TBR News May 6, 2016

May 06 2016

The Voice of the White House

Washington, D.C. May 6 2016: “The incestuous politicians who infest Washington are basically the puppets of the oligarchs who really run the United States. They view the bulk of the natives solely as taxpayers whose money funds them and their often bizarre and always corrupt activities. These view Trump’s ascendancy with great alarm because he is not part of their puppet show. On the other hand, the Democratic front runner is not at all appealing. Hillary is, to be blunt, a Jewish lesbian and as such, liable to exposure and certain rejection by the voters. In the end, they will slowly come to kiss the backside of Donald Trump and leave Hillary to her strap-ons.”

 

The Müller Washington Journals   1948-1951

At the beginning of December, 1948, a German national arrived in Washington, D.C. to take up an important position with the newly-formed CIA. He was a specialist on almost every aspect of Soviet intelligence and had actively fought them, both in his native Bavaria where he was head of the political police in Munich and later in Berlin as head of Amt IV of the State Security Office, also known as the Gestapo.

His name was Heinrich Müller.

Even as a young man, Heini Müller had kept daily journals of his activities, journals that covered his military service as a pilot in the Imperial German air arm and an apprentice policeman in Munich. He continued these journals throughout the war and while employed by the top CIA leadership in Washington, continued his daily notations.

This work is a translation of his complete journals from December of 1948 through September of 1951.

When Heinrich Müller was hired by the CIA¹s station chief in Bern, Switzerland, James Kronthal in 1948, he had misgivings about working for his former enemies but pragmatism and the lure of large amounts of money won him over to what he considered to be merely an extension of his life-work against the agents of the Comintern. What he discovered after living and working in official Washington for four years was that the nation¹s capital was, in truth, what he once humorously claimed sounded like a cross between a zoo and a lunatic asylum. His journals, in addition to personal letters, various reports and other personal material, give a very clear, but not particularly flattering, view of the inmates of both the zoo and the asylum.

Müller moved, albeit very carefully, in the rarefied atmosphere of senior policy personnel, military leaders, heads of various intelligence agencies and the White House itself. He was a very observant, quick-witted person who took copious notes of what he saw. This was not a departure from his earlier habits because Heinrich Müller had always kept a journal, even when he was a lowly Bavarian police officer, and his comments about personalities and events in the Third Reich are just as pungent and entertaining as the ones he made while in America.

The reason for publishing this phase of his eventful life is that so many agencies in the United States and their supporters do not want to believe that a man of Müller¹s position could ever have been employed by their country in general or their agency in specific.

 

Friday, 17 December 1948

Two of my people have arrived at last and I was able to get some decent furniture into the house. In cleaning out a closet, I found some old newspapers talking about Wilson’s death. Old newspapers, dripping faucets and dead flies on the window ledges are being cleaned out. My family is doing well enough, I understand, but I can do very little now. The Amis are still looking for me and I have been told to be very careful because they are watching everyone in Pasing. Small, discreet assistance is being rendered.

I have turned nearly all of my State Department material over to the Justice people and also have had my first unofficial guest, Msgr. S. (Spellman, ed.). We make progress to save our souls. A bit of pleasant information for him. Pius hates the communists worse than I do so at least I have some friends left. Christmas is always a bad time when one is away from family but we will make do. The Americans cook turkey (Trauthahn) here and celebrate on Christmas Day instead of Christmas Eve. We shall keep to the old customs and have goose and ham. A tree with candles too but I am told that electric lights are considered safer.

After the war, Müller’s wife and daughter returned to the old family home in Pasing, a suburb of Munich. They were later joined by his son who had been in a prisoner of war camp as a tank driver in the elite Adolf Hitler Leibstandarte Armored Division. The American CIC as well as Soviet intelligence closely watched the family and it was eventually discovered that Müller had contact with his wife but nothing could be done about this because CIC reports were not acted upon. Müller was a nominal Catholic who officially had to leave the Church at Himmler’s request. In 1948, Pope Pius XII who, as Cardinal Eugenio Pacelli had been Nuncio to Germany, had a deep and abiding hatred of communism, having seen its terroristic actions at the end of the First World War.

Wednesday, 22 December 1948

Interesting news this morning. The dining room is much the way I want it with fresh paint, new draperies and much of the furniture from Geneva in place. At breakfast I had a visitor who was much excited. When the servants had left, he closed the door in a most conspiratorial manner and rushed over to tell me the news! Mr. Duggan had accidentally fallen out of his office window last night! Such a tragedy and so soon before the holidays too. Well, I suppose if he had lived, he would have been up before the courts and might have said something. Of course I have not been here long enough to have helped him and I have only been through New York, but my fellow workers seem to be more than capable in this field. We all share such common interests.

My informant, who kept trying to eat my fresh rolls, told me that the matter is to be kept quiet. I wonder when a man falls sixteen floors to the street how this can be kept quiet? Did he come down on somebody I wonder? How do you explain the brains on a car parked on the street? He had a bad headache and his head exploded suddenly?

I am supposed to talk to a Mr. Nixon either today or tomorrow about some of this. Not to mention the fake suicide at all. He doesn’t know and ought not to but is considered a very good ally. Now it seems I will not see the President until after the holidays because he has gone home to his farm. It gives me more time to polish my English. One of the water pipes broke last night but fortunately there was nothing in the cellar and everything has been fixed. The neighborhood is pleasant and there are some excellent parks here. I shall make a visit to the art museum as soon as I can, that is if I get through the mountains of files that they keep dumping on me. The new secretary is not as pretty as the last one but is very accommodating. The question is whether or not she stays in the house or lives elsewhere. We will see how we get along. It is good to have the regular cook back. He knows exactly what I want and when I want it. It is a terrible trouble to break in new servants. I used to let my wife do that but now it is my job. More trouble in Berlin but that is to be expected. Mundt is supposed to stop over this afternoon and perhaps we can settle a few things.

There was great tension in Soviet-blockaded Berlin but this did not materialize into open warfare as the militant U.S. war party so often and loudly predicted. Karl Mundt, a conservative Congressman from South Dakota, had been elected in 1946 along with Senator Joseph McCarthy from Wisconsin. The American Congress was, by 1948, extremely conservative, mainly as the result of a grassroots movement against the rampant liberalism of the Roosevelt era.

Friday, 24 December 1948

Hiss claims that all are lies. We know better. Pot boiling over the Duggan “accident.” Nixon is sure the man killed himself rather than face “the music” but we know better here. The rest of the staff is here and about half of the house is ready for use. My bedroom is finally finished and last night I personally hung my treasures up. One does get used to the same mattress and while the windows do not give me the view I used to have, still, the effect is soothing and restful. Herta is not as pleasant as Barbara or Anna but, all in all, gives promise. I told her to stop eating so much! She is used to the very poor food in Europe after all. If she starts to get fat, I will have to replace her. Krieger will come over in January and if H. doesn’t work out, at least I know where I am with my loyal stenographer.

