Krebs Daily Briefing 24 November 2015


Putin calls Turkey downing warplane ‘a stab in back’

Russian President Vladimir Putin says the downing of a Russian warplane by Turkey will have “tragic consequences” for ties between the two countries. Turkey said Tuesday that it shot down a Russian warplane after it ventured into Turkish airspace but Russia’s defense ministry said the aircraft remained within Syria. Putin called the attack “a stab in Russia’s back delivered by terrorist accomplices” and said it will not be tolerated, Russia’s TASS news agency reported. He said the plane, a Su-24 attack aircraft, was downed by an air-to-air missile launched from a Turkish F-16 fighter jet. The incident is being investigated and comes amid tense relations between Ankara, Moscow and the West over the conflict in Syria. Russia and a U.S.-led coalition are bombing targets in the war-ravaged country. Turkey is a member of NATO. The defense alliance will hold an extraordinary meeting later Tuesday. The Turkish military said that 10 warnings were issued in five minutes before a warplane of unknown nationality was shot down by two F-16 jets after breaching its airspace. The nation’s state-run Anadolu news agency said the plane went down in Bayirbucak, northwestern Syria, near Turkey. “A probe is in progress into the circumstances of the Russian plane’s crash. The Defense Ministry says the plane invariably stayed within Syrian airspace. Objective monitoring data confirm this,” Russia’s defense ministry said, according to TASS. More:

Here’s Where Syrian Refugees Were Sent in Your State

After attacks in Paris by the Islamic State group, lawmakers in Congress have re-examined the U.S. refugee resettlement program. The program, which has found U.S. homes for refugees from other countries since the 1970s, aims to place 10,000 Syrian refugees throughout the U.S. this year. News that one of the Paris attackers may have come through Greece posing as an asylum seeker has brought that plan under fire, though. On Thursday, the House passed a bill that would enhance  the vetting process for refugees. In polls, most Americans now say they are against the plan to resettle refugees from Syria, where the fight against the Islamic State Group has sent millions fleeing dangerous conditions. But many Syrian refugees have already come to the U.S. Since 2011, more than 2,000 Syrians have been sent to 138 cities in 36 states. See charts at below link:

NYC Islamic State Plot: Italian Mafia Warns ISIS To Stay Away From New York

The Italian Mafia in New York issued a warning to the Islamic State group over the weekend: If you come to the five boroughs, you’re going to find yourself in a fight with the mob. A man claiming to represent the Italian crime organization said it will do its part to protect New Yorkers from terrorist attacks and that it is better positioned to provide security than federal agencies like the FBI and Department of Homeland Security. “They often act too late or fail to see a complete picture of what’s happening due to a lack of ‘human intelligence,’” Giovanni Gambino, the son of a New York mob boss, told NBC News. “The Mafia has a bad reputation, but much of that’s undeserved. As with everything in life, there are good, bad and ugly parts – the rise of global terrorism gives the Mafia a chance to show its good side.” Gambino was born in Sicily and moved to Brooklyn in 1988. His father, he says, was a key figure in the Sicilian Mafia in New York City, which has been weakened over the past two decades as mobsters were convicted for various crimes. Recently, however, the crime syndicate has been experiencing a small comeback, according to the Wall Street Journal. Gambino’s comments are a reference to the Paris terror attacks Nov. 13, claimed by ISIS, when gunmen coordinated shootings and explosions throughout the French capital. There were 130 fatalities and hundreds more were wounded. The attacks have resulted in an increased anxiety and focus on security throughout the world. American cities, including New York, have since been threatened by the Islamic State group and individuals who claim to be associated with the terror organization.

Facts about the Syrian Refugees

The Paris bombings and other recent terrorist attacks have given rise to a political debate within the United States about the Obama administration’s plan to admit Syrian refugees. But the facts about refugees are being distorted in some instances.

Here are some claims about the refugees — and the facts:

  • Sen. Ted Cruz says it’s “astonishing” that only 3 percent of Syrian refugees admitted to the United States so far are Christian. He’s right, but the refugees are referred to the United States by the United Nations High Commissioner for Refugees.
  • Cruz also says 77 percent of the refugees “pouring into Europe right now” are young males. That’s inaccurate and misleading. There are more than 4.2 million refugees and only about 850,000 fled to Europe (62 percent of whom are men). A U.N. spokesman says those referred to the U.S. would be among those remaining in the Middle East, such as in Turkey and Jordan, and those refugees are largely women and children.
  • President Obama says the “overwhelming numbers” of Syrian refugees referred to the U.S. by the U.N. have been women and children. That’s true — 67 percent have been children under the age of 12 and women, according to State Department data.
  • Donald Trump suggested the government steers Syrian refugees to states with Republican governors. But nongovernmental agencies, such as World Relief and the United States Conference of Catholic Bishops, place the refugees, not the government, and those decisions are based on family ties, employment and other factors, not politics.
  • Trump, Ben Carson and Carly Fiorina repeatedly have claimed that the Obama administration plans to accept anywhere from 100,000 to 250,000 Syrian refugees. That’s false. By law, the administration can admit slightly more than 10,000 in fiscal year 2016, and no refugee commitments can be made beyond that.


In taking economic war to Islamic State, U.S. developing new tools

Since last month, U.S. warplanes have struck Islamic State’s oil infrastructure in Syria in a stepped-up campaign of economic warfare that the United States estimates has cut the group’s black-market earnings from oil by about a third. In finding their targets, U.S. military planners have relied in part on an unconventional source of intelligence: access to banking records that provide insight into which refineries and oil pumps are generating cash for the extremist group, current and former officials say. The intent is to choke off the Islamic State’s funding by tracking its remaining ties to the global financial system. By identifying money flowing to and from the group, U.S. officials have been able to get a glimpse into how its black-market economy operates, people with knowledge of the effort have said. That in turn has influenced decisions about targeting for air strikes in an effort that began before Islamic State’s Nov. 13 attacks on Paris and has intensified since, they said. While Islamic State’s access to formal banking has been restricted, it retains some ties that U.S. military and financial officials can use against it, the current and former officials said. “We have done a really good job of largely keeping the Islamic State out of the formal financial system,” said Matthew Levitt, who served as deputy assistant secretary for intelligence at the U.S. Treasury in the George W. Bush administration. “But we haven’t been entirely successful, and that may not be a bad thing.” Reuters was unable to verify key aspects of the campaign, including when it started or exactly which facilities have been destroyed as a result. Two current officials who confirmed the operations in outline declined to comment on their details. It was unclear how U.S. intelligence, Treasury, and military officials working on what the government calls “counter threat finance” operations have used banking records to identify lucrative Islamic State oil-related targets in Syria and whether that involved local banks. A report this year by the intergovernmental Financial Action Task Force found there were more than 20 Syrian financial institutions with operations in Islamic State territory. In Iraq, Treasury has worked with government officials to cut off bank branches in the group’s territory from the Iraqi and international financial systems. Gerald Roberts, section chief of the FBI’s terrorist financing operations section, said that Islamic State’s recruits from outside Syria often come with financial trails that officials tracking them can “exploit.” “We are seeing them using traditional banking systems,” he said at a banking conference last week in Washington, adding that young, tech-savvy Islamic State members are also familiar with virtual currencies such as Bitcoin. Islamic State, also known as IS, ISIS or ISIL, is sometimes forced to use commercial banks because the amounts involved are too large to move using other means, said Levitt. The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) uses a set of “business rules” to screen the roughly 55,000 reports it receives daily from financial institutions for signs of activity involving Islamic State, a spokesman said. He declined to describe the rules, but law enforcement sources say names, IP addresses, email addresses, and phone numbers are among the data that intelligence authorities try to match.



