WhistleblowerSupporter

Support Your Local “Occupy Your Town/City” Movement

I received an email today from someone who did not understand why I was not actively supporting the “Occupy” efforts across the country.  I’ve been watching news of these activities with interest. (The real news, not corporate owned media outlets who are NOT reporting it for the most part, and not accurately reporting it for the rest.)   A week or so ago I intended to go down and find out for myself what was going on, but work and several family disasters delayed my expedition down there.  Probably the same excuse, many of you have for not actively helping in some way or another.  

 

When you consider that the Occupy efforts appear to be a collaboration of committed individuals who have various concerns and complaints, many of which are caused by corporations, politicians, bureaucracy, greedy examples of those with more than most, etc.  The problems are social, economic, and political.  I can see my reader’s point

 

These are the same people who are helping to enable corporations and various hands and arms of government that are causing the very situations that are creating whistleblowers.  Greed, power mongering, cronyism, influence pedaling, unethical and criminal contracting activities, fraud, waste, abuse, and a host of other ills are examples.  Honorable people when confronted by this try to change it, report it, fix it and usually get the stuffing kicked out of them for their efforts in the climate we are dealing with in this country today. 

 

I agree that I should help promote the support of those who have the courage, determination and commitment to go be an active part of peaceful protest in events being staged across the nation.  Even if you cannot take part in the sign holding and waving, stop by and talk, find out why these people are down there and what they need to stay well and comfortable.  This is especially true in parts of the country that are now turning cold, wet and inhospitable.  My reader suggested donating supplies that are so critically needed like, warm coats, gloves, hats, food, especially things that can be cooked or heated under outdoor camping conditions.  Waterproof plastic storage boxes, tents, sleeping bags, cooking utensils, first aid supplies, those hand warmer sticks you can buy at sporting goods stores, and anything else that will keep up the volunteer’s spirits and energy.  

 

My reader reported that the Occupy Tacoma (in Washington State, south of Seattle, in a park on Pacific Avenue, downtown, at the cross street with the new bridge across the Puyallup River) is a neat and orderly effort showing a positively motivated cooperative of young and old that demonstrates a stellar example of the best of human effort.  They, who are giving the best they can to make a difference and to help the majority of us break out of our complacency and paralyzed condition, deserve our support and help. 

 

When those  with wealth and political control,  who continue to take and take and manipulate things to the detriment of the majority (working class and poor)  in this country are taken to task, and our society balances and rights itself again, we will also be reducing the number of whistleblowers, because there will be less crap and corruption to report,  and to fight against in our work places. 

 

Please take time this week or weekend and do what you can for your local “Occupy ____________” effort.  If you can report on your local Occupy activities, please comment here on this site; you are welcome to voice your observations and opinions. 

 

As for me, I am going to the coat closet, storage room and pantry right now! 

GFS

 

 

Problem: Corporate Tax Evasion and Loss of Critical Technology

Here is an interesting article and comment sent to me by a reader.  This is something to think about.  Right on from what I know about that problem.  GFS

 

 

G Florence

 

So what other large corporations are enjoying these tax reduction opportunities?  This question becomes critically important when we look at the defense corporations, since transfer of proprietary technologies also has serious export control considerations, and national security considerations.  Is this one more mechanism for the loss of United States militarily critical technologies for large corporate profit returns?

 

An Old Navy Man

 

 

From:  Truthout.Org

 

No Tax Holiday for Multinational Corporations

Saturday 11 June 2011

by: Dr. Eileen Appelbaum, Truthout

 

If you think that "double Irish" and "Dutch sandwich" are schoolyard jump rope games girls play, think again. These are the nefarious, but legal, games that hundreds of multinationals play to avoid paying their fair share of taxes. According to a report by Bloomberg, Google used these techniques to cut its tax rate to 2.4 percent and its taxes by $3.1 billion over the three years from 2007 through 2009. The company's top two markets by revenue are the US, with a 35 percent corporate income tax rate, and the UK, with a 28 percent rate, yet Google - using practices widely employed by global companies - dramatically reduced its tax rate.

 

At the heart of this strategy is the transfer of rights to intellectual property developed in the US - often, as in Google's case, with early research funded by US taxpayers through the National Science Foundation - to a subsidiary in a low-tax country. Foreign earnings based on the technology are then attributed to the subsidiary. Google transferred its search and advertising technology for much of the world to its Irish subsidiary at a price sanctioned in 2006 by the IRS. But even the much-vaunted low Irish taxes were not low enough for Google. That's where the "double Irish" and the "Dutch sandwich" come in.

Here's how it works. In the "double Irish," Google establishes two subsidiaries in Ireland. Google Ireland Holdings, managed from Bermuda, licenses intellectual property rights to Google Ireland Limited, which sells advertising rights in Europe, Africa and the Middle East and collects the advertising revenue. Google Ireland Limited keeps a fraction of these revenues and, ultimately, pays the balance in royalties to Google Ireland Holdings which, under Irish law, is a Bermuda company. No taxes are paid on these royalties because Bermuda has no corporate tax.

