China Is Rapidly Catching Up To The U.S.-- In Corruption Among Political Elites

Yesterday, when I read the RNC had put obscure, horribly corrupt, former one-term Utah Congresswoman Enid Greene (AKA- Enid Mickelsen and Enid Waldholtz) in charge of the search for an appropriate locale for the 2016 Republican National Convention, I joked around by tweeting ole Enid should consider a place where GOP economic policies are appreciated, either China, which has benefitted from American conservatives incentivizing companies to ship jobs there, or an offshore tax haven like the Cayman Islands or Bahamas, where the easy money is sloshing around because the GOP opposes tightening tax loopholes for the super-rich. Later in the day… the tweet above alerted me to The Guardian piece by James Ball about how the U.S. isn't the only nation where self-entitled, anti-social capitalist pigs are hoarding money offshore. It's another all too familiar China corruption story. All the more reason for Enid to have the Republican National Convention there, especially if they're going to nominate some sociopath and class war avatar like Ted Cruz (which is likely).

In any case, the Chinese government has always aggressively denied reports that top political elites are crooks and that they and their families have become fabulously wealthy after dismantling Communist social mores. Ball writes that "[m]ore than a dozen family members of China's top political and military leaders are making use of offshore companies based in the British Virgin Islands" and that the brother-in-law of China's current president, Xi Jinping, as well as the son and son-in-law of former premier Wen Jiabao are among the political relations making use of offshore havens." And, of course, income inequality is catching up with American income inequality. The U.S. is the shining example… and more:

The documents also disclose the central role of major Western banks and accountancy firms, including PricewaterhouseCoopers, Credit Suisse and UBS in the offshore world, acting as middlemen in the establishing of companies.

The Hong Kong office of Credit Suisse, for example, established the BVI company Trend Gold Consultants for Wen Yunsong, the son of Wen Jiabao, during his father's premiership-- while PwC and UBS performed similar services for hundreds of other wealthy Chinese individuals.

The disclosure of China's use of secretive financial structures is the latest revelation from "Offshore Secrets," a two-year reporting effort led by the International Consortium of Investigative Journalists (ICIJ), which obtained more than 200 gigabytes of leaked financial data from two companies in the British Virgin Islands, and shared the information with the Guardian and other international news outlets.

In all, the ICIJ data reveals more than 21,000 clients from mainland China and Hong Kong have made use of offshore havens in the Caribbean, adding to mounting scrutiny of the wealth and power amassed by family members of the country's inner circle.

As neither Chinese officials nor their families are required to issue public financial disclosures, citizens in the country and abroad have been left largely in the dark about the elite's use of offshore structures which can facilitate the avoidance of tax, or moving of money overseas. Between $1trillion and $4trillion in untraced assets have left China since 2000, according to estimates.

China's rapid economic growth is leading to a degree of internal tension within the nation, as the proceeds of the country's newfound prosperity are not evenly divided: the country's 100 richest men are collectively worth over $300 billion, while an estimated 300 million people in the country still live on less than $2 a day. The Chinese government has made efforts to crack down citizens' movements aimed at promoting transparency or accountability among the country's elite.

…One Chinese political family whose financial affairs have not escaped scrutiny — at least in the west-- is that of the former premier, Wen Jiabao. In November, the New York Times reported that a consultancy firm operated by Wen's daughter, who often goes by the name Lily Chang, had been paid $1.8 million by the US financial services giant JPMorgan.

However, the ICIJ files reveal the role of the BVI's offshore secrecy in obscuring Chang's links with her consulting firm, Fullmark Consultants. The company was set up in the BVI by Chang's husband, Liu Chunhang, in 2004, and he remained as sole director and shareholder until 2006, when he took a job in China's banking regulation agency.

Nominal ownership of the firm was transferred at that time to Zhang Yuhong, a Wen family friend, who the New York Times reported had connections with the Wen family's business interests.

…Other "princelings"-- a widely-used term for the families of China's political elite-- with offshore ties include: Li Xiaolin, a senior executive in one of China's state-owned power firms and the daughter of former premier Li Peng; Wu Jianchang, the son-in-law of China's late "paramount leader" Deng Xiaoping; and Hu Yishi, a cousin of former president Hu Jintao.

China's political elite were not the only individuals taking advantage of the BVI's offshore anonymity. At least 16 of China's richest people, with a combined estimated net worth in excess of $45 billion, were found to have connections with companies based in the jurisdiction.

Among those was Huang Guangyu, the founder of China's largest electronics retailer and once the country's richest man. Huang and his wife had a network of more than 30 companies in the BVI, according to the ICIJ records. Huang subsequently fell from grace and was in 2010 sentenced to 14 years in prison for insider trading and bribery.

Despite his imprisonment, Huang's offshore network is not standing idle. In 2011, one of his BVI firms made an unsuccessful bid for the Ark Royal, the retired aircraft carrier which was once the flagship of the British navy. According to press reports, Huang planned to turn the carrier into a shopping mall, but navy officials decided instead to scrap the ship.

…The role of major Western financial institutions in establishing offshore structures has also attracted scrutiny, despite being a routine and entirely legal function for many of them.

The ICIJ records show both PricewaterhouseCoopers and UBS had extensive contacts with incorporation agents in the BVI and other territories in the region. In total, UBS helped incorporate more than 1,000 offshore institutions for clients from China, Hong Kong or Taiwan, while PwC had a role in establishing at least 400.

…The amassed wealth and alleged corruption among China's political elite has been a topic of growing interest not only in the Western media, but also-- to a limited extent-- within China itself.

Spurred on by President Xi's public statements around anti-corruption efforts, a Chinese academic and activist, Xu Zhiyong, inspired a "New Citizens' Movement" in the country-- an informal civil society group which among other goals aims to increase the financial transparency of the country's elite and curbing corruption.

The movement, however, has faced strong opposition from Chinese authorities. Numerous participants in the New Citizens Movement have been arrested at public gatherings, while its founder Xu is in prison facing charged of "gathering a crowd to disrupt public order", and faces up to five years in prison. Meanwhile, international journalists who have reported from within the country on the wealth of China's political elite have faced immigration difficulties from the government, or trouble with authorities.

Closer to home, we have the loathsome Mafia crook from Staten Island and GOP cohort from Illinois, Aaron Schock, a closet case who's entire life is just one big lie, blatantly breaking campaign finance laws with crooked Republican donors and skipping away with not even a slap on the wrist. Although Schock's hometown media has been covering his ass for years, the Peoria Pundit is keeping up with her scandals and in DC, Roll Call broke the story of Schock's involvement with one of Grimm's crooked schemes:

In an action that may be part of a strategic plan to bring pressure on someone under investigation, Federal Bureau of Investigation agents arrested a person who is a friend and donor to a Congressman who is currently under investigation for campaign finance violations.

