Category Archives: China

Pssst, You ARE a Customer of This Bank

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“If the Desert Sunlight solar firm is the ‘beginnings of a renewable energy future,’ then the future doesn’t look bright for taxpayers, ratepayers and all Americans who think mega-corporations should make a living by selling their products, not by selling a bill of goods,” The Heritage Foundation’s Mitchell Tu and David Kreutzer wrote for The Daily Signal.

In addition to benefiting from the Department of Energy’s now-defunct 1705 loan program, two of the four firms involved also are significant beneficiaries of funding provided by the Export-Import Bank: General Electric and First Solar.

The Export-Import Bank provides taxpayer-backed loans and loan guarantees to foreign countries and companies for the purchase of U.S. goods. The bank’s charter is set to expire June 30, and lawmakers on Capitol Hill are beginning to wade into the debate over whether it’s life should be extended.

Pulling back the curtain and going deeper…..

Communist Regime-financing Ex-Im Bank Fights for Survival

The U.S. taxpayer-backed Export-Import Bank (Ex-Im), widely criticized for crony capitalism as well as for financing communist and socialist regimes with American money, is fighting for its very survival amid scandals as a growing coalition of lawmakers in Congress works to finally shut it down. From funneling billions in “loans” to state-owned banks in Russia and Communist China, to offering the corrupt Brazilian state-owned oil giant Petrobras $2 billion to “develop oil fields,” to hiring politically connected “green energy” cronies, the bank’s activities have come under increasing criticism on Capitol Hill. Now, with its charter set to expire this summer without congressional action, the Ex-Im Bank — originally created to subsidize U.S. exports to the mass-murdering regime ruling the Soviet Union — is sparring with the American people’s elected representatives over its fate.

Unsurprisingly, perhaps, key figures in the establishment wing of the GOP, often dubbed “RINOs” for being alleged “Republicans In Name Only,” are pushing for the re-authorizing the Ex-Im Bank’s charter. Corporate welfare-loving Democrats, too, despite being in the minority in both chambers of Congress, are working to keep the controversial bank alive. Even the most extreme self-styled “progressives,” such as Sen. Elizabeth Warren, whose specialty is attacking business and markets in the quest for ever bigger and more oppressive government, want to re-authorize Ex-Im. Meanwhile, Big Business lobbyists with the U.S. Chamber of Commerce and other special-interest outfits are right now twisting arms on Capitol Hill and plotting strategies to keep the taxpayer-backed Ex-Im cash flowing to their members.

Establishment Republicans anxious to please powerful special interests have proposed “reforming” the bank in an effort to make saving it more palatable to the public. Among them is Rep. Stephen Fincher (R-Tenn.), who introduced a bill with more than 50 GOP co-sponsors, so far, to “reform” the bank while re-authorizing its charter until 2019. Last week, a coalition of Big Government-loving Democrats led by ultra-leftist Rep. Maxine Waters (D-Calif.) tried to force the House Financial Services Committee to at least consider renewing Ex-Im’s charter, but conservatives on the panel voted down their amendment. Even Obama, who accurately described the bank as “little more than a fund for corporate welfare” while on the campaign trail in 2008, is now working hard to browbeat Congress into re-authorizing the Ex-Im Bank.

“Bipartisan support for corporate welfare and a corporatism state provides compelling evidence that in the end, it is money and power — not ideology — that drives the DC insider establishment,” wrote Tom Borelli, a senior fellow with the pro-market group FreedomWorks. “Instead of drawing a clear policy distinction over corporatism and making the Democrats own the label of ‘the party of big business and special interests,’ Republican backers of the Ex-Im Bank are blurring the lines between the parties and tarnishing the GOP’s brand.” He said that unless conservative activists express strong opposition to re-authorizing the crony-capitalist bank, conservative members of the House of Representatives would likely be “overwhelmed” by Democrats and “ideologically bankrupt Republicans.”

