Author Archives: Denise Simon

Taxes Driving U.S. Corporations to Shutter

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No wants to change the tax code and no one wants to allow U.S. currency offshore to be repatriated so…

U.S. Stands to Lose Billions From Corporate Tax Inversions

One Estimate Puts Lost Tax Revenue at Close to $20 Billion Over a Decade

How much revenue does the U.S. Treasury stand to lose from corporate tax inversions? It is difficult to say precisely, but one estimate puts the figure at close to $20 billion. Calculating how much the U.S. Treasury would lose is nearly impossible because of a dearth of reliable tax data from companies’ public filings and the variables in how companies can structure their businesses, tax experts say. One way companies seek to reduce their U.S. tax bills by reincorporating overseas is to transfer pretax income from their U.S. operations to their foreign parent companies through intercompany debt, says corporate tax consultant Robert Willens. But it is difficult to know how large of an impact that will have for a given company because of limits on how much interest companies can deduct from their taxable income. There is also a risk that companies act too aggressively attract scrutiny from the Internal Revenue Service. Another variable is the cash many companies keep overseas to avoid U.S. taxes. The cash only becomes taxable once it is brought back to the U.S. to pay dividends to shareholders or is used for other purposes. But companies don’t always disclose how much cash they bring back home or when.

Some companies say they were never going to repatriate the cash anyway, so they aren’t depriving the U.S. tax base of revenue by moving out of the country. Report: 1 million corporations closed, 60,000 a year; taxes blamed America has lost 1 million corporations since their height during the Reagan era, in part driven out of business by the industrialized world’s highest corporate tax rate, according to a new report from the nonpartisan Tax Foundation. The just-issued research revealed that the number of traditional “C” corporations has fall to a “historically low level” and wiped out the corporate tax base, resulting in the federal government relying much more on individual income taxes to fund its operation. “There is now more net business income taxed under the individual income tax system than the traditional corporate tax code, a trend that does not appear to be stopping any time soon,” said the report provided to Secrets. It said that corporate closings have recently picked up steam and now 60,000 a year are shut down. A driver in the loss of traditional corporations has been the ever-rising corporate tax rate, an issue Washington has been ducking for years. The Tax Foundation said that many corporate titans have taken matters into their own hands by restructuring as “pass through” operations which allows profits to be taxed at lower individual rates. “More than 60 percent of U.S. business profits are now taxed under the individual income tax code rather than the corporate tax code, which explains why the U.S. collects a relatively small amount of tax revenue from corporations despite having the developed world’s highest corporate tax rate,” said the foundation. “Although this kind of do-it-yourself tax reform is beneficial to the overall economy because it lowers the tax burden on business investment, something is nevertheless lost,” said Tax Foundation Chief Economist William McBride in a statement. “Pass-through businesses do not offer the same ability to invite investment from thousands of shareholders or easily transfer shares. That means the decline of the traditional corporate sector represents an economic distortion that is hobbling American industrial capacity and job growth. No other developed country has such a distorted business sector,” he added.

Report: 1 million corporations closed, 60,000 a year; taxes blamed

America has lost 1 million corporations since their height during the Reagan era, in part driven out of business by the industrialized world’s highest corporate tax rate, according to a new report from the nonpartisan Tax Foundation.

The just-issued research revealed that the number of traditional “C” corporations has fall to a “historically low level” and wiped out the corporate tax base, resulting in the federal government relying much more on individual income taxes to fund its operation.

“There is now more net business income taxed under the individual income tax system than the traditional corporate tax code, a trend that does not appear to be stopping any time soon,” said the report provided to Secrets.

It said that corporate closings have recently picked up steam and now 60,000 a year are shut down.

A driver in the loss of traditional corporations has been the ever-rising corporate tax rate, an issue Washington has been ducking for years.

The Tax Foundation said that many corporate titans have taken matters into their own hands by restructuring as “pass through” operations which allows profits to be taxed at lower individual rates.

“More than 60 percent of U.S. business profits are now taxed under the individual income tax code rather than the corporate tax code, which explains why the U.S. collects a relatively small amount of tax revenue from corporations despite having the developed world’s highest corporate tax rate,” said the foundation.

“Although this kind of do-it-yourself tax reform is beneficial to the overall economy because it lowers the tax burden on business investment, something is nevertheless lost,” said Tax Foundation Chief Economist William McBride in a statement.