 

Ireland does have a 20 percent withholding tax that it would collect if royalties were paid to Google Ireland Holdings directly. That's where the "Dutch sandwich" comes into play. A Dutch subsidiary, Google Netherlands Holdings, is "sandwiched" between the two Irish subsidiaries. Google Ireland Limited actually pays the royalties to the Dutch subsidiary, which then pays the royalties to Google Ireland Holdings. Irish law exempts this type of royalty payment to companies in other EU countries from the withholding tax.

 

Google is not alone. Hundreds of multinationals - including Microsoft, Oracle and Eli Lilly - use these ploys, with a foreign tax haven as the ultimate repository for the firms' overseas profits. This kind of income shifting - known as transfer pricing - can significantly increase a company's earnings and share price.

 

Companies continue to owe taxes to the US government on these overseas earnings - technically, the taxes have only been deferred. But the taxes don't come due until the profits are brought back to the US - that is, repatriated. And companies do want to repatriate these profits.

 

A dozen large multinationals have joined the "Win America Campaign" to lobby for a tax holiday, so US companies can bring foreign profits home. In 2004, when Congress last declared a tax holiday, much of the $900 billion that corporations held abroad was repatriated at a reduced tax rate of just 5 percent. Today, US corporations hold roughly $1.43 trillion overseas. The demand for a tax holiday clearly indicates that parking profits overseas is a tax-avoidance strategy, not a business necessity.

 

The push for a tax holiday has bipartisan support in Congress. However, the Treasury opposes a tax holiday as a stand-alone measure although it might consider it as part of a broader tax reform package.

 

How should the rules governing taxes on overseas profits be reformed?

House Speaker John Boehner has proposed a system of territorial taxation, in which overseas profits of US corporations would not be taxed in the US. This would only increase incentives for US companies to offshore operations and increase the use of transfer pricing. Ultimately, it would mean a race to the bottom in which no country could tax corporate profits, since companies would threaten to move operations to a lower-tax country unless the home country reduced its tax rate.

Here's a better idea: replace the rules for transfer pricing with rules that allocate a company's profits among its subsidiaries based on metrics such as the number of employees or the sales revenue generated in each jurisdiction. Currently, about half of US states with corporate income taxes use this method for companies that operate in multiple states. It would not be difficult to apply the same rules to multinational companies.

 

Dr. Eileen Appelbaum is a senior economist at the Center for Economic and Policy Research. She previously served as director of the Rutgers Center for Women and Work. During her tenure, Dr. Appelbaum built the Center into a major locus for research on women's advancement in the labor market and at the workplace. The Center undertook numerous projects that were aimed at understanding and improving the lives of working women at all income levels. Prior to taking over the Center at Rutgers she was the research director at the Economic Policy Institute. She previously had been a professor of economics at Temple University.

 

Link to original:  http://www.truth-out.org/no-tax-holiday-multinational-corporations/1307797781

 

Scott Bloch, Former Special Counsel (OSC) Sentenced to One Month in Prison

Someone sent me this comment regarding the Scott Bloch travesty:

 

No one in Washington wants this person to do any serious time. He may get upset and start pointing fingers at who, within our government retaliates against the Federal workers. Congress certainly does not want Whistle Blowers to have protections because the minute they are protected, the floodgates open and the citizenry would then find out who the real crooks are.

 

It is only common sense, the politicians must prevent the American public from knowing what they have always suspected, and that is that members of Congress are there for the Graft, Greed and Corruption. Punishing one of their own, like Scott Bloch of the Office of Special Counsel, who so loyally and successfully protected the guilty for all those years, would just not be in the best interest of the members of Congress. 

 

–Disgusted in DC

 

---------------------------------------------------------------------------------------------------------------------- 

 

National Whistleblowers Center

3238 P Street NW

Washington, D.C. 20007

http://www.whistleblowers.org

 

FOR MORE INFORMATION, CONTACT:

Lindsey M. Williams (202) 342-1903

[email protected] 

FOR IMMEDIATE RELEASE 

Former Special Counsel Sentenced to One Month in Prison

Washington, D.C. March 31, 2011. Scott Bloch, the former head of the Office of Special Counsel (OSC), was sentenced to one month in prison, twelve months probation and 200 hours of community service yesterday, after he pled guilty to criminal charges for his misconduct during is tenure at OSC.

During FY 2008, of the 530 new whistleblower disclosures brought to the OSC, just 25 were reported to the President and Congress, meaning 95% of whistleblower disclosures brought to the OSC were ignored with no determination ever made on their validity. More "highlights" on Mr. Bloch's tenure at the OSC can be found at civilservicechange.org, courtesy of Charlotte Yee.

 Stephen M. Kohn, Executive Director of the National Whistleblowers Center, said:

 Instead of deterring fraud, which was his job as the head of the Office of Special Counsel, Scott Bloch promoted it. This will ultimately cost the American taxpayer billions of dollars. It is a shame that Mr. Bloch has been given nothing more than a slap on the wrist for his crimes, while true whistleblowers such as Bradley Birkenfeld are ostracized and imprisoned.

It has now been over two years since President Obama made a campaign promise to appoint a strong advocate for whistleblowers as the new Special Counsel. The National Whistleblowers Center repeats our call for the immediate appointment of someone who is aggressive, competent, independent and will change the culture of the OSC and stand behind whistleblowers.