Diana Durand, of Houston, Texas, was arrested last Friday and accused of a contribution scheme to use the names of others to funnel $10,000 to the 2010 campaign of Rep. Michael Grimm, R-N.Y. She allegedly lied to federal agents about her actions. Rep. Grimm’s 2009-2010 campaign finance records show he received $41,550 from contributors in Texas, including $22,700 from employees of Sun Coast Resources.

Grimm’s attorney stated, “We are saddened that the government took the extraordinary step of arresting a single mother on these allegations, and hope the matter will be resolved quickly. The complaint does not allege any improper conduct by Congressman Grimm, and he denies any wrongdoing.”

Durand is also accused of funneling other funds to a second candidate. Durand, an employee of Sun Coast Resources, who contributed $2,400 to Rep. Aaron Schock, R-Ill., is accused of giving $4,800 to co-worker to be a ‘straw donor’ and asking the money be passed on in contributions to Rep. Schock. Schock’s campaign finance records shows he received $13,309 from contributors in Texas, including several who also gave to Grimm.

Darren and Rebecca Frye, who appear to have been financing Schock's career, have given hundreds of thousands of dollars to notoriously corrupt Republicans besides Grimm and Schock, from John Boehner, John Thune and Paul Ryan to small fry crooks like Marlin Stutzman, Bob Dold, Robert Gibbs, Schock heart-throb Adam Kinzinger.

Neither McDonnell nor Christie… 2 other crooked Republicans, Grimm and Schock

Too Long For Twitter... Foreign Stuff

Everyone is wondering what Mitt Romney is trying to hide in the only foreign policy he's ever been involved with other than the time when he lived in a Parisian palace for several years working to persuade French people to convert to Mormonism. It's not all that complicated though. $3 million dollars in a Swiss bank account? That's just chump change for Romney. $30 million in the Caymans is scarier and something voters have to think about more seriously. Over the weekend, the BBC's Business Section reminded everyone that Romney is part of a "global super-rich elite had at least $21 trillion hidden in secret tax havens by the end of 2010" and that the size of their dubious stash "is equivalent to the size of the US and Japanese economies combined!"

The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for the Tax Justice Network.

...Mr Henry said that the super-rich move money around the globe through an "industrious bevy of professional enablers in private banking, legal, accounting and investment industries.

"The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries.

"From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems," he said.

The report highlights the impact on the balance sheets of 139 developing countries of money held in tax havens that is put beyond the reach of local tax authorities.

Mr Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3tn to $9.3tn of "unrecorded offshore wealth" by 2010.

Private wealth held offshore represents "a huge black hole in the world economy," Mr Henry said.

So what should we do? Confiscate the whole lot of it... or elect one of the crooks president of the United States?

Global warming and climate change may have "winners and losers," as the political right likes phrasing it when people are impacted by their policies anchored in short-term greed and selfishness. In England, for example, vintners are already benefiting-- even to the point of competing with classic French winemakers-- and winning! It's not just because southern England (West Sussex, Kent and Cornwall in particular) share almost identical geology with the Champagne region of France. Global warming in England has resulted in lower annual rainfall and the kinds of milder winters wine grapes love. Next time you're in London, try a bottle of locally produced Nyetimber Classic Cuvee or the Camel Valley Brut.

Joseph Stiglitz: "The consequences of Austerity will depress our economy"... depress like in Depression. But that's not slowing Mitt Romney or his supporters down. They are hell-bent on another Great Depression. A sensible Stimulus program, he says, "will create jobs now and it will promote growth in the future."



A few weeks ago the whole nation watched in disgust as opportunistic teabagger Joe Walsh tried demonizing his Democratic opponent, Tammy Duckworth, not despite her military service (in which she lost both legs) but because of it. Long ago, when it became public that Walsh was a deadbeat dad, living high on the hog while refusing to pay any child support for his children, most Americans had learned that the loudmouthed lout was one of the most repulsive members of Congress.

When he first ran for Congress in 1996 he "positioned himself as a socially liberal Republican who favored abortion rights and gun control measures-- sharp contrasts to the staunchly conservative stances he now holds. "I think I'm the kind of Republican who can win because I'm open and tolerant," Walsh told the Tribune at the time. "I'm not some right-wing conservative." In 2010 he won because he ran against a hated corporate Democrat and Chamber of Commerce shill, Melissa Bean, a victim of that years' Great Blue Dog Apocalypse." Having taken expensive acting lessons at the Lee Strasberg Theatre and Film Institute in both NYC and L.A., he decided to play the role of teabagger next. It fit him well and now he's using the fate of Israel as a prop in his latest-- and hopefully last-- vile election campaign.



And the last thing's not foreign. Blue America supporters voted and decided that the Republican we should target in our campaign against those who have been trying to kick 18-26 year olds off their parents' health insurance policies is none other than... Paul Ryan. Seems fair to me. Ryan got 60 votes and second place was a tie (at 50 votes each) between Nick Ruiz (D-FL) and Carol Shea-Porter (D-NH). There have been nearly 4 million Facebook impressions already-- in just one week that these ads have been running. The ads will continue running in Racine, Janesville, Kenosha, the southern Milwaukee suburbs and the rest of Wisconsin's first congressional district where progressive Ron Zerban is challenging Ryan. If you'd like to help us pay for the ads, or help Zerban fight back against the millions Wall Street is pouring into Ryan's coffers, here's where you can do both.

What Do Mitt Romney And "Sir" Allen Stanford Have In Common?

The obvious, of course, is that both Romney and Stanford worked up business models that involved financial manipulation, lax off shore Caribbean islands and Swiss bank accounts. But Sir Allen is headed for another 110 years in prison for his fraud and Romney is headed for electoral victories in America's poorest, least educated and most socially backward states-- basically the South and the Mormon domains out West. We started covering Sir Allen in 2009 when he first got caught in a seven billion dollar ponzi scheme and it was revealed that he had found the most corrupt members of Congress-- from John Boehner to Rahm Emanuel-- to lavish immense amounts of bribery and protection money on. He gave at least a million and a half dollars to the Republican and Democratic election committees, like the corruption-soaked DCCC and NRCC.

Short version: Stanford bought a phony "knighthood" from Antigua and set up an offshore bank there that ran a Ponzi scam and ripped off billions from investors. At the time he was apprehended about 3 years ago, we mentioned that

U.S. prosecutors pointed out that Stanford's business practices put the “integrity of the markets” at risk. Stanford is being held without bail since he is considered a 100% flight risk, already having been apprehended trying to escape on a chartered jet. He's been in jail in Virginia and said he was anxious to get back to Texas, a state where they know how to take care of well-connected rich white people.

The update is that this week he was sentenced to 110 years in prison with no possibility of parole. He isn't taking it well-- nor is he in the slightest bit contrite. In fact, he sounds like a case study in billionaire entitlement.

Jaime Escalona was fleeced so thoroughly by the financier R. Allen Stanford that he could no longer pay for his grandson’s autism treatments, he said in a steady voice in court on Thursday, before turning to the defendant and declaring, “You are a dirty, rotten scoundrel.”

Mr. Stanford took the insult in stride, and stared right back.

