Clemency for Wall Street Criminals, Prison for the Powerless

A little help from a passive victim: Why did he hold still?

"Who the hell are these people?"

"I don't know. I used to say they were the same ones we've always had to deal with. Same ones my granddaddy had to deal with. Back then they was russlin' cattle. Now they're running dope. I ain't sure we've seen these people before. Their kind. I don't know what to do about 'em even. If you killed 'em all they'd have to build an annex on to hell."

Sheriff Bell, from Cormac McCarthy's novel No Country for Old Men

  

Johnny Gaskins of Raleigh, North Carolina faces a 30-year prison term -- an effective life sentence --  for the supposed crime of depositing $450,000 in his own bank account. The corporate leaders of Wachovia Bank, a criminal syndicate once headquartered in the same state, won't face prosecution despite admissions that the laundered hundreds of billions of dollars on behalf of Mexican narcotics cartels. 

Wachovia was deemed "too big to fail," and thus too important to prosecute. In our system, mercy is reserved exclusively for the powerful and corrupt, and Johnny Gaskins -- a criminal defense attorney -- was neither. 

Gaskins had earned his money legitimately. As a dutiful tax victim, he reported his income to the criminal predators running the IRS. His purported offense was to make numerous deposits in amounts just under the $10,000 threshold at which banks are required to report to the IRS under the Bank Secrecy Act of 1970.

Punishment without a crime: Gaskins.

Displaying the proprietary blend of depraved creativity and utter dishonesty that typify their caste, federal prosecutors insisted that these innocuous acts constituted the alleged crime of "money structuring." 

Dr. William Anderson, an economics professor at Maryland's Frostburg State University, notes that "money structuring" was defined as "an `ancillary crime' to give prosecutors leverage in cases where people had amassed huge amounts of cash via drug sales or other illegal activities and were trying to avoid detection as well as avoid paying taxes on their money."

In Gaskins's case, there was no predicate offense. The money was honestly earned and duly reported. Yet according to Pecksniffian federal prosecutor Randall Galyon, "The point of the law is to make sure we don't have people trying to fool the bank. The fact that he was trying is against the law." 

Gaskins was trying to "fool" the bank about conduct that was not innately criminal.  His violations of technical statutes constituted an offense of a severity comparable to ripping the tag from a mattress.

Yet the sacred majesty of the law requires that Gaskins suffer exemplary, conspicuous punishment. 

As Dr. Anderson observes, there was an unambiguous element of payback behind this vindictive prosecution: "Gaskins had success representing people accused of crimes, and the police and prosecutors paid him back with what can only be a trumped-up charge. Remember, Gaskins was convicted of depositing money in a bank. He did not evade taxes, he did not gain his cash through illegal means, he just put the money in the bank."

For reasons unstated yet deafening in their obviousness, the same corps of federal prosecutors who went after Gaskins hammer and tongs last year displayed little of the same zeal in pursuing Wachovia Bank on charges that involve both deliberate fraud and financial collaboration with Mexican narco-criminal syndicates. 

Wachovia's corporate headquarters are in Charlotte, North Carolina -- just a three-hour drive from Raleigh. Perhaps the heroes who brought Johnny Gaskins to book were simply too exhausted from that herculean task to grapple with Wachovia, which was absorbed by Wells Fargo in a federally engineered takeover. The details are predictably opaque, but Wells Fargo -- which initially resisted string-laden TARP subsidies -- was given $25 billion by the Feds after it bought out Wachovia, which was collapsing under the accumulated weight of its rotten debts. 

Although it proudly called itself "the nation's fourth-largest bank," Wachovia was actually a federally chartered criminal enterprise. 

Granted, this can accurately be said of the entire fractional-reserve banking system. Wachovia distinguished itself by becoming a full-service institution to swindlers and criminals of many kinds. 



In February 2008 it was revealed that Wachovia's corporate leadership "solicited business from companies it knew had been accused of telemarketing crimes," reported the New York Times. "Internal Wachovia e-mail messages, for example, show that high-ranking employees ... frequently warned colleagues about telemarketing frauds routed through its accounts." 


