Krebs Daily Briefing 27 JAN 2016

Thomas L. Krebs, Securities Litigation, Regulation and Compliance Attorney Lawyer (c)2014 Brandon L. Blankenship
Thomas L. Krebs


The World’s Favorite New Tax Haven Is the United States

Last September, at a law firm overlooking San Francisco Bay, Andrew Penney, a managing director at Rothschild & Co., gave a talk on how the world’s wealthy elite can avoid paying taxes. His message was clear: You can help your clients move their fortunes to the United States, free of taxes and hidden from their governments. Some are calling it the new Switzerland. After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.” Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt. More:

Exclusive: White House dropped $10 million claim in Iran prisoner deal

Nader Modanlo was facing five more years in federal prison when he got an extraordinary offer: U.S. President Barack Obama was ready to commute his sentence as part of this month’s historic and then still-secret prisoner swap with Iran. He said no. To sweeten the deal, the U.S. administration then dropped a claim against the Iran-born aerospace engineer for $10 million that a Maryland jury found he had taken as an illegal payment from Iran, according to interviews with Modanlo, lawyers involved and U.S. officials with knowledge of the matter. The surrender of the U.S. claim, which has not previously been reported, could add to scrutiny of how the Obama administration clinched a prisoner deal that has drawn criticism from Republican presidential candidates and lawmakers. A Washington-based spokesman for the Justice Department declined to comment on discussions over the $10 million, which the jury found that Modanlo was paid to help Iran launch its first satellite in 2005. Modanlo says the money was a loan from a Swiss company for a telecoms deal. In the prisoner swap, five Americans held in Iran were released at the same time as seven Iranians charged or imprisoned in the United States were granted pardons or had their sentences commuted. The deal accompanied the Jan. 16 implementation of a landmark agreement that curbs Iran’s nuclear program in exchange for sanctions relief. Even after receiving the improved offer on Friday, Jan. 15, Modanlo said he didn’t budge at first. He wanted a chance to clear his name in court, he says. “I was mostly disappointed that I have to give up my right to appeal,” Modanlo, 55, told Reuters in one of his first interviews since being released. “If they believe in their justice system why would they deprive me of it? Let them prove me wrong.” As part of their clemency agreements, all of the Iranians had to renounce any claims against the U.S. government. All but one had been accused of violating the economic sanctions the United States has enforced against Iran for decades. More:

United, American to offer refunds for travel to Zika-affected regions

American and United say they will allow customers concerned about the Zika virus to cancel or postpone their trips if they’re ticketed to fly to areas affected by the mosquito-borne virus. United says its policy will include travel to all areas mentioned in a Centers for Disease Control alert. So far, American’s covers flights to four destinations in Central America. “We are offering customers who are traveling to the affected regions the opportunity to rebook at a later date or receive a full refund,” United spokesman Charles Hobart said in a statement to Today in the Sky on Tuesday. American had not yet posted its Zika policy on its website, though spokesman Ross Feinstein says the carrier decided to implement the policy Monday. Feinstein says American will allow customers to receive a refund if they provide a doctor’s note stating they are unable to travel to one of four cities due pregnancy. The cities included in American’s waiver are San Pedro Sula and Tegucigalpa in Honduras as well as Panama City, Panama, and Guatemala City. Feinstein says American continues to review its policy. The Zika virus has been in the news since the Centers for Disease Control (CDC) issued a travel warning alert earlier this month warning about the risk of traveling to countries in theAmericas affected by the virus. Zika has been linked to an epidemic of birth defects in Brazil and is thought to be spreading to other regions of North and South America. The CDC’s warning  focused mostly on pregnant women or those seeking to become pregnant. The World Health Organization (WHO) issued its own alert on Monday, saying it expects the Zika to eventually spread to the United States and most of the Americas. As for United, it said its travel waivers would include countries covered in the CDC’s travel advisories. Currently, the CDC’s advisories mention the following countries and territories in the Americas: Barbados, Bolivia, Brazil, Colombia, Ecuador, El Salvador, French Guiana, Guadeloupe, Guatemala, Guyana, Haiti, Honduras, Martinique, Mexico, Paraguay, Panama,Puerto Rico, Saint Martin, Suriname and Venezuela. American, Delta and United are the three large U.S. carriers with a significant international presence. Each flies to numerous destinations in Central and South America. For now, Delta has no such waiver in place. “We continue to monitor the situation closely. No flight cancelations have resulted as of this time and there is currently no waiver,” Delta spokesman Morgan Durrant says to Today in the Sky. Durant added that Delta remains “in close contact” with both the CDC and WHO on all health risks that could affect air travelers. Outside the United States, the the largest carrier in Latin America also announced that it will waive fees or offer fees to pregnant women seeking to travel to nations affected by Zika, The Associated Press reports.  LATAM, which includes both LAN and TAM airlines, says its policy will cover travel to Brazil, Colombia, El Salvador, Guatemala, French Guyana, Haiti, Honduras, Martinique, Mexico, Panama, Paraguay, Puerto Rico, Suriname and Venezuela.

Inside Tennis’s Match-Fixing Drama

The first week of the Australian Open was overshadowed, rather unfortunately, by claims of rampant match-fixing in tennis. Those allegations, leveled in a BuzzFeed News/BBC investigative report published just as the Australian was getting underway, dominated the discussion on the airwaves and in player press conferences during the early rounds. Organizers no doubt hoped that as the tournament entered its second week, the controversy would recede. No such luck: on Sunday, a mixed-doubles match was flagged for possible match-fixing. According to The New York Times, a match between the Spaniards Lara Arruabarrena and David Marrero and a team comprised of the Czech Republic’s Andrea Hlavackova and Poland’s Lukasz Kubot attracted unusually heavy gambling interest in the days preceding the contest, and almost all of the money was wagered on Hlavackova and Kubot. The money flows were so suspicious that Pinnacle, one of the world’s leading gambling Web sites, suspended betting on the match 13 hours before the players were due to take the court and reported its concerns to law-enforcement officials in Melbourne. The match went ahead as scheduled, and Hlavackova and Kubot won 6-0, 6-3. According to the Times, Marrero coughed up a handful of double faults (he held serve just once in the match), and hit a few strangely feeble lobs that were easily put away for winners. In one game, he missed three consecutive returns of Hlavackova’s serve. (In mixed doubles, the biggest mismatch is when the women serve to the men; it is highly unusual at the professional level for a male player to bungle three straight returns when his female opponent is serving.) After the match, Marrero blamed his poor performance on a knee injury and denied that the match had been fixed in any way. But as the Timesnoted, this was not the first time Marrero has aroused suspicion; the paper cited an Italian sports-gambling expert who said that several other doubles matches involving the Spaniard have also attracted unusual betting activity. All four players involved in Sunday’s match have now apparently been interviewed by the Tennis Integrity Unit, the sport’s anti-corruption watchdog. It has been a rough 48 hours for tennis in Australia all around: Nick Lindahl, a 27-year-old former pro who was once among the country’s most heralded junior players, pleaded guilty in a Sydney court on Monday to match-fixing. He was accused of throwing a match at a Futures tournament in 2013. According to prosecutors, he tipped off two acquaintances, who made sizable wagers based on the information he shared with them. Lindahl allegedly also tried to get his opponent to pay him in exchange for throwing the match; the player refused and instead told tournament officials about the illicit offer. The BuzzFeed/BBC report highlighted potential match-fixing at the top of the tennis rankings. But the Lindahl case, just like Sunday’s mixed-doubles match, underscores that much of the gambling on tennis actually involves obscure matches. In addition to the A.T.P. Tour, the circuit for the best players, men’s professional tennis has two minor circuits, the Challenger Tour and the Futures tour. Many bettors are just as happy to wager on Challenger and Futures matches as they are on A.T.P. matches. Those circuits provide the same inducements for gamblers that the A.T.P. Tour provides: lots of matches, an abundance of data about players, and real-time results readily available online. More:



Trump pulls out of Republican debate in Iowa

U.S. Republican presidential hopeful Donald Trump withdrew on Tuesday from a debate with party rivals this week out of anger at host Fox News (FOXA.O), leaving the last encounter before Iowa’s pivotal nominating contest without the front-runner. Trump’s campaign manager, Corey Lewandowski, told reporters after a combative news conference held by the candidate that Trump would definitely not be participating in the debate scheduled for Thursday in Des Moines, Iowa, and co-hosted by Google (GOOGL.O). During the news conference before he addressed a large crowd in Marshalltown, Iowa, Trump expressed irritation that Fox News planned to leave in place as a moderator the anchor Megyn Kelly, whose questioning of Trump at a debate last August angered him. He also expressed displeasure at a Fox News statement on Monday night saying Trump would have to learn sooner or later that “he doesn’t get to pick the journalists” and that “we’re very surprised he’s willing to show that much fear about being questioned by Megyn Kelly.” “I was all set to do the debate, I came here to do the debate. When they sent out the wise-guy press release done by some PR person along with (Fox News Chairman) Roger Ailes, I said: ‘Bye bye, OK'” “Let’s see how much money Fox makes without me in the debate,” the billionaire businessman added. Trump has been engaged in a public spat with Fox News since the network hosted the first debate and Kelly asked Trump about his treatment of woman, prompting a stream of insults from the candidate. The debate is scheduled for just days before Iowa’s caucuses on Monday, the first nominating contest for the Nov. 8 presidential election. Trump’s campaign announced that instead of participating in the debate, he would hold a fundraiser for “Veterans and Wounded Warriors.” Fox News responded by releasing a statement charging Trump’s campaign manager with threatening Kelly, saying during a call Lewandowski had referred to her “rough couple of days” after the previous debate she moderated and added that he would “hate to have her go through that again.” “We can’t give in to terrorizations toward any of our employees,” Fox said in a statement. The network added that Trump remains welcome to participate in the Thursday night debate.

Republicans point fingers: Who let Trump get this far?

 With time running out until the first primary votes are cast, establishment Republicans have begun a ferocious round of finger-pointing over who is to blame for the party’s failure to stop Donald Trump. The chiding, once limited to private conversations, is now erupting in public view — with campaigns, operatives, donors, party officials and conservative intellectuals arguing over why something hasn’t been done to stop the man who has been leading nearly every state and national poll since August. Trump, many in the GOP’s upper ranks are convinced, would lead the Republican Party to an epic defeat in November, with consequences all the way down the ballot. “This whole thing is a disaster,” said Curt Anderson, a former Republican National Committee political director and veteran operative. “I think I’ll write a book about it.” Receiving much of the blame is Right to Rise, the cash-flush super PAC that broke records when it announced last year that it had raised more than $100 million in support of Jeb Bush. The group has directed relatively little of that sum toward attacking Trump — instead focusing its efforts on taking down Bush’s establishment rivals, above all Marco Rubio. To date, the group has spent about $5 million on TV commercials going after Trump, while dropping four times as much in negative ads against Rubio. The latest spot, which came Tuesday, hammered Rubio over his messy financial history. Right to Rise, with its nearly limitless resources, had the best chance to wage a concerted campaign to take down the real estate mogul, many are convinced — and they blame Mike Murphy, the group’s chief strategist, for missing the opportunity. While Bush often personally went after Trump on the campaign trail and in debates — even calling him a “jerk” and then cutting an ad about it — his super PAC usually hasn’t. In recent days, those once-quiet complaints have become a roar. Stephen Hayes, an influential Weekly Standard columnist, blasted Right to Rise for a strategy that effectively “cleared the way for Trump.” Katie Packer, who served as Mitt Romney’s deputy campaign manager during the 2012 election and has been trying to orchestrate an anti-Trump effort, lamented that just 10 percent of the super PAC’s $100 million “could have had a significant impact.” More:

Bloomberg Could Outspend Trump 10-to-1 if He Entered the Race

In a presidential race filled with 1-percenters, real-estate mogul Donald Trump is in a league by himself. But even Trump’s mountains of money would look like molehills if former New York mayor Michael Bloomberg were to get into the race. Rumors of a possible Bloomberg bid last weekend doused the political world in gasoline and dropped a match, likely sending some candidates’ blood pressure through the burning roof. Pitting Trump, the G.O.P. front-runner, against Bloomberg as a third-party candidate would surely ignite some turf wars in New York, incense anti-income-inequality crusader Bernie Sanders, and invite a fist bump from every foreign oligarch with the same power-driven thirst. It would also take all the business success and personal fortune Trump has been using on the campaign trail to tout his legitimacy and dwarf it by a factor of 10. Net worth to net worth, Bloomberg’s fortune is made up of at least 4 Trumps, and as many as 11, depending on who is counting. In his financial disclosure, Trump claimed that he is worth “in excess” of $10 billion. But Forbes, in its latest estimate, puts his chunk of change closer to $4.5 billion. By the same yardstick, Forbes estimates Bloomberg has $36 billion to his name, making him the 12th-richest man in the world. If we judge Forbes to Forbes, then, Bloomberg is worth eight times what Trump is valued at. If we instead use Trump’s own figures, the number drops to around three and a half. But some are claiming Bloomberg is worth far more than the Forbes estimate. A new calculation from Re/code asserts that Bloomberg’s real worth is $48.8 billion, even excluding his numerous homes and aircrafts, a figure that would make him the sixth wealthiest man on Earth. That would make Bloomberg worth nearly 11 Trumps, by Forbes’s estimate, and nearly five of him with his own measure. Trump gave his own assessment of Bloomberg’s wealth in an interview with CNN earlier this week, downgrading his net worth far below the other estimates out there. “I don’t believe it, I don’t believe it. It’s a technology company,” he said. “I mean, if someone came in, frankly, and comes up with a better machine than him, people would stop using his machine,” he said, referring to the $20,000 Bloomberg terminals, systems which give users real-time financial data and news. What is clear is that both candidates would take some of the joy out of the privilege of the presidency. They already live in multiple mansions, some of which make the White House look like the guesthouse. They already each have their own planes, drivers, and staffs. They’ve been rubbing elbows with heads of state and industry for decades. Donald Trump will be the first to tell you this. Money talks, as they say. Wealth whispers.