Then Angela Shaw Kogutt, who said three generations of her family had lost over $4 million because of Mr. Stanford’s “financial terrorism,” asked all the scores of victims in the federal court gallery to stand before Mr. Stanford to show him their faces of misery. Judge David Hittner of the Federal District Court told Mr. Stanford he was under no obligation to look, but he swiveled his chair toward the victims anyway without a flinch or sign of caring.

For Mr. Stanford, his day in court on Thursday-- the day he was sentenced to 110 years in prison without parole for masterminding a $7 billion Ponzi scheme-- was anything but a time for contrition. Instead, after refusing to testify in his own trial, Mr. Stanford broke his silence to say that unlike Bernard L. Madoff, the most prominent of Ponzi scheme swindlers, “I am not a thief.”

Rather, he said, he was the victim of government “Gestapo tactics” that provoked a run on his Caribbean bank and then sold off his assets at bargain-basement prices. Anyone who lost their money, he said, did so because of the government’s “unnecessary” actions.

“I’m not up here to ask for sympathy or forgiveness,” he said in a rambling statement to the court before the sentencing, intermittently holding back tears and shuffling papers. “I’m up here to tell you from my heart I didn’t run a Ponzi scheme.”

In response, the federal prosecutor William J. Stellmach called Mr. Stanford’s version of events “obscene.”

“This is a man utterly without remorse,” Mr. Stellmach said. “From beginning to end, he treated all of his victims as roadkill.”

A federal jury in March convicted Mr. Stanford of running an international scheme over more than two decades in which he offered fraudulent high-interest certificates of deposit at the Stanford International Bank, which was based on the Caribbean island of Antigua.

Prosecutors argued that Mr. Stanford had consistently lied to investors, promoting safe investments for money that he channeled into a luxurious lifestyle, a Swiss bank account and various business deals that almost never succeeded. Mr. Stanford’s defense lawyers pleaded for a sentence effectively of time served because of the three years he spent in prison awaiting trial. Prosecutors recommended 230 years, the maximum according to sentencing guidelines, for his convictions on 13 counts of conspiracy, wire and mail fraud, obstruction and money laundering. He was acquitted of one count of wire fraud.

The prosecutors heavily relied on James M. Davis, Mr. Stanford’s former roommate from Baylor University, who served as his chief financial officer. Mr. Davis testified that the Stanford business empire was a fraud, with bribes paid to Antiguan regulators and schemes to hide operations from federal investigators. He described how Mr. Stanford had sent him to London to send a fax to a prospective client from a bogus insurance company office to reassure him that his investment would be safe.

...[T]he prosecutors contended that while Mr. Stanford told his clients that their CDs were insured and that the money he invested went into safe financial instruments, he was actually diverting it to his own real estate and private ventures, using more than $2 billion to finance his lifestyle. As prosecutors did in the trial, Mr. Stellmach painted him as a man “who for 20 years orchestrated a massive fraudulent scheme. He corrupted everything he touched.”

Ms. Kogutt and Mr. Escalona, representing two victims’ groups, described how investors had lost their homes, retirements and ability to pay for their children’s and grandchildrens’ educations. They said some victims had become suicidal.

“Mr. Stanford’s heartless actions were coldly calculated and premeditated,” said Mr. Escalona, a Venezuelan who spoke for Latin American investors. Ms. Kogutt, who is from Dallas, said Mr. Stanford “played with our futures as if playing a board game and with our money as if it were Monopoly money. He’s just a common thief.”

It took three years to bring Mr. Stanford to trial because he was severely beaten in a 2010 fight with another federal inmate in a prison outside Houston and then became addicted to prescription antistress drugs. He underwent a year of therapy before Judge Hittner ruled that he was fit to stand trial. The defense said Mr. Stanford could not properly defend himself because he had lost much of his memory.

In an apparent appeal for a lighter sentence, Mr. Stanford said in court Thursday that he had worked hard to recover his memory, though he said it was still like “Swiss cheese.” He spoke of the “toxic mix” of drugs that he been prescribed in federal prison and the assault that led to six hours of surgery.

“This was not three years of pleasure by any stretch,” he said. “I wouldn’t wish it on anybody,” he added, not even the prosecution lawyers.

A couple dozen more billionaires behind bars and this country can get back to its ideals.

What's The Greater Threat To Our Country-- "Espionage" Or Our Own Willful Stupidity? Offshore Banking or Offshoring Jobs?

Clearly, the new Miss America, Nebraska's Teresa Scanlan, had a beautifully successful operation to have whatever vestiges of a pesky ole brain she ever had, removed before the contest... either that or she watches CNN or Fox all day. You wonder how someone like Ben Nelson, Adrian Smith or Mike Johanns keeps getting elected? Just remember who votes. And where they chose to get their information.

I I shouldn't pick on Nebraska. Voters in Ohio are demonstrably as retarded. In a state plagued by unemployment caused by offshoring, they just elected two of the most degenerate architects of American trade policy, Rob Portman and John Kasich, as Senator and Governor, Portman (57-39%) and Kasich (49-47%), while electing 5 new Members of Congress-- Steve Chabot, Steve Stivers, Bill Johnson, Jim Renacci and Bob Gibbs, 100% dedicated to sending their jobs overseas as quickly as possible. Go Ohio!

Last week one of Ohio's top blogs, Plunderbund, looked into how Kasich is balancing his vitriolic attack on public service workers and their unions with unconscionable pay raises for bureaucratic patronage jobs in his administration. One thing all these newly-elected Ohioans have in common is an uncanny dedication to lending a hand to their wealthy campaign donors so that the state's-- and, worse, the nation's-- wealth is concentrated in the hands of fewer and fewer rich families while the middle class sinks into a morass that threatens the very existence of democracy in our country. And that brings us back to... wikileaks, so badly comprehended by the new idiot Miss America. I wonder if this will even matter to people like Teresa Scanlan, Ben Nelson, Adrian Smith, Mike Johanns, Rob Portman, John Kasich, Steve Chabot, Steve Stivers, Bill Johnson, Jim Renacci and Bob Gibbs. Nah... I don't really wonder.

Swiss whistleblower Rudolf Elmer plans to hand over offshore banking secrets of the rich and famous to WikiLeaks.

...The offshore bank account details of 2,000 "high net worth individuals" and corporations-- detailing massive potential tax evasion-- will be handed over to the WikiLeaks organisation in London tomorrow by the most important and boldest whistleblower in Swiss banking history, Rudolf Elmer, two days before he goes on trial in his native Switzerland.

British and American individuals and companies are among the offshore clients whose details will be contained on CDs presented to WikiLeaks at the Frontline Club in London. Those involved include, Elmer tells the Observer, "approximately 40 politicians."

Elmer, who after his press conference will return to Switzerland from exile in Mauritius to face trial, is a former chief operating officer in the Cayman Islands and employee of the powerful Julius Baer bank, which accuses him of stealing the information.

