Documentary – The Pain Project: Bureaucrats

The laws governing illicit drugs, enforced by UN Office of Drugs and Crimes, are unnecessarily blunt and curtail access to legitimate opiates for medical purposes. This segment is part of The Pain Project, a series produced by The International Reporting Program.

For more on The Pain Project series:
Imagine recovering from major surgery or suffering from advanced cancer without any painkillers. That’s the reality for patients in half the countries in the world. But unlike with so many global health problems, this one is not about money or a lack of drugs. Morphine, the gold standard for medical pain treatment, is simple and cheap to make and distribute. So why are so many people left in pain?

The International Reporting Program traveled to Ukraine, Uganda and India to find out, and to document the human toll of this hidden human rights crisis. It turns out a combination of bureaucratic hurdles and the chilling effect of the global war on drugs are largely to blame, leaving humanitarians scrambling to work outside the law — or change the law — to bring relief to suffering patients all over the world.

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SECRET – Senate Permanent Subcommittee on Investigations Apple Offshore Profit Shifting Exhibits

The following exhibits were released May 21, 2013 by the Senate Permanent Subcommittee on Investigations Homeland Security and Governmental Affairs Committee.

U.S. Senate Permanent Subcommittee on Investigations Committee on Homeland Security and Governmental Affairs

  • 142 pages
  • May 21, 2013
  • 4.4 MB


On May 21, 2013, the Permanent Subcommittee on Investigations (PSI) of the U.S. Senate Homeland Security and Government Affairs Committee will hold a hearing that is a continuation of a series of reviews conducted by the Subcommittee on how individual and corporate taxpayers are shifting billions of dollars offshore to avoid U.S. taxes. The hearing will examine how Apple Inc., a U.S. multinational corporation, has used a variety of offshore structures, arrangements, and transactions to shift billions of dollars in profits away from the United States and into Ireland, where Apple has negotiated a special corporate tax rate of less than two percent. One of Apple’s more unusual tactics has been to establish and direct substantial funds to offshore entities in Ireland, while claiming they are not tax residents of any jurisdiction. For example, Apple Inc. established an offshore subsidiary, Apple Operations International, which from 2009 to 2012 reported net income of $30 billion, but declined to declare any tax residence, filed no corporate income tax return, and paid no corporate income taxes to any national government for five years. A second Irish affiliate, Apple Sales International, received $74 billion in sales income over four years, but due in part to its alleged status as a non-tax resident, paid taxes on only a tiny fraction of that income.

In addition, the hearing will examine how Apple Inc. transferred the economic rights to its intellectual property through a cost sharing agreement with its own offshore affiliates, and was thereby able to shift tens of billions of dollars offshore to a low tax jurisdiction and avoid U.S. tax. Apple Inc. then utilized U.S. tax loopholes, including the so-called “check-the-box” rules, to avoid U.S. taxes on $44 billion in taxable offshore income over the past four years, or about $10 billion in tax avoidance per year. The hearing will also examine some of the weaknesses and loopholes in certain U.S. tax code provisions, including transfer pricing, Subpart F, and related regulations, that enable multinational corporations to avoid U.S. taxes.

A. Subcommittee Investigation

For a number of years, the Subcommittee has reviewed how U.S. citizens and multinational corporations have exploited and, at times, abused or violated U.S. tax statutes, regulations and accounting rules to shift profits and valuable assets offshore to avoid U.S. taxes. The Subcommittee inquiries have resulted in a series of hearings and reports. The Subcommittee’s recent reviews have focused on how multinational corporations have employed various complex structures and transactions to exploit taxloopholes to shift large portions of their profits offshore and dodge U.S. taxes.

At the same time as the U.S. federal debt has continued to grow – now surpassing $16 trillion – the U.S. corporate tax base has continued to decline, placing a greater burden on individual taxpayers and future generations. According to a report prepared for Congress: “At its post-WWII peak in 1952, the corporate tax generated 32.1% of all federal tax revenue. In that same year the individual tax accounted for 42.2% of federal revenue, and the payroll tax accounted for 9.7% of revenue. Today, the corporate tax accounts for 8.9% of federal tax revenue, whereas the individual and payroll taxes generate 41.5% and 40.0%, respectively, of federal revenue.”