Wachovia had been given specific warnings from investigators and from other banks regarding the scams, yet "it continued to provide banking services to multiple companies that helped steal as much as $400 million from unsuspecting victims." 

A federal lawsuit against Wachovia accused the bank of accepting "fraudulent, unsigned checks that withdrew funds from the accounts of victims, often elderly," continues the Times. "Wachovia forwarded those checks to other banks that were unaware of the frauds, which in turn sent money to the swindlers." 


One Wachovia executive warned in 2005 that one account being used by swindlers had received 4,500 complaints in the space of two months. "There is more," she wrote, "but nothing more that I want to put in a note." 


Despite that warning and others, Wachovia continued to process the fraudulent transactions "partly because the bank charged fraud artists a large fee every time a victim spotted a bogus transaction and demanded their money back," the Times points out. "One company alone paid Wachovia about $1.5 million over 11 months...." 


"We are making a ton of money from them," admitted Wachovia executive Linda Pera in 2005, referring to a company later accused of stealing $142 million through fraud. 


Rather than doing what it could to stop the swindle, Wachovia profited from it as long as it could. The bank's role in that scam -- as well as mortgage fraud, embezzlement, and other crimes -- was known by federal regulators and prosecutors no later than February 2008. Nobody at Wachovia faced criminal prosecution. Instead, the bank was permitted to buy its way out of trouble through a $144 million settlement -- and taxpayers were forced to make good on that amount, and much more, a few months later in the federally subsidized merger with Wells Fargo. 

Last March, federal prosecutors offered an even more generous deal to the Wachovia cabal in the form of a"deferred prosecution agreement" regarding charges of laundering an estimated $300 billion for Mexican narcotics syndicates. In lieu of prosecution, Wachovia agreed to the criminal forfeiture of $110 million and a $50,000,000 fine; it also promised to "demonstrate its future good conduct and compliance in all material aspects with the Bank Secrecy Act...."


The Bank Secrecy Act, recall, is the same law Johnny Gaskins "violated" by making small bank deposits of his own honestly-earned, fully reported money. Gaskins wasn't offered a deal in which he would "forfeit" an amount equivalent to pennies on the dollar and be spared additional punishment in exchange for the promise of future "good conduct."


According to the stipulations in the federal "Factual Statement" Wachovia endorsed last March, a Miami branch maintained "correspondent bank accounts" for Mexican currency exchange houses (casas de cambio, or CDCs).


"On numerous occasions, monies were deposited into a CDC by a drug trafficking organization," recounts the "Factual Statement." "Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug trafficking organizations." 


Among the offenses to which Wachovia stipulated are "Structured Wire Transactions" intended to launder drug proceeds. Once again, Gaskins was convicted of "money structuring" despite the fact that there was no underlying criminal act. Wachovia, on the other hand, was deliberately washing drug proceeds and facilitating the purchase of aircraft that were used to smuggle at least 22 tons of cocaine.

In 2006, Martin Woods, a Wachovia compliance officer in London, became suspicious when his branch started to receive a large quantity of traveler's checks issued by Mexican CDCs. The checks -- written for large denominations -- were sequentially numbered and improperly endorsed.

Recognizing this as evidence of money laundering, Woods reported his findings to Britain's Serious Organised Crime Agency. A year later, Mexican investigators traced those checks to a CDC used by the Sinaloa Cartel. 

Martin's reward for breaking the case, observed the March 9, 2009 issue of Barron's, was to be bullied and demoted by his superiors at Wachovia, who also threw out his reports of similar suspicious activities in eastern Europe. As was the case with the telemarketing fraud, the dirty dealings Martin had uncovered were much too profitable to stop -- and in this case, they were being overseen by people who make Anton Chigurh look like Mr. Rogers.

In September 2007, a U.S. registered Gulfstream II jet carrying 3.3 tons of cocaine crashed in the Yucatan Peninsula. The plane was one of several purchased through a Mexican CDC with "correspondent accounts" held by Wachovia. This particular private jet -- tail number N987SA -- was also an important link between the CIA-abetted international narcotics trade and the CIA's global torture network.