He is also – at a time when the activities of banks are a matter of public concern-- one of a small band of employees and executives seeking to blow the whistle on what they see as unprofessional, immoral and even potentially criminal activity by powerful international financial institutions.

Along with the City of London and Wall Street, Switzerland is a fortress of banking and financial services, but famously secretive and expert in the concealment of wealth from all over the world for tax evasion and other extra-legal purposes.

Elmer says he is releasing the information "in order to educate society." The list includes "high net worth individuals," multinational conglomerates and financial institutions-- hedge funds." They are said to be "using secrecy as a screen to hide behind in order to avoid paying tax." They come from the US, Britain, Germany, Austria and Asia-- "from all over."

Clients include "business people, politicians, people who have made their living in the arts and multinational conglomerates-- from both sides of the Atlantic." Elmer says: "Well-known pillars of society will hold investment portfolios and may include houses, trading companies, artwork, yachts, jewellery, horses, and so on."

"What I am objecting to is not one particular bank, but a system of structures," he told the Observer. "I have worked for major banks other than Julius Baer, and the one thing on which I am absolutely clear is that the banks know, and the big boys know, that money is being secreted away for tax-evasion purposes, and other things such as money-laundering-- although these cases involve tax evasion."

...[P]rivacy is being abused so that big people can get big banking organisations to service them. The normal, hard-working taxpayer is being abused also.

"Once you become part of senior management," he says, "and gain international experience, as I did, then you are part of the inner circle-- and things become much clearer. You are part of the plot. You know what the real products and service are, and why they are so expensive. It should be no surprise that the main product is secrecy … Crimes are committed and lies spread in order to protect this secrecy."

...That first crop of documents was scrutinised by the Guardian newspaper in 2009, which found "details of numerous trusts in which wealthy people have placed capital. This allows them lawfully to avoid paying tax on profits, because legally it belongs to the trust … The trust itself pays no tax, as a Cayman resident," although "the trustees can distribute money to the trust's beneficiaries."

Now, Blum says, "Elmer is being tried for violating Swiss banking secrecy law even though the data is from the Cayman Islands. This is bold extraterritorial nonsense. Swiss secrecy law should apply to Swiss banks in Switzerland, not a Swiss subsidiary in the Cayman Islands."

Espionage!

And in preparation for the release of more espionage, Bank of America has bought up Internet domain names BankofAmericaSucks.com and, in honor of BofA's CEO, BrianMoynihanblows.com/ Mary Bottari took a look at what Wikileaks actually has on America's biggest bank that's making them so nervous. Here are some of the likeliest scenarios we'll see playing out:

Legal Liability for Toxic Mortgages

BofA is already under the gun, defending itself from multiple lawsuits from private investors as well as Fannie and Freddie demanding that the bank buy back billions worth of toxic mortgages-backed securities. The firm stopped issuing subprime mortgages in 2001, but it kept underwriting subprime mortgage-backed securities for many years. In September 2009, for example, BofA underwrote $239 million worth of securities backed by subprime loans. BofA has reserved $4.4 billion for these "put back" lawsuits. If Assange has emails showing that top executives at BofA knew they were peddling toxic dreck to investors, it would rock the firm and give tremendous ammunition to the army of lawyers already knocking on BofA's door.

Reckless and Illegal Foreclosures

BofA is at the heart of the robo-signing scandal and has wrongfully foreclosed on countless American families. One poor woman returned to a vacation home to find it locked, all her possessions gone -- including the ashes of her late husband. How could such a mistake be made? A BofA employee deposed in February 2010 said that she signed as many as 8,000 foreclosure documents a month without reviewing them, in violation of the law. Mounting questions about the fraudulent and illegal foreclosure practices at the big banks and mortgage service companies prompted BofA to temporarily halt foreclosures nationwide in October 2010. If Wikileaks can document that top BofA officials have a callous disregard for legal processes and constitutionally protected property rights, BofA's mounting legal liability may not be sustainable.

Countrywide Headaches

In 2008, BofA acquired Countrywide, one of the most aggressive and fraudulent lenders during the housing bubble. The result has been a trainwreck of liability and lawsuits for the megabank that now has over 1.3 million customers in foreclosure. To settle the lawsuits with Illinois, California and eight other states over predatory lending, BofA came up with an $8.4 billion loan relief plan for those holding Countrywide mortgages. In June, 2010 BofA paid $108 million to settle a Federal Trade Commission case that charged Countrywide with having extracted excessive fees out of borrowers facing foreclosure. BofA paid $600 million in August 2010 to settle shareholder claims that Countrywide had concealed the riskiness of its lending standards. There is no end in sight for these suits. In June 2010 the State of Illinois sued Countrywide again, this time over racial discrimination in its lending practices. Wikileaks could have further documentation of Countrywide's illegal and reckless underwriting practices or ongoing fraud at BofA.

Taxpayer Paid Bonuses

BofA acquired the brokerage firm Merrill Lynch for $50 billion in January 2009. The U.S. government blessed the merger with a $20 billion bailout loan to aid BofA. After the acquisition went through, it was revealed that Merrill Lynch had lost $15.8 billion in the last quarter of 2008 and that $3.6 billion in bonuses were paid ahead of schedule to top executives at Merrill. Among beneficiaries of the bonus bonanza was Merrill's CEO John Thain, who famously spent a million redecorating his office at the height of the crisis. About the deal New York Attorney General Andrew Cuomo said: "One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding." If Wikileaks has emails showing top executives knowingly used bailout bucks for bonuses, this ugly chapter in history could be reopened, prompting Congressional investigations and further bailout backlash.

Blue Dogs Show Their True Color On The Estate Tax-- And It Ain't Blue

People who live in nice houses like this have pretty tulips-- and the clout to get out of paying their fair share of taxes

The battle over the Estate Tax is heating up again. The simplistic way to look at it is that the defenders of wealthy elites-- the Republican Party and DLC and Blue Dog Democrats (particularly Blanche Lincoln)-- are opposing real Democrats, who want to reform a system that the Bush Regime re-jiggered to save a handful of billionaires immense amounts of money (which is, at least in part, what put the deficit out of whack). That story line works, but it doesn't tell the whole story. It really isn't just the obvious villains who are currying favor with the richest 1 percent of Americans.

Tuesday CQPolitics carried a report that the House was likely to delay consideration if any kind of estate tax. Recall that when Blanche Lincoln and Jon Kyl tried to lower the rate on estates worth more than $7 million (under which the rate is zero; they pay nothing), their efforts (in her case on behalf of the Walton family which owns so much of WalMart) met some success.

Congress is under extreme pressure to act by the end of the year. If it does nothing, current law will make the estate tax disappear on Jan. 1, only to return in 2011 at higher rates and lower exemptions... Democratic leaders [K Street toadies Steny Hoyer and Rahm Emanuel] want to move a permanent extension of the 2009 structure of the estate tax, which features a $3.5 million per-person exemption and a top rate of 45 percent.

