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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Prosperity & Privacy in the Offshore World
Friday, August 23, 2002 - Vol. 4 No. 84
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In This Issue:
* COMMENT: The Real Accounting Scandal
* OFFSHORE: IRS to Get More Offshore Credit Card Records, South Pacific Nations Ask for Help, Setback for ersey, More Nonsense on
Corporate Expatriation.
* WEALTH: Saudis Abandon US banks, Floods Delay German Tax Cuts, 80% of British VAT Audits in Error.
* PRIVACY & RIGHTS
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Our guest commentator is MARK NESTMANN, Editorial Director
of The Sovereign Society
Bob Bauman, A-Letter Editor
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Dear A-Letter Reader:
US Justice Department officials prosecuting the Enron case have won a round with the guilty plea of Michael KOPPER, former managing director of Enron Global Finance, to charges of money laundering and attempted wire fraud. As part of the plea agreement, prosecutors will seize $22.1 million of profits that Kopper admits "laundering."
But this amount is "small potatoes" compared to the multi-billion dollar sleight-of-hand conducted each year by the largest money laundering operation on the planet: the US government.
For instance, Uncle Sam double-counts tax dollars both as a decrease in the government's deficit and as an increase in the Social Security Trust Fund. This way, Congress and the President conceal the true size of the budget deficit. This amounts to several hundred BILLION dollars annually. (You can probably guess what would happen to corporate honchos who raided their employees' pension fund and put the money in the bank to
boost profits.)
Then there's what the US Treasury calls "baseline budgeting." Here, agencies turn a budget increase into a budget cut. For instance, if they ask for a 15% budget increase and then receive only a 10% increase, they call that a 5% budget "cut." How would the shareholders of a corporation react if its CEO tried to carry out the same type of scam?
But the biggest accounting scams perpetrated by the feds are so-called "off-budget enterprises." The Treasury's Federal Financing Bank (FFB) loans billions of dollars each year to federal agencies, but the loans never appear on the agencies' financial statements. If the agencies pay back the loans, the Treasury calls it a "spending reduction." Thus, even though the loans cause an increase in the federal deficit, it is reported as a decrease!
I'm not defending Michael Kopper or his ilk… just observing that when it comes to accounting fraud, Kopper and his shifty colleagues at Enron are mere amateurs compared to the laundering pros at the US Treasury.
That's the way that it looks from here.
Mark Nestmann
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COMMENT LINKS:
* Why corporate executives are like drug dealers. LINK:
http://www.cbsnews.com/stories/2002/08/05/national/main517490.shtml
* How Kopper and his colleagues hid billions of dollars of Enron debt. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT
/FullStory&c=StoryFT&cid=1028185910033&p=1012571727102
* Real accounting fraud: How the feds cook the books. LINK:
http://www.mises.org/freemarket_detail.asp?control=395&sortorder=articledate
* Enron: LINK: http://www.enron.com
* Justice Department: LINK: http://www.usdoj.gov
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* OFFSHORE *
IRS TO GET MORE OFFSHORE CREDIT CARD RECORDS.
MIAMI. MasterCard ordered to cough up records of offshore credit cards issued by banks in 30 countries to pursue alleged tax cheats.
LINK:http://www.forbes.com/business/newswire/2002/08/21/rtr701886.html
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SOUTH PACIFIC NATIONS ASK OECD FOR HELP. HONG KONG
Leaders tell Paris-based bureaucracy they can't comply with the OECD's "harmful tax initiative" without financial assistance. Why not let them compete with low taxes and dispense with the foreign aid?
LINK:http://www.tax-news.com/asp/story/story.asp?storyname=9144
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SETBACK FOR JERSEY. LONDON. Now that the U.S. Treasury has endorsed a proposal similar to the EU's ill-conceived "Savings Tax Directive," hopes in Jersey that "regulatory arbitrage" might delay its implementation have been dashed.
LINK:
http://www.tax-news.com/asp/story/story.asp?storyname=9147
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MORE NONSENSE FROM THE WASHINGTON POST ON CORPORATE EXPATRIATION
. WASHINGTON. It's the Tax Code that encourages US corporations to re-domicile in Bermuda—not big business greed. Even after "expatriation," they still pay US taxes on US profits.
LINKS: http://www.washingtonpost.com/wp-dyn/articles/A42032-2002Aug20.html
http://www.washingtontimes.com/commentary/20020726-43725808.htm
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* WEALTH *
U.S. SABER RATTLING LEADS SAUDIS TO WITHDRAW BILLIONS FROM US. LONDON. Is the Middle East "smart money" shifting from dollars to euros? LINKS:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT
/FullStory&c=StoryFT&cid=1028185905754&p=1012571727102
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT
/FullStory&c=StoryFT&cid=1028185935304&p=1012571727102
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FLOODS DELAY GERMAN TAX CUTS. BERLIN. CHANCELOR
SCHRÖDER'S economic plans now in tatters—tax INCREASE ahead?
LINKS: http://www.tax-news.com/asp/story/story.asp?storyname=9143
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/
FullStory&c=StoryFT&cid=1028185936155&p=1012571727102
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CHINA MONITORS INTERNATIONAL MONEY FLOWS.
SHANGHAI. New agency formed to halt capital flight. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/Story
FT/FullStory&c=StoryFT&cid=1028185939670&p=1012571727102
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80% OF BRITISH VAT AUDITS IN ERROR. LONDON. Leaked study also reveals that nearly one fifth of the U.K. businesses audited for VAT compliance have failed. LINK:
http://www.tax-news.com/asp/story/story.asp?storyname=9145
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* PRIVACY & RIGHTS *
US BOOKSELLERS SUE DOJ. NEW YORK. Civil liberties groups and the American Booksellers Foundation file a Freedom of Information Act request to learn how the surveillance provisions of the USA-PATRIOT Act have been implemented.
LINK: http://www.aclu.org/issues/privacy/USAPA_feature.htm
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COMPUTER PRIVACY TOOL BYPASSED. ORANGE, CALIF. New device said to bypass "anonymizing" features of privacy software.
LINK: http://siliconvalley.internet.com/news/article.php/1449821
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WARN YOUR TEENAGER. ASPEN, COLO. DOJ set to prosecute individuals who illegally trade copyrighted music and video files using services such as "Morpheus." EU to follow suit?
LINK: http://news.com.com/2100-1023-954591.html
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MORE GOVERNMENT DOUBLESPEAK. OAKLAND. New rules that supposedly protect medical privacy require national ID and for doctors to report all medical treatment (even self-paid!) into a centralized database.
LINK: http://www.newsmax.com/archives/articles/2002/8/5/154456.shtml
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