Daily Archives: April 7, 2016

Leaked Files Offer Many Clues To Offshore Dealings by Top Chinese

In this story

  • Relatives of at least eight members of the top leadership of China’s Communist Party have offshore holdings
  • So do China’s super wealthy business executives and kung fu star Jackie Chan
  • Offshore companies incorporated in offices in China and Hong Kong account for 29 percent of Mossack Fonseca’s active companies worldwide

For months, Gu Kailai worried about a secret that threatened to upend her comfortable life and stop her husband’s climb to the top rungs of China’s political leadership. So she took action.

In a hotel room in the southern Chinese megacity of Chongqing, she mixed tea and rat poison in a small container as Neil Heywood, a British business associate, lay drunken and dazed on the hotel bed.

Then she dripped the mixture into Heywood’s mouth.

Hotel staff found his body two days later.

Gu eventually confessed to the 2011 crime. She had been driven to murder, she said, by Heywood’s threats to expose a dark secret: millions of dollars in real estate held in an offshore account on the other side of the world.

If Heywood revealed that she had used a company in the British Virgin Islands to hide her ownership in a villa in the south of France, she figured, the scandal would jeopardize the accession of her husband, Bo Xilai, to the Politburo Standing Committee, a body of fewer than 10 men that stands at the apex of political power in China.

Just over two weeks after the murder — in a previously unknown postscript — the ownership structure of Gu’s offshore company suddenly changed. Her shares in the company were transferred to another business associate, perhaps in an effort to further obscure her ties to the company or to make it easier for the trusted associate to act swiftly as events unfolded, a trove of secret records shows.

In the end, nothing could hide Gu’s secrets. Her pursuit of offshore anonymity ended in death for Heywood and prison for her and her husband — and added more fuel to longstanding concerns about how members of China’s elite use tax-haven hideaways to conceal their wealth.

The leaked documents that provide fresh details about Gu’s overseas dealings also reveal a wealth of new information about the offshore holdings of the families of other powerful Chinese. The documents reveal that Xi Jinping, China’s “Chairman of Everything,” — his titles include president, Communist Party chief and military chief — has a brother-in-law who has had companies in tax havens. Relatives of at least seven other men who have served on the tiny Standing Committee — including two members currently serving with Xi — also have offshore holdings, the records show.

One of these relatives is a grandson-in-law of the late Chairman Mao Zedong, the founding father of the People’s Republic of China.

Read on.

Fed and presidential campaign: where candidates stand

4 Traders:

Three of the five candidates running for U.S. president – Donald Trump, Ted Cruz and Bernie Sanders – have said they supported initiatives that would subject the Federal Reserve’s policymaking to greater scrutiny or change its policy framework.[L3N16W46S]

Here are details of the candidates’ views and the two proposed bills:


* DONALD TRUMP, the Republican front-runner, tweeted in February, “It is so important to audit The Federal Reserve” – a reference to an “Audit the Fed” Senate bill that the central bank fiercely opposes. He has said the Fed played a role in stoking asset bubbles and predicted a “very massive recession.” A spokeswoman declined to elaborate on Trump’s views on Fed independence.

Last year, before the Fed raised rates in December, Trump accused the central bank of keeping rates low at the bidding of President Barack Obama, something the White House has denied.

“Janet Yellen is highly political and she’s not raising rates for a very specific reason: because Obama told her not,” Trump told a news conference in November. “He doesn’t want to see a big bubble burst during his administration.”

* TED CRUZ, the No. 2 Republican candidate, supports Fed audits and a commission to consider a monetary rule tied to gold rather than discretion, according to spokeswoman Catherine Frazier. The United States dropped the gold standard in 1933.

In a Republican debate in October, Cruz said: “I think the Fed should get out of the business of trying to juice our economy and simply be focused on sound monetary policy and monetary stability, ideally tied to gold.”

* BERNIE SANDERS, the No. 2 Democratic candidate who as senator backed Audit the Fed, said in an emailed statement that such an annual policy review would help make the Fed “a more democratic institution that is responsive to the needs of ordinary Americans rather than the billionaires on Wall Street.” He also opposes Fed payments to banks on excess reserves.

In a New York Times column published in December, Sanders wrote: “To rein in Wall Street, we should begin by reforming the Federal Reserve… The sad reality is that the Federal Reserve doesn’t regulate Wall Street; Wall Street regulates the Fed.”

Sanders also criticized the way Fed officials are selected:

“Banking industry executives must no longer be allowed to serve on the Fed’s boards and to handpick its members and staff,” he wrote. “Board positions should instead include representatives from all walks of life — including labor, consumers, homeowners, urban residents, farmers and small businesses.”

Today, bankers and heads of business, industry, unions, and community groups and organizations serve as district Fed directors.


