Author Archives: Deckard1138

PHOTO: J. SCOTT APPLEWHITE/AP
http://www.wsj.com/articles/ubs-deal-shows-clintons-complicated-ties-1438223492

An eyebrow-raising article in the Wall Street Journal reveals details of secret 2009 negotiations between then Secretary of State, Hillary Clinton, Swiss Foreign Minister Micheline Calmy-Rey (pictured above with Clinton on July 31, 2009) and Swiss banking giant UBS AG. The article reports that Clinton personally intervened in the massive lawsuit launched in 2007 by the IRS to obtain the identities of Americans with secret bank accounts at UBS. Ultimately, only 4,450 accounts were turned over to the IRS of the 52,000 originally sought by the agency. Coincidentally, UBS contributions to the Clinton family’s charitable Clinton Foundation increased tenfold over the next few years while Bill Clinton’s top source of corporate income for his paid speeches was UBS Wealth Management.

The UBS case, of course, is widely considered to be the primary catalyst for the introduction of FATCA legislation in early 2010, and the subsequent IRS crusade against Americans overseas. While it is too early to ascertain how Clinton’s involvement with UBS may have influenced the final drafting and implementation of FATCA legislation, it certainly renews speculation about exactly how and why overseas residents became swept-up in an IRS effort that was supposedly aimed exclusively at suspected tax cheats living in the US.

Fair to conclude that this story is just beginning to unfold. It could take quite a while to unravel all the quid pro quos in this one.

Additional coverage here:

http://www.theatlantic.com/politics/archive/2015/07/hillary-helps-a-bankand-then-it-pays-bill-15-million-in-speaking-fees/400067/

http://www.theguardian.com/business/2015/jul/30/hillary-clinton-ubs-tax-evasion-settlement-foundation

https://www.ringoffireradio.com/2015/08/hillary-jets-to-switzerland-to-hustle-deal-with-ubs-taxpayers-lose-billions-her-foundation-wins-big/

This just in from Democrats Abroad, whose front office remains so stunningly oblivious to the number one issue and existential threat to its constituency that it completely ignored it in today’s missive:

Dear [random person on our mailing list],

I hope you agree with me that there has been a lot to celebrate over the last few weeks. The Supreme Court upheld Obamacare and preserved health insurance for millions of Americans. Thanks to the Supreme Court again, this year we were able to celebrate the first Fourth of July in which all Americans truly were equal and free to marry the person of their choice. And we can now celebrate the possibility of an Iran without nuclear weapons.

While there are many things that we cannot yet celebrate, let’s take a moment to celebrate the 54th birthday (on Tuesday) of the man who has made many of our celebrations possible: President Obama. He has worked tirelessly to make America a better country and the world a safer place. He fought for the right of every American to have affordable health care. He appointed two superb Supreme Court Justices who have upheld the fundamental rights of all Americans. And he has worked for peace, not war, around the world.

Let’s send him a gift that he – and we – will appreciate – victory in the 2016 elections. A 2016 election victory that will keep a Democrat in the White House and take back Congress – that will preserve and extend President Obama’s legacy – and keep the Supreme Court from moving further to the right.

You can send that gift by contributing $54 – or whatever you can to Democrats Abroad and help us turn out overseas voters in the 2016 elections. There are now an estimated 8 million Americans living abroad – more than ever before. We have made the difference in the past between defeat and victory – and we will do so again in the crucial upcoming 2016 elections.

But we need your help – so please donate today and click the dropdown menu for “President Obama’s 54th”. That way we can both keep on celebrating.

