Hidden Treuhand: Synopsis and Author Bio

Hidden Treuhand:  How Corporations and Individuals Hide Assets and Money

By Shelley A. Stark

 

Synopsis

What part is Hidden Treuhand playing in the ensuing global financial crisis? The Hidden Treuhand is the single most powerful business tool in the world of globalization today. It is the missing key, reshaping the world’s financial system though few have ever heard of it.

With a Hidden Treuhand you can anonymously exercise complete economic rights in all commercial markets worldwide hiding assets and money from stockholders and taxation alike.

 Many are unaware that U.S. corporations are using Hidden Treuhand to hide the scope of their economic activities – for example – Halliburton. From banks to bailouts, to shareholder value and pension funds – wealth is disappearing. How is it possible to hide stockholder wealth or economic activities worldwide?

Hidden Treuhand is a trade secret of elite European lawyers and powerful banking interests – creating a shadow economy and banking apparatus facilitating movements of money to tax havens. Powered by globalization, it has moved beyond European borders and is working undetected within the capitalist free market secretly affecting the world economy.

 How does Hidden Treuhand work? Who benefits? Who loses? This is the first book ever written, a ‘how-to-book’, that tells the story of Hidden Treuhand and how it is impacting the world economy and your financial security.

 

About The Author

Since 2004, Shelley A. Stark has been researching Hidden Treuhand legal practice, case studies, and history. Shelley holds a B.A. in Management and a M.A. in International Relations and Finance from Webster University in Vienna, Austria. She became keenly interested in Hidden Treuhand when she discovered some of its uses. Subsequent studies and interviews coupled with German law (ABG) explain Hidden Treuhand, how it is created and administrated, how it can be used by corporations, individuals, criminal organizations, and terrorist financiers. This well-researched original work has led to the first documented account of Hidden Treuhand and tactics used to undermine national security and impact global financial security.

 Hidden Treuhand:  How Corporations and Individuals Hide Assets and Money by Shelley A. Stark is now available on Amazon.com and Barnes and Noble.

Bank Secrecy is Alive and Well!

In the Age of Stealth Wealth – Bank Secrecy is Alive and Well!

Written by Shelley Stark author of: ‘Hidden Treuhand: How Corporations and Individuals Hide Assets and Money’ 

“Bank Secrecy Bites the Dust in Europe”- Newsweek. “Switzerland, Luxembourg, Austria Loosen Secrecy Rules” – Bloomberg. “Tax Havens Give in to EU Pressure” – Spiegel ONLINE.

Has banking secrecy finally come to an end? This is what newspapers are unanimously saying. Is it true or should these headlines be punctuated with a question mark? Well, once again Switzerland, Austria, Luxembourg, Liechtenstein, and Belgium too are in the spotlight for their bank secrecy rules. There have been strong words emanating from the international community in the past and they produced little, or we would not be entertaining headlines such as these today. 

Changes to bank secrecy have come along way since the day of the anonymous savings book (‘Sparbuch’ in the German language). On January 1st 1994 some provisions concerning banking secrecy were partly amended in response to concerns of money laundering, but these provisions were largely undertaken on a voluntary basis by each bank. Up until this time, one could simply show up at the bank with $10 or $10 million dollars, and put it in anonymous savings account.  It was anonymous because you didn’t have to show any identification. The bank account was identified by a secret password, which the owner of the account assigned to the savings book and was subsequently registered in the bank. To get the money, you would have to show up at the bank with the savings book and give the secret password. This means in reality, to make a pay-off as seen in spy-thrillers, nobody needed to run around with suitcases of money. One could simply make a pay-off by handing over the savings book with the password and the recipient could visit his money at leisure. The new account holder could change the password to afford more security, but as longs as he had the savings book and the password, the money was safe and the old owner could not obtain these funds. Of course, this also meant if the savings book was lost or the password forgotten, then no one could access the money. The password account is much like its Swiss cousin the numbered account. The concept of the number and the password account originated when Hitler sought to stem the flow of money seeking a safe haven in Switzerland and in Austria. The capital exodus began due to inflation, but later due to Nazi persecution of Jewish citizens, it was feared that Hitler would try to force the Swiss to reveal Jewish accounts. By giving out numbers, the Swiss bank could claim not to know whom the account belonged to. In Austria, the practice became passwords. 