Supporters of the Ex-Im Bank point out that its taxpayer-backed loan programs are contingent on the foreign entities involved purchasing U.S.-sourced goods and services. As such, the controversial bank likes to argue that it helps “support American jobs” and promote exports. Numerous other national governments also have similar institutions that subsidize some companies or government-owned “enterprises,” so the Ex-Im claims that it, too, must subsidize certain U.S. firms and foreign entities. Another argument often cited by the Ex-Im Bank and its supporters — primarily Big Business — is that rather than costing taxpayers money, it sometimes earns some revenue for the Treasury. Even this may be misleading, according to an analysis by the Congressional Budget Office forecasting that U.S. taxpayers will bear some $2 billion in Ex-Im losses over the next decade. Plus, there is always the prospect that enough bad loans from the bank could end up putting U.S. taxpayers on the hook for many more billions of dollars.

The federal bank also harms a wide array of Americans, experts say. “Ex-Im places the 99.96 percent of U.S. small businesses that it doesn’t subsidize at a competitive disadvantage because the subsidies artificially lower costs for privileged competitors,” explained Veronique de Rugy, a senior research fellow with the market-oriented Mercatus Center at George Mason University. “Sadly, the privileges Ex-Im extends to the few come at the expense of countless American firms and their workers. Unsubsidized firms may see reduced revenues — and their employees may see their hours cut, their salaries stagnate, or their jobs simply vanish because their employers cannot compete on the uneven playing field created by the federal government….It is time for Congress to start cleaning up its house and agree to end programs that need to go away. Enough with the pretense of reform.”

Critics have also rallied against the bank in recent years citing a wide array of other arguments. For one, and perhaps most importantly, there is no authority in the U.S. Constitution for the federal government to create a taxpayer-backed bank that picks winners and losers by loaning money to foreign governments, banks, and companies. Secondly, if participants in the free-market do not consider loans to be wise enough to put private funds behind them, critics of the Ex-Im Bank say the federal government has no business putting taxpayers’ money on the line instead. And while it may be true that some businesses and jobs benefit from Ex-Im schemes, many others suffer as a result. Countless examples have been cited by experts.

Even putting those problems aside, another major concern surrounding Ex-Im Bank is its long history of subsidizing ruthless communist regimes — a sordid pattern that continues to this day. In fact, the bank was originally established in 1934 specifically to finance exports to the Soviet Union. Why would a U.S. taxpayer-backed bank be needed to finance exports to Moscow’s regime? Because anyone with any sense in the private sector knew better than to trust the collection of gangsters, mass-murderers, megalomaniacs, and cut-throats in Moscow enslaving the Russian people while trying to mooch off of Americans to pay for it. Numerous other brutal regimes also received Ex-Im financing under a variety of pretexts.

Despite the growing uproar, the Ex-Im Bank’s financing for brutal regimes that analyst say represent major national security concerns to the United States continues unabated. Between 1997 and 2013, for example, the bank provided almost $2 billion in loans and long-term guarantees just to banks in Communist China and Russia, CNSNews.com reported, citing Ex-Im’s annual reports. Among the recipients: Bank of China, the Russian Agricultural Bank, China’s State Development Bank, Gazprombank, and many more. Of course, despite claims to be shifting toward what they call “state capitalism,” the banking “industries” in both Russia and Communist China remain entirely dominated and largely owned by the respective regimes.

“I don’t think Ex-Im subsidies to Chinese and Russian banks or State-Owned Enterprises constitute good uses of taxpayer resources,” Dan Ikenson, the director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, told CNSNews.com. “But, believe it or not, Ex-Im does partner with foreign export credit agencies to fund export sales and infrastructure projects even though the primary rationalization for having Ex-Im in the first place is to counteract the advantages provided to foreign businesses by those export credit agencies. It’s a complete sham.” In a report about Ex-Im’s victims, Ikenson also noted that the bank causes “substantial” “collateral damage” to many American companies.

