Today's comment is by Bob Bauman JD, former U.S. Congressman and now Senior Writer and Legal Counsel for The Sovereign Society. 

Election year 2008 is officially the 18th U.S. presidential election during my lifetime. God willing, it will also be the 13th (maybe an unlucky number?) election that I've cast my vote for president.

Of course, I've also been a candidate elected to public office, so I know from experience that this is the time when all sorts of weird stories about candidates crawl out of the woodwork every election year.

A few months back there was a minor outcry claiming that Republican presidential candidate, Senator John McCain may not have been eligible to serve as president. The critics claimed he was not "a natural born citizen" as required by the U.S. Constitution.

Senator McCain was born in the U.S. Panama Canal Zone in 1936, where his father was stationed in the U.S. Navy. This outcry was more or less silenced when the U.S. Senate passed a bi-partisan resolution endorsing their colleagues' "natural born" status.

Yet Another Unnatural Born Candidate?

Now comes one Philip J. Berg. He is a former member of Pennsylvania's Democratic State Committee and former deputy attorney general of Pennsylvania. Berg also happens to be a highly disgruntled Hillary Clinton fan, who was backing her for president.

Berg filed a lawsuit last week in U.S District Court. He is asking the court to declare Obama ineligible for the presidency because he is not a natural born American citizen. He has asked the court to prevent him from running for the position.

The Berg lawsuit claims that Obama's eligibility is doubtful on several grounds, including some Obama family members' allegations that he was born in Kenya. Berg is also questioning Obama's parents' citizenship status which he claims prevented them from automatically granting Obama U.S. citizenship. He also questions the authenticity of Obama's Hawaii birth certificate.

Berg has also claimed Obama was a citizen of Indonesia as a child and Obama retained that foreign citizenship into adulthood without recording an oath of allegiance to the United States. That's a requirement to retain your American citizenship.

As both an attorney and long-time citizenship expert, I know something about the legal tangle that can befall an innocent infant born to American parents in foreign lands.

Yes, sometimes the odd circumstances of a foreign birth can call into question a hapless child's American citizenship. However, I'll let the federal court decide whether Barack Obama fits into this category or not.

This Is Just a Smaller Symptom of a Greater Issue

Whether legitimate or not, this lawsuit raises a greater issue that impacts all Americans who have an official U.S. passport (which about 30% of us do).

In recent times, the U.S. government is using your U.S. passport as a means of coercion in various ways.

In the United States, the government will deny you a U.S. passport simply for being in debt to the Internal Revenue Service. You can also be denied a passport if you owe more than US$2,500 in back payments for court ordered child support.

Since 1986, the U.S. State Department has told the IRS about any American who renews their U.S. passports from a foreign address (certainly not a crime in any way). Passport renewals require an applicant's Social Security number, so the IRS uses this information to see if applicants have filed income tax returns.

An IRS official speaking in Zurich said the IRS is making a special effort to track down all U.S. citizens who renewed U.S. passports while living in Switzerland (you can surely guess why).

Your Passport Has Become a Tagging Device

More recently, the Department of Homeland Security (DHS) used their all-powerful "fighting terrorism" excuse to track the movements of every U.S. passport that comes or goes by air or sea. They even added land border crossings to the list, so they essentially have a travel profile of each and every American.

As my colleague Mark Nestmann pointed out,

"Instead of known or suspected terrorists, the government is tracking everyone who crosses a U.S. border. And since there are no limits to how the government uses the data collected, the information is almost certain to be used for politically motivated surveillance."

I agree with Mark. The potential for abuse in this system is obvious.

"Imagine that such a system existed now, and the DHS were to release data 'in the public interest' that a leading presidential candidate had made previously undisclosed visits to Iran, North Korea, or Cuba."

The Berg lawsuit alleges Obama used his alleged "Indonesian passport" to visit Pakistan when he was 20 years old. Obama is lucky the DHS surveillance system didn't exist back then, or that trip could have damaged Citizen Obama quest for the White House.

Avoid the U.S. Government-Issued Digital Stalkers

Even if this surveillance system is up and running, you can still avoid these digital stalkers when you travel. You can simply opt to travel with another passport when you travel between countries outside of the United States.