In 1995, Austria became a member of the European Union. Many of the earlier voluntary duties became law so that by November 1^st 2000 the ability to open anonymous accounts was finally ended and no payments or withdrawals could be made to existing accounts unless the bank identified the identity of the savings account holder and money laundering was finally rendered a criminal offence. Tax evasion on the other hand, the concealing of income and not falsifying any documents, is merely a civil offense, not unlike a traffic violation. In addition, as of January 1^st 2000 any cash transaction over €15,000 with a customer that didn’t have an ongoing relationship with the bank or was wired to the bank from offshore, needed to register their identity with the bank. These changes were brought about as the result of a European Council Directive to prevent the financial system from being used to launder money.  As a result of these amendments to the banking law, the European Commission withdrew its complaints against the Republic of Austria.                                           

The story regarding Switzerland and Liechtenstein is slightly rockier. German federal investigators paid €5 million to a former bank employee of the Liechtenstein Große Treuhand bank (LGT). The employee, Heinrich Kieber, is alleged to have removed the secret bank data from the LGT bank, thus kicking off a row over tax evasion in the EU. Before the dust settled, U.S. investigators charged Switzerland’s UBS bank for deliberately encouraging American citizens to engage in tax fraud activities. The Swiss have always attracted a certain limelight regarding chocolate, cheese, cuckoo clocks, and banking secrecy – a financial business model that attracts an estimated $1.84 trillion in assets of which about €450 billion belong to private customers. In Switzerland, the hoopla began when the bank was found to have offered tax evasion tactics to Americans that were invented by auditors at KPMG, who only managed to avoid criminal prosecution when they paid up $456 million in fines and penalties. The UBS bank was ordered to pay $780 million, and then they did the unthinkable, they handed over the names of 300 customers after the U.S. government produced strong evidence of tax evasion. The U.S. authorities are still seeking the names of an estimated 52,000 Americans with secretive UBS accounts.

According to mainstream press, these events are what have sparked the U.S., British, and German push for an ‘end’ of banking secrecy and prompted bankers from Switzerland, Austria, Luxembourg, and Liechtenstein to hoist their skirts and run for cover. Baa-humbug!

Firstly, tax evasion is not a criminal offense in any of these countries currently being hounded for their bank secrecy laws and for the most part bank secrecy is federal and constitutional law in these countries.

Basically the international community has pushed these European tax havens to accept Article 26 of the OECD Model Tax Convention on Income and Capital. Article 26 creates an obligation to exchange information, but the contracting state is not at liberty to engage on a “fishing expedition”. The contracting country must firstly show evidence of tax evasion, can only request information that is relevant to the tax affairs of a given taxpayer, must demonstrate the foreseeable relevance of the requested information, and prove to have pursued all domestic means to access such information. As of yet, it is unclear just how much tax evasion evidence even need be presented.

Austria, Belgium, Luxembourg, and Switzerland were opposed to the current version of Article 26, last updated on July 17, 2008, but since March 2009 each of these countries has notified the OECD that they are withdrawing their reservation to Article 26. They now believe that bank secrecy is not incompatible with the requirements of Article 26. And with little wonder, because the particulars of Article 26 are easily circumvented with a legal phenomenon called ‘Hidden Treuhand’.

Hidden Treuhand is a customary practice in Austria, Switzerland, Luxembourg, Liechtenstein, and even Germany. Due to globalization, it has transcended its national borders to impact industry, commerce, and banking worldwide. It is key to creating shell companies, foundations, and bank accounts where the real owner identity is hidden and cannot be exposed by any legal means. A Hidden Treuhand creates conditions where a lawyer conducts the duties required of him on behalf and in the interest of the client, but all business actions appear to be in the name of the lawyer. The real beneficial owner remains unknown. This construct can be liberally applied to stock in corporations, foundations, real estate, patent and copyrights, financial instruments such as derivatives and bonds, and of course, cash.

In 2000, some aspects of banking secrecy came to an end, but the Hidden Treuhand is frequently used to close the gap that those transparency laws were supposed to fill. In essence, the Hidden Treuhand is somewhat like a hidden trust, but legally it and the environment in which it functions, can achieve far more than is presently realized. Hidden Treuhand hides the beneficial owner of any asset and that includes bank accounts. Hidden Treuhand, when combined with banking secrecy, hides profits beyond the reach of tax investigations and governments. It’s like missile shield for money – nothing gets past this protective barrier.