“Pass-through businesses do not offer the same ability to invite investment from thousands of shareholders or easily transfer shares. That means the decline of the traditional corporate sector represents an economic distortion that is hobbling American industrial capacity and job growth. No other developed country has such a distorted business sector,” he added.

Then comes Congress with threats:

The Senate’s chief tax writer, Ron Wyden, wants U.S. companies looking to move abroad for a lower tax bill to understand one thing: “[T]hey won’t profit from abandoning the U.S.”

The Democrat’s comments, made in a Wall Street Journal op-ed last week, came amidst a spate of proposed mergers between major American companies and foreign rivals that would end up in their reducing their U.S. tax bill.

The proposed merger that’s gotten the most attention of late: The so far unsuccessful bid by Pfizer (PFE) for British pharmaceutical maker AstraZeneca (AZN).

Today, a U.S. company can move to a more tax-friendly country in a process known as “inversion” if the foreign partner owns more than 20% of the stock in the merged entity, among other requirements.

Wyden wants to raise that threshold to at least 50%, and he would like to make such a provision retroactive to May 8, 2014.

 

Apprehended in U.S. from Terror States

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Consider as you read below, how many we did not catch. Consider how many actually got a pass. Consider how many received visas from the State Department to come here under a green card.

Just consider Iraq, a worn torn country currently in a war. How many have been allowed into the United States and why? This is chilling only from 2013.

WASHINGTON—Two Iraqi citizens living in Bowling Green, Kentucky who admitted using improvised explosive devices (IEDs) against U.S. soldiers in Iraq and who attempted to send weapons and money to al Qaeda in Iraq (AQI) for the purpose of killing U.S. soldiers were sentenced today to serve federal prison terms by Senior Judge Thomas B. Russell in U.S. District Court for the Western District of Kentucky.

The sentences was announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division.

Mohanad Shareef Hammadi, 25, a former resident of Iraq, was sentenced to life in federal prison, and Waad Ramadan Alwan, 31, a former resident of Iraq, was sentenced to 40 years in federal prison, followed by a life term of supervised release. Both defendants had pleaded guilty to federal terrorism charges.

Iraqi Refugee Processing

Part of the humanitarian mission of the USRAP is to provide resettlement opportunities to especially vulnerable Iraqi refugees. Since large-scale Iraqi refugee processing was announced in February 2007, DHS and DOS have worked cooperatively to increase the number of Iraqi refugees admitted to the United States as part of the worldwide commitment. DHS and DOS have worked closely to expand processing capacity for Iraqi refugee applicants while ensuring the highest level of security. In support of these efforts, USCIS currently deploys approximately 55 officers per quarter to the Middle East to conduct refugee processing circuit rides. Since the inception of the program in 2007, 203,321 Iraqi nationals have been referred to the USRAP for resettlement to the United States. USCIS has interviewed 142,670 Iraqi refugee applicants; approved 119,202 for resettlement and, 84,902 Iraqi refugees have arrived in the United States.

Does Customs and Border Patrol coordinate with ICE, then DHS then the FBI? Well take a look at the FBI homepage on terrorism.

(CNSNews.com) – The Department of Homeland Security’s Customs and Border Protection reports that in fiscal year 2014 (Oct. 1 through Sept. 30) agents apprehended 1,191 individuals from 12 of the 14 countries that DHS and the State Department have considered as countries that have problems with terrorism.

In December, CBP released its apprehension statistics for 2014, which show that of the 486,651 apprehensions, 257,473 were from countries “other than Mexico.” Of those apprehended from countries “other than Mexico,” CBP provided CNSNews.com the countries of origin of those taken into custody.

Of those from countries “other than Mexico,” 1,191 were from 12 countries – Iran, Sudan, Cuba and Syria (state sponsors of terror), and Afghanistan, Algeria, Lebanon, Libya, Nigeria, Iraq, Pakistan, Saudi Arabia, Somalia and Yemen (“countries of interest”) – designated by the federal government to have terrorist links.

The breakdown of the apprehension of individuals from 12 countries designated as “countries of interest” is as follows, according to CBP: Afghanistan (4); Algeria (3); Cuba (1,061); Iran (4); Iraq (7); Lebanon (10); Nigeria (29); Pakistan (31); Saudi Arabia (16); Somalia (6); Syria (14); and Yemen (6).

