Crown Resorts executive authorises transfer to drug trafficker

A Crown Resorts vice-president authorised a junior casino staff member to wire $500,000 to a Melbourne drug trafficker, while Crown withheld details of the transaction from authorities for a year.

The revelation marks the first time since the Crown scandal erupted last year that a senior casino executive has been exposed facilitating the activities of serious organised crime.

Crown’s vice president of international operations, Veng Anh, authorised the transfer of money to drug trafficker and nightclub operator Nan Hu in January 2017. Mr Anh likely knew Mr Hu through his Melbourne nightclub, Heaven, which was popular with Crown high rollers. There is no suggestion Mr Anh knew Mr Hu was a drug trafficker.

However, the ultimate beneficiary of the $500,000 was the Ma heroin syndicate, an Australian-Chinese organised crime group operating out of Melbourne.

Banking and casino records also reveal that Crown Resorts failed to alert anti-money laundering agency Austrac about the transaction.

The casino is legally obliged to tell authorities about suspicious transactions or any movement of funds over $10,000 within three days, but Crown only alerted Austrac a year after the transaction and only after West Australian gaming authorities began making inquiries about it.

The Age, the Herald and 60 Minutes have spent months tracking the transaction after being tipped off about it by a casino insider.

Crown Resorts’ vice president of international operations, Veng Anh.Credit:60 Minutes

The former director of intelligence at Austrac, Todd Harland, said the $500,000 transfer displayed clear indicators of money laundering – taking dirty money and making it look clean. However, that might not have been immediately clear to Mr Ahn when he authorised the transaction.

“Taking cash and putting it through a casino and hopefully turning that into some level of winnings or at least the ability to make it look like it was winnings … that's money laundering 101.”

Softening its approach

The money transfer goes to the heart of the allegations facing the casino giant: that it had a reckless and aggressive approach to cultivating super-wealthy Chinese high rollers which encouraged money launderers and serious organised criminals.

Leaked emails from inside Crown show Mr Anh was also part of a trusted team of senior managers who were sent to China to recruit high rollers, an activity that contributed to the October 2016 arrest and imprisonment of Crown’s China staff.

The revelations about the $500,000 transaction also raise questions for Austrac, the anti-money laundering agency which helps uphold money laundering laws but which has failed to take any meaningful action against Crown.

Law enforcement officials from multiple agencies along with former Austrac staff said the small agency had not done enough to act on the multiple indicators that Crown was enabling money launderers, with Austrac instead directing its litigation resources to high-profile actions against banks.

But sources also said the agency had alerted partner policing agencies about suspicious activity at Crown and, at least until recently, this had led to little tangible action. Austrac previously declined to comment on its dealings with Crown, but has insisted it closely scrutinises all casinos.

Crown’s initial reaction to allegations last year that it had failed in its corporate and social responsibility to counter money laundering was to argue (including with full page media advertisements) that the media expose that sparked a raft of inquiries was inaccurate.

Crown Sydney Barangaroo casino is under threat from multiple inquiries.Credit:Peter Braig

One of those inquiries, an investigation by the NSW Independent Liquor and Gaming Authority and former judge Patricia Bergin to probe Crown’s fitness to run its proposed high roller casino in Barangaroo, Sydney, opened last month. Since then, Crown executive chairman John Alexander has stood down and Crown appears to have softened its public response. The Australian Criminal Intelligence Commission is also probing money laundering at Crown and other casinos.

In response to allegations relating to the Nan Hu money transfer, Crown said in a statement: “Crown takes these allegations very seriously and has notified these issues to the relevant federal and state regulators and the ILGA (Bergin) inquiry set up to examine such matters and will assist any investigations.”

A deal made in Heaven

The $500,000 transaction involving Crown vice president Veng Anh and Nan Hu leads to a world of big gamblers, nightclubs and crime bosses.

Hu is a criminal who was convicted in 2015 for trafficking cocaine, possessing ice and money laundering offences. Mr Anh likely knew Hu through Chinese nightclubs in Melbourne’s CBD, which Mr Anh attended with Crown high rollers and junket agents though it is not clear if he knew of his criminal past. Among the clubs was the now defunct Heaven Club.

The Heaven ClubCredit:Luis Ascui

Casino records sighted by The Age, the Herald and 60 Minutes reveal that in January 2017, Anh authorised Crown staff at its Burswood Casino to transfer $500,000 to Hu from a Crown Resorts- controlled account. Hu was not an approved Crown gambler or agent, and sending him funds breached the casino’s own policies which were created to prevent money laundering.

The funds came from an account linked to Crown high-roller agent Tom “Mr Chinatown” Zhou, who was exposed last year as an international criminal fugitive wanted by Interpol. Mr Zhou worked with Mr Anh to lure Chinese high rollers to Crown.

Mr Zhou was a regular attendee of the Heaven nightclub, often going with prostitutes, drugs and Crown high rollers. He told associates he wanted to invest in the club.

