Various Artists - From Dusk Till Dawn (OST)
4 hours ago
Wednesday, 12 October 2011
Goldman Sachs let off paying £10m interest on failed tax avoidance scheme
Britain's tax authorities have given Goldman Sachs an unusual and generous Christmas present, leaked documents reveal. In a secret London meeting last December with the head of Revenue, the wealthy Wall Street banking firm was forgiven £10m interest on a failed tax avoidance scheme.
HM Revenue and Customs sources admit privately that the interest-free deal is "a cock-up" by officials, but refuse to say who was responsible.
Documents leaked to Private Eye magazine and published in full by the Guardian record that Britain's top tax official, HMRC's permanent secretary Dave Hartnett, personally shook hands on a secret settlement last December.
Hartnett is due to be questioned on Wednesday by the Commons public accounts committee. The leaked documents suggest that a previous PAC chairman, Edward Leigh, was misled when he was told it was illegal to reveal details of such cases to parliament.
Leaked legal advice from James Eadie QC, which the Guardian also publishes today, says the opposite. Hartnett has discretion to reveal such facts to the parliamentary watchdog, according to the advice.
Leigh said: "It just underlines the absurd culture of secrecy that still pervades Whitehall."
Hartnett also refused to give the facts about Goldman Sachs to MP Jesse Norman on the Treasury committee last month, claiming disclosure would be illegal. He also refuses to brief ministers on the details.
The £10m Christmas gift for Goldman was the culmination of a prolonged attempt by the US firm to avoid paying national insurance on huge bonuses for its bankers working in London.
The sum was pocket change to Goldman, whose employees received $15.3bn (£9.5bn) in pay and bonuses last year. Its Wall Street head, Lloyd Blankfein, received $68m in 2008 and at the height of Britain's banking crisis 100 London partners set their bonuses at £1m each. This level was considered a mark of restraint.
In the 1990s, Goldman set up a company offshore in the British Virgin Islands. This entity, called Goldman Sachs Services Ltd, supposedly employed all of Goldman's London bankers, who were then "seconded" to work there.
The device appears to have been designed to conceal the size of the bonuses. Judge David Williams said in 2009 that it was "a way of keeping information about the GS accounts and payroll out of the public domain and confidential".
Goldman also begrudged paying its share of UK national insurance on the six-figure bonuses. Court judgments disclose that a typical Goldman bonus to a junior banker was £143,000 in 1998, and £191,000 the following year.
The company, along with 21 investment banks and other firms, purchased blueprints for an avoidance scheme called an employee benefit trust (EBT). The bonuses were indirectly invested into elaborate share option schemes.
It took the Revenue until 2005 to demonstrate in court that these EBTs were merely illegitimate tax avoidance devices. The 21 other firms surrendered, and handed over what they owed.
But Goldman Sachs refused to pay its £30.81m bill. Instead the city firm Freshfields and the tax QC David Goldberg fought tooth and nail on Goldman's behalf through the courts. By 2010, according to a public judgment, the unpaid bill with accumulated interest had mounted to £40m.
According to Revenue lawyers, in the leaked documents, Goldman's tactics were highly obstructive: they "resisted for five more years, raking up every conceivable point in the tribunal, and putting up a 'stooge' witness when Mr Housden [Goldman's tax director] was the obvious person to answer questions".
In April 2010, the bankers lost a key point: a judge threw out the claim that their true employer was in the British Virgin Islands. In July, HMRC's own QC, Malcolm Gammie, gave "broadly positive" advice that the government was in a strong position to get all of its money.
But on 30 November, a high-level HMRC committee handling the most aggressive banks heard troubling news. Their top expert, Hartnett, had met Goldman's tax director, Mike Housden, and as a result "a late submission had come in about a deal on which Dave Hartnett had 'shaken hands' with Goldman Sachs". The government was not going to get its full £40m, but only £30m.
