See Who Does Exploit Offshore Tax Havens

Posted on April 19, 2016April 19, 2016 by Denise Simon

Offshore investment is among the murkiest sectors of the financial world. That’s by design — keeping money offshore can help shield money from tax authorities, obscure its origin and conceal the genuine owners. There are many legitimate reasons for opening an offshore banks account. Wealthy people do it to better manage their investment portfolios or protect their assets. Offshore accounts can also help the rich pay less tax — legally.

However, offshore accounts are also the lynchpin in many illegal tax avoidance schemes. Owners go to great lengths to conceal the existence of these accounts from their home governments, and they are often helped by lax disclosure rules in offshore tax havens.

Investors caught trying to hide their accounts can face steep penalties. More here from CNN.

US corporations have $1.4tn hidden in tax havens, claims Oxfam report

Charity analysis of the 50 biggest US businesses claims Apple have $181bn held offshore, while General Electric has $119bn and Microsoft $108bn

Guardian: US corporate giants such as Apple, Walmart and General Electric have stashed $1.4tn (£980bn) in tax havens, despite receiving trillions of dollars in taxpayer support, according to a report by anti-poverty charity Oxfam.

The sum, larger than the economic output of Russia, South Korea and Spain, is held in an “opaque and secretive network” of 1,608 subsidiaries based offshore, said Oxfam.

The charity’s analysis of the financial affairs of the 50 biggest US corporations comes amid intense scrutiny of tax havens following the leak of the Panama Papers.

And the charity said its report, entitled Broken at the Top was a further illustration of “massive systematic abuse” of the global tax system.

Technology giant Apple, the world’s second biggest company, topped Oxfam’s league table, with some $181bn held offshore in three subsidiaries.

Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing, was second with $119bn stored in 118 tax haven subsidiaries.

Computing firm Microsoft was third with $108bn, in a top 10 that also included pharmaceuticals giant Pfizer, Google’s parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state.

Oxfam contrasted the $1.4tn held offshore with the $1tn paid in tax by the top 50 US firms between 2008 and 2014.

It pointed out that the companies had also enjoyed a combined $11.2tn in federal loans, bailouts and loan guarantees during the same period.

Overall, the use of tax havens allowed the US firms to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014.

The charity said this had helped firms spend billions on an “army” of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers.

The top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government, Oxfam said.

“For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts,” said Oxfam.

Robbie Silverman, senior tax adviser at Oxfam said: “Yet again we have evidence of a massive systematic abuse of the global tax system.

“We can’t go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill.

“Governments across the globe must come together now to end the era of tax havens.”

Oxfam estimates that tax avoidance by US corporations costs the world’s largest economy some $111bn a year, but said it was also fuelling the global wealth divide by draining $100bn from the poorest countries.

“Tax dodging practised by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth,” the report said.

Oxfam also singled out British overseas territories such as Bermuda for their popularity with US firms seeking to slash their tax bill by “profit-shifting”.

In 2012, said Oxfam, US firms reported $80bn of profit in Bermuda, more than their combined reported profits in Japan, China, Germany and France, four of the world’s five largest economies.

The charity called on the US government to pass the Stop Tax Haven Abuse Act, including a requirement for firms to report their tax contribution on a country-by-country basis, there is only one caution when doing this though and that is to not be mistaken that a country is a tax haven when in fact it isn’t, for example many people refer to Andorra as the tax haven of Andorra however Andorra is not actually a tax haven, one way to be sure whether a country is a legally classed tax haven is refer to the FATF blacklist, it lists every country that is recognised by government as an actual tax haven.

Country-by-country reporting has been recommended by a host of non-governmental organisations and charities to prevent companies from artificially shifting their income out of the poorest countries.

Hillary Granted Big $$ to Yunus and Grameen Bank

Posted on April 18, 2016April 18, 2016 by Denise Simon

Pssst, Stanley Ann Dunham, Barack’s mother also had historical connections to Grameen Bank. The audio and article are found here.

Thank you Secretary of State, Hillary Clinton, for your wonderful speech last Friday, January 23rd.

