from badger’s “Comments” to a “New Post”…
Maybe this is already noted on IBS, but here’s another famous renunciant. Judging by this article, he’d be a covered expatriate. Is his name on the Federal register list?
http://www.rferl.org/content/afghanistan-mahmud-karzai-enters-politics/24882541.html
‘Wednesday, February 20, 2013
Afghanistan
Karzai’s Brother Renounces U.S. Citizenship To Enter Afghan Politics’
from the article above:
…”Karzai, 57, is a wealthy entrepreneur whose business interests include banking, mining, and real estate.
He lived in the United States for many years and reportedly has owned restaurants in San Francisco, Boston, and Baltimore.
Media reports say Karzai controls a 7 percent stake in Kabul Bank, Afghanistan’s largest private bank.
Last year, an independent audit found that Kabul Bank was involved in a fraud that sent nearly $900 million outside Afghanistan. Karzai denied any wrongdoing…”
http://www.rferl.org/content/afghanistan-mahmud-karzai-enters-politics/24882541.html
And I’m wondering if he was FBAR and FATCA compliant?
Another untouchable too big (or politically important to the US) to prosecute? I wonder.
Are Karzai and his family (many US citizens who moved back to Afghanistan) all IRS tax and FBAR and FATCA compliant on their ‘foreign accounts’? Is the IRS fully cognizant of all of their Afghan ‘foreign accounts’ ? Would the IRS pursue Karzai and his clan the same as they are pursuing ordinary Canadians with TFSAs, Swiss, Swedes, and others?
http://www.nytimes.com/2012/06/04/world/asia/karzai-family-moves-to-protect-its-privilege.html?pagewanted=all&_r=0
…….”“If you are one of the Afghan oligarchs, where you put your money and where you live is an open question now,” Seth Jones, an analyst at the RAND Corporation, said. “That means you are thinking about moving your money and finding a backup option about where to live.
The president’s family — many of whom are American citizens who returned to Afghanistan after an American-led coalition toppled the Taliban in 2001 and brought Mr. Karzai to power — are among those who have prospered the most, by the accounts of many Afghan businessmen and government insiders. …..”
…”Mahmoud Karzai was a key figure in the scandal surrounding the near-collapse of the bank, which was Afghanistan’s largest, in 2010. It lost about $900 million in insider deals, much of which is believed to have ended up in secret bank accounts in Dubai. Last year, a federal grand jury in New York began a criminal investigation into Mahmoud Karzai’s business activities in Afghanistan, pursuing accusations of tax evasion, racketeering and extortion. No charges have been brought against Mahmoud Karzai, who is a United States citizen.”….
from; ‘Intrigue in Karzai Family as an Afghan Era Closes’ By JAMES RISEN
Published: June 3, 2012 New York Times
Submitted on 2013/02/19 at 11:21 pm
http://www.nytimes.com/2012/11/28/world/asia/inquiry-into-kabul-bank-fraud-hits-snags.html
Political Meddling Hampers Inquiry Into Kabul Bank Debacle
By MATTHEW ROSENBERG
Published: November 28, 2012
KABUL, Afghanistan — “Persistent political interference has hampered efforts to unravel the colossal fraud at Kabul Bank, with President Hamid Karzai and a small panel of his top aides actually dictating to prosecutors who should be charged and who should not, according to Afghan and Western officials and the results of a public inquiry into the scandal.”
Did the Kabul bank get any bailout? See NPR story from 2010
http://www.npr.org/blogs/thetwo-way/2010/09/02/129607778/kabul-bank-woes-spur-call-for-another-u-s-bailout
Kabul Bank Woes Spur Call For Another U.S. Treasury Bailout
by Frank James
September 02, 2010
………..”The two officials were reportedly involved in unauthorized investments involving about $160 million in Dubai real estate, according to a big shareholder in the bank, Mahmoud Karzai, the older brother of Afghan President Hamid Karzai.
Mahmoud is making a suggestion that is likely to gain very little traction in Washington: he’s calling for the U.S. to bail out Kabul Bank.
An excerpt from the Washington Post which has been closely tracking the Kabul Bank story:
Action by the United States, said Mahmoud Karzai, would prevent a run on Kabul Bank and protect other banks, too. He said Kabul Bank is “stable and has money” but cannot withstand a stampede by panicked depositors.
“If the Treasury Department will guarantee that everyone will get their money, maybe that will work,” said Karzai, who holds 7 percent of the bank’s shares, making him the third-biggest shareholder. Karzai, who spends most of his time in Dubai – where he lives in a waterfront villa paid for by Kabul Bank – rushed to Kabul on Wednesday to join efforts to salvage the bank.”………
http://online.wsj.com/article/SB10001424052748704760704575516052903781616.html
‘U.S. Probes Karzai’s Kin
Prosecutors Focus on Mahmood Karzai, Posing Diplomatic Risks for Washington’
September 27, 2010 By MATTHEW ROSENBERG, DEVLIN BARRETT And ADAM ENTOUS , Wall Street Journal
……”If U.S. prosecutors decide to bring charges against Mr. Karzai, they are unlikely to move until early next year, after a review of Afghan strategy by the Obama administration, officials say. The decision about whether to proceed with a U.S.-based prosecution rests with the Justice Department.