Over the past several years, the amount of permanently reinvested foreign earnings reported by U.S. multinationals on their financial statements has increased dramatically. One study has calculated that undistributed foreign earnings for companies in the S&P 500 have increased by more than 400%. According to recent analysis by Audit Analytics, over a five year period from 2008 to 2012, total untaxed indefinitely reinvested earnings reported in 10-K filings for firms comprising the Russell 3000 increased by 70.3%. During the same period, the number of firms reporting indefinitely reinvested earnings increased by 11.4%.

The increase in multinational corporate claims regarding permanently reinvested foreign earnings and the decline in corporate tax revenue are due in part to the shifting of mobile income offshore into tax havens. A number of studies show that multinational corporations are moving “mobile” income out of the United States into low or no tax jurisdictions, including tax havens such as Ireland, Bermuda, and the Cayman Islands. In one 2012 study, a leading expert in the Office of Tax Analysis of the U.S. Department of Treasury found that foreign profit margins, not foreign sales, are the cause for significant increases in profits abroad. He wrote:

“The foreign share of the worldwide income of U.S. multinational corporations (MNCs) has risen sharply in recent years. Data from a panel of 754 large MNCs indicate that the MNC foreign income share increased by 14 percentage points from 1996 to 2004. The differential between a company’s U.S. and foreign effective tax rates exerts a significant effect on the share of its income abroad, largely through changes in foreign and domestic profit margins rather than a shift in sales. U.S.-foreign tax differentials are estimated to have raised the foreign share of MNC worldwide income by about 12 percentage points by 2004. Lower foreign effective tax rates had no significant effect on a company’s domestic sales or on the growth of its worldwide pre-tax profits. Lower taxes on foreign income do not seem to promote ‘competitiveness.’”

One study showed that foreign profits of controlled foreign corporations (CFCs) of U.S. multinationals significantly outpace the total GDP of some tax havens.” For example, profits of CFCs in Bermuda were 645% and in the Cayman Islands were 546% as a percentage of GDP, respectively. In a recent research report, JPMorgan expressed the opinion that the transfer pricing of intellectual property “explains some of the phenomenon as to why the balances of foreign cash and foreign earnings at multinational companies continue to grow at such impressive rates.”

C. Transfer Pricing and the Use of Shell Corporations

The Subcommittee’s investigations, as well as government and academic studies, have shown that U.S. multinationals use transfer pricing to move the economic rights of intangible assets to CFCs in tax havens or low tax jurisdictions, while they attribute expenses to their U.S. operations, lowering their taxable income at home. Their ability to artificially shift income to a tax haven provides multinationals with an unfair advantage over U.S. domestic corporations; it amounts to a subsidy for those multinationals. The recipient CFC in many cases is a shell entity that is created for the purpose of holding the rights. Shell companies are legal entities without any substantive existence – they have no employees, no physical presence, and produce no goods or services. Such shell companies are “ubiquitous in U.S international tax planning.” Typically, multinationals set up a shell corporation to enable it to artificially shift income to shell subsidiaries in low tax or tax haven jurisdictions.

According to a 2008 GAO study, “eighty-three of the 100 largest publicly traded U.S. corporations in terms of revenue reported having subsidiaries in jurisdictions list as tax havens or financial privacy jurisdictions….” Many of the largest U.S. multinationals use shell corporations to hold the economic rights to intellectual property and the profits generated from those rights in tax haven jurisdictions to avoid U.S. taxation. By doing this, multinational companies are shifting taxable U.S. income on paper to affiliated offshore shells. These strategies are causing the United States to lose billions of tax dollars annually. Moreover, from a broader prospective, multinationals are able to benefit from the tax rules which assume that different entities of a multinational, including shell corporations, act independently from one another. The reality today is that the entities of a parent multinational typically operate as one global enterprise following a global business plan directed by the U.S. parent. If that reality were recognized, rather than viewing the various affiliated entities as independent companies, they would not be able to benefit from creating fictitious entities in tax havens and shifting income to those entities. In fact, when Congress enacted Subpart F, discussed in detail below, more than fifty years ago in 1962, an express purpose of that law was to stop the deflection of multinational income to tax havens, an activity which is so prevalent today.