 

Links:

"Highlighting the Accomplishments of Scott Bloch" (Charlotte Yee)

http://civilservicechange.org/?p=2952

Highlighting the accomplishments of Scott Bloch, former head of the Office of Special Counsel

Posted in July 19th, 2010

by C Yee in Absurd, Accountability, Current Events, Merit Systems Protection Board Statistics

Tomorrow, Scott Bloch, former head of the Office of Special Counsel (OSC), is scheduled to be sentenced before Magistrate Judge Deborah Robinson. Bloch has pleaded guilty to one count of criminal contempt of Congress for not disclosing the nature and extent of his instructions that a private company erase files from his government-issued computer and the computers of two other Office of Special Counsel employees. As this ominous day approaches, from the U.S. Office of Special Counsel Fiscal year 2008 Annual Report, here are some highlights of Bloch’s five-year OSC career:

During his tenure, Scott Bloch reduced total matters pending at OSC by 56 percent. Statistical analysis indicates he accomplished this by having his agency throw out matters without investigating them. In Fiscal Year 2008, of 2,447 Prohibited Personnel Practice (PPP) Complaints, OSC referred six percent of them to the Complaints Examining Unit (CEU). Of these, only 88 were processed. Prohibited Personnel Practice Complaints made up 67 percent of total matters, yet only 88 of 2,447, four percent were processed by investigators.

In FY 2008, OSC obtained zero stays from the Merit Systems Protection Board (MSPB), the quasi-judicial agency tasked with enforcing federal civil service law. In the same year, OSC filed zero corrective action petitions with MSPB.

On whistleblower disclosure activity, OSC received 530 new disclosures in FY 2008. Of these, 25 were reported to the President and Congress. That’s less than five percent that were investigated and any determination made on disclosure validity. Looking at it another way, 95 percent of whistleblower disclosures were not acknowledged by OSC.

That then, explains the record low satisfaction ratings OSC garnered in its survey of customers. Of those that responded to its survey, only 1 out of every 21 respondents obtained a satisfactory result from OSC. Moreover, more than half of respondents indicated that their complaint included allegations of whistleblowing. On a five-point scale, 200 of 220 rated OSC’s results as either dissatisfactory or very dissatisfactory.

As Scott Bloch heads for sentencing tomorrow, he leaves behind innocent victims sentenced to reprisal by his failure to protect those he was tasked to serve. Additionally, as Special Counsel William E. Reukauf’s message from OSC’s Annual Report reads, “FY 2008 was a challenging time for this small, but important, agency. Employees were called upon to respond to and cooperate with two extensive inquiries involving the then-agency head, including a grand jury investigation, and execution of search warrants on agency premises.”

 

Whistleblowers and Wallstreet

http://www.ft.com

US to pay big sums for Wall St tip-offs

By Jean Eaglesham and Brooke Masters in New York

Published: August 8 2010 22:30 | Last updated: August 8 2010 22:30

New US whistleblowing incentives within the Dodd-Frank financial reform act – that could net informants multimillion dollar pay-outs – are likely to generate a surge in allegations against US-listed companies and Wall Street banks, lawyers say.

The Securities and Exchange Commission is expecting a sharp increase in tip-offs from senior employees and third parties prompted by potential seven-figure bounties.

“The scale of the awards reflects the high quality of whistleblower we hope to get – people within a company, broker or other regulated firm that we might not have heard from before,” Stephen Cohen, an SEC official, told the Financial Times. “We’re expecting a tremendous response.”

The substantive new financial incentives for securities fraud whistleblowers are part of the sweeping Wall Street reforms that became law last month.

People who provide original information that leads to a successful SEC enforcement action will now be entitled to 10 per cent to 30 per cent of any sanction collected over $1m – including a share of the proceeds from any related regulatory action.

“We’ve seen recent settlements of SEC actions of up to $800m . . . this is a tremendous incentive for people to blow the whistle and for entrepreneurial law firms to represent them,” said John Coffee, a law professor at Columbia University.

Similar whistleblowing payments for actions for fraud against the government, under the false claims act, have spawned a multibillion dollar industry of law firms specialising in healthcare claims.

“We’re predicting that there are going to be more cases, based on the experience under the false claims act,” said Tim Coleman, a partner at Freshfields Bruckhaus Deringer, the law firm.

However, financial industry bodies and lawyers representing companies warned that the scale of the potential pay-outs could generate rogue tip-offs by disaffected employees, wasting resources for both the employer and regulator.

“Our only concern is if this were to encourage malicious whistleblowing – people making stuff up to cause trouble,” said the Association for Financial Markets in Europe.

“The company will end up being cleared, but investigations still take up a great deal of time and resources. This [provision] will need careful monitoring.”

The SEC insisted it could cope with the expected influx of new allegations.

“We already have systems in place, which we’re improving, for dealing with thousands of tips every year,” Mr Cohen said. “If this canhelp us to bring cases more efficiently and quickly, it will make us a more effective regulator.”

Terrorist Financing Made Easy with Hidden Treuhand

 

In spite of new controls, Austrian tax haven practices continue to ease the financing of terrorism, money laundering and organized crime.  

