Archive for June, 2011

Thank you Robin, for leaving this as a comment on an earlier blog post.  I reposition it here as a post of its own, as I feel it is such an important matter and case against those who would behave in a most unethical manner against U.S. citizen employees.  GFS


Robin Petersen said:

Robin Patrick Petersen

100 Robins W. Parkway #105

Warner Robins, GA 31088

(480) 993-5344

April 30, 2011

The Honorable Patrick Leahy,

U.S. Senator

437 Russell Senate Bldg

United States Senate

Washington DC 20501

Subj: Extraterritorial Jurisdiction Act – Boeing Fraud/Passport Confiscation

Dear Senator Leahy,

I am writing this letter to ask for your assistance. I do so because I believe your work in introducing a Congressional Bill entitled H.R. 4567 Civilian Extraterritorial Jurisdiction Act (CEJA) in February of 2010 may apply to my particular situation. You have my written consent to investigate should you decide to help me.

In January of 2009, I was employed by “The Boeing Company” (TBC) and its wholly owned subsidiary Boeing International Support Systems, Saudi Arabia (BISS) who have engaged in fraudulent and criminal activities (First) here in the United States and then again in the country of Saudi Arabia.

The criminal activity I am referring to was (First) committed here in the United States and arises from fraudulent recruiting practices that BISS is conducting while operating as an unregistered business from Oklahoma City, Oklahoma and in St. Louis, Missouri.

The criminal activity overseas stems from fraudulent representations made by TBC management; fraudulent activities taking place within these companies operations; and the fact that Boeing/BISS management confiscated my U.S. Passport and did not returned it upon my written demand.

I believe the confiscation of a U.S. Passport; not returning it upon demand; and holding a person in a foreign country for months against their will constitutes the criminal act of false imprisonment.

During the time I was being held against my will I reported this incident to Boeing’s Ethics Department, Boeing’s CEO and to U.S. Department of State, but heard nothing back from them. On June 8th, 2009 (nearly four months of captivity) I was able to get out of Saudi Arabia with the assistance of a security officer who was working at the U.S. Consulate who demanded that Boeing/BISS return my passport. When I returned home to the United States, I reported this incident to the Phoenix FBI. Although, I provided the FBI with as much detail as I could they never took any action.

I then contacted Senator John McCain who passed my complaint on to Senator Jon Kyl who then inquired on my behalf to find out why law enforcement (the FBI) failed to act. The U.S. Justice Department responded informing Senator Kyl that the FBI stated that they did not have jurisdiction in this matter. I strongly disagree with the statement that the FBI provided Senator Kyl because the criminal act of “Fraud” was in fact initiated here in the United States by a company (BISS) that according to its own attorneys has no legal right to be operating in this country. (They are not legally registered in the U.S. and are not paying U.S. Corporate income taxes.

The U.S. Department of Justice without careful analysis appears to have failed to recognize or consider this fact. (Please find Senator Kyl’s letter to me dated October 29, 2010 and the response he received from the U.S. Department of Justice dated 07 Oct 2010)

In May of 2010 I filed a lawsuit in the U.S. District Court of Arizona alleging wrongdoing by TBC and BISS. TBC and BISS have filed motions to have my case dismissed against them based on improper forum selection. The court has granted their motion to dismiss, ruling improper forum selection while not taking in to account that I was defrauded by BISS (First) here in the United States and that BISS is operating illegally within the United States.

1. Please find evidence enclosed and listed as (Exhibit A) that attorneys representing “The Boeing Company” (TBC) and Boeing International Support Systems (BISS) have provided a sworn affidavit from Yvette B. Kumi a Boeing Corporate paralegal who states ” the only jurisdiction in which BISS is authorized to do business is the Kingdom of Saudi Arabia.”

 2. Please find enclosed as (Exhibit B) a business card that I received from a Mr. Dan Nelson who clearly identifies himself as a Manager for International Support Systems – BISS and who states his operations are located at 6001 S. Air Depot, Oklahoma City, OK.

3. Please find enclosed as (Exhibit C) an email from BISS Manager Daniel J. Nelson stationed and “Doing Business” in Oklahoma City, Oklahoma. This email identifies that his supervisors are operating from St. Louis, Missouri.

4. Please find enclosed (Exhibit D) a Boeing Company press release dated (Jan. 7, 2010) that indicates that the Boeing Company is making leadership changes to include Mr. Torbjorn Sjogren to be named Vice President of International Support Systems and Alsalam Aircraft Company. Mr. Sjogren lives and operates from St. Louis, Missouri.

5. Please find enclosed correspondence from Boeing/BISS attorney Geoffrey M.T. Sturr that provides evidence that BISS/Alsalam has financial accounts (Citi Bank, NY) located here in the United States.

6. Please find enclosed a copy of my attorney’s motion to vacate and file an amended claim against the Boeing Company and Boeing International Support Systems (BISS). Although Boeing attorney’s with all the power of their company have been able to twist the facts in their favor, please understand that it is my contention that “Fraud” took place (first) here in the United States. I should be allowed the right to litigate here in my own country and not forced to return to Saudi Arabia to obtain justice when that country subverts freedom, continues to violate the rights of others, and is listed by our own government as a Tier III violator whose legal system is unjust and subject to corruption.