Movie – Dirty Wars – Documentary Excerpt

Dirty Wars follows investigative reporter Jeremy Scahill, author of the international bestseller “Blackwater,” into the heart of America’s covert wars, from Afghanistan to Yemen, Somalia and beyond.

Part political thriller and part detective story, Dirty Wars is a global investigation of the secretive and powerful Joint Special Operations Command (JSOC).

In this excerpt, Scahill travels with a self-proclaimed general who was once an enemy of the US but is now on the Americans’ payroll.

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Unveiled – Snowden Censored by Craven Media

Snowden Censored by Craven Media

Mr. Snowden, please send your 41 PRISM slides and other information to less easily cowed and overly coddled commercial outlets than Washington Post and Guardian. Their arm-waving, self-aggrandizing verbosity, after conspiring to obey official demand (below) to censor your information is a pattern well-documented by unfettered disclosure sites. Their piecemealing release is hoary dramatization, diverting cover-up, of failure to deliver untampered material. Your valor is yet to be fully disclosed, do not settle for being seduced by false promises portending being kicked under the bus. Heed this under-bus-kick published today by Secrecy News:


… “When you are subverting the power of government– that’s a fundamentally dangerous thing to democracy.”

“I’m willing to go on the record to defend the authenticity [of these disclosures]. This is the truth. This is what’s happening. You should decide whether we need to be doing this,” he said of his disclosures.

In the history of unauthorized disclosures of classified information, a voluntary admission of having committed such disclosures is the exception, not the norm. And it confers a degree of dignity on the action. Yet it stops short of a full acceptance of responsibility. That would entail surrendering to authorities and accepting the legal consequences of “subverting the power of government” and carrying out “a fundamentally dangerous thing to democracy.”

And two days ago this go-to-prison kick by The Atlantic:

Whistle-blowing is the moral response to immoral activity by those in power. What’s important here are government programs and methods, not data about individuals. I understand I am asking for people to engage in illegal and dangerous behavior. Do it carefully and do it safely, but — and I am talking directly to you, person working on one of these secret and probably illegal programs — do it.

High officers and rhetoricians convene safe at base to wargame, destined by history, to praise and send youngsters into harm’s way to protect high privilege, then crow about leadership, sacrifice, pretending remorse, gloating in amply-pensioned retirement. Bear in mind, fodder for their ambitions is how they see you imprisoned for disobedience, emblazoned in by-lined headlines, warehoused in vet hospitals, or best, flag-draped in coffins disappearing into vote-rigged databanks.

To effect his plan, Snowden asked for a guarantee that The Washington Post would publish – within 72 hours – the full text of a PowerPoint presentation describing PRISM, a top-secret surveillance program that gathered intelligence from Microsoft, Facebook, Google and other Silicon Valley companies. He also asked that The Post publish online a cryptographic key that he could use to prove to a foreign embassy that he was the document’s source.

Gellman told him the Post would not make any guarantee about what the Post published or when. The Post broke the story two weeks later, on Thursday. The Post sought the views of government officials about the potential harm to national security prior to publication and decided to reproduce only four of the 41 slides, Gellman wrote in his story about their communications.

Der Anfang vom Ende des “GoMoPa”-“Nawito”-Google-Terrors

BGH-Urteil zu Suchmaschinen
Richter nehmen Google-Vorschläge unter die Lupe
Ein Kosmetikhersteller hat vor dem BGH ein wegweisendes Urteil erstritten: Künftig können Suchmaschinenbetreiber für Verletzungen des Persönlichkeitsrechts bei sogenannten Autocomplete-Vorschlägen haftbar gemacht werden.