“Mr Chinatown”, Tom Zhou.

A source who worked with Crown’s security team said he had seen Mr Anh at Heaven, while other sources with knowledge of Mr Anh’s activities said he encouraged high rollers to attend. It is unclear if Mr Anh knew that Hu was a convicted drug trafficker and organised criminal when he directed Crown’s Perth staff to send him the $500,000 in January 2017. But the transaction should have raised red flags, and there was no legitimate reason for the funds to be sent to Hu.

Bank records show Hu collected the $500,000 sent from Crown from his Commonwealth Bank account in the form of bank cheques. He then gave these cheques to a company controlled by Timothy Ma, a notorious organised crime figure who was jailed for heroin trafficking in the early 2000s and who works with the Italian mafia and bikies trafficking drugs.

Mr Anh declined to answer questions when confronted at his mother’s house, and Hu has flown to China and could not be contacted.

Belated disclosure

The $500,000 transaction should have been reported by Crown to Austrac within three days but waited almost a year until West Australian money laundering authorities contacted the company about it. This meant the cash had disappeared into a criminal syndicate before it could be traced and seized.

Former gaming regulator and counter money laundering expert Alan Pedley said the delay suggested Crown prioritised pleasing high rollers over its reporting duties.

“The customers were of such high value that (Crown was)… perhaps prepared to overlook their normal money laundering controls,” he said.

By accessing Crown internal records and other financial transaction data, The Age, the Herald and 60 Minutes has uncovered a pattern of serious organised criminals using the casino as a hub for their money laundering and criminal operations.

The Ma criminal syndicate and Hu appear to have used Crown’s high rollers and agents to fund their operations in Melbourne. Casino records show that the Ma syndicate has multiple financial ties to Crown, and the syndicate’s members had gambled millions of dollars at, and received large money transfers from, Crown’s casinos.

Hu was also behind efforts to set up a karaoke bar to cater for Crown high rollers at the site of an illegal brothel on Melbourne’s Elizabeth Street. Records show this venture too was funded by Crown’s high rollers and junket agents.

The Age and The Sydney Morning Herald’s revelations about Crown

Former Crown China employee Jenny Jiang revealed what Crown had long denied – that it was illegally selling gambling trips to mainland Chinese customers, endangering local staff by offering luxury gifts, free gambling cash known as “lucky money” and free use of private jets.

Financial adviser Roy Moo, a licensed Crown junket representative, in 2013 used Crown to transfer $969,000 in drug money to Hong Kong. He was just one of those who helped international crime syndicate The Company exploit Crown to launder funds.

Crown Resorts paid brothel owner and alleged human trafficker Simon Pan to lure high rollers to its Australian casinos. Asian sex workers had been flown into Australia on private jets organised by Crown “junket” operators.

Crown junket partner and Toorak resident Tom “Mr Chinatown” Zhou was an international criminal fugitive, the subject of an Interpol red notice for financial crime.

Ming Chai, the cousin of Chinese president Xi Jinping, was a Crown VVIP, implicated in crime and an associate of Zhou.

A number of serving police and border force officials including Andrew Ure and Greg Leather were moonlighting doing security work for Crown junket operators.

Huang Xiangmo, the political donor ASIO expelled from Australia over his foreign influence activities, was an $800 million-a-year Crown high roller and such a big punter that Crown used him as a case study of the benefits of uber-wealthy Chinese gamblers moving to live in Australia.

Australia’s peak criminal intelligence agency, the Australian Criminal Intelligence Commission, announced a sweeping investigation into organised crime in Australian casinos.

Alvin Chau, the chief executive and co-owner of Crown Resorts' major junket partner, Suncity had been blocked by Home Affairs from entering Australia over alleged links to organised crime.

Victorian gaming minister Marlene Kairouz announces an investigation into the “serious allegations that must be investigated” relating to Crown.

Crown’s high-roller agent partner, Song Zezhai, had been named in a Chinese court as running a large illegal gambling syndicate in eastern China that engaged in extortion.

Drug traffickers used two private companies, Southbank Investments Pty Ltd and Riverbank Investments Pty Ltd, both set up by Crown Resorts with Crown executives as directors, to bank suspected proceeds of crime including drug trafficking and money laundering.

NSW Independent Liquor and Gaming Authority announces a public inquiry with royal commission powers into the casino giant and "its close associates".

Joseph Wong, a businessman blacklisted by the UN and Australia because he funded a war criminal, was a Crown Resorts high roller who gambled millions in its VIP rooms even though he was subject to international sanctions.

An inquiry by the NSW Independent Liquor and Gaming Authority began with an outline of multiple probity and legal issues. James Packer was slated to give evidence.

Crown Resorts' most senior board member John Alexander stepped down as executive chairman as part of sweeping governance overhaul.

Hong Kong gambling giant Melco Resorts, run by Lawrence Ho bailed on its plan to build up a large stake in James Packer's casino group Crown Resorts.

