kingdom Foreign Office post-box. It is thought that this may raise issues of VAT and excise duties for businesses involved in import and export activities.

More on this story here.


Italian prosecutors investigating for fraud at Parmalat are not the only authorities examining the food firm’s multi-billion-euro accounting scandal. Following is a list of some of the investigations and inquiries under way around the world. No one has yet been charged.

More on this story here.


Close to $90 billion US is flowing from the pockets of foreign workers and immigrants in developed countries like Canada to family and friends back home -- a massive amount that has caught the eye of finance ministers from the world’s richest states. How to both facilitate and keep better track of the massive global cash flow will be high on the agenda when Finance Minister Ralph Goodale meets with his counterparts from the Group of Seven major industrialized countries. Finance ministers will discuss ways to make it easier for foreign workers to send billions of dollars in hard currencies back to their families, often in developing states that do not always have formal banking networks. Closer tabs on such cash flows will also help regulators track money laundering and terrorist financing.

More on this story here.


Chinese authorities have launched their biggest crackdown for a decade on a network of underground banks, closing down funds that handled hundreds of millions of renminbi in an attempt to combat laundering and inflows of “hot money”. The crackdown, which also resulted in the recovery of 18 million renminbi ($3.7 million) and frozen bank assets worth 70 million renminbi, was aimed at reasserting control over capital flows and eradicating irregular transactions that allow “hot money” in. Such speculative inflows, which may have totalled a $50 billion last year, have become one of the central bank’s biggest headaches. The inflows not only boost money supply and stimulate excessive credit growth, but add to foreign exchange reserves, providing ammunition for those who argue that China’s renminbi should be revalued.

More on this story here.



With selective taxes such as Customs duties, Gaming and Departure providing the bulk of government revenue, Minister of State for Finance, Senator James Smith said that at least three alternative tax impositions are being reviewed: a sales tax, a payroll tax and a value added tax (VAT) -- considered part of a “level playing field” required for individual countries to receive the full benefits of global trade, he said.

He cited studies have concluded that the existing system of customs and stamp duties are distortionary and certainly not well structured for the development of local production nor increasing the efficiency of local commercial and industrial activities in the long term.

More on this story here.


The three options put forward for replacing the current system are: allocating a larger percentage of VAT revenues, imposing an energy tax, or allocating a portion of corporate tax revenue.

More on this story here.

Germany expresses opposition to EU tax plans.

The German government has expressed its opposition to the principle of a direct tax to fund the European Union. “The idea of an EU tax is not something the German government will be following up,” a spokesperson for the Finance Ministry announced on Monday.

More on this story here.


A bill which government claims will simplify the income tax system received its first reading in the House of Keys this week. The proposed legislation will give people an extra two months to make a tax return -- they will now have five instead of three -- but those who return their forms late will be fined £50 after September 2005. The bill also updates offences in relation to returns which are more than two years overdue.

In addition, it gives new powers to the assessor of income tax to obtain documents including material relevant to exchanging tax information internationally, which is in line with the Island’s commitment to the OECD. There is also a provision to prevent company directors avoiding Manx tax, for example by using company loans to exploit the differential between the corporate and personal income tax rates.

More on this story here.


Beginning February 3, representatives of high-tax governments and low-tax jurisdictions will meet in London as part of the OECD’s “level playing field” sub-group. This meeting is a continuation of the Ottawa conference, and is part of the OECD’s ongoing (and almost entirely futile) effort to convince low-tax jurisdictions that they should agree to serve as fiscal colonies for high-tax nations.

The fundamental issue is whether low-tax jurisdictions should agree to emasculate their privacy laws and surrender their fiscal sovereignty so that high-tax nations can more easily enforce their bad tax laws -- including taxation of income earned outside their borders. Using the threat of protectionism, the OECD convinced many so-called tax havens to sign “commitment letters” indicating that they would take the aforementioned steps, but the low-tax jurisdictions simultaneously stated that the letters were not binding unless all OECD nations agreed to abide by the same misguided rules. This “level playing fiel”q requirement has created a stalemate since a number of nations -- including OECD members such as the United States, the United Kingdom, Luxembourg, and Switzerland -- are “tax havens” according to the OECD’s own definition.

The OECD hoped this problem would be solved by the adoption of the EU Savings Tax Directive; however, the EU was forced to eviscerate the proposal. So what, then, is the purpose of the London sub-group meeting? There is no good answer to this question, but the best guess is that the OECD does not want to officially admit that its project has failed. It is also likely that the Paris-based bureaucrats hope that endless nagging might convince low-tax jurisdictions to acquiesce.

More on this story here and here.

The Economics of Tax Competition: Harmonization vs. Liberalization

The battle between tax competition and tax harmonization is really a fight about whether government will control the factors of production. Supporters of tax harmonization would like to hinder the flow of workers and investments from high-tax nations to low-tax nations. Some assert that tax harmonization policies are needed to reduce evasion, but there are two ways to improve tax compliance. Fundamental tax reform would reduce incentives to evade while simultaneously reducing opportunities to evade (because capital income would be taxed at the source).

Ironically, the OECD’s staff economists know the answer. They write that “legal tax avoidance can be reduced by closing loopholes and illegal tax evasion can be contained by better enforcement of tax codes. But the root of the problem appears in many cases to be high tax rates.” Ultimately, this is a debate about the size of government. Harmonization means higher tax rates and bigger government. Freed from the rigor of competition, politicians would cater to special interests and resist much-needed fiscal reforms. This is why the residents of high-tax nations have the most to lose if governments create an “OPEC for politicians”.

More on this story here.


The 2nd US Circuit Court of Appeals last week ruled that taxes constitute property under US mail and wire fraud statutes, meaning that the government can prosecute individuals and businesses which try to defraud federal, state, or foreign authorities of taxes. The verdict was delivered in a case involving an unsuccessful attempt to smuggle cigarettes from Canada, through an Indian reservation, and then back to Canada, thus depriving the Canadian authorities of substantial tax revenue.

More on this story here.


The government of the Cayman Islands has announced that satisfactory progress is being made in negotiations with the UK aimed at limiting the potential damage to the jurisdiction’s offshore sector by the provisions of the European Savings Tax Directive.

More on this story here.

Caymans calls of Constitutional talks with U.K.