Von Michael Reissenberger, SWR

Gernot Lehr, der Anwalt von Bettina Wulff, die ihren Ruf gegen Rotlichtgerüchte vor Gericht verteidigt, hatte den richtigen Riecher, als er kürzlich eine Vertagung des laufenden Verfahrens erwirkte. Denn das jüngste Urteil des Bundesgerichtshofs (BGH) sorgt künftig für Schutz für alle, die sich beim Googeln ihres Namens von Suchvorschlägen beleidigt fühlen.

Die Bundesrichter nehmen jetzt die Betreiber von Suchmaschinen stärker in die Pflicht. Sie müssen zwar nicht selber das Netz auf alle Suchwortkombinationen, die vielleicht Anstoß erregen könnten, durchpflügen. Denn – so sagen die Bundesrichter – im Prinzip sei gegen eine Suchwortergänzung nichts einzuwenden. Schließlich würden von einer Rechenmaschine zunächst nur Suchvorschläge von Internetnutzern ausgewertet.

Geldentschädigung für Rufschädigungen

Aber sie müssen spätestens reagieren, wenn Betroffene auf solche Rufschädigungen per Internet hinweisen. Die Internetunternehmen müssen dann zumindest rechtswidrige Verletzungen des Persönlichkeitsrechts abstellen und bei weiteren Verstößen auch eine Geldentschädigung bezahlen.

Schutz der Persönlichkeitsrecht hat Vorrang
tagesschau 20:00 Uhr, 14.05.2013, Gigi Deppe, SWR
Download der Videodatei
Ein Kosmetikhersteller hat dieses Urteil für Google-Geschädigte erstritten. Er sah seinen Namen zu Unrecht mit den Kombinationswörtern Scientology und Betrug in den Schmutz gezogen und bestand darauf, dass er in keinerlei Zusammenhang mit diesem als geldgierig verrufenen Sektenbetrieb steht oder stand. Zudem sei ihm kein Betrug vorzuwerfen, es habe auch kein entsprechendes Ermittlungsverfahren gegeben. Die Suchergebnisse von Google würden auch keine einzige Seite auflisten, die eine Verbindung zwischen dem Kosmetikhersteller und den beiden Ergänzungswörtern Scientology und Betrug aufweisen.

Ihm hatten Kölner Richter in zwei Instanzen den Schutz gegen den Internetriesen verweigert. Es seien schließlich nur mathematische Effekte je nach Suchworthäufigkeit, kein Internetnutzer nehme für bare Münze, welche Suchwortvorschläge da kommen, so hatten die Kölner Juristen argumentiert.

Googles Autocomplete-Funktion
Ein praktischer Helfer mit Risiken | mehr
Google allzu dickfellig

Doch nun muss Google solche Beschwerden wegen Rufmords ernster nehmen. Auch im Fall von Bettina Wulff dürfte mit dem jetzigen Bundesgerichtshofurteil klar sein, dass der Internetkonzern sich in den letzten Monaten allzu dickfellig verhalten hat. Die Rotlichtgerüchte um die Präsidentengattin, die der Google-Suchwortmodus verbreitet hat, waren ja schon seit längerem öffentliches Thema, bis sich Bettina Wulff entschloss, dagegen vorzugehen. Hier dürfte sehr spannend werden, ob und welche Geldentschädigung hier verlangt werden kann.

Der Bundesgerichtshof hatte auch im vorliegenden Fall noch nicht darüber zu entscheiden, weil er das Kölner Musterverfahren nochmal an die untere Instanz zur Nachbesserung zurückgeschickt hat. Die Bundesrichter kündigten aber im Grundsatz bei solchen Google-Rufschädigungen einen Anspruch auf Geldentschädigung zumindest in engen Grenzen an.

