Archive
Senate Armed Services Committee Hearing — Pending Legislation Regarding Sexual Assaults in the Military
Oversight Hearing: Pending Legislation Regarding Sexual Assaults in the Military
Source: U.S. Senate Armed Services Committee
Webcast plus testimonies in PDF.
Memo: Offshore Profit Shifting and the U.S. Tax Code – Part 2 (Apple Inc.)
Memo: Offshore Profit Shifting and the U.S. Tax Code – Part 2 (Apple Inc.) (PDF)
Source: U.S. Senate Permanent Subcommittee on Investigations
From press release (Sen. Carl Levin (D-MI):
Apple Inc. has used a complex web of offshore entities – including three foreign subsidiaries the company claims are not tax resident in any nation – to avoid paying billions of dollars in U.S. income taxes, a bipartisan investigation by the Senate Permanent Subcommittee on Investigations has found.
The subcommittee will spotlight Apple’s extensive tax-avoidance strategies at a Tuesday hearing. Witnesses will include Apple CEO Tim Cook, other Apple executives, Treasury Department officials and outside experts. Sen. Carl Levin, D-Mich., and Sen. John McCain, R-Ariz., subcommittee chairman and ranking member, respectively, will also issue a 40-page memorandum with findings and recommendations.
The subcommittee, which previously explored tax avoidance by other multinational corporations using offshore subsidiaries, found similar practices at Apple. In addition, the subcommittee review discovered an unusual tax scheme: Apple’s claim that two key offshore companies are not tax residents of Ireland, where they are incorporated, or of the United States, where Apple executives manage and control the companies. One of those Irish subsidiaries has paid no income taxes to any national tax authority for the past five years.
See also: Offshore Profit Shifting and the U.S. Tax Code – Part 1 (Microsoft & Hewlett-Packard)
Markey Report: Compounding Pharmacies Going Untracked, Unregulated, Under-inspected from Coast to Coast
Markey Report: Compounding Pharmacies Going Untracked, Unregulated, Under-inspected from Coast to Coast
Source: U.S. Senator Ed Markey (D-MA)
Compounding pharmacies are going largely untracked, unregulated and under-inspected by states across America, according to a new report released today by Rep. Ed Markey (D-Mass). Following the meningitis outbreak originating in a Massachusetts compounder that killed dozens and sickened hundreds, Rep. Markey, along with Reps. Henry A. Waxman (D-Calif.), John Dingell (D-Mich.), Frank Pallone (D-N.J.) and Diana DeGette (D-Colo.), quizzed all states on their oversight of compounding pharmacies, which mix specialty drugs.
The report, “State of Disarray”, is a shocking compendium of the responses from the states queried in the investigation, showing that they are largely leaving compounding pharmacies to their own devices, without the ability to effectively inspect, track or police activities within states and across state lines when the drugs are shipped.
JPMorgan Chase Whale Trades: A Case History Of Derivatives Risks And Abuses
JPMorgan Chase Whale Trades: A Case History Of Derivatives Risks And Abuses (PDF)
Source: United States Senate Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs
JPMorgan Chase & Company is the largest financial holding company in the United States, with $2.4 trillion in assets. It is also the largest derivatives dealer in the world and the largest single participant in world credit derivatives markets. Its principal bank subsidiary, JPMorgan Chase Bank, is the largest U.S. bank. JPMorgan Chase has consistently portrayed itself as an expert in risk management with a “fortress balance sheet” that ensures taxpayers have nothing to fear from its banking activities, including its extensive dealing in derivatives. But in early 2012, the bank’s Chief Investment Office (CIO), which is charged with managing $350 billion in excess deposits, placed a massive bet on a complex set of synthetic credit derivatives that, in 2012, lost at least $6.2 billion.
The CIO’s losses were the result of the so-called “London Whale” trades executed by traders in its London office – trades so large in size that they roiled world credit markets. Initially dismissed by the bank’s chief executive as a “tempest in a teapot,” the trading losses quickly doubled and then tripled despite a relatively benign credit environment. The magnitude of the losses shocked the investing public and drew attention to the CIO which was found, in addition to its conservative investments, to be bankrolling high stakes, high risk credit derivative trades that were unknown to its regulators.