Liberals are upset that such an extension-- which would cost $233.6 billion over 10 years and benefit the country’s wealthiest families-- would not be offset, even as they have to scrape up every dollar they can to offset health care legislation.

Meanwhile, a moderate faction led by Shelley Berkley, D-Nev., has offered a proposal that would be more favorable to estates. It would gradually bring the top rate down to 35 percent, and push the exemption up to $5 million and index it for inflation.

Berkley’s legislation mirrors a plan supported by a bipartisan group of senators during the budget debate earlier this year. The amendment-- offered by Blanche Lincoln, D-Ark., and Jon Kyl, R-Ariz.-- was adopted by a 51-48 vote, signaling that Republicans and moderate Democrats had the clout to get a better deal for estates than the 2009 rates.

Wednesday's CQPolitics followed-up with the story of a revolt from the Democratic congressional ranks. Real Democrats are telling Hoyer and House Ways and Means Committee Chair-- and notorious crook-- Charlie Rangel that they're not going along with this proposal that puts an unfair tax burden of the middle class to clean up the mess that corporate America made on behalf of the very wealthiest families. John Larson (D-CT) and Richard Neal (D-MA) led the revolt that ended in a Ways and Means Committee vote that backs a one-year extension and ties it to a broader overhaul of the tax code next year.

That move would spare Democrats from endorsing a tax cut for the wealthiest few families during a time of double-digit unemployment.

But Rangel, D-N.Y., and Majority Leader Steny H. Hoyer, D-Md., have been seeking a permanent extension of current law, which would cost $233.6 billion over 10 years but would not have to be offset under the budget framework backed by Democrats.

An estate tax bill is expected to reach the floor after the Thanksgiving recess.

Under current law, the tax includes a top rate of 45 percent and a per-person exemption of $3.5 million. If Congress does nothing, the tax disappears Jan. 1 and then returns, with a $1 million exemption and a 55 percent top rate, in 2011.

Rangel said that no final decisions had been made and that committee Democrats would meet again later Wednesday.

But Larson and Neal said the direction Democrats were heading was clear. A one-year extension would make the estate tax levels expire at the same time as many other provisions in the tax code, potentially giving members an opportunity for a broader rewrite of the revenue structure. It was unclear whether the estate tax measure would include specific language that would somehow trigger a broader tax measure.
A one-year bill could face some difficulty, however.

A leading Ways and Means moderate, Earl Pomeroy, D-N.D., warned that the push for a one-year extension might falter in the broader Democratic caucus.

“It’s not about that room,” he said, gesturing toward Rangel’s off-the-floor office, where Democrats met Wednesday morning.

He threatened to vote against the rule that would bring such a bill to the floor and said other members of the fiscally conservative Blue Dog Caucus might do the same.

Before you listen to Parker Griffith (Blue Dog-AL), who is both a multimillionaire and the single most reactionary Democrat in Congress, please remember that assets left to spouses (or charities) are exempt from estate taxes, as are family farms. The idea behind an estate tax is to ameliorate the accumulation of tax free wealth in the hands of a small number of families. Estate taxes in America are far too low and have already led in the dangerous direction of perpetuating the nation's wealth in the hands of a few powerful families. Even conservative icon Winston Churchill famously argued that estate taxes are argued that estate taxes are “a certain corrective against the development of a race of idle rich," and argument entirely embraced by two of America's wealthiest men, Bill Gates and Warren Buffett. As Buffett pointed out in 2006, in regard to predators like Griffith: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” That same year he also said "I would hate to see the estate tax gutted. It's a very equitable tax. It's in keeping with the idea of equality of opportunity in this country, not giving incredible head starts to certain people who were very selective about the womb from which they emerged."

Now please listen to this neo-Confederate Blue Dog scumbag reading Republican Party talking points, all distortions, about the estate tax:



And speaking of slimy, greed-obsessed and selfish rich people like Parker Griffith, the IRS announced this week that their crackdown on off shore banking cheats will produce billions of dollars. Almost 15,000 Americans who were cheating have come forward in time for the leniency window.

A rush of tax evaders applied before the program's Oct. 15 deadline-- nearly double the IRS preliminary tally-- taking advantage of guarantees that they wouldn't face criminal prosecution if they paid taxes, interest and reduced civil penalties... The leniency offer accompanied the IRS' legal battle with UBS, which in February agreed to a $780 million settlement of criminal charges that it had secretly sent bankers into the U.S. to help American clients evade taxes. The bank later turned over data for up to 250 Americans whose accounts had alleged signs of tax evasion.

Under the federal civil settlement, Swiss authorities have until August to disclose accounts for 4,450 American clients of UBS. Federal officials said the first 500 would be identified by month's end.

The targeted UBS accounts include those that held more than 1 million Swiss francs-- roughly $985,000-- any time between 2001 and 2008 for which "tax fraud or the like" is suspected.

And a bonus-- Forbes is reporting that the IRS will be looking for patterns that point to specific financial advisors and companies that were steering their clients into cheating on their taxes. I sure hope there's no amnesty or leniency for them.

Unwarranted Leniency For Tax Cheats Supposedly Runs Out Thursday

This morning I listened to a California Republican legislator-- yes though a rapidly dying breed, there are still a few scattered around the state making trouble-- explaining why he and some of his cronies are opposing a water bill for the parched state. He didn't think the Democrats' proposal to impose stiff penalties on people and, most especially, entities that are illegally drilling into public water sources and diverting it for their own use. A small and inconsequential fine? Fine! A real fine that would discomfort Republican campaign donors? He'd rather see southern California shrivel up and blow away in the wind.

Yesterday's NY Times Business Section carried a piece by Lynnley Browning explaining the Thursday deadline for one subset of off-shore tax cheats. Chances are there are "tens of billions of dollars" illegally hidden away, to avoid taxes, in offshore tax havens like Switzerland and shady Caribbean islands like Antigua, the island that knighted "Sir" Stanford, currently in jail as a flight risk after being caught bilking scores of clients out of millions of dollars. Anyone who comes clean by Thursday will get a good deal of leniency. This is a criminal ripoff of American taxpayers. The only leniency should be that instead of life in prison they should merely forfeit every cent they have. But instead of penalties ranging to 50% of what they owe, they'll only be charged 5-10%. This is absolutely disgraceful, something I'd expect from the Bush Regime but something becoming just as typical of the Obama Administration.

Several thousand wealthy people have come forward, hoping to avoid large fines or possibly even prison. But many others are still weighing their options. The choice is stark: They can confess and pay the penalties, or gamble that they will not get caught. With the deadline only days away, tax lawyers say they are being inundated by anxious clients.

“We’re seeing a flood of people,” said Scott D. Michel, a tax lawyer in Washington. His firm, Caplin & Drysdale, has 350 clients who are preparing to report their offshore accounts to the Internal Revenue Service. The firm has 14 lawyers handling their cases, one of which involves a tax bill of hundreds of millions of dollars.

