The International League of Dark Money

Donald Trump and Vladimir Putin are bent on destroying the peaceful international order that the United States built after World War II. They're hostile to the World Trade Organization, NATO, you name it. But Trump is not the only complicit American here. Because Trump and Putin are champions are a very different, more lawless international order, which many wealthy Americans participate in and derive benefit from: the international league of dark money.

Whatever else does or doesn't bind Trump and Putin, they're united by their dependence upon international money laundering, which moves large amounts of cash across borders in disguised transactions. Putin's oligarchs routinely move their dirty money into the West through shady means, and Trump's real estate business has become heavily dependent on Russian customers whose money should not be examined too closely. The Trump Organization may not actually launder money, but they accept a lot of well-fluffed money straight out of the laundry room. Both Trump and Putin have strong vested interests in keeping the dark money flowing and keeping it out of sight.

They're not alone. There is a robust international infrastructure of shell companies, off-shore banks, and shady middlemen devoted to moving money around while disguising where it comes from. This is especially convenient for people who can't admit where how they got that money or even that they have it. Money laundering allows corrupt government officials in Russia or Nigeria to spend their graft in the West. It allows organized criminals to spend their profits from drugs, gun-running, and human trafficking. And it allows international terrorists to fund operations overseas. So there are strong reasons for the world community, working through the post-WWII international order, to close the flow of laundered money down.

Without access to money laundering, big-time criminals would not be able to use most of their ill-gotten money, because to spend it they would need to explain where they got it. Without access to money laundering, money stolen by corrupt officials could only be spent in the same country those officials help to impoverish. Without money laundering, terrorists could not support sleeper cells in foreign countries or fly volunteers to battle areas. A world where every bank transaction was transparent and on the level would be a better and safer place.

But the money-laundering infrastructure also enables tax evasion. (I mean, no one launders money so they can pay taxes on it.) And many wealthy and prominent people in America and the rest of the developed West use their legal resources to evade taxes. They use shelters and shell companies and foundations to avoid paying their full share of the tax burden, to pass on multi-million-dollar inheritances tax free, and to disguise some of the ways they spend their money. Take a look at the Panama Papers some time, which opens to a window on a single law firm's efforts to get around tax laws for its clients. You see both Russian oligarchs and Western celebrities and politicians, including a former British Prime Minister, in those pages. Lots of nominally law-abiding people rely on offshore accounts and tax havens and largely fictitious legal entities to keep from paying taxes like the rest of us. Closing down the money-laundering system on criminals and terrorists would also close down the tax-evasion system on otherwise legitimate rich people. After all, they're the same system.

Trump and Putin want a world where legal and financial accountability stops at every border, where moving money overseas moves it out of the authorities' sight forever. The existing maze of international loopholes, which already allows tens of billions of secret dollars to flow through anonymous bank accounts, is still too transparent for them. So they want to destroy any lawful international agencies which might have the tools to close down the dark money. They want a world without effective international institutions, because only international institutions can effectively fight money laundering.

But you will find plenty of well-placed Americans and Europeans who don't want international financial controls, either. They want their shell companies and make-believe charitable foundations and secret accounts in the Caymans. They might not care much for Putin. They might detest the jihadists or the Mafia or the Crips. But they won't support the steps necessary to close down Putin or the Crips, because that would mean closing down other businesses that they actually own. It is just one of the many ways that elements of our ruling class are complicit in Russia's attacks on this country.

cross-posted from Dagblog; please comment there, not here

On the

Getting to No: Obama and the Republicans

cross-posted from Dagblog

I am delighted by Obama's statement on gay marriage. I'm proud to be an American today.

A great deal of focus is rightly on Obama himself today, on his decision-making process and on how he got here. But I'd like to take a second to think about the anti-gay-marriage movement and how it got here. This week should have been a triumph for them. Tuesday night they won their hard-line constitutional amendment in North Carolina, banning not only gay marriage (which was already illegal), but civil unions and anything that resembled a civil union. Wednesday should have been a day to celebrate their victory.

Instead, they had a sitting President of the United States taking a public stand against them on national television, in an election year. And it was actually worse than that: a famously cautious and accommodating politician caught up in a very tough re-election fight threw the full weight of his office behind a position that polls at barely better than 50/50 and that just got solidly voted down in a swing state. And by doing that, he put hope and energy back into a movement that should have been feeling defeated and demoralized. How did the anti-gay movement get to the point where the President would do that in an election year? How did they get to the point where this President did that in an election year?

I think this is the fruit of the right wing's general strategy of obstructing Obama. This is a President bent on compromise, facing an opposition party that refuses to take yes for an answer. The President offers a health-care-reform bill based on Republican ideas, and gets denounced as a diabolical socialist.  And the Republicans in Washington have adopted a bizarre negotiation strategy that I can only call "getting to no." In a normal, rational negotiation you respond to concessions from the other side by making a concession of your own and moving toward a middle ground that both parties can live with. The Republican strategy, if I can call it strategy, has been to respond to every concession by making more extreme demands. Ask for something, get offered half, and respond by tripling your original demand. This strategy can only work if the other party is in such a hopeless position that you don't actually need to negotiate with them anyway, or it can work for a short time simply because it's so strange that it takes the other side by surprise and you take advantage of their confusion. But sooner or later, the other party figures it out, and stops negotiating.