Tom Zhou had been arrested in January and extradited to China for suspected money laundering and corruption.

FOI documents revealed Crown casino's "special arrangement" with the Australian government gave Chinese high rollers access to fast-tracked visas and allowed Crown itself to vouch for people's character.

Tom Zhou in 2017 had been involved in a plan to buy the Vanuatu casino resort using a company that involved Zhou’s child as a director, along with the former chief lawyer for Sydney’s The Star casino, Michael Anderson. There is no evidence that Mr Anderson has been involved in or knew about any wrongdoing.

Crown announced a 34 per cent dive in VIP turnover in the six months to December 31, which drove a sharper than expected fall in underlying profits. It blamed “weak high-roller market conditions and negative publicity”.

Cheng Ting Kong, Co-owner of Crown and The Star’s junket partner Suncity, was on the Australian Priority Organisation Target list in around 2017, putting him among a select group of suspected regional crime bosses that the Australian Criminal Intelligence Commission has assessed “represent the top tier of groups involved in serious and organised criminal activity.”

A Crown Resorts vice president, Veng Anh, authorised junior casino staff to wire $500,000 to a Melbourne drug trafficker, Nan Hu. Crown withheld details of the transaction from authorities for a year. There is no suggestion Mr Anh knew Mr Hu was a drug trafficker.

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Intuit Nears Deal to Buy Credit Karma for $7 Billion: WSJ

Intuit Inc. is close to buying Credit Karma Inc. for about $7 billion in cash and stock deal, the Wall Street Journal reported, citing people familiar with the matter it didn’t identify.

The purchase, which could be announced by Monday, will push the maker of TurboTax deeper into the consumer finance space, the newspaper said. The acquisition would also be Intuit’s largest in its 37-year history, it added.

Broadening its sales base is important at a time when Morgan Stanley said it’s expecting tax-preparation software companies to face headwinds for the revenue they get from each tax return this year due to the combined effect of a rising mix of free filings and lower need for services that assist do-it-yourself filers.

Still, Morgan Stanley analyst Keith Weiss had expected Intuit to hit the high end of its implied consumer tax guidance as TurboTax continues to gain market share. Intuit shares have risen 14% since the start of the year, compared with a 3.3% advance in the S&P 500 Index.

Tax-Prep Analyst Sees More Free Filers Hampering Revenue Growth

Under current negotiations, closely-held Credit Karma would operate as a standalone unit with its Chief Executive Officer Kenneth Lin staying in charge, one person told the paper. The San Francisco-based company is backed by funds such as private-equity firm Silver Lake and financial-technology venture firm Ribbit Capital, it added.

Credit Karma, which was co-founded by Lin, was considering an initial stock offering before late 2019 amid a series of weak-performing trading debuts, the newspaper said. Its website gives users access to credit scores and recommends financial products from credit cards to personal and car loans.

Intuit is expected to report its second-quarter earnings on Monday.

Credit Karma Changed Its Approach to Gain Customer Trust

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Buffett letter praises Berkshire’s performance

At Berkshire Hathaway, 2019 was another good year — and an opportunity for its leader, Warren Buffett, to prepare his company for life without him.

Berkshire spent $5 billion buying back its own stock last year.Credit:Photo AFP

In his latest letter to investors, published Saturday morning, the billionaire largely praised the performance of his $566-billion conglomerate, whose portfolio includes the insurer Geico, the chemical-maker Lubrizol, Fruit of the Loom underwear and more.

"Our unrivaled mountain of capital, abundance of cash, and a huge and diverse stream of noninsurance earnings allow us far more investment flexibility than is generally available to other companies in the industry," he wrote.

The annual report was accompanied by the latest assessment of Berkshire's financial health: The company reported $29 billion in net income for the fourth quarter of 2019 and $81.4 billion for last year overall. Operating earnings, Buffett's preferred measure of financial performance, declined slightly last year from 2018, to $24 billion.

In a further show of belief in his company's value, Buffett said that Berkshire spent $5 billion buying back its own stock last year. But investors have hoped that the company would spend more on stock repurchases since loosening its policy on such moves in 2018.

Much of Saturday's letter served up a sort of greatest hits for fans of Buffett — investors around the world who hang onto his pronouncements as America's favourite capitalist uncle.

There were quips, like one comparing corporate acquisitions to marriages that start with "a joyful wedding — but then reality tends to diverge from prenuptial expectations."

There was the complaint that Berkshire, with a $128-billion cash hoard that Buffett wants to spend on big acquisitions, did not have great opportunities to do so. (Missing from action this year was his favourite description of that cash pile, "elephant gun.")

Instead, Buffett wrote, "The fickle stock market serves up opportunities for us to buy large, but noncontrolling, positions in publicly traded companies that meet our standards." That currently includes a $73-billion stake in Apple, $33 billion in Bank of America stock and $22 billion in Coca-Cola shares.

