Author Archives: Denise Simon

Microsoft and Their $100 BILLION Offshore

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While some domestic corporations do maintain headquarter offices in the United States, their money is often elsewhere to avoid the destructive tax code. But does Microsoft get an official pass or waiver from the Obama administration?

In September of 2014, Obama and Jack Lew at Treasury took decisive action.

Washington Post: The Obama administration took action Monday to discourage corporations from moving their headquarters abroad to avoid U.S. taxes, announcing new rules designed to make such transactions significantly less profitable.

The rules, which take effect immediately, will not block the practice, and Treasury Secretary Jack Lew again called on Congress to enact more far-reaching reforms. But in the meantime, he said, federal officials “cannot wait to address this problem,” which threatens to rob the U.S. Treasury of tens of billions of dollars.

“This action will significantly diminish the ability of inverted companies to escape U.S. taxation,” Lew told reporters. “For some companies considering deals, today’s action will mean that inversions no longer make economic sense.

“These transactions may be legal, but they’re wrong,” he added. “And the law should change.”

Tax analysts praised the new regulations, saying they will make it much harder for U.S. firms to bring cash earned abroad back to the United States tax-free — a major incentive in the relocations known as tax “inversions.” It was not immediately clear, however, whether the new rules would be sufficient to head off a wave of inversions expected to cascade over the American landscape in the weeks before the Nov. 4 midterm congressional elections.

Microsoft’s Offshore Profit Pile Surges Past $100 Billion Mark

Microsoft Corp.’s stockpile of offshore profits rose to $108 billion, with a 17 percent increase over the past year as the company continues reaping profits in low-tax foreign jurisdictions.

The company crossed the $100 billion mark, making it just the second U.S. corporation — after General Electric Co. — to do so, according to a securities filing July 31. Apple Inc. has more cash abroad than Microsoft, but it already has assumed for accounting purposes that it will pay tax on some of the stockpile and thus has less than $70 billion offshore that would affect earnings directly if repatriated.

What’s keeping Microsoft’s cash abroad is the U.S. tax code. The company would be required to pay the difference between its foreign taxes and the 35 percent U.S. corporate tax rate if it brought the money home.

To get its $108.3 billion back, Microsoft would have to pay the U.S. $34.5 billion in taxes. That equals a 31.9 percent rate, which suggests that the company has paid as little as 3.1 percent in taxes on its foreign income, because of operations in low-tax Ireland, Singapore and Puerto Rico.

The Internal Revenue Service and Microsoft are in the midst of an intense legal battle over the company’s transfer pricing, or intracompany transactions. The federal government is auditing the company’s returns as far back as 2004, and Microsoft has challenged the government’s hiring of outside lawyers.

Peter Wootton, a spokesman for Microsoft, declined to comment.

Repatriating Profits

Under current law, U.S. companies owe the full 35 percent rate on profits they earn around the world, but they don’t have to pay the U.S. until they repatriate the profits. That gives companies an incentive to book profits overseas and leave them there, and that’s just what they’ve done.

U.S. companies have more than $2 trillion amassed outside the U.S., according to a Bloomberg News review earlier this year of the securities filings of 304 companies.

Apple has more than $200 billion in cash stockpiled, with almost 90 percent of it overseas. As of its most recent annual report, Apple had $69.7 billion in profits on which it hasn’t assumed taxes.

U.S. lawmakers are looking for ways to get some of that cash back in the U.S. President Barack Obama supports a one-time 14 percent tax on stockpiled profits, with the proceeds going to highways and other infrastructure programs. Some Republicans favor a similar approach and are working on a detailed plan.

Obama and DoJ to Interfere on Jury’s Decision on PLO

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In February of 2015, a Federal jury found the Palestinian Authority and the Palestinian Liberation Organization liable for supporting 6 terror attacks in Israel that affected American families at the time.

The lawsuit was filed in 2004 under the U.S. Anti-terrorism Act. The two terror groups above have been ordered to pay $218 million to the families. Federal law also has a major section that applies in this case where the damages are actually tripled.

If you wonder why Obama may order the DoJ to intervene, just refer to my previous article on why Obama holds first loyalty to the Palestinians.

Just one of the articles of evidence is found here.

