• Tag Archives corruption

  • Government Run Amok at the Bureau of Alcohol, Tobacco, and Firearms

    Posted on by Azrael Comment

     

    The Bureau of Alcohol, Tobacco, and Firearms (BATF) must be anxious to get on my list of government bureaucracies that shouldn’t exist.

    The bureaucrats have engaged in some really silly and petty behavior (such as confiscating Airsoft toy guns because they might be machine guns), and they’ve engaged in some behavior that is criminally stupid and dangerous (running guns to Mexican drug gangs as part of the “Fast and Furious” fiasco).

    If It’s Not One Thing, It’s Another

    Now we have another example. Though it’s so bizarre that I’m not sure how to classify it. Basically, the bureaucrats created an illegal slush fund, and then used the money illegally.

    The New York Times has been on top of this story. Here are excerpts from the latest report.

    For seven years, agents at the Bureau of Alcohol, Tobacco, Firearms and Explosives followed an unwritten policy: If you needed to buy something for one of your cases, do not bother asking Washington. Talk to agents in Bristol, Va., who controlled a multimillion-dollar account unrestricted by Congress or the bureaucracy. …thousands of pages of newly unsealed records reveal a widespread scheme — a highly unorthodox merger of an undercover law enforcement operation and a legitimate business. What began as a way to catch black-market cigarette dealers quickly transformed into a nearly untraceable A.T.F. slush fund that agents from around the country could tap. …One agent steered hundreds of thousands of dollars in real estate, electronics and money to his church and his children’s sports teams, records show. …At least tens of millions of dollars moved through the account before it was shut down in 2013, but no one can say for sure how much. The government never tracked it.

    Oh, by the way, the BATF was breaking the law.

    Federal law prohibits mixing government and private money. The A.T.F. now acknowledges it can point to no legal justification for the scheme.

    But you won’t be surprised to learn that there have been no consequences.

    …no one was ever prosecuted, Congress was only recently notified, and the Justice Department tried for years to keep the records secret.

    And it’s also worth noting that this is also a tax issue. As I’ve noted before, high tax rates encourage illegality.

    Though cigarettes are available at any corner store, they are extraordinarily profitable to smuggle. That’s because taxes are high and every state sets its own rates. Virginia charges $3 per carton. New York charges $43.50. The simplest scheme — buying cigarettes in Virginia and selling them tax-free in New York — can generate tens of thousands of dollars in illicit cash. By some estimates, more than half of New York’s cigarettes come from the black market.

    By the way, I can’t help but wonder why the federal government is engaging in all sorts of dodgy behavior to help enforce bad state tax laws. Yes, I realize the cigarettes are crossing state lines, but so what? The illegal (but not immoral) behavior occurs when an untaxed cigarette is sold inside the borders of, say, New York. Why should Washington get involved?

    In other words, I like the fact that borders limit the power of government. It’s why I don’t like global schemes to undermine tax competition (why should Swiss banks be required to enforce bad U.S. tax law?), and it’s why I don’t like the so-called Marketplace Fairness Act (why should merchants in one state be required to enforce the sales taxes of other states?).

    But I’m digressing.

    Let’s get back to the Bureau’s misbehavior. Here’s some additional reporting from the U.K.-based Times.

    A US government crime-fighting agency ran a secret bank account that its employees used to buy luxury cars, property and trips to casinos. Officers for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), charged with investigating smuggling and gun crimes, built up a slush fund worth tens of millions of dollars through illicit cigarette sales, ostensibly as part of an operation to catch traffickers. The scandal is the latest controversy to hit the agency, which has been criticised in recent years for lack of accountability and allowing the flow of guns and drugs to go unchecked. …Cash from the slush fund generated at an ATF field office in Bristol, Virginia, …funded activities such as a trip to Las Vegas, donations to agents’ children and the booking of a $21,000 suite at a Nascar race.

