On Tax Amnesty and Running for Office

Did Mitt Romney receive a Tax "Amnesty" from the IRS?

UBS, the 'Giant' (or, shall we say the 'Monster') Switzerland based Investment Bank paid $760 million in 'fines' to the US Government, in 2006-2007, after a prolonged legal fight, to settle potential criminal charges for aiding & abetting Americans taxpayers into criminal tax shelters, aka undisclosed numbered Swiss Bank accounts. 

US tax law is clear: one MUST disclose 

all income, regardless of its source, and pay federal taxes on ALL income.

Tax-Shelters do exactly what shelters do - provide a facility where current income is sheltered from purview, and deferred indefinitely for tax purposes.

So while the 'Magical' Swiss Bank Account Number is available for spending money, none of the income is reported to the US IRS. Hence the taxpayer has no LEGAL obligation to report such income.

Alongside paying fines, UBS also handed over identities of 4,000 US citizens who had availed themselves of such services. The IRS began reaching out to everyone on this list and offered an Amnesty deal: Pay the taxes owed plus a 20% penalty on the gross cumulative undisclosed income, in exchange for Amnesty from criminal prosecution.

For the uninitiated, Al Capone was indicted, convicted, and served time - for not paying his taxes. The Feds couldn't pin anything else on him at that time.

America is still a place where "Due Process" is a constitutional right. So, each person in that 'Elite' group had to make a choice: take the Amnesty deal, or, roll the dice and have their day in court. By way of reference, the folks over at the IRS do play hardball - the penalty rate today is 27% for anyone who's not taken the deal yet.

Mitt Romney, remember, was running for the GOP nomination during the run-up to our 2008 Presidential elections, until he ended his campaign in favor of Sen. McCain.  

Over the past weekend, Romney release all 375 pages of his 2011 tax returns. While there are some interesting takes on Romney's 1040 for 2011 - the effective tax rate paid of 14 odd percent, etc., the real bomb of a story may lie in his 2009 returns which are not required to be released, and which have not been released by Romney.

We know that Romney had Swiss Bank accounts. Mysteriously enough, his 2011 returns make no mention of any assets in Swiss banks. Cayman Islands,yes. But not in Switzerland.  There's now plenty of chatter to outright dismiss the notion, that Romney accepted such an IRS Amnesty deal, as mere political mud-slinging.

Did Mitt Romney do a la Al Capone in not disclosing ALL his income? I am leaning towards the affirmative. And, if that is true, then Mitt has duped every Republican, of all stripes, in the GOP - in running for and securing the GOP Republican Party Candidate for President of the United States of America.

A criminal act in violation of US laws, not withstanding the Amnesty, must preclude such individuals from occupying any elected office. Forget about becoming the US President. If these allegations are true, Romney shouldn't ever be elected to ANY office - municipal, State, or Federal - in our country. Not even to his local Country Club Board.

Gotta say though Mitt, you got some Brass.

And, Justice for All

The wheels turn, as if in excruciatingly slow motion, and the proceedings are liberally interspersed with months of "standstill" to accommodate "motion practices" of Defense Lawyers, and in deliberate regard of Defenda

nts' "Due-Process" rights, but when the 'Good Guys' decide Enough-Is-Enough, the entire house of cards can come down:

Financial Fraud Enforcement Taskforce

Don't get me wrong, I am not uncorking my bottle of 'Moet Chandon' yet (sorry, 'Dom' - you are just way too hyped up and freaking overvalued). These 3 men (men they are, but only by their gender) of the house of UBS - Union Bank of Switzerland, convicted recently for their roles in financial crimes in the Municipal Arena, aren't even the proverbial 'Spoke-in-the-Wheel'; They are Minor-Minions of Wall Street, who manipulate the system and perpetrate criminal acts (in this case, on our civic municipalities). And, these 3 men are by no means an exhaustive list of such pin-heads, driven by sheer greed and willing to compromise everything. Just so they can claim a larger paycheck.

Their greed neither imposes, nor recognizes any bounds - social, moral, or otherwise, on their own behavior. They usually travel in packs, for at their core they are essentially opportunistic cowards. Like Hyenas, encircling us, our institutions, and our System, looking for the proverbial weak spots, the loopholes, and for 'like-minded' citizen officials of authority, or for middlemen with access and influence upon officials, and upon our institutions and our Systems.

These are men (in general, very few women of Wall Street are involved in such criminal enterprise. But, there are some. Recent cases remind me of the 'Sex Queen' of Hedge Funds, the one who was co-convicted along with her 'Men of Money' (Raj Rajarathnam, Anil Kumar, et alii) who bring their fraternal ways right out of college frat-houses, and into our lives. They seem to believe they are entitled, that they have earned the right, to a boat-load of money simply because they have a degree in 'Business Administration'.