More recently, the Ex-Im Bank offered $2 billion to Petrobras, an oil conglomerate owned primarily by the corruption-plagued, Marxist-Leninist-dominated Brazilian government, currently headed by former communist terrorist and close Castro ally Dilma Rousseff. A series of scandals in recent years surrounding the state-owned giant, which has also counted billionaire Obama ally George Soros among its investors, revealed that Petrobras was being used by Rousseff’s extremist “Workers’ Party” to bribe politicians and help finance more socialist scheming in Brazil and Latin America. Aside from the national security concerns, U.S. lawmakers lambasted Ex-Im for funding Brazilian government oil exploration even while the Obama administration was working to shut down as much American energy production as possible and destroy Petrobras’ U.S. competitors.

A growing chorus of critics from across the political spectrum is calling on Congress to finally let the Ex-Im Bank’s charter expire as a first step to reining in cronyism, corruption, market distortions, and the financing of hostile foreign governments with U.S. taxpayer money. However, despite the mass opposition, unless the American people speak out loudly and clearly against Ex-Im and corporate welfare, analysts say the alliance of politicians in the pockets of Big Business and Big Government may yet succeed in re-authorizing the taxpayer-backed boondoggle.

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Detail about this bank: The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States federal government.[1] It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. The Bank is chartered as a government corporation by the Congress of the United States; it was last chartered for a three-year term in 2012 and extended in September 2014 through June 30th, 2015.[2] [3] Its Charter spells out the Bank’s authorities and limitations. Among them is the principle that Ex-Im Bank does not compete with private sector lenders, but rather provides financing for transactions that would otherwise not take place because commercial lenders are either unable or unwilling to accept the political or commercial risks inherent in the deal. Its current chairman and president is Fred P. Hochberg.

Community Organizing, Back to the Future

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The White House just wrapped up a 3 day summit on violent extremism. The platform of the summit was ending the cycle of hate, in other words, it was a collaboration of anger management classes. Barack Obama told his audience that scaling back on the tensions was not meant for Islamists, but rather to every common citizen worldwide to be gentle going forward with Muslims.

The invitees were hand chosen and those not in attendance were also notable. Were leaders in the fields of intelligence, counter-terrorism, Christians or Jews invited? Well now so much. Imagine the Director of the FBI, James Comey who has open cases in 49 American states not attending.

When it comes to those that did attend standing for ‘human rights’, those representatives come from countries whose own human rights come into question.  “There is a very profound conceptual disagreement about whether the best way to counter violent extremism is through human rights and civil society or through an iron fist,” said Marc Lynch, director of the Institute for Middle East Studies at George Washington University. The Obama administration wants “to project the human rights side, but you look at the people they’re working with and fighting alongside, and there’s a lot more to it than that.”

Elisa Massimino, president of the advocacy group Human Rights First, attended Thursday’s meeting and was struck by the juxtaposition of rhetoric and reality: “We’re sitting in that room with representatives of governments that are part of the problem,” she said. “If the president believes what he’s saying, then the actions that these governments are taking are undermining our supposedly shared agenda.”

From the outside, however, the summit appears hastily organized and fraught with gaps. As of Friday, neither the White House nor the State Department had announced the names of any attendees, an agenda or what specifically the summit is designed to achieve. The summit is scheduled to take place on Wednesday, Feb. 18, and Thursday, Feb. 19.

“It’s bizarre,” says Naureen Shah, a former legislative counsel with the ACLU who recently became the security and human rights director at Amnesty International. “On the one hand they’ve been touting this summit and trying to showcase the U.S. and global efforts to combat violent extremism. But on the other hand, they’re not providing any information about what’s going to happen.”

State Department spokeswoman Jen Psaki declined to comment last week on whether Russia would be participating in the summit, saying she did not currently have the list of invitees. She anticipated that, in the days before the summit, “we’ll do a briefing on the plans for the summit, what we hope to accomplish, et cetera.”

The takeaway was Barack Obama’s edit to reach out to governance in Muslim countries and require them to be more sensitive to the plight of those in poverty that would build programs generating educational access and later jobs. This is where the ‘community organizing’ comes into play.

Michelle Malkin says it best, laying it out for required reading.

