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BELIZE – ONE OF THE WORLD’S TOP RETIREMENT HAVENS
From its Caribbean shores to its jungle interior, Belize has great natural beauty – blue water, deserted beaches, and inland retreats where you can explore Mayan ruins, tall waterfalls, rainforests, and rivers. Bird watching in Belize’s interior is also a treat. You will be able to spot parrots, toucans, flycatchers, and herons in their natural habitat or visit a jaguar preserve where you can venture into the jungle in search of the elusive cats. It is no wonder Belize’s tourism industry is booming. If recent figures are any indication, this tiny tropical paradise could be on its way to becoming the next hot destination for explorers, expats, retirees, and investors. Between 2003 and 2004, cruise visits to this country increased by a full 55.1% – as opposed to 13.1%, for example, for the same period in the Bahamas.
Belize’s far-thinking banking laws have given the nation a distinct advantage when it comes to banking privacy. In an age when the accounts in other jurisdictions are under attack, those in Belize remain secure … no mean feat. And Belize’s retiree program offers attractive incentives to foreigners looking to relocate here – particularly those who are already planning to declare their permanent residency outside the U.S. But what really sets Belize apart from its neighboring countries is that its population speaks English. If you feel you are at the stage in your life when you do not really want to learn a new language, put Belize at the top of you list as a potential destination for business, retirement, or a new home.
Belizeans themselves and the expatriates their country has attracted over the centuries are fiercely independent. In Belize, people solve their own problems. They avoid taking their petty disputes to court. In a few cases where court action was threatened, the two parties suddenly found a way to settle things themselves. They could not stand the thought of the government (or anyone else) making a decision for them.
Thanks to the Trusts Act of 1992, Belize has become a premier jurisdiction for asset-protection trusts. Today, Belize is a haven offering rock-solid protection of assets that are transferred into a Belizean Trust. It is also one of the few trust jurisdictions in the world that offers protection from court action initiated by creditors that might challenge your transfer of property into a trust. In the absence of actual fraud in the creation of a trust, the assets of a Belizean trust cannot be attached to satisfy the judgment of a foreign court. Belizean trust laws have been tested and proved solid. Belize IBCs enable foreigners to incorporate in Belize and enjoy huge advantages.
Belize is not the most affordable place to settle in Central America. You will likely find prices for some items to be more than what you are used to paying in the U.S., but many services actually cost less. Also, your cost of living will depend largely on where and how you choose to live. If you settle on Ambergris Caye, the island that attracts the vast majority of Belize’s tourists (and investors) for example, you will likely find living a bit more expensive than in the U.S. Being an island, everything is imported so you will pay extra for that transport cost. On the other hand, if you decide to live in the north of Belize in Corozal and can take advantage of easy shopping trips to nearby Mexico, you can enjoy all the benefits of English-speaking Belize, but buy your goods for less just across the border.
On September 15, 1999, Belize enacted some of the most attractive “retiree” legislation available anywhere in the world today. The program is aimed squarely at North American and UK nationals already planning to live full time outside their native counties. And it comes with almost no fine print or red tape. To qualify, you need to be 45 years and older and be able to show only that you have a monthly income of at least $2,000. To keep your “Qualified Retired Person” (QRP) status, you must spend just one month of the year in Belize. The law allows you to import your car as well as personal and household effects duty-free. Qualified Retired Persons (QRPs) also receive certain tax advantages. More information on the benefits of the QRP program is available at this Web site.Link here.
THE RISE AND FALL OF AN EXPAT HAVEN
San Miguel de Allende, Mexico is a beautiful town, with one of the best climates on the planet, and now, one of the hottest real-estate markets on the planet. The town began as a destination for Americans when in the 1950’s a few yanks discovered that they could attend the Instituto Allende, an art school put together by an American, Stirling Dickinson, on their G.I. Bill benefits. What better life than having a dollar stipend, a perfect climate, and all the Tequila and Pot you could buy in a sweet lovely little Mexican town that had been forgotten by time?
The 1950’s U.S. Veterans were followed by 1960’s/70’s U.S. bohos and beats (Neil Cassidy of Kerouac’s On the Road fame died in San Miguel). Where the Hipsters went, the well-to-do soon followed. So the “scene” in San Miguel – great parties, great drugs, great weather, great beauty great art, reached its apex in the 70’s and 80’s. Americans continued to arrive in San Miguel attracted by its reputation, its beauty and climate and by something difficult to describe, that did not exist in other gringo gathering spots – cultural respect for Mexican art and life. New generations of yanks, attracted more by how far their Social Security checks would stretch than by the plentiful cannabis and other intoxicants came. Older Americans who were barely scraping by could buy a house for $10,000, have a maid and gardener and still have enough left over to go out for Margaritas and tacos.
Then a few years ago, Conde-Nast’s Traveler Magazine’s readers voted San Miguel among the 10 best destinations in the world. Another wave of Americans visited and looked for homes there. Now San Miguel de Allende is morphing into The Hamptons with chili as the upwardly chic crowd pour in to snap up renovated homes for a million plus dollars apiece. Rich Texans seek relief in July and August from the humid heat. The old bohos are gone, the Social Security people are being priced out of the market and it is is becoming a weekend destination for rich Mexicans from Mexico City. These days the narrow cobble-stoned streets can barely accommodate the ludicrously massive SUV’s, Escalades and Hummers. I am selling my house and moving on.Link here.
ANTIGUA HITS OUT AT U.S. INACTION AND HYPOCRISY OVER WTO GAMING RULING
Antigua and Barbuda’s Ambassador to the WTO, Dr. John W. Ashe, responded with disappointment to a U.S. statement made at a meeting of the WTO’s Dispute Settlement Body over the countries’ internet-gaming dispute. A ruling by the WTO Appellate Body in April 2005 upheld one of Antigua and Barbuda’s complaints over U.S. prohibitions, which prevented U.S. banks and major internet search engines from doing business with gambling firms on the island. The WTO has given the U.S. until April, 2006, to implement its ruling. Dr. Ashe said that the U.S. statement provided little in the way of useful information as to when and how the United States would come into compliance with the WTO’s recommendations and rulings.
Continued Dr Ashe, “With an implementation deadline approaching on 3 April 2006, less than three weeks from now, we might be forgiven, Sir, for having some anxiety at a complete lack of information from the United States on this most important matter facing the small and delicate economy of Antigua and Barbuda.
“This is our first experience with dispute resolution at the WTO, but we had perhaps naively expected that the United States would wish to engage with our government on devising an equitable solution to our dispute that would take into account the benefits accorded Antigua under the recommendations and rulings, but also reasonably and comprehensively address the concerns raised by the United States during the course of the dispute as its justification for prohibiting the provision of services from Antigua to American consumers. To our great disappointment, and in spite of our numerous attempts on our part, the United States has shown absolutely no interest in engaging with us in this regard.
“The official silence from Washington on this matter that is deeply troubling. What is equally troubling is what has actually been happening in the United States since we won our hard-fought and costly dispute. Legislation has indeed been introduced in the United States Congress addressing the difficult topic of remote and Internet gambling. In fact, two bills have been introduced separately in the Congress which are substantively quite similar. This legislation, one bill entitled the ‘Unlawful Internet Gambling Enforcement Act of 2005’ and another entitled the ‘Internet Gambling Prohibition Act’, is the only legislation introduced into the Congress since the determination of the ‘reasonable period of time’ in our case.
“Unfortunately, each proposal is about as directly contrary to the recommendations and rulings of the DSB as could possibly be imagined. Not only do these bills do nothing to provide Antiguan operators with any access whatsoever to the vast American gambling market, but in fact each would further entrench the anti-GATS nature of United States gambling law by expressly exempting from its application domestic Internet gambling on horse racing, Internet gambling conducted by Native American tribes and, most significant of all, Internet gambling that occurs entirely within the border of a particular state. We have maintained all along that the American prohibition was really based upon the cross-border nature of the services rather than any true ‘evils’ associated with ‘remote’ gambling-and this pending legislation emphatically confirms we were correct.
“In addition to this legislation, WTO members should know that the ubiquitous American-based money transfer service Western Union this January ceased providing money transfer services to and from Antigua and Barbuda. Ironically then, our country, with a strong, tightly regulated and overseen financial services sector, an enviable record of mutual assistance in cooperating with other countries around the globe to detect, deter and prevent financial crimes – and the only country to confront the United States over its anti-competitive gaming practices – is one of the very, very few countries in the entire world to which you cannot send or from which you cannot receive funds via Western Union.”
The tiny Caribbean jurisdiction, where several online gaming firms are based, had argued that by seeking to legally prevent U.S. citizens from accessing online gambling services such as those offered by many companies in Antigua and Barbuda, the government of the U.S. was contradicting service sector commitments that it made when the WTO was formed in 1995. U.S. federal laws bar the placing of bets across state lines by electronic means, preventing Antiguan online gambling companies from accessing U.S. customers.Link here.
ISLE OF MAN CEMENTS CLOSER BUSINESS TIES WITH BOOMING GULF REGION
In common with the UK’s Channel Island dependent territories, the Isle of Man has been undertaking an ongoing business initiative in recent months designed to foster closer business links with the Gulf region, particularly in the areas of ecommerce and financial services. A 30-strong delegation led by Isle of Man Finance, comprising representatives from the Government and the private sector, recently visited the rapidly growing commercial center of Dubai – widely recognized as the Middle East’s premier financial services center and a trading hub bridging the gap between east and west.