Currency Spoofing Is Said to Be New York’s Latest Target

The New York attorney general is investigating possible manipulation in foreign-exchange trading, according to a person familiar with the matter, aiming more scrutiny at a market already tainted by scandals that have led to billions of dollars in fines. The investigation centers on brokers who may be placing fake orders, a technique sometimes called spoofing, according to the person. These practices are also referred to as ghosting, because they create the impression of activity that isn’t really there. New York’s top cop, Eric Schneiderman, has sought to expand his oversight over financial markets, targeting allegedly unfair practices in the U.S. stock market over the past year. In the latest investigation, his office has sent subpoenas for records to interdealer brokers including TFS-ICAP, Tullett Prebon Plc, BGC Partners Inc. and GFI Group Inc., the person said. Spokespeople for the brokers declined to comment. TFS-ICAP is an ICAP Plc joint venture, and BGC Partners owns GFI. Matt Mittenthal, a spokesman for Schneiderman, declined to comment. The investigation, still in its early stages, is examining whether fake bids and offers in FX options were posted on the electronic trading platforms hosted by the interdealer brokers, in order to ramp up interest from options traders in largely illiquid emerging-market currencies, according to the person familiar with the investigation. Shares of ICAP dropped as much as 1.4 percent after the news broke. Tullett Prebon lost as much as 1.6 percent, and BGC slumped up to 3 percent.


Litigation Funding Pioneer Hits a Roadblock

Litigation finance—the business of third-party funders taking a stake in corporate lawsuits in exchange for a cut of the profits—has long been divisive in the legal industry. As some funds’ fortunes have risen, others have shut their doors. Last week, Juridica Investments Ltd. added its name to the list of stumbling funds. As the American Lawyer’s Julie Triedman reports:  The Guernsey-based company announced that it has decided to freeze its portfolio and focus on existing investments at the prompting of its shareholders. Juridica is one of just three publicly listed litigation funders worldwide, and it helped to pioneer the business in the U.S. market. It currently has $200 million in assets under management, the company reported. Juridica only took an interest in a few areas of the law, according to Am Law, focusing half its investments in antitrust claims, a quarter in patent cases, and the remainder in commercial claims. That strategy may have cost them. In the statement announcing the investment freeze, Juridica Chairman Lord Daniel Brennan said the board and its investment manager “acknowledge that scale and diversity are now required in order to invest successfully in this asset class, which is not achievable under the company’s existing structure.” A Juridica spokeswoman had no additional comment Monday. Am Law has more on what prompted Juridica’s move:  Investor confidence has slid since June 18, when the fund announced that it was writing down a $30 million expected return on a claim involving alleged overseas price-fixing in the market for liquid crystal displays. The write-down appears to have been prompted by the U.S. Supreme Court’s denial of certiorari in two related appeals, Motorola Mobility v. AU Optronics  and Hsiung v. United States. Another publicly-traded litigation funder, Bentham IMF , went in the opposite direction last week and said it’s expanding into a new line of business. Instead of investing solely in individual cases that have gone through its vetting process, Bentham is now also investing in portfolios of cases at some law firms “based on their existing track record” and the types of cases they handle. In the past year, Bentham said, it’s pumped $30 million into such funding deals with seven different law firms, and even helped launch a new litigation boutique. Critics say litigation funding raises ethical questions because decisions could be made that benefit the funder but not the litigants. Those in the industry are quick to dispel such challenges, saying they act merely as passive investors.


Indiana governor sued for halting Syrian refugee resettlement

INDIANAPOLIS — Gov. Mike Pence is facing a federal lawsuit that challenges his power to block Syrian refugees from resettling in Indiana. The lawsuit, filed Monday night, accuses Pence of violating the Equal Protection Clause of the Constitution by accepting refugees from other countries but not those from Syria. It comes a week after the Indiana governor — and more than a dozen from other states — suspended the resettlement of Syrian refugees in the state following terrorist attacks in Paris. The complaint was filed Monday night in the U.S. District Court for the Southern District of Indiana by the American Civil Liberties Union of Indiana on behalf of Exodus Refugee Immigration, an Indianapolis non-profit organization that resettles refugees in Indiana. John Wernert, secretary of the Indiana Family and Social Services Administration, which oversees refugee settlement in the state, is the other defendant named in the lawsuit. A spokesperson for Pence did not immediately return a request for comment Monday night, but Pence said in an editorial that he is “deeply moved” by the plight of people trying to escape threats of violence and seeking a better life in Indiana. However, he said, the federal government must first address “security gaps” regarding refugees from Syria. “Indiana and the U.S. must continue to serve as a safe harbor for refugees from around the world; however, unless and until the federal government addresses the security gaps acknowledged by the FBI and Department of Homeland Security with regard to refugees from Syria, as governor I will continue to put the safety and security of Hoosiers first,” Pence wrote. Pence also is accused of violating Title VI of the Civil Rights Act for suspending resettlement of Syrian refugees “solely because of their national origin,” the complaint says. “Decisions concerning immigration and refugee resettlement are exclusively the province of the federal government, and attempts to pre-empt that authority violate both equal protection and civil rights laws and intrude on authority that is exclusively federal,” ACLU of Indiana’s legal director, Ken Falk, said in a news release.