We have, with President Obama, someone who believes in development and diplomacy. Coming to the State Department yesterday sent a very strong signal. A few of you may even know, as I mentioned in my testimony before the Foreign Relations Committee, that the President’s late mother was an expert in microfinance and worked in Indonesia. I have been involved in microfinance since 1983, when I first met Muhammad Yunus and had Muhammad come to see us in Arkansas so that we could use the lessons from the Grameen Bank in our own country. I was actually looking forward to being on a panel with the President’s mother in Beijing on microfinance.

You were very warmly welcomed by foreign service workers who have been struggling through eight years of the US losing its moral footing in the world. You brought up a favorite subject, microcredit, and two of my favorite people (along with yourself), President Obama’s late mother, Ann Dunham Soetero, and Muhammad Yunus, my “boss.”

One of those helping President Obama’s late mother organize that meeting was Lawrence Yanovitch now heading up Poverty issues at the Gates Foundation. He spoke to me about his work with Ann Dunham Soetero when in Paris last year. This Obama victory is also a victory for her and her work with microcredit.

Microcredit is not the only answer but it surely should be an important part of not only how we restructure our own American economy, but how we support others around the world.

Microcredit helps women. Microcredit helps fight against fundamentalism and violence against women, children, immigrant communities, and makes the business-model approach to ending poverty a human one.

Muhammad Yunus’ work with the Grameen Bank has now made it to the US with Grameen America. Organizations such as the Grameen Foundation have been replicating this model around the world.

President Obama’s late mother “got it,” Hillary Clinton “got it”…years before others. Now let’s grow it at home and around the world. It’s one banking system that is actually working. What other bank these days is made up mostly of women borrowers and can claim a 98-99% payback rate? Surely not Citibank!

EXCLUSIVE: Disgraced Clinton Donor Got $13M In State Dept Grants Under Hillary

Thank you to DailyCaller News Foundation: Hillary Clinton’s Department of State awarded at least $13 million in grants, contracts and loans to her longtime friend and Clinton Foundation donor Muhammad Yunus, despite his being ousted in 2011 as managing director of the Bangladesh-based Grameen Bank amid charges of corruption, according to an investigation by The Daily Caller News Foundation.

The tax funds were given to Yunus through 18 separate U.S. Agency for International Development (USAID) award transactions listed by the federal contracting site USAspending.gov.

They highlight how Clinton mixed official government business with Clinton Foundation donors. Yunus gave between $100,000 to $300,000 to the foundation, according to the Clinton Foundation website.

Groups allied to Yunus received an additional $11 million from USAID, according to the contracting website. Yunus had business relationships with all of them.

For more than 30 years, Yunus oversaw the distribution of Grameen Bank “micro-credit loans” to the poor to set up small businesses. He was eventually regarded as a saint among many anti-poverty activists.

But he also got a big helping hand over the three decades Bill and Hillary Clinton actively promoted him and repeatedly showcased him as a celebrity figure at major Clinton Foundation functions.

The former president is credited with launching a personal lobbying campaign to press the Nobel Committee to award its peace prize to the Yunus. It did so in 2006.

Secretary Clinton’s mixing of official work with foundation donors is reportedly the focus of a second, less publicized FBI public corruption investigation of the former secretary of state. The more widely known FBI probe focuses on her use of a private email server located in her New York residence to conduct official government business.

“Presumably if The Daily Caller News Foundation has this information, then the FBI has it,” said Robert T. Hosko, former assistant director of the Bureau’s criminal division. “Certainly, the FBI would want to know the nature of these relationships,” he told TheDCNF.

“That’s precisely the sort of thing that the FBI would be looking at and should be looking at to determine whether there’s an official act of corruption,” he said.

The FBI declined comment, saying, “we generally do not comment on whether or not we’re conducting a particular investigation.”

Clinton was not shy about using her post as America’s chief diplomat on behalf of Yunus and Grameen Bank when the Bangladesh government announced an investigation into multiple allegations of financial mismanagement by the political activist.

