|W.I.L. Home Page||Offshore News Digest Home|
|Sign Up||Finance Digest Home|
OFFSHORE TAX HAVENS IN U.S. CROSSHAIRS
How will the incoming (an assumption, to be sure) U.S. administration deal with the incontrovertibly dire federal government deficit? If it is Obama, a good bet is that an early target will be the "low-hanging fruit" of wealthy tax evaders who are accused of using offshore havens, and corporations that use a variety of offshore entity-juggling strategies to reduce their tax bills. After all, Obama co-sponsored the "Tax Haven Abuse Act" introduced last year.
When John McCain or Barack Obama enter the White House next January, either one will face a crucial problem: How to raise revenues or cut spending to shrink the massive federal budget deficit.
Tax economist Martin Sullivan suspects Obama will go for the "low-hanging fruit" first -- that is, chasing down wealthy tax evaders, individual and corporate. Obama signed on to the Tax Haven Abuse Act, a bill introduced in 2007 by Sens. Carl Levin, D-Michigan, and Norm Coleman, R-Minnesota.
Levin figures secretive offshore tax havens cost the federal government $100 billion in lost tax revenues each year. That is part of the total "tax gap" -- the amount of unpaid taxes owed by individuals, corporations, and other organizations -- estimated by the IRS to be $345 billion. As Levin sees it, these tax evaders are "willing to rob Uncle Sam and offload their tax burden onto the backs of honest taxpayers." His bill will be reintroduced next year. ...
Ah the blinding power of an ideology. It flat does not seem to occur to Levin and his ilk that an alternative interpretation of things is that it is Uncle Sam who "offloads" the burden of his beneficiaries onto the backs of everyone it can shake down. Even forgoing a fundamental reorientation of beliefs such as that, what about the huge amount of waste in the federal budget, starting with the multi-trillion dollar boondoggle in Iraq? Is it unreasonable to ask that they mount some rhetorical offensive against all those who feed at the federal trough at the expense of everyone else?
Tax havens have existed for many decades. That is because some commercial banks have effectively blocked legislation to curtail their activities, explains Lucy Comisar, co-chair of the U.S. wing of the Tax Justice Network, a London-based group. Banks, she charges, make a "lot of money" from placing private financial accounts in such places as the Cayman Islands, Bermuda, the Isle of Man, etc. The business has been growing for years.
The Tax Justice Network is a reliable voice in favor of increasing taxes and getting rid of "loopholes." For more commentary on TJN, see this posting. And you have to love Ms. Comisar's name. Very fitting.
But the tolerance toward tax havens on both sides of the Atlantic appears to be weakening. In Europe, tax havens were brought into the public eye this year by a juicy scandal involving secret bank accounts in Liechtenstein. A multimillion dollar sum was paid to an informer who provided hundreds of names behind tax-dodging accounts held by German business tycoons, about 100 American taxpayers, and tax cheats from other nations.
In Washington, the IRS stated in February that it is "initiating enforcement action" against the 100. It said "combating offshore tax avoidance and evasion are high priorities." But so far, no further word on the action has emerged.
The Bush administration, in Comisar's view, has been inadequate in tackling tax-haven losses. While McCain has not talked about tax havens on the campaign trail, Obama has frequently referred to Ugland House in Grand Cayman, a building that houses thousands of tax haven corporations, as "the biggest tax scam on record."
Comisar is hopeful Obama will push for the Levin bill, if elected. Maybe closing or limiting tax havens is "an idea whose time has come," she says.
Sullivan sees greater efforts to close tax havens as a "twofer." It would raise substantial revenues. It also would trim the growing income gap in the United States between the wealthy and the middle and lower classes, since the wealthy are more likely to use tax havens than those with less income.
Probably true. But does anyone believe that those who control the political process are going to allow themselves to be caught in a net of their own making?
An IRS report obtained by the Wall Street Journal in March indicated the nation's top 400 income-tax payers (with at least $100.3 million in adjusted gross income) controlled 1.15% of the nation's total income in 2005 -- twice the share they controlled in 1995. Over that same period, the average effective income tax rate paid by this same group fell from 30% to 18%. The Bush tax cuts aided this shift. Also, there is a suspicion the use of tax havens has increased. Money transfers can be done electronically and easily with the help of a bank. It is no longer necessary to cart bushels of money in a briefcase to some remote island.
Joel Slemrod, a tax economist at the University of Michigan Business School in Ann Arbor, sees tax havens as "clearly a bad thing." They enable many small island nations to "commercialize" their sovereignty at the expense of mostly industrial nations, he says. Tax havens have given tiny nations a lucrative job-creating business. The Cayman Islands, for instance, has 5,400 financial-services employees.
Another in a distiguished line of academic economists who end up serving as scribes and apoligists for the state. But the subject of academics is another story.
TEXAS REAL ESTATE SLUMP LETS MEXICANS TAKE IT BACK
Too much time has passed since the U.S. annexed a major portion of Mexico for this to qualify as irony, but students of history will surely experience some amusement -- what goes ‘round, comes ‘round indeed. The Mexican peso and economy have outperformed their U.S. couterparts sufficiently that some Mexicans are buying U.S. property on the cheap.
When Texas successfully seceded from Mexico in 1836, its population largely consisted of recent European immigrants who came in via the U.S. So the idea of "Mexicans" taking back what was forcibly taken from their ancestors does not really fly. But that corrupt, socialist Mexico is outperforming the great imperialist to the north is surely another sign of the decline and fall.
More than a century and a half after Mexico lost Texas to the U.S., Virgilio Garza wants a piece of it back. A "Texas for Sale" sign and cowgirls in boots and white hats greeted Garza at the Convex center in Monterrey, Mexico, earlier this month. A Monterrey developer and investor, Garza was in search of foreclosed U.S. property to buy.
"Texas is like our home," said Garza, 45, who joined hundreds of Mexicans poring over lists of Texas properties at the 4-day event. Garza, who owns manufacturing sites and other land in Mexico, said he and five partners may invest as much as $8 million in Texas. "We believe there can be some opportunities."
A rising peso and an economy growing faster than the U.S. have given some Mexicans the buying power to take advantage of the housing slump in Texas, which the U.S. annexed in 1845 after Texans gained independence from Mexico nine years earlier. A 3-year war followed and ended with Mexico ceding about half its territory, including Arizona, Nevada and California, to the U.S. under an 1848 treaty.
The peso has gained 5.9% against the dollar since the beginning of the year. ... The economy, which rose 2.6% in the first quarter from a year ago, is expected to grow 2.6% this year ...
Marco Ramirez of McAllen, Texas, is among those trying to sell foreclosed Texas homes to Mexicans. Ramirez's company, called Now! Co., has bought 32 Texas properties and has options on 88 more. His best prospects are Mexican buyers, especially in Monterrey, 150 miles from the Texas border, he said. "Many of these people have children who are studying in the U.S.," Ramirez said. "They've been renting or leasing and now it's a great time to buy."