The complaint cites the Immigration and Nationality Act, which gives the president of the United States the power to increase the number of refugees admitted into the country for humanitarian reasons. President Obama announced in September that the U.S. will take in at least 10,000 Syrian refugees over the next year. More:


U.S. appeals court rules against Wisconsin abortion doctor law

A Wisconsin law requiring doctors who perform abortions to have admitting privileges at a nearby hospital is unconstitutional, a U.S. appeals court ruled on Monday, addressing a topic the U.S. Supreme Court is considering during its current term. Abortion providers in Wisconsin had challenged the state law, which requires doctors to have privileges at a hospital within 30 miles (50 km). The law’s supporters said the measure ensures continuity of care while opponents say it serves almost no public health value and is intended to shut clinics. A federal judge in March permanently blocked the Wisconsin law, ruling that the health benefits, if any, were outweighed by the burden on women’s health caused by restricted access to abortion. The U.S. Supreme Court earlier in November agreed to take up a major abortion case for the first time since 2007. In that case, Texas abortion providers are challenging state requirements that they have admitting privileges and costly hospital-grade surgical facilities. In the Wisconsin case, the 7th Circuit U.S. Court of Appeals said a statute that curtails the constitutional right to an abortion, such as the Wisconsin and Texas laws, cannot withstand challenge without evidence that it is justified by benefits. The evidence presented to the Texas legislature and discussed in the 5th Circuit U.S. Court of Appeals was weak and was nonexistent in the Wisconsin case, Judge Richard Posner found in an opinion concurred in by Judge David Hamilton. Judge Daniel Manion dissented, saying that Wisconsin had a rational basis for the law. Abortion remains a contentious issue in the United States more than four decades after the U.S. Supreme Court legalized the procedure and some states have sought to chip away at a woman’s right to terminate a pregnancy. The Supreme Court has allowed some state restrictions on abortions, such as permitting states to mandate parental consent for minors. But the top court has said states cannot impose an “undue burden” on the right to end a pregnancy.


Poll: More Americans trust Clinton than GOP contenders to combat terrorism

When it comes to terrorism, more Americans trust Democratic front-runner Hillary Clinton than the top Republican candidates in the field, according to the latest results of an ABC News/Washington Post survey released Monday. But among those who worry most about terrorism, Donald Trump is the preferred candidate. The former secretary of state’s largest advantage overall comes against Ben Carson, taking 49 percent to 40 percent among the more than 1,000 adults surveyed in the days following the Nov. 13 terrorist attacks in Paris. Clinton also fared about as well matched against Donald Trump, taking 50 percent to the Manhattan mogul’s 42 percent. Clinton also holds an eight-point lead over Cruz (48 percent to 40 percent), though former Florida Gov. Jeb Bush and Florida Sen. Marco Rubio performed slightly better. Clinton held a 46 percent-to-43 percent advantage against Bush, and a 47 percent-to-43 percent lead over Rubio on the issue. Among registered voters, however, the results bear out differently. Clinton’s advantage is significantly less or nonexistent against top Republicans, with the exception of Trump, who has repeatedly said that he would relentlessly bomb the Islamic State in order to defeat it. About 50 percent said they preferred Clinton, while Trump earned the trust of 43 percent of voters on the issue. Other Republicans are either tied with or lead Clinton within the margin of error, most notably Bush, who came out ahead of Clinton, 46 percent to 45 percent among registered voters on terrorism. However, 42 percent of Republicans and leaners in the same poll cited terrorism as the top issue of the 2016 election, compared to just 18 percent of Democrats and Democratic-leaning independents. Issues related to the economy are of more concern to Democrats. Among the overall 28 percent who see terrorism as the top issue, 65 percent trust Trump, while just 35 picked Clinton in a head-to-head matchup. Langer Research Associates conducted the poll from Nov. 16-19, surveying 1,004 adults nationwide by landlines and cellphones. The overall margin of error is plus or minus 3.5 percentage points.


Donald Trump’s black-on-black crime tweet is wrong in so many ways

Donald Trump once again stirred controversy over the weekend, this time by tweeting a set of wildly incorrect stats about crime in America with a racist point. The tweet’s graphic insinuates the real problem in the criminal justice system is not police brutality or racial bias but black people themselves — since, after all, black-on-black crime is the most likely outcome, according to the graphic. These figures reinforce a common defense of racial disparities in the criminal justice system: Conservatives often raise the point of “black-on-black” crime, rhetorically implying that the real issue is a lack of personal responsibility in black communities, which leads police to shoot black people at higher rates. There are all sorts of problems with this narrative, particularly the mischaracterization of why levels of black-on-black crime are higher within black communities. But perhaps more importantly, the numbers in Trump’s tweet are completely wrong. Every single number in Trump’s tweet is wrong. Here are the real numbers for 2014, the latest year available in the FBI’s Uniform Crime Reports:

  • Nearly 90 percent of black homicide victims were killed by someone who’s black, and nearly 8 percent were killed by someone who’s white.
  • More than 82 percent of white homicide victims were killed by someone who’s white, and nearly 15 percent were killed by someone who’s black.
  • It’s impossible to know just how many homicide victims are killed by police, because these killings are underreported and, in some cases, completely unreported.

What’s immediately clear is Trump’s numbers are completely wrong. Not only are the great majority of white homicide victims not killed by black people, but they’re in fact killed by other white people.

These figures speak to racial segregation in the US: People are simply more likely to kill those who are closer to them, and most people happen to be closer to others of the same race. But the figures’ inaccuracy isn’t too surprising when considering the source. As blogger Charles Johnson of Little Green Footballs found, the original source of the graphic appears to be a neo-Nazi who praises Adolf Hitler in his profile: “we Should have listened to the Austrian chap with the little moustache.” And the source cited in the tweet — the Crime Statistics Bureau in San Francisco — doesn’t appear to exist.

It’s unlikely Trump knew a neo-Nazi is the apparent source of the graphic, but he should have known that he was wading into some rather racist territory with the tweet. More:


Getting the Politics of Fear Right

This is the season of fear—for experiencing it, exploiting it and pooh-poohing it. Exhibit A, of course, is Donald Trump, who had already risen to the top of the GOP polls by exploiting Americans’ fears of immigrants and foreigners and who, following the Paris attacks, went on a fear-mongering bender. He endorsed waterboarding, appeared to embrace a registry for Muslims and vividly remembered thousands of Jersey City Muslims cheering the carnage of September 11—an incident for which there is no evidence. The result is that Trump’s poll numbers have gone up, and voters rate him as best able to deal with terrorism. Meanwhile President Obama has tacked sharply in the other direction, playing down the public’s anxiety, defiantly continuing to downgrade the possibility of an attack on the U.S. and the capabilities of Islamic State. “They’re a bunch of killers with good social media,” Obama told reporters on Sunday as he finished out his 10-day overseas trip. Secretary of State John Kerry continued the theme, telling NBC from Abu Dhabi, “ISIS is not 10 feet tall.” Obama’s dismissiveness is no doubt one reason for Trump’s popularity; clearly many voters believe our current crop of leaders—starting with the president—have been too inattentive to their fears.Can anyone get the message right? The political reaction to the Paris attacks was as swift as it was powerful, all of it built on a foundation of fear. Within days, a veto-proof majority of the House—including 50 Democrats—voted to bar Syrian refugees from entering the country. Polls showed a dramatic, fully predictable, leap in concern over terror. Republican candidates competed to see who could be more militant in barring America’s doors to the refugees. Gov. Chris Christie won this prize by pronouncing his opposition to orphans under the age of 5; at least until Trump endorsed a national database registry for Muslims (or at least Muslim refugees; he wasn’t clear which).