I would ask that you please conduct your own investigation, asking the Attorney General again why criminal activity such as “Fraud” that was committed by TBC/BISS in this country cannot be investigated by our own law enforcement officials (the FBI) and why the U.S. Justice Department has failed to provide due diligence in enforcing the laws of our country which are instituted to protect its Citizens from those who knowingly and willfully engage in criminal acts.

I look forward to hearing from you. Thank you for taking the time to review the enclosed material.


Robin Patrick Petersen

Here is an interesting article and comment sent to me by a reader.  This is something to think about.  Right on from what I know about that problem.  GFS

G Florence


So what other large corporations are enjoying these tax reduction opportunities?  This question becomes critically important when we look at the defense corporations, since transfer of proprietary technologies also has serious export control considerations, and national security considerations.  Is this one more mechanism for the loss of United States militarily critical technologies for large corporate profit returns?


An Old Navy Man

From:  Truthout.Org

No Tax Holiday for Multinational Corporations

Saturday 11 June 2011

by: Dr. Eileen Appelbaum, Truthout

If you think that “double Irish” and “Dutch sandwich” are schoolyard jump rope games girls play, think again. These are the nefarious, but legal, games that hundreds of multinationals play to avoid paying their fair share of taxes. According to a report by Bloomberg, Google used these techniques to cut its tax rate to 2.4 percent and its taxes by $3.1 billion over the three years from 2007 through 2009. The company’s top two markets by revenue are the US, with a 35 percent corporate income tax rate, and the UK, with a 28 percent rate, yet Google – using practices widely employed by global companies – dramatically reduced its tax rate.

At the heart of this strategy is the transfer of rights to intellectual property developed in the US – often, as in Google’s case, with early research funded by US taxpayers through the National Science Foundation – to a subsidiary in a low-tax country. Foreign earnings based on the technology are then attributed to the subsidiary. Google transferred its search and advertising technology for much of the world to its Irish subsidiary at a price sanctioned in 2006 by the IRS. But even the much-vaunted low Irish taxes were not low enough for Google. That’s where the “double Irish” and the “Dutch sandwich” come in.

Here’s how it works. In the “double Irish,” Google establishes two subsidiaries in Ireland. Google Ireland Holdings, managed from Bermuda, licenses intellectual property rights to Google Ireland Limited, which sells advertising rights in Europe, Africa and the Middle East and collects the advertising revenue. Google Ireland Limited keeps a fraction of these revenues and, ultimately, pays the balance in royalties to Google Ireland Holdings which, under Irish law, is a Bermuda company. No taxes are paid on these royalties because Bermuda has no corporate tax.

Ireland does have a 20 percent withholding tax that it would collect if royalties were paid to Google Ireland Holdings directly. That’s where the “Dutch sandwich” comes into play. A Dutch subsidiary, Google Netherlands Holdings, is “sandwiched” between the two Irish subsidiaries. Google Ireland Limited actually pays the royalties to the Dutch subsidiary, which then pays the royalties to Google Ireland Holdings. Irish law exempts this type of royalty payment to companies in other EU countries from the withholding tax.

Google is not alone. Hundreds of multinationals – including Microsoft, Oracle and Eli Lilly – use these ploys, with a foreign tax haven as the ultimate repository for the firms’ overseas profits. This kind of income shifting – known as transfer pricing – can significantly increase a company’s earnings and share price. 

Companies continue to owe taxes to the US government on these overseas earnings – technically, the taxes have only been deferred. But the taxes don’t come due until the profits are brought back to the US – that is, repatriated. And companies do want to repatriate these profits.

A dozen large multinationals have joined the “Win America Campaign” to lobby for a tax holiday, so US companies can bring foreign profits home. In 2004, when Congress last declared a tax holiday, much of the $900 billion that corporations held abroad was repatriated at a reduced tax rate of just 5 percent. Today, US corporations hold roughly $1.43 trillion overseas. The demand for a tax holiday clearly indicates that parking profits overseas is a tax-avoidance strategy, not a business necessity. 

The push for a tax holiday has bipartisan support in Congress. However, the Treasury opposes a tax holiday as a stand-alone measure although it might consider it as part of a broader tax reform package. 

How should the rules governing taxes on overseas profits be reformed?

House Speaker John Boehner has proposed a system of territorial taxation, in which overseas profits of US corporations would not be taxed in the US. This would only increase incentives for US companies to offshore operations and increase the use of transfer pricing. Ultimately, it would mean a race to the bottom in which no country could tax corporate profits, since companies would threaten to move operations to a lower-tax country unless the home country reduced its tax rate.

Here’s a better idea: replace the rules for transfer pricing with rules that allocate a company’s profits among its subsidiaries based on metrics such as the number of employees or the sales revenue generated in each jurisdiction. Currently, about half of US states with corporate income taxes use this method for companies that operate in multiple states. It would not be difficult to apply the same rules to multinational companies.