By Shelley Stark

  Austria’s measures to combat money laundering and terrorist financing still face obstacles achieving their goals, according to a December 2009 report by the International Monetary Fund’s Financial Action Task Force (FATF). Limitations on access to ownership of assets through custodial Treuhand arrangements, foundations, and companies issuing bearer shares all help protect criminal activity.

  Despite all good intentions, the FATF reports that it is impossible to satisfy the needs of clients seeking to keep banking relationships secret and hide beneficial ownership and still impose stringent verifiable rules that mandate transparency. 

  In Austria, custodial “Treuhand” arrangements are different from the trusts familiar to British or American clients.  The Austrian legal code as described in Rummel: Kommentar zum Allegemeinen bürgerlichen Gesetzbuch states, “it is self evident that a third-party should not ever be made aware that any indirect or direct relationship exists between the businessman and the asset via the lawyer. The relationship between the businessman and the lawyer is secret, which often includes even knowledge of a ‘power of attorney’ existing between the lawyer and the businessman”. 

  These “Treuhand” accounts can have either a lawyer or a notary as official trustee or Treuhänder, and thus play an important role in the sale and purchase of enterprises and real estate. These trustees administer assets and securities, create foundations, operate trusts and open bank accounts with banks that correspondingly want this kind of business. One possibility for the trustee is to create an ‘open Treuhand’ arrangement where the legal relationship between them and the client is not held secret, or they may decide on a ‘hidden Treuhand’ where attorney-client privilege prevents disclosure of a Treuhand contract.

  With a hidden Treuhand arrangement, it is effectively impossible to ascertain beneficial ownership of private foundations, corporations, and bank accounts. According to Austrian law as described in Rummel, “Treuhand contracts are not regulated, because there exists the freedom to make contracts as one pleases.”

  In Austria, both lawyers and notaries serve as official trustees and thus play an important role in the sale and purchase of enterprises and real estate.

  “They let the bank know an account is a trust account,” Rummel explains, “but do not have to disclose the name of the client, because the banking relationship is between the trustee and the bank, and not the bank and the client.”

  Currently, there are no measures in place for persons acting as official trustees who are not lawyers or notaries, the FATF report stated. As there is no central register of people authorized to be trustees, ownership could only be traced through a police search, involving a check of every relevant professional. In a case where the person is not a member of the Bar Association, or a notary, then the search is effectively impossible.

  The impetus for the FATF initiatives lies an interest eliminating the opportunities for terrorist financing. The assumption made in the FATF report, however, is that neither criminals nor terrorists would be interested in engaging in the traditional financial activities or identity subterfuge, where the participation of lawyers and notaries would be required.

  Complicating matters further, the laundering of personal funds is not treated as a crime under Austrian law, as Article 165 limits the scope of money laundering offences to assets “that derive from the crime of another person.” In essence, these unregulated activities leave a wide loophole for criminals and terrorist financiers.

  Although the criminalization of the financing of terrorist activities is consistent with the 1999 UN Terrorist Convention, credit institutions individually assess whether customers or products represent a low risk of money laundering or terrorist financing. The FATF report states “even though banks will comply with requests by the Austrian Financial Investigative Unit, court orders from the public prosecutor are rejected if in the view of the bank, adequate evidence was not presented and the legal conditions for disclosure were not met.”

  Another problem in identifying criminal activities is how legal authorities can become aware of criminal activities outside the due-diligence banks. Even high-level staffers at Austrian regulators often lack the expertise to identify activities that lie outside the law. In a Jan. 25 interview, Dr. Edwin Zauchner at the Austrian Finance Ministry admitted that there is not one tax expert on his staff familiar with hidden Treuhand and thus capable of identifying tax avoidance using the with hidden Treuhand mechanism.

  In addition, Dir. Franz Kurz at the Tax Investigation Unit (Steuerfahndung) revealed that there are at least 70 staff people with knowledge concerning hidden Treuhand, but that not one of them has ever pursed a reported case, because the obstacles to doing so “make the effort pointless.”

  “Unless one provided the Treuhand contract and illustrated what illegality is occurring,” says Mag. Rudolf Unterköfler of the Criminal Intelligence Service with the Federal Ministry of Interior,  “an investigation would not be pursued.” Outside of the due diligence of the banks, there is little laudable chance of an investigation into any hidden Treuhand activities.

  How then is it possible to satisfy the needs of clients seeking to keep beneficial ownership of domestic or international enterprises discrete and still impose the necessary due diligence and stringent verifiable rules that make corporate transparency rules essential for market stability effective?

  According to the FATF, beneficiary identity in the case of fiduciary accounts held by attorneys or notaries from Austria, or any other country, does not need to be provided to credit or financial institutions if several requirements are fulfilled. Those include the infeasibility of the beneficiary identity due to the representation of large co-ownership communities of changing composition, as well as the certainty that the client is not domiciled in a non-cooperative country and that no money laundering or terrorist financing have taken place.

  Clearly, some people are interested in hiding their economic activities as well as their income because. And while there is no data available for assets under management in the private banking sector, aggregated balance sheets of banks in Austria show a growing trend in the ratio of foreign deposits.