The Duggan referred to here is Laurence H. Duggan, who had been accused by Whittaker Chambers of being a communist spy. Duggan had attended Harvard University where he knew Alger Hiss, also an accused State Department spy (later convicted). Duggan joined the Department of State in 1930 and became a political affairs advisor, leaving the Department in 1944. At the time of his death, Duggan was connected with the Rockefeller interests. After being accused by former communist agent Chambers, Duggan either jumped, fell, or, as now seems most likely, was pushed from his office window in New York. His friends in the government subsequently lauded him and the matter was shelved. Subsequent deciphering of Soviet secret messages, called Venona by U.S. intelligence, revealed that Duggan was indeed an agent. Müller was already aware of this fact because the Germans had intercepted Soviet intelligence messages sent from Ottawa, Canada, in a code that like the codes used by the NKVD in Australia, could be easily broken.

Saturday, 25 December 1948

Christmas this evening. An excellent goose which I bought myself and in the very large drawing room a very fine tree. I decided not to put electric lights on it and I put it into the stand that revolves and plays songs on the apparatus inside. The candles make my staff feel at home. The gifts are ready to hand out and the staff got me a very nice watch that I will have to wear to keep them happy.

The President’s people have said that Duggan was not a spy and was the victim of an accident, not a suicide. How do you define an accident? He was accidentally standing by an open window in the middle of winter when some thoughtless secretary shoved him out because he bit her breasts the night before? That awful Roosevelt woman says that press accounts of the high-flying Duggan were terrible. I can write better English than she can but we at least have similar interests…women.

I have discovered that Washington is, like the boiler in the cellar, not unlike Berlin. Gossip, chatter, innuendo, deep thrusts into the back by good friends, greed and, above all, total ignorance of almost everything but how to acquire money and most of all, importance.

I am learning to be very awe-inspired when I have to listen to people like General Smith who is a very small-minded man. He is near-sighted and stares intently at people, impressing them with the brilliance of his mind. If he wore glasses, he would be less impressive. When he was in England with Eisenhower, he chased hotel maids from morning to night. Of course Eisenhower had an affair with his driver, female I must say. Well, I can’t condemn them for such activities but I would never have chased old English women around with my pants open. Smith is now busy practicing his expertise on the Russians but it is rumored that he may return here permanently. They seem to like military personages running their various agencies.

The Admiral was at Pearl Harbor when it came under attack. For some reason, I have neglected to enlighten him about certain facts concerning that episode, facts which would no doubt meet with the disbelief the orthodox display when confronted with uncomfortable truths. I may have to go to New York after all when the Grand Jury comes back next month. It will be interesting to go to the Metropolitan Museum at least. Perhaps I will have the chance to see the President before then. I will have to go downstairs soon so I will wish my family and myself a very Happy Christmas and a Fortunate New Year!

 

https://www.amazon.com/DC-Diaries-Translated-Heinrich-Chronicals-ebook/dp/B00SQDU3GE?ie=UTF8&keywords=The%20DC%20Diaries&qid=1462467839&ref_=sr_1_1&s=books&sr=1-1

 

SECRECY NEWS

From the FAS Project on Government Secrecy

Volume 2016, Issue No. 40

May 5, 2016

HASC FAVORS CLASSIFIED NATIONAL MILITARY STRATEGY

The forthcoming National Military Strategy, unlike previous versions of the Strategy, should be a classified document, the House Armed Services Committee (HASC) said in its markup of the FY2017 defense authorization bill.

Paradoxically, the Committee said that classifying the Strategy would enable increased disclosure of information– to the Committee, not to the public.

“The committee understands the importance of the Department publicly communicating its defense strategy to the American people, Congress, other U.S. Government agencies, and international partners and allies. However, the committee also recognizes that the classified assumptions and analysis underpinning the strategy, as well as the subsequent programming, budgeting, and contingency planning guidance that implement the strategy, are also important oversight tools for the committee and help to frame the annual budget request.” (Section 904)

“The committee believes that the NMS [National Military Strategy] should be re-focused to provide a strategic framework for the development of operational and contingency plans by the combatant commands, and to provide joint force and joint capability development guidance to guide resource investments by the military services.” (Section 905)

“To provide such guidance, the committee believes that the NMS should be a classified document,” the Committee markup said.

The Chairman of the Joint Chiefs of Staff, Gen. Joseph Dunford, recently stated that the next National Military Strategy will in fact be classified, as the House Armed Services Committee desires.

The House Committee did not adopt a DoD proposal for a new exemption from the Freedom of Information Act for certain military tactics, techniques and procedures, as well as rules of engagement, that are unclassified but considered sensitive. The proposed FOIA exemption was excluded from the pending bill without comment.

Recent DoD policy and doctrinal publications of interest to some include the following.

Management of DoD Irregular Warfare (IW) and Security Force Assistance (SFA) Capabilities, DoD Instruction 3000.11, May 3, 2016

DoD Nuclear Weapons Personnel Reliability Assurance, DoD Instruction 5210.42, April 27, 2016

DoD Identity Matching Engine for Security and Analysis (IMESA) Access to Criminal Justice Information (CJI) and Terrorist Screening Databases (TSDB), DoD Instruction 5525.19, May 4, 2016

Department of the Army Polygraph Activities, Army Regulation 195-6, April 21, 2016

QUESTIONS FOR THE RECORD: ARCTIC CAMOUFLAGE

The camouflage netting used by the U.S. Army in the Arctic region is obsolete and ineffective, Army officials told Congress in response to a question for the record in a newly published hearing volume.

“The existing Arctic camouflage system has not been upgraded since its inception in the mid-1970s. The Army’s current camouflage system, the Ultra-Lightweight Camouflage Net System (ULCANS) was developed in the late 1990s and only included Woodland and Desert patterns. Due to improvements in technology, these variants are now ineffective against current and emerging advanced sensor threats and are in need of updates,” the officials said.”The next-generation ULCANS capabilities add three new variants (Arctic, Urban, and Aviation) and upgrade the existing systems (Woodland and Desert). The next-generation ULCANS will provide concealment from visual, near infrared, short-wave infrared through long-wave infrared, ultraviolet, radar, and multi-spectral/hyper-spectral detection.”

“Ultimately,” but not yet, “these systems will provide U.S. forces detection avoidance and sensor defeat capabilities as a low-cost force multiplier,” they said in response to the question submitted by Sen. Dan Sullivan (R-AK). See FY2016 Defense Authorization: Airland, Senate Armed Services Committee, March 19, 2015 (published April 2016), at page 95.

Questions for the record (QFRs) constitute a valuable though unpredictable and often neglected genre. At their best, they serve to elicit new information in response to focused, sometimes unwelcome questions. The House and Senate Armed Services Committees are now among the most interesting practitioners of the form. Senate Intelligence Committee hearing volumes used to be a must-read for their QFRs alone, but that Committee ceased publishing them over a decade ago.

JUDGE GARLAND’S OPINIONS, AND MORE FROM CRS

The Congressional Research Service continues to devote substantial attention to the nomination of Judge Merrick Garland to the Supreme Court, even if the U.S. Senate remains unwilling or unable to act on the nomination. This week CRS issued a new report presenting an annotated tabulation of hundreds of decisions written by Judge Garland.