Such values are fostered and further nurtured in the workplace, as most of them put in that obligatory and mindless 2 to 3 year 'Junior Associate' stint across Wall Street, and, across Consulting and Accounting type Corporations. This is when they encounter their eventual teachers and mentors – their 'Seniors' - the 'Made Men' (Any resemblance to the Mafioso worlds is entirely intended). who are slightly older versions of their own distorted 'Id', their uncoordinated 'Ego', and their dysfunctional 'Super-Ego'. The future criminal mind is conceived (or triggered), as witness to a variety of underhanded, and less than aboveboard shenanigans of their Seniors, that are rewarded instead of being discouraged, as they themselves go about their mundane responsibilities of 'Making Copies' and 'Stapling Presentations'.

Junior Associates are constantly encouraged by the system, to go get that MBA degree. Almost as if, if one wanted be a 'Master Criminal', one would need a Master’s Degree in Business Administration. So, off they go. To ‘Preferred’ schools such as Harvard, Yale, Princeton, NYU, Columbia, Wharton, Cornell, and the likes, GMAT scores and all in hand, begging for a slot, polishing up their 'Liar Resumes', more than likely forging References Letters, and almost certainly writing essays, as part of their application process, that convey a strong desire and determination to 'Change the World'.

No, I am neither a pessimist nor a cynic . There is a large body of MBA candidates who get in and graduate the right way, and for the right reasons, even among the 'Wall Street' wannabe crowds on MBA graduate school campuses. But the ones who truly end up changing the world are regular folks with ferocious determination and drive to do good, and not the obnoxiously vocal types that bring only couched and unbridled ambition along. I am yet to meet someone who has proclaimed "I want to change the world", and then gone on to actually do something about it. Talk and rhetoric continue to be free.

So 2 years in, and they graduate, with all the 'Power and Privileges' of the diploma bestowed upon them (I never understood the Power and Privileges bit). They graduate, usually with enormous financial baggage. Of up to $100,000 in tuition they paid over 2 years, and other accumulated living expenses, which can be in the 50,000 to 100,000 range. The pressure to make money is just starting.

Wall Street covets MBA graduates from the Ivy Leagues. I spent a bit of time on Wall Street, trading and selling derivative products. I witnessed roughly 10 annual rites of passage for freshly minted MBA grads – the recruiting season, the Super Saturdays, etc. I never understood Wall Street's fascination with Ivy League MBA graduates.

With the exception of a handful of recruits (over a ten year period), most of these Ivy League MBA wielding folks, in my mind’s eye, were completely worthless as Finance majors, lacking even the basic understanding and even a working knowledge of finance and economics. Listen, if you carry an MBA, with a Finance Major, and yet somehow are unable to calculate simple interest on a constant Principle, you need to surrender that MBA diploma. I shall refrain from speculating upon 'How' such MBAs got through the system.

And, I witnessed, first hand, what these people are capable of when presented with ‘Opportunities’ - Sheer Collateral Damage, to their clients, to their employers, to colleagues – subordinates, peers, and managers. It is almost as if they lay waiting for their ‘Moment’, waiting to strike, rip someone’s face off, and smirk it all off on their way to collecting larger paychecks, aka bonuses.

Wall Street also covets ‘Producers’. Despite most producers not having real management talent or skills, a disproportionate number of them ultimately end up at the top of the Wall Street’s internal food chain – as CEOs, CFOs, or, as Global Head of ‘Something-Something’.  

But, the road to such ascension is not inevitable. Despite their sense of being ‘Masters of the Universe’, and their accumulated wealth, sometimes the lawman catches up with their criminal misdeeds: A casual (albeit restricted) search for 'Municipal Finance Fraud FBI Justice Department' reveals a telling story. I knew a fair number of these now convicted felons. They happened to work at the same employer, during my time.  

Wall Street itself is a whole different animal. It is, today, metaphor (Yes, I am aware of the street named 'Wall Street', that runs East to West in lower Manhattan, from Church Street, to the South Street Seaport, that begins at a Graveyard, and ends at the East River. How prophetic). Wall Street is an ecosystem (see note on Ecosystems and Food Chains). Over the past 30 years, Wall Street has come to pervade every aspect of our lives. Wall Street is - Our Credit Cards, our Bank Accounts, our Car Loans, in our Homes through the Mortgages we have, our Education Loans, and in a global sort of way, in every aspect of our life where our money changes hands, or where we sign a contract to borrow/pay money. 

It used to be that Wall Street was restricted to our brokerage accounts. Everything else went through our bank. And our banks used to be institutions with integrity, worthy of our trust. Not anymore. Over those 30 years, our banks have turned into, or have been taken over by Wall Street.

So, we sort of understand why Americans lost their jobs, homes, credit scores, their savings, pensions, etc. When Justice does catch up, and at times it does, the perpetrators lose “Everything”.

Or, do they?