SECRET – Joint and Coalition Operational Analysis (JCOA)

Reducing and Mitigating Civilian Casualties: Enduring Lessons

17 pages
April 12, 2013


The United States has long been committed to upholding the Law of Armed Conflict (LOAC) and minimizing collateral damage, which includes civilian casualties (CIVCAS) and unintended damage to civilian objects (facilities, equipment, or other property that is not a military objective). In support of these goals, the U.S. military developed capabilities for precision engagements and accurately identifying targets, such as the development of refined targeting processes and predictive tools to better estimate and minimize collateral damage. These capabilities permitted the conduct of combat operations with lower relative numbers of civilian casualties compared to past operations. However, despite these efforts, and while maintaining compliance with the laws of war, the U.S. military found over the past decade that these measures were not always sufficient for meeting the goal of minimizing civilian casualties when possible. Resulting civilian casualties ran counter to U.S. desires and public statements that the United States did “everything possible” to avoid civilian casualties, and therefore caused negative second-order effects that impacted U.S. national, strategic, and operational interests.

Afghanistan (2001-2002)

The United States reaffirmed its commitment to minimizing harm to the peaceful civilian population when it commenced major combat operations in Afghanistan and Iraq in 2001 and 2003, respectively. On 7 October 2001, U.S. forces began combat operations to capture Al Qaeda leadership and eliminate the use of Afghanistan as a launching point for terrorism. Within days of the start of operations, international media began reporting incidents of civilian casualties. Many of these incidents involved villages where suspected enemy were located, highlighting the challenge posed by fighting an enemy that eschews its obligations under the law of war (e.g., not wearing a uniform and hiding among the population). As a result, obtaining positive identification (PID) was more problematic, and U.S. engagements tended to rely more on self-defense considerations based on perceived hostile acts or intent. Probably the two highest profile incidents during this time were the 21 December 2001 attack on a convoy that the Afghan government claimed included tribal leaders; and the 1 July 2002 AC-130 attack on a group in Deh Rawud, central Afghanistan, that turned out to be a wedding party. In both attacks, U.S. aircraft had observed ground fire and engaged because of self-defense considerations.

Iraq Major Combat Operations (2003)

During major combat operations in Iraq, the ability to distinguish the enemy from the civilian population was simplified by the fact that the enemy was the Iraqi military. Iraqi forces were generally located away from civilian areas; their military equipment and uniforms reduced the ambiguity of engagement decisions relative to those faced by U.S. forces in Afghanistan. However, the Iraq military purposely violated law of war rules designed to protect the peaceful civilian population by employing human shields, misusing protected symbols for impartial humanitarian organizations (e.g., Red Crescent), and placing equipment in protected sites. In addition, Fedayeen Saddam forces did not wear uniforms and fought using irregular tactics, contributing to U.S. challenges in obtaining positive identification.

In contrast, the United States and its allies went to great lengths to minimize collateral damage; for example, in Iraq, similar to Afghanistan, most air engagements used precision-guided munitions. While no Department of Defense (DOD) assessment of civilian casualties during Iraq major combat operations could be found by this author, an independent assessment judged U.S. pre-planned attacks to be relatively effective in minimizing civilian casualties. The main concerns over civilian casualties centered on coalition forces conducting time-sensitive targeting of leadership in urban areas.

Counterinsurgencies in Iraq and Afghanistan

As insurgencies developed in Iraq and Afghanistan, the United States was forced to adopt a counterinsurgency (COIN) approach for which it was largely unprepared. With civilian protection being a central feature of COIN, the reduction and mitigation of CIVCAS became a key issue in these operations.