Memoranda of Understanding governing banking, investment and insurance services, were signed during an earlier visit in 2005 headed by Chief Minister Donald Gelling. These MoU also provide for businesses to relocate to the Isle of Man for disaster recovery purposes. “Dubai is one of the fastest growing business centers in the world,” observed Tim Craine, the Treasury’s Director of E-Business and Space Commerce. “This memorandum allows certain functions of a regulated company to be moved to the Isle of Man for a period of 30 days, which can be extended to 60 days on application.”
The delegation visited Dubai Internet City, a purpose built facility geared to accommodating new technology businesses, including Microsoft, Oracle, Dell, Siemens and Nokia. Launched in February 2000, the Internet City is a free-trade zone for electronic commerce and technology. The free zone authority oversees the establishment of the necessary infrastructure at the zone, licenses companies wishing to set up shop there and leases land and property to them for up to 50 years. Companies are allowed 100% foreign ownership in the zone. Goods imported to the zone and products for export are exempt from custom duties and companies are exempt from taxes, including income tax.Link here.
ELIOT SPITZER IS NEEDED IN JAPAN
On March 9 the Bank of Japan was preparing to release details of its first policy shift in five years, one telegraphing its first rate increase campaign in a decade. Before the central bank’s policy meeting even ended, the country’s national broadcaster NHK had the story. Yet Tokyo was oddly devoid of outrage. When you ask BoJ officials about the leak, you get the impression it is an afterthought. The local media did not run with the story. In fact, a Nexus search of the words “Bank of Japan” and “leak” turns up one article – mine. All this gets at a bigger point about Japan. It involves disclosure and troubling questions about fairness and economic maturity.
For example, corporate earnings figures routinely find their way into the local media before they are released. Why regulators are not investigating this violation of Tokyo Stock Exchange rules is a mystery. They should probe the possibility of illegal trading. Also disturbing is the way in which prosecutors have managed press leaks in their high-profile case against Livedoor Co. founder Takafumi Horie. The 33-year-old entrepreneur, who shook up Japan Inc. as rarely before, has been tried in the media by countless leaks. Even if – and it is a huge “if” – Horie is found innocent of cooking Livedoor’s books, he may have no Internet company to go back to. The company he started will be delisted next month, completing Horie’s passage from national hero to cocktail-party joke.
It would be nice if a Japanese equivalent of Eliot Spitzer were pounding the podium and demanding answers from Japan Inc., just as the New York state attorney general Spitzer does with Wall Street. Such a dynamic is sadly missing here. Now that it is finally shaking off a 15-year funk, the world’s investors are anxious to rediscover Japan. It would be nice if Japan began acting like the world’s second biggest economy. Whatever the motivation is for the leaks the reality remains that Japan has a loose-lips problem.
Dodgy corporate governance standards that allow profit figures to be divulged ahead of time should be a matter of concern. They are a reminder that the focus is not just on Japan’s revival, but also on whether Asia’s biggest economy is ready for its moment in the spotlight. The Horie saga also speaks volumes about how Japan Inc. continues to operate. Perhaps Livedoor is guilty of the growing list of misdeeds prosecutors allege. Clearly, the man who came to personify Japan’s New Economy has some explaining to do. Yet the time when Horie could mount a spirited defense has long since passed. He has already been tried in the court of public opinion, thanks to prosecutors who are not taking any chances that Horie may be found innocent.
Japan Inc. should stop congratulating itself simply because the economy is growing again – or because there is no Spitzer-like character calling attention to its problems. It should be shaping up a financial environment that is up to now out of step with the world’s other economic powers.Link here.
HOW RISING WAGES ARE CHANGING THE GAME IN CHINA
For years, Yongjin Group has earned a decent profit selling lamps and furniture to the likes of Wal-Mart, Home Depot, Target, and Pottery Barn. But lately the company has seen its margins shrink to 5% – half what Yongjin made when it opened its factory in the steamy southern Chinese city of Dongguan 14 years ago. Why? Labor shortages are forcing the company to boost wages. Last year salaries surged 40%, to an average of $160 a month, and Yongjin still cannot find enough workers. “This business needs a lot of labor,” says President Sam Lin. “This is a very tough challenge.”
Some 1,500 miles northeast, in the city of Suzhou, Emerson Climate Technologies Co. is facing similar woes. The maker of air conditioner compressors has seen turnover for some jobs hit 20% annually, and Emerson General Manager David Warth says it is all he can do to keep his 800 employees from jumping ship to Samsung, Siemens, Nokia, and other multinationals that are now operating in the tech manufacturing hub. “It has gotten to the point that we are just swapping folks and raising salaries,” says Warth.
Wait a minute. Does China not have an inexhaustible supply of cheap labor? Not any longer. From the textile and toy factories of the south to the corporate headquarters and research labs in Beijing and Shanghai, the #1 challenge today is finding and keeping good workers. Turnover in some low-tech industries approaches 50%, according to the Institute of Contemporary Observation, a Shenzhen labor research group. Guangdong Province says it has 2.5 million jobs that remain unfilled, while Jiangsu, Zhejiang, and Shandong provinces say they, too, face shortages of qualified workers. “Before, people talked about China’s unlimited labor supply,” says Zhang Juwei, deputy director of the Institute of Population & Labor Economics at the Chinese Academy of Social Sciences in Beijing. “We should revise that. China is facing a limited supply of labor.”
Reports of labor shortages first cropped up in late 2004, but companies thought the phenomenon was temporary. Now a surge in both turnover and wage costs is convincing multinationals and their suppliers that the China game is changing permanently. With the gap between wages in China and those elsewhere gradually closing, the pressure to pass price increases on to consumers in the U.S. and other markets will start to build. Eventually China will be forced to upgrade its entire industrial base to make higher-margin goods. And those bigger paychecks are building a consumer class in China that multinationals want to target.
The wage issue has started to affect how companies operate in China. U.S. corporations and their suppliers are starting to rethink where to locate facilities, whether deeper into the interior (where salaries and land values are smaller), or even farther afield, to lower-cost countries such as Vietnam or Indonesia. Already, higher labor costs are beginning to price some manufacturers out of more developed Chinese cities such as Shanghai and Suzhou. This is a slow process, to be sure. Imports from the mainland have yet to fuel inflation in the U.S., while improved productivity in China has so far offset higher wages. But economists say those productivity gains are getting harder to find, and manufacturers who are seeing their margins hit, such as Yongjin, can hold out for only so long before they have to try to raise prices.
The pressure has as much to do with skills as it does with numbers. Although the total labor force is about 800 million, relatively few people have the qualifications employers want. For most textile, toy, and tech-assembly jobs, for example, export-oriented manufacturers prefer women from 18 to 25 years old or people with experience operating machinery. As a result, companies across the board are feeling the squeeze. China will still be the world’s workshop. But the world will need to adjust to the inexorable rise of the workshop’s wages.Link here.
China emerges as new frontier for property buyers.
China’s top-tier cities like Beijing and Shanghai are the new frontier for well-heeled global property investors looking beyond increasingly expensive New York, Paris and Tokyo. Investors are drawn to China because its properties remain relatively cheap despite a strong run in the past five years, the government is spending massively on infrastructure, and the yuan is appreciating, making yuan-dominated assets more valuable. The attraction of Chinese real estate has led to a boom in property shares. It also has spurred Hong Kong developers and foreign banks to set up property ventures on the mainland.
Sure, there are signs of overheating. Pessimists point to a string of empty apartments in some of Shanghai’s upscale neighborhoods as a sign China’s housing market is a bubble destined to burst. And average home prices in Shanghai dipped about 15% last year, as the government took steps to cool the market after a couple of heady years of 30 to 40% rises. But investors focus on the long-term prospects of China’s cities. Apartments in Hangzhou, a popular tourist destination about 110 miles away from Shanghai, for example, still have room for further appreciation, they say. The government earlier this month approved plans to build a high-speed train line linking the two cities, shortening the travel time to merely 27 minutes.
A two-bedroom apartment in central Shanghai, the most expensive city in mainland China, costs about $250,000, roughly a quarter of the average price of an Manhattan apartment.Link here.
BELIZE BUDGET AIMS TO BALANCE GOVERNMENT’S BOOKS
In marked contrast to 2005 when Prime Minister Said Musa’s budget announcement sparked street riots, strikes and protests, the 2006 budget statement was by comparison a tame affair with little in the way of new taxes announced as the government concetrated on reining in the budget deficit. On the revenue side, the Approved Budget provided for increases in rates of business tax, environmental tax, sales tax on luxury items and excise tax.
However, after the budget was approved, and in response to public sentiment, significant reconfigurations were made to expenditure and revenue plans. The reconfigurations included a reduction in the Recurrent Revenue target as a result of the partial roll back of approved increases in the environmental tax. The reconfigurations also included an expansion in the Recurrent Expenditure target to provide for the full implementation of the 5% and 8% salary increases to public officers and teachers.
The only major change to tax laws this year will be the elimination of the current Sales Tax and its replacement with a 10% general sales tax from July 1, 2006. During the first quarter of the current fiscal year, Cabinet approved further adjustments to revenue and expenditure plans in order to achieve the fiscal targets. On the revenue side, excise taxes were increased. During the first 10 months of fiscal year 2005/2006, the tightening of Government’s fiscal policy was reflected in a sharp reduction in its Recurrent Deficit to $6.8 million, as compared to $42.4 million for the same period of the last fiscal year. There was also a substantial reduction in the Overall Deficit from $127.6 million for the first 10 months of last fiscal year to $65.1 million for the same period this year.