  Consider this: Afghanistan’s opium production has gone from 640 tons in 2001 to 8,200 tons in 2007, worth an estimated $6.4 billion on the streets of Western countries. Afghanistan now supplies over 93% of the global opiate market. And while the Taliban may move heroin out of Afghanistan to supply world consumption, it is doubtful that they will truck their ill-gotten gains back into the country just to hide them in a cave. It is highly more likely that this money would remain in tax havens in Europe where it would be safe and could be readily used to purchase ever-increasingly sophisticated equipment to carry out terrorist activities.

  Despite recommendations, however, the status quo suggests that the legal community is unaware of criminal organizations’ and terrorist financiers’ intentions to hide or create profits by engaging a lawyer and possibly working in legitimate capital markets. While the FATF has recommended greater transparency regarding Treuhand relationships, there is still no viable means to achieve it as long as lawyers and banks are still the guardians of secrecy.  

Shelley Stark is the author of Hidden Treuhand: How Corporations and Individuals Hide Assets and Money, published by Universal Publishers, Boca Raton, Florida. Also available through Amazon and Barnes & Noble bookstores.

The Goldman Sachs Show (courtesy of Brasscheck)

Gfs

It's been a long time in coming, but Goldman Sachs
has finally been called to answer questions about
the way it does business.

Unfortunately - and predictably - the Senate sub-committee
was unprepared and wasted an opportunity.

Facts of life:

* Goldman has a multi-decade history of fraud
going back to the 1920s

* Goldman was one of the ring leaders of the
DotCom IPO scam of the 1990s

* By being willing to package and re-sell total
garbage real estate loans, Goldman & other banks
massively inflated real estate prices, defrauded
investors all over the world, and brought the
world financial system to the brink (and we're
not out of the woods yet.)

Criminals...and if they didn't own the last three
White Houses, some of them would be in jail.

http://www.brasschecktv.com/page/837.html

- Brasscheck

P.S. Please share Brasscheck TV e-mails and
videos with friends and colleagues.

That's how we grow. Thanks.

================================
Brasscheck TV
2380 California St.
San Francisco, CA 94115

Presidential Appointments Contributing to Continuing Waste, Fraud and Abuse in Defense Contracting

May2,2010

 

A reader sent this today after  I posted a number of other things this morning.  This reader understands why I have been unrelentingly posting concerns about some of President Obama’s political appointments.  We have a real mess on our hands that is getting worse, by appointment.  GFS

 

 

 

-------------------------------------------------------------------------------------------------

 

What’s happenin’?

 

 

G. Florence-

 

Remember when the State Department posted export violation cases and export enforcement actions for recently closed investigations and cases?  I guess all that is no longer important.  The current Boeing Company controlled government administration doesn’t consider such information relevant.

 

It appears that 2007 is the last State Department posted information.

 

Could this be the following individuals hard at work for Boeing and the defense industry?

 

-Jim Jones, President’s National Security Advisor (former Boeing Director Audit and Finance Committees)

 

-Jim McNerney, Chairman, President’s Export Advisory Council (Boeing Company Chairman)

 

-Eric Holder, Attorney General (orchestrator of the Department of Justice Deferred Non-Prosecution Agreement with Boeing)

 

http://www.justice.gov/opa/pr/2007/October/07_nsd_807.html

 

Concerned Citizen

 

Goldman Sachs Focus of Possible Criminal Investigation

House Members Call for Criminal Investigation Into Goldman Sachs After Senate Hearing

Friday 30 April 2010

by: Grace Huang, t r u t h o u t | Report

 

Goldman Sachs building, New Jersey. (Photo: lymangsr / Flickr; Edited: Lance Page / t r u t h o u t)

In a letter to Attorney General Eric Holder sent Wednesday, 62 members of the House asked the Justice Department to begin a criminal investigation of Goldman Sachs and other firms that possibly committed fraud.

"If both global and domestic confidence in the integrity of the U.S. financial system is to be regained, there must be confidence that criminal acts will be vigorously pursued and perpetrators punished," the House members, led by Rep. Marcy Kaptur (D-Ohio), wrote in the letter.

The Securities and Exchange Commission (SEC) filed a civil suit against Goldman Sachs on April 16 accusing it of securities fraud, accusing it of selling mortgage investments that it was betting would fail without telling its clients. Though these were first intended to protect Goldman from losses if the housing market soured, it created more of these securities over time to make large amounts of money as the market worsened.

Goldman earned a record $4.79 billion in the last fiscal quarter of 2009.

The SEC alleges that Goldman created the investments - known as collateralized debt obligations (CDOs) - and then bet on them based on the advice of John Paulson after paying him $15 million to devise such investments that were likely to decline.

 

To read the rest of the article, go to link below:

 

http://www.truthout.org/house-members-call-criminal-investigation-into-goldman-sachs-after-senate-hearing59037

Review: 20 Things You Should Know About Corporate Crime...Still!

