This is most interesting. Revolving Door examples include people who worked for Defense Contractors, such as Boeing and Lockheed-Martin and then inexplicably decided to apply for jobs in government, (most likely at lower salaries), including oversight agencies that have alleged “oversight” of government defense contracting matters in companies such as Boeing and Lockheed. Agencies such as Defense Security Service currently have hired people directly from industry, which places doubt on the integrity of the accomplishment of their oversight responsibilities. This is an area that should be investigated, and prosecuted if found improper by the appropriate authorities.
There are things that have been happening that at first look have made no sense, but may be becoming more clear now. One wonders if the mysterious Boeing DoD Direct Commercial Sale of a Boeing Wedgetail plane, with it’s state of the art static multi-phased array sensor suite capabilities, to Turkey was due to the strong arming of Cohen and his group. Cohen used to be the Secretary of Defense under President William Clinton. In many respects, the Wedgetail is more capable than the U.S. Air Force’s AWACS surveillance platform. So, thanks to powerful lobbyists, foreign countries have superior technology to what the United States currently is using.
Cohen denies being paid directly by Turkey, but one could wonder what other types of “in the dark” transactions might be possible. Please see a previous post from this blog regarding the use of a Hidden Treuhand. Could this or a similar way of hiding true beneficiaries of profits from manipulated contracts and sales have been used? See article included after El Gato’s comments in this post.
El Gato – Reflections on the World (Link to original: http://elgato2000.blogspot.com/2008/09/revolving-door.html)
Essays on contemporary politics and history and sometimes other miscellaneous topics
Thursday, September 25, 2008
The Revolving Door
The term “revolving door” describes a cunning device whereby government employees elected or appointed move from their jobs to private jobs for much higher salaries in industries or lobbying firms that are receiving favors from the very same Congressional representatives. It can be plainly a conflict of interest but is usually ignored. The cycling of jobs is a very important asset of the lobbying industry.
Before getting into the dizzying complexities of lobbying in Washington, let’s look as an example at the case of Dennis Hastert, the former Republican Speaker of the House. It is by now a well known fact revealed by the whistleblower, Sibel Edmonds, a former FBI Turkish-American translator, that Dennis Hastert while Speaker had received tens of thousands of dollars in bribes for favors to the lobbying firm representing Turkey. He received the money in payment for his support of a Turkish oil and gas pipeline that was to run from Baku to the Mediterranean. He did other favors for Turkey and eventually when he left Congress, he joined in June 2008 the lobbying firm of Dickstein and Shapiro that represented Turkey in Congress. Salaries usually jump from 150,000 annually to 100,000 monthly for those who go through the revolving door. Quite an incentive, eh? It’s somewhat mindful of Alice in Wonderland. Except unlike Matrix it is real.
A word about Turkey. Most of us know very little about the role of Turkey. There are many lobbying machines that are on the Turkish payroll and they manage to keep the Turkey influence invisible. However, Turkey plays a central role in areas of terrorism, money laundering, black marketing of arms sales, nuclear secrets and manufacturing and sale of narcotics. It operates inside criminal networks with ostensible legitimate fronts and has links to our military and political machines. Turkey is a major customer of the US for military hardware, technology and weapons. It is very active in criminal networks that transport narcotics from Afghanistan through Central Asia to Turkey. The poppies are processed in Turkey then transported through the Balkans to Europe and America. Money laundering is done through its own banks or banks in Cyprus. High ranking US government employees sell nuclear secrets to Turkey and Pakistan which are then passed on to A.Q. Khan, the Pakistani black marketeer of nuclear secrets. He in turn with the approval of Pakistan government officials helps Iran and North Korea to start their nuclear programs. Pakistan, of course, gets its cut.
There is a link between terrorism and organized crime. Narcotics trafficking and black marketing of arms sales supports terrorism financially. Funds are used to buy arms and train terrorists.
Public service and influence peddling have crossed to such a degree that the revolving door is wide open and proliferating. Political and federal employees leave office for the “insider game” of lobbying and advising private interests how to gain advantage from federal officers. Influence peddling has become a multi-billion dollar industry annually. Today 32 former US Senators and 250 ex-Congressmen now lobby Congress for private interests. Unelected individuals who work for powerful committees in Congress go through the revolving door multiple times to work for lobbying firms. It’s a dizzying merry-go-round in that many cycle back and forth. As a result, House and Senate appropriations committees dole out billions in pork (earmarks).