Article 26 of the OECD MODEL TAX CONVENTION ON INCOME AND CAPITAL concerns the exchange of information between Contracting States. Hidden Treuhand is the creation of customary practice, but it is not regulated and there are no laws in existence that could be equated as regulatory. The following Hidden Treuhand provisions are quoted from law books referring to customary practice and illustrate how each of the OECD provisions is rendered mute. Compare the inherent capabilities of Hidden Treuhand with text of Article 26 where it states that none of the following provisions shall be construed so as to impose the obligation to:

OECD: to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

Hidden Treuhand: “What makes a Treuhand contract so special and unique under Austrian Law is that there is no special law regulating Treuhand contracts…there is no regulation of Treuhand contracts under Austrian Civil Law, and there are not any laws that could be equated as regulatory.” 

OECD: to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

Hidden Treuhand: “It is not to be expressed that any direct legal relationship or connection exists between the businessmen and the lawyer. In fact, the lawyer would be guilty of misconduct should the lawyer reveal that a legal relationship (power of attorney) exists between himself and the client”.  

OECD: to supply information which would disclose any trade, business, industrial commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).

Hidden Treuhand: “When using a Hidden Treuhand, trustees are referred to as a Straw Man. A trustee functions like a Straw Man and acts in the name of the client who remains undeclared in the background. The relationship between the businessman and the lawyer is secret, which often includes even knowledge of a ‘power of attorney’ existing between the lawyer and the businessman”

When it comes to Hidden Treuhand, lawyers exploit attorney client privilege and claim it their legal duty to deny information and to keep all matters pertaining to their client confidential. No one, no court or authority, no government, can force an attorney to reveal any secrets concerning his client. And what of banking or bank accounts?  

The EU and international money laundering laws have striven to eliminate any criminal elements from the banking system, but Hidden Treuhand works within the law and in the banking system. Hidden Treuhand bank accounts are not made public because only the trustee is entitled to use the account, and there is no legal relationship between the client and the bank account. A lawyer lets the bank know that an account is a trust account, but does not have to disclose the name of the beneficiary. A Treuhand account means a banking relationship exists between the bank and the trustee and the bank is not entitled to know whom the lawyer represents anymore than anyone else.

“According to leading banks, designating an account as a Treuhand account alters nothing. The true account beneficiary remains a secret because only the trustee is authorized to use the account and there is no legal relationship between the client and the ‘special account’. The clients’ identity is not exposed when making bank transactions because it is the trustee’s responsibility to make money transfers from this ‘special lawyer trust account’ (Anderkonto)”.

As result of the crackdown against tax havens, more clients will have to resort to Hidden Treuhand and lawyers services. Already Liechtenstein has sold its Treuhand services to a separate company, quite possible even to itself via Hidden Treuhand. Their business model will no doubt resemble the Austrian one where the registration of foundations and Hidden Treuhand is separate from bank institutions. If foreign tax authorities manage the first hurdle and can provide strong evidence of tax evasion and seek further information regarding bank accounts they will firstly have to petition the cooperation of the Ministry of Finance. The ministry will ask the banks, but to what end? The bank cannot tell them what they do not know.  

So much for the grandiose announcement heralding the end of bank secrecy and tax havens!

Many large-cap US corporations have headquarters or subsidiaries based in tax havens. For example: McDonalds recently moved to Switzerland. Moreover, it is possible for a hedge fund to own an offshore bank. For example: the highly secretive hedge fund Cerberus owns Bawag, an Austrian bank, as well as a majority shareholder stake in Chrysler and GMAC. If questioned, would Bawag reveal information regarding any accounts held by a stakeholder of Cerberus?

Just how big is the offshore banking industry? The OECD estimates that assets held by the offshore banking industry might be as high as $11.5 trillion. Little wonder U.S. banks are having trouble lending money and no big surprise the European legal community claims to have no objection to Article 26.

Bank secrecy is alive and well! No question mark necessary. It just got a bit more expensive and devious. It is high time someone made the announcement: we have officially entered the ‘Age of Stealth Wealth’!