Mexico is better known for providing the U.S. with cheap labor than investment. The U.S. is home to an estimated 12 million Mexican-born residents, about half of them living there illegally, according to the Pew Hispanic Center in Washington.
Sales of existing U.S. homes in April fell 18% to an annual pace of 4.89 million from 5.93 million a year ago as banks shied away from making new loans, according to the National Association of Realtors in Washington. The slump in demand pulled down the median price of an existing U.S. home in April to $202,300 from $219,900 a year ago, according to the association.
While Texas has not been hit as hard as California and Florida, where the housing boom drove up prices the most, existing home sales in Texas fell 12% from a year ago in the first quarter. Foreclosures in Texas rose 29% in the first quarter from a year earlier, with one of every 274 households in the foreclosure process, according to RealtyTrac Inc. ...
Garza and other Mexicans with money to invest believe the time is right to buy, Ramirez said. "These are very sophisticated businessmen," he said. "They realize what's going on in our country. Everybody needs cash right now and Monterrey has lots and lots of cash."
Victor Gonzalez, 48, who owns a Monterrey print shop that employs 40 people, wants to use his savings to buy a $250,000 house in a gated community in the South Texas community of Mission. "This is exactly what we've been looking for," said Gonzalez, who was wearing a black Harley-Davidson T-shirt. "We're ready to go." He said the price is $50,000 less than he expected he would have to pay. Gonzalez said he plans to turn over the shop to his children in five years and retire to Mission, where the traffic is lighter and the crime rate lower.
The only requirement for foreigners purchasing residential and commercial property in the U.S. is a valid visa to enter the country, said Jose Cuellar, a realtor with Houston-based Cornerstone Mortgage Co. who caters to Mexican clients.
Raul Fabela, owner of McAllen, Texas-based Construction, Ltd., came to Monterrey looking to sell 42 rental properties of four apartments each, double his normal inventory of available properties. U.S. buyers have dried up, he said. ... He said 26 people filled out credit applications in Monterrey. "It turned out a lot better than we thought."
For Garza, the U.S. real estate slump has opened the door to diversifying his holdings. Garza's company, Grupo Vigia, owns five industrial parks and 600 hectares (1,483 acres) of land earmarked for housing development near Monterrey. "We think there's opportunity to buy right now at reasonable prices," Garza said. "We want to keep the properties two or three years until the market turns around and then begin to develop them."
WILL JAMAICA BEAT TRINIDAD AND TOBAGO, DOMINICAN REPUBLIC TO AN OFFSHORE FINANCIAL CENTER?
Jamaica has began making noise about becoming an OFC as long as five years ago. And consultants and analyst familiar with the industry seem to think that Jamaica is a viable jurisdiction for such an endeavor. But while Jamaica has bided its time in putting the idea into action, other jurisdictions are moving forward. Meanwhile, this article contains an interesting discussion of the OFC industry itself.
On [June 23], Reuters reported from New York that Trinidad and Tobago planned to open an international financial center to compete with Miami and Panama in September, which could include a commodities exchange, as part of their plan to diversify their economy into financial services and away from energy.
Trinidad's Minister of Finance, Karen Nunez-Tesheira, who was in New York to meet with investment banks and credit agencies, told Reuters that such a commodities market could, for example, trade liquid natural gas, methanol, ammonia and other products it exports. She added that accountants PricewaterhouseCoopers are now helping Trinidad and Tobago to review how they might change their tax structure.
The new center is to be marketed to hedge funds and banks for a range of activities, from transportation finance to capital markets and credit card transactions, whilst in the next couple of weeks, officials from Dubai will visit to explore "using Trinidad and Tobago as hub for monies coming out of the Middle East." ...
This visit to New York follows closely the recent Euromoney Conference, the Caribbean Investment Forum, held in Port of Spain June 11-12, which was well attended by an audience of fund managers, bankers and other financial professionals from all over the region and the U.S. The panel discussions primarily focused on Trinidad's planned International Financial Center in Trinidad, and the forum was described by some of the attendees almost as the Trinidad IFC's launch party.
Stocks and Securities analyst Michelle Hirst, in a report on the conference posted on their website, advised that the developers of Trinidad's proposed IFC noted that they had examined many IFCs around the world, particularly Ireland's IFC located in Dublin, as well as looking at emerging IFCs such as Dubai and Qatar. In fact, one strategy that Trinidad is apparently looking at very closely is halving its overall corporate tax rate (for the entire country), from the current 25% (already much lower than in years past) to close to Ireland's single corporate tax rate of 12.5%.
She believes, however, that Trinidad has not yet decided on the regulatory framework and tax structure that it will implement, a difficult decision as IFCs can either have different taxes and regulations than the other financial institutions in the country, or have the same regulations and tax structure for everyone, e.g., a single rate of corporation tax. ...
In many ways, the recent conference appears to be a follow-on from last year's very similar Caribbean Investment Forum conference in Montego Bay held around the same time, which was unfortunately largely ignored by government officials as well as much of the local media. ... [That] forum had been arranged to ask the question as to why Bermuda and the Cayman Islands were so successful as offshore financial centers, and whether other Caribbean emerging offshore centres such as those planned for Trinidad and the Dominican Republic would be able to take advantage of what was at that time described as the "perceived excess demand."
In Montego Bay, Mr. Ridley [not previously referenced in article -- apparently Chairman of the Cayman Islands Monetary Authority, Timothy Ridley] argued that the problems with many IFCs have been based more on perception rather than reality. He noted that in addition to competing with the leading IFC, which is London, much of the business of Cayman, Bahamas and BVI was really to facilitate London's business. Caribbean IFCs were therefore merely a small piece of the puzzle in the recycling of the world's money, and are dependent on getting the balance of regulation right for their success in the very competitive environment.
He noted that Cayman operated on the principle that for each regulatory measure introduced, they must be satisfied that it is necessary, it is appropriate for the nature of financial services business in the Cayman Islands, it is proportional to the identified risks; the regulatory impact is understood, and the benefits outweigh the cost of the regulation.
Wendy Warren outlined the Bahamian national commitment required to make the business a success. According to her, this requires not just the cross party commitment of current and future policy makers, but the buy in of the general population. Just as with the tourism industry, Warren advised that every Bahamian realizes that they must not let something kill the golden goose of the offshore industry. In her view, the more intimate nature of small populations allowed buy-in of the benefits of the offshore industry much more rapidly than in larger jurisdictions.
Other key requirements to successfully conduct offshore businesses include political stability and a strong legal system. For Bahamas, this means specifically, "Respect for the rule of law, due process and the right to privacy of personal financial information."
Additional critical areas include: direct tax system, good telecommunications and the correct skill sets. In the case of The Bahamas, a historically attractive lifestyle is complemented by geographical proximity to the U.S. All agreed that, as in any business, the most important thing was to know who was your client, and what market you were in.
Mathavious argued that a successful offshore business required not "a light touch but the right touch", with the key being able to take advantage of opportunity when it came knocking. BVI's growth took place when Panama was in crisis, when BVI took the unusual step of licensing Panamanian service providers. Their further growth had benefited from the uncertainty in the run-up of the transfer of Hong Kong from British to Chinese rule.