Counterinsurgency in Iraq

In Iraq, noncombatant casualties were primarily caused by escalation of force (EOF) incidents, both at check points and during convoy operations. These incidents resulted in a significant outcry from nongovernmental organizations (NGOs) and the media; the shooting of a vehicle containing Italian journalist Giuliana Sgrena and her rescuers during an EOF incident further increased visibility of this issue. In mid-2005, U.S. forces in Iraq adapted and made heightened efforts, widely seen as successful, to prevent and mitigate the effects of civilian casualties. Still, this issue was not completely resolved: later in the conflict, Multinational Forces – Iraq (MNF-I) pointed to the strategic importance of reducing CIVCAS from EOF and cited the lack of available nonlethal capabilities and inadequate training in their use as key deficiencies.

Counterinsurgency in Afghanistan

In Afghanistan, President Karzai made his first public statements regarding CIVCAS in 2005, asking the International Security Assistance Force (ISAF) to take measures to reduce such casualties. Initial initiatives to reduce CIVCAS in Afghanistan, such as the “Karzai 12” rules for approving operations in 2005 and the initial Commander, ISAF (COMISAF) Tactical Directive in 2007, were not successful in reducing high profile incidents. Additional efforts, including redrafting the COMISAF Tactical Directive in 2008, were made in response to several high profile, high casualty CIVCAS incidents; however, a May 2009 incident in Bala Balouk highlighted the lack of progress in effectively addressing the issue of civilian casualties.

The Bala Balouk incident served as an impetus for major efforts to reduce CIVCAS by both ISAF and the United States. Since mid-2009, ISAF leadership clearly and consistently emphasized the importance of reducing CIVCAS, and ISAF modified its policies and procedures to that end. Similarly, concerted efforts on the part of the United States—spearheaded by the U.S. Joint Staff CIVCAS Working Group, currently led by a three-star general officer—aided efforts to improve U.S. pre-deployment training to better prepare U.S. forces for CIVCAS reduction and mitigation in Afghanistan. This renewed focus addressed deficiencies in pre-deployment training regarding the use of nonlethal weapons (NLWs), amongst many other efforts. Collectively, these dedicated efforts bore fruit: because of improved guidance and training, ISAF forces adapted the way they conducted operations in light of CIVCAS concerns, and ISAF-caused CIVCAS decreased over time. Importantly, analysis of available data suggested that these CIVCAS mitigation efforts were a win-win, with no apparent cost to mission effectiveness or increase in friendly force casualties.

CIVCAS: An Enduring Issue

While the progress in Afghanistan is good news, to date the changes put into place have remained largely focused on supporting operations there. Sharing lessons between operations and institutionalization of those lessons are less apparent. For example, existing lessons from Iraq regarding EOF did not appear to migrate to Afghanistan, and lessons from Afghanistan regarding air-to-ground operations did not reach North Atlantic Treaty Organization (NATO) participants in Libya during Operation UNIFIED PROTECTOR (OUP). Further, a CIVCAS incident where a U.S. Navy ship engaged a small boat in the Persian Gulf and incidents regarding U.S. operations in Yemen and Pakistan (as reported in the international media) also suggest that the applicability of lessons regarding ways to minimize civilian casualties and mitigate their impact are not limited to Afghanistan. Former COMISAF, General David Petraeus, echoed this point, describing the enduring nature of the challenge of CIVCAS: “Avoiding civilian casualties is a central operational challenge in Afghanistan and Iraq and it will be a challenge in any future conflict as well.” Lessons learned in the past decade should therefore be looked at with an eye toward their application in future conflicts, as well as their continued importance to current operations in Afghanistan and elsewhere.

This paper identifies key CIVCAS lessons that are applicable to future operations conducted by the United States and its allies. These lessons were drawn from four years of analytic effort focused on understanding and effectively responding to the challenge of CIVCAS in Afghanistan, Iraq, and elsewhere. These lessons are not limited to COIN operations; rather, they apply to a wide range of potential combat activities, including major combat operations (in light of the political impact of CIVCAS during 1991 and 2003 Iraq wars), airpower-focused operations such as OUP in Libya, and counterterrorism operations such as the U.S. is currently conducting in Pakistan. Since each of these cases included an enemy that did not appropriately distinguish itself from the peaceful civilian population, these lessons should be particularly applicable in other, similar situations.