Talks that were scheduled to be held in London on 5th & 6th February 2004 between U.K. representatives and the Cayman Islands will not take place. The British Government expressed the hope that the decision not to participate further in the constitutional review process before the November 2004 elections would be reconsidered and that talks can be rescheduled

More on this story here.


Oregonians easily overturned the state Legislature’s $1.2 billion tax increase. Measure 30 fared poorly throughout the state, losing worse than a smaller tax increase a year ago. “I think it’s a clear message from taxpayers and voters that No. 1, they don’t believe government is spending its money efficiently,” said Russ Walker, leader of the opposition campaign, “and No. 2, they sent a message last year and they think it was ignored.” Walker’s group, Citizens for a Sound Economy, now will seek more controls over the growth of state government, he said.

The failure of the measure triggers $545 million in automatic budget cuts on May 1, heavily targeting public schools, the state health plan for the poor and state crime labs. Additional across-the-board cuts might be required later if state tax collections do not rebound in the coming months.

More on this story here.


Speaking at last month’s public meeting of the IRS Oversight Board, chairman of the tax arm of the American Bar Association, Richard Shaw urged the US tax agency to aggressively promote the simplification of the tax code in its dealings with lawmakers, arguing that the increasing complexity of US tax legislation and its enforcement processes are eroding taxpayer confidence in the system.

More on this story here.


As part of the 2005 budget proposals, the Bush administration has asked Congress to make available $10.67 billion for next year’s IRS budget, up from the $10.18 billion approved for 2004. Of this, a significant chunk is to be allocated to compliance and enforcement. Much of this extra cash will enable the IRS to carry out its planned increase in audits of both small and large businesses, as well as high-net-worth individuals. In addition, the IRS has plans to carry out 229 investigations into suspected cases of “significant corporate fraud” in the coming tax years through 2007. The IRS also hopes to hire and train an extra 2,000 staff to work in its document matching program, and to examine some 30,000 extra investor returns from small businesses and self-employed investors, targeting in particular high income investors.

More on this story here.


The IRS has issued a warning to taxpayers to beware of so-called “pennies on the dollar” schemes promoted by private tax “experts”, who claim large fees for settling taxpayer debts through the “Offers in Compromise” program. An Offer In Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer’s tax debt. The IRS has the authority to settle, or “compromise”, federal tax liabilities by accepting less than full payment under certain circumstances.

According to the IRS, the OIC may be considered only after other payment options have been exhausted. If taxpayers are unable to pay their taxes in full, there are other payment options, such as monthly installment agreements, that must be explored before an OIC can be submitted.

More on this story here.


The cascading corporate tax level cuts by the EU accession states in the run up to May 1st has forced Austria to respond by reducing its own corporate tax rate from 34% to 25% starting next year. In comments made to the Financial Times, Austria’s Finance Minister Karl-Heinz Grasser said that the government is “convinced” of the merits of the move in terms of attracting fresh investment and stimulating the job market. However, the minister conceded that the measure has in many ways been forced upon the country due to its close proximity to several of the ten new member states, which have an average corporate tax rate of 21%, and in many cases an aggressive low-tax ethos.

More on this story here.


Slovakia is attempting to cement its growing pre-eminence as the low tax jurisdiction of Central Europe with elimination of taxation on dividends as part of the new income tax act. “One of the objectives of the whole tax reform was to keep this rule -- to tax all income only once,” Peter Papanek, spokesman for the finance minister, told the Slovak Spectator, while noting the “positive secondary effects” the legislation will have on investment by encouraging foreign and domestic entrepreneurs.

Slovakia has also implemented a somewhat controversial flat tax, levied on personal and corporate incomes at a rate of 19%. The flat rate also applies to VAT (Value Added Tax) although this entailed an increase in tax.

More on this story here.


The head of Estonia’s office investigating tax fraud said on Tuesday he believed the inflow of tax fraudsters from Europe will increase after the Baltic country joins the European Union. He said that as borders come down as Estonia joins the bloc, which expands to 10 new countries on May 1, tighter economic and business contacts would be fostered. “It is highly logical that the criminal economy will come along with the normal economy.”

Eero Ergma, a top official at the economic crime department of the Estonian Police, said he also expected economic criminality to increase after joining the EU, with attempts to launder money and tax related crimes.

More on this story here.


Traditional tax havens like Mauritius and the Caribbean countries may lose some of their importance in the coming years, as the “trust” element is getting restored in onshore jurisdictions as well. Ernst & Young director-private client services & entrepreneurial services Paul Knox finds this to be an emerging trend. Observers from another consulting firm find two reasons for the likely decline of tax havens. First, due to global concerns about terrorism, strict anti-money laundering laws are being put in place. Second, the World Trade Organisation and aspects related to it will gradually render the concept of tax havens obsolete.

More on this story here.


As it looks for ways to maintain and boost its status as a regional hub for investment, Hong Kong is adding a previously obscure weapon to its arsenal: tax diplomacy. Although it has long been considered a tax haven because of its low rates of personal and corporate income taxes, experts say Hong Kong’s tax regime could still use some tweaking. Notably, it lacks agreements with other jurisdictions to help businesses with international operations avoid being taxed twice as they move earnings between Hong Kong and other places.

The government says it wants to set up a network of double-taxation avoidance agreements with its major trading partners. (They are agreements, not treaties, because Hong Kong is not a country.) It signed the first of these, with Belgium, in December, and more should be on the way.

More on this story here and here.


Access to the complete texts of all U.S. tax treaties, in force and proposed, is available here. Access to all U.K. double taxation agreements is available here.


In an interview with the Wall Street Journal, Mark Scott, director of the IRS tax-exempt bond division, revealed that there are “four or five” so-called “Section 6700” cases being dealt with at the present time. Section 6700 refers to the section of the tax code that deals with penalties for promoters of illegal tax shelters. Attention now focusing on market professionals who could be subject to such penalties for certifying non-compliant municipal bond transactions. In particular, the authorities want to crack down on the practice of “opinion shopping”, whereby lawyers certify that a muni transaction is legal and entitled to tax-exempt status, despite the fact that the transaction breaks tax shelter rules.

More on this story here.


The Bloc Quebecois claimed that CSL dodged $100 million in Canadian taxes by registering some of its ships in Barbados. “Won’t the prime minister admit that his beautiful speeches on tax havens (should) read, ‘do what I say, not what I do?’,” asked Bloc Quebecois leader Gilles Duceppe. Finance Minister Ralph Goodale described the $100 million figure as a “figment of (the opposition’s) imagination.”

