Treasury gives banks multi-billion tax break windfall
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Below are one-paragraph excerpts of important news articles you may have missed. These news articles include revealing information on the huge tax break windfall provided to the biggest bailed-out banks, a secret order enabling Special Operations worldwide, the swarm of lobbyists at the Treasury seeking bailout monies for a wide range of corporations, and more. Each excerpt is taken verbatim from the major media website listed at the link provided. If any link fails to function, click here. Key sentences are highlighted for those with limited time. By choosing to educate ourselves and to spread the word, we can and will build a brighter future.
Treasury gives banks multi-billion tax break windfall
Some of the nation's biggest banks are in for a windfall – on top of the $700 billion government bailout – thanks to a new tax policy quietly issued by the Treasury Department. The notice gives big tax breaks to companies that acquire struggling banks hit hard by the mortgage crisis. In some cases, the tax breaks could exceed the cost of acquiring the banks, according to analyses by private tax experts. The change could cost the Treasury as much as $140 billion by enabling firms that acquire struggling banks to use more losses incurred by those banks to offset their own taxable profits. San Francisco's Wells Fargo & Co., which made a bid to acquire Wachovia Corp. just days after the notice was issued, stands to reap about $20 billion in additional tax savings because of the change, according to the analyses. Wells Fargo paid $14.8 billion in a stock deal to buy Wachovia. The notice was issued Sept. 30 as Congress debated the $700 billion bailout plan. Some members of Congress are upset that such a sweeping tax change was issued with no public hearings or congressional input. "I am concerned that the notice, which was never debated by Congress, could end up costing taxpayers tens of billions of more dollars on top of the hundreds of billions of dollars already approved by Congress in the financial rescue plan," Sen. Chuck Schumer, D-N.Y., said in a letter last week to Treasury Secretary Henry Paulson. Some tax lawyers questioned the legality of the notice. Before the notice was issued, the merged bank could write off only a limited amount of the losses. The notice removed those restrictions, enabling the acquiring banks to make huge reductions in their tax liabilities.
Note: With no limitations placed on the nine biggest banks receiving many billions of dollars in bailout money, they are free to buy up smaller banks. And they will likely receive huge tax breaks, sometimes even greater than the purchase price, for doing so! For many revealing, reliable reports on the Wall Street bailout, click here.
Secret Order Lets U.S. Raid Al Qaeda
The United States military since 2004 has used broad, secret authority to carry out nearly a dozen previously undisclosed attacks against Al Qaeda and other militants in Syria, Pakistan and elsewhere. These military raids, typically carried out by Special Operations forces, were authorized by a classified order that Defense Secretary Donald H. Rumsfeld signed in the spring of 2004 with the approval of President Bush. The secret order gave the military new authority to attack the Qaeda terrorist network anywhere in the world, and a more sweeping mandate to conduct operations in countries not at war with the United States. In 2006, for example, a Navy Seal team raided a suspected militants’ compound in the Bajaur region of Pakistan. Some of the military missions have been conducted in close coordination with the C.I.A.. In others, like the Special Operations raid in Syria on Oct. 26 of this yea r, the military commandos acted in support of C.I.A.-directed operations. Apart from the 2006 raid into Pakistan, the American officials refused to describe in detail what they said had been nearly a dozen previously undisclosed attacks, except to say they had been carried out in Syria, Pakistan and other countries. The new authority was spelled out in a classified document called “Al Qaeda Network Exord,” or execute order. The 2004 order identifies 15 to 20 countries, including Syria, Pakistan, Yemen, Saudi Arabia and several other Persian Gulf states.
Note: For key reports on government secrecy from major media sources, click here.
Lobbyists Swarm the Treasury for Piece of Bailout Pie
When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool. Many new supplicants are lining up for an infusion of capital as billions of dollars are channeled to other beneficiaries like the American International Group, and possibly soon American Express. Of the initial $350 billion that Congress freed up, out of the $700 billion in bailout money contained in the law that passed last month, the Treasury Department has committed all but $60 billion. The shrinking pie — and the growing uncertainty over who qualifies — has thrown Washington’s legal and lobbying establishment into a mad scramble. The Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers — as well as for [ot her more] improbable candidates. The lobbying frenzy worries many traditional bankers — the original targets of the rescue program — who fear that it could blur, or even undermine, the government’s effort to stabilize the financial system after its worst crisis since the 1930s. Adding to the frenzy is the possibility that the next Congress and White House could change the rules further. President-elect Barack Obama has added his voice by proposing that the struggling automakers get federal aid, which could mean giving them access to the fund. Meanwhile, the list of candidates for a piece of the bailout keeps growing. American Express won approval Monday to transform itself into a bank holding company, making the giant marketer of credit cards eligible for an infusion.