Regulators to Return $21.5 Million to Hedge Fund Shut After Raid

A little more than five years after federal agents raided the offices of Level Global Investors, securities regulators are returning $21.5 million in settlement money that the hedge fund paid to resolve an insider trading investigation. A federal judge on Tuesday ordered the hedge fund’s 2013 settlement vacated after the Securities and Exchange Commission said it would not oppose the request by lawyers for the now-defunct hedge fund. Level Global shut its doors in 2011 after investors lost confidence in its management when one of its founders, Anthony Chiasson, was implicated in the insider trading scandal. Mr. Chiasson was convicted at trial, but the verdict was overturned and the charges tossed out by a federal appeals court in 2014. The ruling by the United States Court of Appeals for the Second Circuit, which made it more difficult for federal prosecutors to pursue certain insider trading cases, has led to a number of convictions being overturned as well. The settlement money, which was paid by Level Global to settle a civil complaint filed by the S.E.C., will be returned to the firm’s former investors and management  company. Gregory Morvillo, a lawyer for Mr. Chiasson, said he did not know the mechanics of how the money would be returned to investors but added that he was “glad they are getting it back.” In a statement on behalf of his client, Mr. Morvillo said that Mr. Chiasson “is grateful that the S.E.C. eventually recognized the import of the appellate ruling by fully reimbursing the fund to the benefit of his investors who entrusted their capital to him for many years.”

The charges against anti-Planned Parenthood filmmaker, explained

In a surprise move, Texas authorities leveled criminal charges against the antiabortion activists behind a series of undercover videos targeting Planned Parenthood, which sparked fiery debate last year nationwide and on Capitol Hill. Harris County District Attorney Devon Anderson, a Republican, said David Daleiden, the director of the Center for Medical Progress, faces a felony charge of tampering with a governmental record and a misdemeanor count related to buying human tissue. Sandra Merritt, one of his employees, was indicted on a charge of tampering with a governmental record. Arrest warrants have been issued for the activists, with a bond amount of $10,000. They can be arrested in any state. A grand jury, meanwhile, cleared Planned Parenthood Gulf Coast of any wrongdoing. By way of background, Daleiden’s team posed as biomedical employees and wore body cameras to secretly shoot video of Planned Parenthood clinics and employees. They recorded officials discussing the logistics of donating fetal tissue from abortions to researchers, who use human organs to develop new medications. Daleiden claimed the footage proved Planned Parenthood was illegally selling fetal tissue for profit — a charge the organization has denied. Although Planned Parenthood has apologized for the casual tone its employees took in the videos, the organization said it will continue to donate tissue to scientists. It will no longer, however, collect fees to cover the cost of transferring the tissue, which ranges between $25 to $50 per donation. Initially, the grand jury set out to investigate Planned Parenthood. But on Monday, it instead returned charges against Daleiden. Harris County prosecutors declined to explain the charges. But Josh Schaffer, an attorney for Planned Parenthood in Houston, says this is what it all means:


Contested Republican Convention Is Possible

Three different dynamics are raising the prospects that delegates to the Republican convention could arrive in Cleveland in July without a clear first-ballot winner, something that hasn’t happened in American politics in decades. First, there is the unusually crowded GOP field and the unconventional impact of Donald Trump, the New York businessman who in breaking all of the conventional campaign rules has energized voters who don’t normally come out for the party’s primaries. Then there is the Republican Party’s redrawn primary map that gives more sway to Southern states that often back nominees who aren’t successful in other regions. And, finally, the party has instituted a new way of counting delegates in early contests that will spread them out among the competitors, preventing anyone from separating from the pack. Those forces could create a scenario in which no candidate arrives in Cleveland with the 1,237 delegates needed to clinch the nomination. For now, the political world is focused on the first four dates of the nominating calendar: February contests in Iowa, New Hampshire, South Carolina and Nevada, where just 133 delegates will be picked. After that, about 600 delegates are at stake on March 1 in Texas, Virginia and nine other states. Delegates in each of the states will be awarded proportionally based on the percentage of the votes the candidates receive, making it likely that one candidate won’t be able to build an insurmountable lead over a crowded field in which several contestants are accruing delegates.

Recent primary contests have featured a candidate with mainstream backing and financial support— George H.W. Bush, Bob Dole, George W. Bush, John McCain and Mitt Romney—facing upstart candidates who eventually ran out of money and ceded the nomination. But in 2016, Florida Sen. Marco Rubio, Govs. Chris Christie of New Jersey and John Kasich of Ohio and former Florida Gov. Jeb Bush are fighting over centrist voters.  Meanwhile, Texas Sen. Ted Cruz is consolidating social conservative support and Mr. Trump is drawing newcomers or some dormant voters. Such a contest makes it mathematically tough for any candidate to clinch the nomination early. Even if one candidate wins 40% of the delegates awarded by March 15, he or she would have less than one-half of the necessary delegates to win the nomination. More:


Hedge Funder John Paulson Puts Up His Own Fortune to Save His Firm

John Paulson, the hedge-fund manager who profited to the tune of several billion dollars by shorting the 2007 housing bubble, is now in need of his own refinancing. Paulson has been putting up his own wealth to back a line of credit his firm Paulson & Co. has had with HSBC since 2010, Bloombergreported. It is not uncommon for a fund to establish these lines of credit, which are often used to meet payroll and other routine expenses as an assurance that there will be cash on hand to meet these recurring demands. Paulson & Co. first secured its credit line with the 1 to 2 percent management fee and a 20 percent performance fee the fund collects on profits each year, according to Bloomberg. But Paulson & Co. has hit a dry patch, and the steady flow of fees that once backed the firm’s credit line have dried up. The firm’s assets have tanked 50 percent, falling to $18 billion over the last five years or so, Bloomberg reported. The firm peaked in 2011, managing $38 billion, but investors have since fled. Paulson has put up his own fortune, worth nearly $11.5 billion, according to an estimate from Forbes, to combat the losses and back the firm’s borrowing to keep the credit line open for the short-term cash it relies on. Paulson infamously amassed his fortune as much of the world—Main Street, Wall Street, entire economies—had its decimated. In 2006, with the housing market one strong gust of wind away from implosion and the world on the brink of a total financial collapse, Paulson made a bet against the millions of financially vulnerable Americans who had taken out risky mortgages in order to buy a home of their own. He bought tons of credit-default swaps, investments that insured these risky mortgages, so that when homeowners defaulted and lost everything, Paulson would end up a king. The doomsday bubble burst in 2007, and Paulson & Co. made $15 billion on the bet. Paulson himself walked away with about $4 billion, at the time one of the largest paydays in Wall Street history, according to The Wall Street Journal. With the global economy once again sputtering, Paulson has another chance to profit, allowing him to shore up his credit line and just about anything else if the bet is big enough and the fall as great. Not that he, or anyone, would ever hope for that.

Milwaukee man charged in machine gun plot targeting Masonic temple

A 23-year-old Milwaukee man was charged Tuesday in connection with an alleged mass shooting plot involving the use of machine guns against members of a local Masonic temple, according to federal prosecutors. Samy Mohamed Hamzeh, who has been the target of a federal authorities since September, allegedly abandoned a separate plan to attack against soldiers in Israel, is accused of touring the Milwaukee temple along with two FBI informants as recently as last week to plot the assault. According to court documents, Hamzeh engaged in “extensive” conversations with the two informants, beginning in October when the plan to target Israeli soldiers was discarded in favor of a domestic attack. Following last week’s temple visit, where Hamzeh allegedly learned meeting schedules and the physical layout of the facility, the suspect “reaffirmed his intention to commit an armed attack.” “We want two machine-guns,” Hamzeh allegedly told the informants in a recorded conversation, adding that one of the informants already possessed such a weapon. “And we need three silencers. That’s it. Find out how much altogether these will cost, and then we will march.” With each attacker armed with a machine-gun and attached silencer, Hamzeh allegedly told the informants that “the operation will be 100 percent successful.” Hamzeh, according to court documents, said one of the attackers would remain at the temple’s main door while the two others would go to an upstairs meeting room to target people there. “As long as the one on the door understands he has bigger responsibility than the others,” Hamzeh allegedly told the informants. “He has to annihilate everyone… When we go into a room, we will be killing everyone, that’s it, this is our duty.” Hamzeh allegedly said his goal was to kill at least 30 people to capture the attention of the “Mujahedeen all over the world.” “Thirty is excellent,” he allegedly told the informants. “If I got out, after killing 30 people, I will be happy, 100% happy, because these 30 will terrify the world.” Hamzeh allegedly arranged to purchase the machineguns and silencers from two other undercover FBI agents, who delivered the weapons Monday. “Hamzeh agreed to a price and paid it to the undercover agents,” prosecutors said Tuesday. “Hamzeh carried the bag to the vehicle in which he had traveled to the meeting, and he placed the bag in the trunk of the vehicle; he then was arrested.” “Samy Mohamed Hamzeh devised a detailed plan to commit a mass shooting intended to kill dozens of people,” U.S Attorney Gregory J. Haanstad said, “He also said that he wanted this mass shooting to be ‘known the world over’ and to ‘ignite’ broader clashes.” Haanstad credited information provided by “concerned citizens,” as helping to avert an attack. “It is difficult to calculate the injury and loss of life that was prevented by concerned citizens coming forward,” the prosecutor said.

FBI: several militants arrested, one dead in Oregon occupation

The FBI and Oregon State Police have arrested several people in connection to the occupation at the Malheur National Wildlife Refuge. One person was killed.  Ammon Bundy, Ryan C. Bundy, Brian “Booda” Cavalier, Shawna Cox and Ryan W. Payne were all arrested Tuesday night along Highway 395 between Burns and John Day, Oregon, police said. Everyone arrested Tuesday night will face felony charges, according to law enforcement. Officials said one person suffered non-life threatening injuries. The injured person was reportedly transferred to a local hospital. The arrest of Ammon and Ryan Bundy along with three others took place around 4:30 p.m. PST. Shots were fired during the arrest. Law enforcement said no additional information will be released at this time about the deceased person. In a separate event in Burns, Oregon State Police arrested Joseph Donald O’Shaughnessy, 45, of Cottonwood, Arizona. They did not give details about the nature of the arrest. The FBI have also confirmed that Peter Santilli, age 50, of Cincinnati was arrested in Burns. St. Charles Health System in Bend confirmed a helicopter had been dispatched to Harney County and is on standby awaiting to transport patients to its level II trauma center. The hospital is on lockdown. Ammon Bundy and a group of armed activists and militiamen stormed the empty headquarters of the remote wildlife refuge in Oregon on Jan. 2 to protest the impending imprisonment of two ranchers convicted of arson on federal land.

An Unprecedented Threat to Privacy

Throughout the United States—outside private houses, apartment complexes, shopping centers, and businesses with large employee parking lots—a private corporation, Vigilant Solutions, is taking photos of cars and trucks with its vast network of unobtrusive cameras. It retains location data on each of those pictures, and sells it. It’s happening right now in nearly every major American city. The company has taken roughly 2.2 billion license-plate photos to date. Each month, it captures and permanently stores about 80 million additional geotagged images. They may well have photographed your license plate. As a result, your whereabouts at given moments in the past are permanently stored. Vigilant Solutions profits by selling access to this data (and tries to safeguard it against hackers). Your diminished privacy is their product. And the police are their customers. The company counts 3,000 law-enforcement agencies among its clients. Thirty thousand police officers have access to its database. Do your local cops participate? If you’re not sure, that’s typical. To install a GPS tracking device on your car, your local police department must present a judge with a rationale that meets a Fourth Amendment test and obtain a warrant. But if it wants to query a database to see years of data on where your car was photographed at specific times, it doesn’t need a warrant––just a willingness to send some of your tax dollars to Vigilant Solutions, which insists that license plate readers are “unlike GPS devices, RFID, or other technologies that may be used to track.” Its web site states that “LPR is not ubiquitous, and only captures point in time information. And the point in time information is on a vehicle, not an individual.” But thanks to Vigilant, its competitors, and license plate readers used by police departments themselves, the technology is becoming increasingly ubiquitous over time. And Supreme Court jurisprudence on GPS tracking suggests that repeatedly collecting data “at a moment in time” until you’ve built a police database of 2.2 billion such moments is akin to building a mosaic of information so complete and intrusive that it may violate the Constitutional rights of those subject to it. More:


Judge denies motion to postpone Speaker Mike Hubbard’s case

Lee County Circuit Judge Jacob Walker denied House Speaker Mike Hubbard’s motion to postpone his ethics trial but indicated that appeals of some unresolved pretrial motions could still lead to a delay. Hubbard attorney Lance Bell asked for a continuance of the trial, set for March 28. Bell said the withdrawal of Hubbard’s lead law firm earlier this month and other factors would not allow the defense to be ready. Prosecutors objected, saying the defense has had plenty of time to get ready and has instead spent that time on delaying tactics. During a hearing today, Walker initially told lawyers he was inclined to deny the motion for continuance but was taking a “wait and see approach” because he expected appeals of his rulings on pretrial motions, which could lead to delays. Later in the hearing, Walker said he had denied the motion to continue, but again raised the possibility that there could be delays. Still pending are Hubbard’s motions to dismiss the case on claims of prosecutorial misconduct and his claims that the ethics law, for which Hubbard was a leading advocate, is unconstitutional. A special grand jury indicted Hubbard in October 2014 on 23 felony ethics counts. He is accused of using his public offices to benefit his businesses. Hubbard has denied any wrongdoing. Earlier this month, Walker approved the request of Hubbard’s lead defense firm, White Arnold and Dowd, to withdraw from the case. They did not give a reason publicly. Hubbard consented to the withdrawal.

Bell said he and the other lawyers remaining on the defense team were in supporting roles before the withdrawal and will need more time to prepare to lead the defense. “We cannot possibly change our roles to get ready for that trial date,” Bell said. If Hubbard’s trial goes on as scheduled, it will overlap with the legislative session, which starts next Tuesday and will probably last until mid-May. Deputy Attorney General Matt Hart said the public deserves to see the case resolved because of the important matters before the Legislature and because the accusations against Hubbard are related to his position as speaker. The case had been scheduled for October, but was postponed until March at Hubbard’s request. “The court has bent over backwards to give plenty of time,” Hart said. “The state has bent over backwards.” Part of today’s hearing was spent with the two sides arguing over the defense request to depose Hart about allegations of grand jury leaks to the media. Hart sent a sealed court motion to the Alabama Political Reporter on Dec. 31. It was posted online briefly but removed after Hart said he realized the motion was sealed and asked for it to be taken down. Hart later sent an email to the court and the defense apologizing. Bell cited that incident today as an example of grand jury leaks by Hart. Bell introduced a number of Alabama Political Reporter articles as exhibits and accused Hart of being the unnamed source in the articles. The defense has alleged leaks since early in the case, and Bell said they were a serious matter that violated Hubbard’s constitutional rights. “I think we need to depose Mr. Hart and find out if he is the source of those leaks,” Bell told the judge. Hart objected strongly. He apologized again for sending the sealed court motion, but said the incident gave no credence to the claims of grand jury leaks. “It’s a scurrilous accusation,” Hart said. He said the defense had not produced a “shred of evidence” of misconduct by prosecutors. The judge said Hart’s release of the sealed motion on Dec. 31 “opened all this back up.” He cited the incident in issuing a gag order earlier this month, instructing lawyers on both sides not to talk to the press. Walker did not rule on the defense motion to depose Hart. But the judge told Bell he would need to see a previous case in which the defense was allowed to depose the prosecutor.


Poarch Creek Indians contribute $1 million to Gate 9 project in Huntsville

 The Poarch Band of Creek Indians today donated $1 million to relieve traffic problems at busy Gate 9 at Redstone Arsenal in Huntsville. The donation was presented in downtown Huntsville where Federal Building Authority and other leaders gathered for a press conference. Robert McGhee, vice chair for the Poarch Band of Creek Indians, said infrastructure issues are a safety threat for thousands of drivers who use Gate 9 each day. McGhee said Sen. Arthur Orr, R-Decatur, brought the Gate 9 problem to his organization, the only federally recognized Indian Tribe in Alabama. “I think this was a perfect example on how the Poarch Band of Creek Indians could benefit not only the state of Alabama, north Alabama, but Madison County to the safety issue that’s going on,” he said. Bob Ludwig, chairman of the Federal Building Authority in Huntsville, said the donation will fund the first phase of a project that will move and widen Gate 9, making it easier for travelers to get in and out of the U.S. Army base. It also allows officials to get started on the work sooner than they anticipated, with an estimated completion date of about 18 months. “This project is to be able to move Gate 9 three quarters of a mile,” Ludwig said. “If you’re going towards NASA today, you’ll see a stoplight down in close to where you turn to go to the airport on base and that’s where the new Gate 9 will be located. The visitor’s center will move, other things will go along with it, but it will allow you to be able to have almost a mile’s worth of collecting point for people.” Dirt is already moving on the $8 million to $9 million, two-phase project, which received $1 million from Madison County. Ludwig said other entities in Limestone County, Tennessee and Scottsboro also chipped in toward Phase I. Chip Cherry, CEO of the Chamber of Commerce of Huntsville/Madison County, said Redstone Arsenal initiated a plan to develop a business park on the northern edge of the installation 10 years ago. He said that vision is being manifested in brick, mortar and asphalt for people working at Redstone Gateway, a more than 400-acre mixed-use complex adjacent to I-565 at Gate 9 in Huntsville. Of the more than 41,000 people who work at Redstone Arsenal, about 19,000 cars enter Gate 9, which is inadequate to handle that level of traffic. “It’s critical to our regional economy that we do everything we can to improve this infrastructure,” he said. McGhee said the Poarch Band of Creek Indians is investing $14 million at TownePlace Suites by Marriott at Redstone Gateway and may build another hotel at the site. TownePlace Suites is expected to open early this year. The 120-unit, four-story hotel, developed and operated by Yedla Management Company, sits on the south side of the six-acre lake with access from Market Street.


State GOP chairman says Republicans do not need Democrats to settle speaker fight

 Republicans hold a supermajority of the seats in the Alabama House of Representatives and are divided over who should wield the speaker’s gavel and the power that comes with it. But Republicans do not need to look to Democrats to help them settle their leadership fight. That’s the view of the chairman of the Alabama Republican Party, Terry Lathan. “Alabama House Republicans will stand on their own votes and decisions. They do not need counsel from Alabama Democrats,” Lathan responded in an email asking for comment on an story detailing how some supporters of Rep. Phil Williams. Williams is challenging Speaker Mike Hubbard, have approached Democrats seeking their votes to oust Hubbard. It is expected foes of Hubbard will attempt to oust him when the regular session of the Legislature starts Feb. 2.

