By Bill Bonner, Chairman, Bonner & Partners:
Imagine our delight! “Crony Hung in Own Noose” is the headline we would have put on the story. The New York Times has the report:
J. Dennis Hastert, who served for eight years as speaker of the House of Representatives, was paying a former student hundreds of thousands of dollars to not say publicly that Mr. Hastert had sexually abused him decades ago, according to two people briefed on the evidence uncovered in an F.B.I. investigation.
Federal prosecutors on Thursday [May 28] announced the indictment of Mr. Hastert, 73, on allegations that he made cash withdrawals, totaling $1.7 million, to evade detection by banks. The federal authorities also charged him with lying to them about the purpose of the withdrawals.
John Fund of National Review continues:
But his fall from grace should prompt other questions about how a former high-school teacher who held elective office from 1981 to 2007 could leave Congress with a fortune estimated at $4 million to $17 million. When he entered Congress in 1987, he was worth at most $275,000. Hastert was the beneficiary of very lucky land deals while in Congress; and since leaving office, he has earned more than $2 million a year as a lobbyist.Denny Hastert used to visit the Wall Street Journalwhere I worked when he was speaker. He was a bland, utterly conventional supporter of the status quo; his idea of reform was to squelch anyone who disturbed Congress’s usual way of doing business.
Although everyone else is down on the apparent child molester/crony enabler/and hack politician… today, taking a line from the French and the “Affair Charlie Hebdo”: We Are Dennis Hastert.
The usual way of doing business in Washington is, of course, corrupt. It is intended to protect the status quo because it is the quo that has the status. And the money. That’s how people such as Hastert, Newt Gingrich, and the Clintons have pocketed so much money – by helping the cronies and the politicians get together, working together, hand in sleazy hand, trying to prevent the future from happening.
Gingrich made a fortune pushing drugs (i.e., lobbying for the trade group Pharmaceutical Research and Manufacturers of America).
Hastert made much of his money pushing candy-flavored tobacco.
The Clintons help foreign governments get what they want from Washington… and get paid millions for their speeches.
Nancy Pelosi and her husband made millions as “special customers” in an IPO of Visa stock, while Pelosi strangled legislation that would have lowered the company’s profits.
But what is at least mildly satisfying is that Hastert stuck his head into his own stupid noose. While in Congress, Hastert approved and promoted laws that made it harder and harder to conduct one’s financial affairs freely and privately. He was charged neither with molesting a minor nor with bribery or fraud. Instead, the feds tagged him for “structuring” banking transactions so as to avoid federal reporting requirements.
The trouble is the noose is tightening on us all.
The Banks Won’t Bank
A friend in Paris reports:
When I landed in the U.K. last week, my U.S. bank “helpfully” froze my ATM card, because they figured I couldn’t possibly be the one using it.
Had I not had a small amount of cash in pocket before getting to a WiFi zone, so I could Skype-call them (my SIM card wouldn’t work in the U.K. either), I would have been out of luck.
And this, not a week after getting a letter from our French bank, saying they could no longer carry our checking account, because they aren’t “registered with the SEC.”
In Argentina, too, the long reach of the U.S. cronies is causing trouble. When you travel to a place such as Argentina, you take cash. Because it’s an economy that functions on cash, not credit. But taking cash out of a U.S. bank sets off alarms. An 82-year-old American, living in Buenos Aires, was ratted out by his bank when he took out $10,000 to take with him back home. Then the bank closed his account. It didn’t matter that he had been a customer for 40 years.
And then, in Switzerland, our bank – with which we have done business for years – has just turned us out, too.
“This is not a tax issue. We know you’re paying your taxes. [How did they know?] It’s just that we’re not prepared to deal with U.S. clients any longer. The regulatory costs are too high.”
No big deal. We can change banks. But wait. Maybe that’s against the law, too.