As CNSNews.com reported in 2010, following the failed attempt to bring down Northwest Flight 253 on Dec. 25, the Transportation Safety Administration (TSA) announced enhanced airport screening for people traveling through or from 14 “countries of interest.” TSA did not specify which nations it considered “countries of interest.”

“TSA is mandating that every individual flying into the U.S. from anywhere in the world who holds a passport issued by or is traveling from or through nations that are state sponsors of terrorism or other countries of interest will be required to go through enhanced screening,” the TSA said.

“TSA directed the increased use of enhanced screening technologies and mandates threat-based and random screening for majority passengers on U.S. bound international flights,” it added.

But a Jan. 4, 2010 New York Times report, citing Obama administration officials, identified them as Afghanistan, Algeria, Lebanon, Libya, Nigeria, Iraq, Pakistan, Saudi Arabia, Somalia and Yemen. The other four – Iran, Sudan, Syria and Cuba – were identified as state sponsors of terrorism by the State Department.

A Jan. 4, 2010 report in USA Today, citing the TSA as the source, described the full list of nations whose citizens would be targeted for enhanced security checks as “14 countries with terrorism problems.”

 

Streets of Paris, al Qaeda Cold Blooded Murder

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Cherif Kouachi, 26, and Thamar Bouchnak, 25, were arrested in Paris in January 2005 as they prepared to fly to Damascus. They were sentenced to three years, as requested by Xavier- Rolai.

Kouachi said on the stand that he was inspired by detainee abuse by U.S. troops at Baghdad’s Abu Ghraib prison, though he was relieved he was stopped. The court said Kouachi had wanted to attack Jewish targets in France, but Benyettou had told him that France wasn’t a “land of jihad” but Iraq was.

Update:  21.30. the three suspects have been identified. It comes from Saïd Kouchi., born in 1980 in Paris, Charles Kouchi., born in 1982 in Paris and Waleed M. Hamyd, born in 1996. All three are originating in Gennevilliers (Hauts-de-Seine). They were reportedly arrested but no official confirmation comes for the hour of the Ministry of the Interior.

21 h 20.According to Metronews, the three suspects have been identified. It would be two brothers of 32 and 34 years, born in Paris, and a young 18-year-old man, whose nationality is not known.

2110. thousands of people gathered Wednesday evening in several European cities, like Berlin, Brussels, Madrid, Vienna or London. In Berlin, they were 500 late afternoon outside the Embassy of France. Near the Brandenburg Gate, in the centre of the German capital, many demonstrators came with candles, waving placards proclaiming “I’m Charlie” or ancient some of Charlie Hebdo. And this sign: “Europe United in solidarity ‘. In Brussels, several hundred people gathered outside the Consulate of France and the European Parliament, where they brandished silently pencils or pens in solidarity. Candles, too, have been lighted, under the sign “I’m Charlie” clings to a statue. A little more than 200 people gathered in Liège. At Trafalgar square, in the heart of London, several hundred people gathered, serious faces, including many French. Many had brought with them placards ‘I am Charlie’ or displayed the message on the screen of their mobile phone.

In Madrid, they were several hundred outside the Embassy of France, in the presence of Ambassador Jérôme Bonnafont. The crowd chanted “freedom of expression, freedom of expression, before singing the Marseillaise in front of a blue-white-red flag. The Socialist former President José Luis Rodríguez Zapatero, was there, too, to show his support. In the Hague, a hundred people gave themselves go to the Spui, in downtown. Some waved french flags while others sang when you have that love, Jacques Brel. Stockholm, 70 people gathered outside the Embassy of France, some with flowers, others of candles.

20 h 57. «»”Trips, stays and outputs school, an exceptional nature, organized by region Île-de-France are, until further notice, suspended”, announced the Ministry of Education by way of press release. Same set sent to mayors, in charge of organizing extracurricular activities. “For the whole of the national territory, the presence of adults to the inputs and outputs is implemented.” A Visual inspection must be done on bags and “special attention is requested in order to avoid any gathering in the vicinity of these institutions.” Finally, the Department asked rectors, in relation to the prefects, to identify schools and sensitive schools. A minute’s silence will be observed in all schools and universities, at noon tomorrow

 

The gunmen (3) still at large, spoke perfect French. al Qaeda claims involvement. This is militant Islam, where Paris sadly had their own Benghazi. The media operation had unarmed security. Holland immediately called this a terror attack, as French intelligence had already foiled several like operations in recent weeks.