The JPMorgan Chase whale trades provide a startling and instructive case history of how synthetic credit derivatives have become a multi-billion dollar source of risk within the U.S. banking system. They also demonstrate how inadequate derivative valuation practices enabled traders to hide substantial losses for months at a time; lax hedging practices obscured whether derivatives were being used to offset risk or take risk; risk limit breaches were routinely disregarded; risk evaluation models were manipulated to downplay risk; inadequate regulatory oversight was too easily dodged or stonewalled; and derivative trading and financial results were misrepresented to investors, regulators, policymakers, and the taxpaying public who, when banks lose big, may be required to finance multi-billion-dollar bailouts.
The JPMorgan Chase whale trades provide another warning signal about the ongoing need to tighten oversight of banks’ derivative trading activities, including through better valuation techniques, more effective hedging documentation, stronger enforcement of risk limits, more accurate risk models, and improved regulatory oversight. The derivatives overhaul required by the Dodd-Frank Wall Street Reform and Consumer Protection Act is intended to provide the regulatory tools needed to tackle those problems and reduce derivatives-related risk, including through the Merkley-Levin provisions that seek to implement the Volcker Rule’s prohibition on high risk proprietary trading by federally insured banks, even if portrayed by banks as hedging activity designed to lower risk.
See also: Exhibits (PDF)
Hearing — Oversight: Sexual Assaults in the Military
Oversight: Sexual Assaults in the Military
Source: U.S. Senate Committee on Armed Services
PANEL I AT 10:00 AM
Honorable Barbara L. Boxer
United States Senator
PANEL II (Immediately Following PANEL I)
Anu Bhagwati
Executive Director and Co-Founder, Service Women?s Action Network
BriGette McCoy
Former Specialist, United States Army
Rebekah Havrilla
Former Sergeant, United States Army
Brian K. Lewis
Former Petty Officer Third Class, United States Navy Advocacy Board Member, Protect Our Defenders
PANEL III AT 2:00 PM
Robert S. Taylor
Acting General Counsel of the Department of Defense
Lieutenant General Dana K. Chipman, JAGC, USA
Judge Advocate General of the United States Army
Vice Admiral Nanette M. DeRenzi, JAGC, USN
Judge Advocate General of the United States Navy
Lieutenant General Richard C. Harding, JAGC, USAF
Judge Advocate General of the United States Air Force
Vaughn A. Vaughn A. Ary, USMC
Staff Judge Advocate to the Commandant of the Marine Corps
Major General Gary S. Patton, USA
Director, Sexual Assault Prevention and Response Office
Rear Admiral Frederick J. Kenney, Jr., USCG
Judge Advocate General of the United States Coast Guard
Dr. Coburn Releases “Safety at Any Price” Report on Questionable Grant Spending at Department of Homeland Se curity
Source: Senator Tom Coburn (R-OK)
U.S. Senator Tom Coburn, M.D. (R-OK) today released an oversight report, “Safety at Any Price: Assessing the Impact of Homeland Security Spending in U.S. Cities.” The report is based on a year-long investigation of the Department of Homeland Security (DHS) grant programs and the Urban Areas Security Initiative (UASI).
More than $35 billion has been spent on DHS grant programs since 2003 with the intent to make Americans safer from terrorist attacks. However, 10 years later, DHS has been unable to establish goals or metrics to ensure that funds were used to make Americans safe, and cannot accurately measure how much safer we are today after spending $35 billion.
“At a time when our $16 trillion national debt is our greatest national security threat, we must make sure that all programs, especially those meant to prevent terrorism, are achieving their mission. This report shows that too often so-called security spending is making our nation less secure by directing scarce dollars to low-priority projects and low-risk areas,” Dr. Coburn said.
“For instance, paying for first responders to attend a HALO Counterterrorism Summit at a California island spa resort featuring a simulated zombie apocalypse does little to discourage potential terrorists. I hope this report encourages DHS to award funds based on calculated risk, not politics. Congress has a duty to ensure that this grant program does not become a parochial, pork-barrel entitlement program. We need to help the program fulfill its original goal of providing funds for projects in areas most at risk,” Dr. Coburn said.