Clinton, the Democratic front-runner, and the third-place Republican Kasich have not commented publicly on Fed policy independence.


* The Federal Reserve Transparency Act, known as “Audit the Fed”, was introduced by Republican Senator Rand Paul early last year. It would instruct the Government Accountability Office, a non-partisan congressional watchdog agency, to review and evaluate the Fed’s monetary policy decisions, repealing a decades-old firewall between the GAO, which now reviews other Fed activities including bank regulation, and policy decisions on interest rates. The bill has struggled to gain Senate support and was referred to a committee.

* The Fed Oversight Reform and Modernization Act (FORM), sponsored by Republican Representative Bill Huizenga, passed the House in November. Among other changes to Fed structure and bank supervision, the bill would tie policy decisions to a single “directive” rule. An audit could be launched or congressional testimony called if the GAO determined the Fed strayed from the rule. The bill was sent to the Senate and also referred to its banking committee.

* GAO Managing Director Orice Williams told Reuters that, were either of the bills to become law, the agency would take a non-partisan approach and hire experts as needed to do the job.

Larry Summers criticizes Fed’s Kashkari for ‘blatantly political’ comments

Larry Summers needs to crawl under a rock…

ST. LOUIS — Former Treasury Secretary Lawrence Summers on Wednesday sharply criticized the “style and tone” of Federal Reserve Bank of Minneapolis President Neel Kashkari’s recent push to address whether taxpayers may have to rescue the biggest U.S. banks in the future.

Kashkari, a senior Treasury official during the financial crisis who became president of the Minneapolis Fed in January, said in a February speech that postcrisis financial reforms didn’t go far enough to prevent future government bailouts and floated the idea of breaking up the biggest banks. Kashkari on Monday hosted a high-profile symposium on “Ending Too Big To Fail” in Minneapolis.

“I thought President Kashkari’s first speech on the topic was one of the two or three most blatantly political things…that I’ve seen come from a prominent Federal Reserve official in the last 15” years, Summers, a former candidate for Fed chairman, told reporters Wednesday before delivering a lecture at the St. Louis Fed. “I did not think the style and tone and degree of collaboration with others was the kind of thing one could expect from the Fed.”

Summers, a Harvard University economist who served as Treasury secretary under President Bill Clinton, said, “There is no question that Dodd-Frank is a place to start, not a place to finish, in achieving financial stability.” But he added that he “would far prefer an inquiry that stayed a little further from sloganeering.”

Read on.

Meet Green Party Presidential candidate Jill Stein

Media has forgotten once again that the Presidential race is not only between Democrats and Republicans. There has never been media coverage for the Green Party. Who is Jill Stein? From Jill Stein’s website:

Jill Stein was the Green Party’s 2012 candidate for president of the United States. She is an organizer, physician, and pioneering environmental-health advocate. She has led initiatives promoting healthy communities, local green economies and the revitalization of democracy – addressing issues such as campaign finance reform, green jobs, racially-just redistricting, and the cleanup of incinerators, coal plants, and toxics. She was a principal organizer for the Global Climate Convergence for People, Planet and Peace over Profit.

Here are some of Ms. Stein’s plan for the people:

Key points of the Power to the People Plan:

A Green New Deal:

Create millions of jobs by transitioning to 100% clean renewable energy by 2030, and investing in public transit, sustainable agriculture, and conservation.

Jobs as a Right:

Create living-wage jobs for every American who needs work, replacing unemployment offices with employment offices. Advance workers rights to form unions, achieve workplace democracy, and keep a fair share of the wealth they create.

End Poverty:

Guarantee economic human rights, including access to food, water, housing, and utilities, with effective anti-poverty programs to ensure every American a life of dignity.

Health Care as a Right:

Establish an improved “Medicare For All” single-payer public health insurance program to provide everyone with quality health care, at huge savings.

Education as a Right:

Abolish student debt to free a generation of Americans from debt servitude. Guarantee tuition-free, world-class public education from pre-school through university. End high stakes testing and public school privatization. 

A Just Economy:

Set a $15/hour federal minimum wage. Break up “too-big-to-fail” banks and democratize the Federal Reserve. Reject gentrification as a model of economic development. Support development of worker and community cooperatives and small businesses. Make Wall Street, big corporations, and the rich pay their fair share of taxes. Create democratically run public banks and utilities. Replace corporate trade agreements with fair trade agreements.

Protect Mother Earth:

Lead on a global treaty to halt climate change. End destructive energy extraction: fracking, tar sands, offshore drilling, oil trains, mountaintop removal, and uranium mines. Protect our public lands, water supplies, biological diversity, parks, and pollinators. Label GMOs, and put a moratorium on GMOs and pesticides until they are proven safe. Protect the rights of future generations.