Multiple sources – Republicans and Democrats – contend that Williams does not have enough support among the 70 Republicans in the House to get to the 53 votes he needs to take the speaker’s chair and will need Democrats if he is to have any chance of winning. In a follow-up email, Lathan was asked if she believed that the effort remove Hubbard is one that only GOP members should decide. “The House has a Republican supermajority to make their decisions sent directly to Montgomery by the Alabama voters,” writes Lathan. “When the Democrats were in control for 136 years up until the 2010 election, they were not interested in what a Republican thought or were concerned with their opinions. I doubt that they took a poll or brought Republicans into the conversation of leadership positions. This is no different now.”

Lathan said she strongly encourages the people of Alabama to “engage their elected officials on votes of leadership positions, legislation and decisions they make that affect our lives ever year.” The leadership fight has not only divided the House, it has divided the Steering Committee of the Alabama Republican Party which governs the GOP. It passed a resolution recently asking Hubbard to not resign the speakership but to suspend his hold on the seat while criminal charges he faces move toward trial currently set for late March. Eight members of the committee out of the 20 members voted against the resolution. Fifteen months ago Hubbard was indicted on 23 charges of using his office for personal financial gain. If convicted on any one of the charges Hubbard would lose his seat in the House and could face time in a state prison. Hubbard has denied any wrong doing.


Environmentalists, state spar over beachfront hotel and conference center

 The process for awarding $58 million of BP oil spill fines for a beachfront hotel and conference center at Gulf State Park was flawed and failed to consider alternative projects, an attorney with an environmental advocacy group argued before a federal judge Tuesday. But attorneys representing the U.S. Department of Justice and the state of Alabama, along with a representative of the Gulf Shores-based project, said they were in the legal right to do what they did in 2014, when the project was initially approved.

Both sides argued their cases before U.S. District Judge Charles Butler, whose decision could have a wide-ranging impact on more than 60 projects approved from an initial settlement agreement with BP totaling $1 billion. The fines were part of an early pot of money that BP made available to coastal states following the 2010 Deepwater Horizon disaster. The spill poured 134 million gallons of oil into the Gulf of Mexico. “If this court finds that alternatives should’ve been considered that were not negotiated with BP, it  invalidates the entire early restoration process,” said Jane Calamusa, an attorney for Gunter Guy, commissioner of the Alabama Department of Conservation and Natural Resources. “It would jeopardize the early restoration projects. We have a total of 64 projects and $852 million that would be up in the air.”

Representatives with the New Orleans-based Gulf Restoration Network said that Butler’s decision won’t leave the other 64 projects in limbo. Among other coastal Alabama projects being funded with BP fines are a $5 million shoreline project in Bon Secour Bay and $3.2 million project to create oyster reefs.

“The law says you have to look at alternative ways to do things,” said Robert Wiygul, attorney with the restoration network. “That’s not what happened with this project.” More:


Gas tax increase could help fix Bloody 98, build I-10 bridge, Alabama transportation committee says

The Alabama Joint Transportation Committee met in Mobile on Tuesday to discuss a topic on everyone’s minds: infrastructure and how to pay for it. Committee chairman, Rep. Mac McCutcheon is advocating for a 12 cent gas tax that would make up for inflation since the last gas tax increase in 1992. Since ’92, Alabama’s population has increased from 4.1 million to 4.8 million in 2014. By-and-large, examples of Interstate 10 tunnel traffic and Highway 98 injuries and deaths were brought up most during the two and a half hour meeting. Vulcan Inc. CEO Tommy Lee kicked off the meeting with a presentation that showed some of the obstacles in the way of maintaining roads and bridges in Alabama, and touched on the idea of a gas tax that could rectify funding shortfalls. One of the examples that Lee gave was that a Honda in 1994 contributed roughly $184 in taxes for every 12,000 miles driven. In 2013, that car would contribute $146 for the same amount of miles due to greater efficiency in modern vehicles. Lee also cited a the rule that by 2024, all cars must get 54.5 miles to the gallon on average. He said that was evidence that funding from the existing gas tax, established in 1992, would be even less adequate if action is not taken.

Following his presentation, 21 speakers were signed up to address the large delegation, and of that number, most did. Mobile County Commissioner Connie Hudson spoke first, commending the delegation for communicating with local citizens and listening to local needs. She also highlighted Bloody 98.

“One project that for us has been head and shoulders above the others is the Highway 98 project,” said Hudson. “It has been on the books of ALDOT for the better part of 20 years, and in that period of time only five of 13 phases have been completed. There is approximately a 10 mile stretch of road that needs to be improved.” “Between 2012 and 2014, the accident picture with injuries has increased 62 percent, it’s one of the most dangerous two-lane roads in the state.” Bill Ward represented the Alabama Association of Truckers to highlight the issues faced by 18-wheelers. He spoke at length about the delays truckers face on Highway 98 in the portions that go down to two lanes as well as the bottleneck in the tunnel.

Chairman of the Build The Bridge coalition addressed the bottleneck, saying that “building bridge could benefit many areas. No single thing addresses so many issues as this one thing,” he said. Ward explained that for a trucker, a delay like the tunnel bottleneck means money lost. Ward said that places like Airbus have to halt production if they do not receive their cargo on time, hurting the economy.

He said that improved infrastructure could help to limit those delays and help prevent accidents involving truck on the roadways, of which 70 percent are caused by four-wheeled cars. CEO of Infirmary Health Mark Nix gave some real-world examples of how infrastructure deficiencies are deadly. He said that heart attacks and strokes need to be addressed within a limited amount of time, and congested roads in the growing Daphne/Fairhope area are preventing people from getting the care they need, especially on Highway 98. To deal with those issues, $45,000 has been spent on telemetry units being installed in ambulances because the time it takes to get people to the hospital in Baldwin County is increasing, he said. Vice President of the Alabama Section of the American Society of Civil Engineers Kendall Kilpatrick explained to that the condition of the roads means dollar bills to every citizen in the state and why a gas tax would help. More:


Here’s the dumbest law in Alabama

Let’s face it – the Heart of Dixie doesn’t always do things perfectly. There are times that all of us Alabamians want to bury our head in our hands and cry out why. But it’s our state and we love it. And hopefully, we can laugh at it when appropriate – such as now. This is one of those times when it’s OK to chuckle. Olivet Nazarene University recently ranked each state’s dumbest law and Alabama’s is a doozy. According to the university, it’s illegal to wear a fake mustache in Alabama for the purpose of causing laughter in church. (I guess it’s OK to wear a fake mustache as long as you don’t want to make someone laugh, something that appears to be a rather large loophole.) Now, as the appropriately named points out, police aren’t actually going around enforcing either the validity of one’s mustache or the wearer’s intent. And, as’ s Kelly Kazek noted, it’s almost impossible to actually prove the origin of such crazy laws but they are at least good for a laugh. Alabama’s not the only state with dumb laws. We’re not even the only state with dumb laws related to church attendance. It’s illegal in Rehoboth, Delaware to whisper in church. You are not supposed to eat peanuts while attending religious services in Boston. And, supposedly, it’s against the law to kill a housefly within 160 feet of a church in Ohio unless you have a license. See – doesn’t have make us all feel better?