White House mulling intervention in massive judgment against Palestinians in terror case

FNC: The Obama administration has signaled it may intervene next week in a civil lawsuit in which 11 American families won a potential billion-dollar judgment from the Palestinian leadership over a series of bombings and shootings that killed or wounded dozens of U.S. citizens, a move that critics say would find the government siding with terrorists over its own citizens.

The families won a $218.5 million judgment in February after a seven-week trial in Manhattan Federal Court in which a jury found the Palestine Liberation Organization and Palestinian Authority were responsible for a string of attacks from 2001 to 2004 that killed 33 and injured hundreds. A 1992 law that requires damages in such cases to be tripled, as well as interest on the award, would push it to as much as $1.1 billion. The judgment, which the Palestinians are appealing, would equal nearly a third of the Palestinian Authority’s annual operating budget.

 

Late last month, the Department of Justice, which had previously not been involved in the 11-year-old case, informed the court it was considering filing a “statement of interest” in the case by Aug. 10, but officials would not elaborate. A source said the Department of Justice was working with the State Department on the matter.

“As the filing states, the United States is considering whether to submit a Statement of Interest in the [Sokolow v. Palestine Liberation Organization] matter,” a DOJ spokeswoman told FoxNews.com. “Any filing would be made on behalf of the United States, not on behalf of any other party.”

“An administration which claims to be fighting terror is planning to weigh in favor of the terrorists.”

– Kent Yalowitz, atttorney for families who sued Palestinian leadership

The Palestinian leadership would not have to pay the award unless it is upheld on appeal, but U.S. District Judge George Daniels said he may require the Palestinians to post bond while the case works its way through the process to show “some meaningful demonstration that the defendant is ready and willing to pay the judgment.”

The plaintiffs included the estates of four U.S. citizens who were killed and several dozen Americans who were physically or psychologically injured in the attacks as well as their families. Kent Yalowitz, the families’ attorney, has requested that the Palestinian leadership be required to place $30 million per month in escrow while the case is appealed. Yalowitz suspects the U.S. government is considering intervening to help the cash-strapped Palestinian leadership avoid the bond.

“An administration which claims to be fighting terror is planning to weigh in favor of the terrorists,” Yalowitz told FoxNews.com. “If our government actually came in favor of convicted terrorists, it would be a really sorry statement about the way our government treats terror.”

John Bolton, former U.S. Ambassador to the United Nations and a Fox News contributor, said the administration would be wrong to assert a diplomatic role in the case.

“Palestine is not a state, and is therefore, not entitled to be treated like a state,” Bolton told Fox News. “It does not enjoy sovereign immunity and it would be wrong for the United States government to argue otherwise in federal court.”

The complicated damage formula includes tripling the award to $655.5 million under a 1992 U.S. anti-terrorism law, as well as interest, which lawyers for the families place at $165 million, and which would also be tripled. Although Daniels has indicated he is unlikely to impose interest, the total sought by the families’ attorneys is $1.15 billion.

“This could be the end of the Palestinian Authority,” Palestinian Authority attorney Mitchell Berger said in court. “And that’s why we’re here to argue over the judgment.”

Families of the victims say the jury has spoken, and note the PLO and Palestinian Authority pays stipends to the very terrorists and their families who carried out the attacks.

“The U.S. government and the DOJ should be ashamed that they are even considering telling an American court that the PLO and the PA can afford to pay convicted terrorists, but cannot afford to pay the victims of those very same terrorists,” Alan Bauer, a family member, told Fox News.

The federal jury in February found the PLO and Palestinian Authority liable over six shootings and bombings between 2002 and 2004 in the Jerusalem area, which have been attributed to the al-Aqsa Martyrs Brigades and Hamas.

In two cases, the attackers were Palestinian Authority police officers; in another, a suicide bomber was shown to have worked closely with the PA’s military intelligence office in planning the attack; and in a 2004 suicide bombing of a bus, in which 11 were killed and 50 wounded, PA police and security officials admitted to participating in the plot and making the bomb.

In each case, the Palestinian Authority paid the families of suicide bombers and those later jailed for their participation in the attack.

FBI Alert: Middle-Eastern Males Approaching Family Members of US #Military

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The instruction ebook for the hijrah.