Instead of killing jihadists, keeping them off our soil, locking up their poisonous spiritual agitators, and shutting off their terror-funding pipelines, President Obama called on America and the world to “invest” in unnamed immigrant “communities” vulnerable to unnamed extremism. Some of the most generous welfare states on the planet have suffered horrific jihad attacks this year. Liberal Denmark’s soft-on-jihad rehab program has been a disaster. But that hasn’t stopped State Department spokes-babbler Marie Harf from mewling incessantly about “combating poverty” to combat ISIS. Vice President Joe Biden opened the convention of jihad-coddlers on Tuesday by emphasizing the need for “respect” (cha-ching) and “a sense of community.” White House senior aides spoke generically about terrorists of “all shapes and sizes,” as they studiously avoided the precise nature and identity of the perpetrators of evil that precipitated the meeting. Screw that. Muslim jihadists chopped off the heads of 21 Egyptian Coptic Christians in Libya last weekend. Muslim jihadists launched deadly shooting sprees in Copenhagen at a cartoonists’ free-speech event and a synagogue. Muslim jihadists murdered Jews at a kosher deli in Paris and slaughtered the entire staff of Charlie Hebdo over their drawings. Muslim jihadists caged and burned alive Jordanian pilot Moaz al-Kasasbeh. Muslim jihadists threw gays off buildings in Iraq. Muslim jihadists beheaded journalists James Foley and Steven Sotloff, humanitarian workers Alan Henning and Peter Kassig, and Japanese nationals Haruna Yukawa and Kenji Goto Jogo. Muslim jihadists have kidnapped and slaughtered thousands of innocent men, women, and children in Nigeria. The solution, the Obama administration wants the 60 nations that sent representatives to D.C. to learn, is a super-sized community-organizing campaign. It’s Jobs for Jihad Delinquents! No, this is not a Saturday Night Live anniversary skit. Politically correct public officials from L.A., Boston, and Minnesota are holding seminars on their “outreach” efforts to disaffected yoots as shining counterterrorism models. In Minneapolis, where al-Shabaab recruiters have metastasized, the U.S. attorney has bought into Muslim grievance-mongers’ complaints that “immigrant youngsters remain marginalized, without access to adequate education, employment, and other opportunities.” Social-justice warriors are united: Less “marginalization.” More midnight basketball. What a bloody crock. States like Minnesota and Maine have bent over backward to resettle thousands upon thousands of Somali refugees — putting their demands for halal-food freebies, taxpayer-funded foot baths, and “cultural sensitivity” over the safety and well-being of native-born citizens and taxpayers struggling to make ends meet. While grandmothers and disabled soldiers and breastfeeding moms must submit to invasive TSA screening, Muslim leaders in Minneapolis have the feds groveling in apology over increased scrutiny of some Somalis. I mean, it’s not like dozens of young male members of their “community” are flying off to the Horn of Africa and the Middle East to take up arms for jihad after benefiting from America’s blind generosity. Oh, wait. They are. The persistent left-wing myth of the poor, oppressed jihadist is absolute madness. How many times do we have to remind the clueless kumbaya crowd that al-Qaida mastermind Ayman al-Zawahiri had a medical degree, as did Hamas bigwig Abdel al-Rantisi and the seven upper-crust doctors who helped plan the 2007 London/Glasgow bombings? Or that al-Qaida scientist Aafia Siddiqui studied microbiology at MIT and did graduate work in neurology at Brandeis. Terror architect Khalid Sheikh Mohammed earned a mechanical-engineering degree at North Carolina Agricultural and Technical State University. 9/11 lead hijacker Mohamed Atta majored in urban planning at a German technical university. Ahmed Omar Saeed Sheikh attended the London School of Economics before abducting and murdering American journalist Daniel Pearl. And Osama bin Laden and Sayyid Qutb (Colorado State Teachers College) had plenty of exposure to wealth and Western studies. The “root cause” of their evildoing is not a lack of employment, education, community centers, iftar dinners at the White House, or publicly funded “opportunities.” When will these fools in high office learn that you can’t bribe these adherents of Stone Age ideology to behave? They don’t want jobs. They want blood. Revenge. Islamist dominance. Ruthless extermination of Jews, gays, Coptic Christians, Christian aid workers, cartoonists, journalists, apostates, and infidels of all shapes and sizes. The M****m j*******s are not victims of Islamophobic intolerance and Western callousness. We are the victims of our own leaders’ bleeding-heart overindulgence and reckless refusal to deal with reality.