If you're a U.S. citizen, you must use your U.S. passport when you enter or leave the United States. But you're under no such obligation when you enter or leave other countries.

I have no way of knowing the merits of the Berg lawsuit, but the U.S. Supreme Court has repeatedly ruled that American citizens retain their citizenship when there is no clear intent to end that status.

The Court has also supported American citizens' right to hold dual citizenship. Those rulings would seem to protect Senator Obama's American status, although he might qualify as a "dual national."

What Is Dual Nationality and Why Does it Matter?

Dual nationality simply means that you are legally a citizen of two countries at the same time, qualified as such under each nation's law.

You could automatically receive this status if you're born in a foreign country and one of your parents is a U.S. citizen. In that case, you would become both a U.S. citizen and a citizen of the country where you're born.

Or you could become a dual national from an operation of law. For example, as a U.S. citizen, you could marry a foreigner and become a citizen of your spouse's nation. Or if you were a foreigner who was naturalized as a U.S. citizen, you can still retain your citizenship from the country of your birth.

You get the idea. The point is acquiring and using a foreign passport does not endanger your U.S. citizenship in any way. In fact, it's pretty common to retain two passports depending on your circumstances.

Some countries won't permit their citizens to hold a passport from another nation. This was the case in the U.S. until 1967, when the U.S. Supreme Court upheld the right of U.S. citizens to hold a second, foreign passport. Before that time, the official rule was that a person acquiring second nationality automatically lost U.S. citizenship.

Since 1967, the government generally presumes a U.S. citizen does not intend to surrender citizenship. You have to produce proof of that intention before the U.S. government will officially let you give up your U.S. citizenship (i.e. "expatriate"). The burden of proof then falls to the government to prove U.S. citizenship. This presumption is set forth in a U.S. Department of State publication, Advice About Possible Loss of U.S. Citizenship and Dual Nationality, (1990).

As a matter of policy, the U.S. Government recognizes dual nationality, but does not necessarily encourage it. (Once again, you can guess why - they would rather be able to track your every move.)

Just Say "NO" To the Stalking Big Brother

Big Brother Homeland Security is now mindlessly tracking our every move, so I think it wise for Americans to acquire a second passport. You need a second passport to guard against the inevitable restrictions that take away your freedom to travel and associate with foreigners.

I often hear concerns expressed about currency controls. But a far greater and very real threat is people control.

Now you can begin to see why a second passport may be highly useful. Your qualification for a second nation's passport, one that comes without restrictive strings attached, can serve as your additional passport to greater freedom.

That official document can be your key to a whole new world of free movement, expanded international investment, greater flexibility, and adventure. In addition, it can mean safe passage without delay.

BOB BAUMAN, Legal Counsel

EDITOR'S NOTE: Bob is the author of the long-time Sovereign Society best-seller, The Passport Book (now in a 6th edition). This all-inclusive guide gives you facts, figures and helpful how-tos about living in dozens of countries abroad. You can pick up your own copy here.

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Bank Failures: Number 9 - and Counting

According to the Federal Deposit Insurance Corporation (FDIC) a total of nine banks have failed this year. Five folded in July alone! At this rate, you know that more banks will fail in the U.S. - especially as the real estate and credit crisis continues to strain bank coffers to the point of financial exhaustion.

Later today, the FDIC will update its list of "problem" financial institutions. The list already included a total of 90 "problem" banks as of March 31.

Since then, however, credit strains have accelerated worldwide, especially for interbank lending rates, non-government debt securities and the leveraged loan market. Credit spreads are now trading at multi-decade or multi-year highs this morning.

Indeed, the credit world has deteriorated markedly since March. So imagine how many more banks will join the FDIC's "problem" list later today.

Bank stocks, of course, remain mired in a secular bear market. Banks are struggling with their worst crisis in a generation. Both credit and real estate assets are still in a freefall. You've got to believe many more banks will fail before this bear market is over.

Banks might be cheap but nobody really knows what their true net asset values are or what securities have honestly been booked as mark-to-market.