Marco Rubio’s operation is relying on unprecedented dark money spending

Marco Rubio’s been called many things this primary season. A rising star. The GOP establishment’s last, best hope. Sweaty. Let’s add one more to the list: he’s the dark money candidate. Rubio has benefited from anonymous, undisclosed cash to a degree that’s unprecedented for a modern presidential primary contender. Indeed, the vast majority of ads aired to promote Rubio so far this year have been funded by a single group — one that won’t reveal its funders. And Rubio is unique in this. According to data from NBC News and SMG Delta, ads promoting every other candidate in both parties have either been overwhelmingly funded by the candidates themselves or by Super PACs (which disclose their donors).

At least $8.4 million has been spent on pro-Rubio dark money ads so far This pro-Rubio group — the Conservative Solutions Project, a nonprofit — keeps its fundraising sources anonymous. It can raise, and has been raising, tons of money, and spending it on pro-Rubio ads, without telling the public where that money came from. And as of early November, it was the second-largest advertiser in the entire 2016 race, according to the Associated Press’s Julie Bykowicz. Campaign finance watchdogs are appalled. “Never before” have we seen an anonymously-funded group like this “seemingly shoulder sole responsibility for a presidential candidate’s TV advertising in multiple early presidential primary states,” says Paul S. Ryan of the Campaign Legal Center. “It’s a huge new problem.” (A Rubio spokesperson didn’t respond to a request for comment on the topic.) There have been various (excellent) one-off reports about all this over the past few months — first from National Journal, then from the New York Times, then from the Associated Press, then the Times again. Yet this highly unusual situation hasn’t really become central to the media narrative of Rubio’s candidacy. It should. At least $8.4 million has been spent on these pro-Rubio ads so far. Who provided the money? And what might these generous donors hope to get in return?


Daily Fantasy Sports Sites Face Challenges, and Options

The adage that “you can’t teach an old dog new tricks” certainly does not apply to criminal laws, which are routinely used in new situations hardly conceived when they were adopted. That will play out this week in New York when a judge will have to decide whether daily fantasy sports constitute gambling under laws adopted long before these contests were even possible. New York State’s attorney general, Eric T. Schneiderman, filed lawsuits against the two leading daily fantasy sports companies, FanDuel and DraftKings, asking for an injunction to stop them from operating, saying that they are violating the prohibition on gambling that is part of the state’s constitution. Like many such legal disputes, this one centers on a seemingly simple phrase in the definition of gambling in New York State’s penal law: “A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence.” Chance means that “the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.” In a memorandum filed as part of the case, Mr. Schneiderman asserts that daily fantasy sports “is nothing more than a rebranding of sports betting” which is “plainly illegal.” He stepped up the criticism in an editorial in The New York Daily News when he called the argument that the contests did not qualify as gambling because they involved a measure of skill “nonsense.” Showing how important the issue has become, DraftKings brought in David Boies, one of the country’s leading litigators, to fight the attorney general’s case. FanDuel has temporarily suspended operations in New York, while DraftKings continues to allow residents there to play. A hearing is set for Wednesday in the New York Supreme Court in Manhattan to consider Mr. Schneiderman’s request. More:


Pew: White Christians no longer a majority

White Christians now make up less than half of the U.S. population, largely receding from the majorities of most demographic groups, with one notable exception: the Republican Party. According to the latest results from Pew Research Center’s Religious Landscape survey published Monday by National Journal’s Next America project, just 46 percent of American adults are white Christians, down from 55 percent in 2007. At the same time, according to the report, the share of white Christians identifying as Republican has remained steady, even equal with the share of the party that carried President Ronald Reagan to his 1984 reelection. Nearly seven in 10 white Christians — 69 percent — identify with or lean toward the GOP, while just 31 percent do the same with Democrats. Among nonwhite Christians, meanwhile, 32 percent identify with or lean toward Democrats, and just 13 percent do the same with Republicans.

In less than a decade, the gap in Christian identification between Democrats and Republicans has increased by 50 percent. According to the data presented, in 2007, 88 percent of white Republicans and 70 percent of white Democrats identified as Christian, an 18-point disparity. By 2014, 84 percent of white Republicans identified as Christian, but the share of white Democrats identifying as Christian fell by 13 points, to 57 percent, a 27-point gap. Pew conducted the massive survey by telephone between June 4 and Sept. 30, 2014, interviewing 35,071 Americans, with an overall margin of error of plus or minus 0.6 percentage points.


Actors of ‘The Big Short’ Talk About the Debt Crisis, in Beverly Hills

BEVERLY HILLS, CALIF. — Besides starring in “The Big Short” — the forthcoming comic drama about the Wall Street outsiders who anticipated the subprime mortgage collapse and made a mint betting against the American economy — Steve Carell, Ryan Gosling and Finn Wittrock all have something else in common. Basically, how little they actually understood about the recent housing and credit bubble before researching their roles. “I thought I knew, but I didn’t really know anything at all,” Mr. Gosling said.

To help moviegoers understand, the director Adam McKay, adapting Michael Lewis’s best-selling book of the same title, took a lively kitchen-sink approach. He used such devices as celebrity tutorials on complicated concepts (Margot Robbie plays herself as she explains mortgage-backed securities) and Mr. Gosling’s breaking of the fourth wall. The plot itself is easily digestible: Mr. Carell’s character, Mark Baum, is a blunt-talking hedge fund manager who gets into the credit default swap business with Mr. Gosling’s flashily attired loudmouth, Jared Vennett. Mr. Wittrock’s Jamie Shipley, who is one half of a more bush-league investment team, enlists an ex-banker (Brad Pitt) to help his group capitalize on the impending crisis. Recently, Mr. Carell, 53; Mr. Gosling, 35; and Mr. Wittrock, 31, got together in a hotel room in Beverly Hills to swap stories about power-learning Wall Street jargon, what they learned from the traders they played and being part of a cast so sprawling — including Christian Bale — that many of its members never laid eyes on one another until the publicity tour. “I still haven’t met Christian yet,” Mr. Wittrock confessed. “We were in totally different worlds.” The film opens Dec. 11. Here are edited excerpts from the conversation:




Feds to Bentley: Refugees go through intense screening

 Federal officials Monday pushed back against the decisions by Gov. Robert Bentley and other governors to resist the settlement of Syrian refugees, stressing the numerous background checks in the refugee acceptance process. In a letter dated Friday, Secretary of State John Kerry and Secretary of Homeland Security Jeh Johnson wrote to Bentley that refugees seeking admittance into the United States go through an extensive series of background and security checks and that they had “tremendous faith” in the system’s ability to track threats. “A refugee applicant cannot be approved for travel and admission to the United States until all required security checks have been completed and cleared,” the letter said. “Bottom line – under the current system, if there is doubt about whether an applicant would pose a security risk, that individual will not be admitted to the United States as a refugee.” Bentley’s office did not return a request for comment Monday. Following the Nov. 13 attacks in Paris that left 130 people dead, Bentley announced he would oppose the settlement of Syrian refugees in the state. The governor last week ordered state agencies to use all “lawful means” to resist resettlement. Refugee aid groups question both the legality and practicality of Bentley’s stand. The impact of his order to state agencies is unknown. Only one Syrian refugee settled in Alabama between 2011 and 2014, according to the U.S. Department of Health and Human Services’ Office of Refugee. No Syrian refugees have settled in Alabama since the current fiscal year began in October. The men involved in the Paris attacks were French or Belgian nationals; at least one held a Syrian passport, though its authenticity is uncertain. Bentley cited the attacks for his stand, as well as comments made by FBI Director James Comey to Congress in October that gaps in available Syrian intelligence made it difficult to cross-check the status of every refugee. “One mistake by the federal government in allowing a refugee with a terrorist connection (to enter the country) poses a major safety threat to our people,” the governor wrote in a letter to President Barack Obama last week. “Failure to change course exposes millions of Americans to the possibility of terrorist acts on American soil.” In their letter, Kerry and Johnson stressed the work that goes into refugee assessment, a process that averages 18 to 24 months. The United Nations High Commission on Refugees first interviews prospective refugees to assess whether they meet U.S. resettlement requirements, such as being families, unaccompanied children or victims of torture. If the UN deems them a possible candidate, the UNHCR refers the individual to a resettlement organization that contracts with the U.S. State Department, to begin the data-gathering process. The State Department checks the refugee’s name against databases used for fighting terrorism, as well as law enforcement and intelligence databases. After screening, United States Citizens and Immigration Services (USCIS), within the Department of Homeland Security, collects fingerprints and biometric information on the applicant, checking those against FBI databases. USCIS officers with special training — including refugee law and background on the population from which the refugee comes — then interview  the refugee. A supervisor reviews decisions to accept or reject the applicant. “Applicants are often placed on hold until supplemental information is obtained,” the letter said. Refugees go through further Homeland Security screening and background checks before traveling to the United States. The Kerry/Johnson letter said “no one has the right to be resettled in the United States as a refugee.” “With every refugee application, the burden of proof is on the applicants — the refugee must show that he or she qualifies for refugee status,” the letter said. “The law requires the applicant to provide information that establishes their identity and allows us to assess whether they present a security risk to the country. If the expert screener fails to be satisfied on either score, the applicant will not be resettled in the United States.”


Alabama Supreme Court won’t revise ‘open-carry’ gun law ruling

The Alabama Supreme Court last week refused a request by the City of Jacksonville to revise its ruling that declared unconstitutional a state law that bans the open carry of a gun on someone else’s property. The Alabama Supreme Court in September had ruled the law unconstitutional in an appeal by Jason Dean Tulley. The Calhoun County man had been convicted in Jacksonville city court for violating a law that prohibited “carrying a pistol on premises not one’s own or under his control.” Court records show Tulley had been confronted by a security guard after he openly carried a pistol on his hip while inside the First Educators Credit Union on March 31, 2011. In overturning his conviction and declaring the law unconstitutional, the Alabama Supreme Court in September found that there was not a punishment provision for the crime under state law. Cities can adopt the state laws as part of their city codes and prosecute them as municipal violations. However, the Alabama Supreme Court ruled that because state law was unconstitutional, the prosecution by the city under that law is improper. The City of Jacksonville asked the Alabama Supreme Court for a rehearing on the case. The city, in a written brief to the court, agreed with the justices that the law is unconstitutional. But the court should not make their ruling retroactive and affirm Tulley’s conviction, the city argued. Justices rejected the city’s for a rehearing Friday. Marilyn May Hudson, special prosecutor for the City of Jacksonville, stated in an email to that “the towns and counties of Alabama, together with their law enforcement agencies, have a duty and responsibility to abide by, uphold, and enforce ALL the laws of the State as written in the Code of Alabama.” “We are not given a choice of which laws to enforce and which ones to ignore,” Hudson wrote. “There are numerous statutes in the Code that are vague, incomplete, or poorly worded.  This decision sets a precedent bringing into question the integrity of parts of the Code.” The Jacksonville City Ordinance incorporated Title 13A of the Criminal Code of Alabama – including the law involved in the Tulley case. “The city ordinance included provisions for definition and punishments for any statute in that Alabama Code that lacked such,” Hudson wrote. “The Supreme Court’s ruling in this case overrules the lawful City Ordinance and effectively places the burden and blame for poorly written laws on the towns and counties, rather than on the Legislators in Montgomery who wrote these laws.” J.D. Lloyd, one of Tulley’s appellate lawyers, said now that the Alabama Supreme Court has ruled the the case should be dismissed once it’s sent back the circuit court. “Everything should be over. I’m not sure what the City’s going to try to do, but Jason should be done for good with this case. There’s really nothing else that they can do,” he said. Tulley’s attorneys have said that the Alabama Legislature will have to fix the law, if it wants, in order for it to be valid. At one time the old law did have a punishment clause but in 1940 during revisions of the state code the punishment provision was dropped, court records show. The Alabama Legislature in 2013 did update the law to include a phrase that states no one can carry on premises not their own or under their control “unless the person possesses a valid concealed weapon permit or the person has the consent of the owner or legal possessor of the premises.” But the revision did not add a punishment clause.


Shadrack McGill to publicly announce Senate run against Shelby on Tuesday

Former Alabama state Sen. Shadrack McGill is scheduled to publicly announce his candidacy Tuesday challenging U.S. Sen. Richard Shelby, R-Ala., and three others in front of the Jackson County Courthouse. McGill, who gained national media attention for claiming that strippers knocked on his door in the middle of the night during his state senate campaign, registered earlier this month with the Alabama Republican Party to run in the primary. His wife, Heather McGill, also complained of women trying to message him on Facebook. An email from McGill’s campaign said he would be giving “a special important announcement concerning the political future of our state and nation” at the Jackson County Courthouse in Scottsboro at 11 a.m. Tuesday. He served in the Alabama Senate from 2010 to 2014, when he opted not to run for re-election.