(U//FOUO) FBI Alert: Middle-Eastern Males Approaching Family Members of US Military Personnel

The following alert related to “Middle-Eastern males” approaching military family members was obtained from the website of a veterans advocacy organization.  A force protection advisory that was released by the Washington National Guard & Military Department days later describes a similar incident that occurred in Washington.

(U//FOUO) In May 2015, the wife of a US military member was approached in front of her home by two Middle-Eastern males. The men stated that she was the wife of a US interrogator. When she denied their claims, the men laughed. The two men left the area in a dark-colored, four-door sedan with two other Middle-Eastern males in the vehicle. The woman had observed the vehicle in the neighborhood on previous occasions.

(U//FOUO) Similar incidents in Wyoming have been reported to the FBI throughout June 2015. On numerous occasions, family members of military personnel were confronted by Middle-Eastern males in front of their homes. The males have attempted to obtain personal information about the military member and family members through intimidation. The family members have reported feeling scared.

(U//FOUO) To date, the men have not been identified and it is not known if all the incidents involve the same Middle-Eastern males. If you have any information that may assist the FBI in identifying these individuals, or reporting concerning additional incidents; in Colorado please contact the FBI Fort Collins Resident Agency at 970-663-1028970-663-1028, in Wyoming please contact the FBI Cheyenne Resident Agency at 307-632-6224307-632-6224.

(U) This report has been prepared by the DENVER Division of the FBI. Comments and queries may be addressed to the DENVER Division at 303-629-7171303-629-7171.

The .pdf of the official document is here.

The White House Charming Venezuela

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Did you consider that normalizing relations with Cuba, which blind-sided everyone was part of the demands by Iran in the nuclear talks? Uh huh…

Did you consider and additional demand for Venezuela?..Hummm

A U.S. State Department lawyer, Tom Shannon has traveled to Caracas to meet with Venezuelan President Nicolas Maduro and there have been other clandestine meet-ups in Haiti to set the table for restoring relations between the two countries.

Strangely enough, the University of Rhode Island was also chosen along with 4 other universities to enhance relationship opportunities through student exchanges.

Barack Obama feels empowered now due to the deal with Iran and the notion that Cuba and the United States have formally opened respective embassies.

Obama is now exploiting the moment where he used Cuba as a springboard when he attended the Summit of the Americas last April. His ‘new chapter’ has been read and accepted as noted in his speech at this summit. Actually he had many secret and formal messages in his speech which sounded much like that of his outreach speech to the Muslim world in his 2009 Cairo speech.

“President Obama indicated our strong support for a peaceful dialogue between the parties within Venezuela,” said Bernadette Meehan, a spokeswoman for the White House’s National Security Council. “He reiterated that our interest is not in threatening Venezuela, but in supporting democracy, stability and prosperity in Venezuela and the region.”
Maduro later described the meeting as frank and cordial, saying the 10-minute exchange could lead the way to a meaningful dialogue between the two nations in the coming days. “I told him we’re not an enemy of the United States,” Maduro said. “We told each other the truth.”

Several charming people and words and being delivered and dispatched, Venezuela is here.

 

Obama Charm Offensive Targets Venezuela After Iranians, Cubans

The Obama administration’s charm offensive with unfriendly states has rolled through Myanmar, Iran and Cuba. Next stop: Venezuela.

Just months after the administration declared Venezuela a threat to U.S. national security, it’s working to improve relations, driven by concern that upheaval there could destabilize the region.

State Department officers have been meeting quietly with officials in the leftist government of President Nicolas Maduro since April to develop what Secretary of State John Kerry has called “a normal relationship.”

The outreach is another test of President Barack Obama’s 2009 inaugural pledge to “extend a hand” to repressive and corrupt regimes if they are “willing to unclench” their fists.

Falling oil prices, plummeting foreign reserves, a 68.5 percent inflation rate and growing political tensions are battering Venezuela. There’s enough at stake that even a Justice Department probe into the alleged drug ties of the lead Venezuelan in the talks hasn’t derailed the diplomacy.