The Central Statistical Office estimates that real growth in GDP decelerated from 4.6% in 2004 to 3.1% in 2005, which, according to Musa “is more than commendable” in global terms. Said, who also holds the Finance portfolio, explained that the economic slowdown reflects the impact of tighter fiscal and monetary policies that were implemented in 2005 to dampen domestic consumption so as to improve the balance of payments.Link here.
VISA RESTRICTIONS BY COUNTRY
Americans, Finns and Danes can travel to 130 countries without a visa, according to Henley & Partners, which advises individuals where to live and companies where to be located. Pakistanis enjoy less freedom to roam. Only 17 countries will admit them without a visa. South Koreans can visit 115 countries visa-free, while North Koreans could visit 18 – if only their regime would let them. For number of coutries and territories which can be entered without a visa, country by country, see this chart.Link here.
THOSE STUBBORN SHRUBS
The latest U.S. figures indicate there has been a big increase in coca cultivation in Peru over the past year and a smaller but noticeable spike in Bolivia. Even more significantly, the coca estimates for Colombia, which will be published later, are also up after three years of what looked like a successful eradication effort. Actually, this has been the pattern for the last 30 years. Every time it looks like eradication is working cultivation goes back up again. Is anyone in any position of responsibility in the U.S. even considering the possibility of a totally new approach? I hasten to add that there are signs that some officials at the State Department understand the need to deemphasize the drug issue to Latin American countries. There are even signs that Washington may be amenable to some compromise with Andean countries like Bolivia that want to increase the number of hectares of coca allowed for legal uses.
This reasonable attitude might avoid immediate diplomatic problems and help diffuse the tension that is brewing in the Andes with the rise of political caudillos critical of the U.S. who are allying themselves with coca growers. But the problem is with the policy itself. The drug war is not working and will never work unless totalitarian regimes are installed across much of this hemisphere. (Even that would be a long shot—the Soviet prohibition of alcohol in the 1920s, 1958, 1972, and 1979 failed miserably!)
Between 2001 and 2004, a colossal effort was made to reduce coca plantations in Colombia. The idea was to kill two birds with one stone. On the one hand, Colombia accounts for some $65 billion worth of cocaine that flows into the U.S. and, on the other, Columbia faces a terrorist insurgency that feeds on drug money. But the effect was also an increase in coca plantations in Peru and Bolivia. And now it looks as if Colombia coca cultivation is picking up again as well. The UN estimates that most coca plantations spotted last year in Colombia were new. Coca growers are simply moving the shrubs from areas where they are vulnerable to aerial spraying to places where that type of eradication is forbidden. They are decentralizing their plots to avoid heavy concentration in certain areas. School kids’ stuff, really.
A few weeks ago, the Government Accountability Office, a research arm of the U.S. Congress, put out a report stating that the amount of cocaine available in the U.S. has not been reduced. They think the price may have gone up because of an increase in law-enforcement action in this country but the number of users, some two million, has stayed the same and the flow of cocaine continues to be strong. Since 1980, the price of cocaine in the U.S. has decreased by 50%. Many people in South America understand this reality better than U.S. officials do. They understand that many decades of collectivist land reforms in the Andes have destroyed agriculture and that, in the absence of good alternative crops, the increased value of coca, artificially raised by the drug war, is irresistible.
Year after year masses of statistics refute the official boasts about progress on the drug war. How much more money needs to be wasted, how many more Latin Americans alienated, and how many more U.S.-bashing demagogues created before the most powerful nation in the history of human civilization realizes that, yes, perhaps there is a better solution than trying to terminate those stubborn little shrubs?Link here.
AMERICAN TV SHOW EPISODE INVOLVES CHARACTER TELLING THE IRS TO “STICK IT!”
One web site claims that the average American watches more than 4 hours of TV each day, or 28 hours a week. Since 99% of all American homes have one or more TVs, that means millions of 300 million Americans are watching the boob tube at any given moment. Whether it is “American Idol” or “The Sopranos”, a lot of Americans supposedly talk about what they see on TV around the office water cooler the next day. Well I hope they saw and were talking about the March 14th edition of David E. Kelley’s TV show “Boston Legal” on ABC.
Kelley is a lawyer, but also creator and producer of this Emmy Award winning show that tells the stories of a group of brilliant but emotionally challenged attorneys at Crane, Poole and Schmidt, a mythical Boston law firm. Critics call the show “fast-paced and darkly comedic” and the series confronts social and moral issues, while its characters stretch the boundaries of the law. Frankly, the show’s politics usually are too far left for me, but the March 14 show hit several nails right on their well deserved heads – and I hope millions of Americans were watching and understood the serious meaning of what they saw.
The show – entitled “Stick It!” – dealt with one of the leading lawyer’s, Alan Shore’s (played by James Spader) secretary, Melissa, who is arrested and handcuffed by two burly IRS agents for tax evasion. Shore defends this outspoken girl who says her late, patriotic grandfather would be proud of her for challenging the U.S. government. Instead of filing her Form 1040, she mails it with a yellow post-it attached that simply tells the IRS to “Stick it!” This young protester is not challenging the income tax per se, but rather what the government is doing with her taxes – the Iraq war, curbs on civil liberties, secret, illegal wiretapping, “anti-terrorism” programs that are destroying constitutional rights and liberties. This is her individual way of exercising civil disobedience as a protest of what she sees as ominous trends that endanger Americans’ rights.
In his closing argument to the jury, attorney Shore ticks off what should be, for all Americans, a highly distressing list of wrongful actions taken by the Bush administration, highlighting the atrocious USA PATRIOT Act, recently extended and amended to make it a federal crime to even protest with a sign or T-shirt anywhere near the president or vice president. He properly notes that many America politicians have created a calculated climate of fear to justify numerous, heretofore unthinkable, limits on our civil rights, even on our right to protest and exercise free speech. “Those who disagree are being called traitors,” he says. The jury finds the defendant guilty, but she lucks out with a $1000 fine and a suspended sentence.
I just hope that Joe Sixpack and family saw, heard and understood the “Boston Legal” message. Americans and our freedoms are in grave danger, and most Americans do not seem to give a damn.Link here.
LIVE TAX FREE OFFSHORE
If you decide to live abroad, following your cash, assets and investments offshore, there is a very helpful provision of U.S. tax law you might use to your financial advantage. The so-called “foreign earned income exclusion” lets a U.S. citizen who lives and works outside the U.S. to exclude up to $80,000 of foreign earned income from U.S. income taxes. Both you and your spouse, if employed, can earn a tax free $160,000 annually offshore, plus tax free housing allowances an offshore employer pays. This is an outright exclusion of your offshore earnings from gross income, so you pay no U.S. income tax on that amount.
To qualify for these benefits you must: (1) establish a “tax home” in a foreign country, (2) pass either the “foreign residence test” or the “physical presence test”, (3) actually have earned income, (4) live in the U.S. for no more than one month per year, and (5) file a U.S. income tax return for each year you live abroad.
Usually your “tax home” is where your principal place of business is located, not where you live. The term “tax home” is broader when determining eligibility for the foreign earned income exclusion. Confusion over this point hurts many Americans overseas. If you work overseas and maintain a U.S. residence, your tax home remains in the U.S. To qualify for the foreign earned income exclusion you must establish both your principal place of business and your actual residence outside of the United States.
A complicated test that determines if you get this exclusion involves counting the maximum number of days you are in or out of the USA. But the foreign residence test is easier for most taxpayers to pass. You must establish yourself as a bona fide resident of a foreign country for an uninterrupted period that includes an entire taxable year, and you must intend to stay there indefinitely. If you do not pass this test, you are considered a transient and will not qualify. The bottom line is that you must establish clearly yourself as a member of a foreign community.Link here.
CHINA COULD ACHIEVE DOMESTIC–FOREIGN CORPORATE TAX UNIFICATION IN 2007
China could introduce its much discussed unified corporate tax rate for domestic and foreign-funded enterprises as early as next year. Jia Kang, president of the Institute of Fiscal Science under the Ministry of Finance was quoted as stating that Beijing has not excluded the possibility of introducing a single rate of corporate tax for all companies by 2007 “if things go smoothly”. While the introduction of a unified corporate tax rate has been on the cards in China for some years, it seems that Beijing is now keen to press ahead with new legislation bringing the change into effect.
Currently, the official rate of corporate tax in China is 33%. However, in an attempt to attract higher levels of foreign investment as the authorities sought to develop a market-based economy, various deductions and waivers have allowed foreign-funded firms to pay tax at an effective rate of 14%, while domestic firms effectively pay corporate tax at about 24%. It is thought that the new unified corporate tax rate will be set at or near 25%.Link here.
INDIVIDUAL AUDITS INCREASED IN 2005, IRS DATABOOK REVEALS
The IRS announced this week that its 2005 IRS Data Book is now available. The publication contains tables detailing, among other subjects, the amount of revenue collected, the number of audits (examinations) conducted, and the number of refunds issued between October 1, 2004, and September 30, 2005. The increase in enforcement by the IRS is documented in this year’s Data Book. During Fiscal Year 2005 the IRS completed more than 1.215 million audits of individuals, up almost 21% from last year’s figure of 1.008 million. The Data Book provides state-by-state statistics on areas such as electronic filing, which accounted for more than half of all individual income tax returns last year.Link here.
IRS DEBUNKS FRIVOLOUS ARGUMENTS USED TO AVOID PAYMENT OF TAX
The IRS has issued a warning to taxpayers not to be tempted to avoid paying their income taxes based on “frivolous” arguments such as that income taxes are technically illegal under federal law, and therefore need not be paid. “Taxpayers need to avoid being taken in by groundless theories suggesting that they don’t have to pay taxes or file returns,” announced IRS Commissioner Mark W. Everson. “The truth about these frivolous arguments is simple: They don’t work.”