Freedom and Equality:

End police brutality, mass incarceration and institutional racism within our justice system. Expand women’s rights, protect LGBT people from discrimination, defend indigenous rights and lands, and create a welcoming path to citizenship for immigrants. Protect the free Internet, replace drug prohibition with harm reduction, and legalize marijuana/hemp.

Justice for All:

Restore our Constitutional rights, terminate unconstitutional surveillance and unwarranted spying, end persecution of government and media whistleblowers, close Guantanamo, abolish secret kill lists, and repeal indefinite detention without charge or trial.

And here are the entire 2016 Presidential candidates:

Presidential Candidates
Third Party Candidates
Republican Candidates
Democratic Candidates
Libertarian Candidates
Independent Candidates
Green Party Candidates
Constitution Party Candidates

Hillary Clinton Fundraiser Hosted by All-Star Cast of Financial Regulators Who Joined Wall Street

This will certainly be a continuing topic of discussion between Sanders and Clinton in the heated Democratic Presidential race….

The Intercept:

AS HILLARY CLINTON questions rival Bernie Sanders over the depth of his financial reform ideas this week, a group of former government officials — once tasked with regulating Wall Street and now working in the financial industry or as Wall Street lobbyists — are participating in a fundraiser for her in the nation’s capital.

The invitation for the April 6 fundraiser, obtained by Sunlight Foundation’sPolitical Party Time, describes a “conversation” with Hillary finance chair Gary Gensler and Sens. Sherrod Brown, D-Ohio, and Carl Levin, D-Mich.

The host: Julie Chon, a former Senate Banking Committee staffer who today is a managing director at the New York hedge fund Perry Capital.

Finance chair Gensler is a former Goldman Sachs staffer who later joinedthe Obama administration as a financial regulator.

Several members of the organizing committee are now either advocating for corporate clients or advising them how to best work with and around the regulations they once enforced.

One member of the committee is Raj Date. Date was the deputy director of the Consumer Financial Protection Bureau, tasked with reining in Wall Street abuses. In January 2013, he left the bureau and by April started a new lending firm, Fenway Summer. He then became an adviser to Promontory Financial Group, which pitches Date as advising its “clients on complying with consumer protection regulation and managing complex risks.”

Another member of the organizing committee is Bob Heckart. Heckart is aformer Senate staffer who, according to his bio, worked on the “implementation of the Dodd-Frank Act and the Volker Rule, tax reform legislation, abuse of corporate tax loopholes, securities markets regulation, and other financial policy issues” for Sen. Levin. Prior to that, he was senior adviser for economic and financial policy for then-Sen. Kirsten Gillibrand, D-N.Y., and served as “her liaison with Wall Street.” Today, he is a senior counsel at Davis Polk & Wardwell LLP, the same major Wall Street law firm he worked for before getting hired by Gillibrand. His practice focuses on hedge funds, capital markets, credit, and real estate.

Tyler Gellasch, another organizer of the fundraiser, also worked for Levin. His biography describes him as having been “intimately involved in drafting several high-profile pieces of legislation, including the Volcker Rule provisions of the Dodd-Frank Act, the crowdfunding provisions of the JOBS Act, and the securities law provisions of the STOCK Act.” Gellasch today works for the Healthy Markets Association, a group that advocates for its members, which include various financial firms.


Housing rights protestors shut down FHFA Director Watt’s lecture at Harvard

They want principal reduction and they want it now

A group of “anti-foreclosure” protestors disrupted a lecture given by Federal Housing Finance Agency Director Mel Watt at Harvard Law School on Monday, eventually leading to the event being prematurely canceled amid security concerns.

According to the Harvard Crimson, the event was supposed to be a “fire-side chat” about the role of the FHFA and federal housing policy, but scores of housing rights advocates showed up and repeatedly interrupted Watt.

The Harvard Crimson report states that members of three groups, City Life, Lynn United for Change, and Springfield No One Leaves, made up nearly all of the audience at the event.

And what do those groups want? They want Watt to approve principal reduction plans for Fannie Mae and Freddie Mac.

Last month, the Wall Street Journal reported that the FHFA recently approved a plan for the government-sponsored enterprises to engage in principal reduction on a large scale for the first time since the housing crisis.

But later that same day, Watt gave a speech at a public policy luncheon hosted by the Women in Housing and Finance, in which he said that the issue of principal reduction has been the “most challenging” that the FHFA has faced in his two years there and that in actuality, no decision on principal reduction had been made.

Watt also said that his objective for any principal reduction plan was to achieve a “win-win” situation for borrowers and the GSEs alike.

“Many have asked why it has taken so long to reach a conclusion. The direct answer is that making this determination involves consideration of an extremely complicated set of factors,” Watt said at the time.

Watt told the audience Monday that the FHFA is not prepared to announce a decision on principal reduction, but planned to announce it soon.

Read on.