“The U.S. has a broader goal here, no matter what they think about the Venezuelan government,” said Christopher Sabatini, a Latin American studies professor at Columbia University in New York. “The goal is to prevent a black hole that will suck in other Latin American economies.”

One frequent critic of the administration’s foreign policy has cautious praise for the effort. “I’m very glad the administration is trying to deal with them” on political repression and staging fair elections in December, said Senator Bob Corker, the Tennessee Republican who heads the Senate Foreign Relations Committee.

Toilet Paper Queue

Corker visited Caracas last month and returned dismayed by the sight of Venezuelans queuing outside stores in the early morning hoping that toilet paper might be in stock.

“I don’t think I’ve been to a place that has more potential but is totally blowing it,” Corker said in an interview. “It’s just sad.”

Beyond the hyperinflation that burdens ordinary people and erodes the government’s spending ability, the country’s international reserves fell to a 12-year record low of $15.37 billion on July 27, according to data compiled by Bloomberg. The country’s basket of crude oil and petroleum, a major source of national revenue, fell 4.2 percent last week to $45.87 per barrel, according to the Oil Ministry’s website. A year ago, a barrel of oil brought Venezuela about $96.

‘Fear of Contagion’

Venezuela and its state oil company have about $5 billion in bond payments due in the last three months of this year and about $10 billion in 2016, according to Bank of America Corp. estimates.

Harvard Professor Ricardo Hausmann is saying Venezuela will have no choice but to default on its debt next year amid shortages of staples such as medicine and milk.

“One of the fears is contagion,” said Carl Meacham, director of the Americas program at the Center for Strategic and International Studies in Washington. With the world’s largest proven oil reserves, Venezuela has wielded regional clout by offering neighbors cheap energy and subsidies.

Now, with the country becoming “more and more a hub for international drug cartels,” Meacham said the U.S. effort is about preventing it from becoming a failed narco state. “The spillover won’t just affect folks inside Venezuela, it also has the potential to affect countries all over the region,” he said.

Trading Partner

There also are strategic considerations. The U.S. is Venezuela’s biggest trading partner, the country currently has a vote on the United Nations Security Council as one of 10 nonpermanent members, and it has allied itself with Cuba and other nations hostile to the U.S., sending oil to Syria’s regime despite sanctions in 2012 and last year agreeing to let Russia establish naval and military bases in its borders.

The U.S. “wants Venezuela to relax its international positions on countries like Iran, Russia, Syria and Greece,” said Carlos Romero, an international relations professor at the Central University of Venezuela.

There’s concern, too, that tensions with Venezuela could damp efforts to improve relations with other Latin American nations. Kerry said on July 20 that he and Cuba’s foreign minister had discussed the U.S.-Venezuela relationship, and “our hopes that we can find a better way forward because all of the region will benefit.”

Diplomats Expelled

In the past two years, both nations have expelled diplomats from the other country, and the U.S. has sanctioned Venezuelan officials for human rights abuses.

Maduro, who embraces the socialist rhetoric of his late predecessor Hugo Chavez, called the sanctions the “most aggressive, unjust and disgraceful” action ever taken against Venezuela.

In May, the Justice Department launched its investigation into Diosdado Cabello, the president of the National Assembly, for possible cocaine trafficking and money laundering.

By then, though, there already were signs of change. In March, officials say, Maduro reached out to initiate talks.

“He was afraid of another round of sanctions, and he was afraid of losing support from the rest of Latin America,” said Romero of Venezuela’s Central University. “The majority of Latin American countries, including Ecuador and Bolivia, have been improving ties with the U.S., and Venezuela wants to be recognized as legitimate.

‘Modus Vivendi’

Maduro’s government is eager to reach some sort of ‘‘modus vivendi’’ with the U.S., Romero said. The precarious economy, coupled with the sight of other Latin American countries — particularly Cuba — warming to the U.S., was a spur for Maduro.

Maduro publicly voiced optimism for U.S.-Venezuela relations after speaking with Obama at the Summit of the Americas in Panama in April, an event where Obama and Cuban leader Raul Castro shook hands as their countries’ moved toward normalization.

‘‘There’s a real sense the U.S.-Latin American relationship had been a bit distant and now has new possibilities,” said Harold Trinkunas, director of the Latin America Initiative at the Brookings Institution. “The one thing that could spoil that is the situation in Venezuela, so the administration is looking for ways to manage that.”