Jihadi chatter abounds now on all social media stating that Paris burns. Close but graphic video perspective is here. Signs are pointing to AQAP. AQAP put the publication on their target list.

Reactions On The Forum Jihadi Media Platform

Members of the pro-ISIS forum Jihadi Media Platform (alplatformmedia.com) lashed out at France. A member called Al-Dia’ Al-Gharib wrote: “France was [once] part of the land of Islam and will return to be the land of Islam, in spite the worshippers of the Cross.” Another, who goes by the name Muhib Al-Salihin, wrote: “France is one of the harshest enemies of Islam and of the Islamic State in particular.” Forum member Abu Al-Qassem Al-Shawqi commented: “[This] is news that quenches the thirst for revenge. By Allah, beloved ones, let us not think lightly of prayers. By Allah, they [the attackers] are soldiers of Allah.” And a member calling himself Abu Bakr Al-Zari’ni remarked: “Congratulations to France and to its people for reaping what their hands sowed. Did these evil cartoonists think that we were a nation that would remain silent in face of those who insult our Prophet…? Did [French President] Hollande and the governments that preceded him think that their interventions and despotism in the lands of the Muslims would not be met with retribution? No, by Allah, from now on the youths of Islam will no longer remain silent, especially since we have a state [ISIS] to mobilize armies if anybody insults the nation of Islam.”

Richard Clarke, the former White House counter-terrorism czar called this operation a military operation complete with AK-47’s and rocket launchers.

The video from a close by roof perspective is here.

Steve Gomez, former head of the Counter-Terrorism Division for the FBI in Los Angeles, said that the attack appeared markedly different from recent “lone wolf” attacks, such as the deadly incident in Ottawa in October.

“Many lone wolves are looking to die. Those are suicide operations. This, Paris, isn’t a suicide mission,” said Gomez, an ABC News consultant. “They went in, shot up people and they’re out. They probably have an escape hatch and, if they’re connected to terrorists, who knows what kind of support system could be helping them out.

French security forces are hunting for three gunmen who stormed the offices of satirical newspaper Charlie Hebdo in Paris, killing 12 people Wednesday. A cartoonist with the publication told a French newspaper of the moment she encountered the two attackers as they entered the office. “When I arrived in front of the door of the building of the paper, two men hooded and armed brutally threatened us,” she said. She indicated that the men spoke French perfectly, and that they claimed to be with al-Qaeda. An estate agent who also witnessed the attack said that, before launching the assault, the attackers approached another man in the street saying, “Tell the media that this is al-Qaeda in the [sic] Yemen.”

Here is what we know so far, as night falls in Paris:

A woman pays tribute during a gathering at the Place de la Republique in Paris.
A woman pays tribute during a gathering at the Place de la Republique in Paris. Photograph: Gonzalo Fuentes/Reuters

I’m now handing over this liveblog to my colleague Tom McCarthy, who will continue with updates throughout the rest of the day. Thank you for reading.

The Queen has sent a message to French president François Hollande:

Prince Philip and I send our sincere condolences to the families of those who have been killed and to those who have been injured in the attack in Paris this moming.

We send our thoughts and prayers to all those who have been affected.

Radio France, Le Monde and France Télévisions have put out a statement saying they will offer staff and other support to help the Charlie Hebdo magazine “continue to live”.

They invite all French media to do the same, “to defend the principles of independence, freedom of thought and expression, the guarantors of our democracy”.

General Shelton Slams Iran

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The summary below translates into a few questions. Why does Secretary of State John Kerry continue to legitimize Iran and to bring the country on equal footing globally as they are a rogue nation? The next question, will the White House continue to ignore Iran’s history of terrorism?

Iran is a dangerous ‘ally’ in Syria and Iraq

At the dawn of 2015, the U.S. has yet to articulate a comprehensive foreign-policy strategy to counter the influence and territorial gains of Islamic State, the terrorist group that emerged last year — and poses a dangerous and vexing threat to stability across the Middle East and North Africa. By the Pentagon’s admission, we neither understand the underlying ideology of the merciless group nor have a grasp of all the players in the region who have aggravated the crisis.