McConnell accused of bribery scheme in Alabama U.S. Senate primary

MONTGOMERY, Ala. — Republican U.S. Senate candidate John Martin is accusing fellow candidate Jonathan McConnell of perpetrating a bribery scheme that may have run afoul of federal and state law.

According to Mr. Martin, Mr. McConnell called him upon finding out that he had qualified to run for the U.S. Senate and offered him a bribe to exit the race. “He called me asking me to drop out of the race,” Mr. Martin told Yellowhammer, after initially alluding to the allegation on his campaign’s Facebook page. “He told me that he was going to file the next day and that he had $250,000 of his own money that he was going to put into the race. I just listened, but then I said I wouldn’t do it. Then he offered to pay me off and cover all of my expenses. That was absolutely illegal.” Mr. Martin said he then received a phone call from Mr. McConnell’s father, Roger McConnell, the following day. Roger McConnell is a past chairman of the Alabama Republican Party and remains very active in state politics, particularly in the Mobile area.

“His father called me the next morning when I was at work and was basically apologizing for it,” Mr. Martin recalled. “He just wanted to make it all go away. But it’s not going to because it was illegal.” In a phone interview with Yellowhammer on Monday, Mr. McConnell initially denied the allegations, then conceded that he told Mr. Martin he would deliver financial assistance to him if he would exit the race.


Board of Adjustment pays out $8 million for claims against state

The Alabama Board of Adjustment in Montgomery OK’d payouts to some 227 claimants who filed claims against 29 state agencies. The board processes claims of injury by state employees, agencies, or institutions in lieu of a trial, since the state in most cases cannot be sued due to the legal doctrine of “sovereign immunity.” An award from the board, therefore, is most often the only remedy a citizen has for a claim against the state. State Auditor Jim Zeiger, who sits on the four-member panel which votes to approve or deny claims, said in a release his 10-month tenure on the BOA was like a “baptism by fire,” hearing more than a thousand petitions this year. “I felt like Judge Judy. These were everyday people trying to prove damage from actions of state agencies or employees,” Zeigler said “It was almost like a small claims docket.” “The cases ranged from broken windshields due to gravel from state vehicles to wrongful death,” said Zeigler. Zeigler’s office of State Auditor represents one permanent seat on the board. The others are held by the State Treasurer and Secretary of State, plus the State Finance Director, an executive position appointed by the Governor. Besides claims from citizens, the Board of Adjustment is also designated in state statute as the “awarding authority” for benefits to families of police offices and firefighters killed in the line of duty and National Guardsmen who perish while “quelling a riot, rout or civil disturbance.”


Walter Energy seeks to end agreements with unions before bankruptcy auction

Walter Energy is asking for a bankruptcy court’s approval to end its employment agreements with its unions and stop paying retiree benefits, according to documents filed Monday. The Birmingham-headquartered coal company announced that senior lenders had entered into an asset purchase agreementearlier this month after filing for Chapter 11 bankruptcy protection in July. The lenders won’t buy the operations under existing union contracts, according to the documents. “That comes as no surprise: the [collective bargaining agreements] impose onerous financial obligations on the Debtors’ operations that market conditions simply cannot support, either now or in the foreseeable future,” Walter’s lawyers write in the filings. The documents propose eliminating retiree benefits owed to about 3,100 retirees in either the United Mine Workers of America or the United Steelworkers after the sale is complete. The UMWA collective bargaining agreement covers about 700 current employees, and the USW about 120. Walter said it has been working with the unions to develop an agreement, and presented a proposal to the UMWA, which it rejected on Friday. Walter’s attorneys wrote the company cannot expend anymore time on these discussions. “If the 363 Sale … is not approved by early January of next year, the Debtors will be forced to liquidate, with the attendant loss of all jobs,” The documents say. A Walter spokesman did not immediately respond to a request for comment. “It’s very disappointing that people who have worked a lifetime to create this company are now being told that they have to give up everything they’ve worked for,” UMWA Director of Governmental Affairs Phil Smith told “We’ve got retirees who are looking at the end of their healthcare benefits. For many of them, this is going to be a matter of life and death. ” UMWA workers have organized in Alabama twice since the original filing to fight for health and retiree benefits. Smith said this filing isn’t an ending, and the UMWA will fight it. “We will absolutely respond in court, no question about that,” Smith said. “We will be filing a court document as soon as possible and we will fight it all the way through.”


Gov. Robert Bentley makes 17 appointments in November

It has been another busy month for the Governor’s office as Governor Robert Bentley made 17 appointments to seven different boards and committees in November. You can find more information on open board positions on the appointments webpage. See appointments at link below:



Yes, It’s Fair to Compare the Plight of the Syrians to the Plight of the Jews. Here’s Why.

Last week, Peter Shulman, an associate professor of American history at Case Western Reserve University, caused a political stir when he tweeted results from a Fortune Magazine poll dated July 1938. “What’s your attitude towards allowing German, Austrian & other political refugees to come into the US?” Fortune asked its survey audience. Over two-thirds of respondents answered in the negative.

Shulman’s tweet went viral, igniting a spirited debate about whether opposition to welcoming Syrian refugees is morally or situationally equivalent to American indifference in the 1930s toward Jewish victims of the Nazi state. In what can only be described as a sharp reversal of prevailing norms, many conservatives, who these days seem inclined to liken every government overreach to Nazism, are incensed by the analogy, while many liberals, who have grown accustomed to rolling their eyes each time that Bill Kristol invokes the Munich Agreement, are sticking by it. So is the analogy a good one? In short, yes. Contrary to what conservatives are saying these days, language commonly invoked in opposition to admitting Syrian refugees bears striking similarity to arguments against providing safe harbor to Jewish refugees in the late 1930s. Then as now, skepticism of religious and ethnic minorities and concerns that refugees might pose a threat to national security deeply influenced the debate over American immigration policy. For conservatives, this likeness is an inconvenient truth. But the analogy doesn’t stop there. There may be no historic precedent for the rise of the Islamic State, but many current-day conditions in the Middle East are reminiscent of the broader context in which the Holocaust occurred. Europe in the 1930s and 1940s witnessed a systemic breakdown of national borders and civil society; brutal ethnic cleansing and population transfers; and a refugee crisis that strained the world’s creativity and resources. These human-made disasters do not just befall majority-Muslim countries. For liberals, this raises its own inconvenient truth. Even had the United States admitted a large number of Jewish refugees in 1938, the underlying forces tearing Europe apart would not have abated. Winning this particular argument is important, but it does not resolve the larger challenge facing Syria or Iraq. The most obvious parallel between the 1930s and today is popular opposition to the admission of refugees. It was strong then, and it’s strong now. More:


Morning Money

M.M. PREDICTION CONTEST — As we head into the Thanksgiving break, M.M. wants your predictions for next year on some top questions. We will start sharing some answers tomorrow and more as we head toward the end of the year. And we will revisit the predictions at the end of next year and crown a winner. Email your entries to The questions:

1.) Who wins the GOP nomination?
2.) Who wins the White House?
3.) When does the Fed raise interest rates?
4.) What will the unemployment rate be on Election Day?
5.) What unexpected story will drive the outcome of the 2016 race?