IRS Notice 2006-31 describes 26 frivolous arguments that taxpayers should avoid when filing their returns. Five revenue rulings issued in conjunction with the notice address specific frivolous claims often made to the IRS. These include false arguments that taxpayers can attribute income and expenses to a purported trust to avoid federal income tax liability, that a general “Native American treaty” exists allegedly providing tax-exempt status, and that only federal employees and persons residing in Washington, D.C. or federal territories and enclaves are subject to federal tax.
The IRS has also heralded the imminent publication of a 65-page document, entitled, “The Truth About Frivolous Arguments”, addressing false arguments about the legality of not paying taxes or filing returns. The updated document includes citations from numerous cases decided by the courts in 2005 and 2006, and responds to 40 frivolous contentions. “Our rulings on frivolous arguments emphasize that the IRS and the courts reject these arguments about the validity of the income tax and ‘too good to be true’ schemes to eliminate tax liability,” observed IRS Chief Counsel Donald L. Korb.
The IRS went on to warn that in addition to tax and interest, taxpayers who file frivolous income tax returns face a $500 penalty, and may be subject to civil penalties of 20 or 75 percent of the underpaid tax. Those who pursue frivolous tax cases in court may face an additional penalty of up to $25,000.Link here.
U.S. VIRGIN ISLANDS WEATHERING SKEPTICAL REPORTS THAT QUESTION EDC PROGRAM’S MERITS
In recent weeks, news media across the United States have reported stories that imply that the territorial government is trying to maintain a tax haven and that question some Washington lawmakers for accepting donations from V.I. businesses and residents. Stateside newspapers, most prominently The New York Sun, have printed several articles this month about politicians trying to “protect a tax loophole” – referring to the V.I. Economic Development Commission’s tax incentive program – and singling out U.S. senators who have received thousands of dollars in campaign contributions from the V.I. donors during the current campaign season.
Virgin Islands government officials and off-island professionals working on the territory’s behalf say the recent national representations of the EDC program are inaccurate and unfair, and the office of a lawmaker who has been cast in a negative light by some of the reports said they are politically motivated. “I think the stories are biased,” said Frank Schulterbrandt, chief executive officer of the V.I. Economic Development Authority. “In the states, they definitely see that they are losing value when some of their taxpayers move elsewhere. All of the people everywhere are competing for the same business. What’s wrong with the Virgin Islands attracting some of those people?”
The EDC program has been under the federal magnifying glass since late 2004, when the JOBS Creation Act changed federal rules that apply to the tax incentive program. The rule changes affect the program’s residency and source-of-income requirements. The EDC program, which offers tax breaks to participants in return for local job creation and investment, is worth about $100 million annually to the local economy. Government House spokesman James O’Bryan Jr. said that the EDC has been crucial to lifting the territory from a dire financial crisis seven years ago to the present-day projection of a fiscal year surplus in excess of $50 million.
The program has been abused in the past, but Schulterbrandt and O’Bryan said that many of those problem beneficiaries have left, and the companies still receiving EDC benefits are real companies that employ real people, follow the rules and make a real difference in the Virgin Islands economy. Even though the Virgin Islands is part of the U.S., the territory has very limited direct input on national policy. An outreach effort, which has been touted by Gov. Charles Turnbull in his last two State of the Territory Addresses, brings U.S. lawmakers to the Virgin Islands so they can have a chance to become familiar with the territory. The outreach program has accomplished its goal, said Virgin Islander Kevin Callwood, coordinator of the program.Link here.
COALITION URGES IMMEDIATE WITHDRAWAL OF PROPOSED CLINTON-ERA IRS REGULATION
The Center for Freedom and Prosperity Foundation, joined by more than 30 of the country’s largest and most influential free-market groups, urged Treasury Secretary John Snow to immediately withdrawal the IRS regulation “first proposed by the Clinton Administration three days before President Bush’s first inauguration over five years ago.” The proposed rule (Reg 133254-02) would force U.S. banks to report deposit interest paid to nonresident aliens.
The letter from the Coalition stated, “This proposed rule … is an abuse of the regulatory process that seeks to overturn the law rather than to enforce it. Moreover, it will undermine our economy’s performance by causing capital to flee the American banking system. This will have a negative impact on homeowners, consumers, and businesses.” The letter further stated, “The regulation has met with strong disapproval from Congress since its inception. More than 150 Members of Congress, including more than 20 Senators, have come out against the regulation since 2001. Every major free-market think tank, as well as every national banking association, has expressed strong opposition.”
“It has been more than 64-months … since the Clinton Administration proposed this midnight regulation. Not one member of Congress or one financial service industry representative has supported it. The IRS held two hearings and was unable to find one supporter of the regulation,” said Andrew Quinlan, President of the Center for Freedom and Prosperity Foundation.Link here. Full text of letter here.
CYBER BOOKIE THUMBS NOSE AT UNCLE SAM FROM OFFSHORE OASIS
On a warm, bright morning just outside San José, Costa Rica, Calvin Ayre, slightly hungover, was lounging in his bathrobe at a poolside office in his new $3.5 million, 10,000-square-foot compound. Sipping coffee poured by one of his five servants, the entrepreneur declared, paraphrasing Sun Tzu’s The Art of War, “I’m going to win this war without fighting battles. I’ve put a lot of energy into finding ways not to fight my enemies.”
From this tropical oasis, Ayre has dodged and taunted those enemies, the main one being the U.S. Department of Justice. His Bodog Entertainment Group is in the not very kosher business of Web gambling. It takes bets from 16 million customers, most of them in the U.S. And that appears to violate the law – Title 18, §1084 of the U.S. Code – which forbids using telephones or other communication devices “in interstate or foreign commerce” in order to take bets. “Online gambling, whether it is located offshore or not, is illegal when it comes to the United States and its citizens,” says a DoJ official who works on Internet gambling crimes.
But Bodog has no physical presence in the U.S., Ayre is not an American citizen, and the extraterritorial reach of U.S. law is not clear. Ayre, at any rate, has no assets in the U.S. for the G-men to seize. Last year the privately held Bodog handled $7.3 billion in online wagers. Ayre presumably has not just the vice squad but the tax collectors in a huff. While 95% of his sales come from the U.S., the 44-year-old does not pay a nickel in corporate or personal income tax here. Is that legit? Foreigners are supposed to pay federal tax on income derived from U.S. business activities. The suckers are stateside, the electronic roulette wheels and digitized sports pools in Costa Rica. Where is the action? It remains to be seen whether IRS agents could make Ayre pay, assuming they could get their mitts on either him or his money.Link here.
HEDGE FUND LEGISLATION ATTEMPTS TO SUBJECT OFFSHORE ADVISERS TO U.S. JURISDICTION
Martin Livingston from Cayman Islands law firm Maples & Calder points out a close similarity between the SEC’s hedge fund registration rules and the Treasury’s abortive 2003 attempt to impose anti-money laundering rules via its FinCEN unit, and worries about their impact on offshore advisers. In an article submitted to hedge fund publication Albourne Village, Mr. Livingston says about the SEC rules, “Using similar criteria to that imposed by the Treasury, U.S. advisers having more than $30 million of assets under management, 15 or more clients (in a 12-month period) and who either hold themselves out as investment advisers or advise registered investment companies will now need to be registered. Historically, advisers were allowed to regard the hedge funds themselves as their ‘clients’. The rule now includes as clients the investors of private funds, which are essentially defined as any unregistered investment companies with less than a two-year lock-up period. Reinvested dividends and redemptions for extraordinary circumstances were excepted when determining eligibility for the two-year lock-up period.”
“A broad range of regulatory compliance controls will be imposed upon registrants, including periodic reporting to the SEC (Form ADV) and investors alike, key employees of the adviser being subject to SEC fitness screens, as well as advisers establishing programmes to prevent violation of federal securities laws.” Mr. Livingston says that, as in the case of the Treasury rules, the registration requirements extend to non-U.S. advisers with more than 15 U.S.-resident clients. The SEC appears to have ignored the need for offshore advisers to have managed assets over $30 million.
Mr. Livingston says that although, technically, SEC registration does not yet make an investment adviser a financial institution, as defined under the Bank Secrecy Act for the purposes of the Patriot Act, it does bring them one step closer to being subject to the U.S. anti-money laundering regime. Indeed, most U.S. investment advisers now choose to adopt anti-money laundering programmes based on Patriot Act requirements regardless. The Patriot Act has also, according to U.S. Treasury Secretary John Snow, assisted the Treasury in preventing money laundering and terrorist financing through greater transparency of correspondent accounts maintained by U.S. banks on behalf of foreign banks.
Mr. Livingstone points out that SEC registration has the effect of subjecting offshore advisers to U.S. jurisdiction and SEC examination, which is costly, threatens confidentiality, and seems to be another example of the extra-territorial hegemony of U.S. legislation.Link here.
Offshore: A new regime
New requirements for hedge funds to register with the SEC have created a hive of activity in the Cayman Islands. The deadline for hedge funds to register with the U.S. Securities and Exchange Commission in compliance with SEC Rule 203 (b)(3)-2 passed on February 1, 2006. With 80% of the world’s 8,000-plus hedge funds domiciled in the Cayman Islands, the impact of the new regulations has certainly been felt in this jurisdiction, primarily in the areas of structuring lock-ups for new funds clients and creating independent boards of directors for hedge funds. The volume of hedge funds in Cayman likewise makes the jurisdiction a global bellwether for how the new rules will play out on a global basis.
