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
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educate ourselves and to spread the word, we can and will
build a brighter future. With best wishes, 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
Children 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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