Note: American Express is a credit-card company; if it failed due to losses on its risky, predatory lending, its failure would present no "systemic risk" to the financial system as a whole. But by turning itself into a "bank holding company," as it just won approval to do, it can scoop up billions of easy money from the government anyway! For many revealing and reliable reports on the Wall Street bailout, click here.
Government Rescue Spending: Clear or Cloudy?
After weeks of sometimes frenzied efforts by the federal government to rescue the financial system ... critics say there are many questions but few answers about the work performed by the Treasury Department and the Federal Reserve. "The bailout, the Treasury, the Federal Reserve -- it's like a three-card monte game, you don't know where the money's coming from, you don't know who it's going to, and I think the public has every right to be outraged by this," said Bill Allison, a senior fellow at the Sunlight Foundation, a government transparency watchdog group. Gerald O'Driscoll, a former vice president at the Federal Reserve Bank of Dallas ... said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. "Nontransparency in government programs is always associated with corrupt ion in other countries, so I don't see why it wouldn't be here," he said. Questions about transparency at the Federal Reserve, in particular, have prompted a lawsuit: Bloomberg L.P., which operates the news agency Bloomberg News, is suing the Fed for the release of information on its lending to private financial institutions. "We really don't know anything," Matthew Winkler, the editor-in-chief of Bloomberg News, told ABCNews.com. "All we know is something close to 2 trillion is being used and that money is the taxpayers'. ... We don't know whom it's being lent to and for what purpose because we can't see it because it isn't disclosed."
Note: For many revealing and reliable reports on the Wall Street bailout, click here.
Fed Defies Transparency Aim in Refusal to Disclose
The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return. Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure. The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months. The Fed's lending is significant because the central bank has stepped into a rescue role that was also the purpose of the $700 billion Troubled Asset Relief Program, or TARP, bailout plan -- without safeguards put into the TARP legislation by Congress. Total Fed lending topped $2 trillion for the first time last week and has risen by 140 percent, or $1.172 trillion, in the seven weeks since Fed governors relaxed the collateral standards on Sept. 14. The nation's biggest banks, Citigroup, Bank of America Corp., JPMorgan Chase, Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley, declined to comment on whether they have borrowed money from the Fed. They received $120 billion in capital from the TARP, which was signed into law Oct. 3.
Note: For many revealing and reliable reports on the Wall Street bailout, click here.
A.I.G. Secures $150 Billion Assistance Package
The American International Group said on Monday that it ... had secured a new $150 billion government assistance package intended to stem the bleeding from its complex financial contracts. A central component of the new package will be to get the most tainted assets out of the company, in an effort to stop the collateral calls that have been rapidly draining A.I.G.’s cash. A.I.G.’s trading partners in these financial contracts will largely be made whole in the process. [An] important feature will be government investments of about $50 billion to create special-purpose entities to relieve the company of its most tainted assets. About $30 billion of the government money will be used to buy complex debt securities that were insured by A.I.G. and about $20 billion more will be used to buy securities backed by home loans. A.I.G.’s counterparties — financial institutions in the United States and Europe — have not b orne significant losses on the financial contracts that led A.I.G. to the brink, and the new program suggests they will not. “We’re funding somebody on the other side” of A.I.G.’s derivatives contracts, said Lynn E. Turner, a former chief accountant with the Securities and Exchange Commission. Neither A.I.G. nor the federal government has been willing to provide the names of the company’s biggest counterparties, or their amount of exposure. “We’ve had way too many things here that nobody knows anything about,” said Mr. Turner, who is on the Treasury’s Advisory Committee on the Auditing Profession. “That’s why no one has faith in the capital markets.”