    But That’s Not All

    And what about the overall BATF bureaucracy? Well, it’s getting some unfavorable attention. Keep in mind that this scandal is on top of the “Fast and Furious” scandal of the Obama years.

    The ATF has said that it has “implemented substantial enhancements to its policies, and has markedly improved leadership, training, communication, accountability and operational oversight”. Under the previous administration, it was widely derided for a botched weapons operation known as “Fast and Furious”. The agency allowed licensed firearms dealers to sell weapons to illegal buyers, hoping to track the guns to Mexican drug cartel kingpins. But out of the 2,000 firearms sold, only a fraction have been traced. The secret account scandal has renewed calls from across the political spectrum for the department of about 2,000 agents to be reformed or shut down.

    Last but not least, I think we have a new member of the Bureaucrat Hall of Fame.

    Thomas Lesnak, a senior ATF investigator, began the scheme. …Mr Lesnak retired with his pension and was not reprimanded.

    Just like Lois Lerner and the IRS, engaging in corrupt and crooked behavior and then escaping any punishment.

    Maybe the two of them should hook up? They’d make a great couple. I’m sure they could even figure out a way to make taxpayers finance their wedding and honeymoon.

    P.S. The “Fast and Furious” scheme was just one of the scandals that occurred during the Obama years, but it may have been the most foolish. Didn’t anybody at the BATF realize that it wasn’t a good idea to funnel weapons to Mexican drug gangs?!?

    P.P.S. The silver lining to that dark cloud is that we got a couple of good one-liners about the Obama Administration’s gun-running scandal from Jay Leno and Jimmy Fallon.

    Reprinted from Intentional Liberty


    Daniel J. Mitchell

    Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

    This article was originally published on FEE.org. Read the original article.



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  • Hacked email appears to show DOJ official tipping Clinton campaign about review

    Posted on by Azrael Comment

    An email released by WikiLeaks on Wednesday appears to show a senior Justice Department official sending information about the State Department’s review of Hillary Clinton’s emails to her presidential campaign — a move that comes as the Justice Department is under increased scrutiny for its handling of the email investigation.

    Assistant Attorney General for Legislative Affairs Peter Kadzik, who essentially serves as the Justice Department’s lobbyist to Congress, sent the email in question to Clinton campaign chairman John Podesta from a private Gmail account on May 19 last year with the subject line, “Heads up.”

    “There is a (House Judiciary Committee) oversight hearing today where the head of our Civil Division will testify,” he wrote. “Likely to get questions on State Department emails.”

    “Another filing in the (Freedom of Information Act) case went in last night or will go in this am that indicates it will be awhile (2016) before the State Department posts the emails,” he added.

    The exchange is one of tens of thousands of emails stolen from Podesta’s Gmail account and published by WikiLeaks in recent weeks. CNN cannot independently verify the authenticity of any of the emails, and the Clinton campaign has so far declined to verify individual emails.

    The Department of Justice declined to respond to questions regarding the email, and Clinton campaign spokeswoman Jennifer Palmieri, who was among the officials to whom Podesta forwarded the email in 2015, also declined to comment when asked by a reporter aboard Clinton’s campaign plane.

    The email plays into Republican candidate Donald Trump’s long-running narrative that Clinton and her entourage belong to a corrupt political elite seeking to exert influence at the Justice Department. Over the summer, days before the FBI announced it had completed its investigation into the private server, Bill Clinton met with Attorney General Loretta Lynch aboard her government plane, sparking accusations of a conflict of interest.

    Trump was quick to raise the Kadzik email during a campaign rally in Florida Wednesday afternoon, calling Kadzik “a close associate of John Podesta.”

    “These are the people that want to run our country, folks,” Trump said to a chorus of boos. “The spread of political agendas into Justice Department — there’s never been a thing like this that has happened in our country’s history — is one of the saddest things that has happened to our country.”

    The legal filing referenced in the second part of Kadzik’s email had been submitted to the court a day before Kadzik sent it, and had already been reported on in the media. But Kadzik’s phrasing, and his decision to write from his personal email account, gives the impression he was passing the information along as an informal tip, not knowing whether it had been filed.