Democratically yours,

Katie Solon
International Chair
Democrats Abroad

This message is paid for by the Democratic Party Committee Abroad
Democrats Abroad

PO Box 15130
Washington, DC 20003
United States
Telephone: +1-202-621-2085 +1-202-621-2085

After being so thoroughly and regularly betrayed and insulted by your own overseas organization’s breathtakingly tone-deaf leadership, I have two completely genuine suggestions for Democrats Abroad members who still truly respect democracy and who actually want to remain abroad:

1. Take that $54 you were going to send to DA and instead donate it to the American-based FATCA Legal Action Fund. By contributing directly to legal challenges demonstrating FATCA’s unconstitutionality, you will be making a far better investment in your own future, and that of your children and grandchildren, than by celebrating the birthday of a President and supporting a party whose FATCA campaign against you and your family has turned your lives into a living hell.

2. While you’re at it, why not demonstrate some more of that old-time Democratic compassion and progressive support for civil and human rights everywhere by also donating to the Canadian-based ADCS FATCA legal challenge, which seeks redress under Canada’s Charter of Rights and Freedoms from the Canadian federal government’s capitulation to those same FATCA laws you already know and loathe so well. Since $54 USD is now equivalent to 70-something Canadian dollars, and since our just-announced Canadian federal election is expected to last a record-breaking 78 days, I would suggest that $78 CDN would be an entirely appropriate amount to start with to help support your Canadian brothers and sisters, especially if you’re a member of one of DA’s Canadian chapters.

So, instead of pointlessly counting birthday candles today, why not count human lives affected by FATCA, and do something positive about it? Your soul might just thank you – and don’t forget about those kids either.

Goat Rodeo:
A chaotic situation, often one that involves several people [or organizations], each with a different agenda/vision/perception of what’s going on; a situation that is very difficult, despite energy and efforts, to instill any sense or order into.

I don’t think there’s a much more apt expression for what is happening right now in the larger FATCA / FBAR / CBT universe. The calm-before-the-storm waiting game of the last few years is now clearly giving way to frenzied activity and veritable verbal warfare across multiple organizations and web sites around the globe. The big-picture dots of this reality have not yet been fully connected into a single post and thread, so that’s why I’m starting this one.

In no particular order, here are some of the latest developments to consider:

1. The ADCS summary trial is poised to begin next Tuesday, August 4th. Even now, the Canadian Government is wheeling out their propaganda machine to fight our lawsuit in the court of public opinion as well as in the Federal Court in Vancouver. One of the first targets of their inevitable smear campaign is our legal counsel, Joe Arvay, via a Conservative Party soapbox piece published in today’s Globe and Mail. And, as I write this, news that the Canadian federal government, “…may seek an adjournment of the summary trial scheduled to be heard on August 4-5,” as reported in the ADCS thread.

2. Mirroring the Canadian Charter Challenge is last week’s filing of the James Bopp / Republicans Overseas Action FATCA lawsuit whose seven plaintiffs include Rand Paul and Stephen Kish.

3. Republicans Overseas reports on the US Federal government response to their motion to expedite a Preliminary Injunction:

On July 22, Republicans Overseas Action and the seven Plaintiffs asked the District Court to expedite the consideration of the request for a preliminary injunction to give the Court adequate time decide the matter before some of Plaintiffs’ sensitive account information is reported to the IRS at the end of September. The government’s response is to say that shortening its response time would be too burdensome and that it needs even more time to respond. Normally, they would have 21 days to respond, and we’ve only asked to have that time shortened by a week. The federal government instead has asked the Court to delay the suit and give them 60 days to respond to Plaintiffs’ request for a preliminary injunction—three times the amount of time to which it would normally be entitled! The truth is that the Plaintiffs are the ones playing catch up in this case. The government has had nearly five years to consider the constitutional underpinnings of FATCA. They should not be allowed to complain now that they need more time to understand it when American citizens’ constitutional rights are being pushed aside.

4. Democrats Abroad has published a couple of trash-talk pieces here and here condemning the Bopp/RO suit. So far, every one of the 22 comments on the DA Switzerland piece has been uniformly opposed to DA’s positions on FATCA and Same Country Safe Harbor (SCSH), which has also been referred to as SCE (Same Country Exception).