Multi- use asset: A CIA "torture taxi" takes flight...

Until a few weeks before the crash, the plane's registered owner was a Florida-based pilot (and alleged CIA asset) named Greg Smith, who was reportedly involved in a series of federal operations targeting Columbian drug networks from1997-2000. 

Only those so ingenuous as to make Candide look worldly would be surprised to learn that the same individual, and the same aircraft, were involved in smuggling drugs into the United States, or that the CIA found even more repellent uses for the same vehicle.


Mr. "Smith" was the Gulfstream's owner of record between 2003 and 2005, when the plane was used by the CIA for at least three trips between the east coast of the U.S. and the prison camp at Guantanamo Bay.

The same plane was part of the CIA's fleet of "torture taxis" used to ferry detainees to foreign dungeons, reported The Independent of London last January. 

"In 2004, another torture taxi crashed in a field in Nicaragua with a ton of cocaine aboard," the Independent recalls. "It had been identified by Britain and the European Parliament's temporary committee on the alleged use of European countries by the CIA for the transport and illegal detention of prisoners as a frequent visitor in 2004 and 2005 to British, Cypriot, Czech, German, Greek, Hungarian, Spanish and other European cities with its cargo of captives for secret imprisonment and torture in Iraq, Jordan and Azerbaijan."

.... wreckage of the same plane, and its cargo of cocaine.

The gentle treatment given to Wachovia testifies of its value as a pass-through to fund criminal syndicates used by the CIA to conduct the business of perpetual war -- whether it's designated the "war on drugs" or the "war on terror."

To cite Bastiat's invaluable formula yet again, both of those "wars" are exercises in creating the poison and the antidote in the same laboratory. 

The "war on drugs" -- which is an exercise in corrupt, murderous foolishness greater, by several orders of magnitude, than Prohibition -- will not end as long as it is profitable to the criminal elite in Washington, their allies in the banking industry, and their largely interchangeable and thoroughly disposable minions in the underworld. 
 
As Hugh O'Shaughnessy of The Independent puts it, decriminalization of drug use would impoverish "the traffickers, large and small, and those who have been making good money building and running the new prisons that help to bankrupt governments -- in the US in particular, where drug offenders -- principally small retailers and seldom the rich and important wholesalers -- have helped to push the prison population to 1,600,000." 

That population will soon include Johnnie Gaskins, a principled but powerless man who committed no crime. The majesty of the law requires nothing less. None of the criminals in Wachovia's corporate leadership will be joining him behind bars, of course, since clemency is a gift the Regime bestows exclusively on its valued accomplices in official crime.

(Note: This essay was originally published under a different title.)

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Quantum of Suffering: Economic Hitmen Target Main Street

You should know something about me, and the people I work with. 

We deal with the left and the right, dictators or liberators. If the current president had been more agreeable, I wouldn't be talking to you.

So if you decide not to sign, you'll wake up with your balls in your mouth, and your willing replacement standing over you. 

If you doubt that, then shoot me, take the money, and have a good night's sleep.

Dominic Greene, political acquisitions specialist for the secretive Quantum criminal oligarchy, explains to Gen. Medrano -- the organization's new pet Bolivian dictator -- how the world really works, as seen in the film Quantum of Solace.

If we were to suture a toupee -- preferably in a procedure not involving anesthetic -- to the scalp of Lloyd Blankfein, the Goldman Sachs commissar would strongly resemble Dominic Greene, the reptilian villain of the most recent James Bond film, Quantum of Solace.

Blankfein already resembles Greene in ways that transcend mere aesthetics. The same can be said regarding the fictional Quantum criminal syndicate and the corrupt real-life oligarchy to which Blankfein belongs.

Although it was hampered with an undercooked script and an editing style that makes the action sequences all but impossible to follow (think of what Michael Bay would do in the editing bay following a two-day Red Bull jag), Quantum of Solace is the only Bond film to feature an entirely believable villain, and a surprisingly credible Evil Plot.

Dominic Greene is a composite of several real-life oligarchs. In addition to his resemblance to Blankfein, Greene -- an ersatz conservationist who plunders countries and overthrows governments behind a facade of environmental philanthropy -- also somewhat resembles Maurice Strong and George Soros.