Clinton rocked the Bangladeshi political establishment when she publicly intervened on behalf of Yunus in 2011 as the South Asian government prepared to launch its probe.

With Bangladesh Foreign Minister Dipu Moni — also a woman — at her side, Clinton said at a State Department news conference that “we have expressed directly to the government our concern and hope that the Grameen Bank … is able to continue to function productively on behalf of the people of Bangladesh.”

Emails from Clinton’s private server disclose that Bill and Hillary Clinton closely monitored the Bangladesh government’s investigation of Yunus, who is a high-profile fixture at most of the Clinton Foundation’s major gatherings. The foundation features him at 37 places on its website.

David Bossie, president of the conservative activist group Citizens United and a long-time Clinton critic, called for the FBI to look into possible conflicts of interest linked to the long association between Yunus and the Clintons.

“The mixing of State Department and U.S. government business with Clinton Foundation donors and interests is a prime example of what the FBI could be investigating in addition to the private email server setup.” Bossie told TheDCNF.

The Clinton-Yunus relationship dates from Bill Clinton’s tenure as Arkansas governor, when he and Hillary fell in love with the concept of micro-credit loans. Yunus, then a Bangladesh economist, has championed the micro-credit cause through Grameen Bank since 1978.

Things went terribly wrong for Yunus and Grameen Bank about five years ago when a number of independent authorities decided to take a closer look at the bank and the 50 inter-related enterprises Yunus created, most of which operate in Third World countries where there is little financial oversight.

Former Secretary Clinton and her husband closely followed Yunus’ mounting problems. A June 11, 2012 email from Amitabh Desai, the foundation’s foreign policy director, for example, alerted Hillary Clinton of a Yunus response to the Bangladesh investigation.

“In case you haven’t seen it already, WJC wanted HRC and you to see this,” Desai said in the email routed through Cheryl Mills, Hillary Clinton’s chief of staff, and Huma Abedin, her deputy chief of staff. “WJC” is Bill Clinton and “HRC” is Hillary Clinton.

Hosko said the email “is potentially an indicator of the co-mingling of state business with the Clinton Foundation. It is very concerning.”

Clinton’s aid to Yunus also included 18 grants, contracts and loans awarded to two of his America-based foundations, the Grameen Foundation USA and Grameen America, according to USASpending.gov.

The awards, totaling $13 million, were issued by the U.S. Agency for International Development, the development arm of the State Department, beginning when Clinton became secretary of state. Another $11 million in federal funds went to organizations allied with Yunus.

When asked to explain the Yunus grants and loans, USAID Spokesman Raphael Cook said the agency didn’t have the “manpower” to respond to questions about the transactions.

Other federal agencies also opened their coffers to Yunus after Clinton entered the administration. The Department of Treasury awarded a $600,000 grant directly to Grameen America under a fund designed to boost financial institutions in community development. A Treasury Department spokesman declined to provide any details beyond the fact the funds were for activities in New York.

A series of Small Business Administration grants to Grameen America also began in July 2011, totaling $934,000. Those grants were for “salaries and expenses” for the foundation to operate its New York offices where Clinton once a U.S. senator.

In addition to being revered among anti-poverty activists, Yunus was popular among elements of the Bangladesh military. When a group of generals overthrew the Bangladesh government in January 2007, Yunus considered establishing a new political party to lead the new military-led government, thereby legitimizing the coup.

The BBC reported April 7, 2007, that “the army would sponsor Nobel Peace prize winner Dr. Muhammad Yunus as a new leader.”

Sabir Mustafa, the BBC’s Bengali Service editor, added that “Dr. Yunus is still viewed as a credible candidate by elements in the army.” In the end, Yunus opted not to create the new party.

The Grameen Foundation, USA did not respond to a request for comment from TheDCNF. Neither did spokesmen for the Clinton presidential campaign or the Clinton Foundation.

Obama Executive Orders on Rotary Phones and Cable Boxes

Posted on April 15, 2016April 15, 2016 by Denise Simon

It is all to level the playing field eh? An executive order will fix corporate competition. I see another objective to punish corporate success and likely a matter of picking winners and losers. Read on, your thoughts are invited.