Let’s look at one other example. William Cohen, former Secty of Defense under Clinton, after leaving the US government, set up his own lobbying company, called the Cohen Group. It represents the largest defense companies in the business, e.g. Lockheed Martin and Boeing. Cohen’s company is an active member of the American Turkish Council (ATC). Lockheed Martin is on the board of ATC and its biggest paying client. The Cohen Group also is very active in India and has just opened in China.
Laws to control lobbyists are full of loopholes so that the Cohen Group is not registered and is able to say that Turkey is not a “direct client”. Cohen claims he is not getting paid directly by the government of Turkey, according to his spin machine. But somehow money does pass between them. Money laundering is very useful. And the corrupt Turks are experts.
Lewis Black, the standup comic, once said: I wake up everyday thinking that it can’t get any worse and it does.
Edmonds, Sibel. justacitizen.com
Zwicker,Barrie. Towers of Deception. 2006.
Posted by El Gato at 9/25/2008 03:46:00 PM
Monday 11 August 2008
by: Shelley Stark, t r u t h o u t | Report
Vanity Fair reported shipments of over $12 billion in cash to Iraq. $9 billion of the cash is gone and unaccounted for. (Photo: The Village Voice)
Halliburton takes advantage of a European loophole that lets corporations hide beneficiaries and assets.
Little is known of a customary European legal practice that offers corporations and individuals an opportunity to profit from assets while maintaining complete anonymity of the beneficiary’s identity. This practice is referred to as “Hidden Treuhand” in the English language. The practice of Hidden Treuhand submits to legal local customs in Austria, Germany, Liechtenstein, Luxemburg and Switzerland, but due to globalization, has moved beyond European borders via corporations and individuals, who put it to personal use.
The practice of Hidden Treuhand is relevant and unregulated. More and more, the relevant practice of Treuhand is used in hiding an asset owner’s identity from the outside world. Assets, whether they are corporate shares or fixed assets, can be owned in secret. The personal income derived from these assets can also be kept secret from tax authorities. An example of how Hidden Treuhand facilitates tax evasion is part of the latest scandal where thousands of Germans evaded tax through the services of the LGT Treuhand Bank in Liechtenstein, using a combination of Treuhand and foundations to hide true owner identity of bank accounts.
Hidden Treuhands in Europe impact the lives of American citizens. Hidden Treuhands enable even American corporations to hide the identity of beneficiaries, assets and income. Halliburton has a Hidden Treuhand embedded in its Austrian subsidiary. It prevents transparency regarding corporate activities.
The lack of transparency creates special advantages for some, and consequences for others such as governments, competitors, stockholders and citizens. For example, a beneficiary can evade personal income tax, because the income derived from a hidden asset is not linked to the beneficiary. There is another advantage to Hidden Treuhands that borrows from the concept of a “trust.” The “trust” concept allows for dividends to be removed. Money transferred to a subsidiary may be considered a dividend. By using a network of subsidiaries, favorable tax laws and banking secrecy, CEOs and insiders can profit without transparency. The Hidden Treuhand is an important aspect of what makes globalization so attractive to American and European corporations.
Given these attributes, it is alarming when a Hidden Treuhand is discovered in a subsidiary that is fully owned by Halliburton USA. Halliburton’s Hidden Treuhand is evident in the firm’s corporate records. Halliburton International GmbH was created in Austria in June of 1992, although another subsidiary, at the same address, was in existence in Austria since 1958. The new subsidiary, Halliburton International GmbH, has no apparent reasons for existing other than to house a Hidden Treuhand in its corporate structure, receive dividends from other subsidiaries and acquire other subsidiaries. This firm has no employees. It creates no income. Another company, Halliburton Company Austria GmbH, at the same address, could have equally performed whatever function this subsidiary has, but it has no Hidden Treuhand. The obvious conclusion is Halliburton USA needed a subsidiary with a Hidden Treuhand.