Note: The culture of secrecy around this bailout using nearly $1 trillion of taxpayer money is appalling. For many revealing and reliable reports on the Wall Street bailout, click here.
Government black boxes will 'collect every email'
Internet "black boxes" will be used to collect every email and web visit in the UK under the Government's plans for a giant "big brother" database, The Independent has learnt. Home Office officials have told senior figures from the internet and telecommunications industries that the "black box" technology could automatically retain and store raw data from the web before transferring it to a giant central database controlled by the Government. Plans to create a database holding information about every phone call, email and internet visit made in the UK have provoked a huge public outcry. Richard Thomas, the Information Commissioner, described it as "step too far" and the Government's own terrorism watchdog said that as a "raw idea" it was "awful". News that the Government is already preparing the ground by trying to allay the concerns of the internet industry is bound to raise suspicions about ministers' true intentions. Further details of the database emerged on Monday at a meeting of internet service providers (ISPs) in London where representatives from BT, AOL Europe, O2 and BSkyB were given a PowerPoint presentation of the issues and the technology surrounding the Government's Interception Modernisation Programme (IMP), the name given by the Home Office to the database proposal. "It was clear the 'back box' is the technology the Government will use to hold all the data. But what isn't clear is what the Home Secretary, GCHQ and the security services intend to do with all this information in the future," said a source close to the meeting.
Note: For lots more on threats to privacy from reliable sources, click here.
New Terrain for Panel on Bailout
Having been handed vast authority and almost no restrictions in the bailout law that Congress passed ... a committee of five little-known government officials, aided by a bare-bones staff of 40, is picking winners and losers among thousands of banks, savings and loans, insurers and other institutions. It is new and unfamiliar terrain for the officials, who are making monumental decisions — a form of industrial policy, some critics say — that contradict the free market philosophy they usually espouse. Predictably, the process is stirring alarm from Capitol Hill to Wall Street. Among the problems, critics say, is that despite earlier promises of transparency, the process is shrouded in secrecy, its precise goals opaque. Treasury officials have refused to disclose their criteria for deciding which banks ... get money. And officials have yet to say they even have a broader strate gy, though banking executives are convinced the government wants to encourage acquisitions. Already, critics from Capitol Hill to Wall Street are lashing out at the program, saying the banks are misusing the capital infusions by hoarding the money rather than lending it. The government, the critics say, is wrongly steering funds to banks to take over weaker rivals. All this comes after Mr. Paulson abruptly shifted the focus of the program to injecting capital rather than buying distressed mortgage-related assets from the banks. This meant that Congress had never debated the details of how the government ought to carry out a recapitalization.
Note: With the intense secrecy and all of the lobbyist and big guns for banking fighting for hundreds of billions of dollars given practically free by the government, do you really think these "five little-known government officials" will be impartial in their decisions? For many revealing, reliable reports on the Wall Street bailout, click here.
State off course on 'personal genomics'
California officials recently ordered two "personal genomics" firms to cease and desist operations within the state. The companies eventually were allowed to continue operations - with a few more regulatory conditions - but why did the state demand that they shut down in the first place? Why would a state that regards itself as progressive and high-tech act to censor what we can know about ourselves? Though regulators may shut down unscrupulous firms, the services offered by Navigenics and 23andMe meet the highest standards of accuracy, validity and reliability. The laboratories employed by both companies are fully licensed and trusted by researchers around the world. These companies give individuals the ability to take a "snapshot" of their DNA. The state objected, determining that doctors are gatekeepers of the human body, and Californians need a prescription to access their genetic blueprint. Docto rs have a powerful lobby in Sacramento, and these technologies directly threaten their profits. Personal genomics aims to empower the individual, not line the pockets of an elite medical establishment. This establishment believes that individuals cannot be trusted with their own genetic information. The genome is vast, complicated and poorly understood, the argument goes, and therefore customers could be inundated with raw information of little or no practical use. Forbidding us from looking at our genes because we don't yet understand them, however, is contrary to science, innovation and human nature.
Note: For revealing reports of government corruption from reliable, verifiable sources, click here.