One of the key criteria under New Rule 203 is that any fund with 14 or more U.S. investors is required to register with the SEC, even if the fund is not domiciled in the U.S. Unlike the rules that apply to U.S. managers, there is no minimum amount of assets under management that an offshore fund manager needs to have before registration is required. One way to work around this is to take advantage of the exemption from registration that applies to funds with a 25-month lock-up on capital contributions made on or after 1 February, 2006. Some funds are making this lockup across the board while others are employing “side letters”, or special arrangements for select investors, that reduce the lock-up for a small number of investors. The SEC has stressed that any liquidity side letter arrangements must be disclosed to all investors.
We have seen lock-ups being used by 20%-30% of the new funds with which we are working. While some experts say that making the funds illiquid is not desirable for investors, there are indications that, as the surplus in capital as well as more stable markets mean generally lower returns, some hedge funds are getting into longer-term investments. Other trends that our firm expects to see as funds tackle the compliance burden include a limit on the number of US investors and possibly a consolidation of smaller fund managers to help spread out the financial costs and risks. The cost of regulation is estimated to be between $25,000 and $40,000 annually, not including the cost of hiring a compliance officer, so for funds with less capital, sharing this cost with other managers is an attractive option for some.Link here.
U.S. BANK APPROVES RIPPED-UP CREDIT CARD APPLICATION
A U.S. man who sent in a torn up, and taped back together, credit card application as an experiment to see whether he needed to shred his applications has received a credit card. Rob Cockerham used his father’s address and his mobile (as opposed to land line number) when making an application for a JP Morgan Chase credit card. A spokesman for Chase described the experiment as an internet prank. He insisted that Chase takes fraud seriously and pointed out that the bank was obliged to process credit applications, whatever condition they are received in.
It is easy to imagine a fraudster submitting a torn up application but from the point of view of credit card companies, if not consumers, the risk is worth it, as net security guru Bruce Schneier points out. “All other costs and problems of identity theft are borne by the consumer; they’re an externality to the credit card company. They don’t enter into the trade-off decision at all,” Schneier writes. “We can laugh at this kind of thing all day, but it’s actually in the best interests of the credit card industry to mail cards in response to torn-up and taped-together applications without doing much checking of the address or phone number. If we want that to change, we need to fix the externality.”Link here.
LIECHTENSTEIN WILL RESIST MOVES TO END BANK SECRECY
Liechtenstein is unlikely to dispense with its coveted banking secrecy laws any time soon because such a measure would probably not be approved if put to a referendum, according to Prince Alois, ruler of the Principality. Prince Alois told Bloomberg News that banking secrecy is “very firmly anchored” in Liechtenstein and any proposed watering down of current laws to satisfy the OECD and the FATF would therefore be rejected when put to a referendum – a necessary measure under the Principality’s constitution. “I don’t think a draft law or international accord proposing to scrap bank secrecy would be successful in the foreseeable future.”, the prince stated.
Financial services constitutes about 30% of Liechtenstein’s GDP. According to the recent progress report on anti-money laundering initiatives across the globe by the U.S. State Department, Liechtenstein’s well-developed offshore financial services sector, relatively low tax rates, liberal incorporation and corporate governance rules, and tradition of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from abroad. However, the report went on to note that these same factors have historically made the country attractive to money launderers. “Rumours and accusations of misuse of Liechtenstein’s banking system persist in spite of the progress the principality has made in its efforts against money laundering,” [our emphasis] the report stated.
Besides Liechtenstein, other countries also not cooperating with the OECD to improve rules on tax disclosure are Andorra, Liberia, the Marshall Islands and Monaco. Industrialized countries said when the list was drawn up that they are unable to collect hundreds of billions of dollars in taxes because of the havens. Tax havens impose no more than nominal taxes and refuse to disclose tax information, among other practices cited by the OECD. Liechtenstein’s bank secrecy does not protect criminals although tax evasion is not considered a crime in the principality. “Low taxes and bank secrecy are the basis for Liechtenstein’s prosperity,” said Wolfgang Gerke, a banking professor at the University of Erlangen and Nuremberg in Germany. If they drop secrecy “they will be doing themselves great harm.”
Under pressure from the EU, Liechtenstein last year introduced a tax on the savings of EU residents. The 15% tax will rise to 35% by 2011 and applies to interest earned on bond-coupon payments, bank-account interest and gains from mutual funds holding 40% or more of their assets in debt securities. Liechtenstein, home to 15 banks including LGT, owned by the royal family, and VP Bank Group, agreed to levy the tax and distribute it to the countries whose residents have savings in the principality. To preserve bank secrecy, Liechtenstein will not disclose the identity of the account holders. There is no sign the tax is slowing inflows of client assets into Liechtenstein, while existing clients have probably moved their savings into tax-exempt products, Prince Alois said.
Liechtenstein, with 34,000 residents in a mostly mountainous territory the size of Washington, DC, joined Norway and Iceland in the European Economic Area in 1992 to benefit from free trade with the EU. Its residents have the highest per capita income in Europe, according to a 2005 study by GfK, a German market researcher. The country, which uses the Swiss currency and relies on Swiss customs officers to monitor its borders, has no plans to join the 25-country EU, the prince said. Switzerland is not a member of the EU. “EU membership is inconceivable at the moment,” he said. “We would have to adopt rules that aren’t attractive for us and above all we would have to massively expand our civil service.”Link here.
BRITISH VIRGIN ISLANDS NEW BUSINESS COMPANIES ACT IS TRANSITIONING IN
The BVI Government, in consultation with the industry and the Financial Services Commission (FSC), the local regulatory body, has recently introduced a new BVI Business Companies Act (BVIBCA). In order to allow flexibility, BVI introduced a 2-year transition period for the introduction of the BVIBCA – which came into force on 1 January, 2005 – and the eventual phase-out of the IBC Act and the much less frequently used Companies Act for incorporating local companies. From January 1, 2006, only Business Companies (BCs) under the BVIBC Act can be incorporated. However, International Business Companies (IBCs) under the IBC Act and local companies (CAPs) under the Companies Act (Cap 285) can coexist until December 31, 2006. At any time during 2006, IBCs or CAPs can optionally reregister as a BC. On January 1, 2007, all non-converted IBCs and CAPs will be automatically reregistered to BCs.
The BVIBCA has been introduced for three main reasons. (1) To avoid the risk of being seen to practice “ring fencing” in the BVI – treating different types of companies, such as local and international companies differently, most notably with respect to tax treatment. (2) The IBC Act, which has been successful for the past 20 years, was felt to be dated in various aspects. (3) The introduction of a brand new piece of legislation, rather than to try to amend the previous act, allowed for a thorough and comprehensive review.
The BVIBCA provides greater flexibility than its predecessor, the IBC Act. Under the IBC Act, only one type of company could be incorporated, the company limited by shares. The BVIBCA provides for the incorporation of seven different types of transactional vehicles. The BVIBCA also has some innovative provisions concerning company names, which will be attractive to overseas parties, including Limited, Corporation, Incorporated and abbreviations thereof, as well as SA. Perhaps most interesting is the ability to add foreign characters such as Chinese or Cyrillic script, as an additional name. Finally, the company registration number can comprise the name of the company, e.g., BVI Company Number 123456 Limited.
Distributions can be made to members at any time and in any amount provided the familiar tests of solvency are satisfied – positive net worth and the ability to pay debts as they fall due. The solvency tests also, in reality, offer the best protection to creditors, especially in view of the wide-ranging provisions of the Insolvency Act. The ability to move assets and effect share for share exchanges, subject only to the solvency tests makes reorganizations as painless as possible, especially where there may be different groups of shareholders in the BVI or wider structure. The liquidation of a BC may be on a solvent, voluntary basis or through insolvency, in the latter case, the terms of the BVI Insolvency Act 2003 apply. The process of appointing a voluntary liquidator to effect a solvent liquidation is straightforward. The directors must be able to produce a declaration of solvency and to approve an uncomplicated “plan of dissolution”.Link here.
INLAND REVENUE WIDENS ITS SCRUTINY OF OFFSHORE FUNDS
As part of its crackdown on tax evasion, tax experts say the UK government is now pursuing with more vigor wealthy individuals and UK residents who have money in offshore havens such as Jersey, Guernsey and the Isle of Man and who might have avoided paying taxes in recent years. “We’ve seen plenty of evidence that there are more probes going on into that matter,” says John Whiting, a tax partner with PricewaterhouseCoopers. Under the spotlight are individuals who are using credit cards linked to offshore accounts and who are not declaring any interest earned on those accounts. “If you’re paying off your Tesco bill with a debit or credit card linked to an offshore account, then you’re probably under suspicion,” Mr. Whiting says.
In most cases, these individuals are either very wealthy Britons or so-called “non-domiciled residents” who are living in the UK but are not UK citizens, many of whom do much of their banking in offshore centers to avoid paying higher taxes. Recent court records show the Revenue has asked an unnamed bank to disclose records of customers who live in the UK and used credit cards linked to offshore accounts, which “they considered posed a significant risk to the proper collection of UK tax.” Last year the Revenue sent out 500 letters to people with funds in offshore tax havens asking investors to justify why they thought no tax liability arose from their offshore accounts and reminding them that income from offshore accounts needs to be declared in the UK.