Buffett also noted that Berkshire valued its roughly 27 per cent stake in Kraft Heinz, the packaged foods company that was one of its biggest recent deals — and one of its most prominent investing flops in recent years — at about $13.8 billion. By contrast, Buffett's annual letter in 2018 valued its Kraft Heinz stake at $17.6 billion.

The billionaire also took time to complain about the poor state of many corporate boards:

— Too few women serve on them.

— Directors are often captive to the management teams they are meant to supervise, particularly when it comes to acquisitions that chief executives want to make. "Don't ask the barber whether you need a haircut," he wrote.

— Too many directors go along with management teams in hopes of getting a good reference so they can be added to a second corporate board and earn more paychecks. "When seeking directors, CEOs don't look for pit bulls," Buffett wrote. "It's the cocker spaniel that gets taken home."

Yet as in many years past, this year's letter did not dwell on the topic Berkshire shareholders want most desperately to know: who will succeed Buffett, now 89, as the conglomerate's chief executive. Time and again, Buffett has said only that he has someone in mind and in the meantime has no plans to retire anytime soon.

In Saturday's letter, Buffett reiterated that Berkshire was "100 per cent prepared" for the day that he and his longtime business partner, Charles Munger, 96, leave the scene. The reasons: Berkshire's investments are strong and prudent, the company's businesses are overseen by able managers, and its remaining directors are trusted to stay the course.

The letter reflected one more sign that Buffett was willing to share the limelight with his lieutenants, Ajit Jain and Greg Abel, both of whom have been widely speculated as potential successors.

Buffett said that he would allow attendees of Berkshire's annual shareholder meeting in May to direct questions — part of a long-standing tradition where he and Munger answer queries on any topic — to either of those men.

Also left unaddressed in the letter was Buffett's most recent deal, the sale of Berkshire's newspaper holdings, in a sign that he was giving up on the news business.

The New York Times

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Bernie Sanders Dominates Early Vote Count in Nevada Caucuses

Bernie Sanders took a commanding lead in Nevada with very early results showing him beating rival Democratic presidential candidates by wide margins.

A decisive win for Sanders among the state’s diverse electorate would cement his status as the front-runner and deprive low-performing candidates of the momentum they need to go forward to later contests.

Joe Biden was holding second place in early returns. He had promised voters after disappointing finishes in Iowa and New Hampshire that he would come in first or second in Nevada.

Fox News projected Sanders would win the race, about two hours after the caucuses opened. Other networks said it was too early to project the winner.

Entrance polls broadcast on CNN suggest Sanders had broad support across demographic groups, with the most support from Latinos and in every age group except those 65 and older, who were supporting Biden. Biden was also leading among African American voters.

Sanders, a self-described democratic socialist, also dominated caucus goers who describe themselves as very liberal or somewhat liberal, well ahead of his progressive rival Elizabeth Warren. He was even ahead with those who said they were moderate or conservative, with 23% support, edging Biden, who had 22%.

Heading into the caucus, Sanders held a double-digit lead in the RealClearPolitics average of Nevada polls ahead of the vote, with Biden, Pete Buttigieg and Warren all bunched up in the fight for a distant second.

Buttigieg is the only other Democrat who’s won a contest, with his narrow victory in Iowa. Biden and Warren have finished far back in the pack in the first two votes, and anything less than second place would make it hard for them to springboard into the 14 races on March 3 — states that include Texas, North Carolina, Minnesota and the biggest prize: California.

Warren hopes her strong debate performance this week in Las Vegas, regarded as her best of the campaign, will inspire some voters to give her a second look. Her main target that night, Michael Bloomberg, whose unprecedented spending has made him a wild card in the 2020 primaries, is not contesting Nevada.

(Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)

Warren’s campaign announced that she had doubled a $7 million goal by early Saturday. Whether that money translates into votes remains to be seen. A four-day early voting period wrapped up before the debate.

Donuts and Selfies

The candidates spent the day reaching out to voters and visiting caucus sites.

Warren brought donuts and posed for her famous selfies with volunteers. At Cheyenne High School in North Las Vegas, where 14 precincts are caucusing, Biden charmed the crowd of 150 and said he believed the primary was a test for whether the party wanted to move to the left, with Sanders, or take a more moderate path.

“That’s the battle inside the party right now and there’s a lot of differences among us that are being made more obvious now,” he said. “The contrast is becoming clearer and clearer in how we’re going to move forward.”

Buttigieg greeted supporters at Sierra Vista High School in Las Vegas. He faces his biggest test in trying to win over voters of color, as polls have shown he significantly trails Biden and Sanders with black and Latino voters.

“We’re encouraged that some of the most diverse crowds we’ve had yet had been here in Nevada too so definitely a great opportunity for us to show that broadening coalition,” Buttigieg said as he walked through the school.

Timing of Results

Nevada’s caucus comes on the heels of the Iowa debacle, which left everyone waiting days for final results. And while Nevada party officials have taken pains to avoid a repeat, they have said they cannot promise timely results.

