Attn: News desks

     Remember last year’s incident at the Oakland International Airport when 204 Marines were shunted to a remote area and not allowed inside the passenger terminal while their plane was being re-fueled and re-provisioned? They were flying back to their home base in Hawaii after serving in Iraq.

     An investigation by the Department of Transportation’s Inspector General found that no laws or regulations were breached. To the contrary, keeping the Marines out of the passenger terminal was justified for several reasons.

     One reason cited by the Inspector General was because airport officials didn’t know if passenger security screening at military bases “is sufficient to meet the Transportation Security Administration’s standards and procedures at commercial airports.” Or, to put it another way, the airport security officials didn’t know if the Marines were subjected to the same pre-boarding indignities that are suffered by commercial passengers.

     The Inspector General’s report was completed six months ago, but it was recalled when Rep. John Mica (R-Fla.) announced in a press release that an agreement had been reached between the Pentagon and two Dept. of Transportation agencies–TSA and the Federal Aviation Administration–to prevent such hostile greetings to traveling troops.

     Under a Memorandum of Understanding (MOU in bureaucratese), TSA will provide security training to military personnel who will be responsible for screening troops who wish to enter a sterile passenger terminal. The military will also be required to post guards on charter military aircraft while on the ground to ensure that no one enters or tampers with the aircraft or the weapons it might be carrying.

     “This agreement will allow returning military personnel to receive their due respect without compromising airport security,” Mica said.

     Rep. Tom Petri (R-Wis.) who this year became chairman of the House Aviation Subcommittee, said the agencies should be commended “for giving this matter their prompt and proper attention.”

Attn: News desks

     A federal investigation into the use of foreign bank accounts to hide assets and money from U.S. tax collectors might get a boost from an examination of photographs that were taken of the grandstands behind the 17th green at this year’s TPC Players Championship at the Sawgrass course in Ponte Vedra Beach, Fla. Or, by checking the tail numbers on private jet aircraft that landed at nearby Jacksonville airport during the tournament weekend.

     A staff report released last week by the Senate Subcommittee on Permanent Investigations reveals that UBS AG (the Union Bank of Switzerland), the golf tournament’s sponsor, used sporting and cultural events in the U.S. to promote its business of selling private banking services that are tailored to evade U.S. disclosure and tax laws.

     For years, UBS has sent a small army of bankers to rub shoulders with wealthy Americans. At least 20 UBS bankers, even though the bank has branch offices in all 50 states, made over 300 trips from Switzerland to the U.S. between 2003 and 2008. Their customs declaration forms, which all visitors to the U.S. must complete prior to entering the country, described the purpose of their visits as “non-business.” But, an analysis of the dates and ports of entry showed the trips coincided with UBS-sponsored events, suggesting that the trips were, in fact, business related.

     Credentials to enter the grandstands behind the 17th green, and the hospitality tent behind it, became a hot item at this year’s TPC tournament when Sergio Garcia and Paul Gaydos were deadlocked after 72 holes of regulation play and headed to the 17th tee to start their playoff. Garcia won the tournament–and a $1.7 million prize, the winner’s share of a $9.5 million purse which is golf’s largest–when he sank a putt on the 17th green.

     Whatever UBS paid to sponsor the tournament, it was chickenfeed compared to the business which the Swiss bank does with American customers who have parked billions of dollars into accounts that are carefully structured to avoid their disclosure to U.S. taxing authorities.

     The subcommittee report focused on UBS and another tax haven bank, the LGT Bank in Liechtenstein which is co-owned by UBS and Liechtenstein’s royal family.

    U.S. tax authorities have fought a never-ending and never-winning battle against foreign bank secrecy laws for decades. There are 50 tax haven countries, some in places most Americans have never heard of such as Andorra and Vanuatu, but they “are engaged in economic warfare against the United States,” Sen. Carl Levin (D-Mich.), the subcommittee’s chairman, said at a July 17 hearing.