If this really does stimulate quality competition without raising costs, then great….skeptics abound. Frankly this has all the hallmarks of providing free cable and internet access to a sector of the population, with hidden charges in our bills much like the Obamaphone program.

Oh yeah, just what are the hidden technologies of those cable boxes anyway? Example, the Comcast culprit.

Thinking Outside the Cable Box: How More Competition Gets You a Better Deal

Summary:

Learn how President Obama’s new efforts are spurring competition to make life better for consumers.

Today, building on efforts over the last seven years, the President is launching a new initiative to stoke competition across our economy, so that no corporation can unfairly squeeze their competitors, their workers, or their customers at everyone’s expense. Stronger competition matters because it can deliver lower prices, higher quality, and better customer service for consumers. It gives workers more of a voice and can help strengthen wage growth. And it’s what entrepreneurs need to get a fair shot at growing their businesses and creating jobs.

Before There Were Cable Boxes

Before getting into the details, a little historical context (and more on a specific action we’re taking today).

Millenials are often defined as the generation born after 1980. But they could also be described as the generation that doesn’t remember what it’s like to be forced to rent a big, overpriced, basic phone from the phone company.

Until the early 1980s, the phone company had a monopoly—not just on the wire to your house but, in many cases, on the phone you plugged into that wire.

And the result wasn’t pretty.

Phones had little variety, evoking the famous Henry Ford quote — “You can have any color, so long as it’s black” — and only the most basic functionality. Worse yet, households had to pay a fee each month to rent these phones that added up over time to many multiples of what they would have paid to purchase a similar (or fancier) phone themselves.

Then, all that changed when the Federal Communications Commission (FCC) and others took action to open up phones to competition. This competition and the technological progress it helped drive, led to a proliferation of digital dialing, built-in answering machines, a panoply of styles, cordless phones, and other innovations.

A similar dynamic has taken hold elsewhere in American homes today: According to a recent study, 99 percent of all cable subscribers lease a set-top box to get their cable and satellite programming.

It sits in the middle of our living rooms, and most of us don’t think twice about it. But that same study found that the average household pays $231 per year to rent these often clunky boxes. And, while the cost of making these boxes is going down, their price to consumers has been rising.

Like the telephones in 1980s, that’s a symptom of a market that is cordoned off from competition. And that’s got to change.

How We’re Taking Action To Fix It

That’s why today the President announced that his Administration is calling on the FCC to open up set-top cable boxes to competition. This will allow for companies to create new, innovative, higher-quality, lower-cost products. Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want — including their cable or satellite content, as well as online streaming apps — in one, easier-to-use gadget.

But we’re not stopping there. In many ways, the set-top box is the mascot for a new initiative we’re launching today. That box is a stand-in for what happens when you don’t have the choice to go elsewhere—for all the parts of our economy where competition could do more.

Across our economy, too many consumers are dealing with inferior or overpriced products, too many workers aren’t getting the wage increases they deserve, too many entrepreneurs and small businesses are getting squeezed out unfairly by their bigger competitors, and overall we are not seeing the level of innovative growth we would like to see. And a big piece of why that happens is anti-competitive behavior—companies stacking the deck against their competitors and their workers. We’ve got to fix that, by doing everything we can to make sure that consumers, middle-class and working families, and entrepreneurs are getting a fair deal.

That’s why today, the President announced a broader new initiative through an Executive Order that calls on departments and agencies to make further progress through specific, pro-competition executive actions that empower and inform consumers, workers, and entrepreneurs. In 60 days, agencies will report back on specific areas where we can make additional progress.

Alongside that announcement, the White House Council of Economic Advisers (CEA) released a new issue brief that describes the many benefits of competition, highlights recent work by the independent antitrust authorities, and argues that consumers, workers, entrepreneurs, and small businesses would benefit from additional policy actions to promote competition within a variety of industries. These new steps will build on pro-competition progress we’ve made—from cell phone unlocking to net neutrality, from cracking down on conflicts of interest in retirement advice to efforts to free up essential technologies so that big incumbent companies can’t crowd out their competitors.