A spokeswoman for the federal prosecutor’s office in New York declined to comment. The U.S. embassy in Kabul said it couldn’t comment on “ongoing legal matters.” “……
…….”Mahmood Karzai’s status as a U.S. citizen would make him easier to prosecute than other Afghans, should prosecutors go forward. He is subject to U.S. tax law, and some of the transactions any prosecution might focus on could involve U.S. government loans, which he sometimes has used to build his businesses.”…
…….”Mahmood Karzai’s years in the U.S. gave him access to people like Jack Kemp, the late Republican congressman and vice presidential candidate, who Mr. Karzai said helped him obtain $5.5 million in U.S. government loans to finance a pair of housing developments.”…..
Another rich person renouncing so as not to be indicted. It made me laugh to read he had borrowed the money for his ownership in the bank (7%) from the bank itself.
No wonder donors are questioning any continual support. Corrupt as hell.
Is he a covered expatriate liable for the “exit” tax?
Won’t be prosecuted that’s for sure. US has made enough enemies in Afghanistan without adding this to it. After all, what’s a few million lost in taxes. We’ll just grind it out of all the little ordinary tax payers instead.
Interestingly, the original story I read about Mahmud Karzai and his renunciation of US citizenship was from http://www.rferl.org/content/afghanistan-mahmud-karzai-enters-politics/24882541.html
I saw it was from an intriguing source:
See;
http://www.rferl.org/section/FAQ/777.html
I was curious who the source of rfe/rl was, and on their ‘About us’ page I saw that it is funded by Congress, and chartered in – Delaware:
Q. How is RFE/RL funded and managed?
A. RFE/RL is funded by the U.S. Congress through the Broadcasting Board of Governors (BBG). The BBG is a bipartisan federal agency overseeing all U.S international broadcasting services. In addition to RFE/RL, this includes Voice of America, Radio Free Asia, Alhurra, Radio Sawa, and Radio Marti.
Under IRS rules, RFE/RL is a private, nonprofit Sec. 501(c) 3 corporation. Chartered in Delaware, it receives federal grants as a private grantee. RFE/RL maintains a corporate office in Washington, D.C.
Dennis Mulhaupt chairs the Board of Directors of RFE/RL, Inc, with Susan McCue serving as Vice Chairman. Steven Korn was named president of RFE/RL, Inc. on June 3, 2011.
Q. If the U.S. government funds RFE/RL, how can it be independent and unbiased?
A. This is a very important and crucial point: The U.S. government is not involved in RFE/RL’s operational or editorial decisions. Our governing board, the BBG, serves by law as a firewall to protect our editorial independence.
RFE/RL journalists provide straightforward, professional journalism, and the results are clear — our audiences trust us. The popularity of many of our programs reflects this: In Afghanistan, over 60 percent of the adult population listens to our programs, and Radio Farda’s website receives over 10 million page views every month.
Q. Why should U.S. taxpayers pay for this?
A. The basis for RFE/RL’s operations is that the first requirement of democracy is a well-informed citizenry. By promoting the free flow of information, RFE/RL supports the development of civil society and thus makes a contribution to long-term development and stability in the region we cover.
It’s hard to imagine a more direct, effective way of supporting human rights and promoting democracy and the rule of law. We reach over 23 million people in 21 countries with a budget of just under $93 million.”
The RFE/RL article says;
…”Karzai, 57, is a wealthy entrepreneur whose business interests include banking, mining, and real estate.
He lived in the United States for many years and reportedly has owned restaurants in San Francisco, Boston, and Baltimore.
Media reports say Karzai controls a 7 percent stake in Kabul Bank, Afghanistan’s largest private bank.”………..
I am still wondering why there is no mention of his exit tax and other final obligations to the IRS that attend renouncing US citizenship, despite the field day that the press had with coverage re Saverin, and Denise Rich (“….she’ll face a so-called “exit tax,” which was passed by Congress in 2008 to compel people with a net worth of more than $2 million to pay the IRS before leaving the United States for good”.. from http://www.nydailynews.com/news/national/socialite-denise-rich-u-s-citizenship-favor-taxes-austria-article-1.1111135#ixzz2O7kV7q5k )
Interestingly, though mostly neutral on Tina Turner’s decision, the media still managed to mention the tax issue, but Karzai’s brother doesn’t seem to register the same way.
Owning a portion of a foreign (=non-US) bank is an interesting angle re expatriation and US exit tax. Do you FBAR your part of a ‘foreign’ bank?
This despite the fact that Mahmood/Mahmud had already had to pay up to the IRS on undeclared capital gains on the sale of his Dubai house back in 2010 http://www.thenational.ae/business/property/karzais-brother-in-us-tax-wrangle-over-sale-of-villa ….”Mr Karzai, an American citizen, had used a loan from Kabulbank to buy a villa on the Palm on July 2 2007 for about Dh7m and resold it in 2008 for more than Dh10m. He had not previously disclosed the transaction to the US government…”………..”He said a mistake made on filing taxes was “not a criminal offence” but a civil matter”…….
See also: http://www.thenational.ae/featured-content/channel-page/business/middle-article-list/mahmoud-karzai-discloses-net-worth
Karzai owed the US substantial taxes on the sale of his Dubai house, but originally hadn’t reported the transaction. Where were the spokespeople for the IRS and Treasury on their tired theme of “when some Americans don’t pay their taxes……” ?
Shouldn’t Forbes or some other business/tax writer be writing this particular expatriation, renunciation and tax story up?
Will Mahmood Karzai make the Name and Shame list? I guess we’ll find out. It’ll be interesting to see.
Why do I think the BBC’s World Service reaches more people for less cost and is more impartial anyway.
I doubt Karzai’s name will make the list. US needs the Afgan president more than he needs the US on his doorstep. Prosecuting his brother won’t do much to help already strained relations.