The Nevada party held last-minute classes to train volunteers to use a new calculator on party-owned Apple Inc. iPads. To address concerns about user error, volunteers will also be expected to call the results into a phone hotline and input them on a paper record.

There were reports that some caucus sites were short of volunteers, but Nevada Governor Steve Sisolak tamped down fears of another night of snafus. He told CNN on Saturday that the volunteers he’s spoken to had no trouble grasping the process, and that the caucus methodology was clearly explained when he cast an early ballot.

At stake are 36 pledged delegates to the national convention of the 1,991 needed to secure the party’s nomination. More important than delegates, each win gives candidates momentum going into later contests.

This year, Nevada allowed for early voting in which people could rank their top three candidates, with the option of ranking up to five. About 77,000 Nevadans filled out ballots early. The number of early voters was almost as many as the total who caucused in 2016, when 84,000 people came out support a candidate.

‘A Toss-Up’

Chris Miller, the former chairman of the Clark County Democratic Party who is backing Buttigieg, said it’s still anyone’s game.

“Honest to God I think it’s a toss-up,” Miller said. “Bernie has an advantage but I think Biden will do well here. If he doesn’t, he’s done.” Referring to the early voting, he added, “The turnout numbers were huge, no one expected it to be that high, no one knows what’s going to happen.”

One challenge for Sanders is his complicated relationship with organized labor in Nevada, where unions are particularly influential. The Culinary Workers Union, the state’s largest with 60,000 members, released a flier denouncing Medicare for All plans like the one advocated by Sanders. However, the union declined to endorse a candidate, which was seen as a blow to Biden, who its leadership called a “friend.”

One thing Saturday’s vote will not settle is where Bloomberg — and his hundreds of millions of dollars — will land in the Democratic race. He is not on the ballot in Nevada, although he appeared in the most recent debate there by getting more than 10% in four national polls.

The former New York mayor has already dropped more than $468 million on advertising around the country and despite a widely panned debate performance, will be a factor in the race once he appears on ballots starting on Super Tuesday, March 3.

— With assistance by Jennifer Epstein, Tyler Pager, and Misyrlena Egkolfopoulou

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Sotomayor’s Scathing ‘Public Charge’ Dissent Lights Up Twitter

Justice Sonia Sotomayor lit up Twitter after issuing a dissent against the Supreme Court’s 5-4 vote to allow an immigrant wealth test — designed to weed out green card applicants deemed likely to need public assistance — to go into effect.

The Illinois rule says immigrants who are “likely at any time to become a public charge” because they may in the future need benefits such as food stamps, Medicaid or housing assistance may be turned away. It followed a ruling on Jan. 27 that was already poised to take effect in 49 states.

Sotomayor, who joined fellow liberal Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan in the minority, argued that cases have repeatedly been rushed to the Supreme Court without being “ventilated fully in the lower courts.”

She went as far as to say that the practice is “putting a thumb on the scale in favor” of the party that won a stay — a pointed dig at the Trump administration and her conservative colleagues.

“Claiming one emergency after another, the Government has recently sought stays in an unprecedented number of cases, demanding immediate attention and consuming limited court resources in each,” Sotomayor wrote. “And with each successive application, of course, its cries of urgency ring increasingly hollow.”

Death Penalty

Sotomayor comments drew renewed calls from Democrats to “flip the Senate” in November, and thus have more control over the confirmation of Supreme Court justices. Others praised the decision as a victory for the policies of President Donald Trump.

Among those commenting were Sister Helen Prejean, the Roman Catholic nun and advocate for abolition of the death penalty portrayed by Susan Sarandon in the 1995 film “Dead Man Walking.”

The court, said Prejean, has been quick to grant stays requested by the Justice Department, but not when death-row prisoners request the same — an issue central to Sotomayor’s dissent.

“I fear that this disparity in treatment erodes the fair and balanced decision-making process that this court must strive to protect,” Sotomayor wrote.

Andrew Romanoff, who’s running for the U.S. Senate from Colorado as a Democrat, said Sotomayor was pushing back on a top court that’s “become unbalanced.” And presidential candidate Elizabeth Warren tweeted that she would “roll back” the public-charge policy if elected.

“Millions of children could lose their health care coverage because of the Trump administration’s cruel public charge rule,” Warren said.

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G20 officials seek $100B windfall in tax crackdown on Big Tech

EU is most likely prepping for digital war against US, China: Former Romanian trade minister

Former Romanian Trade Minister Ilan Laufer says the European Union’s proposed rules on artificial intelligence will be bad for the U.S. economy and global markets.

Leading world economies must show unity in dealing with aggressive “tax optimization” by global digital giants like Google, Amazon and Facebook, G20 officials said on Saturday.

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Global rules are being developed by the Organisation for Economic Cooperation and Development (OECD) to make digital companies pay tax where they do business, rather than where they register subsidiaries. The OECD says this could boost national tax revenues by a total of $100 billion a year.