Ridley again noted that at one time Cayman had been little more than a mosquito swamp, but had been almost handed the offshore business by Bahamas due to mistakes made by their then Prime Minister Pindling several decades ago. In the case of Panama, it was the invasion by the first President Bush that had really helped BVI.
Whilst all the panelists believed that OECD pressure on their jurisdictions was likely to continue, they argued there was a lot of hypocrisy in this pressure, as they claimed that all their jurisdictions met international standards, often exceeding those in OECD countries.
Quoting from a background paper written on Cayman's offshore industry, Ridley fully accepted that Cayman should adhere to generally accepted and applied international standards -- and not just as they are, but as they evolve. Cayman's experience has been that it was not the absence of regulation that has promoted business, but the introduction of sensible and balanced regulation as circumstances demanded.
According to the panelists, the most important thing to remember was that international financial services is a business, just like tourism. The market was, however, very sensitive, and countries looking to get into the industry needed to understand what was their advantage, e.g., cost of labor, skills, geography, tax treaties, etc.
Countries entering the offshore industry also needed to decide what was their target niche. Bermuda had successfully specialized in insurance, while the major international law firms had the power to move the business to various jurisdictions, such as Cayman.
Mathavious believed that for a new jurisdiction to succeed, it would need a very strong partnership between the private sector and government. This point was echoed by Ridley, who stressed Cayman's culture of consultation and co-operation between the government and private sector. Mathavious added that the jurisdictions that succeeded would be those, like the BVI, that "reputation was a currency."
At that conference over a year ago, the intention of the Dominican Republic to move into the offshore financial business was particularly interesting, bearing in mind their very recent financial crisis and associated debt default. At that time, the DR's intention left Jamaica as virtually the only Caribbean country without such a plan. This was despite the fact that, in the opinion of one international consultant involved in BVI's success, Jamaica was one of the most ideal locations in the Caribbean for such an industry.
At the same conference, a former investment banker very familiar with both countries advised that he thought that DR was a longshot due to its weak banking regulation, recent default and unsophisticated local financial market, all of which he argued was not true for Jamaica.
Nevertheless, it is noteworthy that Economist Conferences, in association with the Commercial Banking Association of the Dominican Republic (ABA), plans to have a Regional Financial Forum on the topic "Harmonizing financial regulations in Central America and the Dominican Republic," between July 31 and August 1 in ... Dominican Republic.
All of this suggests that the space for Caribbean IFCs is about to become even more crowded, with Trinidad as a very serious competitor (albeit focusing on its energy niche), and continuing ambitions to create an IFC in the Dominican Republic. It is, therefore, clearly unfortunate that Jamaica's Government did not start the process for the creation of such a center when it was called for by the Jamaica Chamber of Commerce nearly five years ago, as well as slightly ironic that it is Trinidad that is so carefully studying Dublin's success.
LIECHTENSTEIN IMPLEMENTS 3RD MONEY LAUNDERING DIRECTIVE OF THE EU INTO NATIONAL LAW
This announcement from Liechtenstein does not directly pertain to the bank data theft scandal that has damaged Liechtenstein's reputation and been used to besmirch offshore havens in general, but it may be an attempt at damage control. It declares that Liechtenstein will join most the EU countries and extend the scope of due diligence for detecting money laundering from "the core area of the financial sector" to "professions such as statutory auditors, accountants, and tax consultants." The claim is that while Liechtenstein's commitment to privacy is still strong, criminals cannot expect to find refuge for their ill-gotten gains in the country's financial system. We will see if that placates the anti-offshore mob.
Liechtenstein has set out the goal of applying leading standards in the fight against money laundering and financing of terrorism. The 3rd Money Laundering Directive of the EU and the recommendations of the International Monetary Fund will therefore be adopted into national law by way of a revision of the Due Diligence Act.
The Liechtenstein financial center can only assert itself in the tightened international competition among business locations if the highest international standards are followed in the application of the law. The evaluation by the IMF gave Liechtenstein good marks with respect to implementation and application of the international standards for the prevention and suppression of money laundering. The IMF report also issued several recommendations, however, to improve the prevention of criminal acts. For instance, the IMF voiced some doubts whether the scope of the defensive measures is already extensive enough to fully cover the relevant FATF recommendations. In the fight against financing of terrorism, the IMF furthermore suggested modifying the definition of the offense, so that it covers all elements set out in the International Convention for the Suppression of the Financing of Terrorism. ...
With the legislative project on revision of the Due Diligence Act, which entered into force in 2004 as part of implementation of the 2nd EU Money Laundering Directive, the Government plans to expand due diligence obligations. While the scope of due diligence so far has focused on the core area of the financial sector, professions such as statutory auditors, accountants, and tax consultants will henceforth be included in due diligence. While the scope has so far been limited to the acceptance and safekeeping of third-party assets and the formation of domiciliary companies, the law will be expanded to include relevant activities of natural and legal persons who, within their enterprises, are responsible for the formation of companies, exercise the function of general manager of a company, or make a domicile available.
With this expansion of due diligence, Liechtenstein is confronting the danger that money laundering and terrorist financing may move to non-regulated areas. The scope of due diligence continues to include banks and investment firms, investment undertakings and life insurances, the post office and exchange offices. The law will henceforth also cover casinos, real estate brokers, auditors, auditing companies, professional trustees, and lawyers, to the extent that they engage in financial transactions. Due diligence also covers persons and companies dealing in goods, if payment is made in cash and the amount exceeds 25,000 [Swiss] francs.
The Government is also adopting international standards concerning the reporting requirement in the case of suspicion of money laundering and terrorist financing. Henceforth, a reporting requirement under the Due Diligence Act will apply not only in the case of existing business relationships and completed transactions, but also in the case of attempted transactions. The preventive defensive measures set up by Liechtenstein will thus be reinforced by an additional pillar. The Government is convinced that the reporting requirement in the attempt phase will enhance the level of knowledge of the FIU (Financial Intelligence Unit) with respect to critical phenomena in the financial center, thereby strengthening the early-warning system provided by the defensive measures.
The revision of the Due Diligence Act through the incorporation of the 3rd EU Money Laundering Directive and the FATF anti-money-laundering and counter-terrorist-financing recommendations fits into a framework established by the Government for the Liechtenstein financial center. Liechtenstein wants to take a leading position in the fight against crime and to meet international obligations. Especially in connection with the current debate concerning the protection of privacy, the Government has made clear that criminals cannot benefit from this protection. This unequivocal approach is in line with the guideposts established for the future of the Liechtenstein financial center in the "Futuro" project.
If you would like further information on Liechenstein including current Liechtenstein topics please visit us at liechtenstein.li.
CANADA ENLISTS REALTORS TO FIGHT MONEY LAUNDERING
Canada demonstrates it that it will not accept secondary status in the race for seeing who can implement the greatest number of noxious police state laws. Now if you want to buy or sell a property there, you must fork over a lot of personal information and proof of identification to the realtor, who keeps it on record. This is only for deals that close ... so far. (One can just see the next step: Anyone who is considering buying or selling property might be a money lauderer, and thus should be monitored.) But relying on realtors to keep sensitive data on file strikes us as a rather weak link in the data protection chain.