Quantum itself is a tenebrous, Bilderberg-like Power Elite fraternity seeking control over the global economy. To that end, the group finances terrorism and revolution (which played a significant role in the previous -- and much superior -- Bond film, Casino Royale) with utter indifference to the ideology of its allies. It is the objective -- the consolidation of power -- that matters, rather than the doctrine used to recruit and motivate the cannon fodder.

At least one of the four people responsible for the Quantum of Solace screenplay appears to be at least superficially familiar with the writings of Carroll Quigley and C. Wright Mills.

A steer, not a bull: Gen. Medrano (Joaquin Cosio).

Dominic Greene's little lecture to Quantum's Bolivian rent-a-thug, General Medrano, brings to mind the following observation by Quigley:

"There does exist an international Anglophile network which operates in the way the radical Right believes the Communists act. In fact, this network has no aversion to cooperating with the Communists and frequently does so."

In the film, Greene and Quantum have recruited General Medrano to overthrow the leftist government of Bolivia. All the cabal seeks in return is a large tract of barren desert.

When the CIA starts sniffing around the scheme, Greene buys them off with a side deal: He promises Washington an oil concession if the Company permits the coup to proceed.

By infiltrating a Quantum teleconference, Bond learns of a plot to control "one of the world's most precious resources." In Bolivia he discovers that Greene -- working under the cover of his "Greene Planet" land acquisition corporation -- is planning to monopolize Bolivia's water supply.

Medrano initially balks when told to sign an agreement giving Quantum control over the country's water utility (which would double the price Bolivians were paying for the service), but he grudgingly scribbles his signature when he's reminded how easily he could be replaced.

In addition to the writings of Quigley and Mills, John Perkins' 2005 memoir-expose Confessions of an Economic Hit Man appears to have inspired at least some aspects of the Quantum of Solace storyline.

According to Perkins, the organs of international finance, such as the World Bank and International Monetary Fund, engage in what is essentially a global loan-sharking scheme.
As an economic forecaster covertly recruited by U.S. intelligence in the 1960s, Perkins was dispatched to various countries — including Indonesia and Panama — as an "economic hit man," or EHM. His role was to help induce national leaders to take out huge World Bank loans to fund mammoth infrastructure programs.

Perkins claims that he was was just one EHM among thousands plying the same trade worldwide. If an EHM is successful, writes Perkins, "the [World Bank] loans are so large that the debtor is forced to default on its payments after a few years. When this happens, then like the Mafia we demand our pound of flesh. This often includes one or more of the following: control over United Nations votes, the installation of military bases, or access to precious resources…. Of course, the debtor still owes us money — and another country is added to our global empire."

Vulcan's Forge: Civic symbol of Birmingham, Ala.

Economic Hit Men aren’t the only weapons in the Power Elite's arsenal. Perkins also refers to "Jackals," who are sent to deal with the most refractory foreign leaders by fomenting revolutions, or staging assassinations. 

"When the Jackals fail," Perkins continues, "young Americans are sent in to kill and die."

These depredations aren't confined to the Third World, at least as that designation is conventionally understood. 


During the early years of the 21st Century, just before the Federal Reserve's most recent debt bubble collapsed, the EHMs preyed on municipal and county governments across the United States. 

Among their victims are the residents of Jefferson County, Alabama, which has been bankrupted and ruined as the result of a plot eerily similar in some ways to the one depicted in Quantum of Solace.

In 1996, Birmingham was forced to sign a federal consent decree requiring it to reconstruct its municipal sewer system. The initial estimated cost was roughly $250 million. However, that initial cost estimate was like a tiny grain of sand lodged inside the mantle of an oyster.  The Jefferson County political establishment quickly turned that grain of sand into an immense pearl of civic corruption, inflating the cost of the project to $3 billion. 

Sharp-dressed sellout: Larry Langford, JP Morgan's whore.

When the County Commission sought lenders to refinance its sewer bonds, JP Morgan dispatched a low-grade EHM named Charles E. LeCroy. In 2002, Larry P. Langford, a man with a troubled financial background and a weakness for expensive clothes, was appointed president of the Jefferson County Commission -- and LeCroy had his General Medrano. 