10-13-08

I am hearing from a lot of people who are dealing with the same old same old in government, particularly defense, and in the work they do in some defense contractors.  There appears to be just as much corruption, fraud, waste and abuse going on as before.  And unfortunately, there is no miraculous change in how oversight is being managed, and in the poor leadership that seems to be endemic in both government and industry as of late.  More whistleblowers are still being created and whistleblowers are still suffering retribution and every other kind of abuse for caring enough to try to stand up to wrongdoers.  I am extremely disappointed that the political change does not seem to have had a reparative effect on government and business.  GFS

This is a very interesting piece that I thought I’d post again.  Visit Alternet and see what else they’ve got going there:  http://www.alternet.org

http://www.alternet.org/story/54093/

----------------------------------------------------------------------------------------------------------------

Twenty Things You Should Know About Corporate Crime

By Russell Mokhiber, AlterNet
Posted on June 16, 2007, Printed on October 13, 2008
http://www.alternet.org/story/54093/

The following is text from a speech delivered by Russell Mokhiber, editor of Corporate Crime Reporter to the Taming the Giant Corporation conference in Washington, D.C., June 9, 2007.

20. Corporate crime inflicts far more damage on society than all street crime combined.

Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide.

The FBI estimates, for example, that burglary and robbery -- street crimes -- costs the nation $3.8 billion a year.

The losses from a handful of major corporate frauds -- Tyco, Adelphia, Worldcom, Enron -- swamp the losses from all street robberies and burglaries combined.

Health care fraud alone costs Americans $100 billion to $400 billion a year.

The savings and loan fraud -- which former Attorney General Dick Thornburgh called "the biggest white collar swindle in history" -- cost us anywhere from $300 billion to $500 billion.

And then you have your lesser frauds: auto repair fraud, $40 billion a year, securities fraud, $15 billion a year -- and on down the list.

19. Corporate crime is often violent crime.

Recite this list of corporate frauds and people will immediately say to you: but you can’t compare street crime and corporate crime -- corporate crime is not violent crime.

Not true.

Corporate crime is often violent crime.

The FBI estimates that, 16,000 Americans are murdered every year.

Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.

These deaths are often the result of criminal recklessness. Yet, they are rarely prosecuted as homicides or as criminal violations of federal laws.

18. Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live.

The mafia, no.

The gangstas, no.

The street thugs, no.

But the corporate criminal lobby, yes. They have marinated Washington -- from the White House to the Congress to K Street -- with their largesse. And out the other end come the laws they can live with. They still violate their own rules with impunity. But they make sure the laws are kept within reasonable bounds.

Exhibit A -- the automobile industry.

Over the past 30 years, the industry has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Today, with very narrow exceptions, if an auto company is caught violating the law, only a civil fine is imposed.

17. Corporate crime is underprosecuted by a factor of say -- 100. And the flip side of that -- corporate crime prosecutors are underfunded by a factor of say -- 100.

Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.

For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.

For every company convicted of polluting the nation’s waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.

For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.

For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.

For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don’t even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country have historically investigated workplace deaths as homicides.

White collar crime defense attorneys regularly admit that if more prosecutors had more resources, the number of corporate crime prosecutions would increase dramatically. A large number of serious corporate and white collar crime cases are now left on the table for lack of resources.

16. Beware of consumer groups or other public interest groups who make nice with corporations.

There are now probably more fake public interest groups than actual ones in America today. And many formerly legitimate public interest groups have been taken over or compromised by big corporations. Our favorite example is the National Consumer League. It’s the oldest consumer group in the country. It was created to eradicate child labor.

But in the last ten years or so, it has been taken over by large corporations. It now gets the majority of its budget from big corporations such as Pfizer, Bank of America, Pharmacia & Upjohn, Kaiser Permanente, Wyeth-Ayerst, and Verizon.

15. It used to be when a corporation committed a crime, they pled guilty to a crime.

So, for example, so many large corporations were pleading guilty to crimes in the 1990s, that in 2000, we put out a report titled The Top 100 Corporate Criminals of the 1990s. We went back through all of the Corporate Crime Reporters for that decade, pulled out all of the big corporations that had been convicted, ranked the corporate criminals by the amount of their criminal fines, and cut it off at 100.

So, you have your Fortune 500, your Forbes 400, and your Corporate Crime Reporter 100.

14. Now, corporate criminals don’t have to worry about pleading guilty to crimes.

Three new loopholes have developed over the past five years -- the deferred prosecution agreement, the non prosecution agreement, and pleading guilty a closet entity or a defunct entity that has nothing to lose.

13. Corporations love deferred prosecution agreements.

In the 1990s, if prosecutors had evidence of a crime, they would bring a criminal charge against the corporation and sometimes against the individual executives. And the company would end up pleading guilty.

Then, about three years ago, the Justice Department said -- hey, there is this thing called a deferred prosecution agreement.

We can bring a criminal charge against the company. And we will tell the company -- if you are a good company and do not violate the law for the next two years, we will drop the charges. No harm, no foul. This is called a deferred prosecution agreement.

And most major corporate crime prosecutions are brought this way now. The company pays a fine. The company is charged with a crime. But there is no conviction. And after two or three years, depending on the term of the agreement, the charges are dropped.

12. Corporations love non prosecution agreements even more.

One Friday evening last July, I was sitting my office in the National Press Building. And into my e-mail box came a press release from the Justice Department.