HMRC's lawyers were dismayed. At a meeting a week later, on 8 October, chaired by general counsel Anthony Inglese, "he said he would always want to assist Dave Hartnett, but not if this were 'unconscionable'. He referred to the difficulty all those present at this meeting were having in justifying a settlement without an interest element."
The minutes added: "It was … clear that the proposed settlement gave GS no additional penalty for having resisted for five more years."
At a Treasury committee hearing last month, Hartnett refused to explain any of this to Jesse Norman, a Conservative MP. Hartnett claimed that it would be illegal to reveal any information about the Goldman deal. In fact, according to the leaked documents, HMRC has already received legal advice that says otherwise.
Treasury counsel James Eadie QC advised the HMRC board in 2009 that Hartnett was free to disclose information to parliamentary committees, at his own discretion.
Privately, HMRC sources say that £10m of taxpayers' money was thrown away because of a "technical mistake" by an unidentified official, junior to Hartnett, who misinterpreted the law. They claim that the National Audit Office, which audits HMRC accounts, has accepted the situation.
HMRC said in a statement: "The picture you have been given is incomplete and therefore fundamentally flawed but taxpayer confidentiality prevents us from correcting your story in detail. Dave Hartnett's long career in the tax service has been built on ensuring the right tax is paid by large businesses and individuals alike. HMRC does not do 'sweetheart' deals." Goldman Sachs declined to comment.
David Leigh @'The Guardian'
HM Revenue and Customs sources admit privately that the interest-free deal is "a cock-up" by officials, but refuse to say who was responsible.
Documents leaked to Private Eye magazine and published in full by the Guardian record that Britain's top tax official, HMRC's permanent secretary Dave Hartnett, personally shook hands on a secret settlement last December.
Hartnett is due to be questioned on Wednesday by the Commons public accounts committee. The leaked documents suggest that a previous PAC chairman, Edward Leigh, was misled when he was told it was illegal to reveal details of such cases to parliament.
Leaked legal advice from James Eadie QC, which the Guardian also publishes today, says the opposite. Hartnett has discretion to reveal such facts to the parliamentary watchdog, according to the advice.
Leigh said: "It just underlines the absurd culture of secrecy that still pervades Whitehall."
Hartnett also refused to give the facts about Goldman Sachs to MP Jesse Norman on the Treasury committee last month, claiming disclosure would be illegal. He also refuses to brief ministers on the details.
The £10m Christmas gift for Goldman was the culmination of a prolonged attempt by the US firm to avoid paying national insurance on huge bonuses for its bankers working in London.
The sum was pocket change to Goldman, whose employees received $15.3bn (£9.5bn) in pay and bonuses last year. Its Wall Street head, Lloyd Blankfein, received $68m in 2008 and at the height of Britain's banking crisis 100 London partners set their bonuses at £1m each. This level was considered a mark of restraint.
In the 1990s, Goldman set up a company offshore in the British Virgin Islands. This entity, called Goldman Sachs Services Ltd, supposedly employed all of Goldman's London bankers, who were then "seconded" to work there.
The device appears to have been designed to conceal the size of the bonuses. Judge David Williams said in 2009 that it was "a way of keeping information about the GS accounts and payroll out of the public domain and confidential".
Goldman also begrudged paying its share of UK national insurance on the six-figure bonuses. Court judgments disclose that a typical Goldman bonus to a junior banker was £143,000 in 1998, and £191,000 the following year.
The company, along with 21 investment banks and other firms, purchased blueprints for an avoidance scheme called an employee benefit trust (EBT). The bonuses were indirectly invested into elaborate share option schemes.
It took the Revenue until 2005 to demonstrate in court that these EBTs were merely illegitimate tax avoidance devices. The 21 other firms surrendered, and handed over what they owed.