LeCroy compromised Langford with the clinical precision of a practiced seducer. Plying him with expensive clothes, jewelry, and cash payouts, LeCroy induced Langford to sign off on a series of esoteric "synthetic debt swaps" that eventually inflated the county's debt -- for rebuilding a sewer system, remember -- to $5.4 billion. 

The mechanics of these instruments are deliberately convoluted; the agreements were cluttered with recondite language designed to obstruct understanding, and conceal trip-wires and trap-doors. 

"I needed somebody to tell me what all that stuff was," Langford would testify in a June 2008 deposition. "And even when they told me, I still don't understand 99 percent of it."


Seeking an "independent" adviser to vet JP Morgan's proposals, Langford turned to William Blount, who ran the local investment firm of Blount Parrish & Company. It's entirely possible that Langford honestly didn't know -- at first -- that Blount had also been compromised by Quantum -- er, make that JP Morgan. In fact, Blount's $300,000 side-deal with LeCroy was roughly double the size of Langford's price tag. 


In Quantum of Solace, Bond discovers that Greene and his cohorts had managed to buy off dozens of officials in both the U.S. and British governments with promises of lucrative oil concessions. As Mr. White, a bagman for Quantum who had been introduced in Casino Royale, tells Bond: "The first thing you need to know about us is that we have people everywhere" -- including supposed allies in key positions within U.S. and British intelligence.

As mentioned earlier, Dominic Greene was able to get the CIA to butt out of Bolivia in exchange for a bogus oil deal. It cost LeCroy, JP Morgan's EHM in Birmingham, $3 million to persuade Goldman Sachs to avert its gaze from the opportunities for plunder in Jefferson County.


When queried by a comrade at JP Morgan, LeCroy explained that the money was the price of Goldman "not messing with us. It's a lot of money, but in the end, it's worth it on a billion-dollar deal." 


As the irreplaceable Matt Taibbi pointed out in his definitive journalistic autopsy of Jefferson County, just about everybody in the Banking Cartel sought a piece of the action: Four of the nation's top investment banks, the very cream of American finance, were involved in one way or another with payoffs to Blunt in their scramble to do business with the county. 

In addition to JP Morgan and Goldman Sachs, Bear Stearns paid Langford's bagman $2.4 million, while Lehman Brothers got off cheap with a $35,000 `arranger's fee.' At least a dozen of the county's contractors were also cashing in, along with many of the county commissioners." 


Dozens of local businessmen and political officials -- including Langford, who was elected Birmingham Mayor in 2007,  and Blount -- have been convicted on charges of bribery and other forms of corruption. LeCroy was eventually convicted and sent to prison for three months -- yes, three months -- for his role in a similar criminal enterprise in Philadelphia.


Some of those responsible for pillaging Jefferson County are behind bars, but nothing they will experience will compare to the suffering they have left in their wake. 

A chilling scene near the end of Quantum of Solace shows Indian peasants looking on in frustration and alarm as their local water pumps suddenly run dry in (temporary) consummation of Greene's plan. More than a few residents of Jefferson County have lived through very similar privations.


County residents now pay an estimated $750 a year for municipal services, more than twice the national average. Sewer costs are now 300 percent higher than they were when the reconstruction project began in 1996. These ruinous increases reflect the fact that those sentenced to live in Jefferson County are being taxed to pay the service on the debts created by JP Morgan's Economic Hit Man and his seraglio of civic servants. 

Birmingham resident Dora Bonner, a woman in her 70s who lives on a Social Security check and shares her home with four grandchildren, was among those forced to choose between paying a $250 water bill or keeping the furnace running in wintertime.  "I couldn't afford the water, so they shut it off," Bonner told Bloomberg News. 

Jefferson County residents draw nearer to bankruptcy every time they shower or flush the toilet. JP Morgan, the architects of this misery, received $25 billion in TARP bailout money and unspecified tens of billions more from indirect subsidies. Last year it dished out more than $11 billion in management bonuses. 