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The call for unity appeared mainly directed at the United States, home to the biggest tech companies, in an attempt to head off any stalling on the rules until after the U.S. presidential election in November.

German Chancellor Angela Merkel, right, and German Finance Minister Olaf Scholz. (AP Photo/Michael Sohn)

“There is no time to wait for elections,” German Finance Minister Olaf Scholz told a tax seminar on the sidelines of a meeting of G20 finance ministers and central bankers.

EU 'WILL RESPOND IN KIND' IF US IMPOSES TARIFFS ON FRANCE OVER DIGITAL TAX

“This needs leadership in certain countries,” Scholz said, looking directly at U.S. Treasury Secretary Steven Mnuchin, sitting next to him at the seminar.

The taxing of digital firms and the effect of the coronavirus outbreak on the global economy are among the hot topics being debated by G20 financial leaders, from the world’s 20 largest economies, during their talks in Riyadh this weekend.

(AP Photo/Virginia Mayo, File)

The OECD wants to set a minimum effective level at which such companies would be taxed and seeks agreement by the start of July, with an endorsement by the G20 by the end of the year.

“A coordinated answer is not the better way forward, but, given the alternatives, the only way forward,” OECD head Angel Gurria told the seminar.

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The OECD efforts were stalled late last year by last-minute changes demanded by Washington, which many G20 officials view as reluctant to deal with a potentially politically tricky matter before the presidential election.

Mnuchin said OECD countries were close to an agreement on the minimum tax level, which he said would also go a long way to resolving the issue of where tax is paid.

U.S. Treasury Secretary Steven Mnuchin (AP Photo/Carolyn Kaster, File)

“I think we all want to get this done by the end of the year, and that’s the objective,” Mnuchin told the seminar.

He sought to reassure G20 delegates that a U.S. proposal to add a “safe harbor” regime to the tax reform effort — which has drawn criticism from France and other countries — would not let companies simply opt out of paying taxes.

MORE CLARITY NEEDED

French Finance Minister Bruno Le Maire told reporters it remained unclear exactly what the U.S. proposal would entail.

“We’re still in the process of assessing what it really means,” he said, adding, “It’s not a non-starter for the French government. It’s fair and useful to give all the attention to this new proposal.”

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European Union Economy Commissioner Paolo Gentiloni told Reuters there was still hard work ahead.

“It’s good that there is a commitment to find a solution, but … it’s not there,” he said, adding that he would meet with Mnuchin for bilateral talks later Saturday.

European Commissioner for Economy Paolo Gentiloni, right. (AP Photo/Virginia Mayo)

Scholz told reporters Germany remained skeptical. “I think we shouldn’t start with letting companies choose which taxes they want to pay. This is leading to nowhere,” he said.

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Several European countries, including France, Spain, Austria, Italy, Britain and Hungary either already have a plan for a digital tax or are working on one, creating the risk of a highly fragmented global system.

“You cannot have in a global economy different national tax systems that conflict with each other,” Mnuchin said.

Facebook Chief Executive Mark Zuckerberg said on Feb. 14 he would be ready to pay more tax in Europe and would welcome a global OECD solution that would make the levies uniform.

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Michael Bloomberg says it’s not so ‘simple’ to produce his tax returns — here’s what most high-income tax returns have in common

Michael Bloomberg, the billionaire former New York City mayor running for the Democratic presidential nod, says he will release his tax returns — but that’s no easy feat.

“I can’t go to TurboTax,” Bloomberg, the founder and CEO of the global media and financial data company Bloomberg L.P., told Democratic debate moderators on Wednesday night.

Bloomberg, who is worth $65.2 billion according to Forbes, said he makes money from all over the globe, so his tax payments are complex.

“The number of pages will probably be in the thousands of pages,” he said of his tax returns, which he said he’ll release in “a few weeks. And that’s just as fast as I can do it.”

Sen. Elizabeth Warren of Massachusetts didn’t see what the fuss was about, and said Bloomberg just needed to pay staffers some overtime to “get it done.”

“I wish it were that simple,” Bloomberg responded.

(Tom Steyer, another Democratic presidential contender who is worth $1.6 billion, has released 10 years of tax returns. His campaign says that totals 3,201 pages.)

If Bloomberg can’t easily produce his returns, that might put him on common ground with other rich taxpayers.

The wealthy have a slew of savvy professionals to help them navigate a complicated tax system, according to Internal Revenue Service statistics.

Nearly 69% of taxpayers earning between $200,000 and $500,000 a year used a professional tax preparer versus 85% of those earnings between $500,000 and $1 million, and 92% of people earning at least $1 million.

That compares to a national average of 53.4%. While many less wealthy Americans may not have such complicated accounts, they also miss out on the myriad ways of legally avoiding paying taxes, experts say.

Paid preparers — like accountants and tax attorneys — submitted 80 million of the almost 150 million tax returns in 2016, the most recent data on the matter.