But Goldman Sachs refused to pay its £30.81m bill. Instead the city firm Freshfields and the tax QC David Goldberg fought tooth and nail on Goldman's behalf through the courts. By 2010, according to a public judgment, the unpaid bill with accumulated interest had mounted to £40m.
According to Revenue lawyers, in the leaked documents, Goldman's tactics were highly obstructive: they "resisted for five more years, raking up every conceivable point in the tribunal, and putting up a 'stooge' witness when Mr Housden [Goldman's tax director] was the obvious person to answer questions".
In April 2010, the bankers lost a key point: a judge threw out the claim that their true employer was in the British Virgin Islands. In July, HMRC's own QC, Malcolm Gammie, gave "broadly positive" advice that the government was in a strong position to get all of its money.
But on 30 November, a high-level HMRC committee handling the most aggressive banks heard troubling news. Their top expert, Hartnett, had met Goldman's tax director, Mike Housden, and as a result "a late submission had come in about a deal on which Dave Hartnett had 'shaken hands' with Goldman Sachs". The government was not going to get its full £40m, but only £30m.
HMRC's lawyers were dismayed. At a meeting a week later, on 8 October, chaired by general counsel Anthony Inglese, "he said he would always want to assist Dave Hartnett, but not if this were 'unconscionable'. He referred to the difficulty all those present at this meeting were having in justifying a settlement without an interest element."
The minutes added: "It was … clear that the proposed settlement gave GS no additional penalty for having resisted for five more years."
At a Treasury committee hearing last month, Hartnett refused to explain any of this to Jesse Norman, a Conservative MP. Hartnett claimed that it would be illegal to reveal any information about the Goldman deal. In fact, according to the leaked documents, HMRC has already received legal advice that says otherwise.
Treasury counsel James Eadie QC advised the HMRC board in 2009 that Hartnett was free to disclose information to parliamentary committees, at his own discretion.
Privately, HMRC sources say that £10m of taxpayers' money was thrown away because of a "technical mistake" by an unidentified official, junior to Hartnett, who misinterpreted the law. They claim that the National Audit Office, which audits HMRC accounts, has accepted the situation.
HMRC said in a statement: "The picture you have been given is incomplete and therefore fundamentally flawed but taxpayer confidentiality prevents us from correcting your story in detail. Dave Hartnett's long career in the tax service has been built on ensuring the right tax is paid by large businesses and individuals alike. HMRC does not do 'sweetheart' deals." Goldman Sachs declined to comment.
David Leigh @'The Guardian'
Nobody's gonna make Herman Cain talk about foreign policy if he doesn't want to
Herman Cain: Tax Poor People’s Food To Finance Massive Tax Break For The Rich
Gawd - the man is SUCH a moron but wouldn't Cain VS Obama in 2012 freak some people out :)
Billy Bragg: Occupy Wall Street and Melancholia of Party Politics
Melancholia descended upon the world this week. The latest movie by Lars von Triers contrasts the personal conflicts of a family with the end of the world as we know it. While two sisters go quietly bonkers, a giant planet appears in the night sky and heads directly towards Earth. Much has been made of the metaphorical references to von Triers own struggles with depression, but, for me, the movie touches on a different horror unfolding before our eyes.
Anyone whose team has, like mine in recent seasons, been involved in a relegation battle since before Christmas, will be familiar with the sense of foreboding that comes with reading the sports pages. Over the past few weeks, I have felt that same sense of dread when tripping through the financial section. Maybe it’s desperation that focuses the imagination, because I couldn’t help but see ‘Melancholia’ as a metaphor for the coming crash.
As the giant planet shatters the Earth in the opening sequence, all I could think of was the bloated financial markets running out of control, smashing into the real world and destroying the hopes and dreams of millions. In the long two hours of film that follow, the market crash metaphor just grew in size as the super planet loomed larger on the horizon. Everyone could see it coming and understood what it meant, but no-one seemed able to work out a response.