The deadline is part of a broad crackdown on Americans who use offshore accounts to evade federal taxes. As part of the effort, United States authorities have challenged the long tradition of banking secrecy in Switzerland, and, in particular at UBS, that nation’s largest bank.

Flagrant Paranoia On The Far Right-- And The Delusion That Tax Evasion Is A Right

If you think that the disruptive teabagger nuts only run around chanting "Liar, Liar" and "Read the bill" (the Glenn Beck/Rush Limbaugh version of "the bill," not the actual bill, of course) you'd only be half right. They have other, more arcane chants that pop up at all the town halls across the country-- like sudden coordinated shouting for "tort reform." Yesterday, in the account of the highly successful-- if not quite as entertaining as Barney Franks'-- town hall event Alan Grayson held in Orlando, I noticed one of the self-righteous and ill-informed cranks was whining that he opposes health care reform because it'll "usher in socialism" and "expose his bank accounts to government scrutiny." I heard a lot of the wingnuts grousing about that government-poking-into-bank-accounts stuff at the teabagger event I went to as well.

It's one of their memes. Knowing what a stickler he is for facts and never letting anything slip by, I called Alan Grayson last night and asked him what the hell they're carrying on about. He told me it was more of their flagrant paranoia, and he said he looked into it to make sure he understood what they're actually referring to. "There was a lot of faux specificity... shouting about page 59, lines 21-24, so I went back and went through it carefully. The lines refer to a provision that encourages health care providers to arrange to receive payments electronically (ACH) rather than by paper checks. It's just a cost cutting provision with no nefarious undertones." Yep... right-wing paranoia, stoked by Glenn Beck, Rush Limbaugh, Bill O'Reilly and irresponsible Republican politicians earning their keep from their Insurance Industry paymasters.

Now, on the other hand, there are a group of Americans who should be very much afraid of the power of the federal government. Perhaps you noticed that yesterday quite a few multimillionaires who haven't been paying their taxes-- by stashing their money offshore-- are actually about to really get the government poking around in their bank accounts. The IRS made a deal with UBS (a crooked Swiss bank) which is resulting in UBS turning over 4,450 names of willful tax evaders.

Switzerland's largest bank, UBS AG, is set to give the U.S. government information on 4,450 accounts suspected of hiding money from the IRS. In June, the U.S. and Swiss governments came to an information-sharing agreement after a six month battle over how much the bank would divulge. The Swiss government says it will fulfill a request for the information within a year.

Back in February, UBS admitted to participating "in a scheme to defraud the U.S.," paid a $780 million fine, and gave the IRS the names of 250 American clients who hid assets. The IRS then sued the bank for information on 52,000 accounts. UBS argued that disclosing more information would violate Switzerland's banking confidentiality laws but eventually agreed to hand over information related to 4,450 accounts that were of "the greatest interest" to the IRS.

Since UBS admitted its part in the scheme, four of its clients have agreed to plead guilty to failing to report their offshore bank accounts. Thousands of other clients have avoided penalties by sharing their accounts with the IRS under a special voluntary program that ends in September.

About $18 billion was being hidden, and there will be stiff fines and possible prison sentences coming soon. Teabaggers and wingnuts who I've spoken to actually seem to believe that they have the right to evade taxes. Hopefully the government will deal with them the way they need to deal with all serious lawbreakers.

Republicans Brand Obama's Proposal To Make Big Business Pay Their Taxes As "Raising Taxes"

My ears are still ringing from waking up to the howls and yowls of outrage-- and that was yesterday... and it isn't stopping. The wealthiest and most powerful-- always campaign donors-- have spent billions of dollars to make sure they wouldn't have to pay taxes and to make sure the federal government's primary tasks would be to guarantee their continued primacy. This Obama feller isn't playing by their rules-- the ones they paid for. The hysteria that started yesterday was sparked by the gumption of this guy trying to force them to pay their taxes. God, you would have thought he just decided to change the name from "Congress" to the "People's Soviet!" What he did was take aim at tax avoiders seeking to shelter their money in offshore accounts. Now there's something to stir the rancid hearts of any teabagger too stupid to put 1 + 1 together and figure out not to eat his own feces on the subway! Obama estimates getting these scofflaws to pay their fair share will add $210 billion to the treasury over the next decade. I wonder if Grover Norquist drowned himself in his own bathtub today.

While most Americans pay their fair share of taxes, Mr. Obama said, “there are others who are shirking theirs, and many are aided and abetted by a broken tax system.” Multinational corporations, he said, paid an average tax rate of just 2 percent on their foreign revenue. And some wealthy individuals hide their fortunes in foreign tax havens.

The president thus set up a frontal clash with big business over the tax advantages enjoyed by companies with extensive overseas operations.

Few Republicans are stupid enough to take this on directly and head-on-- maybe Michele Bachmann, Paul Broun, Virginia Foxx and Richard Burr. But Mitch McConnell, Paul Ryan, Eric Cantor and other right-wing shills for Big Business were already twisting the argument away from tax fairness and towards... socialism. That worked real well for them in the early 1930's (not!) and I have my fingers crossed that it will have the same impact this time-- 88 Republicans left in the House of Representatives. Miss McConnell was already calling the proposal “a significant tax increase on companies representing 44 percent of total U.S. private employment” and said that in the depths of recession, it seemed “particularly harmful to our shared goal of creating more American jobs rather than driving them overseas."

President Obama addressed some of the concerns Monday, saying that “I want to see our companies remain the most competitive in the world” but that the way to do that was “not to reward companies for moving jobs off our shores or transferring profits” abroad.

One proposed change would restrict companies from deferring the payment of taxes on profit earned overseas. Administration officials said the plan would keep businesses from taking deductions against their taxes by inflating the amount of foreign taxes they paid.

Mr. Obama raised the idea frequently during his presidential campaign. In his remarks to Congress in February, as he outlined his priorities for the year, he pledged to make the tax code more equitable by “finally ending the tax breaks for corporations that ship our jobs overseas.”

The White House said that Mr. Obama is seeking to shut down overseas tax havens in an attempt to “close the international tax gap.”

Mr. Geithner noted that the Group of 20 industrial countries had agreed this year to act against tax havens like Switzerland, Liechtenstein, Luxembourg and Monaco. Amid such rising pressure, 10 countries have agreed to adopt new international standards, he said.

“For years, we’ve talked about shutting down overseas tax havens,” Mr. Obama said.
“That’s what our budget will finally do.”

The president said he hopes to remove the competitive advantage for companies that invest and create jobs overseas, working to replace their tax advantages with incentives to produce jobs in the United States.

The richest and most powerful among us don't plan on taking this lying down. Like Illinois Senator Dick Durbin reminded us a few days ago, they own the Senate. They own the entire Republican Party lock, stock and barrel and they own the DLC wing of the Democratic Party-- corrupt reactionaries like the Evan Bayh anti-Obama Bloc, bribe-taking sleaze-bags, Blanche Lincoln, Ben Nelson and Max Baucus for example.