In the coming months, we’ll be doing everything we can across government to build on that progress and deliver on the pro-competition initiative we’re announcing today.

Obamaphones Back in the News, the Scandal was a Secret

Posted on April 13, 2016April 13, 2016 by Denise Simon

Primer: Remember YOU, the taxpayer are subsidizing this program.

FNC/WSJ: The U.S. government spent about $2.2 billion last year to provide phones to low-income Americans, but a Wall Street Journal review of the program shows that a large number of those who received the phones haven’t proved they are eligible to receive them.

The Lifeline program—begun in 1984 to ensure that poor people aren’t cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. Payouts under the program have shot up from $819 million in 2008, as more wireless carriers have persuaded regulators to let them offer the service.

The FCC on the Lifeline program.

FCC Kept ‘Obamaphone’ Fraud Under Wraps Until After It Expanded Program

Commissioners were instructed not to reveal $5 million fine until day after controversial Lifeline expansion vote

Federal regulators were instructed to keep a massive fraud investigation under wraps until a day after a controversial vote to expand a program that was allegedly used to bilk taxpayers of tens of millions of dollars, one those regulators claims.

The Federal Communications Commission on Friday announced that it would seek $51 million in damages from a cell phone company that allegedly defrauded the federal Lifeline program of nearly $10 million.

The commission’s five members unanimously backed the Notice of Apparent Liability (NAL), but Republican commissioner Ajit Pai parted from his colleagues in a partial dissent. According to Pai, he and other commissioners were told not to reveal the details of its investigation until April 1, a day after the FCC voted to expand the Lifeline program.

“Commissioners were told that the Notice of Apparent Liability could not be released or publicly discussed until April 1, 2016, conveniently one day after the Commission was scheduled to expand the Lifeline program to broadband,” Pai wrote. “That’s not right.”

Pai did not say who issued that directive. However, it had the effect of preventing public knowledge of widespread fraud in the Lifeline program ahead of a contentious vote on expanding it despite persisting concerns about a lack of internal safeguards.

FCC spokesman Will Wiquist insisted that the timing was completely coincidental. “The timing of the enforcement action was in no way related to the timing of the vote on the program modernization,” he said in an email.

Lifeline has faced controversy over enrollment requirements that its critics say are too lax and vulnerable to fraud. The service, which subsidizes cell phone plans for low-income Americans, allows beneficiaries to enroll using cards issued for the Supplemental Nutrition Assistance Program (SNAP), a welfare program that has also faced fraud allegations.

Critics of the Lifeline program began calling its subsidized cell phones “Obamaphones” early in the Obama administration in response to viral YouTube videos of beneficiaries thanking the president for their free phones. The program was actually created under President Ronald Reagan.

The FCC’s NAL last week accused cell phone provider Total Call Mobile, which provides Lifeline services in 19 states, of “systematic and egregious misconduct” and “widespread enrollment fraud.”

According to the commission, Total Call employees enrolled tens of thousands of duplicate Lifeline beneficiaries and pocketed the extra subsidies. The FCC caught onto the scheme when the company enrolled an undercover FCC investigator in the program without asking for any eligibility documentation.

“Since 2014, Total Call has requested and received an estimated $9.7 million dollars in improper payments from the Universal Service Fund for duplicate or ineligible consumers despite repeated and explicit warnings from its own employees, in some cases compliance specialists, that company sales agents were engaged in widespread enrollment fraud,” the FCC said in a news release.

A common means of fraudulent enrollment was the repeated use of a single SNAP identification card, according to the FCC. That drew the ire of Commissioner Michael O’Reilly, who said the use of SNAP cards as Lifeline verification mechanisms is woefully inadequate.

“I must once again lodge my extreme frustration that the Commission continues to rely on SNAP as an entry point in the Lifeline program, and has the gall to claim that it is a highly accountable program, when it is painfully obvious to anyone paying attention that SNAP is riddled with waste, fraud, and abuse,” he wrote in a partial dissent in the Total Call case.

