Fed Co-chair Fischer deflects call for numbers on wages

Fed Co-chair Fischer deflects call for numbers on wages

Feb 2, 2016 – At the Council on Foreign Relations yesterday, I pointed out to Stanley Fischer, Vice Chairman, Board of Governors of the Federal Reserve, that the current low unemployment rate he cited in his talk doesn’t mean what it did when workers had good manufacturing jobs – when now the employed are often working for the minimum wage and need government aid. Shouldn’t the Fed put out those numbers? He avoided answering the question.

NY Review of Books reports this comment, but won’t print it

NY Review of Books reports this comment, but won’t print it

Jan 15, 2015 – Anne Applebaum wrote an article about Putin’s Russia in the Dec. 18, 2014 issue of the New York Review of Books that was filled with distortions. When I saw NYRB editor Robert Silvers at a Dissent magazine party in New York Dec. 5th, I told him my opinion. He said to send him my comments. But then he declined to print those comments and said that he would run this editorial statement:

Lucy Komisar has written to us that she has a statement to make about the article by Anne Applebaum in our December 18, 2014 issue. This statement is available on her website, The Komisar Scoop. — The Editors.

Feds still investigating IDT on foreign bribery charges

Oct 15, 2012 – If you have followed the stories here showing strong evidence that IDT, the Newark-based telecom, bribed officials of the Haitian phone company, Teleco, you will be interested in today’s SEC filing by IDT. It says that the SEC and the Justice Department are still investigating charges made in 2004 by former IDT employee D. Michael Jewett that the company had paid off Haitian officials in connection with (ie. to get) a contract to supply long distance service between the U.S. and Haiti. That would have violated the FCPA, the Foreign Corrupt Practices Act. At the time, IDT was run by James Courter, the former Republican congressman from New Jersey.

New York Ethics: It takes a Fed

New York Ethics: It takes a Fed

100Reporters, March 19, 2012 – One could be forgiven for thinking that the New York State Legislature was a criminal enterprise. It had its mafioso style assemblyman, Democrat Tony Seminerio, telling a prospective “client” that he would “bury” him unless he paid off.

It had entrepreneurs like Democratic Senator Pedro Espada Jr., who set up a community health operation and, prosecutors say, looted it for millions.

It even had a comical nickel-and-dime guy, Democratic Assemblyman Brian McLaughlin, who sent one of his staffers driving on the New York Thruway with his E-ZPass so that McLaughlin could fake time in Albany and collect per diem payments.

New York State has rules against some of those practices, but rarely were they enforced against legislators who were collecting huge sums of cash from companies that wanted laws passed or state contracts awarded.

Romney on Board: Marriott accused of cheating clients on his watch

Romney on Board: Marriott accused of cheating clients on his watch

100Reporters, Jan 19, 2012 — Mitt Romney, who makes his hands-on business experience a talking point in his campaign for the Republican presidential nomination, was a member of the board of directors and audit committee of a global company when it paid millions of dollars to settle charges of extracting kickbacks that cheated clients.

The company is Marriott International and the accusers were hotel owners who had hired Marriott to manage their properties under the Marriott name.

In recent weeks, Romney has come under fire for his role at Bain Capital. But his actions as an independent director at Marriott in the late 1990s and again just two years ago open another window on the candidate’s record in business and leadership qualities.

Ex-employee who claimed firing over opposition to Haiti bribery settles suit against IDT

Jan 24, 2011 – The lawsuit filed by a former employee against the Newark-based global telecom IDT is over. J. Michael Jewett, who was an IDT executive, claimed in 2004 that he was fired for opposing bribes to Haitian officials. Lawyers for both sides agreed to drop the complaint and counterclaims in an accord filed with the U.S. District Court in Newark on January 13th. This has not been reported before now.

IDT spokesman Bill Ulrey said, “We have no comment…as usual. Thank you.” Jewett’s attorney William Perniciaro also declined to discuss the matter. When both sides don’t talk about an agreement to dismiss a case, that normally means a confidential settlement has been reached.

Shells, Shams and Corporate Scams

Shells, Shams and Corporate Scams

The American Interest, Jan-Feb 2011 (online Dec 9, 2010)

Corporate secrecy, which involves hiding the identities of company owners from tax and other legal authorities, is itself no secret. It is well known that offshore banking centers such as Switzerland, Liechtenstein and the Cayman Islands have for many years enabled fraudsters all over the world to carry out scams, launder illicit profits, stash stolen loot and hide money from tax authorities.