    …

    Podesta later forwarded Kadzik’s note to Clinton’s other senior campaign staff with the comment, “Additional chances for mischief,” though it wasn’t clear to whom or what he was referring.

    The conversation suggests Kadzik may have felt inclined to keep Podesta informed about developments at the Department of Justice that related to the fledgling campaign. The FOIA case in question involved the State Department, not the campaign, and Podesta was not directly involved in the legal proceedings.

    Kadzik previously worked for Podesta as a lawyer, and additional emails released by WikiLeaks suggest the two men were friends. For example, in January, Kadzik and his wife emailed to wish Podesta a happy birthday and invite him to dinner next time he was in town. Kadzik’s wife, Amy Weiss, worked in the White House in the late 1990s when Podesta was then-President Bill Clinton’s chief of staff.

    It’s unclear how Kadzik learned of the FOIA filing, which was submitted by Department of Justice attorneys representing the State Department in ongoing lawsuits.

    …

    The stolen email is one of several published by WikiLeaks in recent weeks that raise questions about the coziness between the Clinton campaign and government officials.

    Last month, the group published an email in which Brian Fallon — a former spokesman for the Department of Justice now working for the Clinton campaign — indicated he has spoken with “DOJ folks” about pending FOIA litigation.

    And on Wednesday, an email emerged showing communication between a State Department spokeswoman and top Clinton aides about how the State Department would respond to reports about the former Secretary’s emails. This particular exchange was from March 1, 2015 — one day before Clinton’s private server was first revealed by The New York Times, and about a month before the official launch of her presidential campaign.

    The spokeswoman outlined the State Department’s response to the upcoming report, indicating that the press office had incorporated input from the Clinton aides.

    Source: Hacked email appears to show DOJ official tipping Clinton campaign about review – CNNPolitics.com


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  • Panama Papers Are About Government Corruption, Not ‘Tax Evasion’

    Posted on by Azrael Comment

    The “Panama Papers” are the largest leak in world history, revealing millions of documents related to the offshore accounts of politicians, former politicians, and billionaires around the world.

    Despite much of the media’s focus on tax evasion as the primary theme of the Panama Papers story, which embarrassed governments are happy to adopt as the primary theme as well, the question is one of official corruption.

    The International Consortium of Investigative Journalists (ICIJ) itself, which first published the data, says it reveals the holdings of “drug dealers, Mafia members, corrupt politicians and tax evaders–and wrongdoing galore.”

    Yet the numbers they offer tell a different story. According to ICIJ, 214,000 entities are described in the Panama Papers. They include the off-shore assets of 140 politicians and other public figures (including 12 current or former heads of state or government), as well as 33 people and companies that were “blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran.” Yet The Economist counts 33 Forbes list billionaires to the 140 politicians in the Panama Papers.

    The prime minister of Iceland, for example, resigned earlier today over revelations that he owned a shell company in the British Virgin Islands. Prime Minister Sigmundur David Gunnlaugsson insists he’s paid his taxes and done nothing wrong. Yet his shell company, according to CBS News, “held interests in failed Icelandic banks that his government was responsible for overseeing.”

    In general, this is why politicians have off-shore accounts, to hide wrong-doing, and not just to “evade taxes.” Iceland has instituted capital controls, under Prime Minister Gunnlaugsson, so the prime minister appears to have run afoul of that. But the insinuation that anyone who decided to move their money oversees is “evading” an obligation is tired and backwards. A person’s money belongs to them, not the government, just as their bodies and their freedoms do.

    Donald Trump recently suggested intercepting the remittances of Mexicans living in the United States and sending money to their families in Mexico as a means to force Mexico to pay for a border wall. That’s little more than a capital control. It’s the sender’s money, and up to them what they want to do with it.

    Full article: Panama Papers Are About Government Corruption, Not ‘Tax Evasion’ – Hit & Run : Reason.com


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