Investigative Report Criticizes Counterterrorism Reporting, Waste at State & Local Intelligence Fusion Centers
Source: U.S. Senate Committee on Homeland Security & Governmental Affairs, Permanent Subcommittee on Investigations
A two-year bipartisan investigation by the U. S. Senate Permanent Subcommittee on Investigations has found that Department of Homeland Security efforts to engage state and local intelligence “fusion centers” has not yielded significant useful information to support federal counterterrorism intelligence efforts.
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The investigation determined that senior DHS officials were aware of the problems hampering effective counterterrorism work with the fusion centers, but did not always inform Congress of the issues, nor ensure the problems were fixed in a timely manner.
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The Department of Homeland Security estimates that it has spent somewhere between $289 million and $1.4 billion in public funds to support state and local fusion centers since 2003, broad estimates that differ by over $1 billion. The investigation raises questions about the value this amount of funding and the nation’s more than 70 fusion centers are providing to federal counterterrorism efforts:• The investigation found that DHS intelligence officers assigned to state and local fusion centers produced intelligence of “uneven quality – oftentimes shoddy, rarely timely, sometimes endangering citizens’ civil liberties and Privacy Act protections, occasionally taken from already-published public sources, and more often than not unrelated to terrorism.”
• DHS officials did not provide evidence to the Subcommittee showing unique contributions that state and local fusion centers made to assist federal counter terrorism intelligence efforts that resulted in the disruption or prevention of a terrorism plot.
• The investigation also found that DHS did not effectively monitor how federal funds provided to state and local fusion centers were used to strengthen federal counterterrorism efforts. A review of the expenditures of five fusion centers found that federal funds were used to purchase dozens of flat screen TVs, two sport utility vehicles, cell phone tracking devices and other surveillance equipment unrelated to the analytical mission of an intelligence center. Their mission is not to do active or covert collection of intelligence. In addition, the fusion centers making these questionable expenditures lacked basic, “must-have” intelligence capabilities, according to DHS assessments.
Hearing — Taking Consumers for a Ride: Business Practices in the Household Goods Moving Industry
Taking Consumers for a Ride: Business Practices in the Household Goods Moving Industry
Source: U.S. Senate Committee on Commerce, Science & Transportation
The U.S. Senate Committee on Commerce, Science, and Transportation will hold a hearing and release a staff report on how online moving companies have successfully taken advantage of many consumers. The hearing will explore complaints that some “moving” companies quote a low dollar rate to move goods but then charge a sharp markup in order to physically deliver and unload the goods.
“Far too many consumers are duped by abusive moving companies in tactics that should be, and in some cases are, against the law,” said Chairman John D. (Jay) Rockefeller IV. “Companies that take advantage of Americans during moves, whether they are across the country or across town, must be held accountable. That’s the purpose of this hearing.”
Archived hearing webcast available.
Staff Report: INTERNET MOVING BROKERS: A NEW CONSUMER PROTECTION PROBLEM IN THE HOUSEHOLD GOODS MOVING INDUSTRY (PDF)
Feinstein, Grassley Release Report on Strategies to Prevent a Security Crisis in the Caribbean
Feinstein, Grassley Release Report on Strategies to Prevent a Security Crisis in the Caribbean
Source: United States Senate Caucus on International Narcotics Control
U.S. Senators Dianne Feinstein (D-Calif.) and Chuck Grassley (R-Iowa), co-chairs of the Senate Caucus on International Narcotics Control, today released a bipartisan report entitled Preventing a Security Crisis in the Caribbean that provides recommendations for Congress and the Obama Administration to enhance current security efforts in the Caribbean.
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The report recommends:
- An assessment by the State Department and the Drug Enforcement Administration (DEA) of where Sensitive Investigative Units are most needed in the Caribbean. Jamaica, with the fourth highest murder rate in the world, should be considered a top candidate for one of these units.
- Immigrations and Customs Enforcement (ICE) should send a full criminal history of all deportees to authorities in the Caribbean so they are aware of the return of any criminals or drug traffickers. Caribbean countries’ authorities do not currently receive a full criminal rap sheet from ICE on deportees returning home.
- United States technical assistance to the countries of the Caribbean to support the drafting of asset forfeiture laws and laws controlling precursor chemicals used to make illegal drugs.