Bloc MP Pierre Paquette said Prime Minister Paul Martin intervened to make sure Barbados was not included in the OECD’s 2000 list of tax haven countries -- a country where CSL had paid income taxes of about 2.5%, he said.

More on this story here.


The Revenue Commissioners is to get new powers to investigate offshore accounts and nab suspected tax dodgers. Under the powers tax inspectors will have the power to demand access to financial records of offshore accounts for scrutiny. The Minister for Finance, Charlie McCreevy, also published the report of the Revenue Powers Group, which has recommended granting enhanced powers of criminal investigation to the taxman, including being allowed access to telephone records of suspected tax dodgers and permitting Revenue officials to question persons in Garda custody.

More on this story here.

Revenue to use new powers for offshore tax inquiries.

The Revenue Commissioners plan to use new powers from May to demand that tax dodgers hand over details of offshore bank accounts held with Irish financial institutions. The move follows the Revenue’s decision to write to the State’s 10 major banks asking them to instruct their customers with accounts or policies in offshore locations to come forward to the tax authorities before March 29th.

More on this story here.


According to the Professional Contractors Group (PCG) and opposition MPs, the measures outlined in paragraph 5.91 of the Pre-Budget Report, now widely-dubbed as IR591, could have potentially devastating consequences for small firms. “This could be one of the most significant tax proposals for many years, resulting in much larger income tax and national insurance bills for small business owners,” the PCG warned on its website which aims to highlight the impending tax bombshell. PCG notes that the Report does not outline the proposed measures in any detail, but it refers to Government concerns about “the longstanding differences in tax treatment between earned income and dividend income”.

More on this story here.



Bearer shares are corporation stock certificates which are owned simply by the person who holds them, the “Bearer”. Eventually, most U.S. states even dropped the provisions allowing bearer shares, but recently they have made a comeback. But does the fact that you can get a corporation with bearer shares both in the U.S. and in the offshore jurisdictions mean that you should use bearer shares? No -- except in very specific circumstances you should avoid them like the plague, for bearer shares suffer from a couple of very serious defects.

We regularly deal with the very best licensed planners in the U.S., and they will all tell you that the use of bearer shares is a very, very bad idea. If someone suggests the use of bearer shares to you RUN-FAST-!-!-!- for they really do not have the first clue about what they are doing, and are suggesting an act so amateurish as to belie even a hint of real competence on their part. Notwithstanding the foregoing, bearer shares are a tool and in certain circumstances can serve their purposes. But they should be avoided most planning purposes, and when they are utilized the downside should be carefully discerned in advance.

More on this story here.


A very interesting article -- in exploring what is called for in recovering hidden dishonestly-acquired assets the author also shows what works for protecting assets of normal, non-criminal origin.

As the term implies, “concealed asset recovery” involves the recovery of wealth from a dishonest obligor, where such wealth has been laundered, camouflaged or hidden. This simple explanation, however, belies the complexity which accompanies the process. It is a difficult and time-consuming activity. Any effective civil recovery model involving a dishonest obligor and substantial value requires the employment of a serious, professional recovery team which is comprised of an appropriate blend of forensic accountants, investigators, multi-jurisdictional pre-emptive remedy lawyers, information technology experts and fraud experts. The process requires the investment of substantial financial and human capital.

The five cornerstones to a well-constructed asset protection fortress include the following components: a trust, a company, structuring, multi-jurisdictional nature, protection of “confidential” information.

More on this story here.


The 1989 International Business Companies (IBC) Act that was repealed in 2000 during a comprehensive reform of the financial services industry in order to escape an international blacklist, is to be further amended. The 1989 legislation was replaced by the IBC Act, 2000. With the approximately 100,000 IBCs in 2000 dwindling to 47,040 active ones in 2002, Minister of Financial Services and Investments Allyson Maynard Gibson told parliamentarians on Wednesday, “It is an incontrovertible fact that The Bahamas is no longer considered as a leading jurisdiction for IBCs.” Opening debate on the amendments, she said the goal is to achieve a modest level of growth in 2004 as compared to 2003 and thereby minimize further erosion of IBCs.

An IBC is a corporate entity described by experts as being “tailor-made for the needs of international business”, having the attractive features of limited liability, minimal legal restrictions, ease of administration, and speed of incorporation. A Bahamian-incorporated IBC allows a client to operate many aspects of a business with ease and confidentiality, with the additional benefit of tax neutrality, by allowing a client to manage and maximize income.

More on this story here.



Although privacy worries led several states to pull out of a federally funded crime and terrorism database project, others are actively considering joining and thereby sharing information on their residents. Officials in Iowa and North Carolina said that they are exploring the system. And documents obtained through a public-records request indicate Arizona and Arkansas also may have interest in the quick-access information repository, which combines state records with 20 billion pieces of data held by a private company. For now, MATRIX -- short for Multistate Anti-Terrorism Information Exchange -- involves Florida, Connecticut, Pennsylvania, Ohio, New York and Michigan.

A Thursday story detailed Utah’s involvement in the program. Before that, Utah political leaders say they were unaware of Utah’s participation, which was approved by former Gov. Mike Leavitt. Later Thursday, Utah governor Olene Walker said she was halting the state’s participation and appointing a panel to examine security and privacy issues. Another state once involved, Georgia, said Friday it is now dropping out completely -- after the AP confronted officials with documents indicating the state was continuing to participate despite a public proclamation to the contrary in October from Gov. Sonny Perdue.

Law enforcement officials say MATRIX is an ultra-efficient way for investigators to get information about suspects that authorities previously had to obtain from disparate sources. They insist it includes only public records and does not make predictions about crime or terrorism. But privacy advocates say MATRIX gives law enforcement too much access to private details on millions of people, resembling the Pentagon terrorism data-mining program that drew public rebuke and lost Congressional funding last year.

More on this story here and here.

Privacy Hero of the Month: Utah Governor Olene Walker

One state’s database that is no longer in the MATRIX system is Utah. That is because the state’s new governor, Olene Walker, has halted the Utah’s participation in the database after learning that former Gov. Mike Leavitt signed the state up for it on the sly before taking his new Beltway job as EPA Administrator. Leavitt had thrown data on Utahns including Social Security numbers, dates of birth, addresses, property records, motor vehicle information and credit history into a database available to government agencies in eight states and managed by a private company in Florida.