So far, the talks have focused on regional issues such as the peace process in neighboring Columbia and Haiti’s elections, and on domestic issues such as jailed opposition leaders and the need to hold credible elections in December with international observers, according to a State Department official who spoke on condition of anonymity to discuss diplomatic business.

Immediate aims include finding “an exit to Venezuela’s political crisis” and preventing its “breakdown into lawlessness,” Sabatini said.

Meacham, of the Center for Strategic and International Studies, is among critics who question the effectiveness of the talks.

“Is it the right approach? Up to now I’d say no,” he said. “We haven’t seen progress with the political prisoners, we haven’t seen them commit to international observers.”

Still, Meacham said, “there is something to be gained from opening the channels of communication.” If things go badly, it will help the U.S. “predict and assess the scope of the damage for the region.”

 

 

 

Shaarik, Flying Under the Radar, but Packs a Policy Punch

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Shaarik (Rik) Zafar to date has had quite the public service powerbroker trail from Texas to Washington DC. Today, he is John Kerry’s ‘go-to’ point person for Muslim outreach, at home and globally.

Zafar is a man with the keys to all the doors…appears to be the access and policy keys.

Born in Texas and gaining a law degree he moved on to being the Deputy Chief of Homeland, Cyber and Countering Violent Extremism Group for the Office of the Director of National Intelligence, the National Counter-terrorism Center and even the Director of Engagement on the White House National Security Staff. Add in being the Senior Policy Advisor at the DHS Security’s Office for Civil Rights and Civil Liberties and now the State Department’s Special Representative to Muslim Communities, and we have a man on a mission, some of which are not in America’s best interest.

While at DHS, Zafar established a TSA policy for head coverings for Muslims.

He recently moderated a panel discussion of prominent Muslim women who are authors, bloggers, and Hollywood types to tell their stories where plans are in process for a well…propaganda movie or documentary it seems.

When he joined the State Department, he participated in a United Nations Displacement of Religious Minorities session where ‘government and civil society can better support members of religious minorities displaced by violent persecution around the world, including aiding in resettlement efforts, ensuring the security and rights of members of religious faiths, and promoting societal and governmental respect for religious freedom.’

Then there was the post 9/11 DHS mission by Zafar.

Zafar served as the Special Counsel for Post 9/11 National Origin Discrimination at the U.S. Department of Justice, where he led DOJ’s Initiative to Combat Post 9/11 Discriminatory Backlash. As Special Counsel, his duties included: (1) coordinating the investigation of hate crimes, employment discrimination, and other unlawful forms of national origin and religious discrimination; (2) conducting outreach to vulnerable communities to provide them information about Federal civil rights protections; and (3) advising the Assistant Attorney General for Civil Rights on issues affecting the American Arab, Muslim, Sikh, and South Asian communities. In September 2005, he delivered a speech on “Improving the Effectiveness of Law Enforcement in Preventing and Combating Hate Crimes” at the Second OSCE Meeting of Police Experts in Vienna, Austria.

Hillary Clinton created this position at the State Department and it has had two leaders assigned to head the division that has a multi-track mission.

WaPo in part: Zafar’s predecessor, Farah Pandith, had held the job since it was created by then-Secretary of State Hillary Rodham Clinton in 2009 and focused on building initiatives with young Muslims around the world.

But his to-do list is daunting. His goals chart for the office includes developing a plan to combat Shia-Sunni sectarian violence and trying to discourage American foreign fighters from traveling to conflict areas. This week alone, two American Muslims were reportedly killed in Syria fighting for the extremist Islamic State group.

Zafar says he will focus primarily on “pushing open doors” — on matters where cooperation is likely. Two of the State faith office’s top priorities are climate change and entrepreneurship. Another priority (which Pandith focused on as well) is promoting “the creative economy” in Muslim communities overseas, helping them powerfully tell stories through film or art that may help further U.S. foreign policy goals.

Zafar will be in Los Angeles in a few weeks to meet with filmmakers who can help storytellers abroad.

The white board in his office where he brainstorms is topped with cultural themes: “sports, Hollywood.”