Dr. Eileen Appelbaum is a senior economist at the Center for Economic and Policy Research. She previously served as director of the Rutgers Center for Women and Work. During her tenure, Dr. Appelbaum built the Center into a major locus for research on women’s advancement in the labor market and at the workplace. The Center undertook numerous projects that were aimed at understanding and improving the lives of working women at all income levels. Prior to taking over the Center at Rutgers she was the research director at the Economic Policy Institute. She previously had been a professor of economics at Temple University.

Link to original:

Anyone interested in both real national security and economic security should read this set of articles.  What is discussed in these articles does not cover even half of the problems.  It is not only cyber espionage and theft, but other more direct kinds of actions that may also be very risky to our security and economic well-being.   Problems, such as sloppy security or imprudent decisions made by defense contractors regarding how security is handled, often brought about by penny wise, pound foolish financial decisions designed to save money for the company.  Misguided notions of an open world – a fantasy non-competitive world where science and technology should all be shared, can also bring about loss of technology and “technical secrets”.  Sometimes the visitors that are allowed in, (as in the case of foreign nationals), who ask for in person visits, or sometimes extended project or work time, in the defense contractor’s company sites, can provide significant risks to these same kinds of materials.   

Read these two articles for now if you did not already see them.  GFS

* * * * *

US arms makers said to be bleeding secrets to cyber foes

By Jim Wolf



* * * * *

From Nextgov:

Pentagon to adversaries: An attack on U.S. networks might unleash military force

By Aliya Sternstein  05/31/11

A new Defense Department policy that reportedly authorizes troops to use physical force in response to a cyberattack does not represent a change in posture, but rather a signal to adversaries that the United States will not hesitate to act, said a former U.S. military and intelligence official who managed network security.

According to an article in Monday’s Wall Street Journal, the Pentagon penned a departmental policy that for the first time unequivocally states that a grave attack on U.S. networks will be treated as an act of war. In other words, a cyberattack severe enough to cause death and destruction can trigger the use of military force.

“I don’t think the statement is a giant step forward in terms of new policy,” said retired Air Force Maj. Gen. Dale W. Meyerrose, former chief information officer for the Office of the Director of National Intelligence. “It’s an explicit statement, which underpins the military being serious about cyberspace and its relationship to the other domains of land, sea and air.”

The policy, expected to be publicly released within the next month, arrives at a time when the notion of cyberwar increasingly is becoming a real-world problem. During the past year, sophisticated intrusions such as the Stuxnet virus, which targets industrial equipment such as nuclear reactors, and so-called advanced persistent threats, worms that invade silently for extensive periods to steal intelligence, have fueled national security concerns.

 This weekend, Defense and Homeland Security Department officials confirmed the government is investigating a network penetration at Defense contractor Lockheed Martin Corp.

While the Pentagon’s policy may seem like a statement of the obvious, “it does put potential folks who want to do mischief with national security apparatus on notice,” said Meyerrose, who also served as CIO at several Defense and Air Force commands.

Few nations have enough cyber-savvy to cripple U.S. critical infrastructure, such as power grids, but as soon as terrorist groups or enemy states attain that capability, they will not hesitate to use it, James A. Lewis, a cybersecurity researcher at the nonprofit Center for Strategic and International Studies, testified before Congress just last week.

The more imminent possibility is that adversaries will disrupt military communications, said Meyerrose, now a senior executive at information technology firm Harris Corp. Under the new Pentagon edict, “the retribution [for that] could be — we’ll take out your ability to transmit, or it could involve killing,” he said. “When we report on the elements of cyber, we tend to boil it down to a user on a keyboard. It’s not quite that simple. It could be an attack on a military place where computer systems are assembled.”

In mid-May, while unveiling a new White House policy framework on international cybersecurity with other Cabinet officials, Defense Department Deputy Secretary William J. Lynn III alluded to “a forthcoming strategy for operating in cyberspace.”

The White House document asserts that the United States has the right to use military force to defend itself against cyber threats.

“All states possess an inherent right to self-defense, and we recognize that certain hostile acts conducted through cyberspace could compel actions under the commitments we have with our military treaty partners,” the strategy states. “We reserve the right to use all necessary means — diplomatic, informational, military and economic — as appropriate and consistent with applicable international law, in order to defend our nation, our allies, our partners and our interests.”


From: National Whistleblowers Center []

Sent: Wednesday, June 01, 2011 8:59 AM


Subject: Victory for National Security Whistleblowers




Dear Friend,

I am writing with some great news. The Senate Intelligence Committee’s pension stripping provision was not approved by Congress! This is a tremendous victory.


Thank you for your emails and phone calls on this very important issue. We all know how dangerous it would have been to give the heads of the intelligence agencies the power to summarily revoke a whistleblower’s pension if they were simply accused, not convicted, of leaking information. As a result of the thousands of messages that poured in from across the county, that has not happened.


On behalf of all the whistleblowers that the NWC helps and for the numerous current and former FBI agents I know personally, thank you.




Jane Turner

Former FBI Special Agent, 25-Year Veteran

Member of NWC’s Board of Directors and Director of NWC’s FBI Oversight Program