KOCH FUNDED FINANCIAL REFORM GROUP — A little birdie passed along the 990 form from the Koch Brother’s funded Freedom Partners. Page 22, line 12 lists a $100,000 2014 donation to the “Main Street Growth Project,” a financial reform group we noted in Morning Money last week. Per the source: “Getting a hundred thousand from the Koch network makes their motto of defending the ‘little guy’ a little ironic.”

DEMS SLAM PFIZER INVERSION — POLITICO’s Katy O’Donnell: “Pfizer’s blockbuster $160 billion merger with Irish pharmaceutical maker Allergan is stoking the partisan debate on corporations that move their headquarters overseas to lessen their U.S. tax bills — with Democrats like Hillary Clinton quickly condemning the deal while Republicans called it a symptom of a broken tax code. The deal ‘will leave U.S. taxpayers holding the bag,; Clinton said in a statement Monday, calling on Congress to limit corporations’ ability to use the tax-limiting maneuver known as an inversion.

“Democratic primary rival Bernie Sanders called on the Obama administration to block the deal, and while the White House didn’t go that far, spokesman Josh Earnest accused Republicans who refuse to support limits on inversions of being ‘bought and paid for’ by big business. The proposed merger would be the biggest inversion ever and create the world’s largest pharmaceutical company”

TARULLO ON CAPITAL — Guggenheim’s Jaret Seiberg: “Federal Reserve Board Gov. Daniel Tarullo spoke with Bloomberg television about several regulatory issues. We offer the following observations for investors: Tarullo said the biggest problem with the current stress testing regime is that it does not focus enough on what would happen if there were broad losses throughout the financial system. Such a crisis could produce losses that are beyond those captured in the current CCAR regime. …

“We see his comments as consistent with our view that the Federal Reserve in the next few months will propose requiring the biggest banks to incorporate their G-SIFI surcharge and/or the supplemental leverage ratio into their passing scores for the CCAR stress test. This is why we continue to believe the policy environment favors the regional banks over the mega banks”

YELLEN DEFENDS LOW RATES — Reuters: “Federal Reserve Chair Janet Yellen on Monday argued for a cautious approach to the pace of interest rises in an unusual exchange with U.S. consumer advocate Ralph Nader. In a letter to Nader, the Fed chair repeated recent statements that the central bank should only gradually raise interest rates. ‘An overly aggressive increase in rates … would at undercut the economic expansion, necessitating a lasting return to low interest rates,’ Yellen said in the letter.

“Nader published an open letter to Yellen on Oct. 30 that asked her to consider the ‘humble savers’ with money in banks and money market accounts who were ‘frustrated by the Fed’s low rates and melodramatic debate about when to move higher’. ‘Thank you for your recent letter,’ Yellen said on Monday, adding that she and other rate-setters were ‘very well aware’ of savers’ frustrations. She said the fundamental solution to this problem is to foster a stronger economy.”

GOOD TUESDAY MORNING — Email me on and follow me on Twitter @morningmoneyben

DRIVING THE DAY — President Obama this morning hosts French President Francois Hollande for a bilateral meeting and a joint press conference … Second estimate of Q3 GDP at 8:30 a.m. expected to be revised up to 2.1 percent from 1.5 percent … Case-Shiller Home Prices at 9:00 a.m. expected to rise 0.4 percent … Consumer Confidence at 10:00 a.m. expected to rise to 99.5 from 97.6 …

PFIZER WANTS DC SUPPORT FOR DEAL — FT: David Crow and James Fontanella-Khan in New York and Barney Jopson in Washington: “Pfizer’s chief executive has called on Washington to support its $160bn takeover of Dublin-based Allergan, as politicians including Hillary Clinton lined up against the drugmaker’s attempt to slash its tax bill by moving overseas. … Pfizer, founded in Brooklyn in 1849, stands to save at least $21bn in future tax bills by moving the combined group to Ireland …

“The largest deal seen in the sector, which requires US regulators’ approval, drew condemnation from politicians including Mrs Clinton … Ian Read, Pfizer’s chief executive, countered that it would allow the combined group to boost spending on discovering new drugs by accessing cash that had been trapped overseas. ‘I cannot comprehend why it’s not being applauded by the political class, or why anyone would want to frustrate this transaction,’ Mr Read told the Financial Times. ‘It’s a great deal for the US, given that it frees up our ability to invest in American science.’”

MAYER RUNNING OUT OF TIME AT YAHOO — WSJ’s Douglas Macmillan: “Marissa Mayer has repeatedly said reviving growth at Yahoo Inc. would take multiple years. But many insiders have lost patience, saying the embattled chief executive has no clear sense of direction and has misled investors and advertisers about the company’s progress. In recent months, a crisis of morale has gripped Yahoo, as dozens of executives who had been instrumental to Ms. Mayer’s turnaround plan have left for jobs elsewhere.

“Ms. Mayer called a meeting with senior executives in August and asked them to sign a written agreement to stay with the company for at least three more years … Finance chief Ken Goldman was one of the first to pledge his commitment, but some executives left the room unsure they could make such a promise … In January, Ms. Mayer expects to complete the spinoff of shares in Alibaba Holding Group Ltd., putting the focus squarely on Yahoo’s core business. Sales from that business continue to shrink, from $4.5 billion in 2012 when Ms. Mayer arrived to $4.4 billion last year and even less expected for 2015.”

CHRISTIE GAINING STRENGTH? — NYT’s Michael Barbaro: “In the course of a two-hour campaign stop here, Gov. Chris Christie of New Jersey brought a handful of men and women to tears describing the deathbed wishes of his cancer-ridden mother, cracked them up with the declaration that his presidency would be golf-free and riveted them with his remembrances of the family friends he lost on Sept. 11, 2001. … Afterward, a stream of voters walked up to him, pledging their votes to an unexpected vessel for their newly heightened anxieties about security and terrorism.