To learn more about Hidden Treuhand and what role it is playing in the financial crisis, bank secrecy, bailouts, globalization, the privatization of Iraq, and your financial security, please read: Hidden Treuhand: How Corporations and Individuals Hide Assets and Money

Available direct from publisher and Amazon and Barnes and Noble

Boeing Unsure of Timeline of 787 Fix and Flight

Boeing doesn’t know yet how long 787 fix will take
By Dominic Gates
Seattle Times aerospace reporter
When might the 787 Dreamliner fly and what’s the cost to fix it and get it in the air?
That was the big question dominating an early-morning earnings teleconference Wednesday between Boeing CEO Jim McNerney and Wall Street analysts, who expressed concern about the new jet program’s profitability.
McNerney said Boeing is still assessing how long it will take to fix the structural flaw that has grounded the jet. The company won’t have a new schedule or an estimate of the added costs until “later this quarter,” he said.
That extends the time frame for providing answers. A month ago, Boeing said it hoped to have a new schedule for first flight and delivery within “several weeks.”
“We are working through this matter as quickly as we can but will not sacrifice quality for expediency on such an important effort,” McNerney said.
The focus on the 787 meant that Boeing’s buoyant quarterly earnings got scant attention during the conference call.
Its second-quarter profit rose 17 percent to just shy of $1 billion on revenue of $17 billion.
Boeing has about $5 billion in cash on hand, and profit margins were healthy at about 10 percent in both the defense and commercial-airplane divisions. In the midst of a steep and broad economic downturn, it maintained its financial forecast for the year.
And despite more than 70 jet-order deferrals in the last three months, and the announced cut in 777 output next year, McNerney said he expects to hold 737 production steady in Renton.
But the good news was overshadowed by worries over the 787. McNerney offered what reassurance he could.
He said Boeing has identified and analyzed the structural problem at the wing-to-body join, duplicated it on a computer model and selected a preferred solution.
The hangup, he said, is that it’s difficult to implement the fix — especially on those planes already built — because of the inaccessibility of the place inside the wing where the modification has to be made.
In addition, he said, Boeing engineers are using “an abundance of caution” to ensure other stress issues are not created by the modification.
A Seattle Times story published Wednesday before the earnings release cited two engineers who identified the problem as delamination of the composite-plastic material at a stress point at the end of the long rods, called stringers, used to stiffen each wing.
The engineers estimated that the fix could delay first flight four to six months even if the fix works, potentially pushing first flight into 2010.
When asked directly about that prediction during the conference call, McNerney stuck to his answer that no new schedule is yet available.
The engineers cited in the Times story described the Boeing fix as a redesign at the wing-to-body join that involves only a handful of additional parts at the end of each stringer, but is nevertheless complex to implement.
McNerney emphasized that the problem is limited to the join and that the whole wing doesn’t need a redesign.
“There is nothing we have learned to lead us to believe that this is anything but a local issue, which can be addressed with a local fix,” McNerney said.
Boeing also punted on the financial impact of the new 787 delay, saying the answer cannot be known until the new plan is determined.
On the earnings call, Barclays Capital analyst Joe Campbell asked Chief Financial Officer James Bell the question in plain English:
“Are you sure that you’re not losing money on this thing?”
The concern is that Boeing, despite the huge order book for 850 Dreamliners, may not be able to make enough money on each plane to recover over time all the added costs piling up: the extra research and development needed to solve the current problems, the late penalties that will have to be paid to customers and suppliers, and the cost of holding all the expensive inventory for months longer without any income.
Bell disclosed that Boeing has in its inventory almost $8 billion worth of 787 structures work — completed and partially built airplanes — for which it can receive no income until the jets are delivered to customers. He said this 787 work-in-progress inventory is growing at a rate of $800 million per quarter.
In response to Campbell, Bell conceded that the new 787 delay “puts pressure on the profitability of this program.”
“We’ve always been concerned with the cumulative impact of the schedule delays and the pressure it puts on cost,” Bell said.
“We also have been concerned with the delays to our customers and how that converts to penalties or the settlements we have to work through with them.”
But Bell said Boeing expects to create efficiencies over the expected long production run of the 787 that will reduce costs and increase profit per plane to cover all the extra expenses.
“We still believe the program to be profitable,” Bell said.
In an interview later, Campbell said that in rough numbers, using the figures released Wednesday, Boeing will have spent up to $13 billion on inventory buildup by the time it starts delivering the 787s. It has maybe an additional $8 billion to $10 billion sunk into research and development, and it’s on the hook for a few billion dollars more in customer and supplier penalties.
Campbell estimates that the overrun on costs attributable to the delays up until now is around $6 billion.
But that doesn’t include the additional costs being incurred due to the wing-to-body flaw.
Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Boeing VP concerned about the public reading non-Boeing controlled blogs

Pay no attention to the man behind the curtain….  Boeing wants you to only read and believe their corporate blogs.  Got that?  The all and powerful Boeing has spoken.  –GFS

P.S.  Please look at these documents and see how serious Boeing has been about following “securities laws and regulations that dictate how we disclose significant events.”