Tax experts say there are many people with offshore accounts who may not have declared the income because they think they do not have to. Non-domiciled individuals do not need to pay income tax on their offshore accounts, but UK citizens who are resident in the UK need to declare any income generated offshore. The crackdown on offshore banking by the HMRC follows the launch last July of the EU savings directive that allows EU states and offshore territories to exchange more details about bank holdings.
To avoid new requirements on reporting, a growing number of UK residents are moving offshore accounts to Singapore and Hong Kong as both of these financial centers fall outside of the EU’s jurisdiction, accountants say. However, the EC says it would like to persuade authorities in these other jurisdictions to comply with tax agreements. “They would like to extend the measure to include Singapore and Hong Kong,” Germano Mirabile at the Commission said.Link here.
OFFSHORE HAVEN SHORT TAKES
The Jersey and Guernsey legal markets’ peaceful and arguably mutually exclusive coexistence is fast becoming a thing of the past, as two of Jersey’s high-profile firms target their Channel Islands neighbor. The Isle of Man Government has opened its first business-focused London office, in a bid to increase the island’s visibility among the capital’s business community. In February the first Luxembourg-based firm to launch in the UK opened a London office. Offshore advisers – often among the most entrepreneurial of firms – are clambering aboard the Dubai bandwagon and looking to take advantage of the commercial opportunities on offer thanks to the region’s lack of regulation and tax-haven status. Meanwhile, few offshore advisers have been hiring as prolifically in recent times as Bermuda leader Conyers Dill & Pearman. Less fashionable among offshore jurisdictions than glamorous Dubai, Gibraltar saw the departure earlier this year of its only truly international player, with the news that top 20 City of London law firm Denton Wilde Sapte was preparing to exit the market.Link here.
PHEW! GOOGLE SAVES U.S. NETIZENS FROM FEDERAL GOVERNMENT SNOOPSWhat is wrong with this headline?
Google has made the internet safe for U.S. citizens! Or at least that was what the company implied, after a federal judge ruled that the company did not have to turn over a sample of anonymized search queries to the U.S. Department of Justice, and only needed to provide a sampling of websites it searched. “This is a clear victory for our users,” Google said in a statement. The DoJ had wanted the anonymized data to bolster its attempt to revive COPA, or the Child Online Protection Act, a 1998 law requiring site owners to restrict content, or access to content. In 2004 the Supreme Court agreed with an appellate court decision that the law violated the First Amendment.
It should be noted that Microsoft, AOL and Yahoo! meekly handed over the data without a fight. But the case was never about protecting the privacy of Google users – as no personal information was requested. And ominously, the judge explained that there was no reason for Google to hand over the queries because the DoJ already had obtained what it wanted from Microsoft, AOL and Yahoo! who had supplied a week’s worth of search queries, and a sample of million websites in their respective indices.
What should put this decision in its proper perspective is explained in this month’s issue of article of The Atlantic, where investigative journalist and author James Bamford, whose 1983 book Puzzle Palace documented much of the work of the National Security Agency for the first time. “Today the NSA has access to more information than ever before,” Bamford reminds us. “People express their most intimate thoughts in emails, send their tax returns over the internet, satisfy their curiosity and desires with Google searches, let their hair down in chat rooms, discuss every event over cell phones, make appointments with their BlackBerrys, and do business at Wi-Fi hot spots. NSA personnel … have the ultimate goal of intercepting and reviewing every syllable and murmur zapping into, out of, or through the United States. They are close to achieving it.”Links here.
SURVEILLANCE CAMERAS “SHOULD SPY ON DRIVERS’ HABITS”, SAYS U.K. PARLIAMENTARY ADVISOR
The mother of parliaments is set to debate the extension of camera surveillance of its motorized subjects. Robert Gifford, of the Parliamentary Advisory Council for Transport Safety reckons number plate recognition systems could be used to keep a closer eye on drivers, many of whom may be terrorists or mobsters. After all, he points out, “Those responsible for 7/7 got to Luton station by car.” Gifford suggests that for “the greater good of society” the law-abiding and seat-belt wearing community might tolerate, “a slight reduction of our liberty.”
Britain is dotted with around 8,000 number plate recognition cameras and 6,000 speed cameras, which raise around £113 million a year in fines, automatically, without Her Majesty’s plod even having to get out of bed. Gifford says the cameras should start logging details of what the occupants of cars are up to as well as the speed they are driving at, since many of them will be up to no good. Even if they do not turn out to be terrorists, those apparently driving without due care and attention will at least have to pay a fine which will help pay for new cameras.Link here.
IRS PLAN TO SELL DATA FROM RETURNS HAS PRIVACY ADVOCATES UP IN ARMS
The IRS is quietly moving to loosen the once-inviolable privacy of federal income-tax returns. If it succeeds, accountants and other tax-return preparers will for the first time be able to sell information from returns, or even entire returns, to marketers and data brokers. The change is raising alarm among consumer and privacy-rights advocates. It was included in a set of proposed rules that the Treasury Department and the IRS published in the Dec. 8 Federal Register, where the official notice labeled them “not a significant regulatory action.”
IRS officials portray the changes as housecleaning measures needed to update outmoded regulations adopted before it began accepting returns electronically. The proposed rules, which would become effective 30 days after a final version is published, would require a tax preparer to get written consent before selling tax information. Critics call the changes a dangerous new breach of personal and financial privacy. They say signed consent would prove meaningless for many.
Criticism of the proposal also came from U.S. Sen. Barack Obama, D-Illinois. In a letter to IRS Commissioner Mark Everson, Obama warned that once in the hands of third parties, tax information could be resold and handled under even looser rules than the IRS sets, increasing consumers’ vulnerability to identity theft. “There is no more sensitive information than a taxpayer’s return, and the IRS’s proposal to allow these returns to be sold to third-party marketers and database brokers is deeply troubling,” Obama wrote.Link here. Discussion here.
DATA THIEF EXPOSES ACXIOM’S FLIMSY SECURITY, NETS 8 YEARS IN JAIL
The former owner of an email marketing company will be spending eight years on a forced sabbatical for filching one billion data records from Acxiom, one of the world’s largest managers of personal, financial, and corporate data. Acxiom handles 14 of the 15 top credit cards companies, five of the six biggest retail banks and seven of the top 10 car makers. All share the credit card and other information of their customers with Acxiom. Acxiom claims it “continually gathers data from thousands of public and private sources,” enabling it to offer the “widest and latest selection of data possible” with “the most informative, accurate and recent demographic, socio-economic and lifestyle data available-at the individual or household level.” And all that data is not being collected for posterity. Acxiom offers it to direct marketers, among others, to identify the best prospects. Chances you are not in Acxiom’s system? Darned near zero, if you are a U.S. denizen.
A database housing the sensitive data for every sentient citizen demands Fort Knox-level security. Or at least “local museum” security. So you may be surprised at how Scott Levine’s heist was exposed …Link here.
PROOF OF CONCEPT: UNAUTHORIZED MATCHING OF PUBLIC AND PRIVATE EMAIL ADDRESSES
Do you use a throwaway or public email address on the web, and save your private email address for friends and business associates? Most of us do. Keeps out the riff-raff. Gives you a certain amount of privacy, too. So imagine how you would feel if you signed up for a contest with your throwaway address, and suddenly started getting messages from the contest holder at your private address. Some Miller Brewing customers say that is exactly what happened to them. And Spam King sleuth, Brian McWilliams, says Equifax performed the data mining operation that made it possible. Further, McWilliams offers compelling evidence that the Equifax grey-ops email-matching project is driven by a guy who is well-known to spam hunters: Scott Hirsch.
Hard to believe, no? Miller and Equifax have shocked some folks. Maybe we should thank them for the wake-up call. There is no real privacy for those who participate in a modern open society, and there never was. In the U.S., the tracking began a short time after your Social Security Number was issued. Old School groups like Equifax, Experian, TransUnion, Acxiom and others sliced and diced information as you grew, from myriad sources, frequently yielding nuggets better left buried. The advent of the Internet made tracking, buying, selling, leaking and stealing the data that is “you” infinitely easier. You have likely left footprints all over the web – IP address, cookies, user name, email addresses, real name, address, phone.
And New School data trappers have run the gamut of respectability … Alexa, Doubleclick, Gator, Claria, Cydoor and many, many more. All it takes is a bit of time meshing the Old School data with the New School. Out pops everything there is to know about you, from Social Security Number, voting habits, religious preferences, credit history, and banking details to all your user names and email addresses. By comparison, the Equifax-Miller Brewing stunt is a parlor trick. Are you paranoid yet?Link here.
BREATH ANALYZER SOFTWARE SOURCE CODE DEMAND SAVES DRIVERS FROM DUI CONVICTIONS
U.S. lawyers using software intellectual property laws to get clients off drink driving convictions. It all started when one Timothy Muldowny’s lawyers asked for the source code to the Intoxilyzer alcohol breath analysis machine which was the police’s main evidence against him. However Intoxilyzer did not want to make its source code public because it would mean handing over the information to its rivals or hackers. A Seminole County judge tossed out Muldowny’s alcohol breath test and the ruling was upheld by an appeals court in 2004.
Since then Driving Under the Influence suspects in Florida, New York, Nebraska have had their cases throwned out or reduced to lesser offences. Now law makers are considering bringing in new laws that will mean that source code does not have to be produced for DUI defendants. However they might find that such laws are unconstitutional. Apparently it is everyone’s legal right to face an accuser in court, even if the accuser is a machine.Link here.