Indeed, the fog of war seems to have muddied Iran’s role in this dark chapter of regional affairs. Is Tehran an ally or a nemesis in the fight against Islamic State? At least initially, the U.S. believed that Iran could play a constructive role in combating a mutual adversary. Secretary of State John F. Kerry, touting the age-old axiom “the enemy of my enemy is my friend,” suggested that Iran could be part of the solution.

The only trouble is that Iran is a major part of the challenges we face.

Islamic State, also known by the acronym ISIS, rose out of the sectarian conflict that exploded in Iraq in 2004, shortly after the U.S.-led occupation. Iran immediately backed Shiite Muslim militant factions with training, money, weapons and intelligence, sparking a vicious Sunni Muslim militant counter-reaction that nourished Al Qaeda and, later, ISIS. The rise to power of Nouri Maliki, an inept and corrupt Shiite prime minister with strong ties to Tehran, sealed Iraq’s fate not only as a breeding ground for Sunni extremism, but as an Iranian satellite state.

Iran now has more than 7,000 Revolutionary Guards and elite Quds Force members in Iraq, according to the National Council of Resistance of Iran, an Iranian opposition organization. The killing of Iranian military advisor Hamid Taqavi, a brigadier general in the Revolutionary Guard, in December in Samarra put an exclamation point on the scope and significance of the Revolutionary Guard’s presence in Iraq. As the most senior commander of the Quds Force to die abroad since the Iran-Iraq war ended 26 years ago, Taqavi played a key role in Tehran’s training and control of Shiite militias in Iraq.

Amnesty International has pointed to the presence of Iran’s proxy militias in Iraq as a key source of instability and sectarian conflict there. In an October report called “Absolute Impunity, Militia Rule in Iraq,” Amnesty found that the growing power of Shiite militias has contributed to a “deterioration in security and an atmosphere of lawlessness” and that the Shiites “are ruthlessly targeting Sunni civilians … under the guise of fighting terrorism, in an apparent bid to punish Sunnis for the rise of the ISIS and for its heinous crimes.”

Iranian clerics’ paranoia over domestic discontent has made meddling in regional countries, Iraq in particular, a cornerstone of Tehran’s foreign policy and survival strategy. Speaking at Taqavi’s funeral, top Iranian security official Ali Shamkhani said, “Taqavi and people like him gave their blood in Samarra so that we do not give our blood in Tehran.”

Iran’s reasons for “fighting” ISIS diverge considerably from U.S. objectives. Whereas we seek a stable and nonsectarian government in Iraq, the mullahs’ interests are best served by the ascension of a subordinate Shiite leadership, enabling them to use the neighbor to the west as a springboard for their regional hegemonic, anti-Western designs. The Iranian government sees an opening in the turmoil in Iraq for consolidating its grip on that country, weakened by the ouster of Prime Minister Maliki.

Iran’s role in the civil war in Syria is following a similar dynamic: Through its proxy Hezbollah — the Shiite Muslim political and paramilitary organization — Iran has served as Syrian President Bashar Assad’s battering ram against his people, killing and enraging Sunnis and fueling ISIS’ exponential growth.

Aiding and abetting Iran’s destructive role in Iraq or Syria would be a strategic mistake for the U.S. that only exacerbates a profound crisis. It is a dangerous irony to even consider allying with Iran — which the U.S. State Department still considers the world’s most active state sponsor of terrorism — to fight the terrorism inspired by ISIS.

Iranian opposition leader Maryam Rajavi, who is well versed in the agenda and ambitions of Tehran’s mullahs, rightly describes a potential Western alliance with Iran against ISIS as akin to “jumping from the frying pan into the fire.” The eviction of the Iranian government from the region, especially from Syria and Iraq, must be part of the U.S. strategy for countering ISIS and resolving the sectarian divides that drive extremism throughout the region, Rajavi says.

She’s right. The U.S. must think beyond ISIS to what kind of region will be left in its smoldering wake. As the U.S. weighs its policy options, any scenario that leaves Iran in control of large swaths of the region must be rejected outright.
Gen. Hugh Shelton served as the 14th chairman of the Joint Chiefs of Staff.