The system is so rigged up that the feds can go after anyone – even one of the riggers himself. There are so many pettifogging papers to file, so many jackass regulations to watch out for, so many rules you probably don’t think apply to you – you’re bound to spend most of your life in breach of some criminal statute.
Asset protection specialist at the Sovereign Society Ted Bauman:
…what matters is over-criminalization: converting trivial, harmless acts into major felonies. For example, the postal worker who flew a gyrocopter on to the U.S. Capitol lawn to protest the corrupt role of money in U.S. politics faces up to nine years in prison on multiple felony charges. Three U.S. restaurateurs were sentenced to eight years in federal prison for “importing lobster tails that were the wrong size and that were packaged in clear plastic bags rather than in cardboard boxes,” which violated a Honduran law that they didn’t even know existed and the Lacey Act. People have served time in federal prison for faking sick days and getting lost in federal parks.
Federal appellate judge Alex Kozinski wrote an essay titled “You’re (Probably) a Federal Criminal.” In it he gives numerous examples of federal felony statues that are so absurd — such as inadvertently misfiling a tax return — that no one with a sense of justice would ever use them. Indeed, if all these laws were enforced as written, “Any attempt to go after all criminals would sweep up millions of people.”
But selectivity is precisely the point of many of these laws. As crusading lawyer-journalist Glenn Greenwald points out, “When everything — even trivial transgressions — can become a serious felony, it empowers law enforcement to punish whomever they want.”
For reasons we don’t know, they have chosen Hastert this week. Who’s next? By Bill Bonner, Chairman, Bonner & Partners
This is what happens when a mortgage insurer talks its book: Millennials and immigrants become “plankton” in the “food chain” for “big wales and sharks.” Read… Canadian Mortgage Insurer Tells US Hedge Funds Why Canada’s Housing Bubble Is Immortal. Hilarity Ensues
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You can get very far in life as a crony if they have leverage over you, just in case you get too big for your boots or they wish to discard you to take on some new fresh meat.
Yep. The more control they have over your future the more likely you are to play by their rules.
I disagree. The harder they make it for people to survive, the more disconnected they will become from the govt. In the end it will be like Rome. When the barbarians arrived the citizens let them in.
The US is going to make the yuan and the ruble into desirable currencies by virtue of its stupidity. Eventually the black markets will start using one or both of these currencies and then everyone else will too because they are more convenient. Leave it to the US congress to turn China and Russia into the two biggest super powers. The level of arrogance and stupidity of our elected officials is truly mind boggling.
Perhaps not. We all know that all officials eagerly follow the mandates set by un-elected individuals with more money and power than over 60% of “sovereign” countries.
” Instead, the feds tagged him for “structuring” banking transactions so as to avoid federal reporting requirements.” Since when did conducting one’s business to avoid paperwork hassles become a crime? And what jury would convict?
Robert: its been a crime to conduct any kind of useful, worthwhile endeavor in the US for quite some time. Did you miss this?
http://www.washingtonpost.com/local/dc-politics/uncle-sam-may-have-picked-the-wrong-cash-cow/2015/04/14/227aa73c-de2e-11e4-a500-1c5bb1d8ff6a_story.html
How many times have you heard people say they don’t care about government invasion of privacy because they have nothing to hide? The problem is that one really doesn’t know what’s a crime any more, or what could later be determined to be a crime.
There have been several unsuccessful attempts to count how many federal laws there are. Estimates run to at least 3,000. In addition there are tens, perhaps hundreds, of thousands of federal regulations that carry criminal penalties. Be careful about picking up a feather while you’re out hiking since possession of an eagle feather is a federal crime,
““Show me the man, and I’ll find you the crime.”” – Lavrentiy Beria, head of Joseph Stalin’s NKVD.
Chillingly well said…
BTW, this was what brought down Eliot Spitzer. He was flagged by his bank for unusual activity. It turned out that he was trying hide his prostitution expenditures and that ended his career.
This thing with FATCA actually opens up some tremendous opportunities.