The Canadian government has enlisted realtors to help combat money laundering, asking them to collect personal data about their clients when a property deal closes, according to new federal regulations.
The rules, which came into effect on [June 23], mean realtors must collect and verify a client's personal information, including name, address, date of birth and occupation, and ask for proof of identity, such as a driver's license or passport. "If I've known you for 25 or 30 years and you want to sell your home or buy a home, I have to keep personal information for identification now," said Gerry Weir, president of the Ontario Real Estate Association, which represents 47,000 realtors.
The new requirement is part of legislation passed by the federal government in 2007 that covers a range of financial services. Officials said it is aimed at fighting money laundering, which is estimated to be in the billions of dollars annually.
"The record keeping and client ID will remove some of the anonymity that is possible in carrying out transactions and keep a record for later use should it be necessary, whether it is a money laundering investigation or a mortgage fraud investigation," said Peter Lamey, spokesman for the Financial Transactions and Reports Analysis Center of Canada, a federal agency that fights money laundering and terrorist financing.
Previously, real estate brokers had to report transactions they saw as suspicious or ones that involved more than C$10,000 in cash. Canada's real estate industry has six months to inform customers and some 96,000 brokers and agents about the new rules before fines and penalties come into effect on January 1, 2009. The Canadian Real Estate Association said its members completed half a million real estate transactions in 2007.
UNUSUAL FRAUDSTER CLAIMED TO BE A VATICAN AFFILIATE
This fraud gets credit for originality. An Italian businessman and celebrity apparently convinced a billionaire Clintons-intimate that he had authority directly from the Vatican to sell U.S. Catholic Church property for below market value. An administrative confederate within the Vatican was allegedly bribed to arrange meetings, arrange tours of the museums and gardens, and to connect with bishops and other clergy. The swindle took in over $1 billion.
Those familiar with the more sohisticated High Yield Income Program scams will note similarities between this setup and those, namely a semi-plausible story and a gaggle of accomplices who appear to be providing independent corroboration of the story. Interesting to know would be exactly how large the promised discounts from market value were.
Throughout the ages, there have been plenty of things that have been done in the name of God. The latest is wire fraud, conspiracy and money laundering.
Italian real-estate mogul and [actress] Anne Hathaway arm-candy Raffaello Follieri, 29, has been called out by the U.S. FBI for posing as the chief financial officer of the Vatican and cheating investors out of millions for his personal use and that of his famed actress ex-girlfriend.
According to the 18-page indictment, Follieri gave the impression that he was an affiliate of the Vatican and that he had the right to sell Church property in the U.S. for below market value. He reportedly swindled billionaire Ron Burkle and his company the Yucaipa Group out of more than a billion dollars that was meant to be used for acquiring properties owned by the Catholic Church. Burkle filed suit against Follieri in Delaware for misusing funds from their joint venture. Burkle was not mentioned in the complaint ...
A little search engine foraging shows that Burkle and the Yucaipa Group are no strangers to controversy. He is #91 on the latest Forbes 400 listing. Burkle is an intimate of the Clintons and a major Democratic party fundraiser. He was in the middle of the brief Clintons/Cayman Islands brouhaha earlier this year. Hanging around the Clintons could have compromised his fraud-detection apparatus. If you believe in them you can convince yourself to believe in anything.
The "Get Smart" actress is said to have no knowledge of Follieri's bad behavior, but she clearly got a little wiser when she ended her four year relationship to the fraudulent friar last week.
Follieri was not exactly a model of relationship fidelity either.
The indictment details how Follieri used the money from investors for a $37,000- per month apartment overlooking Rockefeller Center in New York, a dog-walking service, cosmetics, clothes, wine, flowers, as well as medical expenses for Hathaway and Follieri's family. Follieri was allegedly transferring large sums to banks in Monaco where he could conceal where the money came from.
Follieri allegedly paid-off an administrative assistant at the Vatican to obtain meetings there, arrange tours of the museums and gardens, and to connect with bishops and other clergy.
"This is a typical confidence scheme where someone with a very good story goes to a deep pocket and convinces them to invest in them," said Robert Goecks, practice leader of accounting firm Eisner LLP's Bank Secrecy Act/Anti-Money Laundering Compliance Services Division. Goecks is a former Special Agent with IRS Criminal Investigations where he conducted and supervised money-laundering investigations. He said that cases like this one usually start with suspicions from the investor and that now that the indictment has been issued it will be in the hands of the lawyers from both sides.
PROSECUTOR: DELAWARE JUDGE EXCEEDED AUTHORITY IN FORFEITURE PROBE
Ironies and absurdities abound in a case which puts a spotlight on the corrupting possibilities inherent in the U.S. forfeiture laws. These laws allow law enforcers to confiscate property without due process merely by claiming the property is under suspicion of being involved in the commission of a crime. The property-owner does not need to be accused of a crime, at the time of the confiscation or ever, for this to happen. Precedures for recovering the confiscated property are generally stacked against the (ex-)owner. Frequently the (ex-)owner will agree to let the confiscating agency keep a cut in exchange for not dragging out the fight.
In Delaware, a court is investigating allegations that the Delaware County Prosecutor and two deputy prosecutors diverted funds confiscated from accused drug dealers into their personal accounts. (The facts can be gleaned from links here and here.) Taking such funds and using them to turn one's work office into a Taj Mahal is allowed, but this personal diversion would be a definite no-no.
The Delaware County Prosecutor, Mark McKinney, takes exception to the whole investigation. Among his procedural defenses, he "repeatedly asserted to [the] court that he may enter into confidential agreements and dispose of drug forfeiture funds without court adjudication." But the presiding judge disagrees. What a surprise.
Here is one ironic/absurd element: McKinney wants the judge removed from the case because of his alleged bias and arrogation of power. He directly accused the judge: "You have put yourself in the position of being a law enforcement investigator, prosecutor and judge." Um, does he mean like the capacity that law enforcers such as himself act in vis a vis all forfeiture cases? Talk about your basic "now that the shoe is on the other foot" situation.
Ironic/absurd element #2: "If you have not done anything, you don't have anything to worry about" is the standard spoonful of sugar used to make the latest surveillance tool, prosecutor-aiding measure, or other "get tough on crime" proposal medicine go down. It is pure bunk. Prosecutors can charge anyone they want with a made-up crime and coerce the victim into plea-bargaining (thus adding another notch in the prosecutor's belt) even if they are actually guilty of very little, if anything. The victim would do that rather than risk "not cooperating" and getting a life sentence if he or she is found guilty of one or more of the dozens of counts padded into the formal accusation.
Soooo ... if Mr. McKinney has not done anything wrong, why does he care about who the judge is or what investigatory powers he claims? Because McKinney knows better. He claims the allegations are politically motivated. Could well be. In which case he is well aware that guilt or innocence is a secondary issue. Good luck to him with getting a facsimile of true due process.