The press release announced that Boeing will pay a $50 million criminal penalty and $615 million in civil penalties to resolve federal claims relating to the company’s hiring of the former Air Force acquisitions chief Darleen A. Druyun, by its then CFO, Michael Sears -- and stealing sensitive procurement information.

So, the company pays a criminal penalty. And I figure, okay if they paid a criminal penalty, they must have pled guilty.

No, they did not plead guilty.

Okay, they must have been charged with a crime and had the prosecution deferred.

No, they were not charged with a crime and did not have the prosecution deferred.

About a week later, after pounding the Justice Department for an answer as to what happened to Boeing, they sent over something called a non prosecution agreement.

That is where the Justice Department says -- we’re going to fine you criminally, but hey, we don’t want to cost you any government business, so sign this agreement. It says we won’t prosecute you if you pay the fine and change your ways.

Corporate criminals love non prosecution agreements. No criminal charge. No criminal record. No guilty plea. Just pay the fine and leave.

11. In health fraud cases, find an empty closet or defunct entity to plead guilty.

The government has a mandatory exclusion rule for health care corporations that are convicted of ripping off Medicare.

Such an exclusion is the equivalent of the death penalty. If a major drug company can’t do business with Medicare, it loses a big chunk of its business. There have been many criminal prosecutions of major health care corporations for ripping off Medicare. And many of these companies have pled guilty. But not one major health care company has been excluded from Medicare.

Why not?

Because when you read in the newspaper that a major health care company pled guilty, it’s not the parent company that pleads guilty. The prosecutor will allow a unit of the corporation that has no assets -- or even a defunct entity -- to plead guilty. And therefore that unit will be excluded from Medicare -- which doesn’t bother the parent corporation, because the unit had no business with Medicare to begin with.

Earlier, Dr. Sidney Wolfe was here and talked about the criminal prosecution of Purdue Pharma, the Stamford, Connecticut-based maker of OxyContin.

Dr. Wolfe said that the company pled guilty to pushing OxyContin by making claims that it is less addictive and less subject to abuse than other pain medications and that it continued to do so despite warnings to the contrary from doctors, the media, and members of its own sales force.

Well, Purdue Pharma -- the company that makes and markets the drug -- didn’t plead guilty. A different company -- Purdue Frederick pled guilty. Purdue Pharma actually got a non-prosecution agreement. Purdue Frederick had nothing to lose, so it pled guilty.

10. Corporate criminals don’t like to be put on probation.

Very rarely, a corporation convicted of a crime will be placed on probation. Many years ago, Consolidated Edison in New York was convicted of an environmental crime. A probation official was assigned. Employees would call him with wrongdoing. He would write reports for the judge. The company changed its ways. There was actual change within the corporation.

Corporations hate this. They hate being under the supervision of some public official, like a judge.

We need more corporate probation.

9. Corporate criminals don’t like to be charged with homicide.

Street murders occur every day in America. And they are prosecuted every day in America. Corporate homicides occur every day in America. But they are rarely prosecuted.

The last homicide prosecution brought against a major American corporation was in 1980, when a Republican Indiana prosecutor charged Ford Motor Co. with homicide for the deaths of three teenaged girls who died when their Ford Pinto caught on fire after being rear-ended in northern Indiana.

The prosecutor alleged that Ford knew that it was marketing a defective product, with a gas tank that crushed when rear ended, spilling fuel.

In the Indiana case, the girls were incinerated to death.

But Ford brought in a hot shot criminal defense lawyer who in turn hired the best friend of the judge as local counsel, and who, as a result, secured a not guilty verdict after persuading the judge to keep key evidence out of the jury room.

It’s time to crank up the corporate homicide prosecutions.

8. There are very few career prosecutors of corporate crime.

Patrick Fitzgerald is one that comes to mind. He’s the U.S. Attorney in Chicago. He put away Scooter Libby. And he’s now prosecuting the Canadian media baron Conrad Black.

7. Most corporate crime prosecutors see their jobs as a stepping stone to greater things.

Spitzer and Giuliani prosecuted corporate crime as a way to move up the political ladder. But most young prosecutors prosecute corporate crime to move into the lucrative corporate crime defense bar.

6. Most corporate criminals turn themselves into the authorities.

The vast majority of corporate criminal prosecutions are now driven by the corporations themselves. If they find something wrong, they know they can trust the prosecutor to do the right thing. They will be forced to pay a fine, maybe agree to make some internal changes.

But in this day and age, in all likelihood, they will not be forced to plead guilty.

So, better to be up front with the prosecutor and put the matter behind them. To save the hide of the corporation, they will cooperate with federal prosecutors against individual executives within the company. Individuals will be charged, the corporation will not.

5. The market doesn’t take most modern corporate criminal prosecutions seriously.

Almost universally, when a corporate crime case is settled, the stock of the company involved goes up.

Why? Because a cloud has been cleared and there is no serious consequence to the company. No structural changes in how the company does business. No monitor. No probation. Preserving corporate reputation is the name of the game.

4. The Justice Department needs to start publishing an annual Corporate Crime in the United States report.

Every year, the Justice Department puts out an annual report titled "Crime in the United States."