5. Democrats Abroad has doubled-down on its SCSH campaign by re-igniting its FATCA Reform 1000 letters sign-on campaign, apparently completely ignoring the frustration of its dwindling constituency, as exemplified by one of the comments:

Most of us will not support this. Same country exemption is a diversion from the issue. It will enable you to try and tell people that you have done something. 90% of us see right through this and want nothing to do with this. Full repeal of FATCA and CBT is what needs to be done. Anything else is a distraction. Time for the democrats to join the rest of the world and use the world standard tax practice of residence based taxation (RBT). Why does the party of “progress” want to hold onto an outdated, civil war era tax policy that all other countries have abandoned?

6. Republicans Overseas is also pushing back on SCSH and the letter writing campaign:

By delaying the Motion for Preliminary Injunction, it gives DA time to push for the Same Country Safe Harbor (SCSH) exemption

DA is asking expats to write 1,000 letter to Congress to support SCSH by pressuring Treasury Secretary Lacob Lew and IRS Commissioner John Koskinen to selectively enforce FATCA based on expats’ accounts in one foreign country or more than one foreign country. DA knows better than that. This is lawlessness because neither Secretary Lew nor Commissioner Koskinen have the constitutional authority to amend or selectively enforce FATCA without a vote in Congress to amend the law.

7. Meanwhile, other organizations have apparently chosen to hitch their wagons to the increasingly-maligned Safe Harbor campaign, including FAWCO (Federation of American Women’s Clubs Overseas) and AARO (Association of Americans Resident Overseas), though the latter has posted a position paper calling for the replacement of CBT with RBT. American Citizens Abroad has remained rather low-key, focussing on its own, rather convoluted RBT proposal and partnering with the University of Nevada via its ACA Global Foundation on a research study about the effects of FATCA on American citizens living abroad. Other groups, such as American Expatriates, appear to be inundated by a confusing and often contradictory array of opinions from across the political spectrum, though the same thing can often be said of IBS.

8. The Trump factor. Will his brand of demagoguery help or hurt our cause? Here is a quote from his most recent advertorial for his own book:

America has become the world’s “dumping ground” for everyone else’s problems. A “whipping boy” for other countries as we sink further and further into the debt of no return.

Trump warns of so-called leaders willingly giving our jobs to foreign hands and further crippling the economy. Literally taking future opportunities from our children and grandchildren.

Meanwhile those same leaders feed America’s looming debt beast — an $18 trillion tab — with foreign aid and terrible negotiations.

And what then do we get for extending our wealth to help a legion of other countries? Lack of respect. We’re the “laughingstock” of the world.

These are just a few examples of how fragmented and confusing the landscape has become, and just how far away US Persons are from achieving any kind of consensus about how best to fight back against FATCA and CBT. The dominant “camps” now emerging are, predictably, identifiable largely along traditional party lines, but with some important exceptions. On one hand, “Safe Harbor” has crystallized into the Democrats singular take-it-or-leave-it proposition. On the other hand are the lawsuits in both the US and Canada, initiated by an increasingly diverse mix of Republicans, disaffected Democrats and untold numbers of other supporters who have no allegiance to any US party. In the case of Canada, our battle is dishearteningly with our own Canadian government, which has lowered itself to becoming a mere proxy for the US. Nevertheless, when it comes to the issues of FATCA, FBAR and CBT, it would appear that the most dominant fault line now starkly divides an increasingly out-of-touch and disingenuous Democratic Party with, literally, everyone else on the planet.

UPDATE: The initial story by Ralph Z. Hallow, chief political writer at The Washington Times, has been revised and greatly expanded at the same previous link:

http://www.washingtontimes.com/news/2015/jun/24/sen-rand-paul-sue-irs-us-treasury/

This is stop-the-presses news: Rand Paul has joined forces with Jim Bopp, Solomon Yue and Republicans Overseas and will be one of seven plaintiffs in the upcoming lawsuit against the IRS and the US Treasury Department. The suit will be filed by a new composite organization called Republicans Overseas Action.