Delaware Circuit Court 2 Judge Richard Dailey declined to name a special judge ... to review forfeiture cases despite arguments by County Prosecutor Mark McKinney that the judge had displayed bias and exceeded his authority.
"You have put yourself in the position of being a law enforcement investigator, prosecutor and judge," McKinney said about Dailey conducting hearings to determine whether fraud or theft was committed when the prosecutor's office and Muncie-Delaware County Drug Task Force seized drug forfeiture money and assets.
And McKinney defended himself during the Monday hearing, the third conducted by Dailey in the past 10 days. "How can it possibly be alleged that I committed fraud on the court when your honor approved the process?" McKinney asked the judge.
Dailey heard more than an hour of testimony from McKinney, city attorney Charles "Chic" Clark, and attorney Michael J. "Mick" Alexander, who represents defendants in drug forfeiture cases. The judge ultimately decided he had authority to continue the hearings, subject to an Indiana Supreme Court decision on whether he can maintain jurisdiction over the cases. ...
The change-of-judge motion also accused Dailey of showing personal bias by saying he was "deeply troubled" by confidential agreements used to seize money and property from suspected drug dealers. Dailey also said he was "trying to find out if there is fraud on the court" when he questioned the lack of court orders on other forfeitures, the motion noted. ...
McKinney also has expressed concerns that the court ordered county sheriff's Sgt. Doug Ellison to produce confidential agreements that the DTF used to seize money and property, which could expose confidential informants or defendants that cooperated with police.
Alexander said some of those agreements provide evidence of theft that could have committed by DTF officers seizing money and spending it on equipment, vehicles or other expenses instead of having a court order distribute it to local government general funds or common school funds, according to state law.
City attorneys could argue that issue and whether McKinney had a conflict of interest being a deputy prosecutor and also paid as a civil attorney handling the forfeiture cases. The city is seeking a special prosecutor to investigate the forfeiture cases. Mayor Sharon McShurley also filed a disciplinary complaint against the prosecutor that is pending before the Indiana Supreme Court.
WHAT IS OBSCENE? GOOGLE COULD HAVE AN ANSWER
In an obscenity trial the standard for what exactly constitutes obscenity relies critically on whether the material in question is "patently offensive" based on "contemporary community standards." In practice this comes down to Supreme Court Justice Potter Stewart's (later recanted) standard that pornography it is hard to define but that "I know it when I see it." Totally subjective. And unless the community standards are encoded into laws that can be objectively followed and broken, any juror can decide for himself or herself what those standards are for the purposes of any given trial.
Courtesy of Google, a defense attorney is attempting to inject a small dose of objectivity into the morass. He will use readily available data to argue that community standards are a little more prurient, behind closed doors, than people might think. Does the fact that search terms used by a community include "orgy" more than "apple pie" proove any such thing? No. Besides the problem of defining standards for an abstact entity like a community, the results could refect the actions of a couple of hyperactive sex-obsessed Web surfers. But it certainly is worth a shot in a trial. We will see how it flies, if the judge admits the evidence.
Judges and jurors who must decide whether sexually explicit material is obscene are asked to use a local yardstick: Does the material violate community standards? That is often a tricky question because there is no simple, concrete way to gauge a community's tastes and values.
The Internet may be changing that. In a novel approach, the defense in an obscenity trial in Florida plans to use publicly accessible Google search data to try to persuade jurors that their neighbors have broader interests than they might have thought.
In the trial of a pornographic Web site operator, the defense plans to show that residents of Pensacola are more likely to use Google to search for terms like "orgy" than for "apple pie" or "watermelon". The publicly accessible data is vague in that it does not specify how many people are searching for the terms, just their relative popularity over time. But the defense lawyer, Lawrence Walters, is arguing that the evidence is sufficient to demonstrate that interest in the sexual subjects exceeds that of more mainstream topics -- and that by extension, the sexual material distributed by his client is not outside the norm.
It is not clear that the approach will succeed. The Florida state prosecutor in the case, which is scheduled for trial July 1, said the search data may not be relevant because the volume of Internet searches is not necessarily an indication of, or proxy for, a community's values. But the tactic is another example of the value of data collected by Internet companies like Google, both from a commercial standpoint and as a window into the thoughts, interests and desires of their users.
"Time and time again you will have jurors sitting on a jury panel who will condemn material that they routinely consume in private," said Mr. Walters, the defense lawyer. Using the Internet data, "we can show how people really think and feel and act in their own homes, which, parenthetically, is where this material was intended to be viewed."
Mr. Walters last week also served Google with a subpoena seeking more specific search data, including the number of searches for certain sexual topics done by local residents. A Google spokesman said the company was reviewing the subpoena.
Mr. Walters is defending Clinton Raymond McCowen, who is facing charges that he created and distributed obscene material through a Web site based in Florida. The charges include racketeering and prostitution, but Mr. Walters said the prosecution's case fundamentally relies on proving that the material on the site is obscene. ...
The question of what constitutes obscenity relies on a three-part test established in a 1973 decision by the Supreme Court. Essential to the test has been whether the material in question is patently offensive or appeals to a prurient interest in sex -- definitions that are based on "contemporary community standards."
Lawyers in obscenity cases have tried to demonstrate community standards by, for example, showing the range of sexually explicit magazines and movies available locally. A better barometer, Mr. Douglas said, would be mail-order statistics, because they show what people consume in private. But that information is hard to obtain.
"All you had to go on is what was available for public consumption, and that was a very crude tool," Mr. Douglas said. "The prospect of having measurement of Internet traffic brings a more objective component than we have ever seen before." ...
The search data [Mr. Walters] is using is available through a service called Google Trends. It allows users to compare search trends in a given area, showing, for instance, that residents of Pensacola are more likely to search for sexual terms than some more wholesome ones. Mr. Walters chose Pensacola because it is the only city in the court's jurisdiction that is large enough to be singled out in the service's data.
"We tried to come up with comparison search terms that would embody typical American values," Mr. Walters said. "What is more American than apple pie" But according to the search service, he said, "people are at least as interested in group sex and orgies as they are in apple pie." The Google service does, however, show the relative strength of many mainstream queries in Pensacola: "Nascar", "surfing" and "Nintendo" all beat "orgy".
Chris Hansen, a staff lawyer for the national office of the American Civil Liberties Union, called the tactic clever and novel, but said it underscored the power of the Internet to reveal personal preferences -- something that raises concerns about the collection of personal information. "That is why a lot of people are nervous about Google or Yahoo having all this data," he said.
One question is whether the judge in the case will admit the data as evidence; it was given only in a deposition this month. Mr. Walters said he was confident the information would be allowable given that there has been a growing reliance on such data.
Russ Edgar, the Florida state prosecutor, said he was still assessing whether he would try to block the search data's use in court. He declined to discuss the case's specifics, but said that the popularity of sex-related Web sites had no bearing on whether Mr. McCowen was in violation of community standards. "How many times you do something does not necessarily speak to standards and values," he said.