- The integration of Puerto Rico into working level meetings held between the State Department and countries in the Caribbean on security and narcotics issues.
- Strong support of Haitian counternarcotic efforts.
- Strengthening of U.S. anti-money laundering laws.
- Continued extradition of drug kingpins from the Caribbean to the United States.
- The return of DEA helicopters used in Operation Bahamas, Turks and Caicos to the Exumas Islands in The Bahamas.
Harkin: Report Reveals Troubling Realities of For-Profit Schools
Harkin: Report Reveals Troubling Realities of For-Profit Schools
Source: Senator Tom Harkin
Today, Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, unveiled a report on the findings of the Committee’s two-year investigation of the for-profit higher education industry. The report outlines widespread problems throughout the sector, as evidenced by the thousands of pages of never-before-released internal documents that education companies submitted to the Committee at Harkin’s request.
“In this report, you will find overwhelming documentation of overpriced tuition, predatory recruiting practices, sky-high dropout rates, billions of taxpayer dollars spent on aggressive marketing and advertising, and companies gaming regulations to maximize profits. These practices are not the exception — they are the norm; they are systemic throughout the industry, with very few exceptions,” Harkin said.
“Justice Louis Brandeis famously said that sunlight is the best disinfectant. As a result of this investigation, a wide range of Americans – including taxpayers, prospective students and their families – are waking up to the troubling realities of this industry. I hope that for-profit colleges will be moved by this final report to reform and focus on students’ success instead of just their financial aid dollars. But that will not be enough — real, bold legislative reforms are critical. We need to know how every student is faring. We need to ensure that resources intended for education are spent productively. We need colleges to provide the services that students need to succeed. And for companies so reliant on taxpayer revenues, we need to start requiring they demonstrate results for students, not just shareholders.”
Zachary Chesser: A Case Study in Online Islamist Radicalization and Its Meaning for the Threat of Homegrown Terrorism
Zachary Chesser: A Case Study in Online Islamist Radicalization and Its Meaning for the Threat of Homegrown Terrorism (PDF)
Source: Majority and Minority Staff, Senate Committee on Homeland Security and Governmental Affairs
From press release:
The Homeland Security and Governmental Affairs Committee issued a staff report Monday detailing the internet radicalization of a homegrown terrorist to violent Islamist extremism and the inadequacy of U.S. policy to counter online radicalization.
The report presents a classic case study of how quickly online radicalization can occur compared to the traditional process of face to face contact between an aspirant and an established terrorist group.
In the case of Zachary Chesser, a young Virginia man now serving 25 years on terrorism related charges, the trajectory from high school graduate to incarcerated felon occurred in just two years.
“Chesser represents a growing breed of young Americans who have such comfort and facility with social media that they can self radicalize to violent Islamist extremism in an accelerated time period, compared to more traditional routes to radicalization,” the report said.
Chesser’s “prolific online writings and written correspondence with Committee staff provide a window into his thinking, and in turn, may shed light on the thinking of other like-minded individuals who may follow in his destructive path of radicalization toward violent Islamist extremism.”
Committee staff corresponded with Chesser over a three-month period from August through October 2011 and included four of those hand-written letters in the report.
U.S. Senate — Staff Report on Unauthorized Charges on Telephone Bills
Staff Report on Unauthorized Charges on Telephone Bills
Source: U.S. Senate Committee on Commerce, Science, & Transportation
From press release:
Chairman John D. (Jay) Rockefeller IV today revealed the findings of a yearlong Committee staff investigation into a nationwide epidemic involving mystery fees being placed on consumers’ landline telephone bills without their knowledge or consent.
The investigation shows that this practice could be costing Americans $2 billion a year, that the nation’s largest telephone companies are profiting from it, and that third-party landline telephone billing has largely failed as a legitimate method of payment.
“This report is a stark picture of a billing system that is hurting consumers and making profits for phone companies,” Chairman Rockefeller said. “Despite industry promises to end this fraudulent practice years ago, hundreds of third-party billing companies have continued to place unauthorized mystery charges on consumers’ phone bills for services they do not want or use. In exchange, they reap tens of millions of dollars a year in profit. This fraud against millions of American consumers, businesses and even government agencies is utterly reprehensible. It’s time for us to take a new look at this problem and find a way to solve it once and for all.”