 Link:  http://gflorencescott.wordpress.com/2009/07/16/boeing-sued-class-action-for-violations-of-federal-securities-laws/ 

 

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Randy’s Journal, Boeing VP

Heard it through the grapevine

Link to Boeing Corporate Blog Site(S):

http://boeingblogs.com/randy/archives/2009/04/heard_it_through_the_grapevine.html

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As we get closer to the first flight of the 787 Dreamliner, clearly there’s going to be more and more focus on day-to-day, if not minute-to-minute progress. It’s the first new airplane program where we’ve seen the full effects of “new media” or “social media” coverage.

Forums and sites are proliferating – ranging from fan and hobbyist pages to journalist blogs and everything in between – chronicling even the most obscure details gleaned from “sources.”

Web sites and blogs focused on commercial aviation are nothing new. We’ve been discussing commercial aviation through this blog for more than four years now. There are many experienced industry writers, journalists, and analysts who provide pertinent commentary through Web sites and other media. They add to the discourse and make the industry all the more interesting and exciting.

The challenge is distinguishing those sources and pages from the various blogs, Twitters and other sites which sometimes position themselves as authoritative – but really are not.

Even the most informed outsiders frequently lack comprehensive and direct knowledge of what’s happening at Boeing – including about our development programs, the 787 and 747-8.

Unfortunately, the seemingly insatiable appetite for any information about those programs has given rise to Web postings and social media sites that distribute rumors or details without ample – or sometimes any – of the context that would aid understanding of what’s really going on. Some of these sites use official sounding titles and designs in an attempt to enhance their credibility.

We’ve seen many examples of “exclusive” postings claiming to have just heard certain information from “sources.” These reports often claim to have inside information about our production plans or progress, orders, deliveries, cancellations, or development program milestones – that often turn out to be incorrect.

Airplane development programs are inherently complicated. What may seem like a major issue today is often fully resolved by tomorrow. Without the context that often can come only from a comprehensive program or company view, incorrect or incomplete information can be circulated as conclusion and fact when it is not. That helps nobody.

That’s why Boeing strives to communicate to the public when we’ve analyzed our data and reached truly informed conclusions, so we can provide definitive explanations of what’s happening. By the way, we’re also governed by securities laws and regulations that dictate how we disclose significant events.

So a bit of a “buyer beware” is in order. Shop carefully when it comes to the information you consume on the Web. Especially when that information has not come from a truly authoritative source.

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Andrea Jame’s Seattle PI blog post on this topic and reader comments:

http://blog.seattlepi.com/aerospace/archives/167004.asp

More Boeing Layoffs; most in Defense

Boeing hands out layoff notices, most of them in defense

Link to Seattle Post Intelligencer:  http://blog.seattlepi.com/aerospace/archives/173941.asp

Chicago-based The Boeing Co. on Friday plans to issue about 600 layoff notices to warn employees about job cuts effective Sept. 18.

The 600 notices include about 100 in Puget Sound area. Just 80 of the notices are in Boeing’s commercial airplanes division and most of those are in Puget Sound.

The numbers indicate that Boeing’s defense unit will be harder hit.

The layoffs are part of Boeing’s plan to eliminate 10,000 positions this year. Earlier this week, Boeing indicated that it would lay off 1,000 people in its defense unit. It’s still not clear whether those 1,000 are in addition to, or part of, the 10,000 previously announced cuts.

Boeing is in a legal “quiet period” in advance of its earnings announcement next Wednesday.

Previously:

• Pentagon budget cuts means Boeing to cut 1,000 defense jobs (memo)
• Boeing layoff round: 250 company-wide, 150 in Puget Sound

 

Posted by Andrea James at July 17, 2009 5:00 a.m.