After the Economic Hit Men have done their work, John Perkins informs us, those who employ them send in first the jackals, then the troops. The destruction of Alabama's most populous county suggests that, at least where domestic operations are concerned, Quantum's real-life counterparts might simply skip the second stage and go directly to martial law. 

First Hit Men, then Jackals, then troops.

Last fall, a "kind of civil legal civil war broke out" in Jefferson County "when three county agencies -- the sheriff's department, an indigent-care hospital and the tax-assessor's office -- sued the county commission to stop ... budget cuts on the grounds that they posed a danger to public safety," reported Bloomberg News last October. 


Maintaining that budget cuts would make it impossible to provide law enforcement coverage for Jefferson County, Sheriff Mike Hale suggested that it would be necessary to call in the National Guard to serve as a police force. In fact, as AlterNet's Mike Ames observes, martial law is "a logical progression in the ongoing billionaire plunder of America."


In March 2009, following a shooting rampage in which 27-year-old Samson, Alabama resident Michael McClendon murdered ten people before killing himself, troops from Fort Rucker "were brought into Samson and other surrounding areas to patrol the streets," reported Ames. "This was a clear violation of the Posse Comitatus Act, every freedom-loving American's worst nightmare." 

A subsequent investigation by the Army confirmed that it was illegal to dispatch soldiers to patrol the streets and man roadblocks, but no effort was made to identify, let alone punish, those responsible. As Ames points out, the damage done in Alabama by Wall Street's Economic Hit Men was hardly confined to Jefferson County: Pilgrim's Pride, one of the state's largest private employers, was seduced into leveraging itself into bankruptcy. 


"Now you can see why Alabamans are loading up on so many weapons," concludes Ames. For the same reason, it's not surprising that some statewide political campaigns in Alabama this year have an insurrectionary tone -- not that this is necessarily a bad thing, of course. The problem, predictably enough, is that the understandable rage and frustration are likely to be skillfully misdirected in the service of the same people who have all but reduced the state to Third World status. 


Those of us who don't live in Alabama need not feel left out, since -- as Quantum's Mr. White might put it -- Wall Street's taxpayer-subsidized oligarchy has people everywhere. Their fingerprints will most likely be found wherever a municipal or county government is suffocating in debt and wringing whatever revenue it can from tax victims who have nothing left to give.


Yes, I know: Quantum of Solace is a silly movie, full of implausible action gags and dodgy dialogue. And yet....

Video Extra: Your Moment of Wish Fulfillment

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Dum spiro, pugno!

The Economic Show Trials Begin

The inverted pyramid of corporate socialism: The wealthiest are subsidized, through inflation, by those who can least afford it.



Could it be that our ruling elite has effectively transcended hypocrisy? As the aphorism informs us, hypocrisy is the tribute that vice pays to virtue; it is the product of a person's capacity for decent shame, the fig-leaf garment concealing one's naked corruption.


Shame being a vital precursor to hypocrisy, those who rule us -- not only the politicians, but the banksters and image-molders as well -- can't be accused of hypocrisy. This would be a bit like criticizing the fashion sense of somebody who's color-blind. This doesn't mean, however, that they should be allowed an indulgence for the evil that they do.


Last week, during a brief digression in the ongoing efforts to socialize the losses suffered by the super-rich kleptocrats at Fannie Mae and Freddie Mac, Congress conducted an authentic Orwellian hate-fest directed at "super-rich" people who had earned their money through legitimate enterprise.


The Fannie/Freddie nomenklatura built huge profits through the government-subsidized generation and "securitization" of bad mortgages and criminally corrupt bookkeeping. Last week's hearings by the Senate Subcommittee on Investigations focused on people who had made large sums of money through honest, productive commercial activity -- and then tried to preserve their honest earnings for their posterity by protecting it in bank accounts in Liechtenstein.


Congress and the ruling elite it serves are eagerly stealing everything in sight, through taxes, subsidies, and inflation. But as last week's Senate hearings-cum-show trial illustrate, they are tuning up the machinery of mass hatred in anticipation of scapegoating authentic capitalists for the ongoing economic collapse.