Winning the hearts and minds of jihad….riiiiight….. maybe including Obamacare, Obama phones, the SNAP cards and Section 8 housing will work too.

Ask the Clinton’s About These Foreigners Please

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How about the HSBC bank that is embroiled in a major scandal? How long have the Clinton’s known the Brit Richard Caring? Have Hillary and Bill describe their relationship with Frank Giustra, a Canadian mining magnet. Then of course there is Huma Abedin, the Dubai Foundation, Friends of Saudi Arabia, Hani Masri, Oman, Saban Family Foundation and the Soros Foundation, just handful of the Clinton’s foreign friendly network.

So, where does all this lead? Foreign friends, NGO’s, foundations and powerbrokers buy presidential candidates and Hillary is no exception. She using the same page out of the money playbook that Barack Obama used.

Foreign Government Gifts to Clinton Foundation on the Rise

Donations raise ethical questions as Hillary Clinton ramps up expected 2016 bid

The Clinton Foundation has dropped its self-imposed ban on collecting funds from foreign governments and is winning contributions at an accelerating rate, raising ethical questions as Hillary Clinton ramps up her expected bid for the presidency.

Recent donors include the United Arab Emirates, Saudi Arabia, Oman, Australia, Germany and a Canadian government agency promoting the Keystone XL pipeline.

In 2009, the Clinton Foundation stopped raising money from foreign governments after Mrs. Clinton became secretary of state. Former President Bill Clinton, who ran the foundation while his wife was at the State Department, agreed to the gift ban at the behest of the Obama administration, which worried about a secretary of state’s husband raising millions while she represented U.S. interests abroad.

The ban wasn’t absolute; some foreign government donations were permitted for ongoing programs approved by State Department ethics officials.

The donations come as Mrs. Clinton prepares for an expected run for the Democratic nomination for president, and they raise many of the same ethical quandaries. Since leaving the State Department in early 2013, Mrs. Clinton officially joined the foundation, which changed its name to the Bill, Hillary & Chelsea Clinton Foundation, and has become a prodigious fundraiser as the foundation launched a $250 million endowment campaign, officials said.

A representative for Hillary Clinton referred all questions to the Clinton Foundation.

A spokesman for the Clinton Foundation said the charity has a need to raise money for its many projects, which aim to do such things as improve education, health care and the environment around the world. He also said that donors go through a vigorous vetting process.

One of the 2014 donations comes from a Canadian agency promoting the proposed Keystone pipeline, which is favored by Republicans and under review by the Obama administration. The Foreign Affairs, Trade and Development agency of Canada, a first-time donor, gave between $250,000 and $500,000. The donations, which are disclosed voluntarily by the foundation, are given only in ranges.

One of the agency’s priorities for 2014-2015 was to promote Keystone XL “as a stable and secure source of energy and energy technology,” according to the agency’s website. Mrs. Clinton’s State Department was involved in approving the U.S. government’s initial environmental-impact statement. Since leaving State, Mrs. Clinton has repeatedly declined to comment on Keystone.

The Canadian donation originated from an agency office separate from the one that advocates for Keystone XL, a Foundation spokesman said.

While the Canadian donation didn’t appear in a Clinton Foundation online database of donors until recently, the donation of about $480,000 was announced in June in Cartagena, Colombia, where the program provides job training for youths.

Kirk Hanson, director of the Markkula Center for Applied Ethics at Santa Clara University in California, said the Clintons should immediately reimpose the ban, for the same reasons it was in place while Mrs. Clinton led U.S. foreign policy.

“Now that she is gearing up to run for president, the same potential exists for foreign governments to curry favor with her as a potential president of the United States,” he said.

