— source pbs.org/independentlens
— source pbs.org/independentlens
The case of Marissa Alexander, the African-American mother of three who was sentenced to 20 years in prison for firing what she maintains was a warning shot at her abusive husband in 2010. She attempted to use Florida’s “stand your ground” law in her defense, the law that was made famous when white vigilante George Zimmerman successfully used it in his defense after he shot and killed unarmed African-American teenager Trayvon Martin. But in March 2012, the jury rejected Alexander’s use of “stand your ground” and convicted her after only 12 minutes of deliberation. She was sentenced to 20 years behind bars under a Florida law known as “10-20-Life” that carries a mandatory minimum for certain gun crimes regardless of the circumstance. Alexander won an appeal for a new trial and later accepted a plea deal that capped her sentence to three years of time served.
— source democracynow.org
It is a fact that the trust laws of some tax havens openly promote illegality. The reality that some tax havens will not enforce foreign laws (e.g. ensuring non-recognition of foreign laws and judgements that favoured legitimate heirs and former spouses) is even publicly advertised by some offshore service providers, not on the deep web like drugs and illegal weapons, but on the internet, accessed by a simple google search on tax or estate planning.
Despite this, there has been some reluctance from governments to take on the issue of trusts, and some difficulties posed for governments that have attempted to deal with some of their more problematic features. Today, a new paper called Trusts – Weapons of Mass Injustice from the Tax Justice Network attempts to reopen the debate on trusts, and argues that there is urgent need for effective measures to curtail their activities.
A controversial issue
Trusts create a lot of controversy. While many of them are taxable at the trust level, they may hold assets or engage in business just like companies, and not everybody fully agrees with the idea of registering all trusts, including some transparency campaigners. That’s either because of their complexity or because they believe in “cheaper” options, such as targeting only tax haven trusts.
We looked at some of these issues in a paper we published in November 2015, which made the case for trust registration. The paper describes trust’s secrecy risks and explains why available technology applied to registers of companies means that registering trusts’ beneficial owners is just as simple. Another crucial point is that incorporation of trusts (requiring them to incorporate or register in order for them to legally exist) is the only way to enforce trust registration. This idea currently applies to companies and other legal entities similar to trusts in their effects, like foundations.
Taking on the trusts
In May 2015 the European Union approved the 4th Anti-Money Laundering Directive, establishing central registries of beneficial owners for companies and legal persons (in Art. 30) but leaving glaring loopholes when dealing with the beneficial owners of trusts (in Art. 31).
In response to this, we published a paper suggesting amendments both to the EU Directive but also to the FATF Recommendations’ definitions of beneficial owners of trusts. In contrast to some countries’ regulations (e.g. the UK and the U.S.) that limit the definition of the beneficial owner of a trust to the trustee and anyone with control, we favour a definition that encompasses all related persons of the trust as beneficial owners (all settlors, protectors, trustees, beneficiaries, classes of beneficiaries, and any other person mentioned in the trust deed with control over the trust). This ought not be controversial: the OECD’s Common Reporting Standard (CRS) for automatic exchange of information already requires financial institutions in more than 100 countries to take this approach when identifying the beneficial owners of their trust clients.
In a set back for transparency, in July of 2016, the French Constitutional Court banned the newly introduced French public registry of trusts on the basis of an individual’s right to privacy. Our arguments, which can be found here, rely on a very basic principle: trusts should not be considered a private matter if they can be used and abused to commit financial crimes (e.g. tax evasion, money laundering) and also to defraud legitimate creditors. In essence, we propose a basic principle of responsibility: if you want your trust provisions to be binding on third persons (e.g. a personal creditor to whom you owe money), then a trust must be registered and its beneficial owners publicly disclosed. You don’t need to register anything else that can have no effect on people not related to the trust arrangement.
But, back to the beginning: the problem with trusts goes way beyond their sophisticated secrecy that allows so many crimes to be committed. This new paper explores trusts as creatures of history. While they had good reasons to exist centuries ago (e.g. to protect the family of knights joining the crusades in the Middle Ages), trusts have been used across time to evade and avoid taxes and restrictions placed on asset ownership or transfer by governments.
More recently, new types of trusts and provisions, such as spendthrift provisions and discretionary trusts (available not only in traditional tax havens but some of them also in the U.S. or the UK), allow trusts to be used as asset protection vehicles. This effectively shields assets from legitimate creditors of settlors and beneficiaries, such as tax authorities, former spouses or victims of damages (e.g. mala praxis). Such schemes are being offered instead of an insurance (after all, why pay an insurance premium as a medical doctor if your personal wealth can be protected by placing it in an asset protection trust?).