     “Each year,” the staff report said, “the U.S. loses an estimated $100 billion in tax revenues due to offshore tax abuses. Offshore tax havens today hold trillions of dollars in assets provided by citizens of other countries, including the U.S.”

     Today, the U.S. government is on the brink of cashing in on its biggest break ever. Last February, a Liechtenstein bank employee delivered the names of 1,400 LGT Bank customers to U.S. and other tax authorities.

     “The former employee who exposed LGT’s dirty laundry had to go into hiding to avoid arrest by Liechtenstein which has listed him as its Number 1 target for arrest,” Sen. Levin said.

     Levin added: “A $10 million reward has been placed on his head…the subcommittee obtained about 12,000 pages of LGT documents related to U.S. clients from this former LGT employee. The documents and information he provided depict a bank that is a willing partner, and an aider and abettor, to clients trying to evade taxes, dodge creditors, or defy court orders. Internal LGT documents and other information show secrecy was a deeply embedded way of life at the bank.”

     In May, U.S. authorities broke open a second international banking scandal with the arrest of a former UBS banker while he was travelling on business in Florida. The banker, Bradley Birkenfeld, 43, pleaded guilty to defrauding the IRS by helping bank clients structure their accounts to avoid disclosure and taxation. It is believed to be the first time that the U.S. has criminally prosecuted a Swiss banker for helping a U.S. taxpayer evade payment of U.S. taxes.

     The subcommittee report describes the lengths taken by the Swiss and Liechtenstein banks to attract new customers for their tax evasion services.

     LGT Bank, the report said, advises customers to establish “transfer corporations” to disguise asset transfers to and from LGT accounts that might otherwise trigger a disclosure requirement. “It was also not unusual for LGT to assign its U.S. clients code words to confirm their respective identities,” the report said. An LGT memorandum reveals that the bank used the Swiss bank secrecy law as a selling point (by pointing out that Liechtenstein’s law was even more stringent), and that it used the Liechtenstein royal family to help secure new customers.

     Although UBS has branch bank offices in all 50 states, the company used its Swiss banking staff to target U.S. citizens to open bank accounts in Switzerland. The subcommittee said the Swiss bank has approximately 20,000 American accounts.

–EZ

Attn: Political editors

     The Federal Election Commission, back in operation with four new commissioners who won Senate confirmation in late June, last week announced its approval to distribute $7.4 million in primary election matching fund payments to six presidential candidates, none of whom are still pursuing their party nominations.

     And neither of the candidates who are expected to win their nominations–Sens. John McCain (R-Ariz.) and Barack Obama (D-Ill.)–shared in the loot.  Although they claim they are campaign finance reformers, McCain and Obama have rejected taxpayer funds in order to avoid the strings that go with them, such as state-by-state spending limits and penny-by-penny government audits.

     The spending rules are arcane and meaningless in many instances. They allow candidates to pay the full cost to advertise on a metropolitan television station, but to count for spending limit purposes only that portion of the cost that was directed to viewers residing in a particular state. Or to hold down spending in certain states by housing campaign workers and renting automobiles in an adjacent state.

     Last December, the FEC authorized McCain, who co-fathered the Bipartisan Campaign Reform Act, to collect $5.8 million from the U.S. Treasury. But faced with Obama’s unprecedented fundraising success, McCain changed his mind about accepting the federal matching funds and its limitations on campaign spending. He might have asked the FEC for permission to withdraw his application for matching funds, but the agency was unable to conduct business while four of its former members were unable to continue serving and the Senate was delaying the confirmations for their replacements. Instead, proving the adage that “it’s easier to get foregiveness than it is to get permission,” McCain sent a letter that announced his decision to withdraw his application.