“To assist Members and committees of Congress and their staff in their ongoing research into Judge Garland’s approach to the law, this report identifies and briefly summarizes each of the more than 350 cases in which Judge Garland has authored a majority, concurring, or dissenting opinion. Arguably, these written opinions provide the greatest insight into Judge Garland’s judicial approach, as a judge’s vote in a case or decision to join an opinion authored by a colleague may be based upon a number of considerations and may not necessarily represent full agreement with a joined opinion.”

See Majority, Concurring, and Dissenting Opinions Authored by Judge Merrick Garland, May 2, 2016. (The larger implications of Judge Garland’s opinions were analyzed in a separate CRS report that was issued last week.)

Other new and updated reports from the Congressional Research Service include the following.

  • China’s Natural Gas: Uncertainty for Markets, May 2, 2016
  • Synthetic Drugs: Overview and Issues for Congress, updated May 3, 2016
  • Funding of Presidential Nominating Conventions: An Overview, updated May 4,
  • Green Infrastructure and Issues in Managing Urban Stormwater, updated May 2, 2
  • DHS Budget v. DHS Appropriations: Fact Sheet, May 2, 2016
  • Overview of Commercial (Depository) Banking and Industry Conditions, May 3, 20

 

FBI Told Cops to Recreate Evidence From Secret Cell-Phone Trackers

May 5 2016

by Jenna McLaughlin

The Intercept

A recently disclosed document shows the FBI telling a local police department that the Bureau’s covert cell-phone tracking equipment is so secret that any evidence acquired through its use needs to be recreated in some other way before being introduced at trial.

“Information obtained through the use of the equipment is FOR LEAD PURPOSES ONLY,” wrote James E. Finch, FBI special agent to Chief William Citty of the Oklahoma City Police Department.

The official notice, dated September 2014, said such information “may not be used as primary evidence in any affidavits, hearings or trials. This equipment provides general location information about a cellular device, and your agency understands it is required to use additional and independent investigative means and methods, such as historical cellular analysis, that would be admissible at trial to corroborate information concerning the location of the target obtained through the use of this equipment.”

The document, obtained by nonprofit investigative journalism outlet Oklahoma Watch, pertains to the use of cell site simulators, or StingRays— surveillance technology that mimics a cellphone tower to trick cellphones into transmitting location data and other information, sometimes even the contents of calls.

Journalists and activists have uncovered at least 20 similar nondisclosure agreements between FBI and local police about StingRays in the past few years—but the FBI’s advice about retroactively recreating evidence appears to be new.

Privacy advocates have long warned of “parallel construction,” in which investigators cover up information obtained without a warrant by finding other ways to attribute it — never allowing the source of the original lead to be scrutinized or subject to judicial oversight.

“This is the first time I have seen language this explicit in an FBI non-disclosure agreement,” Nate Wessler, a staff attorney with the American Civil Liberties Union’s Speech, Privacy, and Technology Project wrote in an email to The Intercept. “The typical NDAs order local police to hide information from courts and defense attorneys, which is bad enough, but this goes the outrageous extra step of ordering police to actually engage in evidence laundering,”

“Instead of just hiding the surveillance, the FBI is mandating manufacture of a whole new chain of evidence to throw defense attorneys and judges off the scent. As a result, defendants are denied their right to challenge potentially unconstitutional surveillance and courts are deprived of an opportunity to curb law enforcement abuses,” Wessler continued.

One concrete example of law enforcement engaging in parallel construction was the Drug Enforcement Agency’s “Hemisphere” program, in which agents were given access to troves of AT&T’s historical cell phone records and instructed to subpoena those same records to create a separate legitimate evidence trail.

 

Gimme Shelter (From the Tax Man)

Disappearing Money and Opportunistic Candidates

by Nomi Prins with Craig Wilson

TomDispatch

There’s a pile of money hiding offshore. It’s true that jobs are also leaving the United States because American companies find it convenient to cut labor costs by moving manufacturing abroad, the economic issue you’re hearing most about in this election season. But the stunning amount of money that continues to flow across American borders (and those of other countries), and eventually disappears into the pockets of the corporate and political elite, ultimately causes even more damage to our finances and our lives.

While the two leading candidates for the presidency, Donald Trump and Hillary Clinton, have indeed suggested cosmetic fixes for a situation that only grows more extreme with the passage of time, they have themselves taken advantage of numerous tax “efficiency” strategies that make money evaporate. Of course, you shouldn’t doubt for a second that they’ll change their ways once in the Oval Office.

As with so much in our American heritage, there’s a history to the “offshore” world, too. Finding places to shield money from tax collection first became commonplace among upper-crust industrialists, bankers, and even public servants back in the 1920s. Treasury Secretary Andrew Mellon, a millionaire mogul who served presidents Calvin Coolidge, Warren Harding, and Herbert Hoover (and had a knack for cutting taxes on the wealthy), left office under mounting congressional probes into his tax evasion strategies.

Fast-forward about a century and tax dodging has been woven into the fabric of the lives of the affluent and corporate worldwide in an extraordinary way. According to an April 2016 Oxfam report, the top 50 U.S. companies are hoarding more than $1.4 trillion in cash offshore.

What’s more, for every dollar that these firms spent lobbying Congress for “favorable” tax treatment (a collective total of $2.6 billion between 2008 and 2014), they received $130 dollars in tax breaks and $4,000 in subsidies from the U.S. government. These companies, including Pfizer, Goldman Sachs, Dow Chemical, Chevron, Walmart, IBM, and Procter & Gamble, created “an opaque and secretive network” of more than 1,600 company subsidiaries located in tax havens that they decided to disclose. (Because of the weak reporting requirements of the Securities and Exchange Commission, there could be thousands more.) According to a March 3rd report from the Citizens for Tax Justice, the Fortune 500 companies are now saving $695 billion in federal income taxes on a total of $2.4 trillion in offshore holdings.

Americans can’t afford to ignore such tax games, since we’re the ones who, in effect, wind up paying the taxes these firms don’t. For government policymakers, such tax evasion is a grim matter of attrition, since the U.S. (and other countries) plunge ever deeper into debt thanks to such antics and then find themselves cutting services or raising taxes on us to cover the gap between the money they’re losing and the taxes they’re collecting.

Not only are such firms unpatriotic, they are parasitic and while they’re at it, they use similar techniques — let’s not call it theft (though it is) — to avoid tax payments in the poorest places on Earth. As Oxfam reports, “the biggest burden” of tax havens “falls on the poorest people.” In the process, they only increase already oppressive levels of inequality globally.

Tax “secrecy” specialists — people working in the money-hiding field — help rich individuals, multinational corporations, political leaders, terrorists, and organized crime groups divert cash and capital, sometimes in staggering amounts, from local economies into an obscure, complex, multi-layered global financial network that operates outside any national or international regulatory or tax system. Given this, isn’t it a little surprising that the top candidates for the presidency barely pay lip service to the impact of such hidden money?  What toothless policies they have proposed to deal with the phenomenon will do little or nothing to change it.