Some crucial highlights:

Sen. Rand Paul to sue IRS, U.S. Treasury

Rand Paul is poised to become the first major presidential candidate in memory to sue the government he seeks to lead as president.

The Kentucky senator will take legal action against the U.S. Treasury and the Internal Revenue Service for what he says is the denial of his constitutional right to vote on more than 100 tax-information treaties that the Obama administration unilaterally negotiated with foreign governments, The Washington Times has learned.

In what the suit says is a violation of Article II, Section 2 of the Constitution, President Obama has not consulted the U.S. Senate about the treaties nor given the Senate an opportunity to approve or disapprove of the treaties. The administration calls them “intergovernmental agreements.” They require foreign banks to gather and share private financial information about millions of Americans living and working outside the U.S. — information they would not have to disclose to the U.S. government if they lived and worked in the U.S.

The treaties or agreements are the enforcement mechanisms of the Obama administration’s Foreign Account Tax Compliance Act (FATCA), enacted by a Democratic-controlled Congress in 2010.

The act is despised by many of the estimated 8.7 million Americans living overseas, a record number of whom have — with great anger and reluctance, according to those who have spoken to the foreign and U.S. press — renounced their U.S. citizenship rather than attempt to comply with FATCA.

Mr. Paul, a Republican who announced his presidential bid in early April, will join six other plaintiffs in the suit that a new organization called “Republicans Overseas Action” expects to file in a southern Ohio federal district court the week of June 29. The court’s Republican makeup is considered at least open to the constitutional arguments that the plaintiffs lay out.

Continue reading →

I was going to write about the monumentally hypocritical FATCA IGA signing ceremony yesterday at the Vatican, but the ever-pithy Sovereign Man (Simon Black) took the words right out of my mouth. I’ll let him have the floor instead:

June 11, 2015
Oxford, England

OK this is really getting ridiculous.

Despite being the sacred keepers of the Catholic faith and trustees of the meek, the Holy See has just inked a deal with the US government putting the Pope in bed with the Internal Revenue Service.

It’s so bizarre you couldn’t possibly make this stuff up anymore.

The Vatican City has been forced into sharing information with the US.

So now, like a good little doggy, they’re obliged to cough up financial records on anyone they’ve ever had dealings with whenever Mr. Obama snaps his fingers.

I’m not sure this is what Pope Francis had in mind when he called for an end of “the cult of money and the dictatorship of an economy”.

Ironically, the oft-quoted Book of Proverbs says that “[T]he borrower becomes the lender’s slave.”

And this is true in almost all cases. Except, apparently, when it pertains to the US government.

Despite having borrowed more money than any nation in the history of the world, the US government still acts like everyone’s master, including dictating the most ridiculous terms on financial agreements like this.

It’s all part of FATCA– the 2010 legislative joke formally known as the Foreign Account Tax Compliance Act.

We’ve talked about this before– FATCA may prove to be the greatest disaster in US history. And there’s one simple reason why.

Ever since the end of World War II, the US banking system has formed the backbone of global banking and finance.

Right now, if a South African refiner buys oil from a Brazilian producer, that transaction will likely be settled in US dollars and clear through the US banking system.

In other words, the money will flow from South Africa to New York, and from New York to Brazil.

It’s like this with most international trade transactions, particularly commodities contracts like coffee, oil, and metals.

For over 70 years now, the rest of the world has trusted that the US government would continue to allow free and unfettered access to a sound, safe, stable banking system.

And… one would think that the US government would respect this tremendous responsibility of overseeing the world’s core banking system. Yes. One would think.

But that hasn’t happened at all.

In 2008 after Lehman Brothers failed, suddenly the world got a dose of reality.