     McCain claimed he had a legal right to withdraw since he hadn’t collected any of the money. But it remains a question for FEC review, especially if McCain’s campaign used the prospect of receiving taxpayer funds to secure a commercial bank loan. The campaign claims it didn’t do that, and it is a matter that’s been raised in a lawsuit by the Democratic National Committee. However, there’s ample precedent to suggest that a federal court will dismiss the DNC’s suit on grounds that it didn’t pursue an administrative remedy from the FEC.  And, there’s even more ample evidence to suggest that any enforcement action the FEC may take against McCain will ultimately result in a 3-3 deadlock among the Commission’s three Democrat and three Republican members.

     Last week’s distribution of matching fund payments, announced in an FEC press release, brought back wistful memories of the once-crowded field of Democratic candidates. The last time the FEC announced a distribution of federal matching fund payments for the 2008 presidential election was last December 20 when it divided $19.3 million among seven candidates. The allotments:

                                               Dec. 20            July 16            Total
     DEMOCRATS
     Sen. Joseph Biden              $857,188        $1,135,035       $1,992,225
     Sen. Christopher Dodd     1,447,568             514,173         1,961,742
     Ex-Sen. John Edwards      8,825,424           4,057,452      12,882,878
     Rep. Dennis Kucinich          100,000              970,521        1,070,521

     REPUBLICANS
     Sen. John McCain             5,812,197                          -        5,812,197
     Rep. Duncan Hunter            100,000               353,527           453,527
     Rep. Tom Tancredo          2,145,125                          -        2,145,125

     Last week’s distribution brought the total payment for the 2008 primary election campaign to $26.7 million (including McCain’s uncollected funds).

     Although refusing to collect his allotment of primary matching fund payments, McCain has said he will accept taxpayer funds for his general election campaign. He is eligible to receive $84.1 million to fund his general election campaign, provided he agrees not to accept any private contributions. Obama, on the other hand, has announced his campaign will rely on private contributions.

Attn: News desks

     World War II isn’t over yet! It’s still being fought quietly in courtroom battles around the country. The latest case was initiated last week when the Department of Justice asked a federal judge to revoke the U.S. citizenship of a former Nazi death camp guard who is now 86 years old.

     Nazi Germany surrendered to the Allies in 1945 and now, 63 years later, the Justice Department’s Office of Special Investigations (OSI) remains in hot pursuit of Nazi war criminals who lied about their involvement in the mass murders of civilians in order to gain entry to the U.S. and to later qualify for citizenship.

     Since its 1979 creation, OSI has identified 107 Nazi war criminals who have been stripped of their U.S. citizenships and have been deported back to Europe. None has been more notorious than John Demjanjuk who lived quietly in Chicago until 1977 when he was accused of being “Ivan the Terrible” who ran Treblinka, one of the most horrific of the Nazi death factories.

     After his conviction, Demjanjuk was extradicted to Israel where, instead of being put to death as expected, a court concluded there wasn’t sufficient evidence to prove he was “Ivan the Terrible.” He was returned to the U.S. where he was retried on more easily provable charges that he was a guard at several Nazi concentration camps.

     Demjanjuk’s long court battle, at least the part fought in U.S. courtrooms, may have ended on a quiet note last May 19 when the U.S. Supreme Court rejected his appeal for a new trial. But last month, German Holocaust crimes prosecutor Kurt Schrimm requested that Demjanjuk be extradicted to Germany to face charges that he was involved in killing Jews at the Sobibor extermination camp.

     At OSI, the search for Nazi war criminals goes on. Last week, the office filed charges against Peter Egner, accusing him of concealing his Nazi atrocities when he entered the U.S. in 1960 and when he became a naturalized citizen in 1966.

     Egner, now 86 years old and found living in Bellevue, Wash., was accused in court papers of serving in a Nazi killing unit that executed more than 11,000 civilians, mostly Serbian Jewish men but also communists and gypsies, in the fall of 1941; and 6,280 mostly Serbian Jewish women and children in early 1942.