The fault, we will be told, lies not with our corrupt and incurably profligate government, or the incorrigible official counterfeiters at the Federal Reserve, or the government-subsidized corporatist interests who are their clients -- but rather those who greedily insist on keeping what they earn instead of paying their "fair share" in the name of the "common good."


The calculation here is that a hate campaign of that sort can keep the public from noticing how the phrase "common good" always seems to refer to policies that confer benefits on one particular elite. And it's quite likely that members of that elite have their own numbered accounts in places like Switzerland and Liechtenstein. Which is probably another reason they're so eager to go after well-heeled people who aren't part of their club.


As I have noted before, Liechtenstein, unlike the United States, is a relatively free country. It is presided over with a gentle hand by Prince Hans-Adam II, rather than being ruled by a degenerate fascist oligarchy like the one entrenched in Washington. Hans-Adam II is on record saying that a top tax rate higher than 6% is "tyrannical." This puts him well ahead of any other political leader I can think of in pursuing the truth, which is that taxation is always and everywhere nothing but officially sanctioned theft.


As would be the case in any civilized country, Liechtenstein's banking secrecy laws were designed to protect the assets of depositors from the scrutiny of predators serving the ruling class. Many foreign depositors have, in accordance with the sound and commendable laws of that estimable alpine country, set up foundations to protect their earnings from rapacious tax-gatherers in their own afflicted nations.


Weasel at large: Heinrich Kieber, convicted of fraud in Liechtenstein, esteemed informant for the tax gestapo of various governments. He is what I call an "SOS" -- someone who should be Slapped On Sight (I only use a closed fist on a real man).


Unfortunately, a squalid little creature named Heinrich Kieber who had been a clerk at Liechtenstein's LGT Group, pilfered several CDs worth of data regarding foreign depositors from the United States and Europe. Driven by a variant of the invidious impulses that sixty years ago would have led him to rat out those who protected Jews from the Gestapo, Kieber -- as viscous as he is vicious -- oozed into the offices of Germany's BND intelligence service and sold his stolen information for $7.3 million stolen at gunpoint from German taxpayers.

Kieber conducted similar transactions with ruling criminals in London, Paris, Rome, and Washington. His information This led to last week's hearings, chaired by the loathsome Senator Carl Levin (D-Michigan), who -- in the interests of "bipartisanship" -- gave a prominent co-starring role to the even more repulsive Senator Norm Coleman (R-Minnesota). Kieber himself, who has been taken into the "witness protection program," testified by way of a videotaped statement from a secret location.


The target of Comrade Levin's show trial was the reported $1.5 trillion cached by wealthy Americans in offshore accounts, including those in Liechtenstein, Switzerland's UBS, and elsewhere. Those banks, Levin complained, had employed "tricks" that made it "impossible for the Internal Revenue Service to follow the money, bring tax cheats to justice, and bring back into the US treasury the tens of billions of dollars owed to Uncle Sam."


Well, sure: The banks that sought to protect the assets of Jews during WWII employed the same methods to protect the assets of honorable people from the contemporary tax gestapo, who are the true moral heirs of the Nazi officials who sought to seize the assets of persecuted Jews. Impeding the efforts of criminals to steal wealth is not a "crime," and it's interesting that Levin didn't use that word to describe the "tricks" he protested.

And, if I can be permitted a brief digression, Levin's statement that the money should be brought "back to the US treasury" in order to pay "the tens of billions of dollars owed to Uncle Sam" is a Marxist lie sandwiched between two crusty slices of chutzpah.


For the purposes of this discussion, we'll refer to the fraudulent fiat currency issued by the Fed as "money."


Any quantity of "money" honestly earned does not belong to the Treasury; it belongs to the individual or enterprise that earned it, until he or they decide to spend it for some purpose. Accordingly, that money cannot go "back" to the Treasury, although it can be diverted there to be wasted on corrupt government undertakings of various kinds.


Furthermore, taxes are not "owed" to the federal government; they are seized by the federal government. One "owes" money to another party from whom he has received goods or services pursuant to a legitimate contract. "Contracts" imposed through duress (such as extortion pay-offs) are illegitimate. Those of us who pay taxes do so not because a legitimate contract exists between us and the Regime that extracts our wealth; we do so because of a desire to stay out of prison, or to avoid violent death at the hands of the State's hired killers.