FREE LOCKNOTE FOR WINDOWS OFFERS FAST FREE FILE ENCRYPTION
Locknote is an easy to use Windows (2000, XP "or better" required) utility for encrypting text files. A small downside is that it adds 312KB to the file size during the encryption process. Those of us with residual efficiency instincts might react, but with hard drive space truly too cheap to meter these days this will not an issue unless you many files to encrypt and your machine has an really old hard drive. If your average text file is 100KB, it would take encrypting well over 2,000 files to even add up to 1GB of storage.
Steganos Locknote is a handy little GPL-licensed utility for Windows ... It is designed to keep text files secure, so you can store your sensitive information and passwords without having to worry about the information falling into the wrong hands.
At 312KB, Locknote is quick and easy to download, and requires no installation. Once you have it, just double-click the icon. Locknote presents you with a small text window with instructions for using the program. Highlight and erase the instructions (do not worry, Locknote displays the same instructions each time you open it) and type or paste your own notes into the window.
Once that is done, click File -> Save As and give the file a name. Locknote will then prompt you to enter a password for the file. Enter it twice, and the file is stored as yourfilename.exe, which includes your text file and a copy of the Locknote application. To open it, run the file or click on its icon, enter the password, and there it is.
Alternatively, if you have a text file you would like to encrypt, you can drag and drop it onto the Locknote window. Enter your password, and Locknote saves the file instantly, in the same directory as the original file, with the same name, except for the .exe extension. The resulting file size is 312KB plus the original file size. You can encrypt only files with an extension of .txt this way. You can back up your Locknote files and store them anywhere, just as you would any other file. You can also download a file to any computer and open it, as long as you know the password. Emailing a Locknote file is just like emailing any other file, although since the file has an .exe extension some virus and spam filters will tag it. To get around that, you can rename the file, removing the extension, and have the recipient add it back in.
Locknote functions in a manner similar to KeepYouSafe, an online "lockbox" for sensitive files, and even uses the same encryption technique, but that service is hosted online and larger files cost money to store.
A KeepYouSafe review by the same author was covered here.
If you have Windows, Locknote is a simple, free way to keep your personal or sensitive information private, yet easy to access and completely under your control.
A REVIEW OF BUTLER SHAFFER’S CALCULATED CHAOS: INSTITUTIONAL THREATS TO PEACE AND HUMAN SURVIVAL
Butler Shaffer's articles are reliably stimulating. For instance, see this one on "Obedience as a Radical Act," which we have previously commented on here. Another one is posted immediately below. In Calculated Chaos: Institutional Threats to Peace and Human Survival -- first published in 1985, revised in 2004 -- Shaffer argues that that bane of life called government is a manifestation of a consensus belief system that such an authoritarian institution is necessary for life to work. But that pervasive belief creates lots institutions of an authoritarian nature besides governments. And once such institutions are created, they effectively take on lives of their own with interests and purposes independent of its members.
Now we are at the point where these institutions threaten the survival of the human species. But undermining them is not accomplished by actively working directly towards that end. What you resist will persist if the mind-set behind the creation remains in place. John Lennon summarized the way out pithily: "You tell me it's the institution, well, you know. You better free you mind instead."
My shift from minarchism to anarchism was not completely, over even substantially, motivated by a distaste for government (I already had that). Rather, anarchism is a way of looking at the human condition that does not presuppose the power relationships we take for granted. I grew to view state politics as but one manifestation of these underlying relationships.
If the way in which we organize and think about ourselves precipitates certain outcomes, perhaps we can effect different, more desirable outcomes by choosing different organizing ethics. Such an examination leads one in an extremely open-ended -- yet liberating -- direction, where these ethics and their premises are finally considered on their own merits. To quote Einstein, "The significant problems we have cannot be solved at the same level of thinking with which we created them." So how do we start to talk about that next level of thinking?
The existence of this uncharted territory, outside the pragmatic confines of our regimented, conservative society, is not directly explored in Butler Shaffer's Calculated Chaos: Institutional Threats to Peace and Human Survival. Admirably, Shaffer wastes no time arguing for his -- or any -- particular solutions to mankind's many crises and problems. Instead, he takes the revolutionary step of removing the veil of indifference and deference to the primary units through which we realize our agendas: institutions. The book is a cataloging of the myths we tell ourselves and each other to keep things comfortable and stable at the expense of our freedom.
Written almost a quarter century ago but still penetratingly relevant, Calculated Chaos tries to strip down our modern managerial society into its basic organizing ethics. Shaffer's thesis may seem awkward at first, but through careful examination of society the weight of this argument is established throughout the book
Briefly stated, the basic theme of this book is that institutions are the principal means by which conflict is produced and managed in society. Peace is incompatible with institutional activity. Stated another way, the success of institutions depends upon the creation of those conditions in which personal and social conflict will flourish. We experience so much conflict in our lives because we have permitted ourselves to be organized into self-perpetuating, self-justifying organizations with which we have identified our personalities and to whom we look for direction. We have allowed our lives to be taken over and monopolized by a variety of political, religious, educational, economic, and social agencies over which we have little, if any, influence. These entities have helped us construct the barriers that not only restrain us, but keep us separated from one another and serve as the boundary lines for the intergroup struggles of which we are part. Through these groupings, we have helped to institutionalize conflict, to make it a seemingly permanent and necessary feature of human society. Such conflict has not resulted from mere accident of inadvertence, nor has it been the product of vicious or depraved minds. Rather, for reasons to be developed herein, conflict is a condition upon which the health and well-being of institutions is absolutely dependent.
It is crucial for anarchists and libertarians to note that he is not confining this argument to the state, though he devotes a whole chapter to "the people pushers" of politics. In order to appreciate the weight of this book, you must understand that his argument applies just as much to the Catholic or Baptist churches, to the activist groups of the left and right, to the corporations, to the Kiwanis and Rotaries, and so on.
Not all groups are institutional, Shaffer argues. By institutions, he means:
"any permanent social organization with purposes of its own, having formalized and structured machinery for pursuing those purposes, and making and enforcing rules of conduct in order to control those within it."
A key distinction for Shaffer between institutional and noninstitutional forms of organization lies in part in the formality of such groups. People coming together for a common purpose of their own is not institutional, because the group is merely a convenience for each individual pursuing their interests. The problem arises when the group becomes something more than that: an entity in its own right, with interests and purposes independent of its members'. Surprisingly (for a LewRockwell.com columnist) he even challenges some Austrian sacred cows:
What begins as a simple division of labor, a system of specialization designed to allow the work of the group to get done more efficiently, becomes a division of purpose, with group members segregated into a chain of command. When this takes place, the organization is no longer a tool serving its members: the members have become conscripts in service to the organization.
It should be clear by now that Shaffer plays no favorites in his critique of institutional society -- everything is game for the thinking individual. Yet individualism is not Shaffer's bag, either. To him, that philosophy is just as reactionary as the collectivism of many institutions:
The search for human liberty is not one in which every individual is arrayed against the presumed collective of all others, or of one group struggling against another group, but is a pursuit that should serve to unite us on the basis of our common desire for the autonomy we require if we are to experience self-fulfilling transcendence of our continuing evolution.