After an epic financial disaster which brought down some of the largest banks in the United States, suddenly the world realized that the US banking system wasn’t so safe after all.

One bank after another failed. Several had to be nationalized. Nearly all of them had to be bailed out.

Fool me once, shame on you.

Then in 2010, the US government passed FATCA… which mandated that every bank on the planet jump into bed with the IRS.

They further threatened that any bank which did not comply would be kicked out of the US banking system… essentially choking off a foreign banks’ ability to conduct international business.

Fool me twice, shame on me.

Then last year the US government went after French bank BNP Paribas, fining them a whopping $9 BILLION for doing business with countries like Iran and Cuba (though the latter is now curiously America’s BFF.)

And naturally, if BNP didn’t pay up, the US government threatened to kick them out of the US banking system. Notice a pattern?

Fool me thrice. OK how many f**king times does the world need to be fooled before they do something about it?

Too many times, apparently. But it’s finally starting to change.

The world has realized that the US government has a track record of reckless irresponsibility.

They’ve proven to the world that they’re willing to take the sacred international banking obligation that they’ve been entrusted with and turn it into a weapon of intimidation.

This is unbelievably stupid.

The US government is taking a giant, steaming dump on its last remaining competitive advantage.

Having control over the global financial system is for all intents and purposes a license to print money.

It meant that the US could create as much money as it wanted, indebt itself as much as it wanted, because there would always be strong foreign demand for dollars.

But you can only bully the rest of the world so many times before foreigners start looking for alternatives.

And that is happening.

The new China International Payment System (CIPS) will be the first credible option in conventional banking to circumvent the US. And it’s coming online later this year.

Not only is CIPS not dependent on the US dollar or the US banking system, but it also fixes a number of technological inefficiencies with the current system.

Over the long-term, the end result will be fewer banks using the US system, resulting in a substantial decline in their use of US dollars and their ownership of US government debt.

Think about it like this– foreigners currently own a third of US government debt.

If they no longer have as strong an incentive to own US dollars and start reducing their load, who’s going to pick up the slack?

Who will the US government turn to when they need to borrow money?

Simple. You.

Whether you want to or not, the US government will find the most creative ways possible to ensure that you invest your money in the ‘safety and security’ of government bonds.

Welcome to the coming capital controls.

Until tomorrow,

Simon Black
Founder, SovereignMan.com

http://www.cpifinancial.net/news/category/economics/post/31506/devere-presidential-candidates-owe-it-to-america-to-explain-their-stance-on-controversial-fatca

Nigel Green, CEO of the deVere Group, is calling on all U.S. presidential candidates to explain their positions regarding FATCA and GATCA ahead of the 2016 election.

As reported by Matthew Amlôt in CPI Financial’s news site:

Mr Green comments, “FATCA adversely affects millions of hardworking, middle class Americans around the world, plus U.S. companies that operate internationally – and, therefore, it impacts U.S. jobs and the American economy.

“Presidential candidates who support this tax act now need to justify to America why they support it; whilst those who want it repealed now need to articulate to voters why they believe it is fundamentally flawed and why they will move to repeal it.

“It is an issue that must play a major part in the national conversation ahead of the election.”

Continue reading →

An excellent guest column by Brian Garst in the Cayman Financial Review reports on the US Government’s “atrocious” mishandling of its citizens’ private information and how inevitable breaches of poorly designed and managed IRS and OECD reporting systems will soon unleash a global torrent of unsecured personal identification and financial data:

http://www.compasscayman.com/cfr/2015/04/22/FATCA-reporting-system-leaves-taxpayer-data-vulnerable/

Here’s an excerpt:

The IRS itself has been accused by government watchdogs of having serious vulnerabilities, and of moving too slowly to fix them.

Every year since 2008, the Government Accounting Office has identified 100 cybersecurity weaknesses at the agency. Specifically, the IRS has been faulted for routinely failing to encrypt data or for using weak methods for doing so, allowing greater access to data than workers require to perform their duties, permitting user passwords that are easily guessed, and being dangerously slow to install crucial software updates and security patches.

