Why Are Republicans Rushing This Tax Scam?


Al Drago for the NY TIMES

❝ So, it seems that Republicans are responding to the devastating defeat in Alabama – which is part of a sustained pattern of underperformance in special elections, demonstrating that bad polls reflect reality, not bad polling, by … doubling down on a massively unpopular tax plan, whose main focus is on cutting corporate taxes.

In fact, they’re rushing to jam the thing through before Doug Jones can be certified, in a stunning act of hypocrisy from the same people who demanded that Obamacare wait until Scott Brown was seated and held up a Supreme Court seat for a year. It’s outrageous. But it also looks like really bad politics, especially given what we know is coming: calls next year for cuts in popular social programs, because of a deficit Republicans just voted to explode. So what are they thinking?

❝ I don’t know for sure, but I’d suggest three possible factors in this mad rush.

❝ First…Today’s Republicans are apparatchiks, who have spent their whole lives inside an intellectual bubble in which cutting taxes on corporations and the rich is always objective #1…that the whole game was to win by playing on social issues, national security, and above all on racial antagonism, then use the win to push fundamentally unpopular economic policies…

❝ Second…The idea is that voters are impressed by your record of wins, or conversely that they’ll turn away if you don’t win enough.

Trumpublicans repeat that stupidity all day long.

❝ Third – “I guess I’ll be looking for a lobbying job/ think tank position/commentator role on Fox News in 2019” – in which case your mission in what remains of your Congressional career is to keep donors and the party machine happy, never mind the voters.

Which is what public service in a 2-party system made up mostly of corporate pimps ends up offering to voters.

We don’t need Panama — the US is home to lots of sleazy tax havens


250,000 American corporations hide in this building

The single-story brick building at 1209 North Orange St. in downtown Wilmington, Del., looks bland and innocuous. But the building, home to the Corporation Trust Company, has an intriguing claim to fame. In the last few years, it has served as the registered address for more than 250,000 businesses, giving companies around the world access to Delaware’s business-friendly laws.

During his 2008 presidential campaign, Barack Obama criticized Caribbean tax havens. He mentioned one building in the Cayman Islands that is the registered home of more than 12,000 U.S.-based corporations, saying, “That’s either the biggest building in the world or the biggest tax scam on record.” But as the example of 1209 North Orange St. demonstrates, the same activity is going on in President Obama’s backyard.

A massive leak of confidential documents from Mossack Fonseca, a law firm in Panama that helped wealthy clients set up anonymous companies in tax havens, is highlighting how the global offshore industry secretly invests massive amounts of wealth around the globe. The 11 million leaked documents cover 40 years of the law firm’s operations and allegedly touch on the financial dealings of 12 current or former heads of state, as well as 60 more people linked to world leaders.

The documents…show connections between offshore accounts set up by Mossack Fonseca and money laundering, bribery and tax evasion, among other charges…

But one of the least recognized facts about the global offshore industry is that much of it, in fact, is not offshore. Indeed, some critics of the offshore industry say the U.S. is now becoming one of the world’s largest “offshore” financial destinations…

Offshore isn’t so much a destination anymore as “a set of capabilities,” which include ensuring secrecy, minimizing taxes, managing assets, and providing clients security and access to their wealth from anywhere in the world…The Tax Justice Network ranks the U.S. third in terms of the secrecy and scale of its offshore industry, behind Switzerland and Hong Kong but ahead of the Cayman Islands and Luxembourg…

Responsible politicians in equally responsible countries are setting up regulations to stop the illegitimate uses of shell corporations, e.g., money laundering for criminals and terrorists, fraud, tax avoidance, etc.. No one is surprised at the difficulty encountered trying to get similar efforts through Congress.

RTFA for the details and designs. Think about nudging your Congress-critter to show a little gumption and stand up to corporate class tax fraud.