This Bailout Doesn’t Pay Dividends
Secretary Paulson [has been] described as playing the role of the Godfather, making the banks [a bailout] offer they could not refuse. But in one important respect, he was more Santa Claus than Vito Corleone: the agreement allowed the banks to continue paying dividends to common shareholders. These dividends, if they are paid at current levels, will redirect more than $25 billion of the $125 billion to shareholders in the next year alone. A significant fraction of [the bailout] money will wind up in shareholders’ pockets — and thus be unavailable to plug the large capital hole on the banks’ balance sheets. The officers and directors of the nine banks will be among the leading beneficiaries of the dividend payout. Their personal take of the dividends will amount to approximately $250 million in the first year. Why would the banks want to maintain large dividend payouts when they’ve had such a hard time borrowing, are starved of cash, and the credit markets believe that they run a significant risk of defaulting? Shouldn’t these distressed banks be marshalling all of the financial resources available to them to ensure their viability? Here’s why: Each dollar paid out as a dividend today is a dollar that cannot be seized by creditors in the event of bankruptcy. For a distressed company, dividends are not in the interest of the enterprise as a whole (shareholders and lenders taken together), but only in the interest of shareholders. They are an attempt by shareholders to beat creditors out the door. The government should close the door by putting an immediate stop to the dividend payouts of any banks receiving direct federal support.
Note: Is the fox guarding the hen house? For many revealing, reliable reports on the banking bailout, click here.
Gifts to Pet Charities Keep Lawmakers Happy
They do not seem the most likely classical music patrons: Northrop Grumman, General Dynamics, Boeing and Lockheed Martin. But together, these defense contractors are donating hundreds of thousands of dollars to the symphony orchestra in Johnstown, Pa., underwriting performances of Mozart and Wagner in this struggling former steel town. A defense lobbying firm, the PMA Group, even sprang for a champagne reception at the symphony’s opera festival last month. Company representatives say they are being generous corporate citizens. But the orchestra is also a beloved charity of Representative John P. Murtha, Democrat of Pennsylvania, whose Congressional committee hands out lucrative defense contracts, and whose wife, Joyce, is a major booster of the symphony. For the first time, corporations and their lobbyists are being required to disclose donations they make to the favorite causes of House and Senate me mbers, and a review of thousands of pages of records shows the extent — and lavishness — of this once hidden practice. During the first six months of 2008, lobbyists, corporations and interest groups gave approximately $13 million to charities and nonprofit organizations in honor of more than 200 members of the House and Senate. The donations came from firms with numerous interests before the Congress, such as Wal-Mart, the Ford Motor Company, Kraft Foods and Pfizer, and were received by charities ... as well as local groups controlled by members of Congress or those close to them.
Note: For revelations of corporate corruption from major media sources, click here.
Nebraska Inquiry Is Given File on Sex Abuse of Foster
A state file containing reports of physical and sexual abuse of foster children, based on interviews with some of the children and including one instance reminiscent of slave auctions, has been turned over to the Executive Board of the Nebraska Legislature. One of the reports in the file ... is an account by [a] victim who described parties at various places, including Omaha and cities to which she was flown on the East Coast ... including one in which the ... teen-ager was made to stand nude at a party while she was offered at auction to the highest bidder. ''I don't know if they can prove it,'' the source said, ''but if one-tenth of what that girl is saying is true, I'd sure hate to have her talking about me.'' The foster care agency's submission of the file is among the latest developments in a case that began surfacing Nov. 4, when the Government's National Credit Union Administration shu t down the Franklin Community Federal Credit Union in Omaha. The agency... subsequently filed suit against Lawrence E. King Jr., Franklin Community's manager and treasurer, charging him with diverting millions of dollars of the institution's money to his own purposes. In all, the agency says, Franklin Community is missing $38 million. Mr. King has not been accused of personally engaging in child sexual abuse. But a number of widening Federal and state investigations into the credit union's collapse are aimed in part at determining whether any of the money he is accused of embezzling was ever used to transport children or to pay them for sex.
Note: This article reveals only a small part of what is known about a sophisticated pedophile ring that reaches to the highest levels of government. For more on this key topic, don't miss excellent, reliable resources and the powerful Discovery Channel documentary available here. Note also the Christmas date of this article. The press often discloses the most deeply revealing information on key cover-ups on holidays when few read the paper.
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