Levin is a nearly ideal representative of the parasite class. His mind, or what passes for it, is entirely hostage to collectivist assumptions. Just as a dog cannot discern colors, Levin can't see anything amiss in extending official protection to a foreign criminal (Kieber was convicted of fraud in Liechtenstein) so he can testify against those who have done no injury to persons or property, or in treating foreign bank officers as if they were under Washington's jurisdiction by demanding that they testify before his committee.


All of this is being done, Levin insists, to bring "tax cheats to justice." Leaving aside, for the nonce, the fact that the word "justice" when uttered by the likes of Levin is like the word "love" in the mouth of a whore, the cruel fact is that tax avoidance is impossible for anyone who conducts business using the Federal Reserve's fraudulent scrip.


This brings us to one history-making admission offered last week by Fed Commissar Ben Bernanke beneath the avuncular but relentless cross-examination of Rep. Ron Paul (R-Texas) during Bernanke's recent congressional testimony.

Actually, this illustration is deceptive regarding the innate value of the Federal Reserve Note: The paper grade used in creating that bogus currency is ill-suited to such use.



“Inflation is a tax," Rep. Paul observed during his colloquy with Bernanke. "And if the Federal Reserve, and you as chairman, have this authority to increase the money supply arbitrarily, you’re probably the biggest taxer in the country."


"I couldn't agree with you more that inflation is a tax," admitted Bernanke, quickly seeking to evade responsibility by saying that "inflation currently is too high." The criminal syndicate over which Bernanke presides imposes taxation without representation or accountability.


Furthermore, it exports that inflation world-wide, thanks to the fact that the instrument of debt the Fed calls the "dollar" is the world's reserve currency. This means that nearly everyone who uses the dollar to conduct business is paying the tax called inflation. This is a unique form of withholding, in that the Fed steals an increment of value from each dollar before it ends up in the hands or accounts of private actors in the economy.


Pity poor Emmett Neverend: Once a rational and respected academic, he lost his wits when he finally came to understand the moral implications of the Regime's financial system.


Where a government exercises the power to tax through inflation, no other taxes are "necessary," including the income tax. Furthermore, where governments tax through inflation, no tax evasion is possible, as long as people conduct business in that adulterated currency.


The redoubtable G. Edward Griffin points out that former Fed Chairman Beardsley Ruml admitted that, because of the Fed's ability to tax via inflation, "Taxes for Revenue are Obsolete" -- the title of an essay Ruml published in the January 1946 issue of American Affairs. As Ruml wrote,"given control of a central banking system and an incontrovertible currency [that is, a fiat currency not backed by gold], a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue. All taxation, therefore, should be regarded from the point of view of social and economic consequences."(Emphasis added.)


Thus, where Washington is concerned, taxation exists purely for the purpose of social manipulation through vulgar redistribution of wealth, not to pay the operating costs of government. And as carried out by the IRS, taxation is an instrument of intimidation and terror used to compel social conformity.


By keeping their money in dollars, or any currency "pegged" to the dollar, so-called "tax cheats" aren't evading taxes. They, like the rest of us, are being taxed through the Fed's relentless inflation. Their only hope to evade being taxed by the Fed would be to take the advice offered by Jim Rogers last fall: Get out of dollar-denominated assets entirely.


There are only two ways to acquire wealth: It can be earned through mutually beneficial voluntary action, or it can be stolen through force and fraud. Any effort to acquire wealth that involves any degree of force or fraud is theft.


Senator Levin and his comrades, who are preparing to bail out the politically favored thieves running Fannie and Freddie, spent many taxpayer-funded hours last week dilating upon the supposed iniquity of those "super-rich" Americans who seek to protect what they earn from people whose professional lives are nothing but one prolonged exercise in theft.


It would avail nothing to point out such hypocrisy to Levin and his ilk; they can no more feel honest shame than a chimpanzee can compose a cantata.


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Dum spiro, pugno!