The Panama Papers

U.S. trade agreements generally include rosy promises about partnering with regional economies around the world to encourage the flow of goods and services across borders. At the same time, they generally are focused on the obliteration of barriers that in any way restrict money from flowing out of the United States or into the embrace of other nations. The free movement of capital, or financial globalization as it’s called, has been a bedrock Washington policy for a century and, since the 1980s, places like Panama — a renowned tax haven — have abetted this process.

A month ago, the International Consortium of Investigative Journalists released a trove of documents, 2.6 terabytes of them, including “more than 4.8 million emails, 3 million database files, and 2.1 million PDFs.” These were turned over by an undisclosed source (“John Doe”), communicating through encrypted channels to avoid repercussions. Now known as “the Panama Papers,” they reveal how elite multinational companies, the super rich, and government figures have engaged in tax-dodging practices engineered by a single Panama City-based law firm, Mossack Fonseca (MF).

In addition to public officials and billionaires, more than 500 global banks, their subsidiaries and branches, have registered at least 15,600 shell companies there using MF’s services. That word “shell” is descriptively accurate since such “companies” rarely have employees and are commonly no more than a post office box providing a façade through which books can be doctored, taxes dodged, losses concealed, and money-laundering and other criminal actions carried out.  And keep in mind that MF, which acts for approximately 300,000 companies, is only the fourth largest provider of such offshore services globally.

One mega-bank that used its services extensively was HSBC, which created an astonishing 2,300 shell companies with that law firm’s help. We’ll return to HSBC.

Mossack Fonseca’s official mission, it claims, is “to deliver quality, reliable and comprehensive services to our worldwide clients in the legal, trust, investment consultancy, and digital solution fields.” That’s code for helping select establishment outfits and dubious enterprises to avoid paying taxes on profits, investments, or money made from buying and selling real estate, luxury yachts or planes, oil wells, weapons, or drugs, among other things.

Secrecy is its calling card. Tax havens, or locales amenable to tax dodging, whether in the Caribbean, Central America, Switzerland (still the world’s top location for financial secrecy), or for that matter the state of Delaware, exist to circumvent tax laws. Period. And these operations are so shady that even the functionaries working in the shadows to establish such secret accounts are barely aware of exactly who owns them, where the money came from, or where it’s going. For regulators, prosecutors, and tax collectors, the opacity is far worse.

You don’t necessarily have to be rich or powerful to access the services of such offshore firms and banks, but it helps. Some havens take anyone ready to put up a minimum of $25,000, while others demand staggering sums. Western Samoa, for instance, requires a cool $10 million to get started.

The most alarming aspect of the Panama Papers revelations was not MF’s clientele or even its secretive practices, but that what it does is completely “legal.” Nor was this the first such disclosure. In November 2014, for instance, the “Luxleaks” scandal involving a whole “menagerie of Luxembourg-based tax schemes,” as the Guardian put it, was disclosed by two whistleblowers from the accounting firm PricewaterhouseCoopers. (Luxembourg is a major European tax haven.) Citigroup, Deutsche Bank, Facebook, HSBC, JPMorgan Chase, and Microsoft were on the list of its more than 350 multinational “tax avoiders.”

Avoiding vs. Evading Taxes and Corporate Inversions

Avoiding and evading taxes are technically considered different kinds of acts, the former being legal in the U.S., the latter not. According to the Internal Revenue Service, “Taxpayers have the right to reduce, avoid, or minimize their taxes by legitimate means.” Tax evasion, on the other hand, involves an “act to evade or defeat a tax, or payment of tax” by “deceit, subterfuge, camouflage, concealment, attempts to color or obscure events, or make things seem other than they are.”

The line between the two is obviously thin and vague, but both practices result in the same thing: paying fewer taxes or hiding money.

The subject of tax avoidance and evasion has generally gotten little traction on the campaign trail in election 2016, the exception being corporate “inversions.” These happen when, for example, an American company merges with a foreign one in a tax haven, and so gets a lower tax rate by re-incorporating (filling out some paperwork) there. This, too, is “legal,” although it represents the purest form of corporate tax evasion.  Perhaps you won’t be surprised to learn that the practice began in Panama about 30 years ago.

In 2014, companies with household names like Apple, Microsoft, Pfizer, and General Electric avoided paying a collective $90 billion in taxes through inversion strategies. Apple led that list, holding $181.1 billion offshore.  That’s a lot of iPhone sales.

The Leading Candidates and Hidden Money

Tax havens are, in essence, perfectly “legal” criminal facilities designed to steal money from the rest of us. The two leading candidates in this election season, however, aren’t talking about closing down tax havens for good (which would piss off lots of rich people, banks, drug cartels, and terrorists). They are instead focused on getting companies to voluntarily repatriate, or return, profits made abroad for taxation purposes or on closing tax “loopholes” that allow money to disappear.  Neither, however, offers much detail as to what that means.

Both do share one thing, however, when it comes to tax havens: Hillary Clinton and Donald Trump have companies registered at the same address (also “shared” by 285,000 other companies) in Wilmington, Delaware. In other words, they make use of the “Delaware loophole,” which allows for the legal shifting of earnings from elsewhere in the country to the ultimate tax haven state in the U.S.  Neither, as Rupert Neate of the Guardian has written, has been willing to offer any explanation for this. That’s the political beauty of loopholes: closing one is different from eradicating an entire practice but suffices as a promise.

Hillary

Hillary has gone after tax havens before. In 2004, as a New York senator, she vowed to close tax loopholes for “people who create a mailbox, or a drop, or send one person to sit on the beach in some island paradise and claim that it is their offshore headquarters.”  She introduced no bills to do so, however.

She has spoken out against corporate tax inversions, too. She wants Congress to prevent them by imposing what she calls a “commonsense 50%” threshold on them; in other words, as long as a company keeps at least half of its operations in this country, it would be considered a U.S. company for tax purposes, no matter the inversions. She also has favored an “exit tax” to ensure that multinationals pay a “fair” share of U.S. taxes owed on earnings stored overseas. Both of these suggestions would put some modest limits on offshore tax dodging (after the fact), but not come within a country mile of banning it.

On such subjects, she can sound strong indeed at appropriate moments. In February 2016, for instance, she said, “We need to go after a company like Johnson Controls that is trying to avoid paying taxes after all of us bailed it out by pretending to sell itself in a so-called inversion in Europe.” It evidently didn’t matter to her that the same automotive parts company set to merge with Tyco International (based in Ireland to dodge taxes) had donated money to the Clinton Foundation charity as recently as December 2015. (Johnson Controls denied Hillary’s claims that it had received a bailout during the financial crisis.)

Hillary, lest we forget, joined the board of directors of the the Clinton Foundation, the family charity, in 2013. She resigned in April 2015 to run for president. Now, keeping it in the family, her husband, Bill, and her daughter, Chelsea, remain standing members of the board. Spawned from the William J. Clinton Foundation, founded in 1997, the charity has raised $2 billion, has about 2,000 employees (including at times members of Hillary’s political team), and boasts an annual budget of $223 million.

Like many gilt-edged couples, Hillary and Bill Clinton have themselves utilized onshore and offshore tax loopholes. In 2010, they used a common tax-dodging technique by placing their multi-million dollar home in Chappaqua, New York, in a “residence trust.” After he left office, Bill spent five years as an “adviser” to billionaire (now-ex-pal) Ron Burkle’s investment fund, Yucaipa Global, which had funds registered in the Cayman Islands and Dubai. That alliance netted Bill at least $15 million.