Halting U.S. Firearms Trafficking to Mexico
Halting U.S. Firearms Trafficking to Mexico (PDF)
Source: U.S. Senate Caucus on International Narcotics Control
“Military-style weapons are arming Mexico’s brutal drug trafficking organizations at an alarming rate. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) has consistently found that the overwhelming majority of firearms recovered at crime scenes and traced by Mexican officials originate in the United States.
These guns have contributed to Mexico’s dangerous levels of violence. Since the start of the administration of President Felipe Calderon in December 2006, according to Mexican government estimates, 34,612 people have died in organized crime-related killings in Mexico. The killings reached their highest level in 2010, increasing by almost 60 percent to 15,273 deaths from 9,616 the previous year.
As the U.S. partners with Mexico to combat drug-related violence, we must enhance our efforts to curb firearms trafficking from the United States to Mexico. This report provides background information on firearms trafficking and makes recommendations to Congress and the Obama Administration on key next steps.”
The National Science Foundation: Under the Microscope
The National Science Foundation: Under the Microscope (PDF)
Source: U.S. Senator Tom Coburn, M.D. (R-OK)
The good news for taxpayers is there is no question NSF has contributed significantly to scientific discovery.
The bad news is a significant percentage of your money is going to what most Americans will consider fraud, waste and abuse, and there are many areas where NSF could contribute far more with better management and smarter targeting of resources.
This report identifies over $3 billion in mismanagement at NSF. This includes tens of millions of dollars spent on questionable studies, excessive amounts of expired funds that have not been returned to the Treasury, inadequate contracting practices that unnecessarily increase costs, and a lack of metrics to demonstrate results. Additionally, a significant portion of the agency’s budget is spent on efforts duplicating missions performed by other government agencies and a number of NSF officials and grantees have been caught engaging in inappropriate behaviors, but face little or no consequences.
Evaluating U.S. Foreign Assistance to Afghanistan
Evaluating U.S. Foreign Assistance to Afghanistan (PDF)
Source: U.S. Senate Committee on Foreign Relations
This report takes a close look at how the United States is spending civilian aid dollars in Afghanistan to make sure we are pursuing the most effective strategy in support of our national security objectives. We spend more on aid to Afghanistan than any other country and the environment in which the State Department and U.S. Agency for International Development (USAID) operate is difficult and dangerous. With the upcoming transition to an Afghan security lead in 2014 and the increased responsibilities our civilians will absorb from the military, we have a critical planning window right now to make any necessary changes to support a successful transition.
This report is meant to continue a close working relationship be- tween the Senate Foreign Relations Committee and the Obama ad- ministration on ensuring that our assistance programs in the re- gion meet their objectives. Given this committee’s jurisdiction to conduct oversight of the State Department and USAID and the lev- els of funding in Afghanistan, I asked the committee’s majority staff to conduct a thorough review of U.S. civilian assistance. This report is the product of two years of staff research and travel. It is intended to provide constructive and timely guidance for administration officials at every level who are working to guarantee that our taxpayer-financed aid to Afghanistan is spent in the most effective and efficient manner possible.
Understanding the Economy: State-by-State Snapshots — May 2011 (based on April 2011 Data)
Understanding the Economy: State-by-State Snapshots — May 2011 (based on April 2011 Data)
Source: Joint Economic Committee, U.S. Congress
The U.S. Congress Joint Economic Committee released the fourth installment of its “Understanding the Economy: State-by-State Snapshots” 2011 series, which provides easy access to the major economic indicators in all 50 states and the District of Columbia in the areas of jobs, unemployment, personal earnings and housing (click to read the Executive Summary).
Key economic statistics for each state include:
• Jobs created or lost since the start of the recession;
• Jobs saved or created by the Recovery Act;
• Unemployment rates;
• Per capita earnings; and,
• The condition of the housing sector.