If she becomes president and deals with these nations, “she can’t recuse herself,” added James Thurber, director of American University’s Center for Congressional and Presidential Studies. “Whether it influences her decision making is questionable, but it is a legitimate thing to focus on by her political opposition.”

The donations weren’t announced by the foundation and were discovered by The Wall Street Journal during a search of donations of more than $50,000 posted on the foundation’s online database. Exactly when the website was updated isn’t clear. The foundation typically updates its website with the previous year’s donations near the beginning of the year. All 2014 donations were noted with asterisks.

At least four foreign countries gave to the foundation in 2013—Norway, Italy, Australia and the Netherlands—a fact that has garnered little attention. The number of governments contributing in 2014 appears to have doubled from the previous year. Since its founding, the foundation has raised at least $48 million from overseas governments, according to a Journal tally.

United Arab Emirates, a first-time donor, gave between $1 million and $5 million in 2014, and the German government—which also hadn’t previously given—contributed between $100,000 and $250,000.

A previous donor, the Kingdom of Saudi Arabia, has given between $10 million and $25 million since the foundation was created in 1999. Part of that came in 2014, although the database doesn’t specify how much.

The Australian government has given between $5 million and $10 million, at least part of which came in 2014. It also gave in 2013, when its donations fell in the same range.

Qatar’s government committee preparing for the 2022 soccer World Cup gave between $250,000 and $500,000 in 2014. Qatar’s government had previously donated between $1 million and $5 million.

Oman, which had made a donation previously, gave an undisclosed amount in 2014. Over time, Oman has given the foundation between $1 million and $5 million. Prior to last year, its donations fell in the same range.

The Clinton Foundation has set a goal of creating a $250 million endowment, an official said. One purpose was secure the future of the foundation’s programs without having to rely so much on the former president’s personal fundraising efforts, the official said.

The Saudi Arabia, United Arab Emirates and Oman donations went to the endowment drive.

Obama Approves Minsk Agreement, Great for Putin

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The new Minsk ceasefire agreement empowers Russia-backed separatists with a number of leverages over Ukraine. If implemented, the agreement could provide a functioning framework for a mutually acceptable political settlement. In the event of non-implementation, a re-eruption of hostilities is highly likely.

                          

In Minsk on 12th February, Ukrainian President Petro Poroshenko, Russian President Vladimir Putin, German Chancellor Angela Merkel and French President François Hollande managed to reach an agreement on the ceasefire in Eastern Ukraine, and the outlines of a conflict settlement.

Formally, the document was signed not by the heads of state, but by the Trilateral Contact Group (composed of representatives of Ukraine, Russia and the OSCE) as well as the leaders of the Donetsk and Luhansk separatists. This indirect scheme allowed Kyiv to reach an agreement with the separatists without formally recognizing them as legitimate partners.

The document, composed of thirteen points, refers to the separatist entities as “particular districts of Donetsk and Luhansk oblasts”, using the same wording as the September 2014 Minsk agreement. Hence, neither their self-proclaimed names, Donetsk and Luhansk People’s Republics, nor the Russian term Novorossiya are used, which is a strong signal that none of the parties questions that these regions belong to Ukraine.

                       

*** So what else needs to be known? Who is still supporting Putin and why….

The segments of the Russian population that, arguably, have the best chance to dissuade President Vladimir Putin from his actions in Ukraine are business leaders and the rich. But despite having lost millions of dollars because of sanctions against Russia , the falling ruble and low oil prices, they still rally behind their leader-both privately and publicly.

Despite a cease-fire announced Thursday , Western sanctions on Russia over its support of insurgents in neighboring Ukraine have already pushed Russia’s borrowing costs higher and crushed its currency (Exchange: RUBUSD=). The problems have been made worse by the price of oil, whose fall since September has further undercut the petro-state’s ability to fund itself. Yet Putin still enjoys broad domestic support, and experts tell CNBC that the country’s monied class is no exception. Timothy Ash, who heads emerging markets research at Standard Bank (Johannesburg Stock Exchange: SBK-ZA), summarizes the phenomenon in a few words: “Nationalism plays very well with many people,” he told CNBC

Alexander Kliment, director of Russia research at Eurasia Group, said the sanctions have actually strengthened elite support for Putin because they have bolstered the government’s position as a last-resort lender for them. “Also, sanctions have inflamed patriotic sentiment and been a convenient scapegoat for economic woes,” Kilment told CNBC.