MATRIX backers are not giving up. Seisent, Inc., the company that designed the system, has representatives on a ten-state tour pushing the product to state legslatures. One selling point is the federal grant, which gets the start-up costs down to zero. But like a heroin dealer cooing that “the first one’s free,” after a year the federal funds disappear and the states are stuck.

More on this story here.


The European Satellite Navigation System GALILEO will be the next generation GPS -- Global Position System -- and a separate tracking technology that will usher in total planetary surveillance. This program is a joint initiative of the European Commission and the European Space Agency (ESA). As stressed in the European Commission White Paper on European transport policy for 2010, the European Union needs an independent satellite navigation system. Looking at the broad implications requires a crash course in Molecular Nanotechnology. Galileo plugged into nanotechnology will produce an invisible wire that links to the restraint collar worn around your neck. Instead of looking to the heavens for inspiration and tracking stars, the spy in the sky is designed to monitor your every movement.

More on this story here.

Europe and US inch towards GPS accord.

Europe and the US are nearing agreement on ensuring that the Galileo satellite navigation system will operate with -- and not interfere with -- the US Global Positioning System (GPS). Reading between the lines it seems the US has dropped its earlier insistence the GPS alone was enough to meet the needs of users for the foreseeable future. Europe, meanwhile, has agreed to establish a blueprint for the Galileo system that allows for it to be jammed (by the Americans) for military reasons.

More on this story here.


A copy of the draft agreement on the transfer of EU airlines’ passenger records to the US Department of Homeland Security gives full details of the deal struck between the EC and the DHS, and leaves the strong impression that the Commission, rather than protecting (the ostensible purpose of the EU-US discussions) the personal data of its citizens, is an accomplice in its export. The deal will go ahead, unless Parliament stands up and shouts.

The data one gives the airline in order to fly will be passed to the US authorities, and may be used as a trigger for further research by the US authorities. The deal makes reference to the possibility of the EU adopting a similar system, and as and when that happens we expect the two sides to resist the notion of pooling their databanks for, oh, a couple of minutes? Note also that the current enthusiasm for profiling, the idea being to identify possible threats from people who are not known, and have no record, absolutely requires broad data capture, use and retention. Of course, one must compile records on people who are innocent -- otherwise, how can one confirm that they are innocent? Anyway, innocent people have nothing to hide. Or they soon won’t have...

More on this story here.


Canada will be able to collect information about airline passengers on domestic and outgoing flights to identify security risks after the Public Security Act is passed, Deputy Prime Minister Anne McLellan said. Right now, officials only screen arriving air travelers. Similiar plans for U.S. domestic flights have caused an uproar. Civil liberties groups and airlines are worried about the personal information that will be used to color code each passenger’s perceived threat level and whether racism will play a part.

More on this story here.


When the government wanted millions of passenger records to test antiterrorism data-mining projects, it simply asked for and received the data from JetBlue Airlines and Northwest Airlines, which were both eager to help out. But when government watchdogs subsequently asked the government about the purpose and legality of one of those transfers, government agencies -- from the Transportation Security Administration to the Pentagon -- responded with a wall of silence and a series of delays.

More on this story here.


Observers of the European Commission’s negotiations with the US Department of Homeland Security over the transfer of airline passenger data might easily run away with the impression that the Commission has meekly capitulated to the US’s extraterritorial and unilateralist demands. A report into the EC’s activities published this week by Privacy International, however, argues persuasively that the EC has used the US negotiations as a Trojan Horse to aid the construction, first, of the EU’s own surveillance and monitoring systems, and second, of a global system.

More on this story here.


The U.S. and Canadian governments have started formal negotiations over whether Canada will provide private information on its citizens for U.S. terrorist watch lists and aviation security programs, senior officials from both countries said. Homeland Security Department Secretary Tom Ridge said an agreement is “by no means automatic” and will require “length”q negotiations, given the differences in the laws of both countries.

More on this story here.


There are few records more private than those parleyed among lawyers and doctors and their clients. There are few clients more public than Rush Limbaugh. Until the contentious king of conservative radio became the center of a doctor-shopping investigation last fall, it would have been hard to picture anyone outside his vast fan base embracing Limbaugh as a victim of privacy invasion by vindictive prosecutors.

But the recent tactics of Palm Beach County prosecutors, releasing sensitive plea negotiations with Limbaugh and seizing records from four of his doctors without his knowledge, have prompted a backlash well beyond the ranks of Limbaugh’s fans. The ACLU has joined the dispute over Limbaugh’s medical records, which the civil liberties group likens to a battle for “every Floridian’s fundamental right to privacy.”

Limbaugh, one of the wealthiest and most powerful men in American communications, now stands as an unlikely symbol for Joe Sixpack. Critics say the legal maneuvers of Palm Beach County state attorney Barry Krischer threaten the constitutional rights of a broad spectrum: people with medical secrets they do not want divulged or virtually anyone facing criminal prosecution. “Whether you love him or hate him,” The Tampa Tribune opined, “what’s happening to Limbaugh is scary.”

More on this story here.


Imagine being able to pinpoint someone’s location anywhere in the world simply by typing a few keywords on your PC. That is what software partly funded by the US military is trying to do. The MetaCarta program works by analyzing thousands of documents and cross-checking the results with a massive geographical database. So far it has largely been used by US intelligence agencies to analyse the huge amount of information collected in the war on terror.

Millions of documents can be searched using keywords, place names or a time reference. Search results appear as points on a map instead of as a list of documents. The company says this information can be used, for example, to track patterns of criminal activity and identify spots of intensity. The MetaCarta software uses an AI process to make sense of the geographical information, rating the results on a probability factor.

More on this story here.


The Pentagon canceled its so-called LifeLog project, an ambitious effort to build a database tracking a person’s entire existence. Run by DARPA, the Defense Department’s research arm, LifeLog aimed to gather in a single place just about everything an individual says, sees or does: the phone calls made, the TV shows watched, the magazines read, the plane tickets bought, the e-mail sent and received. Out of this seemingly endless ocean of information, computer scientists would plot distinctive routes in the data, mapping relationships, memories, events and experiences.