 

The Fallout of Qatar’s Reputation

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Qatar has had a long history of funding terrorism and taking in combatants as free refugees such as the Taliban 5. Qatar is denying funding terrorism and the Pentagon is playing stupid on the matter at the behest of the U.S. State Department all for the sake of nefarious diplomacy.

What is more, since the Arab Spring and the power shift in Egypt, al Sissi has moved to terminate the Muslim Brotherhood footprint once based in Cairo. Additionally, Egypt has moved to terminate al Jazeera media in Egypt.

Pressure has been applied to Qatar by several Gulf States recently including the United Arab Emirates as well as Saudi Arabia. Some pressure has also been applied by the U.S. Treasury which tracks terror funding.

Now comes the leader of Hamas.

Hamas leader Mashaal said deported from Qatar

Reconciling with key Arab countries against Brotherhood, Doha boots political chief; Israel welcomes news, Hamas denies it

Qatar has deported Hamas political leader Khaled Mashaal after hosting him for the past three years, Israel’s Foreign Ministry said Tuesday.

The move, first reported by a Turkish newspaper on Sunday, was swiftly denied by an official from the Islamist group.

According to a report in left-wing Turkish newspaper Aydınlık, Qatar has faced significant pressure from Saudi Arabia and the United Arab Emirates to deport Mashaal, amid a diplomatic reconciliation process currently underway between the small Gulf state and the Arab world.

According to CNN, citing a Hamas-run news agency, Mashaal and other Muslim Brotherhood members were most likely to head to Turkey.

On December 20, Egyptian President Abdel Fattah el-Sissi met with Sheikh Mohammad bin Abdul Rahman, a special envoy of Qatari leader Sheikh Tamim bin Hamad al-Thani. The meeting apparently ended the longstanding enmity between the two states over Qatar’s support for Hamas and the Muslim Brotherhood.

In a written message Tuesday, Israel’s Foreign Ministry congratulated Qatar for its decision to deport Mashaal.

“The Foreign Ministry, led by minister Avigdor Liberman, has advanced various moves to cause Qatar to carry out this step and stop aiding Hamas, directly and indirectly. To this end, minister Liberman and the ministry’s professional staff have acted in overt and covert tracks with Qatar and other states. We expect the Turkish government to now follow suit,” the Foreign Ministry’s message read.

But a Hamas official, Izzat al-Rishq, denied reports that Mashaal was in fact deported.

“There is no truth to reports by certain media concerning the departure of Khaled Mashaal from Qatar,” Rishq wrote on his Facebook page Tuesday afternoon.

According to Arab media reports, the deal between Egypt and Qatar included the closing of anti-Sissi Qatari news channel Al-Jazeera Mubasher Misr on December 22; the extradition of Egyptian Muslim Brotherhood members from Qatar to Egypt; and a halt to Qatar’s funding of the Muslim Brotherhood.

If true, Mashaal’s departure from Qatar would mark the end of Hamas’s political presence in the Arab world. Expelled from Jordan in August 1999 and choosing to break ties with the Assad regime in Syria in January 2012, Mashaal has struggled — and failed — to foster political patrons in the tumultuous Arab Middle East.

Appearing before a gathering of Turkish Prime Minister Recep Tayyip Erdogan’s Justice and Development Party in Konya December 27, Mashaal congratulated the people of Turkey “for having [Prime Minister Ahmet] Davutoğlu and President Recep Tayyip Erdoğan” as heads of state, adding that “a strong Turkey means a strong Palestine … Inshallah, God is with us and with you on the road to victory.”

Qatar: “Worst” on Counterterroism in the Middle East?

On Sunday, WikiLeaks revealed a State Department cable last December that labeled Qatar, the tiny, oil-rich Gulf nation, as the Middle East’s “worst” participant in counterterrorism efforts, the New York Times reports. According to the cable, Qatari security was “hesitant to act against known terrorists out of concern for appearing to be aligned with the U.S. and provoking reprisals.”

Another cable from December 2009 stressed increased counterterrorism efforts as a talking point for the Emir’s January 2010 visit.

The details offered in these cables are particularly strange when compared with a 2008 Congressional Research Service report for Congress.