If there is an individualistic theme to Shaffer's argument, it is only because of his insistence on the personal part each of us play in the conflicts that make institutional society function. In contradistinction to the group identities of institutions, Shaffer discusses the spontaneity and intimacy of community, and the need to know and be yourself within it.
Self-analysis and self reflection end up being the lynchpins of this book. Much of our dilemma stems from personal values and assumptions we have accepted of our own free will without careful thinking -- sometimes because of indoctrination, often out of laziness or a lack of self-esteem. Calculated Chaos is in many ways not a call for society to change, but for the reader to rediscover himself.
I must admit my surprise at how metaphysical Shaffer's book becomes as it delves deeper and deeper into the personal nature of the organizational ethics and principles underlying our society. For instance, Shaffer proposes that institutions serve as surrogate identities that allow us to expand what he calls our "ego boundaries". This imperative to seek outside ourselves for purpose and meaning arises, he posits, from failing to train our attention on the present moment and allowing narratives of reality to arise that are incomplete and simplistic. Institutions encapsulate a convenient myth that divorces us from the responsibility to know ourselves fully, providing contrived identities to which we can cling. These identities and allegiances drive the interpersonal and intergroup strife that establishes institutional primacy because we are acting out of a lack of understanding of ourselves.
Shaffer provides very few answers in his exploration of the conflicts we have established within and without ourselves, preferring to ask questions that challenge the hidden premises of our institutionalized society. This is uncomfortably deliberate. One of Shaffer's theses is that institutions thrive in regimented, predictable environments where events conform to articulable principles and systems. To transcend the conflicts created by our institutional manners of thought, we must appreciate that our need for the certainty is largely artificial and unessential, serving the purposes of institutional perpetuation and organization more than our own. A dogmatic, rule-oriented approach to reality will always be necessarily limited, because it is built on assumptions of stability and order based on past experience instead of present experience. By participating in these rigid, static systems of thought, we lose our awareness for the present, which is dynamic, mysterious, and able to be apprehended without inhibition or formula.
It is in this speculative, inquisitive, inward-directed manner that Shaffer explores "our well-organized conflicts". Anarchists would find the idea that institutions create the conditions of strife and discord that give them their social functions quite unremarkable. But Shaffer goes deeper, locating the origin of institutions in our own minds and hearts. It is through sublimating our own selves to institutional identities, adopting the views that reinforce their purposes and interests, complying with and depending upon their expectations, direction, and mobilization, that we realize a world so chaotic and conflicted.
Calculated Chaos advances the unthinkable political concept that you and I are responsible for the institutional dysfunction of society. This seems hard to accept because radical politics is built on identifying enemies in things outside ourselves that compel and control us. Shaffer's book is a new take on the philosophy of liberation: We have made the agendas of institutions our own agendas, but we can choose otherwise. To all left libertarians, anarchists, and advocates of a voluntary society, I give this book the very highest recommendation possible.
NOTE: Google Books has the full text.
George Carlin: A Four-Letter Threat to Authority
Here is an article Butler Shaffer wrote the day after George Carlin died. Carlin embodied the distrust of groups and authority articled in Shaffer's book Calculated Chaos, reviewed above.
When I was in high school, I got into a discussion with a couple of my classmates over the role institutions played in our lives. I had made some comment critical of government, or organized religion, or corporations -- I do not recall which -- and was asked if I was opposed to all such systems. I replied that I was "distrustful of all organizations, from two-handed poker on up." This intuitive insight has stayed with me all of my life. Many years later, I would discover a man whose life-work consisted of using humor to express these sentiments.
It is difficult to find words that convey the sadness I felt upon being awakened, this morning, to the news that George Carlin had died the night before. He was the successor to the man I continue to regard as the most significant dismantler of authority in my lifetime, Lenny Bruce. To most people, Bruce and Carlin were nothing more than dealers in 4-letter words -- men who loved to shock the sensibilities of others. But there was a deeper meaning in their humor, and modern libertarian thinking would not have been possible without their important groundwork.
Each man understood, at least implicitly, that the authority some men presume to exercise over the lives of others depends upon the subjugated regarding their managers with an unquestioning reverence and awe. One ought never to be so bold as to offer an opinion contrary to that provided by the authority figure. More than that, one must always look upon himself or herself as fundamentally inferior to this authority. One does not dare to gaze upon the king, to whom groveling is the expected position.
Bruce and Carlin understood that there is nothing that can more quickly undermine this aura of obeisance than for those who command others to be referred to in vulgar terms. External authority is dependent upon a veneration that is quickly lost when men and women begin to think of their masters in the same 4-letter vocabulary more commonly directed against other motorists or an annoying relative.
The institutional order has long understood this fact, which is why Lenny Bruce was driven to an early grave by criminal prosecutions for his daring to speak, publicly, of politicians, judges, government officials, and other authority figures as practitioners -- if not the personification -- of 4-lettered activity. George Carlin was subjected to a more subdued -- albeit equally insistent -- coercive treatment for even using 4-letter words. Such words can become habit-forming, as easily applied to the president as to an offending neighbor. That Bill Clinton and George W. Bush do not enjoy the kind of respect accorded George Washington and Thomas Jefferson is, to a great extent, the erosion of homage brought about by the likes of Bruce and Carlin.
The mainstream media will doubtless refer to Carlin as an "entertainer," a word that fails to account for what he truly was. I prefer to think of him in words that the late Alan Watts used to describe himself: a "standup philosopher." The media will focus almost entirely upon his "seven words you can't say on television," as though his work consisted of little more than the outbursts of teenagers intent on shocking their parents. I do wish the man had not over-worked the use of 4-letter words, but I was willing to overlook some of his language for the content that lay within it. Like the punch-line of the joke about a young boy who kept digging through a pile of manure out of a sense that "there's got to be a pony in here someplace," there was deep substance to his routines.
There are many so-called comedians whose works consist of little more than 4-letter words, but whose language is not a prelude to the kind of understanding offered by Carlin. Perhaps these younger people believe that, if they can utter a string of expletives, audiences will regard them with the love and respect earned by Carlin. But without the intellectual and spiritual depth of a George Carlin, their "humor" becomes as impotent as an unexploded July 4th firework: some initial sizzle, followed by ... nothing.
Political systems, advertising, organized religions, corporate practices, school systems, ideologies, political and social fashions of all sorts, came in for well-deserved skewering. Prior to 9/11, he did a routine on airport security which, if performed more recently, would doubtless have earned him a visit from Michael Chertoff and his thugs. And what devotee of the new religion of environmentalism -- and its global-warming sect -- could withstand Carlin's treatment of this latest racket for subjecting humanity to the control of those who fashioned themselves fit to run a planet? Before the day is over, I will get out and play part of my collection of George Carlin DVDs as a reminder of the state of mind he helped all of us to develop as an antidote for the insanities perpetrated by institutionalized thinking.