Baucus was as fast out of the gate defending his wealthy patrons as McConnell was! Obama's plans to close loopholes that have been paid for by the wealthy via immense bribes to members of Congress are causing major turmoil in Washington. (Remember, more than a few people think it was President Kennedy's and, even more so, President Nixon's eyeing the oil depletion allowance that led to one being assassinated and the other being deposed in a bloodless coup.

Emily Pierce got it exactly right at Roll Call, writing that "despite being blamed for the near collapse of the U.S. economy, banking interests remain a powerful force in shaping-- and killing-- legislation on Capitol Hill. But their muscle is being tested by a series of bills aimed at bringing the industry under Washington’s regulatory thumb."

“I don’t know how they could bring us to this situation in this economy and have lost so much credibility as an institution,” said Senate Majority Whip Dick Durbin (D-Ill.), who suffered defeat in a major battle with the banks last week. “To think they still have clout in this chamber to dictate what we’re going to do in terms of mortgages and foreclosures. It really troubles me.”

Durbin pointed to an April 23 Gallup Poll showing that only 18 percent of Americans expressed strong confidence in U.S. banks. But Durbin indicated that he believes the $37 million in campaign contributions and $56 million in lobbying expenses that commercial banks spent during the 2008 election cycle helped bolster the banks’ case with his colleagues.

Durbin has sworn off ever supporting any more bailouts for this crooks. That I love! And Larry Lessig takes it one giant, important step further: taking Congress back from the dirty filthy banksters.

Thousands of people are telling members of Congress they won't get a dime from us unless they co-sponsor Senator Durbin's Fair Elections Now Act to overhaul congressional campaign financing. It would replace our broken system with citizen-funded elections, a hybrid of public funding and small-dollar donations.

Already, our strike has withheld over $1.25 million from politicians (based on contributions last cycle). It's also been featured by ABC, NBC, the Associated Press, Politico, Huffington Post, and others.

Now is the time to send politicians a message that we absolutely demand they change the system.

Nothing is more important than getting the corrupting influence of Big Business out of the electoral system. "They own the place" is not something we should be content to ever heard about the relationship between corporate criminals and our government. Meanwhile, in this morning's Wall Street Journal Matthew Richardson and Nouriel Roubini, both distinguished professors at NYU's Business School, point out academically what almost all Americans feel in their gut: taxpayers should not continue subsidizing crooked, arrogant banksters. Just because the Bush Regime started it there is NO reason for the government to continue "providing capital, loan guarantees and financing with no strings attached."

Banks should understand this. When providing loans to troubled companies, they place numerous restrictions, called covenants, on what these firms can do. These covenants generally restrict the use of assets, risk-taking behavior, and future indebtedness. It would be much better if the government focused on this rather than on its headline obsession with bonuses.

For example, consider the fact that the government, while providing aid to banks, did not restrict their dividend payments. A recent academic study by Viral Acharya, Irvind Gujral and Hyun Song Shin (www.voxeu.org) notes that banks only marginally reduced dividends in the first 15 months of the crisis, paying out a staggering $400 billion in 2007 and 2008. While many banks have been reducing their dividends more recently, bank bailout money had been literally going in one door and out the other.

Consider also recent bank risk-taking. The media has recently reported that Citigroup and Bank of America were buying up some of the AAA-tranches of nonprime mortgage-backed securities. Didn't the government provide insurance on portfolios of $300 billion and $118 billion on the very same stuff for Citi and BofA this past year? These securities are at the heart of the financial crisis and the core of the PPIP. If true, this is egregious behavior-- and it's incredible that there are no restrictions against it.

...Is there anything more important in solving the financial crisis than creating a law (an "insolvency regime law") that empowers the government to handle complex financial institutions in receivership? Congress should pass such legislation-- as requested by the administration-- on a fast-track basis.

The mere threat of this law could be a powerful catalyst in aligning incentives. As the potential costs of receivership are quite high, it would obviously be optimal if the bank's liabilities could be restructured outside of bankruptcy. Until recently, this would have been considered near impossible. However, in 2008 there was a surge in distressed exchanges of debt for equity or preferred equity... The government should be able to dangle an insolvency law as an incentive to cooperate. This will result in a $1 trillion game of chicken. But given the size of the stakes, and the alternative of the taxpayers continuing to foot the bill, it's the best way forward.

The End Of Tax Havens? Not Until The Far Right Is Wiped Off The Face Of The Earth

Well, I wish I could report that the primary author of the worldwide economic meltdown, political hack-turned-Swiss bankster, Phil Gramm, has been arrested and carted off to prison but... rarely is there that much justice in the world. Instead we find out that the company he worked for and helped to rip off the U.S. government to the tune of billions of dollars, UBS, has agreed to pay a fine of $780 million for "facilitating" American criminals-- wealthy corporate ones-- avoid taxes on billions of dollars. And the first of UBS' crooked clients, Steven Rubinstein, has been arrested. Set-ups like UBS-- which was caught smuggling diamonds in toothpaste tubes for rich Americans clients-- hold as much as $10 trillion shielded from the tax man.

The arrest is the first of an American client of UBS, which has been under criminal investigation for helping scores of wealthy Americans evade taxes through secret offshore accounts that went unreported to the Internal Revenue Service. It signals that federal authorities are making good on a promise to pursue American clients suspected of tax evasion, and in some cases to make indictments.

UBS admitted in February to conspiracy to defraud the I.R.S. by helping scores of wealthy Americans hide nearly $20 billion overseas.

The bank paid $780 million to settle the charges, but it remains under investigation, as do its American clients. The admission has helped to open the world of offshore banking and dealt a death blow to Swiss financial secrecy.

But Swiss banks, which, like UBS, helped the German Nazis pillage Europe-- and get away with it for decades after the war was won-- are hardly the only places where those eager to avoid anyone knowing about their income-- from drug deals and Third World dictators to garden variety Republican tax cheats. UBS alone was working for 52,000 American crooks.

You may have heard me complaining this week about how dismayed I was that Obama didn't seem to be on board with the Franco-German regulatory demands, one of which was to shut down the off shore tax havens. Under immense pressure from the wealthiest families in the country not to cooperate, it looks like Obama has bucked the establishment after all and agreed to cracking down on tax cheats. I'll believe it when I see it though.

For as long as I've been alive make believe countries like Andorra, Liechtenstein and Monaco, not to mention Vatican City, the worst of them all, have been functioning as what is known in international law enforcement as uncooperative tax havens. More recently they've been joined by a gaggle of island mini-states in the Caribbean, like Antigua, and the Pacific, like Vanuatu, all dedicated to hiding tainted money for wealthy clients. The racket accounts for 13% of Switzerland's GDP and even a higher proportion for the organized crime principality of Liechtenstein.

The G-20 has decided to "blacklist" uncooperative tax havens and possibly even apply sanctions. Of the 4 named as the world's worst, two immediately promised to mend their ways, the Philippines and Uruguay. That leaves Costa Rica and Labuan (part of Malaysia) on the top of the list of rogue states. It's unclear exactly what's going on with other shady financial centers, like Switzerland, Luxembourg, Macao, Hong Kong, Singapore, Iceland, the Cayman Islands, Vatican City, and the 2 British nests of tax evasion, the Isle of Man and Jersey.