This banker can verify the identities of 17,000 Americans who hid money in UBS-Switzerland to evade taxes

A former high-ranking UBS banker charged with helping Americans dodge taxes through secret Swiss bank accounts is expected to plead not guilty on Tuesday to tax fraud conspiracy in federal court in Florida.

Raoul Weil, a 54-year-old Swiss citizen and former head of global wealth management at UBS was charged five years ago with helping about 17,000 Americans conceal $20 billion in numbered accounts at the bank.

He initially disputed the charges and was declared a fugitive a few months later but was arrested on a warrant from Interpol in mid-October while on vacation in Bologna, Italy.

Weil’s appearance in federal court in Fort Lauderdale on Tuesday will be his second since he was extradited from Italy last month. He was granted a $10.5 million bond pending his arraignment, when he appeared in shackles and a gray prison jumpsuit on December 16.

Lawyers for UBS whistleblower Bradley Birkenfeld, the bank employee who revealed the tax fraud conspiracy to U.S. authorities in 2007, fear that Weil may be negotiating a “sweetheart” deal” that would spare him from a trial and ultimately shield secret account holders and other bankers from prosecution…

“Weil knows where all the skeletons are buried,” Stephen Kohn added. “The Justice Department must work closely with the IRS and Department of State to make sure that every person guilty of tax evasion in the UBS America’s program are identified and prosecuted,”…

In a case that shook Swiss banking to the core, UBS paid a record $780 million fine in 2009 and agreed to hand over the names of U.S. clients with secret accounts, breaking Switzerland’s vaunted tradition of banking secrecy to avoid feared criminal charges against the bank or other executives.

Liberal or conservative administration aside, it’s been decades since we had a Department of Justice that actively prosecuted criminal fraud on the global scale that kept Switzerland in the secrecy business. The biggest world banks and their officials have always been untouchable.

While the DOJ under Eric Holder has done a terrific job on insider trading – mostly from the work of Preet Bharara in New York – that’s not news. After all, he’s just trying to keep the market clean of low level fraud that doesn’t affect our tax burden. OTOH, the one-percenteers who store their gonads and gold in offshore tax shelters will raise even more money for the Republican Party if they end up being charged with fraud and have to start repaying their debts to the United States.

Berlusconi barred from office for two years over fraud conviction


You actually had the balls to say – Mission Accomplished!

A court in Milan has banned Silvio Berlusconi, Italy’s former prime minister, from holding public office for two years, following his conviction for tax fraud…However, the ban must be approved by parliament before taking effect.

Earlier this month, a cross-party panel of the Italian Senate recommended his expulsion from the chamber.

If he is expelled from parliament, Berlusconi will lose his immunity from prosecution in a string of criminal cases.

Berlusconi had threatened to topple the coalition government over the issue but backed down during a confidence vote…

He will also spend a year under house arrest, or doing community service – his preferred option, according to a request he formally submitted last week.

The votes on his expulsion and ban on holding office are expected to take place within the next few weeks.

He was sentenced to four years in prison, automatically reduced to one under a 2006 pardon act. He was also banned from holding public office for five years.

That sentence was upheld in August.

As erratic as the course of justice may be in Italian politics, by comparison, this case is one more example of the ineffectual and cowardly attitude towards politicians in the United States. Liars and frauds like George W. Bush and Dick Cheney committed inexcusable crimes against humanity – and left taxpayers with a bill for trillions of dollars.

The financial cost is conveniently forgotten by Republicans. The ethical failure is ignored by both of the TweedleDeeDum parties we are allowed. Add to this Obama’s legalization of government snooping into the lives of ordinary citizens and you need no explanation as to why America’s international reputation for corruption continues to grow.

Italy court upholds Berlusconi tax fraud verdict

ITALY — Former Premier Silvio Berlusconi’s tax fraud conviction and four-year prison sentence were upheld on the first appeal Wednesday in a case that could see him barred from public office for five years.

In Italy, defendants are legally considered innocent until all appeals are exhausted, and Berlusconi’s lawyers are expected to appeal the case to the nation’s highest Court of Cassation once the reasoning for the decision is published.