Responding to Bloomberg’s remarks, a spokesman for IntuitINTU, -1.22%, which owns TurboTax, said, “TurboTax is for everyday taxpayers from simple filers to self-employed to investors that want to receive every dollar they earned and deserve, including the 13 million that filed for $0 last year.”

The wealthy obviously have more complicated returns, and that can cause problems. IRS data for this tax season, as of July, showed a $1.13 trillion tax liability for all individual returns.

Tax liability for taxpayers worth at least $1 million accounted for 14% of that total bill. Including liabilities incurred by those who earn between $500,000 and $1 million, that percentage rises to 25%.

Yet some observers — like Berkeley University economists Gabriel Zucman and Emmanuel Saez — contend the nation’s richest haven’t being taxed enough, and part of that is because the rich know how to minimize their tax exposure. The pair have advised Warren on her proposals to tax the wealthy.

“There are a lot of advantages to being rich, and this is one of them,” said Mark Mazur, director of the left-leaning Urban-Brookings Tax Policy Center. The more money you make, he said, the more money you have to pay someone to find ways to legally avoid paying tax.

Kyle Pomerleau, resident fellow with the right-leaning American Enterprise Institute, said there’s a big difference between illegal tax evasion and tax avoidance “which is totally normal and legal.” MarketWatch initially interviewed Pomerleau for the story while he was chief economist at the right-leaning Tax Foundation.

Tax avoidance is finding the ways within the law to keep taxation at its smallest amount.

One shrewd money move: donating stocks to an heir upon death. If the heir sells the stock, he or she could sidestep the capital gains tax, he said. “Is it tax evasion?” he said. “No. Is it tax avoidance? Of course.”

That advice doesn’t come cheap. Tax attorneys can charge an hourly rate between $200 and $400, though that rate can go much higher in large law firms, according to one estimate.

What’s more, low-income taxpayers claiming the earned income tax credit (EITC) face a disproportionate amount of scrutiny.

In fiscal year 2018, 37% of all the audited individual returns were picked because they had an EITC claim, according to the Taxpayer Advocate Service, a watchdog within the IRS. EITC returns comprised 18% of all individual returns filed in 2017.

This story was published on Oct. 14, 2019 and republished on February 20, 2020.

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Sanders Seeks to Cement Front-Runner Status With Nevada Vote

Bernie Sanders will try to cement his front-runner status Saturday as Nevada’s diverse electorate weighs in on the 2020 Democratic presidential field, but the day could deal a harsh blow to several other candidates limping toward Super Tuesday.

Sanders holds a double-digit lead in the RealClearPolitics average of polls ahead of the vote, with Joe Biden, Pete Buttigieg and Elizabeth Warren all bunched up fighting for a distant second.

Buttigieg is the only other Democrat who has won an early contest, with a razor-thin victory in Iowa. Biden and Warren have finished far back in the pack in the first two votes, and anything less than second place would make it hard for them to springboard into the 14 races on March 3.

Warren hopes her strong debate performance this week in Las Vegas, by far her best of the campaign, will make some voters give her a second look. Her main target that night, Michael Bloomberg, whose unprecedented spending has made him a wild card in the 2020 primaries, is not contesting Nevada.

Nevada’s caucus comes on the heels of the Iowa caucus debacle and while party officials have taken pains to avoid a repeat, they cannot promise timely results.

Sanders’ team hailed its organization before the vote, announcing that they had “knocked on more than 500,000 doors spanning all 17 Nevada counties.”

“Our goal from day one has been to expand the electorate, and we are so proud to see so many first time caucus goers participate during early voting,” Sanders’ Nevada State Director Sarah Michelsen said in a statement.

This year, Nevada allowed for early voting in which people could rank their top three candidates, with the option of ranking up to five. About 77,000 Nevadans filled out ballots early, which suggests the state can expect a very high turnout Saturday. The number of early voters was almost as many as the total who caucused in 2016, when 84,000 people came out support a candidate. And the majority of early voters were caucusing for the first time.

At stake are 36 pledged delegates to the national convention of the 1,991 needed to secure the party’s nomination. More important than delegates, each win gives candidates momentum going into later contests, including Super Tuesday on March 3.

But it is no sure bet that Sanders will win.

Chris Miller, the former chairman of the Clark County Democratic Party who is backing Buttigieg, said it’s still anyone’s game.

“Honest to God I think it’s a toss-up,” Miller said. “Bernie has an advantage but I think Biden will do well here. If he doesn’t, he’s done.” Referring to the early voting, he added, “The turnout numbers were huge, no one expected it to be that high, no one knows what’s going to happen.”

One challenge for Sanders is his complicated relationship with organized labor in Nevada, where unions are particularly influential. The Culinary Workers Union, the state’s largest with 60,000 members, released a flier denouncing Medicare for All plans like the one advocated by Sanders. However, the union declined to endorse a candidate, which was seen as a blow to Biden, who its leadership called a “friend.”