     “Prior to their deaths, these victims were confined in a concentration camp at Semlin, outside of Belgrade (Serbia). In a process that continued daily for a period of approximately two months, the women and children were taken from the camp and forced into a specially equipped van where they were asphyxiated with carbon monoxide while being transported to Avala, an execution and mass burial site near Belgrade,” OSI said in its complaint.

     Last week, local news media attempted to interview Egner about the charges, but he claimed that he was not aware of them. The local news media took him at his word, and didn’t examine OSI’s court papers which disclosed Egner had admitted that he served in the Nazi-run Security Police and Security Service, and that he was assigned to guarding the vans that picked up live victims at Semlin and killed them on the way to Avala.

     “Egner also admitted serving as an interpreter during interrogations of political prisoners. Interrogations conducted by the Security Police and Security Service Belgrade sometimes involved extreme torture, and prisoners were often executed once their interrogations were completed,” the Justice Dept. said in a press release.

     If Egner’s citizenship is revoked, he might be extradicted to Serbia which has an interest in prosecuting Nazi war criminals who were responsible for the World War II-era murders of Serbian citizens.

     OSI’s original mission of exposing and prosecuting Nazi war criminals is becoming a race against the clock as most suspected Nazis are now in their 80s and 90s, and the cost of mounting investigations and prosecutions becomes more questionable with the passage of time. OSI’s critics raise two important policy questions: 1) Why are Nazi war criminals being pursued when it is more likely that they will die of old age before they can be deported by court order; and, 2) Why weren’t they prosecuted in the 1950s and 1960s when they were entering the country and becoming U.S. citizens?

–EZ

Attn: Homeland security reporters, Editorial page editors

     If you’re a terrorist who needs a sprinkle of radioactive dust for a “dirty bomb,” you’d better hurry because the U.S. government isn’t going to wait forever. But so far it’s hard to say it won’t. The Nuclear Regulatory Commission and the U.S. Department of Homeland Security–agencies with shared responsibilities for protecting Americans from radioactive attack–haven’t exactly shown a “need for speed” in closing nuclear security gaps.

     That’s one conclusion that might be drawn from a Government Accountability Office report released earlier this week, criticizing the NRC and the DHS’s Customs & Border Patrol bureau for their slowness to implement security protections for radioactive sources. (Another conclusion might be that the federal government is occupied by some incredibly stupid people.)

     GAO’s report was a followup to its 2003 examination that uncovered weaknesses in the NRC’s nuclear licensing process and gaps in CBP’s ability to detect radioactive materials at border crossings.

     Five years later, GAO said in its report to Congress, regulators at the NRC have made only “limited progress” toward modifying its procedures to ensure that radioactive materials cannot be purchased by persons having no legitimate need for them. Nor has the NRC revised its policies to protect the security of various radioactive sources.

     It appears that the NRC discarded several of the GAO’s recommendations in favor of their own plans, which would be fine if they were actually implemented. The NRC responded to the 2003 GAO report by initiating the development of a National Source Tracking System to provide comprehensive and timely information about potentially dangerous radioactive sources. But, the program’s development “has been delayed by 18 months and is not expected to be fully operational until January 2009,” the GAO said.

     Another NRC initiative is the development of a web-based system (and you might have thought this is so elementary that the agency would have had this years ago) to “verify that those seeking to bring radioactive materials into the country or purchase them are licensed to do so.” No matter how essential it is–and notwithstanding the fact that it is already decades late–the NRC’s development of verification and licensing sysems “are more than 3 years behind schedule,” the GAO said. Moreover, when fully operational, the program might not include licensing information from the 35 states that have signed agreements with the NRC to regulate radioactive sources.

     “The delays in the deployment and full development of these systems are especially consequential because the NRC has identified their deployment as key to improving the control and accountability of radioactive materials,” the GAO said.

      With regard to CBP’s efforts to detect radioactive materials at the country’s border stations, the GAO said needed equipment is in short supply. While people and vehicles are scanned at the borders using devices that can detect very small amounts of radiation, “we found that radiation detectors are not available to all officers who need them.”

–EZ