Clearly this is now approaching the insanity levels you would expect from a utterly delusional paranoid schizophrenic with psychotic and psychopathic tendencies.
But the opportunity that does present itself is the fact that not all governments are the same.
And there lies the solution.
Both China and the Philippines for example have banking systems that do not meet the wired, tech driven, data screwing CIA, NSA, and URS autobot reporting servers of western banks, and tend instead to rely on the more old fashioned approach.
And, jurisdiction is everything.
So it came to pass that I needed an account which avoided all the reporting, mostly because I really decided I was not going to waste my life on some petty pathetic bureaucrats whims and paranoia.
Basically I refuse to do it, it really is that simple, and a chance long conversation of a few drinks with an old law professor who was helping with some advice regarding the setting up of a foreign corporation led to the understanding of what is accepted and how to do it in a foreign jurisdiction. There are always loopholes he told me, and usually those loopholes can be perfectly legally covered by knowing exactly which contract to put in place.
Contracts exist in the Philippines to get around foreign ownership rules, land ownership, and many more that without them and the people in the know who understand how to use them, then a lot of business, vital to the economy would simply seize up.
So to set things up, a very cheap and simple DTI registered business was set up and my friend a local was the registered owner and opened the bank account. A second card was issued an ATM card with a daily withdrawal limit of 50,000 peso ($ 1,125) from any ATM worldwide, and paying interest on the balance. Funds can be wired or transferred internationally to the account.
No questions are ever asked, no one would dream of asking what a withdrawal is for, no ATM would ever simply stop supplying cash for no reason if the funds are there.
The registered business is closed a long time now, but the account carries on totally untroubled, and the one who opened the account moved on years ago.
The agreement drafted by the old law professor was fairly simple, It provided a contract between myself and the local guy to have a consultancy position, with expenses that could be drawn from the issue of the second card.
In the local guys name on the account, but a simple number on the card itself. No personal name.
I have 8 of these cards now. most with the same bank. All different names on the account and all have nothing to differentiate the cards except the different numbers on them.
Cash withdrawals are free from the ATM and so is cash deposits of course, so often I will withdraw various amounts from one account and then pop inside the bank and deposit to another account I have.
Makes the bank very happy, activity on the account and transfers from the US and often from the UK are lost in the rest of the transactions.
And so a new business developed.
Anyone in need of a totally anonymous bank card. that you can make withdrawals of up to $400.000 a year.
The Philippines needs military assistance against china from the US.
We do not need access to and control of the Philippine banking system by the US fed to be part of the price.
What you describe can be done in many places.
I have been saying for some time now that the multiplicity of laws and regulations is intentional, put in place to be used selectively when someone falls afoul of the powers that be. That Hasterd has done so, surprises me not at all – he has ceased to be “the voice of the masses” and now is required to be sacrificed to those same “masses”.
We have come full circle from the Chicago gangsters to Chicago politicians who employed their tactics and the Chicago Way has become the Federal Way, where you don’t have to bribe cops and judges because THEY ARE THE COPS AND JUDGES. When your only tool is a hammer everything looks like a nail.
The only thing the little guy can do nowadays is try to not be one of the nails sticking out higher than the rest. Since money is the biggest reason a nail is sticking out, methinks they will have to start eating their own with greater frequency. Poetic justice if they do!
This reminded me to keep my Thailand bank account open, even though it has virtually no money in it, just in case. When I stayed over there Bank of America routinely froze me out of ATMs, especially if I tried to withdraw over $500 US or even if I tried to withdraw 10,000 baht (about $333) two consecutive days in a row. I called them at least one dozen times having to straighten this out with them–yes it’s me, I’m living in Thailand again, my rent per month is 15,000 baht cash only and WTF? Again didn’t I explain this to you last month? Ironically when I did my US taxes I was allowed to write off something like $500 per day for living expenses, but I would have been in big trouble if I’d managed to save say $10,000 in a Thai bank account. Schizophrenic indeed…