ANTI-GAMBLING CRUSADE A BAD BET
Online gambling is already illegal in the U.S. Proprietors of gaming sites are all incorporated overseas. Yet Internet wagering is still a $12 billion industry. History has shown us that prohibiting private, consensual behavior has never made that behavior go away. Because consensual crimes take no victims, vice laws are difficult to enforce. Police have to use informers and undercover work and sometimes need to break the very laws they are trying to enforce. Consequently, America’s various attempts at prohibiting sinful behavior have bred corruption, organized crime, black markets and significant erosion of our civil liberties. The story is no different with gambling. Here are the three chief reasons why Congress’s latest vice crusade is misguided:
(1) What we do with our own money on our own time ought to be our own business. The idea that government is somehow obligated, or even authorized, to protect us from our own vices and “bad” habits simply is not compatible with a free society.
(2) It is naked hypocrisy. Last month, police in Fairfax, Virginia, conducted a SWAT raid on Sal Culosi Jr., an optometrist suspected of running a sports gambling pool with some friends. As the SWAT team surrounded him, one officer’s gun discharged, struck Culosi in the chest and killed him. In the fiscal year before the raid that killed Culosi, Virginia spent about $20 million marketing and promoting its state lottery. The scene is similar in other states. The new anti-gambling bill sponsored by Virginia U.S. Rep. Bob Goodlatte contains a gaping loophole that lets state lotteries continue to sell their tickets online. All these efforts to ban private gambling sound more like a protection racket than good government.
(3) It will not work. As noted, despite prohibitions against Internet gambling, it is still a billion-dollar industry. Prohibitionists have argued that a law preventing credit-card companies from allowing their services to be used in conjunction with gaming sites will prove to be the death knell for online wagering. Hardly. In fact, several state attorneys general already have gone after the credit companies and online payment services like PayPal, threatening them with Patriot Act charges for doing business with gaming sites. Consequently, third-party vendors such as Neteller, also located offshore, have sprung up to facilitate transactions between gamers and gaming sites. Congress can keep passing laws. But so long as there is demand, innovators will continue to use technology to find ways around them.
Goodlatte pointed out that because gambling companies themselves are offshore, they are not subject to U.S. laws and regulations. But that is an argument against his own bill. Goodlatte’s bill will not stop Internet gaming. Instead, it will not only keep gaming companies offshore, it will facilitate the rise of offshore financing services, too. That means U.S. consumers will be more susceptible to fraud and will have no legal recourse when a shady offshore outfit bilks them out of their money. Not to mention that offshore, black-market outfits present prime funding opportunities for organized crime and international terrorism. A more sensible policy would be to legalize online gambling and let credible gaming companies do business within the reach of U.S. law. The good ones are already begging to be regulated. They understand that legitimately setting up shop in the U.S. will give them an advantage over their competitors. Unfortunately, Congress seems more interested in pushing a moral agenda than taking a realistic approach to a habit that is as old as human nature.Link here.
Death raises concern at police tactics.
The recent killing of an unarmed Virginia doctor has raised concerns about what some say is an explosion in the use of military-style police Swat teams in the U.S. Armed with assault rifles, stun grenades – even armored personnel carriers – units once used only in highly volatile situations are increasingly being deployed on more routine police missions.
Dr. Salvatore Culosi Jr. had come out of his townhouse to meet an undercover policeman when he was shot through the chest by a Special Weapons and Tactics force. The 37-year-old optometrist was unarmed, he had no history of violence and displayed no threatening behavior. But he had been under investigation for illegal gambling and in line with a local police policy on “organised crime” raids, the heavily armed team was there to serve a search warrant. As officers approached with their weapons drawn, tragedy struck. A handgun was accidentally discharged, fatally wounding Dr Culosi.
Two months on, investigations into the incident are still continuing, a delay which Dr Culosi’s family says is compounding the “horror and burden of it all.” Salvatore Culosi Sr, the dead man’s father, told the BBC, “I never knew him to carry so much as a pocket knife so it bewilders me how a detective could spend three months investigating my son and not know he is a pussy cat If anything comes out of this it must be that another family does not experience this pain and anguish for absolutely no reason. Policy needs to change so these kinds of accidents never occur again.”
Professor Peter Kraska, an expert on police militarisation from Eastern Kentucky University, says that in the 1980s there were about 3,000 SWAT team deployments annually across the U.S., but says now there are at least 40,000 per year. Dr. Kraska believes there has been an explosion of units in smaller towns and cities, where training and operational standards may not be as high as large cities – a growth he attributes to “the hysteria” of the country’s war on drugs. “The problem is that when you talk about the war on this and the war on that, and police officers see themselves as soldiers, then the civilian becomes the enemy.”Link here.
BUSH SAYS SPYING ON TERROR SUSPECTS WITHOUT COURT APPROVAL IS OK. WHAT ABOUT PHYSICAL SEARCHES?
In the dark days after the 9/11, terrorist attacks, a small group of lawyers from the White House and the Justice Department began meeting to debate a number of novel legal strategies to help prevent another attack. Soon after, President Bush authorized the National Security Agency to begin conducting electronic eavesdropping on terrorism suspects in the U.S., including American citizens, without court approval. Meeting in the FBI’s command center, the lawyers talked with senior FBI officials about using the same legal authority to conduct physical searches of homes and businesses of terrorism suspects – also without court approval, one current and one former government official tell U.S. News. “There was a fair amount of discussion at Justice on the warrantless physical search issue,” says a former senior FBI official. “Discussions about – if [the searches] happened – where would the information go, and would it taint cases.”
FBI Director Robert Mueller was alarmed by the proposal, the two officials said, and pushed back hard against it. “Mueller was personally very concerned,” one official says, “not only because of the blowback issue but also because of the legal and constitutional questions raised by warrantless physical searches.” FBI spokesman John Miller said none of the FBI’s senior staff are aware of any such discussions and added that the bureau has not conducted “physical searches of any location without consent or a judicial order.”
In December, the New York Times disclosed the NSA’s warrantless electronic surveillance program, resulting in an angry reaction from President Bush. It has not previously been disclosed, however, that administration lawyers had cited the same legal authority to justify warrantless physical searches. But in a little-noticed white paper submitted by Attorney General Alberto Gonzales to Congress on January 19 justifying the legality of the NSA eavesdropping, Justice Department lawyers made a tacit case that President Bush also has the inherent authority to order such physical searches. In order to fulfill his duties as commander in chief, the 42-page white paper says, “a consistent understanding has developed that the president has inherent constitutional authority to conduct warrantless searches and surveillance within the United States for foreign intelligence purposes.” The memo cites congressional testimony of Jamie Gorelick, a former deputy attorney general in the Clinton administration, in 1994 stating that the Justice Department “believes, and the case law supports, that the president has inherent authority to conduct warrantless physical searches for foreign intelligence purposes.”
Justice Department spokesman Brian Roehrkasse says the white paper cited the Gorelick testimony simply to bolster its legal defense of the NSA’s electronic surveillance program. Roehrkasse points out that Justice Department lawyers have told Congress that the NSA program “described by the president does not involve physical searches.” But John Martin, a former DoJ attorney who prosecuted the two most important cases involving warrantless searches and surveillance, says the department is sending an unambiguous message to Congress. “They couldn’t make it clearer,” says Martin, “that they are also making the case for inherent presidential power to conduct warrantless physical searches.”Link here.
THE PATRIOT ACT AND ATTENTION DEFICIT DEMOCRACY
The American political system failed when Congress and the media recently rolled over in favor of extending the most onerous provisions of the USA PATRIOT Act. Despite stark evidence of both the law’s abuses and widespread popular opposition, Bush got a rubber-stamp extension of a law that has come to symbolize boundless government intrusions since 9/11. The reenactment of the Patriot Act symbolizes how America is becoming an “attention deficit democracy” – characterized by pervasive negligence and ignorance throughout society and much of the government. Most Americans appear to no longer care whether there is any leash on government power.
Many Americans did try to stop this juggernaut. More than 400 cities and communities have passed resolutions condemning or opposing the Patriot Act. Yet Sen. Russ Feingold (D-Wisconsin), an opponent of the bill, perfectly captured what Congress did: “What we are seeing is quite simply a capitulation to the intransigent and misleading rhetoric of a White House that sees any effort to protect civil liberties as a sign of weakness.” The Founding Fathers intended Congress to be a vigorous check on and balance to executive power. But Congress has never done anything more than concoct fig leafs for itself in response to public outrage over the Patriot Act. With the Patriot Act renewal, Congress made what Senate Judiciary Committee chairman Arlen Specter (R-Pennsylvania) described as “cosmetic changes” – and then congratulated themselves for defending civil liberties.
With the revised Patriot Act, it will be more difficult for the feds to seize public library records with a Section 215 search warrant (approved by the secret Foreign Intelligence Surveillance Act court). But the feds will still be able to seize library records by invoking other provisions in the law. Businesses, nonprofit groups, and other organizations hit by Section 215 search warrants are prohibited from disclosing that they have been compelled to surrender customers’ information and other data to the feds. The new, improved Patriot Act will allow individuals and organizations hit by such searches to publicly complain about the intrusion – but only after they wait a year after they have been searched, and only if they can persuade a federal judge that the G-men acted in bad faith. A 365-day waiting period is Congress’s notion of due process and fair play for American citizens.
The biggest Patriot Act bombshell of recent times detonated last November when the Washington Post revealed that the FBI is issuing 30,000 National Security Letters (NSLs) a year. FBI field offices issue NSLs on their own in cases that they claim involve international terrorism or clandestine intelligence activities. NSLs empower the FBI to seize records on people’s earning, spending, travels, web searches, emails, and telephone calls. Each NSL can lasso the records of thousands of people. Federal judge Victor Marrero ruled that the Patriot Act’s NSL provision “has the effect of authorizing coercive searches effectively immune from any judicial process.” (The Bush administration is appealing the ruling).