The U.S. State Department called Qatar’s terrorism support since 9/11 “significant,” according to the CRS report. Since the attacks, Qatar established both a Combating Terrorism Law and the Qatar Authority for Charitable Activities (QACA) in March of 2004. The QACA was meant to monitor the operations of all Qatari charity organizations and ostensibly make sure the charities weren’t funneling cash to terrorist organizations. But there was an asterisk: The Emir could stop the QACA from overseeing a particular organization’s activities whenever he wants.

“U.S. concerns regarding alleged material support for terrorist groups by some Qataris, including members of the royal family, have been balanced over time by Qatar’s counterterrorism and efforts and its broader, long-term commitment to host and support U.S. military forces being used in ongoing operations in Iraq, Afghanistan and the global war on terrorism,” wrote Christopher M. Blanchard, the Middle East affairs analyst who authored the CRS report.

So what changed between 2008 and 2009?

Probably not much. The discrepancy in rhetoric is likely more an issue of what the United States is willing to say in public, and in private.

“Keeping U.S. basing rights in Qatar and ensuring the stable flow of oil and LNG gas [liquefied natural gas] are both more important than Qatar’s willingness to deal seriously with its citizens involvement in terrorism,” says Toby Jones, an assistant Middle East history professor at Rutgers University. “The cost of [the United States] pressuring them publicly to take counterterrorism seriously, it seems, might come at too high an economic cost.”

But U.S. officials may have reason to be suspicious of Qatar. Members of the royal family reportedly hosted Khalid Shaikh Mohammed, the 9/11 mastermind, in the late ’90s and may have helped him evade U.S. capture. In 2005, officials discovered another link between Qatar and al Qaeda: Qatar paid al Qaeda (and some speculate it may still be paying) millions of dollars each year so al Qaeda wouldn’t attack it. Qatar struck the deal before the 2003 Iraq invasion and renewed it in March of 2005, when an Egyptian suicide bomber attacked a theater in Doha. Many believed the bomber was part of al Qaeda. “We’re not sure that the attack was carried out by al Qaeda, but we ratified our agreement just to be on the safe side,” a Qatari official said at the time. “We are a soft target and prefer to pay to secure our national and economical interests. We are not the only ones doing so.”

It’s true: Qatar is one of many nations that have allegedly funded Islamic movements to save their own citizens, and that funding was another topic of discussion slated for last January’s meeting. “Officials should make known USG concerns about the financial support to Hamas by Qatari charitable organizations and our concerns about the moral support Hamas receives from Yousef Al-Qaradawi,” the December, 2009 cable said. “It is also essential to stress that high-level Qatari political support is needed, if financial flows to terrorists are to stop.”

But in a region rife with secret terrorist ties and illicit deals, it may seem strange that the only nation to host a U.S. military base could earn the dubious-least-valuable player title.

Yet America’s chummy relationship with Qatar is a key reason for Doha’s hesitancy to comply with every U.S. demand and its apparent eagerness to appease threatening countries and organizations. That relationship is, partly, what makes Qatar such a ready target.

Because it hosts the Al Udeid airbase and Camp As Sayliyah, a pre-positioning facility of U.S. military equipment, Qatar is at greater risk of terrorist attacks than neighboring countries, whose ties to the U.S. are less tangible. Notably, Qatar pays for the upkeep of the American military bases in its borders; the U.S. pays no rent, and no utilities.

So while countries like Saudi Arabia and the emirate of Abu Dhabi have aligned themselves strongly with the U.S. counterterrorism strategy because they rely somewhat on U.S. power and protection, Qatar has no such dependence. “[Qatar isn’t] fully behind the United States in the same way that Abu Dhabi clearly is,” explains Dr. Christopher Davidson, a United Nations and Middle East Policy Council expert on the Gulf monarchies, and a professor at Durham University in England. “This explains why there’s been some criticism of Qatar not being tight enough on counterterrorism. ”

Beyond Qatar’s alleged funding of al Qaeda and its ties to Hamas and Iran, it has also tried to bolster its reputation by allowing money to flow freely through the country, no questions asked. Implementing more scrutiny would likely anger terrorist groups and put Qatar at greater risk.

“If the funding is cut, or if the Qatari authorities listen to America and try to tighten things up so money can’t flow as easily, then you have the real risk of jihad coming home to Qatar,” Davidson explains. “The smaller Gulf states have never really faced a stage of serious terror attacks like Saudi Arabia has, but they all certainly live in fear of that.”