But by "Crime in the United States," the Justice Department means "street crime in the United States."

In the "Crime in the United States" annual report, you can read about burglary, robbery and theft.

There is little or nothing about price-fixing, corporate fraud, pollution, or public corruption.

A yearly Justice Department report on Corporate Crime in the United States is long overdue.

3. We must start asking -- which side are you on -- with the corporate criminals or against?

Most professionals in Washington work for, are paid by, or are under the control of the corporate crime lobby. Young lawyers come to town, fresh out of law school, 25 years old, and their starting salary is $160,000 a year. And they’re working for the corporate criminals.

Young lawyers graduating from the top law schools have all kinds of excuses for working for the corporate criminals -- huge debt, just going to stay a couple of years for the experience.

But the reality is, they are working for the corporate criminals.

What kind of respect should we give them? Especially since they have many options other than working for the corporate criminals.

Time to dust off that age-old question -- which side are you on? (For young lawyers out there considering other options, check out Alan Morrison’s new book, Beyond the Big Firm: Profiles of Lawyers Who Want Something More.)

2. We need a 911 number for the American people to dial to report corporate crime and violence.

If you want to report street crime and violence, call 911.

But what number do you call if you want to report corporate crime and violence?

We propose 611.

Call 611 to report corporate crime and violence.

We need a national number where people can pick up the phone and report the corporate criminals in our midst.

What triggered this thought?

We attended the press conference at the Justice Department the other day announcing the indictment of Congressman William Jefferson (D-Louisiana).

Jefferson was the first U.S. official charged with violating the Foreign Corrupt Practices Act.

Federal officials alleged that Jefferson was both on the giving and receiving ends of bribe payments.

On the receiving end, he took $100,000 in cash -- $90,000 of it was stuffed into his freezer in Washington, D.C.

The $90,000 was separated in $10,000 increments, wrapped in aluminum foil, and concealed inside various frozen food containers.

At the press conference announcing the indictment, after various federal officials made their case before the cameras, up to the mike came Joe Persichini, assistant director of the Washington field office of the FBI.

"To the American people, I ask you, take time," Persichini said. "Read this charging document line by line, scheme by scheme, count by count. This case is about greed, power and arrogance."

"Everyone is entitled to honest and ethical public service," Persichini continued. "We as leaders standing here today cannot do it alone. We need the public’s help. The amount of corruption is dependent on what the public with allow.

Again, the amount of corruption is dependent on what the public will allow."

“"f you have knowledge of, if you’ve been confronted with or you are participating, I ask that you contact your local FBI office or you call the Washington Field Office of the FBI at 202.278.2000. Thank you very much."

Shorten the number -- make it 611.

1. And the number one thing you should know about corporate crime?

Everyone is deserving of justice. So, question, debate, strategize, yes.

But if God-forbid you too are victimized by a corporate criminal, you too will demand justice.

We need a more beefed up, more effective justice system to deal with the corporate criminals in our midst.

Russell Mokhiber is the editor of Corporate Crime Reporter.

© 2008 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/54093/

UBS Whistleblower, Bradley Birkenfeld, Asks for Clemency

National Whistleblowers Center

3238 P Street NW

Washington, D.C. 20007

http://www.whistleblowers.org

 

FOR MORE INFORMATION, CONTACT:

Lindsey M. Williams (202) 342-1903

[email protected]

FOR IMMEDIATE RELEASE

 

UBS Whistleblower Bradley Birkenfeld Files

Official Clemency Petition on Tax Day

 

Washington D.C. April 15, 2010. Today, Bradley Birkenfeld, the whistleblower who exposed the $20 billion illegal UBS tax fraud scheme, filed a direct appeal to President Barack Obama and an official petition requesting clemency. The petition, which is now available online, calls on the president to immediately commute Mr. Birkenfeld's 40-month prison sentence to time served. Mr. Birkenfeld is currently incarcerated in the Schuylkill County federal prison.

 

After filing the petition for clemency, Mr. Birkenfeld's attorney Dean Zerbe said:

 

"When the government cannot stop offshore tax evasion, it is the honest American taxpayer who has to foot the bill. President Obama can change this. He can pardon Mr. Birkenfeld on tax day and send a message to the world that the U.S. is serious about cracking down on bank secrecy, encouraging whistleblowers and stopping tax fraud."

 

In the letter to President Obama attorneys for Mr. Birkenfeld, Stephen M. Kohn, Executive Director of the National Whistleblowers Center and Dean Zerbe, former counsel for the Senate Finance Committee, stated:

 

"We appeal to you today, the day that honest Americans must pay their taxes, with the hope that you will help correct a severe injustice...Every day Mr. Birkenfeld remains in prison undermines trust in the tax system and is a step backward in the fight against corruption."

 

The National Whistleblower Center has initiated an international letter writing campaign, asking that letters and emails in support of Mr. Birkenfeld be sent to President Obama and the Pardon Attorney. 

 

Links:

 

Letter to President Obama Requesting Executive Clemency

 

Clemency Petition

 

International Letter Writing Campaign

Photo of Bradley Birkenfeld, courtesy of the National Whistleblowers Center