The Hidden Treuhand easily accomplishes tax evasion because dividends transferred to a subsidiary with a Hidden Treuhand can be anonymously distributed or used to purchase other holdings. For example, Halliburton International GmbH has acquired acquisitions in Russia and Kazakhstan that later disappear from the corporate records.
Halliburton attracts a certain limelight in connection with any Treuhand activities because of its link to a highly controversial war and Vice President Dick Cheney’s earlier association with Halliburton. We would have expected all ties to his former employer to be have been severed when he took office to avoid a conflict of interest. The impenetrability of the Hidden Treuhand makes it impossible to know who else is involved beyond the CEOs listed on Halliburton International GmbH historic corporate data.
Dick Cheney claims to no longer own stock in Halliburton, but he was its chairman and CEO for five years, and either hired or promoted many of the executives now running Halliburton, or formerly involved with the subsidiary with the Hidden Treuhand in Austria. It is highly unlikely the chief executive officer, Dick Cheney, would be unaware of the Austrian subsidiary’s existence, originally headed by the executive vice president and chief legal officer, Lester L. Coleman, of Halliburton International USA. But it is an absolute certainty Lester L. Coleman and all the other CEOs listed on Halliburton International GmbH corporate historic records do know of the subsidiaries existence and its Hidden Treuhand. It was the intention of these CEOs to set up a secret subsidiary in 1992 with a Hidden Treuhand embedded.
Perhaps more importantly, Halliburton’s CEOs, listed in the corporate historic records of Halliburton International GmbH in Austria, should know Hidden Treuhands could be used to undermine American security by providing a means for financing terrorists. Currently, one of the strongest arguments the US and the OECD are using against banks, lawyers and Treuhand activities in Europe to combat tax evasion and money laundering is how these activities can be used to fund terrorism. The Iraq War is one portion of the overall strategy of the ‘War on Terror’ that also includes preventing any funding for terrorism. It takes little imagination to see the huge potential Treuhands facilitate: creating a means for terrorists and criminal organizations to conceal their true identities and motives and yet work openly in the capitalist system.
Halliburton’s CEOs must be aware of the potential misuse of Hidden Treuhands, as they have not been particularly open about their own use of Hidden Treuhands to date. Halliburton simultaneously contracts to fight a “war on terror,” while utilizing the same nontransparent mechanisms concerned authorities seek to prevent access to by terrorists. Faced with a conflict of interest, Halliburton CEOs demonstrate with their silence a willingness to protect their own interests, and doing so while we are at war with an enemy that works in the shadows.
The noncompetitive contract awarded Halliburton was orchestrated by Vice President Dick Cheney and backed by the Bush administration. This contract has afforded an estimated US$1.4 trillion to US$3 trillion of US taxpayer money to flow through the coffers of Halliburton, virtually unmonitored and fraught with accounting irregularities. The receiver of much of this US taxpayer money is Halliburton USA, its affiliates and subsidiaries. One of the subsidiaries, the Austrian subsidiary, is capable of dispersing any money sent to it to unknown persons, without a hint of transparency.
The Hidden Treuhand is more than just a means of profiting without transparency; it is a national security threat, whether wielded by al-Qaeda or Halliburton. If Americans were brought into a war based on a profit motive while we were supposed to be focused on alleviating the threat of terrorism, it could amount to treason. This risk should be given some credence and investigated. For this reason, Halliburton’s corporate records were given to the US Internal Revenue Service. Maybe they will find something illegal, tax evasion for example, or maybe they will come back and say they found nothing illegal: The Hidden Treuhand is just a little bit naughty.
There is no transparency to a Hidden Treuhand, and, therefore, no means to identify the real benefactors. But the most important factor concerning a Treuhand contract is this: If a Treuhand contract is embedded in the corporate structure, then its sole purpose is to prevent the public from knowing the identity of the real stockholders. Who is calling the shots and who is benefiting is kept secret.
The “True Hands,” the true benefactors’ identity, is hidden from public knowledge; they remain anonymous and nameless in transactions, and that is the sole incentive for creating a Hidden Treuhand.
Shelley Stark is the author of a forthcoming book, “The Hidden Treuhand: How Europe Offers US Corporations and Individuals an Opportunity to Hide Assets, Identity, and Income.”