What most people do not know, however, is that there is a vast and growing American offshore. Foreign crooks prize states such as Nevada, Wyoming and especially Delaware for state laws that don’t require them to list owners or even company officials when a new company is formed. Corporate interests and the Obama administration are blocking congressional efforts to change that.

IDT’s imaginary “ethics letter”

IDT’s imaginary “ethics letter”

Sept 24, 2010 – Last Saturday, Barron’s ran my story in which IDT CEO Howard Jonas admitted for the first time a suspect deal with then Haitian President Jean-Bertrand Aristide that involved sending payments due Haiti to a law firm in the Turks and Caicos. Jonas told me the company had gotten a lawyer’s “ethics letter” clearing the deal. But he wouldn’t provide it.

A day before the story was to run, Barron’s got a call from a lawyer of the firm representing IDT in a lawsuit by former IDT executive D. Michael Jewett, who says the company fired him for objecting to the offshore deal. He promised to provide the ethics letter. It was the end of day, Friday. The magazine noted that promise when it published the next day.

Days later, the lawyer called to say he couldn’t provide the letter because it was sealed. Hard to believe: there is no sealing order for the letter in the case docket.

A Lingering Problem for IDT — CEO admits company official met with Aristide on contract

A Lingering Problem for IDT — CEO admits company official met with Aristide on contract

Barron’s, Sept 20, 2010 –

Scoop summary: Howard Jonas, CEO of U.S. telecom IDT, in an interview with Lucy Komisar, acknowledges for the first time that then Haiti President Jean-Bertrand Aristide in 2003 met with an IDT official during discussions about a contract to pay Haiti Teleco for calls from U.S. customers. That contract included agreement for IDT to send payments to a shell company in the offshore Turks and Caicos Islands. Jonas said IDT got an “ethics letter” from a law firm clearing the deal, but the lawyer said in a memo filed with the court, published here for the first time, that he simply told IDT to do “due diligence.” IDT signed the contract the next day.

A former IDT official, who objected to the deal, was fired and is suing the company; trial is set for Nov 9th. The Justice Department and Securities and Exchange Commission are investigating violation of the Foreign Corrupt Practices Act. Jonas’s revelations are likely to have a major impact in the trial and investigations.

The Wall Street ICEcapade

The Wall Street ICEcapade

The American Interest, July-Aug 2010 (online May 18, 2010) –

As I write this, the U.S. Senate is debating a major financial reform bill in which the credit default swap, a kind of derivative, plays a significant part. An amendment to that bill, proposed by Senators Carl Levin (D-MI) and Jeff Merkley (D-OR), would ban banks from proprietary trading. There are a lot of high-rolling bankers who do not want that amendment to pass, because it will mess up their plans to repatriate foreign profits into the United States, untaxed, by trading in derivatives on their own accounts. The clearinghouse ICE Trust U.S. forms a central part of these plans.

What is ICE Trust U.S., and who owns it? ICE US Holding Co., which was established in 2008 as the parent of ICE Trust U.S., is located in the Cayman Islands. Yet none of the owners of ICE US Holding Co. are based in the Caymans. Among the owners of the Cayman’s company are Citigroup, Goldman Sachs, J.P. Morgan, Merrill Lynch and Morgan Stanley, which are headquartered in New York. Bank of America, which now owns Merrill Lynch, is based in Charlotte, North Carolina.

IDT’s Voodoo Economics: Inside Justice Dept’s probe of telecom bribes in Haiti

The Big Money, March 11, 2010

When the devastating earthquake hit Haiti in January, IDT, the New Jersey-based global phone company, moved fast to help.

It announced it was setting up calling stations at hotels and other sites so Haitians could use its Internet calling-service to reach family and friends around the world. It cut rates on its U.S. prepaid calling-card to 2 cents a minute to Haiti (at least for 12 days), donated 4,000 $2-prepaid calling-cards to Haitian community groups in New York and Florida, and said it would give some proceeds from prepaid calls to Haitian Red Cross relief.

Such a warm, fuzzy response from a U.S. corporation often wins plaudits, though, of course, IDT has a business interest in the impoverished island. In 2005, in its latest publicly available figures, the company reported $4 million in profits from $17 million in revenues for routing calls there.

The ICE Age — big banks set up their own credit default swaps exchange

portfolio.com, March 8, 2010

One year ago, a group of financial institutions quietly launched ICE Trust, a new and theoretically safer way to trade derivatives, a key element of the financial crisis. As lawmakers debate reform, banks at the center of the storm are remaking the market—and stand to profit.

As the financial crisis exploded with full force in 2008, it was obvious that something was gravely wrong with the huge, unregulated market for derivatives.