Hillary’s bedrock thinking on money flowing out of the U.S. and into the offshore world can best be seen in her support for the 2012 U.S.-Panama Trade Promotion Agreement when she was secretary of state. The agreement removed “barriers to U.S. services, including financial services,” which actually simplified the process of squirreling money away in or through Panama by allowing it to flow freely into that country.

The Clinton Foundation inhales donations from people using tax havens (including Panama). Although Hillary denounced Mossack Fonseca’s dealings on cue after the Panama Papers story broke, a number of individuals and multinationals that have contributed to the foundation used MF to establish offshore accounts, according to McClatchy. These include Canadian mining billionaire Frank Giustra who features in the foundation’s $25 million top-tier donor bracket, and two firms tied to Ng Lap Seng, the Chinese billionaire implicated in a major donor scandal involving the Clintons and the Democratic National Committee.

Similarly, in a speech she gave at the New School in July 2015, Hillary highlighted the “criminal behavior” of global bank HSBC. In 2012, the behemoth financial institution agreed to a record $1.92 billion settlement with the Department of Justice and the Treasury Department for enabling drug cartel money laundering and violating U.S. sanctions by conducting transactions for customers in Iran, Libya, Sudan, and Burma. She vowed, “On my watch, it will change.”

Yet, in 2014, the Clinton Foundation accepted between $500,000 and $1 million from that bank.

The Panama Papers are but one conflicted instance in which Hillary’s stated beliefs, her actions, and the generosity of her friends and acquaintances came together in a contradictory fashion. The evidence suggests that tax-dodgers will, in fact, be able to breathe a sigh of relief if she becomes president.  Her actions are likely to — if you’ll excuse the expression — trump her words when it comes to curtailing the behavior of offshore scofflaws in significant ways.  And speaking of Trump…

The Donald

Consider the fact that The Donald won’t even disclose his tax returns. His indignantly delivered explanation is that they are “under audit.” Under the circumstances, don’t hold your breath. Perhaps he doesn’t make nearly as much money as he claims — or maybe he has an embarrassing tax haven habit. Who knows?

Ironically, Mossack Fonseca’s Panama City headquarters is located a mere seven-minute drive from the Trump International Hotel and Towers in Panama City. (If you’re interested, its website is pitching a bargain on rooms at “15% off our currently available Best Unrestricted Rate.”)  That decadent complex is one of many sketchy enterprises to which Trump lent his name for licensing purposes. According to his (unaudited) personal financial disclosure report filed with the Federal Election Commission, the deal earned him $5 million. In true Trumpian style, lawsuits and battles surround the endeavor.

Under the tax plan he’s touting in his presidential campaign, U.S. businesses would see a reduction in their maximum tax rate from 35% to 15%. This lower rate (“one of the best in the world”) would, he claims, render corporate inversions unnecessary. The Donald apparently hopes that corporate America will be so eternally grateful to him that they’ll move their money back onshore and pay taxes on it voluntarily (though most of them already don’t pay the top tax rate here anyway).

Trump’s views on a “repatriation tax holiday” that would let companies bring home their overseas stashes on a one-time basis for little or nothing have shifted over the course of his candidacy. Last year, he proposed the repatriation of hidden funds without penalty or taxation of any kind. Now he’s advocating a more populist one-time 10% tax on them.

Although a key promise of his tax reform plan is to end the practice of stockpiling money in offshore accounts by American companies, he has personally invested in many of the companies that do so. As CBS News noted, in October 2015, Trump owned stock in 22 of the top 30 Fortune 500 companies ranked by their number of offshore subsidiaries. It’s a group that has engineered 1,225 tax-haven subsidiaries holding $1.4 trillion. Of course, Trump has a keen understanding of the practices that disguise or shelter money from taxes. As he explained to supporters in Iowa this January, when it comes to his own business enterprises, “I pay as little as possible. I use every single thing in the book.”

Bernie

As far as we know, Bernie has no personal experience with tax havens and has a far more structured plan than either of the leading candidates to combat their money-sucking, tax-dodging prowess. His policies would prevent American companies from avoiding U.S. taxes through inversions, block them from escaping taxes by establishing a post office box in a tax haven site, and end the practice of letting corporations defer paying taxes on profits from offshore subsidiaries.

In the real world, financial speculation, crime, and tax evasion — sorry for this word again — trump the highly touted goal of “free trade” when it comes to tax havens. Bernie understood this well when he voted against the Panama “free trade” agreement of 2011. In a Senate speech on the subject, he presciently noted that “Panama is a world leader when it comes to allowing large corporations and wealthy Americans to evade U.S. taxes by stashing their cash in offshore tax havens. And the Panama free trade agreement would make this bad situation much worse.”

He was right then and he remains right today. Unfortunately, no one was listening or interested in acting on his warning — certainly not Hillary, who, as secretary of state, characterized the agreement as “an example of the Obama Administration’s commitment to economic statecraft and deepening our economic engagement throughout the world.”

In practical terms, Sanders went significantly further than Hillary by formulating actual legislation on the subject. Last April, he introduced the Corporate Tax Dodging Prevention Act of 2015 in the Senate. Among other things, it aspires to “prevent corporations from sheltering profits in tax havens like Bermuda and the Cayman Islands and would stop rewarding companies that ship jobs and factories overseas with tax breaks.”

Regarding inversions, he would treat companies as American for tax purposes if they were majority-owned by U.S. interests and operating in this country. Even his plan, however, would fall short unless it made inversions illegal — and too many companies are invested in not letting that happen.

Ted

Ted would abolish the Internal Revenue Service and enable people and companies to file taxes on a postcard, so there’s no real point in further analysis of his “positions” on tax havens.

Missing Money Costs

As of 2014, according to Gabriel Zucman, University of California economist and author of The Hidden Wealth of Nations, at least $7.6 trillion, or approximately 8% of global financial wealth, was “missing” somewhere offshore. His analysis demonstrates that the sorts of tax-dodging practices we’ve been discussing put governments across the planet in the red by approximately $200 billion annually. Tax avoidance by major U.S. companies costs governments an additional $130 billion per year since nearly a third of their profits are hidden offshore.

The U.N. estimates that tax dodging by multinational companies costs developing countries $100 billion a year, an amount “equivalent to what it would cost to provide basic life-saving health services or safe water and sanitation to more than 2.2 billion people.”

There are, in other words, harrowing costs to tax dodging. When the wealthy and powerful hide money from governments or speculate with it in sneaky ways, it destabilizes economies and enables the commission of crimes that place a further burden on ordinary people. When money flows from the economic necessities needed by the less privileged to the top fraction of a percent of the world’s population and is then hidden offshore, essentially “disappeared,” it’s a net drain on and a blow to the world economy. This impacts jobs and the quality of our future. Unfortunately, the leading candidates in this election year aren’t championing a major change for the better.