North Carolina's constitutional amendment is a classic getting-to-no move. Gay marriage is illegal? Let's make it more illegal! And outlaw civil unions! And outlaw gay couples using other legal means, such as estate planning, to get any protections for their joint property! Ha ha!

Well, yesterday they got their no. I suspect they actually wanted it, and I hope they're pleased.

It isn't clear to me whether this decision will help or hurt Obama in the election. But it's very clear to me that he's safe from any tide of outrage against him. Everyone who'd be angry with him over this is already outraged with him. He gets outrage when he tries to make nice with them. And the outrage machine is already set to eleven. That means there's really nothing else they can do to him.

Rush Limbaugh is saying that Barack Obama is waging war on the American way of life. You know what that makes this? Thursday. Obama gets accused of scheming against American freedoms when he does bipartisan back-bends for a week. He has shown a lot of deference to the Right on their core issues. So they attack him over peripheral issues, or make up phantom issues and fight for them as if they're making their principled last stand. What that means, in the long run, is that Obama pays no price for opposing the Right, because the price of opposing them is already built in. And it means that he's free to oppose the Right on the issues they care about most of all, because they don't have anything left in reserve to fight him with.

If you don't make any distinction between your major policy goals and your minor ones, then in the end you won't be able to protect the major ones. And if you never compromise, no one compromises with you. It's only reason. Here's your no. There are more where that came from.

Obama's Veto and Mortgage Fraud

cross-posted at Dagblog

If you've been looking for a fight in the lame-duck session, we may be about to see one: this Wednesday, November 17th, the House is going to have a veto override vote on the so-called "Interstate Recognition of Notaries Act," H.R. 3808. (h/t John Cole) What is the Interstate Recognition of Notaries Act, you say?

A law that would basically make mortgage fraud by interstate banks legal. Let me rephrase that: a law that would make documents notarized out of state immune to challenge no matter how they were notarized, meaning the criminal shenanigans that mortgage servicers have gotten up to, such as swearing under oath to the accuracy of documents they've never seen, would become both legal and practically unassailable. [UPDATE: I was blogging in anger when I wrote this, and became a weaker blogger because of it. The bad documents would not become legally unassailable, but they would become harder to assail. The point of the law is to legalize the banks' slipshod electronic records service, MERS, and the general effect would be "solve" the problem of illegal record keeping by changing the law to the banks' benefit. And that is both immoral and foolish.]

If that's still too complicated, let me put it this way: this law would allow the banks to just make up documents and use them to take your house, even if they couldn't actually find the title to your house (because they'd sold your mortgage, say, or because you don't have a mortgage). And there won't be a damned thing you can do about it. The banks will no longer be accountable to the law. [UPDATE again: This was hyperbole on my part. There are other ways to challenge perjured affidavits, and notarizing perjury doesn't make it immune to challenge. But the general thrust of the law is to make that systematic perjury easier, and raise the bar to challenging it. That's a terrible, terrible idea.]

Now, President Obama vetoed this abomination in October. The shocking part is that it got to his desk at all. It got there on a voice vote in the House and unanimous consent in the Senate, meaning that they didn't actually count the votes.

This bill got through both Houses of Congress without the Democrats having any real idea how it would affect the financial crisis, or what its ramifications were. (To be fair, many of the horror stories about mortgage fraud and routine perjury by mortgage companies had not yet come to light when the bills passed.) Basically, it was the Administration that caught this one in time and killed the bill. That should give you an idea of how carefully our representatives generally think about the oversight of big finance, and of how thorough and terrible the influence of banking lobbyists on the Hill is.

The veto-override vote might only be symbolic; Obama tried to straddle some legal ambiguities on this one, and make his veto immune to challenge, by doing a kind of double veto strategy. He pocket-vetoed it, because pocket vetoes cannot be overridden, but also sent the usual veto memo to Congress, to protect against any claim that Congress was technically in session when he chose not to sign it (if the President doesn't sign a bill while Congress is in session, it automatically becomes law; Obama wanted to guard against that). And now that the Democrats have realized what the law would actually do, I don't think there's going to be a two-thirds majority in favor of it.

Tell your representative to vote against this monstrosity, even so. And keep count of who's willing to be counted as favoring it. If this vote ends up being only symbolic, let's remember what's being symbolized.

FINAL UPDATE: According to D-Day at FDL, this vote is actually an expression of procedural displeasure with Obama over the double-veto-failsafe trick. Sigh. I understand that. But it's hard to cheer for Congress after they originally passed this bill without paying any attention to what it said. Obama's procedural caution happened because he was forced to play backstop for a Congress that hadn't done its job.