Lehman Brothers had $738 billion of these contracts—which are based on the value of some other asset, such as a stock or a bond or a hog belly—on its books when it failed on September 14, 2008.

Lehman certainly wasn’t alone. Over the next few months, insurer AIG reported as much as $53.5 billion of derivatives losses—losses that were linked to nearly one third of its $182.5 billion federal

CORRUPTION: U.S. banks abetting corrupt regimes, probe finds

Inter Press Service (IPS), Feb 3, 2010 –

The global bank HSBC may be running offshore accounts for central banks. According to a U.S. Senate investigation, an HSBC subsidiary in London called HSBC Equator Bank had a sister bank in the Bahamas.

According to an internal e-mail, the bank told HSBC USA it had been providing offshore accounts to central banks for 20 years, because the banks wanted to avoid “Mareva” injunctions, legally enforceable orders to freeze funds.

Former U.S. Attorney Chris Christie, GOP Candidate for NJ Governor, gets $ from IDT, NJ telcom investigated by Justice Dept for bribing Haitian officials

Oct 22, 2009 –

Back in 2004, when Chris Christie was the U.S. Attorney for New Jersey, his office first heard allegations that IDT Corporation, a Newark, N.J.-based global telecommunications company, was involved in a case of international bribery. No federal criminal case was ever brought against IDT, in contrast to several successful federal prosecutions in similar cases elsewhere. The company is run by James Courter, a former Republican congressman from New Jersey.

Fast forward to the present, and Christie is now the Republican candidate for the governor of New Jersey. And, an examination of campaign finance records shows, Christie has thus far racked up $26,800 in campaign contributions – earning him a total of $80,400 including state matching funds — from 27 individuals who could have a direct interest in the IDT case.

Q&A: Tax Havens, Bank Secrecy, and Tricks

Inter Press Service (IPS), July 14, 2009 – At a recent conference in Miami organised by Offshore Alert, a specialised media organisation focused on financial crime, IPS sat down with veteran investigator Bob Roach to discuss the hurdles facing regulators trying to crack down on tax havens, which cost the U.S. alone an estimated 100 billion dollars annually.

Exclusive: Florida banking agency helped Stanford set up unregulated office to sell his phony CDs

<em>Exclusive</em>: Florida banking agency helped Stanford set up unregulated office to sell his phony CDs

State aided suspect in huge swindle

Miami Herald, July 5, 2009 –

Winner of second place for Business News, the National Headliner Awards

Years before his banking empire was shut down in a massive fraud case, Allen Stanford swept into Florida with a bold plan: entice Latin Americans to pour millions into his ventures — in secrecy.

From a bayfront office in Miami in 1998, he planned to sell investments to customers and send their money to Antigua.

But to pull it off, he needed unprecedented help from an unlikely ally: The state of Florida would have to grant him the right to move vast amounts of money offshore — without reporting a penny to regulators. He got it.

OECD Tax Havens Deal Falls Short, Critics Say

Inter Press Service (IPS), May 8, 2009
– Jeffrey Owens, the tax “point person” of the Organisation for Economic Cooperation and Development (OECD), was stung by activist critics of the OECD standards under which countries will be put on a tax haven blacklist and targeted for sanctions.
The blacklist was announced last month at the London meeting of the G20, which said in a communiqué that it would “take action against non-cooperative jurisdictions, including tax havens…to deploy sanctions to protect our public finances and financial systems.”

Key civil society criticisms are that the OECD standards require bilateral agreements for information on request, not automatic multilateral tax information exchange; that they call for only 12 such agreements to be signed by each tax haven; and that getting off the blacklist entails only promises, which have not been kept by tax havens in the past.

IRS on the Track of Tax-Cheating “John Does”

Inter Press Service (IPS), April 30, 2009 – The U.S. Internal Revenue Service (IRS) is hitting pay dirt with a novel legal tactic designed to catch tax evaders. And it’s going to use it to force international banks to give up the names of tax cheats. It’s called the “John Doe” summons. Using “John Doe” means the IRS doesn’t know the names of the suspected tax evaders. So it sends a summons to a bank or credit card company that says, “Give us the names and account information of all your U.S. clients with secret offshore accounts.” Daniel Reeves, an IRS agent in charge of the tax agency’s offshore compliance initiative, afforded an unusual look into the broad swath of projects that seek tax-cheating “John Doe’s” every place from accounts of the giant Swiss bank UBS to the records of Pay Pal.