 

‘Free Trade’ vs. Actual Free Trade

Trade agreements pushed by corporate elites are bogus “free trade”

May 6, 2016

by Justin Raimondo

AntiWar

The unlikely rise of Bernie Sanders and Donald Trump has focused public attention on an issue that hasn’t gotten much attention since the Civil War era – international trade.

One of the biggest controversies in nineteenth century American politics was tariffs – with Big Business manufacturers for them, and farmers and producers of other commodities against them. Corporate behemoths wanted protection from foreign competition, while ordinary consumers wanted lower prices. Furthermore, tariff revenue was used to enrich crony capitalists in the industrialized North: the federal government subsidized the building of railroads, canals, and other infrastructure, while the beneficiaries of this largesse turned cheap tariff-free commodities produced in the South and West into high-priced manufactured goods.

These days, however, the “free trade” versus “fair trade” debate is seemingly reversed, with the big corporations supposedly favoring the former while the latter is championed by leftists like Sanders and right-wing populists of the Trumpian variety. In reality, however, nothing has really changed.

It would be very easy to institute a free trade regime in the United States, and you wouldn’t need a thousand-page treaty to do it. You’d only have to abolish all tariffs, subsidies, and other government-imposed impediments to the free passage of goods across our borders. That’s free trade.

But of course other countries, not being as obliging to the wishes of their own downtrodden consumers, would not necessarily reciprocate. The native manufacturers of these countries, enjoying considerable political pull, would follow the example of our own nineteenth century corporate titans and lobby for the imposition of protective tariffs. Here in the US, our own manufacturing giants would soon raise the alarm, political pull would win out over the welfare of mere consumers, and a tariff wall would go up. This is known as a “trade war.”

Absent an international system of free trade, these trade wars are a permanent feature of global commerce. The irony is that they are now being waged in the name of ‘free trade.” A perfect example of this phenomenon is the North American Free Trade Agreement (NAFTA), which Sanders and Trump have pointed to as the villain that decimated America’s industrial capacity and turned many sections of the country into hollowed out shells. And they are perfectly right to do so – but perfectly wrong to attack NAFTA as the epitome of free trade. As Murray Rothbard pointed out over twenty years ago:

“In truth, the bipartisan establishment’s trumpeting of ‘free trade’ since World War II fosters the opposite of genuine freedom of exchange. The establishment’s goals and tactics have been consistently those of free trade’s traditional enemy, “mercantilism” — the system imposed by the nation-states of 16th to 18th century Europe….

“Whereas genuine free traders look at free markets and trade, domestic or international, from the point of view of the consumer (that is, all of us), the mercantilist, of the 16th century or today, looks at trade from the point of view of the power elite, big business in league with the government. Genuine free traders consider exports a means of paying for imports, in the same way that goods in general are produced in order to be sold to consumers. But the mercantilists want to privilege the government-business elite at the expense of all consumers, be they domestic or foreign.

“In negotiations with Japan, for example, be they conducted by Reagan or Bush or Clinton, the point is to force Japan to buy more American products, for which the American government will graciously if reluctantly permit the Japanese to sell their products to American consumers. Imports are the price government pays to get other nations to accept our exports.”

A key ingredient of the new mercantilist formula is “foreign aid,” which is really just a subsidy for American exporters. When our client states get dollars in the form of foreign aid, these dollars are used to buy American products – and enrich the corporate interests who fund our free-spending politicians.

NATO is another example of how the system works to enrich the “donor class” at our expense. Whenever a new member is inducted into the alliance, they must “upgrade” their military hardware to “NATO standards” – and there is Lockheed-Martin, or some other weapons manufacturer, ready and willing to do the job. And American taxpayers foot the bill, because our protectorates pay Lockheed or whomever with the “foreign aid” we lavish on them with abandon. The internationalist tell us we’re holding back global chaos by exercising “global leadership,” but the vulgar reality is that the “security architecture” so beloved by our foreign policy “experts” is just a cash machine for powerful corporate interests:

While the “Asian tigers” are eating our lunch – out-competing American companies, hollowing out our industrial capacity, and throwing hundreds of thousands of workers into the unemployment lines – people wonder: why is this happening? They don’t understand that this is the price we pay for imperialism: Japan and South Korea, for example, allow us to station troops on their territory, in effect accepting their roles as US satellites in exchange for dropping trade barriers – except it’s a one-way street. The Japanese get to maintain tariffs and other barriers to the entry of American goods: ditto for the Koreans. This is the hidden burden of empire.

In addition, the Japanese and Koreans are relieved of the need to pay for their own defense, leaving them free to invest in new products and methods, while US taxpayers must bear the burden, freezing billions of dollars in military spending that might otherwise go into productive investments. Trump calls this a “bad deal,” and he’s right – although his proposed solution, tariffs, will only make the economic dislocation he descries worse.

The Trans-Pacific Partnership (TPP) and similar agreements have nothing to do with free trade: they are in fact cartels set up by the signers to exclude commercial rivals. In the case of TPP, the target is China. Who benefits? Certain corporate interests, who get to exclude competitors. Consumers are the losers.

“Free trade” is nowadays used to further the globalist agenda, which seeks to substitute supra-national “standards” enforced by international “commissions” for the rule of law at home. NAFTA’s numerous “side agreements” set up a whole raft of rules, regulations, and enforcement mechanisms to “harmonize” environmental and labor regulations, taking them out of our hands and giving ultimate authority to unaccountable international bureaucracies. TPP follows the same centralizing, supranational statist pattern.

We are truly living in Bizarro World, where up is down, right is wrong, and protectionist nonsense is “free trade.” But then again, in an age like ours, when “Operation Iraqi Freedom” means destroying an entire country and delivering it into tyranny, and “Operation Enduring Freedom” translates into Operation Perpetual War, what else can we expect?

 

Chicken wings robbery exposes secret surveillance tool of US police

May 6, 2016

RT

To catch a chicken wings thief, Maryland police employed one of their most secretive, high-tech tools: the Stingray. However, many may be more concerned about nearby cops using a spying device that vacuums up all of their data than a $56 food robbery.

Annapolis law enforcement deployed the device when investigating the case of a Pizza Boli deliveryman, who reported being robbed of 15 chicken wings and three subs in March. Police failed to catch the perpetrator despite using the Stingray, in one case out of a total of 17 in which they used the device.

The “chicken wings case” would have gone unnoticed had it not been briefly mentioned in a lengthy report from Capital News Service. It is one of hundreds of times when police in Maryland used a suitcase-sized device called a Cell Site Simulator, also known as a Stingray.

The four-month investigation conducted by CNS revealed that law enforcement agencies used their cell site simulators to set up wiretap cases, locate missing and suicidal persons, investigate homicides, assaults, drug trafficking, and even robberies of gas stations and the abovementioned pizza deliveryman.

Kept under tight secrecy, the surveillance tool is meant to help police locate and apprehend violent offenders, thwart terrorist attacks, and monitor crowds when intelligence suggests threats.

Stingrays work on the same principle as cellphone towers. When the device is activated, it sends out signals which all mobile phones in the area respond to, allowing police to track their location, intercept conversations, and access information. The practice has raised serious privacy concerns since very little is known about the data which police scoop up or how it is handled.