“If you are an oligarch, it’s bad to suffer sanctions from the West,” he said, “but you’re still pretty well-off as part of the Russian system. It’s an awfully big leap to turn your back on that, which would risk literally everything you have.” Read More Total CEO: US will not become energy independent Edward Mermelstein, a New York-based attorney who works with Russian business clients, told CNBC that Putin’s popularity is no longer dependent on finance as much as the might of Russia.

“As long as the country is perceived as strong, he will continue to dominate domestically. The Russian citizen can withstand famine, but they cannot withstand the appearance of weakness,” he said.

While some companies are getting hit hard by what Russian Finance Minister Anton Siluanov has acknowledged is an economy in “dire straits,” others are finding ways to benefit.

*** Now comes the alternate banking system. Almost 91 domestic credit institutions have been incorporated into the new Russian financial system, the analogous of SWIFT, an international banking network.The new service, will allow Russian banks to communicate seamlessly through the Central Bank of Russia. It should be noted that Russia’s Central Bank initiated the development of the country’s own messaging system in response to repeated threats voiced by Moscow’s Western partners to disconnect Russia from SWIFT.

Russian Prime Minister Dmitry Medvedev meeting with miniters

SWIFT (The Society for Worldwide Interbank Financial Telecommunication) is a Belgium-based international organization that provides services and a standardized environment for global banking communicating that allows financial institutions to send and receive messages about their transactions. Earlier this month Russian Deputy Prime Minister Igor Shuvalov expressed confidence that Russia would not be disconnected from SWIFT. In her turn, Russian Central Bank First Deputy Chair Ksenia Yudaeva called upon Russian civilians and financial institutions not to dramatize the current situation.Russian experts point to the fact that Western businesses would face severe losses if they expelled Russia from the international SWIFT system. On the other hand, the alternative system launched by Russia might reduce the negative impacts caused by measures imposed by the West, including possible disconnection from SWIFT, and diminish Western financial dominance over Russia.

 

HSBC Web of Corruption Includes Familiar Names

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British bank HSBC Holdings Plc (HSBA.L) admitted on Sunday failings by its Swiss subsidiary, in response to media reports it helped wealthy customers dodge taxes and conceal millions of dollars of assets.

“We acknowledge and are accountable for past compliance and control failures,” HSBC said on Sunday after news outlets including French newspaper Le Monde and Britain’s The Guardian published allegations about its Swiss private bank.

The Guardian, along with other news outlets, cited documents obtained by the International Consortium of Investigative Journalists (ICIJ) via Le Monde.

HSBC said that its Swiss arm had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.

The Guardian alleged in its report that the files showed HSBC’s Swiss bank routinely allowed clients to withdraw “bricks” of cash, often in foreign currencies which were of little use in Switzerland, marketed schemes which were likely to enable wealthy clients to avoid European taxes and colluded with some to conceal undeclared accounts from domestic tax authorities.

HSBC said the Swiss private banking industry, long known for its secrecy, operated differently in the past and this may have resulted in HSBC having had “a number of clients that may not have been fully compliant with their applicable tax obligations.”

 

HSBC’s clients linked to dictators, arms dealers and tax dodgers

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws.

The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion. They provide a rare glimpse inside the super-secret Swiss banking system — one the public has never seen before.

The documents, obtained by the International Consortium of Investigative Journalists (ICIJ) via the French newspaper Le Monde, show the bank’s dealings with clients engaged in a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities. They also show private records of famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.

These disclosures shine a light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, one of the world’s largest banks.

How the offshore banking industry shelters money and hides secrets has enormous implications for societies across the globe. Academics conservatively estimate that $7.6 trillion is held in overseas tax havens, costing government treasuries at least $200 billion a year.