The results for society can be devastating: in the case of malpractice by a doctor, the claimant will be unable to reach the doctor’s assets for compensation even after trial, while the doctor can avoid liability and financial responsibility for (gross) negligence. Trusts also allow wealth to be accumulated for centuries (reducing or avoiding inheritance tax in the meantime), and inequality inevitably deepens.
To make matters worse, traditional trust rules that did ensure a certain level of good governance are being eroded, such as the rule against perpetuities (to limit the duration of trusts), limits to the settlor having control over the trust or being “a” or “the only” beneficiary of the trust, the requirement for trusts to have beneficiaries (e.g. purpose trusts) and even the very control and management by the trustee (e.g. the BVI Vista Trust).
Often, trusts’ asset protection (and secrecy) is justified by the need to protect vulnerable persons. Yet nothing in trust law requires trust beneficiaries to be vulnerable or minors. And – as our paper shows – specific exemptions could accommodate such concerns easily without creating uncontrollable risks or loopholes.
Trusts offer even more asset protection than an ordinary company. While both trusts and companies may achieve a similar separation of assets and limit liability, corporate shareholder’s personal creditors have one last resort if the shareholder doesn’t pay back: claim the shareholdings (and eventually reach corporate assets). Trusts, in contrast, have no shareholdings. Therefore, if the trust is structured so that beneficiaries have no vested interest (e.g. in a discretionary trust), personal creditors of the settlor and beneficiary have no access to trust assets.
For decades trust law has evolved without democratic scrutiny, and is frequently abused for nefarious purposes. We frankly doubt whether trust law would look as it does if society were aware of the potential harm that trusts can cause.
Our latest paper thus tries to start a new, more critical debate on trusts. Not only on the secrecy that they enjoy (and the fallacious arguments that prolong it), but a more profound discussion on whether society still needs all the current provisions available for trusts, given their huge potential for abuse.
 The natural persons who ultimately own, control or benefit from a company, trust or any type of entity or arrangement.
 Intergovernmental body in charge of setting up and reviewing Anti Money Laundering Recommendations
You can read the paper we’re releasing today Trusts – Weapons of Mass Injustice here. http://www.taxjustice.net/wp-content/uploads/2017/02/Trusts-Weapons-of-Mass-Injustice-Final-12-FEB-2017.pdf
— source taxjustice.net
An Argentine federal court on Wednesday sentenced former military dictator Reynaldo Bignone to life imprisonment for his role in kidnapping, torturing and murdering anti-government protesters during the 1970s and 80s. Bignone, along with six other former military leaders, were convicted for “crimes against humanity.” He was also charged for human rights violations against conscripts of Argentina’s Military College that occurred between 1976 and 1977. Dubbed “Argentina’s last dictator,” Bignone ruled as president from 1982 to 1983, representing the country’s right-wing military dictatorship that arose during the Dirty War.
— source telesurtv.net
The Bail Trap
JPMorgan Chase will pay $55 million to settle a lawsuit with the Justice Department accusing the bank of discriminating against more than 50,000 homeowners of color between 2006 and 2009. The lawsuit accuses JPMorgan Chase of violating the Fair Housing Act and Equal Credit Opportunity Act. As part of the settlement, JPMorgan Chase does not have to admit wrongdoing, and no bankers are facing criminal charges.
— source democracynow.org
what a wonderful country. justice for sale.
Tess Borden talking:
Human Rights Watch and the ACLU undertook this yearlong investigation into just how failed the law enforcement approach to drug use is. And what we found is, first, that the scale of enforcement is absolutely massive. Every 25 seconds, someone is arrested. That accounts for 1.25 million arrests per year, more arrests, as you said in the opening, than any other crime, three times more than all violent crimes combined, five times more than drug dealing. So, the scale is just absolutely incredible and devastating.
Secondly, we found that the consequences of those arrests and prosecution can be sometimes lifelong, not only for individuals, but also for families. On any given day in the United States, some 140,000 people are behind bars just because they possessed a small amount of drugs for their own personal use, while each day tens of thousands more are cycling through jails and prisons, struggling to make ends meet on probation and parole.
We also found that a conviction for drug possession, often at the felony level, because in 42 states small amount of possession can be a felony offense—we found those convictions can keep individuals, and sometimes, again, entire families, out of public benefits, such as food stamps or Section 8 housing. It can make it hard to get a job, rent a house, next month to vote. And for noncitizens, of course, it can result in deportation.
And then, we also found that the enforcement of these laws is disproportionately impacting communities of color and the poor, without justification, just to drill down there. We know around the country black and white people use drugs at equivalent rates, and yet a black person is two-and-a-half times more likely to be arrested for simple drug possession than a white person. In many states, that ratio is significantly higher. And absolutely no state is at one-to-one. So, a black person is more than five times more likely to be arrested for, again, simple drug possession for personal use than a white person in North Dakota, New York, Minnesota, Montana, Iowa, Vermont. Here in Manhattan, a black person is 11 times more likely to be arrested than a white person. Again, that’s despite equivalent rates of use. So, these are racial disparities. But more importantly, under human rights law, this is racial discrimination.