“If the agency doesn’t have a policy in place to delete that data, who knows what they’re doing with it?” Jennifer Lynch, a senior staff attorney with the non-profit Electronic Frontier Foundation, told CNS.

Yet, while some departments, like the one in Annapolis, refuse to comment on the tool, the Maryland State Police, which has used its cell site simulator at least 125 times since 2012, say it does not retain third-party data or use its devices for crowd monitoring.

Other counties, like Baltimore County and Anne Arundel County, have also assured the public that they don’t store any data.

“The main problem is that the police may be doing something illegal and we have to use mental gymnastics to try and uncover these secret aspects of an investigation that are never written down and turned over to us,” Jason Ricke, an assistant public defender in Prince George’s County, told CNS. “The police may be violating our clients’ rights and we will never know it.”

In Maryland, where cell site simulators have been used for at least a decade, laws preventing indiscriminative data gathering did not change until October of 2014. Now, law enforcements must obtain a court order before conducting real-time tracking.

The police surveillance practice has been undermined by public disclosures about cell site simulators. Following last year’s surge in revelations, the US Departments of Justice and Homeland Security started requiring their employees to obtain search warrants before using the devices.

The rule does not apply to local agencies, but some states, including California, Virginia, and Washington, among others, followed suit by placing strict limitations on the use of cell site simulators.

 

What is happening between Turkey’s Davutoglu and Erdogan ‘resembles a horror film’

The winds of a possible new election have been blowing around Ankara. Hilal Koylu reports from Ankara about how the prime minister’s departure has raised speculation about President Erdogan’s machinations.

May 6, 2016

DW

What is happening between Turkey’s Davutoglu and Erdogan ‘resembles a horror film’

The winds of a possible new election have been blowing around Ankara. Hilal Koylu reports from Ankara about how the prime minister’s departure has raised speculation about President Erdogan’s machinations.

Türkei Ahmet Davutoglu und Tayyip Erdogan

During the 20 months that Ahmet Davutoglu has served as Turkey’s prime minister and leader of the Justice and Development Party (AKP), there have been ongoing rumors of a rift between himself and President Recep Tayyip Erdogan. Rumors which Erdogan himself repeatedly quashed.

But, the prime minister’s announcement this week that he would likely give up his post showed – like other recent events – how these rumors might have been true all along.

Signs of discord between the two leaders began to appear late last month when Davutoglu’s authority to appoint district and local party leaders was revoked at a meeting of the Central Decision and Executive Board.

Days later, a blog analyzing the relationship between Prime Minister Davutoglu and President Erdogan appeared online. Entitled “The Pelican files,” the blog pointed out what the anonymous writer described as moves the premier had made against the head of state. The author’s identity remains unknown, but some believe the blog stems from an Erdogan supporter, while others believe it was written by a party outsider.

Davutoglu’s announcement on Thursday came within a week of both of these events. Davutoglu made a point of emphasizing his loyalty to the president, in a bid to contradict those claiming that there was a rupture within the AKP. He also put to rest questions of his resignation by announcing that he would remain prime minister until the extraordinary congress on May 22.

But his departure raises questions about how President Erdogan will use it to expand his presidential powers, as well as what political change is occurring both within the government and in the opposition.

‘A horror film’

In Ankara, both the political ramifications of Davutoglu’s announcement and what exactly occurred between Erdogan and Davutoglu are topics of much curiosity.

According to Ayse Ayata, who teaches political science in Turkey, what is happening “resembles a horror film” and amounts to a “presidential coup” by Erdogan.

“We are talking about a prime minister who saw the fall in votes during the June 7 general election and worked to increase them in the November 1 election. Davutoglu is a prime minister who received 50 percent of the national vote,” the Middle East Technical University professor told DW.

Erdogan will throw out the opposition HDP and call new elections, Ayata says, leading the country into a situation that will damage democracy and society, and, ultimately, “will end badly.”

“It is clear that Erdogan sees nothing preventing his path to the presidential system,” Ayata said. “It also involves protecting himself and his family. That is clear.”

‘The conflicts will escalate’

Ankara University political scientist Baskin Oran also thinks that Turkey is headed toward another election.

“Erdogan took the latest step in installing a presidential system by waging a coup and casting off the Davutoglu government, because Davutoglu didn’t do everything that he said,” Oran told DW.

According to the political scientist, Erdogan will pursue a strategy of provoking the Kurds and keeping his coalition of the AKP, the military and neo-nationalists.

“Erdogan, until the end, will escalate the conflicts in this country. In order to win an election, he will benefit from an atmosphere of fear and chaos,” he said.

But, Oran says, the real question is how long Erdogan will benefit from this strategy – and whether it might ultimately lead to his own downfall.

Foreign Intelligence Services Targeted 2008 Campaign, Officials Were Warned

May 5, 2016

by Jenna McLaughlin

The Intercept

The Intelligence Community evidently gave some incoming members of the Obama administration a star-spangled welcome briefing — complete with a stern warning.

In a newly disclosed document titled “Unlocking the Secrets: How to Use The Intelligence Community,” intelligence officials told incoming officials that foreign intelligence services had been extensively spying on the 2008 political campaigns.

“Foreign intelligence services have been tracking this election cycle like no other,” the authors from the Office of the Director of National Intelligence wrote.

On the campaign trail, the ODNI authors wrote, foreign spooks met with campaign staff and other sources, hacked into campaign data, and engaged in “perception management” more aggressive than traditional lobbying—though the lack of specifics make it’s unclear what any of that really entails.

The world is a different place, and spies overseas are more skilled nowadays, they wrote—leading to a new level of digital and physical monitoring in order to try to find secrets and influence policy.

The authors also warned that foreign agents would continue to try to ask invasive questions, influence key decision makers, invite them abroad, or give them compromised electronic devices, laced with malware—like USB drives.

They should “be mindful of electronic interception”—and not use wireless devices for sensitive conversations, the authors advised. There was no mention of encryption.

And if members of the administration go abroad, they were told, their hotel rooms were almost certainly vulnerable to bugs.

 

Be rational and objective, China cautions US, after Trump trade tirades

State media says Republican ‘attacks China to woo voters’ , while Beijing responds to ‘economic war’ accusation by saying trade benefits both sides

May 5, 2016

Reuters

Beijing-China urged people in the United States to take a rational and objective view of the relationship between the two countries after Donald Trump became the Republican party’s presumptive presidential nominee.

Trump has proposed that tariffs on imported Chinese goods be increased to up to 45% and asserted that China had waged “economic war” against the United States, taking American jobs.

China is the United States’ largest trading partner.

Asked whether China was worried at the prospect of a Trump presidency, after his commanding win in Indiana and as rivals Ted Cruz and John Kasich bowed out of the race, Chinese foreign ministry spokesman Hong Lei said the election was an internal affair he could not comment on.

“What needs to be pointed out is that the essence of Sino-US trade and business cooperation is mutually beneficial and win-win, and accords with the interests of both sides,” Hong said at a daily news briefing.

“We hope people in all fields can rationally and objectively view this relationship.”

The official Xinhua news agency said Trump “gets them wrong, from trade balance to basic economics”, citing western media and academics dismissing his criticisms of trade with China.