This record alone is enough to question the ability of the IRS to secure and protect the sheer breadth of financial records it will receive due to FATCA, but serious concerns are already being raised about IDES’ specific security protocols.

The system’s rules for encryption recommend use of Electronic Codebook (ECB) as its encryption mode. ECB is widely faulted by cryptography experts as being incredibly weak, as it encrypts blocks one at a time and it thus does a poor job of hiding data patterns. Upon discovering the IDES recommendation of ECB in its protocols, prominent security expert Bruce Schneier incredulously asked, “Are they serious?”

Apparently they are not about protecting taxpayer information.

A new video advertorial from CNS Business in the Cayman Islands takes us to the retail front line of the rapidly-metastasizing FATCA compliance industry and shows us how it’s done. A good-sized group of prospects Cayman-based US Persons were invited to a free seminar last week at the Caribbean Club entitled “Navigating US Tax Requirements and Strategic Methods of Coming into Compliance”. Attorneys from Caplin & Drysdale, a DC-based law firm specializing in “the tax controversy area” co-hosted the event with Ham, Langston & Brezina LLP, a multi-service accounting firm based in Texas.

As the story reports:

“There’s no longer the option of ‘I reside in this small island country – no one will find me’

Right now the message I deliver is FATCA is changing all of that and just because you’ve had an account here for 20 or 30 years without issues doesn’t mean you won’t get a letter in the mail. We’ve had clients in Cayman, as well as a host of other countries, receiving these letters,” stated [Caplin & Drysdale attorney, Dianne Mehany].

“It’s becoming harder and harder to hide and you really want to be ahead of the situation. You don’t want the IRS knocking on your door. There are options for you to come forward and come into compliance now before they come to you because once they come to you, it’s a very different conversation,” added Caplin & Drysdale attorney, Zhanna Ziering.

Both attorneys explained they are not trying to scare anyone, but want them to understand there are criminal and civil penalties if you don’t come into compliance.

Heady days indeed for FATCA compliance firms – their oyster truly is the entire world.

Of course, others are not so enthusiastic about the kind of help these firms are pitching. Comments are open and here was the first one:

Just disgusting that our government should be aiding and abetting these greedy parasites. Especially when you remember that many of the “Americans” living here are American only as a matter of law. They were born in the USA to Caymanian parents and have never lived or worked in the States.

And the beat goes on…

In a new “Special to the Financial Post” advertorial that makes Barrie McKenna look like Woodward and Bernstein, über compliance condor Max Reed attempts to reassure “American citizens in Canada” that they have nothing to fear, except perhaps some red-herring nightmare of IRS goon squads swarming across the border to seize their homes.  It is a tour de force of utter nonsense and, sadly, another disheartening example of what now passes for journalism in Canada.  Here are a few tidbits, displaying all the comforting factuality of a PMO press release:

Don’t panic, American citizens in Canada: The IRS is not coming to seize your house

To get on the IRS’s good side, take advantage of the amnesty program called “Streamlined Foreign Offshore Procedures” (which you can find on the IRS site). It will help you catch up on overdue tax returns without fear of penalties.

U.S. citizens in Canada are only subject to U.S. federal tax. (The Canadian taxes you pay are credited against your U.S. taxes.)

Unless you have U.S. source income, you will not owe anything.

The deadline for filing a return in the U.S. is April 15, but can be extended to June 15 for those outside the U.S.

Intriguingly, this is just part one of a spring series of helpful articles for “One million American citizens in Canada.”  It is difficult to imagine just how much more useful advice Max Reed can offer than he does in his first instalment.

Comments are wide open.

http://business.financialpost.com/2015/03/06/dont-panic-american-citizens-in-canada-the-irs-is-not-coming-to-seize-your-house/