Despite those ongoing concerns, the FCC recently voted to expand the Lifeline program to include subsidies for 3G wireless broadband service.

That vote followed a contentious debate over the scope of the expansion and its accompanying price tag. The commission approved the expansion by a narrow 3-2 vote on March 31, a day before the FCC announced its Total Call NAL.

The existence of a massive ongoing Lifeline fraud investigation might’ve affected public perception of that vote, if not the vote itself, leading Pai to call the muzzling of commissioners on the Total Call investigation “conveniently” timed.

Pai also objected to commission delays that he said prevented it from sanctioning Total Call for the full scale of its apparent misconduct.

“Even though [the FCC] identified 32,498 intra-company duplicates, we pursue only 2,587. Even though we have evidence that Total Call Mobile bypassed federal safeguards to enroll 99.8% of its subscribers, we hold the company liable for only 16%,” Pai wrote.

“Under these circumstances, our precedent suggests that a forfeiture of at least $84,295,910 would have been appropriate. Yet the Commission settles for something much less.”

Even as the FCC was investigating this pattern of alleged fraud, Total Call was pouring money into its new Washington lobbying operation. According to disclosure forms, it hired lobbyists with the firm ML Strategies in June of last year, a month after the FCC subpoenaed the company.

ML Strategies has reported collecting $120,000 in fees from Total Call to lobby Congress and the FCC on “general issues related to the Lifeline program.”

The FCC’s investigation is not Total Call’s first time running afoul of federal regulators: the commission issued a $12,000 NAL in 2010 accusing the company of failing to abide by regulations on hearing aid compatibility.

Its sister companies have faced far larger fines for more egregious offenses.

Total Call Mobile is wholly owned by prepaid phone card company Total Call International, which is wholly owned by Japanese telecommunications giant KDDI. KDDI is also the sole shareholder of Locus Telecommunications.

The FCC has targeted Locus in numerous enforcement actions over the past decade, and sought fines reaching into the eight figures.

The FCC levied a $5 million penalty against the company in October “for deceptively marketing its prepaid telephone calling cards.” Previous Notices of Apparently Liability sought fines from the company of $5 million, $330,000, $25,000, $23,000, and $12,000.

New Balance Sneakers vs. the Pentagon

Posted on April 13, 2016April 13, 2016 by Denise Simon

Enter the early consequences of the Trans Pacific Partnership

New Balance accuses Pentagon of reneging on sneaker deal

BostonGlobe: New Balance is renewing its opposition to the far-reaching Pacific Rim trade deal, saying the Obama administration reneged on a promise to give the sneaker maker a fair shot at military business if it stopped bad-mouthing the agreement.

John Tlumacki/Globe Staff/File

New Balance has several Northeast factories, including in Lawrence.

After several years of resistance to the Trans-Pacific Partnership, a pact aimed at making it easier to conduct trade among the United States and 11 other countries, the Boston company had gone quiet last year. New Balance officials say one big reason is that they were told the Department of Defense would give them serious consideration for a contract to outfit recruits with athletic shoes.

But no order has been placed, and New Balance officials say the Pentagon is intentionally delaying any purchase.

New Balance is reviving its fight against the trade deal, which would, in part, gradually phase out tariffs on shoes made in Vietnam. A loss of those tariffs, the company says, would make imports cheaper and jeopardize its factory jobs in New England.

The administration has made the pact a priority. It could be voted on by Congress later this year, though possibly not until after the November elections.

“We swallowed the poison pill that is TPP so we could have a chance to bid on these contracts,” said Matt LeBretton, New Balance’s vice president of public affairs. “We were assured this would be a top-down approach at the Department of Defense if we agreed to either support or remain neutral on TPP. [But] the chances of the Department of Defense buying shoes that are made in the USA are slim to none while Obama is president.”

The administration says the issues of foreign tariffs and of whether the Pentagon should be required to buy shoes made domestically are entirely separate.

New Balance disagrees. Though most of the company’s shoes are made overseas, domestic manufacturing is a big priority for owner Jim Davis, a longtime Republican donor.