Background And Selected Issues Related To The U.S. International Tax System And Systems That Exempt Foreign Business Income
Background And Selected Issues Related To The U.S. International Tax System And Systems That Exempt Foreign Business Income (PDF)
Source: Joint Committee on Taxation, United States Congress
The House Ways and Means Committee has scheduled a public hearing for May 24, 2011 on the rules in certain foreign jurisdictions for taxing foreign income. This document, prepared by the staff of the Joint Committee on Taxation, describes the U.S. international tax rules applicable to foreign income of resident taxpayers, provides a general overview of a territorial system of taxation, including a brief discussion of basic design considerations, and summarizes the rules of nine selected countries for the taxation of foreign income.
End Tax Breaks For Big Oil: Reduce the Federal Deficit Without Increasing Prices At The Pump
End Tax Breaks For Big Oil: Reduce the Federal Deficit Without Increasing Prices At The Pump</strong> (PDF)
Source: Joint Economic Committee, U.S. Congress
Congress is currently searching for efficient ways of reducing the deficit. Democratic members of the 112th Congress, along with the Obama administration as evidenced in the fiscal year 2012 budget, propose repealing certain tax benefits for the major integrated oil companies. Eliminating these tax preferences, which subsidize fossil fuel production, will both reduce the federal deficit and expedite the transition to a cleaner‐energy economy.
Critics of repealing these subsidies argue that the targeted tax breaks spur production and lower energy prices. In reality, most of the so‐called incentives have no impact on near‐term production decisions, and thus repealing them would have no effect on consumer energy prices in the immediate future. Even in the longer term, the current proposed changes to these tax provisions would have little impact on global production and a negligible effect on consumer energy prices. More importantly, these subsidies failed to prevent spikes in the price of gasoline, such as the spike that occurred in 2007‐08. At the same time, these tax breaks may have discouraged investment in other industries, including alternative energy sources or energy efficiency, by distorting the effective tax rate on investments in oil and natural gas.
The proposed changes targeted to the major integrated oil and natural gas companies include: (1) eliminating the ability to claim the domestic manufacturing deduction (Section 199) against income derived from the production of oil and gas; (2) repealing expensing of intangible drilling costs; (3) repealing expensing of costs of tertiary injectants used as part of a tertiary recovery method; and (4) modifying the foreign tax credit rules for dual‐capacity earners.5 The Joint Committee on Taxation (JCT) estimates that making these four changes would reduce the deficit by $1.2 billion in FY 2012 and $21 billion by FY 2021.
A description of these proposed changes follows, along with a discussion of the short‐ and long‐ run impacts on oil production, crude oil prices and consumer energy prices.
JEC State-by-State Analysis Shows Republican Budget Doubles Out-of-Pocket Costs for Older Americans
JEC State-by-State Analysis Shows Republican Budget Doubles Out-of-Pocket Costs for Older Americans
Source: Joint Economic Committee, U.S. Congress
A new state-by-state analysis by the U.S. Congress Joint Economic Committee (JEC) finds that in each state in the country, out-of-pocket health care costs will more than double for residents turning 65 in 2022 under the Republican budget plan passed by House Republicans in April.
The non-partisan Congressional Budget Office has estimated that a typical 65-year-old Medicare beneficiary in 2022 would see their out-of-pocket health care costs increase from $6,154 to $12,513 under the Republican budget. Using that data along with cost-sharing data from the Centers for Medicare and Medicaid Services, the JEC has estimated out-of-pocket costs on a state-by-state basis. While the increase varies by state, residents in all states will see their out-of-pocket expenses more than double when they turn 65 in 2022. Residents in Florida face the largest increase –$7,383.
The report also shows that current Medicare beneficiaries will be harmed by the GOP budget, immediately losing preventive services such as mammograms and facing higher prescription drug costs.
+ Full Report (PDF)
Overview Of Selected Tax Provisions Relating To The Financing Of Infrastructure
Overview Of Selected Tax Provisions Relating To The Financing Of Infrastructure (PDF)
Source: Joint Committee on Taxation, United States Congress
The Senate Committee on Finance has announced a public hearing to examine public financing of infrastructure. This document, prepared by the staff of the Joint Committee on Taxation, provides a description of present-law provisions relating to certain infrastructure trust funds and their dedicated taxes, an overview of public-private partnerships and related tax considerations, and a description of tax-exempt financing that is available for certain transportation infrastructure. The document also briefly describes the now-expired Build America Bonds program, and proposals for a national infrastructure bank.