“Trump attacks China to woo voters,” it said.

In April the Chinese finance minister Lou Jiwei criticised Trump, calling him “an irrational type” due to his proposal for tariffs on imported Chinese goods.

Chinese officials have also indirectly criticised Trump’s proposal to ban Muslims from entering the United States and his assertion that China is stealing US jobs.

The United States reported a $366bn trade deficit with China in 2015, up from $343bn in 2014. It is the largest US trade imbalance with any nation.

China’s tightly controlled state media has largely stuck to reporting the facts about Trump, with some notable exceptions.

In March the Global Times accused Trump of being a racist, warning that other extremists such as Benito Mussolini and Adolf Hitler had been voted into power.

Reacting to Trump’s triumph on Wednesday, Xinhua noted he could beat likely Democratic nominee Hillary Clinton if he toned down his “explosive rhetoric”.

“Despite being a celebrity outside the United States, Clinton, the former first lady and secretary of state, simply neither excites nor galvanises her base,” it said in an English-language piece.

 

Officials plan mass road convoy as Canada’s wildfires grow tenfold

Helicopter to lead initial convoy of 400 vehicles through Fort McMurray and airlift from work camps to continue

May 6, 2016

by Ashifa Kassam

The Guardian

Officials in western Canada plan to use a mass road convoy on Friday to move thousands of Fort McMurray residents from work camps north of the city where they had fled from a catastrophic wildfire.

Authorities scrambled to organise an airlift of 8,000 people from the camps after the wildfire grew tenfold on Thursday and hope to move thousands more by road if Alberta Highway 63, the only major road south, becomes safe.

A helicopter will lead an initial evacuation convoy of 400 vehicles to make sure the highway is safe and will pass through Fort McMurray where the fire, which threatened to engulf huge areas of the arid province of Alberta, has torched 1,600 homes and other buildings.

Officials said 25,000 people had taken shelter in the oilsands work camps to the north of Fort McMurray when the out-of-control blaze engulfed the city in Canada’s energy heartland, burning down whole neighbourhoods. The fire has forced a precautionary shutdown of some oil production, driving up global oil prices.

The Alberta government, which declared a state of emergency, said more than 1,100 firefighters, 145 helicopters, 138 pieces of heavy equipment and 22 air tankers were fighting a total of 49 wildfires, with seven considered out of control.

Three days after the residents were ordered to leave Fort McMurray, firefighters were still battling to protect homes, businesses and other structures from the flames.

Chad Morrison, Alberta’s manager of wildfire prevention, said rain was needed.“Let me be clear: air tankers are not going to stop this fire. It is going to continue to push through these dry conditions until we actually get some significant rain.”

No rain clouds were expected around Fort McMurray until late Saturday, with a 40% chance of showers, according to online forecasts by Environment Canada.

The Alberta premier, Rachel Notley, said in a press briefing on Thursday night that it was not possible to know when residents would be able to return to the city. “The damage to the community of Fort McMurray is extensive and the city is not safe for residents. It is simply not possible, nor is it responsible to speculate on a time when citizens will be able to return. We do know that it will not be a matter of days.”

Justin Trudeau, Canada’s prime minister, described the week’s harrowing events as the largest fire evacuation in Alberta’s history.

“Homes have been destroyed. Neighbourhoods have gone up in flames. The footage we’ve seen of cars racing down highways while fire races on all sides is nothing short of terrifying,” he said. The Alberta community looked “like a war-torn corner of the world instead of our own backyard,” he added.

Officials warned that the communities of Anzac and Gregoire Lake Estates about 30 miles (50km) south of Fort McMurray were “under extreme threat” late on Thursday, as the flames spread to the south-east.

Fire has intermittently blocked the only route south toward major cities, so thousands of evacuees fled north toward oil camps and a few small settlements. Notley said some 4,000 people had already been airlifted to the cities of Edmonton and Calgary late on Thursday.

Erica Decker, who was sheltering in Edmonton with her young family, described having to flee her home in Fort McMurray.

When she spotted a small circle of orange flames flickering in the trees outside, she knew she had just minutes left in the house she had always described as her dream home.

“As we pulled out of the driveway, we could see the flames reaching our front lawn,” said Decker, her voice shaking as she fought back tears. “We knew we wouldn’t have anything to go back to.”

Walls of flames flanked the road as they made their way out of the town. “It was something out of a movie,” she told the Guardian. “It was absolutely apocalyptic. There were vehicles stranded everywhere. The sky was black and orange. There were – and are still – so many people trapped.”

On their first night in Edmonton, her two-year-old daughter kept asking for her own bed and her toys. “There was nothing we could do for her,” she said. “Its unbelievably hard to watch a child go through that and not understand why they can’t have the things they want.”

Soon after, her worst fears were confirmed. Images from Fort McMurray showed an empty space where her home once stood in the neighbourhood of Beacon Hill, the scorched front steps the only trace of the bay-windowed house. “I don’t think there’s anything for me to return for,” she said.

On Thursday, frustration for those stranded up north was growing, with some venting on social media sites, demanding answers.

One Twitter user posted a message saying: “NO ONE IS TELLING US ANYTHING!! We’re just sitting in a camp praying to get out!! Give us answers!!! Please.”

Officials said that with the fire moving to the south-east, they were also hoping to be able to begin a ground evacuation from the north on Friday morning.

Although the cause of the fire was unknown, officials said tinder-dry brush, low humidity and hot, gusting winds left crews unable to stop the massive conflagration.

The blaze, which erupted on Sunday, grew from 7,500 hectares (18,500 acres) on Wednesday aided by high winds, scorching heat and low humidity, to some 85,000 hectares (210,000 acres) on Thursday, an area roughly 10 times the size of Manhattan.

Unseasonably hot temperatures combined with dry conditions have transformed the forest in much of Alberta into a tinder box before the usual spring rains which turn the area green. Morrison said the cause of the fire was being investigated but it had started in a remote forested area and could have been sparked by lightning.

Bill Patzert, a climatologist at Nasa, said the El Niño global weather system had brought Alberta a mild winter and low snowpack. He said the fire had begun at a time between the snowy season and springtime rains, making the region especially vulnerable.

“In a way, it’s a perfect storm,” Patzert said. “It’s been warm, it’s been dry and windy. It’s the in-between period before you’re in the full bloom of spring.”

The winds gave the city a brief reprieve on Thursday by driving the fire to the south-east, away from populated areas. But officials warned that the unpredictable weather could quickly shift again.

At least 680,000 barrels per day of crude output was offline by Thursday evening, according to Reuters calculations, or roughly 20% of Canada’s crude production. The outage is expected to climb as major players in the region cut production.

Athabasca Oil said on Thursday that rapidly advancing fires in the south of the city were behind its decision to shut down its Hangingstone oilsands project and evacuate all personnel. In a statement, the company estimated that the fire front was just 3 miles (5km) away from its facility.

Authorities said there had been no known casualties from the blaze itself, but fatalities were reported in at least one vehicle crash along the evacuation route.

Notley said a water tanker plane had slid off the runway in another part of the province. Police said the two pilots had survived, but were taken to hospital as a precaution.

 

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