The last comment I heard George Carlin make was in a video of a book-signing, in which a young man asked him if he believed that 9/11 was an "inside job." Carlin did not offer an opinion on the matter, but only replied -- in words I do not recall precisely -- that it was a mistake to ever accept consensus-based definitions of reality. What better words to inscribe upon a tombstone or other memorial to this remarkable man!
FIREWORKS IN THE FOG: REFLECTIONS ON THE FOURTH OF JULY
Justin Raimondo's take on the annual American orgy of self-congratulation known as Independence Day, or simply the 4th of July.
In what is surely an "only in America" phenomenon, the most patriotic holiday of the year celebrates the overthrow of the government. That says a lot about this country, or, rather, about the way it used to be. This time around, the Fourth merely underscores how far we have wandered, and raises the question of when we reached that fork in the road and made a fateful turn.
As that trenchant old philosopher Garet Garrett observed,
“The Roman Republic passed into the Roman Empire, and yet never could a Roman citizen have said, ‘That was yesterday.’ Nor is the historian, with all the advantages of perspective, able to place that momentous event at an exact point on the dial of time. The Republic had a long, unhappy twilight.”
As twilight gives way to blackest night, and the creepy-crawlies come out of the woodwork, the foundations of constitutional law are being subverted by some very busy termites, whose appetite will not be sated until the whole hollow edifice comes tumbling down.
We have come a long way from the heroic age of the American Revolution. The spirit that animated that world-historic event has dissipated to a mere Remnant. The degeneration of our old republic has been a long, tortuous, and never-a-straight-line process, but finally -- and agonizingly -- royalism has been restored in all but the formal sense. Our President claims the powers of an Emperor, and most of these have already been granted by the two other branches of the federal government, either by law or custom.
This year, the fog rolled in so thickly that the fireworks sponsored by the city were totally obscured, and that about sums up where we are today. This fourth of July, celebrated in the 7th year of the royalist restoration, conjures memories of what this distinctively libertarian state holiday (now there is an anomaly!) used to mean—and future visions of a revolution betrayed.
Barbados and Seychelles Sign Double Taxation Agreement
Barbados has announced that it plans to become an international finance center, in preparation for the day when its oil resources run dry. It is pursuing that goal by establishing DTAs with a widening network of partners. Frankly, it would not occur to us that the Seychelles would be on Barbados's DTA to-do list, but what do we know?
"The Government of Barbados intends to vigorously pursue the expansion of its treaty network in 2008, in order to cultivate strategic business alliances which would benefit both this country and the other contracting states."
This was enunciated by an official of the Ministry of Foreign Affairs, Foreign Trade and International Business following the recent signing and entry into force of a Double Taxation Agreement between Barbados and the Republic of Seychelles.
According to the official, "It is expected that more of these agreements will be concluded in the near future as Brazil, South Africa, Ireland, India, Malaysia, Nigeria, Belgium, Russia, Czech Republic, Chile, Colombia and Argentina have been targeted for negotiations." ...
Double Taxation Agreements have been recognized as one of the most effective mechanisms for developing new and strengthening existing economic ties between nations. The negotiation of these agreements is a critical element of a framework for developing substantial trading opportunities. They facilitate joint ventures, reduction in taxes and business-related costs, exchange of tax information, and reduction of fiscal impediments to cross-border trade and investment.
Barbados is seeking to promote itself as a legitimate international business and financial services center. Its distinction as a service economy and a strategic base for onward investment into other markets has made it an attractive jurisdiction for conducting business.
Money Laundering Specialist Puts Validity of EU’s “White List” in Doubt
We covered this issue in detail in a posting a few weeks ago. The specialist cited is puzzled about the same things we were, and additionally notes that Canada and Australia got an unjustified pass from the EU.
A lawyer specializing in money laundering and financial service regulation ... questioned the validity of the EU's "white list" of countries where money laundering controls are considered the same as EU member states.
Stephen Platt, BakerPlatt Group barrister and chairman, questioned why countries such as Russia, Argentina and Mexico could justifiably make the list and noted Australia and Canada, also on the list, were less than 25% compliant by the standards set by the Financial Action Task Force [for] money laundering controls ...
Platt described as "bewildering" that white list countries were regarded as having a higher level of control of money laundering compared with leading offshore finance centers, including the British Crown Dependencies.
"Having researched the background to some of the countries included, we question why countries that fall behind recognized international standards are on the list, whilst finance centers such as Jersey, the Bahamas and the Cayman are not," said Platt, who advises gand regulators on the implementation of effective regulatory and anti-money laundering rules.
Grilling of Man Nabbed in Australian Vanuatu Tax Sting Put on Hold
The Australian government's inter-agency Project Wickenby tax evasion task force appears to have bagged a fair-sized fish who was operating out of Vanuatu. His "grilling" has been delayed pending the resolution of an appeal that has been filed on his behalf.
Robert Francis Agius, 58, was arrested in April after being under investigation for two years. Authorities charged Mr. Agius, a senior partner at accounting and business advisory firm PKF Vanuatu, with two counts of conspiring to defraud the [Australian] commonwealth and one count of laundering more than A$1 million, over events dating back to 1997. ...
Two companies -- International Finance Trust Company Ltd. and International Finance Trust Company Broking Services -- are involved in the court proceedings. According to PKF Vanuatu's website, IFTC is a wholly owned subsidiary of the advisory firm. ...
Mr. Agius was arrested as part of Project Wickenby, a whole-of-government task force set up in 2005 to tackle tax evasion and large-scale money laundering. He was granted bail last month after spending three weeks in jail before providing $4.4 million security. He is not allowed to leave [Australian state] New South Wales under his bail conditions
Authorities believe more than A$100 million has been laundered through various entities in a number of countries. About 50 clients of Sydney suburban accounting firm Owen T. Daniel & Co are alleged to have evaded paying tax. Two of those clients, accused of claiming false business expenses, told a court recently they were cooperating with the authorities and had repaid A$100,000 to the Australian Taxation Office.
Climate Concern Ripped as “Religion” by Czech President Vaclav Klaus
A warning from someone who ought to know ...
Environmentalism, says Czech President Vaclav Klaus, is the new communism, a system of elite command-and-control that kills prosperity and should similarly be condemned to the ash heap of history.
The provocative Mr. Klaus, an economist by training and former prime minister, said in an interview that today's global warming activists are the direct descendants of the old Marxists who trampled on individual freedoms and undermined free markets in pursuit of a greater good.
"I understand that global warming is a religion conceived to suppress human freedom," he told editors and reporters at The Washington Times. "It is used to justify an enormous scope for government intervention vis-a-vis the markets and personal freedom."
The 66-year-old Mr. Klaus was in Washington this week for talks with senior U.S. officials, including Vice President Dick Cheney, and to tout his new book, "Blue Planet in Green Shackles," about the dangers to life, liberty and prosperity posed by the modern environmental movement. ...
Mr. Klaus was a leading figure in the first Prague governments after the collapse of the Soviet Union, and was prime minister when the former Czechoslovakia broke into two countries in the "Velvet Divorce" of 1993.
|Previous||Back to top||Next|