So I met 149 people, 64 of whom were in custody when I met them, so in jails, in prisons. And what I found across the board was that these are mothers and fathers, these are friends and family members, who have been taken out of their lives and for whom it’s really hard to move on after the fact of prosecution. I met people like Corey Ladd in the video, like Steven’s family.
To flesh it out a little bit, Corey Ladd has a four-year-old daughter. She’s going to be five. We saw the picture of her. She’s going to be five in January. He was arrested in December, before she was born. He’s never held her. He’s never played with her outside of prison. The first time he held his baby girl in his arms was in the infamous Angola prison in Louisiana.
This is possessing half an ounce of marijuana. His prior convictions were also for drug possession. And because he was considered under Louisiana law a habitual offender, because he had habitual drug use, he was sentenced to 20 years. Twenty years. And so, his little daughter, Charlie, now thinks she visits him at work, when they go to prison. She could be a teenager going off to college by the time he comes home. And she’ll know by then that prison isn’t where her dad works.
Nicole is a mother of three young children I met in the Harris County Jail in Houston, Texas. Nicole was detained pretrial on two charges, both for residue inside drug paraphernalia. The prosecutors could have prosecuted her for misdemeanors, but instead they sought felony charges. Nicole was detained for three months, away from her young children, away from her newborn. The little baby, who I call Rose, learned to sit up on her own, when her mother was inside. And Nicole’s husband brought Rose to the jail. And when you visit someone in jail, there’s glass in front of you, and you often have to speak through a telephone. And so, the baby couldn’t, you know, reach out and feel her mother. Nicole couldn’t hug her, couldn’t congratulate her, because the baby doesn’t understand how to use a phone.
Nicole eventually pled guilty. In exchange, the prosecutor dropped one charge, and Nicole got a felony conviction for possessing 0.01 grams of heroin inside a plastic baggie, inside an empty baggie. Nicole would do a few more months in prison, in a Texas prison, and then she’d get to go home to her children. But now she’d be a, quote-unquote, “felon.” Now she would be a drug offender. And so, Nicole tells me, beyond even the months behind bars, what this meant was she was going to be punished for the rest of her life. She was in school. She was seeking a degree in business administration. She said she’d have to drop out of school, because now she wouldn’t qualify for student financial aid as a felon and a drug convict, quote-unquote. And she would lose—I’ll hurry up—she would lose food stamps. She would no longer be able to rent in her own name. She would no longer be able to feed her children. And she said, “You know, this is my whole life right there.” And for what?
three states, including Florida, disenfranchise people for felony convictions for a lifetime. Many other states have some level of disenfranchisement, whether it’s for a period of years or while one is finishing one’s sentence. And so, Trisha said, you know, she—you know, she had recalled registering to vote and that that was now, you know, a relic of the past, a fond memory that she’d never be able to capitalize on. And people told me across the board that they felt as though, you know, this conviction, whether it separated them from the voting box or other benefits, meant that their voice didn’t matter, meant that they were no longer really a citizen who mattered in the United States. And for—as we look at next month, going into an important election, felony disenfranchisement is literally keeping out people out of our democracy. And we know that drug possession arrests are, you know, the number one cause of people entering into the system that could be disenfranchising them.
We know, 45 years after the drug war was declared, that it hasn’t stopped rates of drug use, and it hasn’t stopped drug dependence, as we see with opiate use right now. So we’re saying we need to invest in a stronger public health approach. We need more evidence-based prevention, education around the risks of drug use and dependence, and voluntary treatment affordable in the community. I do think there’s been a very commendable shift in some policymakers’ and officials’ language towards public health. I would just caution, though, that we don’t invest stronger into the failed criminal justice approach, when we’re—you know, we’re afraid of drugs in this country right now. And I think what we need to say is most people who use drugs don’t become dependent. You know, the opiate epidemic is devastating, and it is tragic. And those people, though, deserve a public health approach instead.
We’re calling for the decriminalization of personal use and possession of all illicit drugs. That includes marijuana. That includes heroin, methamphetamines, cocaine—all drugs. And what we’re saying, to be quite clear, is not that everyone should go out and use drugs. What we’re saying is, for those people who use drugs and don’t harm others, the criminal law is simply inappropriate. For those people who use drugs and develop dependence, they deserve—they have a right to a health-based approach instead. And the state can still use other laws in place if people do put others in harm’s way. We still, you know, criminalize driving under the influence for alcohol. We can treat drug use, personal drug use, like we do alcohol consumption.
Aryeh Neier fellow at Human Rights Watch and the American Civil Liberties Union.
— source democracynow.org