LifeLog’s backers said the all-encompassing diary could have turned into a near-perfect digital memory, giving its users computerized assistants with an almost flawless recall of what they had done in the past. But civil libertarians immediately pounced on the project when it debuted last spring, arguing that LifeLog could become the ultimate tool for profiling potential enemies of the state. Researchers close to the project say they are not sure why it was dropped late last month, and DARPA has not provided an explanation for its quiet cancellation. However, related DARPA efforts concerning software secretaries and mechanical brains are still moving ahead as planned. LifeLog is the latest in a series of controversial programs that have been canceled by DARPA in recent months.

More on this story here.


Bars and convenience stores were the first to utilize license scanners in the name of age and ID verification. These businesses, however, admit they reap huge benefits from this practice beyond catching underage drinkers and smokers and fake IDs. With one swipe -- which often occurs without notification or consent by the cardholder -- a business acquires data that can be used to build a valuable consumer database free of charge. Post 9/11, other businesses, like hospitals and airports, are installing driver’s license readers in the name of security. And still other businesses are joining the rush to scan realizing the information contained on driver’s licenses is a potential gold mine.

SWIPE brings attention to this practice and enables people to see exactly what is stored on their mysterious strip. Many people are unaware that personal data is even encoded on their license, and, if they do realize this, they probably do not know exactly what information is there. SWIPE also illustrates how this information is used and why businesses crave it. Our hope is to encourage thinking beyond the individual self (“I do not care if a bar database has my name and address and time of visit...”) toward understanding databases as a discursive, organizational practice and an essential technique of power in today’s social field. With public knowledge there is a chance for public voices, and ultimately resistance.

The SWIPE Toolkit is a collection of web-based tools that demonstrate the value of personal information on the open market and enable people to access information encoded on a driver’s license or stored in some of the many commercial data warehouses.

More on this story here.


Last November 15, fifteen privacy and consumer organizations called for manufacturers to voluntarily hold off on their plans to equip consumer goods with wireless tracking devices. These devices, called Radio Frequency Identification tags, are based on the same technology that lets cars pay E-ZPASS tolls without stopping. The fear of these activists is simple: They are worried that instead of being used to track boots, bluejeans and books, these so-called RFID systems will be used to track us.

RFID is such a potentially dangerous technology because RFID chips can be embedded into products and clothing and covertly read without our knowledge. Unlike today’s antitheft tags, every RFID chip has a unique serial number. This means that stores could track each customer’s comings and goings.

More on this story here.


Agents with the FBI’s Cyber Crime Squad have been approaching O'ahu computer-repair specialists, network consultants and software developers and asking them to report any overtly criminal activity they find in customers’ computers. Owners of computer repair shops reported that FBI agents have come calling for at least a year.

Some business owners and network security consultants favor the approach, which enlists old-school police beat work to combat high-tech crime. Others -- like the executive director of the American Civil Liberties Union in Hawai'i and some local computer users -- are wary of the tactic, saying it comes dangerously close to violating a person’s privacy rights. The FBI primarily is looking for purveyors of child pornography, software used in the piracy of movies and music, and threats to national security.

More on this story here.


A gang has stolen 9000 blank French passports and 6000 vehicle registration cards in a heist of a truck outside Paris. Police said a gang of armed and masked men hijacked the truck that was transporting the documents to a police station in a northern suburb, briefly taking two hostages in the heist. According to officials, the robbery could pay off handsomely, with each passport fetching on the black market up to €1500 euros ($2465). The vehicle registration cards only sell for maximum €700 but aid in the trafficking of stolen vehicles -- false registration papers are the best way to give a car a new “identity”.

More on this story here.

Falsified passport requires skill, luck.

A “good” falsified passport is worth $10,000, according to a spokesman for the National Passport Information Center who spoke on condition of anonymity. “People do it,” the spokesman said of those who try to use falsified passports, “but they get caught.”

“He gets the birth certificate and goes and gets a driver’s license with his picture on it and uses those two documents. Once you get the right documents, it’s a domino effect,” said the spokesman, speaking of a recent case.

More on this story here.


The introduction of compulsory ID cards would risk making the problem of identity theft worse, MPs were warned. Information Commissioner Richard Thomas warned that the cards would be seen as a “gold standard” of identification, potentially attracting counterfeiters while giving society a false sense of security. And errors by humans and computers could introduce mistakes into cards, with a serious impact on individuals, he said.

More on this story here.

Entitlement vs. Identity

The House of Commons Home Affairs Committee has begun hearing evidence about a national ID card and its uses and/or drawbacks. A bigger issue that never got covered in the hearings: the difference between entitlement and identity. The Home Office has named a number of entitlement problems: benefit fraud, so-called health tourism, illegal working. None of these concern identity. A company hiring me or a doctor giving me treatment truly does not care or need to know who I am; all that entity needs to know is that I am entitled to work or medical treatment. In the first case, the datum needed is my citizenship, covered today by my passport(s). In the second, the information lies with the Inland Revenue, who know that I have paid my taxes. Identity is not relevant except as a unique tag from which to hang those pieces of information. That could be achieved in many different ways, and it would be far, far better if the committee were comparing the national ID card proposals with some of them.

More on this story here.



He has discussed lowering the standard of proof required by a court and introducing more pre-emptive action. Possible plans, revealed on his six-day trip to India, also include keeping sensitive evidence from defendants and secret trials before vetted judges. But civil rights groups have condemned the proposals as shameful and an “affront to the rule of law”.

More on this story here.

Strong opposition to secret trials in Britain.

A proposal for secret trials for suspected terrorists has run into a wall of opposition in Britain. Civil rights groups, lawyers, the opposition Conservative Party and even Labour leaders have strongly opposed new proposals outlined by Home Secretary David Blunkett towards the end of a six-day visit to India last week.

“This is the law of the jungle,” said chief executive of the independent Joint Council for the Welfare of Immigrants Habib Rahman. “This kind of thing is simply not on in any democratic society. Draconian measures were introduced earlier, and now there are more. We do not know where this is going to end.” The new powers are hardly likely to stop suicide bombers, he said. “There is no shortage of strong laws in Israel, but these bombings are only on the rise ... There is no shortage of despotic regimes, and if Britain has such laws, with what face can it talk to the others?”

More on this story here, here, and here.

Soviet-style legislation proposed for the UK.