Tax Havens in Spotlight at G20 Meet

Inter Press Service (IPS), March 29, 2009 –

This could be the moment when a fatal blow is delivered to the world’s tax havens. Or it could be another largely cosmetic change that allows offshore financial centres such as Switzerland, the Cayman Islands and Liechtenstein to deflect attacks on the system by sacrificing the few tax miscreants that governments catch in their nets.

Decisions at the G20 government leaders meeting in London Apr. 2 will set the direction.

Offshore centres, worried what may happen in London, are falling all over themselves promising to cooperate with the major powers on the trail of tax cheats. But the holes in the tax havens’ promises are as big as those in Switzerland’s famous cheese.

Many believe that automatic exchange of information is the only really effective way to end pandemic tax evasion. Some very good proposals are made in a leaked French paper which is linked to the full story.

The Real AIG Scandal: How the Game is Rigged at Wall Street’s Casino

AlterNet, March 26, 2009 –

Congress has deftly avoided the real story of AIG’s collapse, which will make a few million in bonuses seem like peanuts.

Most legislators at a House Finance subcommittee hearing last week deftly avoided the real story of AIG’s collapse. Instead, they homed in on the public relations disaster of hundreds of top AIG officials and staff getting $165 million (later revealed as over $218 million) in bonuses.

The key issue ignored by the congressmen and women was the potential catastrophe represented by as much as $2.7 trillion in AIG derivative contracts and how AIG and the U.S. government are dealing with them. To put that number in context, we’ve so far provided the company only about $170 billion.

Cafeteria Kickbacks

How food-service providers like Sodexo bilk millions from taxpayers and customers

In These Times, March 2009 –

The Investigative Fund at the Nation Institute provided generous support for this article.

At the end of the 2006 school year, children’s nutrition advocate Dorothy Brayley had a disturbing conversation with a local dairy representative. He had come to her office to discuss participation in the summer trade show of food providers she runs as director of Kids First Rhode Island.

At the time, the state’s schools were buying 100,000 containers of milk each week. The salesman for Garelick Farms, New England’s largest dairy, told Brayley that Sodexo—a food and facility management corporation that managed most of the state’s school lunch programs—was paying Garelick more than competitors in order to get a bigger rebate.

That’s just a taste of the hundreds of millions of dollars of “rebates”—or kickbacks from suppliers—that Sodexo, a $20 billion-a-year global leader in the food and facility management industry, has taken while operating cafeterias and other facilities for schools, hospitals, universities, government agencies, the military and private companies across the country, according to evidence provided by whistleblowers and internal company documents.

Offshore tax cheating could become criminal money-laundering offense

Feb 11, 2009 –

The U.S. government might finally get a powerful tool against offshore tax evasion by mega-wealthy individuals and corporations. The worst most miscreants face now is negotiated pay-ups years after they are caught.

A bill introduced last week by Senators Patrick Leahy (D-Vermont) and Chuck Grassley (R-Iowa) would make tax evasion using international transfers a criminal money-laundering offense.

The law aims at cases in which money passes through tax havens. It targets not just the evaded taxes, but any money that is part of the scam.

Exclusive: How One Fund’s Profits Ended Up in the Caymans

Inter Press Service (IPS), Feb 5, 2009 –

President Barack Obama said he would crack down on firms that use offshore centres to evade taxes. He could begin with a New York subsidiary of one of the world’s largest private banks, which used a Cayman Islands company to shift its profits.
Julius Baer logo
Why would a New York investment fund manager run operations through an office in the Caymans? “This type of structure is for optimising taxes,” explained Max Obrist, a Cayman Islands official of the global Julius Baer Group (Zurich).

He told IPS that “generating” the income where a company was actually based, “you would pay much more taxes”. Obrist was describing a company shifting claimed earnings to tax havens to evade home taxes. He allegedly helped Julius Baer Investment Management (JBIM) New York do just that.

Geithner – Treasury Nominee Failed to Halt Bond Scam

Inter Press Service (IPS), Jan 19, 2009 –

U.S. Senators at Timothy Geithner’s confirmation hearing for Treasury Secretary Wednesday may want to ask him about a failure to act that is costing the U.S. a lot more than the amount he evaded on taxes.

The Federal Reserve Bank of New York, which he has led since 2003, conducts the operations on Wall Street of the Federal Reserve in Washington, the country’s central bank.

The New York Fed under Geithner’s presidency has failed to stop massive naked short selling of U.S. Treasury bonds that threatens the stability of the market and sale of the bonds.

Ironically, the scam, enabled by a lack of regulation at the behest of Wall Street brokerage houses, makes it more expensive for the U.S. to bail out those same financial institutions.

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