Another Richard Shelby campaign ad fails the truth test

You can’t blame Richard Shelby for trying. A new campaign ad going up this week portrays the Alabama Senator as a fierce opponent of Wall Street bailouts. “Bailouts reward failure and punish taxpayers,” the woman in the new spot, Shannon Riley, owner of One Stop Environmental, says. “You know that. Senator Shelby knows that. Then why is Washington so stupid?” As we’ll see in a second, not true. “When the big Wall Street banks came with their hand out, Shelby said ‘No way.’ Stood firm. Was the leading Republican voice against them,” Riley continues. “He refused to put hardworking Alabama taxpayers on the hook.” That much is arguably true, no matter how thin. And then the narrator takes over. “Richard Shelby stands up to Obama every single day.” If you watched the ad, you could be forgiven for thinking these two things — President Obama and the Troubled Asset Relief Program — had a great deal to do with each other. The problem is that TARP was signed into law in October 2008 by then-President George W. Bush. This isn’t to say that Obama was opposed to the bank bailout. When he took office three months later, he followed through on the bipartisan triage of America’s banking industry. Most in Washington at the time understood it for what it was — a request they couldn’t refuse. Nobody was overjoyed about it. Many were furious that such a thing could happen. But everyone who was being honest — and “honest” is the key word here — understood that one more bank collapsing like Lehman Brothers could trigger a chain reaction leading to a second Great Depression. A few continued to the beat the let-them-fail drum because, as they knew well, the majority in Congress wasn’t going to let them. And when it came to beating that drum, Shelby might as well have been Keith Moon. But here’s the thing — TARP actually worked. And it didn’t merely save the financial industry from apocalyptic collapse. The federal government put $426.4 billion into TARP, and by the time the program ended six years later it got $441.7 billion back. That’s right. The federal government saved the banks and made money doing so. Really, when was the last time a government program made money? Regardless of how anyone felt then or feels now about the nation being held hostage by Wall Street recklessness, TARP was a success. Did it reward failure? Only in so much that it prevented a financial collapse that could have left us eating our pets. Did it punish taxpayers? Only if you consider getting paid a punishment. However, Shelby hasn’t always voted against bailouts. In 2008, he voted for the Housing and Economic Recovery Act, which pledged $300 billion to shore up Fannie Mae and Freddie Mac. The only way Shelby could outdo himself on this one is if he began campaigning on term limits. Why is Washington so stupid? The problem isn’t that Washington is stupid. It’s that it’s too smart for our own good, and Shelby has been at the center of it for more than three decades. Shelby knows that he can put a commercial up on TV that manipulates voters feelings while ignoring facts — such as where his campaign donations come from. According to, in the last five years the top five industries donating to Shelby were, in descending order, commercial banks ($282,150), securities traders and investment banks ($271,450), insurance companies ($264,750), finance and credit companies ($157,700) and aerospace defense contractors ($109,500). Shelby’s ad might tell one story, but his campaign money tells another. When Wall Street banks come to Washington, Shelby’s the one with his hand out.


Fat cats stay fat in Alabama state budget

 I keep hearing how the governor has tightened the state payroll, how the Legislature has, in the name of small and efficient government, trimmed the fat. But let’s face it. Fat may get cut, but the fat cats don’t. Not like everybody else. The fat cats – like anywhere – get fatter. And the skinny ones get the ax. It’s true there have been cuts across the board in recent years. Overall payroll last year was down 9 percent from 2010, when the Republican Legislature took over for real. But the pain has never been felt at the top of the state food chain. Not by the 1 percenters. Or even the four percenters. Or any of those who make the most taxpayer money. The state of Alabama in 2015 paid 1,232 people more than 100,000, according to payroll records maintained on the Department of Finance website. That’s just 14 jobs fewer than in 2010, when the cutting was said to begin. Fourteen people. Think about that a second. The state reduced its payroll by 4,200 people in that time period, and the number of people paid six figures fell by 14. Because the plump stay plump and the struggling struggle on over to the unemployment line. Among those who made more than $100,000 in 2010 and remained in state jobs last year, salaries actually rose 6 percent. They talk about cuts. But the flabbiest of the felines still get raises. I know, I know. Six figures doesn’t buy what it used to. It is not riches in this day-and-age. But in a state where the median household income is $43,000, it buys a disproportional share. It is no surprise that Retirement Systems chief David Bronner was the highest-paid state employee, at $593,519. Despite the fact that RSA has been bashed by everybody from state legislators to the Pew Charitable Trusts in the last year, RSA workers accounted for the top three salaries, and nine of the top 30. Online Database by Caspio Click here to load this Caspio Online Database. This data does not include pay for state universities. If it did, Alabama Coach Nick Saban’s pay would dwarf that of Bronner.  At Alabama alone, Saban, former defensive coordinator Kirby Smart and basketball coach Avery Johnson made as much as the top 50 state employees combined, but the university will argue they are paid with sports revenue and not taxpayer money. The state jobs do include those of judges, who make more in Alabama than the U.S. average—especially at the appellate level — even though Alabama’s median income is about 20 percent less. Supreme Court Chief Justice Roy Moore – who made $182,000 last year but was not the highest paid justice – argued in state budget hearings this month that cuts had made it difficult to hold onto employees. And it is true in the courts across the state, which can barely pay clerks a living wage. But judges continue to be paid, and to receive raises amounting to about 6 percent since 2010. It is hard to say what it means, really. Many of the salaries – like those of judges — are protected by statute. Others are protected by the Legislature itself. But it is clear that the state needs to compensate those who invest its money, who serve as its lawyers and administrators and hundreds of other jobs. But it is just as clear in an age when government itself is demonized by those in political power that the rush to make easy cuts hurts those who make the least. The rich get richer, regardless of performance. And the rest fend for themselves.

Morning Money

WINTER FED DAY WITH AN EYE TOWARD SUMMER — The Federal Reserve is wrapping up its first meetings today since it decided to begin tightening its easy money policies last month. Officials have set a course for further rate increases this year, but with turbulent markets and other central banks around the world indicating they will go in the other direction, the pressure is on the Fed to back off and wait until possibly June to hike again.