The fact that these kinds of proposals are even considered, shows how this government is set on using this “terrorist” opportunity" to extend its powers and change the basis upon which justice is administered in Great Britain. While we have moved away from the old totalitarianism of the eastern block and the USSR, the new brand of totalitarianism is far more dangerous. This is non-revolutionary socialism/statism. It uses the process of law and the political process to gradually manoeuvre its changes into the system and radically re-shape the social order. What enables this to happen? The basic reason is that most of our people are past caring.

More on this story here.

An affront to the rule of law.

Mr. Blunkett has an unenviable task, but in his refusal to seek a balance between public safety and the rule of law, he loses all sympathy.

Editorial here.


U.S. citizen jailed since he was captured with Taliban soldiers in Afghanistan in 2001 met with his attorneys for the first time yesterday in a jailhouse session that marked a milestone in the government’s war against terrorism. Federal Public Defender Frank W. Dunham Jr. emerged from the one-hour meeting with Yaser Esam Hamdi, whom the government has declared an “enemy combatant,” and said he was pleased to finally see the man whose case he has litigated -- sight unseen -- for more than two years.

More on this story here.


Studies show Americans close to being the worst educated and least aware population among first-world countries. Americans easily stumble into war and give up their rights because of exaggerated fears of terrorists and criminals. Americans have been losing accountable government, liberty and justice for a long time. At some point these values become irretrievable.

Consider justice. The US has the highest rate of incarceration in the world and imprisons 6 to 10 times as many people as any other industrialized country. Between 1990 and 2000 the US population increased 13%. The US prison population more than tripled. There are hundreds of thousands of innocent Americans in prison. They are there because the criminal justice system no longer works to discover the truth of a crime, but to convict at all cost whoever happens to be charged with a crime. And they are there because the US criminalizes more acts than any other country in the world, including tyrannical police states.

In the US there are three categories of prisoners: the guilty, the innocent, and those convicted as a result of prosecutors’ interpretations of vague and broad statutes that deem conduct to be criminal that reasonable people -- and every other country -- do not recognize to be criminal. For example, in the Martha Stewart case, the prosecutor criminalized her exercise of her constitutional right to declare her innocence. He said it constituted fraud for her to declare her innocence and tacked on the charge. Remember that if you ever stand before a judge.

Almost everyone in prison is wrongfully convicted, even the guilty. According to the US Dept. of Justice (sic), 95% of criminal convictions result from plea-bargains. What is a plea bargain but self-incrimination, conviction without a trial by jury and without a test of the evidence against the defendant. An uninformed public believes plea bargains to be sweet deals for criminals. Sometimes they are, but more often pleas result from prosecutors piling on charges until the defendant, innocent or guilty, cries “uncle” and gives up. Prosecutors not only coerce defendants, they coerce witnesses to give false testimony. Sometimes coercion takes place behind closed doors. Other times it takes place in full public view.

More on this story here.

Uneven Justice

Martha Stewart’s criminal trial a staple of the nightly news programs. Kenneth Lay, meanwhile, remains safely ensconced in his multimillion-dollar Houston condominium. More than two years after Enron declared bankruptcy, he still has not been charged with wrongdoing. What gives? To give the government its due, the Enron case is far more complex than the Martha Stewart affair, and it has taken prosecutors time first to untangle what actually happened and then to work their way up the corporate hierarchy. Prosecutors also know the value of publicity, and Ms. Stewart’s celebrity status makes her an attractive prize.

Yet the fraud and subsequent collapse of Enron, which cost investors $70 billion, is a far greater crime than the one Ms. Stewart is charged with, which saved her all of about $50,000. As Enron spiraled toward bankruptcy, its market value plummeting almost to zero, Mr. Lay used a loophole in securities laws to surreptitiously sell some $80 million of Enron stock, while urging Enron employees to continue buying shares. When the company filed for bankruptcy in December 2001, many Enron workers saw their life savings vanish while other investors lost hundreds of millions of dollars.

More on this story here.


Police said that Quaid Robinson, 32, while at Nassau International Airport on Jan. 29, made a false declaration to a U.S. officer, stating he was not carrying in excess of $10,000 into the U.S. A search revealed that Robinson had $17,040 in his possession.

More on this story here.


The Church in Africa is concerned about the U.S. pressure on African countries to introduce anti-terror legislation on pretext of fighting terrorism. The church is cautioning African governments against enacting such laws blindly, which it warns infringe on human rights. During a human rights meeting in Kenya at the weekend, representatives of about 50 National Christian Councils from across Africa heard that militarism and anti-terror laws vested much power in the police. Participants at the meeting fear that the police would resort to harassing citizens under the pretext of tracking down terror suspects. The power that the police will wield, they argue, will interfere with democratic processes and erode civil rights. Therefore, the church urged African governments to avoid interfering with the rights of citizens.

More on this story here.


New York City, site of the country’s most horrific terrorist attack, Wednesday became the latest in a long list of cities and towns that have formally opposed the expanded investigatory powers granted to law enforcement agencies under the USA Patriot Act. The New York City Council approved a resolution condemning the law with a voice vote in its chambers a few blocks from the gaping hole at Ground Zero. “The Patriot Act is really unpatriotic, it undermines our civil rights and civil liberties,” said council member Bill Perkins, the bill’s sponsor. “We never give up our rights. That’s what makes us Americans.”

The impact of the City Council’s vote on security is likely to be put to a major test when the Republican National Convention meets in New York Aug. 30 to Sept. 2. Large-scale protests are expected.

More on this story here and here.


The Asset Forfeiture Unit intends recommending that the minister of justice close a loophole used to contest legislation that the AFU uses to assist other countries by freezing proceeds of crime hidden in South Africa. AFU head Willie Hofmeyr said what the legislation envisages is that when someone’s assets are frozen overseas, then foreign authorities merely need to send a copy of their court order to their South African counterparts, who in turn can approach the High Court to register the order.

“This would mean that it’s not necessary for evidence and a trial to be heard in South Africa ... Our courts then accept the foreign court’s order to freeze assets,” he said. However, the problem at the moment is that this can only be done when the court order is a “final order” and not subject to review or appeal. Hofmeyr said the difficulty is that if an appeal is lodged, it could take “months or even years to be completed”. He said the AFU is to ask the minister of justice to delete the requirement that the order be final.

More on this story here.