For those of us frustrated by the melancholy mood that seems to have gripped the population in the face of the on-coming financial crash, the party conference season won’t have offered much hope. Although Labour’s Ed Miliband began groping toward an alternative to the free market orthodoxy of New Labour – his rather clunky designation of ‘predator’ companies – our three main parties remain chained to a globalisation agenda that is about to go off the edge of an abyss.
At least Chancellor George Osbourne took the opportunity to declare that the free market model was broken and no longer fit for purpose. Of course he didn’t actually say that, but his announcement that the government was going to take responsibility for getting loans to small businesses was an admission that his core beliefs were wrong – the markets don’t always do what is economically and socially beneficial for the country.
While those on the planet free market cling to the notion that the only way to encourage growth is to cut taxes and regulations for entrepreneurs, in the real world we are facing a crisis in demand. The economy isn’t stalling because business people are being constrained by an over-powerful state – quite the opposite. The British state is currently doing all it can, within the Tories own ideological straitjacket, to encourage growth. However, the current financial crises are revealing the lie behind the free market myth that only entrepreneurs create growth, therefore all financial encouragements must be directed solely at them.
We are now seeing that, when it comes to growth, consumer spending is the most important engine. If people don’t have money to spend, then globalisation, a project that relies on quick turn-over and tight profit margins, swiftly grinds to a halt. With prices rising, wages continuing to flat-line and credit becoming scarce, consumers are staying at home.
Even those with money to spend are hanging onto it, spooked by George Osbourne’s recent announcement that he intends to make it harder for employees to challenge their dismissal. Only a Tory politician could claim that he was going to cut unemployment figures by making it easier for bosses to sack people.
We need to change the balance in our economy to ensure that a greater percentage of profits are paid as wages to workers rather than as dividends for shareholders. Yes, investors should expect a return on their money, but since the power of the unions was broken in the 1980s, wages have been seen as little more than a hindrance to the profitability of the stock market. To increase demand, we need to put our economy on a different trajectory.
There was precious little sign that this realisation might be beginning to dawn on our political leaders over the three weeks of the party conferences. Instead, a glimmer of hope appeared with the emergence of opposition to the globalisation project in its heartland. On the day that the Liberal Democrats assembled in Birmingham for their conference, a few thousand protesters marched through downtown Manhattan under the banner ‘Occupy Wall Street’.
By the time Ed Miliband delivered his ‘predator’ speech to the Labour Party conference, OWS had begun to make headlines following the use of pepper spray by the NYPD against passive demonstrators. And when the Prime Minister stood up before his party to make a speech in which he declared equality to be a form of oppression, events on the Brooklyn Bridge had catapulted OWS into the mainstream media. Even President Obama was forced to offer a lukewarm nod of recognition.
Of course there have been some on the Left who have cast scorn on OWS and it’s lack of a list of demands, seeing similarities with the anti-globalisation movement of the past decade, which was unable to translate its anger into an ideology that could be supported by those unable to attend the mass demonstrations. However, the difference between then and now is that anti-globalisation activists sought to challenge the financial sector when it was at its height. For most people, it delivered – unevenly – but many still felt they had better prospects under globalisation.
Now that notion has been challenged by the markets themselves, whose failure has driven many families to the brink of ruin. Public opinion is shifting towards a belief that it is fundamentally unfair to allow those who created the financial crisis to continue to get wealthy while working people struggle to pay their bills.
Is that idea alone capable of motivating a mass movement for a fairer economy? There is always a danger that, just as the nascent Tea Party movement was hijacked by fundamentalist Christians with their book that has all the answers, OWS could be taken over by fundamentalist Marxists, who have their own book that solves all your problems.
In part, the demand for an instantly formulated set of goals reflects a desperate need for right wing news outlets to have evidence that allows them to condemn those gathered in opposition to the status quo. We should not allow our enemies to define the rules by which we are allowed to act. Neo-liberalism is not an ideology, with a programme and list of demands, just a bunch of powerful people doing things in their own self interest. OWS has come to challenge that power, by gathering together a bunch of disenfranchised people and empowering them to act together in their own self interest.