Capital Economics in a note yesterday said the Fed will be keeping an eye on recent swings in the market, the slide in oil prices, an appreciating dollar and some lingering weakness in the economy: “For now, we have not changed our forecast that the Fed will raise rates by a further 25bp in March. But there is a growing possibility that this combination of factors will persuade the Fed to leave rates unchanged until later in the year.”

Allianz’s Mohamed El-Erian emails M.M. about what factor the European Central Bank could play: “The Fed will not be influenced by the ECB’s more stimulative stance provided these divergent monetary policies do not lead to excessive dollar appreciation and financial market volatility.” You can read more on El-Erian’s Fed preview here:

MEANWHILE, MARKET TURMOIL THREATENS FED’s CRED — WSJ’s Steven Russolillo: “In its statement Wednesday, should the Fed walk back last month’s expectation for four rate increases this year, it risks suggesting the economy is in worse shape than previously thought. But if it maintains the status quo, it also risks inflicting more pain on already fragile markets.”

TRUMP OUT — POLITICO’s Shane Goldmacher, Ben Schreckinger, and Katie Glueck: “With less than 150 hours before the Iowa caucuses, Trump thrust himself squarely into the center of the political conversation and the news cycle with his surprise declaration that he would boycott the final debate before voting begins in Iowa. … Trump campaign manager Corey Lewandowski told reporters that plans are already in the works for a competing event when Thursday’s debate is scheduled to air.”

CLINTON FUNDRAISER LINKED TO BAIN — A source tells M.M.’s Ben White that Jonathan Lavine, managing director of Bain Capital affiliate Sankaty Advisors, will be hosting a fundraiser in Boston for Hillary Clinton on Feb. 5. Bain founder Mitt Romney took heat from Democrats during his failed 2012 White House campaign about the private equity firm’s takeover practices. And it comes just as Clinton is trying to deflect criticism of her Wall Street ties while the primary season hits full gear.

GOOD WEDNESDAY MORNING — Your usual host Ben White’s still on break. In the meantime please email tips to

DRIVING THE DAY — New home sales at 10 a.m … Office of Financial Research sends its 2015 report to Congress at 1 p.m. found here FOMC statement at 2 p.m. … Brookings hosts a screening of crisis flick “The Big Short” at 4 p.m.

HOUSE TO TAKE UP CHOKE POINT — The House next week is expected to take up a few Financial Services Committee bills that could help out some banks, according to a committee notice sent to lawmakers yesterday. One in particular from Rep. Blaine Luetkemeyer is an attempt to counter the administration’s so-called Operation Choke Point, which Republicans have criticized for cutting off certain industries — like payday lenders and gun sellers — from the banking system.


RAND RETURNS — It looks like Rand Paul will squeak back onto the main GOP debate stage tomorrow night. POLITICO’s Daniel Strauss and Steven Shepard: “Fox News has set the same criteria for qualification as last week’s Fox Business News debate: the top six candidates in national polls, plus any other candidates in the top five in either Iowa or New Hampshire… According to POLITICO’s calculations, while Paul is outside the top six nationally, the Kentucky senator is currently tied for fifth place in Iowa with former Florida Gov. Jeb Bush at an average of 4 percent.”

NO CARD AT JPM ATM, NO PROBLEM — All you’ll need is a smartphone. From New York Post’s Kevin Dugan: “JPMorgan Chase is preparing a nationwide rollout later this year of thousands of new cash machines that don’t need an ATM card, will triple the withdrawal limit to $3,000 and dispense bills in $1, $5, $20 and $100 denominations.”

TRADE GROUPS URGE MEMBERS TO RESIST DISCLOSURE ADVOCATES — The Center for Public Integrity’s Dave Levinthal unearthed a letter from the U.S. Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers urging members to resist advocates demands to disclose more about their spending than they have to: “The trade groups’ plea comes as the U.S. Chamber is preparing to play a major role in the 2016 congressional elections.”

NEW BANKING GIANT IN OHIO — The New York Times’ Amie Tsang reports the merger of Huntington Bancshares and FirstMerit Corp. announced Tuesday “would create the largest bank in Ohio by deposits. The combined company would have nearly $100 billion in assets.”

POTUS Events

10:00 am || Recieves the Presidential Daily Briefing
11:00 am || Meets with Treasury Secretary Lew
11:45 am || Meets with Sen. Bernie Sanders

12:30 pm || Lunch with Biden
2:30 pm || Interviewed by local television anchors participating in “Live from the White House;” Diplomatic Room
5:45 pm || Delivers remarks at the Righteous Among the Nations Award Ceremony; Israeli Embassy, Washington

All Times Eastern
Live stream of White House briefing at 12:30 pm

Floor Action

Both the House and Senate are still out due to the snow storm. The federal government is shutdown as well. The D.C. government is up and running.


Choose Your Tax Preparer Wisely

If someone helps you do your taxes, you’re not alone. The IRS asks you to choose your tax return preparer wisely – for good reason. You are responsible for the information on your income tax return. That’s true no matter who prepares your return. Here are ten tips to keep in mind when choosing a tax preparer:

  1. Check the Preparer’s Qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on This tool can help you find a tax return preparer with the qualifications that you prefer. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:
  • Attorneys.
  • CPAs.
  • Enrolled Agents.
  • Enrolled Retirement Plan Agents.
  • Enrolled Actuaries.
  • Annual Filing Season Program participants.

Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. However, new rules apply to the rights of non-credentialed tax preparers to represent their clients before the IRS. Non-credentialed preparers without an Annual Filing Season Program – Record of Completion – may only prepare tax returns. The new rules do not allow them to represent clients before the IRS on any returns prepared and filed after December 31, 2015. Annual Filing Season Program participants can represent clients in limited situations. For more, visit and see the Understanding Tax Return Preparer Credentials and Qualifications page.

  1. Check the Preparer’s History. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to and search for “verify enrolled agent status” or check the Directory.
  2. Ask about Service Fees. Avoid preparers who base fees on a percentage of their client’s refund. Also avoid those who boast bigger refunds than their competition. Make sure that your refund goes directly to you – not into your preparer’s bank account.
  3. Ask to E-file Your Return. Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has safely processed more than 1.5 billion e-filed tax returns.
  4. Make Sure the Preparer is Available. You may want to contact your preparer after this year’s April 18 due date. Avoid fly-by-night preparers.
  5. Provide Records and Receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to figure your total income, tax deductions, credits, etc. Do not use a preparer who will e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
  6. Never Sign a Blank Return. Don’t use a tax preparer that asks you to sign a blank tax form.
  7. Review Your Return Before Signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
  8. Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number, or PTIN. By law, paid preparers must sign returns and include their PTIN. Be sure you get a copy of your return.
  9. Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients; however, some preparers are dishonest. Report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on at any time.

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