By the way: Dividends mean nothing in this market. The majority of banks still have toxic paper on their books with only a few attempting to really unclog their balance sheets. Merrill Lynch (NYSE-MER) is the only institution to come clean this summer following the huge disposition of distressed assets last month at fire sale prices.

If the United States really wants to stabilize the financial system now, the first place to start is by bailing out Freddie Mac (NYSE-FRE) and Fannie Mae (NYSE-FNM).

A government rescue would protect bondholders and go a long way to instill market confidence and possibly put a floor to this crisis. The systemic risk of letting these huge lenders fail is not even debatable. We're at the point of no-return here. Freddie and Fannie must be rescued and quickly.

I'm buying Fannie and Freddie short-term and intermediate-term debt up to a maximum of five years. Yield spreads are the highest in history and the government won't let them fail. Shareholders in company stock, however, will probably get wiped-out eventually.

ERIC ROSEMAN, Investment Director

P.S. In a market like this, you really can't put all your faith in dividends - especially when the largest, favored blue-chips keep slashing their dividend checks. In fact, this year, Fannie Mae already cut the company's dividends from US$1.40 to a paltry 20 cents. You might expect that from bleeding financial institutions, but honestly, it's not just banks. This year, Whole Foods, Sprint Nextel, La-Z-Boy Inc have all followed suit and wiped out millions worth of dividend shareholder revenue.

Isn't about time you did something to fight back? Tomorrow at noon EST, my colleagues Justin Ford and David Newman are hosting a special video webinar to protect yourself from this great dividend theft of 2008. They'll even be giving actual recommendations to give your portfolio another boost during the bear market. Best of all - the video is FREE to watch. Just do us a favor and let us know you'd like to attend so we can accommodate as many viewers as possible.

Click Here to Sue! Part II

Did you know that with a simple click of a mouse, any one of your nosy neighbors, scheming colleagues, agitated relatives, or even complete strangers can sue you?

Websites like WhoCanISue.com, SueEasy (http://www.SueEasy.com) and LegalMatch (http://www.LegalMatch.com) are all the rage right now for any potential plaintiff who's looking for a quick buck...at your expense!

To me, this means you need to protect your wealth now more than ever. Here are a few of my best suggestions for shielding your wealth from any future lawsuit:

Keep your mouth shut. Not disclosing personal information is the first line of defense against lawsuits. You have no way of knowing what a friend, lover, a casual acquaintance, or someone on the street who offers you a small reward will do with the information you disclose.

Keep a low profile. People who openly display their wealth get sued much more often than those that don't. So take strides to keep your wealth as private as possible. For instance, instead of buying a mansion, rent a smaller home that is modest on the outside, but impeccably furnished on the inside. Send your children to a local private school, rather than a nationally recognized academy. All these tactics will keep any sue-happy individual from knowing your real worth.

Deal with petty grievances from neighbors, friends, co-workers, etc. If your neighbor asks you more than once to quiet your barking dog, take the complaint seriously. If you don't, one day you just might find a process server at your door giving you notice of a lawsuit filed against you by your neighbor.

Don't make promises you can't keep, and keep the promises you make. These rules are easy to repeat, but difficult to apply in real life. A practical example is when a friend or family member asks you to co-sign for a loan. The question you need to ask isn't, "Can I trust this person?" but, "Do I have the financial means to make good on this obligation?" It's unlikely you can force your friend or family member to pay off the loan, at least not without losing the friendship or straining family ties. You also have little or no control over what extraneous events might occur that would prevent the loan recipient from paying off the obligation.

Get insurance to protect your assets. The most important precaution is to purchase liability insurance for your home, your business, and your vehicles. Don't stop at the minimum limits, either. If you can purchase an "umbrella" policy with limits of US$1 million or more, do so. For additional suggestions, click here.

Even with these precautions, websites like WhoCanISue and SueEasy virtually guarantee an explosion in frivolous lawsuits. No one is immune from attacks by American trial lawyers. But by taking these precautions, you will have come a long way in the right direction!

MARK NESTMANN,
Privacy Expert & President of The Nestmann Group
www.nestmann.com

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