The Group of 20 industrialized and developing nations at an economic summit here Thursday agreed to end "an era of banking secrecy," rooting out hundreds of billions of dollars estimated to be hidden from tax authorities in offshore banks. Faced with the prospect of penalties making it harder for their companies to do business overseas, Austria pledged to comply "without delay." The Philippines swore to take "the necessary steps" and Monaco promised to be off the list by "by the end of the year."

...The list, published by the Organization for Economic Cooperation and Development, a Paris-based group of wealthy nations, in coordination with the G-20, singled out four countries as the worst offenders: Costa Rica, Malaysia, the Philippines and Uruguay. Another 38 countries and territories, including the Cayman Islands, Panama, Bahamas and Liechtenstein, were listed as less serious offenders.

Billionaires and the shills who make a living by scraping and bowing before them and faithfully serving their interests-- like the Republican Party and GOP front groups like the American Heritage Institute, Fox News and the Cato Institute-- are hardly giving up and will fight a battle to persuade gullible Americans that tax cheats are true patriots. This video by Republican Party astroturf group, the Center for Freedom and Prosperity Foundation explains, with a straight face, how absolutely fabulous tax havens are. This isn't a spoof; it's real (I swear):

If You Thought The AIG Bonus Story Was Explosive... Wait 'Til You Hear What Went Down At Merrill Lynch

Will Ken Lewis get a corner cell? With a window?

Matt Renner is breaking the story at Truthout about how the Merrill Lynch Bonus Payments Dwarf AIG's. NY Attorney General Cuomo's office is getting to the bottom of the story but Renner's got a key paragraph that paints a grisly-- pitchfork inspiring-- picture:

In its last days as an independent company, Merrill gave performance-based bonuses exclusively to employees earning $300,000 a year or more and holding a rank of vice president or higher, according to their financial statements. $3.62 billion was handed out to these executives - a sum equal to 36.2 percent of the $10 billion in taxpayer funds that were allocated to Merrill as part of the Troubled Asset Relief Program (TARP) before the bonuses were paid.

So over a third of the $10 billion Bush gave his bankster buddies went directly into the pockets of the incompetent crooks most responsible for the failure of the company! Dennis Kucinich, who chairs the House Domestic Policy Subcommittee is launching an investigation that is likely to result in the firing of Bank of America CEO Ken Lewis, who made the Merrill Lynch deal without letting his shareholders know about the bonuses when they were asked to vote on the merger. (Sign SEIU's petition that calls for the ouster of one of the worst and most dangerous of the crooked banksters in America.)

But that isn't today's only bankster news. TPM has more on Joseph Cassano, the thief who ran AIG's Financial Products division and ran off with a $34 million bonus last month. It looks like the Feds will be able to extradite him from London and arrest him-- but not for theft but, like the way they got Al Capone, on tax charges.

An ABC News investigation found that Cassano set up some dozens of separate companies, some off-shore, to handle the transactions, effectively keeping them off the books of AIG and out of sight of regulators in the U.S. and the United Kingdom.

"This is the other very important issue underneath the AIG scandal," said [tax law expert Jack] Blum. "All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion."

Watch the video of the ABC News report. It's starting to look like what Cassano and AIG have been up to is helping set up tax scams so that corporations and very rich people wouldn't have to pay any, a hallmark of Republican economics and something heartily encouraged by the Bush Regime and their apologists inside and outside of Congress.

And as breathtaking as the sum of taxpayer dollars AIG has managed to put down in its post-crisis nationalized afterlife, the zombie insurer might possibly have indirectly scammed the government out of more money back in its Triple-A days. Today the Wall Street Journal explores AIG's euphemistically-named "tax structuring" business in a story about an IRS battle with Hewlett-Packard over an offshore entity -- or what the IRS terms a "sham that lacked economic substance and a business purpose"-- that AIG set up for the company to collect $132 million in tax credits. AIG's tax business, is "even bigger than the credit-default swaps business that led to the company's meltdown," a person "familiar with the business" tells the Journal. But that might be compartmentalizing things: we are beginning to suspect the credit default swap business and the tax "structuring" business were the same thing-- not just because they served the same end.

An attorney and tax shelter expert we spoke with today says AIG FP was one of the biggest players in the business of engineering offshore tax shelters for corporate and private clients that resembled a multibillion dollar tax evasion scheme called Son of Boss (we don't have time to figure out why) that thousands of corporations and wealthy individuals used to book phony capital gains losses and evade most or all of their income taxes in the late nineties and early 00s. The mind-numbing litany of esoteric loopholes such tax shelters employ to concoct said phony losses is something you don't want to hear about at this hour-- trust us-- but they are generally anchored by a set of exotic unregulated derivative securities whose 'notional value' can help fabricate losses that don't actually exist. Which is where Cassano came in-- only, obviously, the losses existed.

California Financial Crisis Mirrors What Bush Is Leaving Obama

I've already acclimated myself to the reality of a Schwarzenegger financial disaster in California not unlike Bush's in the rest of America. I'm not getting a state tax refund this year; just an IOU. The state Controller, a good guy, John Chiang said he's got no choice but to suspend $3.7 billion worth of tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1 because of the cash crisis the state is facing. There's a $42 billion budget deficit.

I can handle not getting my tax refund. I feel a lot less comfortable about the $300 million in cash grants for needy families and the aged, blind and disabled and $13 million in grants for college students. With unemployment soaring and with more and more families using up their unemployment insurance-- even with the extension-- a strong safety net is more needed than normally. But there isn't one.

Any why not, you wonder. In today's Washington Post there was a report by Carol Leonnig about how some of our biggest corporations avoiding their share of taxes by using off shore banking havens. "Some?" Well... actually most.

A majority of America's largest publicly traded companies and the U.S. government's largest federal contractors-- including some receiving millions in federal bailout money-- use multiple subsidiaries in offshore tax havens to conduct business and avoid paying U.S. taxes, a new report finds.

The new Government Accountability Office (GAO) report, released today by Sens. Byron L. Dorgan (D-N.D.) and Carl M. Levin (D-Mich.), lists Citigroup and Morgan Stanley as having set up hundreds of tax haven subsidiaries, along with American International Group and Bank of America. Also in the tax-haven list are well-known companies and such federal contractors as American Express, Pepsi and Caterpillar.

How big of a deal are we talking? Dorgan and Levin estimate this crap is costing the federal government around $100 billion each year. Now you know me with the capital punishment. But I swear, shoot a couple banksters and CEOs and this just will stop happening. Oh, and confiscate all their assets too. You remember the Members? They warned us back in 1978 with this Steve Lillywhite-produced song, written by Jean Marie Carroll, a former banker himself:



Thanks to David B in comments-- we have an updated version by Carroll.