The time may come when OWS needs to nail a set of demands to the doors of the New York Stock Exchange, but for now, just the fact that so many people across the United States are willing to take a stand against globalised capitalism is inspiring. It shows that, unlike the poor souls in ‘Melancholia’, we are not resigned to our fate, that, as the bloated financial markets career out of control, we are busy working out a new trajectory for our economy, one that will ensure that such a devastating crash never happens again.
Via
Anyone whose team has, like mine in recent seasons, been involved in a relegation battle since before Christmas, will be familiar with the sense of foreboding that comes with reading the sports pages. Over the past few weeks, I have felt that same sense of dread when tripping through the financial section. Maybe it’s desperation that focuses the imagination, because I couldn’t help but see ‘Melancholia’ as a metaphor for the coming crash.
As the giant planet shatters the Earth in the opening sequence, all I could think of was the bloated financial markets running out of control, smashing into the real world and destroying the hopes and dreams of millions. In the long two hours of film that follow, the market crash metaphor just grew in size as the super planet loomed larger on the horizon. Everyone could see it coming and understood what it meant, but no-one seemed able to work out a response.
For those of us frustrated by the melancholy mood that seems to have gripped the population in the face of the on-coming financial crash, the party conference season won’t have offered much hope. Although Labour’s Ed Miliband began groping toward an alternative to the free market orthodoxy of New Labour – his rather clunky designation of ‘predator’ companies – our three main parties remain chained to a globalisation agenda that is about to go off the edge of an abyss.
At least Chancellor George Osbourne took the opportunity to declare that the free market model was broken and no longer fit for purpose. Of course he didn’t actually say that, but his announcement that the government was going to take responsibility for getting loans to small businesses was an admission that his core beliefs were wrong – the markets don’t always do what is economically and socially beneficial for the country.
While those on the planet free market cling to the notion that the only way to encourage growth is to cut taxes and regulations for entrepreneurs, in the real world we are facing a crisis in demand. The economy isn’t stalling because business people are being constrained by an over-powerful state – quite the opposite. The British state is currently doing all it can, within the Tories own ideological straitjacket, to encourage growth. However, the current financial crises are revealing the lie behind the free market myth that only entrepreneurs create growth, therefore all financial encouragements must be directed solely at them.
We are now seeing that, when it comes to growth, consumer spending is the most important engine. If people don’t have money to spend, then globalisation, a project that relies on quick turn-over and tight profit margins, swiftly grinds to a halt. With prices rising, wages continuing to flat-line and credit becoming scarce, consumers are staying at home.
Even those with money to spend are hanging onto it, spooked by George Osbourne’s recent announcement that he intends to make it harder for employees to challenge their dismissal. Only a Tory politician could claim that he was going to cut unemployment figures by making it easier for bosses to sack people.
We need to change the balance in our economy to ensure that a greater percentage of profits are paid as wages to workers rather than as dividends for shareholders. Yes, investors should expect a return on their money, but since the power of the unions was broken in the 1980s, wages have been seen as little more than a hindrance to the profitability of the stock market. To increase demand, we need to put our economy on a different trajectory.
There was precious little sign that this realisation might be beginning to dawn on our political leaders over the three weeks of the party conferences. Instead, a glimmer of hope appeared with the emergence of opposition to the globalisation project in its heartland. On the day that the Liberal Democrats assembled in Birmingham for their conference, a few thousand protesters marched through downtown Manhattan under the banner ‘Occupy Wall Street’.
By the time Ed Miliband delivered his ‘predator’ speech to the Labour Party conference, OWS had begun to make headlines following the use of pepper spray by the NYPD against passive demonstrators. And when the Prime Minister stood up before his party to make a speech in which he declared equality to be a form of oppression, events on the Brooklyn Bridge had catapulted OWS into the mainstream media. Even President Obama was forced to offer a lukewarm nod of recognition.