“It is too early to tell how the Paris attacks will ultimately reshape the topsy-turvy Republican presidential race. But this much is clear: It has brought sudden intensity, attention and focus to the once-moribund candidacy of Mr. Christie. Across New Hampshire, voters are reassessing the man they had all but written off six months ago and whose political standing is still precarious. But for the first time, a solid majority of Republican voters in the state have a favorable view of the governor, according to two polls, a remarkable turnaround from the depths of his unpopularity”

MEET THE FED’S BRIT MARKET MASTER — WSJ’s Katy Burne: “When the Federal Reserve finally decides to raise short-term interest rates from near zero, it will be Simon Potter’s job to make it happen. The 55-year-old, British-born head of markets at the Federal Reserve Bank of New York had never worked at a securities-trading firm before taking his current post three years ago. The economist manages the Fed’s $4.2 trillion securities portfolio and runs a team of nearly 500 traders and analysts. Now, Mr. Potter will be faced with one of the trickiest trading assignments around: making it more expensive to borrow money when the financial system is awash in it.

“Traders in Mr. Potter’s group have spent more than two years testing the levers they will use and trying to sell Wall Street on the idea that they can be effective. ‘Our testing program,’ Mr. Potter told money-market professionals at a dinner off Wall Street in mid-April, ‘gives us confidence that we have the necessary tools to enable a smooth liftoff.’ Some traders aren’t so sure. Already, the Fed’s benchmark federal-funds rate is proving difficult to control around the end of the month, when some banks retreat from borrowing to dress up their balance sheets”

ICAHN BOOSTS PRESSURE ON AIG — FT’s Ben McLannahan: “AIG held out the prospect of further measures to boost its business on Monday, as activist investor Carl Icahn stepped up the pressure on the US insurer by querying the record of Peter Hancock, chief executive. Last month Mr Icahn said the company should immediately split into three, arguing that it was ‘too big to succeed’ in its current form, which subjects it to heavy supervision from regulators and curbs on returning capital to shareholders. … The New York-based group responded three weeks ago by rejecting that idea, saying that doing so would not free up capital, would ‘distract’ from cost-cutting initiatives and would cost up to $5bn in lost tax benefits.

“It also said it would cut about a quarter of its 1,400 senior managers in pursuit of a ‘focused, narrower strategy’. On Monday morning Mr Icahn resumed hostilities by posting a statement to his website, saying that he had been discouraged by several meetings and conversations with Mr Hancock, AIG’s British-born chief executive. ‘In all of our discussions with Mr Hancock it was abundantly clear to us that he is not willing to take the bold steps that we, and so many other shareholders, believe are long overdue,’ Mr Icahn wrote”


FISCAL CONFIDENCE STAYS LOW — Per the Peterson Foundation: “Americans remain highly concerned about the nation’s fiscal health, according to the Peter G. Peterson Foundation’s November Fiscal Confidence Index … The Fiscal Confidence Index, modeled after the Consumer Confidence Index, is 47 (100 is neutral), indicating that with the 2016 election one year away, the nation’s fiscal future is a top priority for American voters.”

TOP CITIES FOR YOUTH FINANCES — Per the Citi Foundation: “A new Economist Intelligence Unit (EIU) research initiative, commissioned by the Citi Foundation, reveals that youth — while optimistic and entrepreneurial — struggle to find employment, access to technology, pay equity and support networks that can help them thrive in cities around the globe. …

“Toronto finishes first in the Index; New York is in second place, ranking first in the United States; and Chicago finishes third in the overall Index, scoring among the top five across all four categories assessed. Three Asian cities — Singapore, Hong Kong and Sydney — finish in the top ten, reflecting the importance these cities attach to engaging the next generation”

POTUS Events

10:15 am || Meets with French President Hollande
11:30 am || Holds a press conference with Hollande; East Room
5:00 pm || Awards seventeen recipients the Presidential Medal of Freedom; East Room

All times Eastern
Live stream Obama-Hollande press conference at 11:30 am

Floor Action

Congress is out for Thankgiving break



Seven Tips to Protect Your Computer Online

The Internal Revenue Service, the states and the tax industry urge you to be safe online and remind you to take important steps to help protect yourself against identity theft. Taxes. Security. Together. Working in partnership with you, we can make a difference. Scammers, hackers and identity thieves are looking to steal your personal information – and your money. But there are simple steps you can take to help protect yourself, like keeping your computer software up-to-date and giving out your personal information only when you have a good reason. We all have a role to play to protect your tax account. There are just a few easy and practical steps you can take to protect yourself as you conduct your personal business online.

Here are some best practices you can follow to protect your tax and financial information:


  1. Understand and Use Security Software.  Security software helps protect your computer against the digital threats which are prevalent online. Generally, your operating system will include security software or you can access free security software from well-known companies or Internet providers. Other options may have an annual licensing fee and offer more features. Essential tools include a firewall, virus/malware protection and file encryption if you keep sensitive financial/tax documents on your computer. Security suites often come with firewall, anti-virus and anti-spam, parental controls and privacy protection. File encryption to protect your saved documents may have to be purchased separately. Do not buy security software offered as an unexpected pop-up ad on your computer or email! It’s likely from a scammer.
  2. Allow Security Software to Update Automatically. Set your security software to update automatically. Malware – malicious software – evolves constantly and your security software suite is updated routinely to keep pace.


  1. Look for the “S” for encrypted “https” websites. When shopping or banking online, always look to see that the site uses encryption to protect your information. Look for https at the beginning of the web address. The “s” is for secure. Unencrypted sites begin with an http address. Additionally, make sure the https carries through on all pages, not just the sign-on page.


  1. Use Strong Passwords. Use passwords of at least 10 to 12 characters, mixing letters, numbers and special characters. Don’t use your name, birthdate or common words. Don’t use the same password for several accounts. Keep your password list in a secure place or use a password manager. Don’t share your password with anyone. Calls, texts or emails pretending to be from legitimate companies or the IRS asking you to update your accounts or seeking personal financial information are generally scams.


  1. Secure your wireless network.  A wireless network sends a signal through the air that allows you to connect to the Internet. If your home or business wi-fi is unsecured it also allows any computer within range to access your wireless and steal information from your computer. Criminals also can use your wireless to send spam or commit crimes that would be traced back to your account. Always encrypt your wireless. Generally, you must turn on this feature and create a password.


  1. Be cautious when using public wireless networks. Public wi-fi hotspots are convenient but often not secure. Tax or financial Information you send though websites or mobile apps may be accessed by someone else. If a public Wi-Fi hotspot does not require a password, it probably is not secure. If you are transmitting sensitive information, look for the “s” in https in the website address to ensure that the information will be secure.


  1. Avoid phishing attempts. Never reply to emails, texts or pop-up messages asking for your personal, tax or financial information. One common trick by criminals is to impersonate a business such as your financial institution, tax software provider or the IRS, asking you to update your account and providing a link. Never click on links even if they seem to be from organizations you trust. Go directly to the organization’s website. Legitimate businesses don’t ask you to send sensitive information through unsecured channels.


To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. Also read Publication 4524, Security Awareness for Taxpayers. Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on