The founding fathers wisely made taxes on exports unconstitutional because they are so obviously harmful to American interests. What they failed to understand, however, is the basic economics of tariffs, which shows how a tax on imports is also effectively a tax on exports as well. As with all forms of tax incidence, what matters is who ultimately actually pays the tax, not who the law says should (in theory) be paying. John C. Calhoun understood this, as did most of his fellow Southerners since they were so burdened by protectionism. Northern steel manufacturers like Congressmen Morrill of Vermont and Stevens of Pennsylvania understood it as well, for the opposite reason: They were on the receiving end of the plunder that was extracted by the Morrill Tariff.

More on this story here.

The moral case for free trade.

The case for free trade is not based on fair trade, trade agreements, international trade theory, factors of production, absolute advantage, comparative advantage, or efficiency. These arguments miss the real issue. There is a far more philosophical defense of free trade that has been neglected: freedom. The moral case for free trade is based, not on how efficient or beneficial free trade is, but on freedom itself. Free trade simply means that every citizen of every country is free to trade with any citizen of any country.

More on this story here.


There are, as Richard Maybury has pointed out in such books as Whatever Happened to Justice?, two simple laws that are the ethical bedrock for all societies: “Don’t encroach on people and their property” and “Do all you have agreed to do”. All three are among the Ten Commandments as “Do not murder”, “Do not steal” and “Don’t tell lies against your neighbor”. Any society that does not follow those two laws will not survive.

I expect all States to ignore those two laws. They always have. In the 20th century, States ignoring those laws led to the murders to what historians estimate are 177 million people. I have seen estimates of up to 200 million dead. The fact that violation of these two laws always leads to catastrophe means they are Natural Law. They are inherent in our nature, and they cannot be changed. They cannot be violated. As such, no one can violate them for any reason. To me, it is as simple as 2+2=4.

These laws cannot be violated even if well-known preachers say they can, or twist passages in the Bible, or take them out of context. Take Jerry Falwell, for example.

More on this story here.


I have no hope of condensing Santayana into a short article, but I do hope to sketch here my appreciation of a primary theme that runs through his life’s work. That theme is egotism, which Santayana thought the primary mistake that riddled the whole of Western philosophy. In his very last book and on its very last pages he wrote: “Often things as they are become intolerable; there must be insurrection at any cost, as when the established order is not only casually oppressive, but ideally perverse and due to some previous epidemic of militant madness become constitutional. Against that domination, established in willful indifference to the true good of man and to his possibilities, any political nostrum, proposed with some rashness, will be accepted with the same faith. Thus the blind in extirpating the mad may plant a new madness.

“That this is the present state of the world [in the 1930s and 1940s] everyone can see by looking about him, or reading the newspapers; but I think that the elements in this crisis have been working in the body-politic for ages, ever since the Reformation, not to say since the age of the Greek Sophists and of Socrates. For the virulent cause of this long fever is subjectivism, egotism, conceit of mind [my emphasis].”

It would appear that a detailed, abstract rationale has been developed by philosophers over the last half-millennium to permit men and nations to adopt the very simple stance that any mere animal adopts instinctively. It is a rationale that argues, indeed insists, that the only reality there is, is my reality. The latest public manifestation in America of this high-toned philosophy of egotistical greed and force is so-called “Straussian neo-conservatism”; but it is really just an old, old, sorry story of force as its own justification. Might makes right.

More on this story here.


The real struggle is not between America and al Qaeda. It is between radical Islamists (represented by al Qaeda) and the rest of the Muslim world for the soul and future of Islam. Although the United States may be engaged in what we have come to call a war on terrorism, it is in many ways not a war that can be won by us. But it can be lost -- if the United States engages in policies and actions that cause Muslims to believe that the war is against the Muslim world -- as bin Laden alleges -- and that they have no choice but to side with the radicals to save their religion and culture.

The Chinese strategist Sun Tzu admonished that “one who does not know the enemy ... will be in danger in every battle.” As long as the United States continues to misunderstand al Qaeda and the nature of the war on terrorism, we will not only be in danger of losing every battle, but also the war itself.

More on this story here.


Chalmers Johnson’s previous recent book, Blowback, published before 9/11, pretty much predicted some kind of dramatic attack on the United States, as a natural consequence of the various overt and covert meddling in which the U.S. government has chosen to engage. “Blowback” is an old CIA term used to describe the usually unintended and/or unpredictable (at least as to timing and precise character) negative consequences of overseas activities.

Mr. Johnson’s most recent book, Sorrows of Empire: Militarism, Secrecy, and the End of the Republic offers a more comprehensive history of the United States’ descent into empire. He shows that the impulse toward empire of varying forms is not a recent development in American history. He has used his experience as a student and analyst of power to warn that hard times may be coming, and that we would do well to face the consequences of our government’s global ambitions honestly.

He sees “sorrows of empire” visiting the United States quite soon (some are already noticeable): A state of perpetual war, leading to more terrorism against Americans wherever they may be; a loss of democracy and constitutional rights; an already well-shredded principle of truthfulness increasingly replaced by a system of propaganda, disinformation, and glorification of war, power, and our military legions; and bankruptcy. He analogizes the US to the Soviet Union in the 1980s: “The USSR collapsed for three basic reasons -- internal economic contradictions driven by ideological rigidity, imperial overstretch, and an inability to reform. Because the United States is far wealthier, it may take longer for similar afflictions to do their work. But the similarities are obvious.”

More on this story here.


“Division of labor” is one of those expressions that people use and politically misuse so frequently that its conceptual significance gets left in the dirt. Division of labor makes my life easier in many ways: I earn money doing something I am reasonably good at, and hire other people to do things I am not good at. Too little use of division of labor will make my life difficult, as will too much reliance on it. I may not want a career as an auto mechanic, but knowing how to change a flat tire will leave me less dependent in an emergency.

Thanks to the menagerie of bureaucrats known as government the more I rely on division of labor, the more subtly expenses begin to multiply. If I buy furniture or a car or a coat, the invisible palm of government reaches out to collect sales tax. That unseen palm may have lined itself with sales tax many times along the path these items traveled to the market -- taxes on imported materials, taxes on fuels used to transport the materials, taxes on wages earned by laborers, property taxes on warehouses and factories.