Of course there have been some on the Left who have cast scorn on OWS and it’s lack of a list of demands, seeing similarities with the anti-globalisation movement of the past decade, which was unable to translate its anger into an ideology that could be supported by those unable to attend the mass demonstrations. However, the difference between then and now is that anti-globalisation activists sought to challenge the financial sector when it was at its height. For most people, it delivered – unevenly – but many still felt they had better prospects under globalisation.
Now that notion has been challenged by the markets themselves, whose failure has driven many families to the brink of ruin. Public opinion is shifting towards a belief that it is fundamentally unfair to allow those who created the financial crisis to continue to get wealthy while working people struggle to pay their bills.
Is that idea alone capable of motivating a mass movement for a fairer economy? There is always a danger that, just as the nascent Tea Party movement was hijacked by fundamentalist Christians with their book that has all the answers, OWS could be taken over by fundamentalist Marxists, who have their own book that solves all your problems.
In part, the demand for an instantly formulated set of goals reflects a desperate need for right wing news outlets to have evidence that allows them to condemn those gathered in opposition to the status quo. We should not allow our enemies to define the rules by which we are allowed to act. Neo-liberalism is not an ideology, with a programme and list of demands, just a bunch of powerful people doing things in their own self interest. OWS has come to challenge that power, by gathering together a bunch of disenfranchised people and empowering them to act together in their own self interest.
The time may come when OWS needs to nail a set of demands to the doors of the New York Stock Exchange, but for now, just the fact that so many people across the United States are willing to take a stand against globalised capitalism is inspiring. It shows that, unlike the poor souls in ‘Melancholia’, we are not resigned to our fate, that, as the bloated financial markets career out of control, we are busy working out a new trajectory for our economy, one that will ensure that such a devastating crash never happens again.
Via
U.S. Accuses Iranians of Plotting to Kill Saudi Envoy
emptywheel emptywheel
Preet: "We will not let other countries use our soil as our battleground." HAHAHAHAHAHAHAHA
Preet: "We will not let other countries use our soil as our battleground." HAHAHAHAHAHAHAHA
ggreenwald Glenn Greenwald
The U.S. Government will not tolerate those who enter other nations to commit assassinations!!!!
The U.S. Government will not tolerate those who enter other nations to commit assassinations!!!!
German police find explosive devices on Berlin railway
German police have discovered another explosive device designed to derail trains in Berlin - the third in two days.
Two of the devices were found on Monday - one on a high-speed line and another near Berlin's main station.The third was discovered on Tuesday on the track of a suburban railway line south of the German capital.
A previously unknown left-wing group, calling itself the Hekla Reception Committee, said it planted the devices.
The explosive devices are made of bottles of flammable liquids attached to fuses.
Leftist group The discovery of the third suspected fire-bomb follows the explosion on Monday of a device on the high-speed line between Hamburg and Berlin, where trains reach speeds of 200km/h.
There were no casualties, but rail traffic was disrupted.
Another device was discovered on Monday before it went off at the mouth of a tunnel leading to Berlin's main station.
It consisted of seven bottles, filled with flammable liquid, bundled together and linked to a fuse.
The leftist Hekla Reception Committee said in an online statement that it had planted the devices in protest at the presence of German troops in Afghanistan.
Police said they were not familiar with Hekla, which is also the name of an Icelandic volcano.
Germany has about 5,000 soldiers deployed in Afghanistan as part of Nato's mission, most of them in the north of the country.
Last November, Berlin's transport system was severely disrupted when signalling cables were set on fire.
There have also been arson attacks on a number of expensive cars in the German capital.
But BBC Berlin correspondent Stephen Evans says these latest attacks on high-speed railway lines take the potential destruction to a new level of danger.
@'BBC'
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