Still, the ruling, which comes just days before prosecutors wrap up closing arguments in his sensational sex-for-hire trial, raises the question of whether Berlusconi’s days as a political force are numbered…

The case already is tightly tied to Berlusconi’s political fortunes. He announced he was stepping aside just two days before the October lower court verdict convicting him in a scheme that involved inflating the price his Mediaset media empire paid for TV rights to U.S. movies and pocketing the difference. Shortly after the guilty verdict, he renewed his political campaign, and his lawyers began seeking a series of trial delays for his electoral commitments…

His lawyers had argued to move the Mediaset appeal and the sex-for-hire case to the nearby city of Brescia, arguing that Milan courts are partial. The high court denied the motion earlier this week…

The ruling also upheld barring him from managing any company for three years. Even if the jail sentence is confirmed, it is unlikely Berlusconi would serve any time for the tax fraud case because a furlough shaving three years off the sentence would likely be applied and one-year sentences are not normally served…

On Monday, the sex-for-hire trial will resume with prosecutor Ilda Boccassini wrapping up closing arguments that were started in early March, before the trial was slowed by delays over Berlusconi’s campaign commitments, his health and the motion for a change of venue. In that case, the media mogul is on trial in Milan on charges he paid for sex with an underage Moroccan teen during the infamous “bunga-bunga” parties at his villa and then tried to cover it up. Both he and the woman, Karima el-Mahroug, better known as Ruby, deny sexual contact.

Overdue. Which is typical in what passes for judicial proceedings in Italy if you have sufficient power and political clout.

Irish food producer/distributor jailed for garlic tax fraud

One of Ireland’s top food producers has been found guilty of dodging taxes on more than 1,000 tons of imported Chinese garlic and sent to prison.

Paul Begley admitted running a scam from 2003 to 2007 in which he instructed his Chinese suppliers to produce false export invoices labeling garlic as apples. Irish import duties on apples are just 9 percent but on garlic up to 232 percent.

The fraud allowed Begley to avoid €1.4 million in tax. He has been trying to repay the sum since Dublin Port customs officers discovered the deception in 2007 but still owes €700,000.

A Dublin judge sentenced Begley to six years in prison

Phew! Anyone notice tax avoiders in the USofA getting lambasted with a comparable penalty?

OTOH, why such a monster tariff on garlic? Are they preparing to defend against a vampire invasion?

Swiss bankers classified as fugitives after skipping federal court


Wegelin & Co, corporate headquarters, St. Gallen, Switzerland
Daylife/AP Photo used by permission

Wegelin & Co., the 270-year-old Swiss bank facing criminal charges in a U.S. crackdown on firms suspected of aiding tax evasion, failed to appear at a court hearing as prosecutors called the bank a “fugitive.”

Prosecutors said after the hearing…in Manhattan federal court that three Wegelin client managers charged in the case also failed to appear and were considered fugitives.

When no defendants or defense attorneys showed up in court, U.S. District Judge Jed Rakoff asked prosecutors for a proposal on how to proceed. Prosecutors said they will confer with the Justice Department and advise Rakoff on their proposals. “Unlike an individual, arresting a company is somewhat difficult,” Rakoff said…

Wegelin is the first overseas bank to be indicted by the U.S. for aiding tax fraud, federal prosecutors in New York said this month. The three Wegelin client managers at the Zurich branch, Michael Berlinka, Urs Frei and Roger Keller, were also indicted.

The managers serviced “undeclared accounts” for U.S. taxpayers, meaning the income derived from them wasn’t reported to the U.S. Internal Revenue Service, according to the superseding indictment filed this month.

Nothing new about international bankers considering themselves above the law. Especially when an historic function of their services is aiding their clients in defrauding the tax departments of one or another government.

For the first time in modern history we have a Department of Justice that actively seeks to repatriate the funds hidden abroad – instead of just relying on the crooks for fundraising.