The White House hyped the Patriot Act renewal as a political triumph. The Associated Press reported, “Republicans declared victory as they sought to polish their national security credentials this midterm election year.” Republicans prattled on about how the revised Patriot Act provides “safeguards.” Apparently, a “safeguard” is anything that a government official can mention when asked about possible abuses of federal powers. If enough Americans comprehend this “patriot” charade, it will become far more difficult for the White House and Congress to pull off similar infringements on freedom in the future. At the very least, citizens can still make it hot for anyone in Washington who betrays his oath to uphold the Constitution.Link here.
ROGER SANDALL VS. THE CULTURE CULT
“When I hear the word ‘culture’ I reach for my gun!” ~~ Joseph Goebbels, Hitler’s minister of propaganda
If Joseph Goebbels were living today he would surely reach for his gun and take a pot shot at Roger Sandall’s book, The Culture Cult. Instead, it’s Sandall himself who, in his collection of essays, gets a shot or two back at the forces of barbarism. This is a contemporary barbarism which, unlike that of Goebbels, goes cloaked in the faux-tolerant mantle of multiculturalism. The protagonists of the story are two traditions, both endemic to the West, but of universal impact. On the one hand is the ideal of culture championed by the Victorian critic Mathew Arnold, which simply means education to the highest and most universal standard of excellence. Confronting it is the notion put forward by thinkers of the romantic counter-enlightenment such as Rousseau and Herder, a concept which equates culture with whatever folkways happen to be current among a given tribe or nation. It was the edifying Arnoldian archetype of culture which Goebbels was so intent on liquidating, the notion of dispassionate scholars and artists creating without political direction.
This is an engrossing tale, but one wonders if Sandall is not prosecuting his case with unreasonable vigor. After all, can we really do without the culture concept any more? According to Sandall, “culture” in its folkish sense evoked the image of harmonious, isolated, egalitarian communities existing as eternal essences, communities which satisfied the libidinal and ego drives of their participants to the extent that comparisons with real life in the modern world became understandably disappointing. Sandall does not deny that people in our world, notably the descendents of indigenous populations, have real grievances, he only asserts the idealization of the past makes no contribution to what Freud called the “discontent” of civilization. Indeed, he claims that fitting our modern circumstances into the procrustean bed of anthropological romantic idealism makes this discontent even more intolerable and the resolution of solvable problems intractable.
Reading the diverse essays which constitute the book should be enough to convince the skeptical reader that many of the absurdities of modern politics can be traced back to the philosophical foundations of anthropology, or rather the absence thereof. Sandall’s contention is that rational decision-making about either individuals or communities is stifled by the oppressive omnipresence of taboo – not taboos against touching or eating, but against thinking and speaking and include a bewildering and ever-increasing system of strictures, the most egregious offenses classified under the heading “political incorectness”. A literary and fictional past is conjured up by the priests of hermeneutic cultural interpretation. To paraphrase Pangloss, we have at last arrived at the best of all possible pasts! Yet readers of Sandall will suffer disillusionment as they witness him drawing aside the curtain from those anthropological wizards of Oz (where he happens to live) and elsewhere, exposing their primitive romanticism as a cloak for a disastrous social agenda.
One of the cunning stratagems of the cult was to turn “cultured mind” from a token of homage to an epithet of elitism. According to Sandall, Rousseau was the first of the “bohemians”, which is to say the first intellectual to define his very existence in opposition to the norms of society. He was also the founder of that collectivist thought which esteems social solidarity above all other values, an insight central to the culture cult of which he was the eponymous ancestor. Sandall goes further than anyone else I know in showing to what extent the chickens had come home to roost on the children of Rousseau by the end of the 20th century. This is a formidable achievement, since the culture cult is omnipresent in contemporary intellectual discourse and consequently invisible. Furthermore, like all successful cabals the culture cult has managed its image as an anti-dogmatic bohemianism while being extremely dogmatic in practice.
Any culture cult catechism would have to include at least the following points: (1) People are organized into social wholes called cultures which largely do their thinking for them. (2) These social wholes are incommensurable and cannot be subjected to any moral comparison. (3) All cultures, with the exception of modern industrial capitalism, are healthy and harmonious. (4) Civilization either does not exist, or if it does exist it is evil (see point 4). (5) Any connection between cultural holism and modern nationalist, fascist, and collectivist movements is purely coincidental. How did it come to this? Most people, after all, have a positive impression of anthropology as a humane and tolerant field which does it best to polish the mirror in which we see our anthropoid faces. To his credit Sandall, though an unsparing critic, reminds us that there are at least two human science traditions called “anthropology” which developed in modern Europe during and after the 18th century. What they discovered they termed the “civil society”, where “civil” is contrasted with military or command-organization. In short, they were able to elucidate the natural basis of what we call the social fabric as opposed to the state, and they further noticed that the latter was at best a by-product, and at worst parasitic upon, the former.
By the beginning of the 20th century a culturalist turn was on the horizon, one that would abort the “pure science” agenda for anthropology. Although Sandall gives him only a passing notice, it was Franz Boaz who was at the center of this picture as far as the U.S. was concerned, the pivot at which the enlightenment tradition of dispassionate scientific analysis began to descend in an arc of increasing angular momentum towards the pit of romanticism. Sandall, a critical rationalist in the Popperian tradition, sees this as tragic, but I am inclined to view it as inevitable. As in the 18th century, there was a countermovement to the culture cult in social philosophy. Sandall makes specific reference to Karl Popper, Ludwig von Mises, and Friedrich Hayek. Among these, Sandall’s own favorite seems to be Popper, the knight of “methodological individualism” who laid the dragons of totalitarianism and collectivism to waste on the field of reason. Unfortunately reason did not manage to filter down the academic pipe swiftly enough to save us from the culture cult by the end of the 20th century.
The problem may not be that 20th century anthropology was wrongheaded, but that it was taken too seriously. After theology, philosophy, and mathematics had been successively dethroned as the king, queen, and jack of the sciences, it was decided that anthropology, the fool of the pack, would serve as the common denominator of wisdom in contemporary society. The desiderata may not be a more scathing criticism of the fool, but a sober understanding of how the motley coat of ethnography turned into the hair shirt of multiculturalism and an accessory to the destruction of civil society by the state. It is not that anthropology as an endeavor is worthless, rather that its institutionalization in academia turned an understandable orientation towards the exotic into a bully pulpit for social criticism in the culture wars of the early 20th century, and anthropological inquiry was hijacked by an alliance of bohemians and Jacobins to revolutionize society rather than return it to sanity.
For the contemporary clash of cultures and civilizations (plural) we can largely blame the anthropologists and their fellow travelers. Thus sayeth Roger Sandall, and he may indeed be right. Yet perhaps Sandall is a bit too hard on his colleagues, against whom he is waging his own one man culture war. After all, it would seem that transcendentalism, romanticism, and bohemianism will always be with us, or at least with the anthropological profession as it is presently understood. It is hard to imagine the person who chooses to wear the motley of such of profession as being anything but a bohemian. The only question is whether such a person is a harmless eccentric or a vicious fool. The criterion, it seems to me, as in all other areas of human endeavor, is whether the person’s behavior harms other people than him or her self. Thus the herbalist who ingests a potentially poisonous hallucinogenic drug is arguably sacrificing herself for the sake of understanding, while the ethnologist who concocts a utopia from his imagination and foists it upon a believing public is guilty of fraud. Both are playing fast and loose with what is conventionally considered “reality” but (apologies to Ayn Rand) the moral distinctions involved must ultimately be decided at the level of ethics rather than epistemology.
When a large segment of the anthropological profession exchanged the hero’s journey towards truth in favor of becoming another branch of the academic inquisition against civil society, this constituted a major betrayal of science, and that in a sense far different from a shift away from “scientism”. While Roger Sandall’s Culture Cult hardly closes the case on this egregious movement, it provides a very readable benchmark against which all future assessments of the profession’s progress, or otherwise, should be judged.Link here.
THE GROUND ZERO GRASSY KNOLL
They keep telling us 9/11 changed everything. But even in this Photoshopped age of unreliable narrators, much remains the same. The assassination of President John Kennedy, the Crime of the Last Century, occurred in plain sight, in front of thousands – yet exactly what happened remains in dispute. The Warren Commission found that Lee Harvey Oswald, fellow traveler of the Fair Play for Cuba Committee, shot Kennedy with a cheap Mannlicher-Carcano rifle from a sixth-floor window of the Texas School Book Depository. The commission found that Oswald, who two days later would be murdered by nightclub owner Jack Ruby, acted alone.
Yet, as with so many such events, there is the sanctioned history and the secret history – players hidden from view. In the Kennedy murder, the involvement of shadowy organizations like the Mafia and the CIA came into question. This way of thinking came to challenge the official narrative put forth by the Warren Commission. It is not exactly clear when the grassy knoll supplanted the sixth-floor window in the popular mind-set. But now, four decades after Dallas, it is difficult to find anyone who believes Lee Harvey Oswald was the lone gunman. But if Oswald did not kill the president, who did? So 11/22 remains an open case, an open wound.
Now here we are again, contemplating the seemingly unthinkable events of September 11. An official explanation has been offered up: The nation was attacked by the forces of radical Islam led by Osama bin Laden and his Al Qaeda jihadists. Again, this narrative has been accepted by many. But not all …Link here.
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