The men who would govern us are pros at cons to deprive us of voluntary divisions of labor, setting up fines, licenses, regulatory agencies and even prohibitions to serve as “tollbooths” between persons A and B. Civilizations crumble when governments weigh heavily on the backs of laborers -- people grow so tired and dispirited that they despair and cease to labor. When will we learn to expect more from ourselves and less from governments? Would anyone like to prove Darwin’s theory of evolution has a point? At least creationists can blame Satan for the mess we are in -- isn’t that better than apologizing for governments?

More on this story here.


I want everyone, even government officials -- hell, especially government officials! -- to obey the law. And I want the laws at every level to fall squarely within the parameters of the Constitution and Bill of Rights as they were originally presented to “the People” whose unalienable rights they were supposed to protect. Now I am given to understand that that very notion is “really scary”. What kind of person would think that a liberty under the Constitution is a frightening proposition? I think I have finally got it: someone who wants the government to “make it all go away” so that he/she can not be afraid any more.

I am afraid they will never truly realize that their ultimate goal is unachievable, and so will keep stripping freedoms from us in a futile attempt to reach it; because they want somebody else to take care of them, they will insist on taking care of me even to the point of constant monitoring, draconian regulation, and back-breaking taxation. And I worry that, to add insult to injury, they will say that is a good thing, and if I dare protest they will silence me and call me ungrateful, or worse (to me, at any rate) they will say I am un-American.

In 1984, George Orwell wrote of something called “doublespeak”. A fictional government ministry issued reports that renamed war as peace and bad as good. Anybody who dared see through the “doublespeak” was promptly coerced and conditioned otherwise. When people who are otherwise intelligent say that a desire for liberty is something to be feared, and that limiting the law according to traditional Constitutional restraints is a bad thing, it is clear that “doublespeak” has taken hold. If “doublespeak” is truly believed by some, as soon as it becomes believed by enough, the coercion and conditioning will follow. Let us see anybody call that proposition anything but terrifying.

More on this story here.


Lew Rockwell said in his essay Subsidizing Sickness: Medicine and the State: “To control people’s access to medical care is to control their very lives, so it is no wonder that this is the goal of every state.” That is why, “In the course of a century we have taken a long march from a largely free system of medical provision to one dominated by unfree programs and mandates.”

The Soviet Union was the first country to adopt all-round socialized medical care -- the dream of most of America’s modern politicians, Republicrat and Demopublican alike. By the time of the collapse of socialism, 80 million people were said to have chronic illnesses, and up to 68 percent of the public was health-deficient by international standards. Mental retardation afflicted nearly a quarter of the children -- a consequence of serious deprivation. “Of course most real care went underground, where bribing for anaesthesia was common,” Mr. Rockwell concludes concludes. “After former Soviet economist Yuri N. Maltsev ... emigrated to the U.S., he was astonished to see that the U.S. was adopting many of the principles that drove the old Soviet system. But in the U.S., it is not called socialism or communism. It is called insurance.”

Today, chicken prices in Russia are allowed to go as high as competition will allow, and there is plenty of chicken in the markets of Moscow. Yet here in America, our brave disciples of Marx, Engels, Lenin and Trotsky (“useful idiots,” in Stalin’s phrase, who never had to actually share the 70-year nightmare of our Russian brethren) assure us, “The free market just cannot work when it comes to necessities.” Like, um ... food distribution? But every other “civilized” nation has socialized medicine, these prancing collectivists desperately prevaricate.

More on this story here.


In one sense, the web is a lot like the world: filled with good and evil, dumb and smart, unified in some ways and radically diverse in other ways, and way too large to characterize in anything like a sweeping statement. It has also taught us much about the world we did not know. In another sense, the web is not at all like the world because the government does not dominate it. What enormous beauty all this human energy has produced! A daily, hourly, minute-by-minute marvel of order and production. It grows and grows, with millions, billions, of people and decisions involved and yet the capacity always expands to produce something no government could possibly have imagined, much less designed.

The web is not a perfect world. It allows sin, vice, degradation, extortion, and every manner of evil -- but every bad thing you can name is matched by a more powerful good thing: faith, reason, learning, art, scholarship, and the possibilities of peaceful human cooperation, are all on display as never before. As in the world, there is crime on the web. But it is mostly managed, discouraged, deterred, and otherwise contained through market innovation, not the police power. The web is not perfect, but it seems to call forth the best competitive and cooperative spirits in all people to yield something that benefits everyone.

Given this near-perfect market setting, we should not be surprised about the ubiquity of libertarian ideas online. That is a natural result of the libertarian method of the medium itself.

More on this story here.


Jim Bovard, in the words of the Orange County Register, is “Washington’s most hated truth-teller.” In his latest book, Terrorism and Tyranny: Trampling Freedom, Justice, and Peace to Rid the World of Evil, he sustains that long-standing reputation with surefire dignity and aplomb. You get a feeling about a book and its author, when, in the book’s very first sentence, he rivets you to your chair with jackhammer force by stating that “the war on terrorism is the first political growth industry of the new millennium.” The rest of the book falls out from that thesis, as Bovard takes the reader on a journey through the war on terrorism, starting with the mostly forgotten Reagan crusade, and onward through to the Bush anti-terror campaign.

Jim Bovard is, without a doubt, the best political researcher-writer in politics today. While most writers add a few footnotes to their writing, Bovard adds some first-rate writing to his immaculate set of footnotes. He does not make wild judgments or blanket allegations. Instead, he provides an encyclopedia’s worth of timely quotes laid out in chronological fashion, to funnel the reader through an extensive framework of US government double-dealing, coercion, corruption, and propaganda milling. Occasionally, he provides us with a timely comment or two, enabling the reader to discern that this author clearly separates opinion from fact.

For starters, perhaps the most unforeseen and brilliant facet of Bovard’s chronology is his application of the war on terror’s inauguration as being firmly planted in the Ronald Reagan camp. It is as if he expected the reader to forgive and forget, or at least not conjure up those deep-rooted memories in light of the Bush administration’s present tyranny spree. The October 1983 attack on the Marine barracks in Beirut, Lebanon took place in a combat zone, however, the surprise attack was immediately portrayed as an act of “terrorism”. Fast-forwarding to the Bush Era, the grab for federal power reached an all-time high. As Bovard calls it, “safety through servility”. Unlike Bill O’Reilly’s books, between these covers lies a genuine no-spin zone.

More on this story here.
Previous News Digest Home Next
Back to top