In many instances the records do describe questionable behavior, such as bankers advising clients on how to take a range of measures to avoid paying taxes in their home countries — and customers telling bankers that their accounts are not declared to their governments.

Highlights from ICIJ’s investigation:

The reporters found the names of current and former politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, the Philippines and Algeria, among others. They found several people on the current U.S. sanctions list, such as Selim Alguadis, a Turkish businessman alleged to have supplied sophisticated electrical goods to Libya’s secret nuclear weapons project, and Gennady Timchenko, a billionaire associate of Russian President Vladimir Putin and one of the main targets of sanctions imposed on Russian individuals and businesses in response to the annexation of Crimea and the crisis in eastern Ukraine.

The files reflect a spectrum of royalty, from King Mohammed VI of Morocco to the Crown prince of Bahrain, Prince Salman bin Hamad bin Isa Al Khalifa, to Prince and Princess Michael of Kent, the beloved cousin of Queen Elizabeth II of England, to dozens of members of Saudi Arabia’s ruling family. Many were partial or full beneficial owners of accounts. The role of the King of Morocco was not specified.

Business figures and political donors from the U.S. include the billionaire owner of the Victoria’s Secret lingerie chain, Les Wexner, who in 2012 donated $250,000 to a super PAC supporting former Republican presidential candidate Mitt Romney; the Israeli diamond-dealing Steinmetz family, and the financier and philanthropist S. Donald Sussman, whose account predated his marriage to Democratic Congresswoman Chellie Pingree of Maine.

A representative for Sussman said the account was not his, adding that he had made a passive investment in a technology venture fund. The representative said it was this fund that had the account, the existence of which he learned for the first time when questioned by ICIJ. “Mr. Sussman’s investments were minority interests,” the spokesman said, “and he had no involvement in the funds’ management, investment decisions, or other activities.”

An analysis of the files by ICIJ shows that many individuals linked to accounts took extra precautions to protect their identities, even though HSBC staff repeatedly assured customers they were already bound by tight Swiss banking secrecy.

Clinton Foundation Donors

The files show Richard Caring, a major donor to British politics, transferring $1 million to the Clinton Foundation, a nonprofit set up by the former U.S. President Bill Clinton with the stated mission to “strengthen the capacity of people in the United States and throughout the world to meet the challenges of global interdependence.”

The donation to the Clinton Foundation was requested in December 2005. The previous month, Caring funded a champagne and caviar extravaganza at Catherine the Great’s Winter Palace in St Petersburg, Russia, flying in 450 guests to be entertained by Sir Elton John and Tina Turner and addressed by Bill Clinton. The event raised more than £11 million for a children’s charity.

A number of other prominent donors to the Clinton Foundation appear in the files, including the Canadian businessman Frank Giustra and German motor racing superstar Michael Schumacher, a seven-time Formula One champion. A representative of Schumacher, who is listed as a beneficial owner of an account closed in 2002, told ICIJ that he is a long-term resident of Switzerland.

A spokesman for the Clinton Foundation told The Guardian it “has strong donor integrity and transparency practices that go well beyond what is required of U.S. charities, including the full disclosure of all of our donors.”

Links to Al Qaeda?

HSBC’s clients’ links to Al Qaeda were first publicly raised in the July 2012 U.S. Senate report, which cited an alleged internal Al Qaeda list of financial benefactors. The Senate report said the list came to light after a search of the Bosnian offices of the Benevolence International Foundation, a Saudi-based nonprofit organization that the U.S. Treasury Department has designated as a terrorist organization.

Osama bin Laden, the mastermind behind the 9/11 attacks, referred to the handwritten list of the 20 names as the “Golden Chain.”

From the moment the names on the Golden Chain list were made public in news reports in the spring of 2003, the Senate subcommittee stated that HSBC should have been “on notice” and aware these powerful business figures were high risk clients.

Though the significance of the Golden Chain list has since been questioned, the ICIJ found what appear to be three Golden Chain names with HSBC Swiss accounts that existed after that date.

Read the full story on ICIJ.org and explore the data.

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