Warren has seen a surge in fundraising after a spirited showing at Wednesday’s debate, during and after which she raised $2.8 million, according to her campaign. Whether that money translates into votes remains to be seen. And the four day early voting period wrapped up before the debate.

One thing Saturday’s vote will not settle is where Bloomberg — and his hundreds of millions of dollars — will land in the Democratic race. He is not on the ballot in Nevada, although he appeared in the most recent debate there by getting more than 10% in four national polls.

The former New York mayor has already dropped more than $468 million on advertising around the country and despite a widely-panned debate performance, will be a factor in the race once he appears on ballots starting on Super Tuesday, March 3.

(Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)

Bloomberg is fighting for the mantle of centrist candidate who can defeat President Donald Trump, but he has a lot of competition for the role. That divided pool of moderate candidates might ultimately help Sanders.

The other candidates spent the hours before the caucus highlighting issues important to Nevada voters.

Buttigieg rolled out a public lands policy plan that calls for setting a national goal of protecting and restoring at least 30% of U.S. lands and oceans by 2030 and achieving net-zero emissions from public lands by 2030.

“I don’t have to tell Nevada how much is at stake,” Buttigieg said as he talked with environmental activists and Native American leaders about his plan.

Amy Klobuchar, who came in third in the New Hampshire primary, underscored her moderate proposals and record of winning over rural and red districts as the pathway to beating Trump. Warren pitched herself as a fighter for working class families.

Biden repeated his promise that the tide would turn as voting moved from Iowa and New Hampshire, two predominantly white states, to more diverse ones like Nevada and South Carolina, which votes next Saturday. And he stressed his longstanding ties to organized labor.

“This campaign is really just getting started. We’re finally at a place where there are folks that represent the country, look like the country,” he said Friday during a stop at a Las Vegas union hall. “They’re good folks in Iowa and New Hampshire but this looks like America.”

In the city that in 2017 suffered the largest-ever mass shooting by a single gunman in U.S. history, he also emphasized his long record of pressing for tougher gun laws. On Thursday, he was joined by Nevadans who lost loved ones to gun violence as he promise to take steps to eliminate gunmakers’ liability shield — something that Sanders voted 15 years ago to enact — beginning on the first day of his presidency.

Iowa Haunts Nevada

It is unclear whether there will even be a winner announced on Saturday night.

The Nevada Democratic Party has been rushing to prevent a repeat of this month’s debacle at the Iowa caucuses, where confusion and phone app glitches led to a days-long delay in reporting results. The party is holding last-minute classes to train volunteers on its new calculator on party-owned Apple Inc. iPads. Results from early voting will already have been inputted.

The party has gone out of its way to insist that it will not be using an app like Iowa’s, which was the original plan. To address concerns about user error, volunteers will also be expected to call the results into a phone hotline and input them on a paper record.

The last-minute training efforts worried some caucus volunteers.

“I would be the happiest person in the world if everything works, but I am nervous,” said Seth Morrison. “We have a new tool that is untested, then we have a very complex caucus process.”

— With assistance by William Turton

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Election-Year Trump Says He’s Ready To Float Farmers On Another River Of Taxpayer Cash

President Donald Trump tweeted Friday that he’s prepared to fork over still more massive taxpayer subsidies to help farmers get through the trade wars he concocted.

He also falsely claimed yet again that money “coming into the country” from tariffs will cover the costs. In fact, tariffs imposed by him are paid by American companies that import goods or parts, which typically pass those costs onto U.S. consumers. The nonpartisan Congressional Budget Office estimated in a report two weeks ago that the tariffs will cost the average American family $1,277 this year.

Trump has already directed an extra $28 billion on top of regular subsidies paid to farmers, who are credited with helping him win the 2016 election, to mitigate the effects of his trade war and retaliatory tariffs. Nearly 40% of farm income last year was provided by government insurance and taxpayer subsidies. 

But farmers are still struggling mightily with the impacts of the trade war, as well as weather complications and international food prices. Farm bankruptcies last year were up 24%.

The Trump administration last month signed a “Phase 1” trade deal with China which includes a pledge from China for major purchases of U.S. farm goods. But China’s struggle with the outbreak of the coronavirus could impact that plan. 

The non partisan Government Accountability Office is launching an investigation into how Trump’s farm subsidies are handed out amid complaints that the money is not going to those who most need it, but to regions most important to Trump’s re-election, and to corporations.

The probe is being initiated at the request of Sen. Debbie Stabenow (D-Mich.), who has complained that the program is providing more funds to southern states that voted for Trump and favoring large and foreign agriculture companies over small farms.

“It’s clear that the Trump Administration’s trade assistance payments pick winners and losers rather than help the farmers who have been hit the hardest by this president’s trade policies,” Stabenow wrote in a letter last month requesting the investigation.

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Mass Shooting Adds Urgency to Merkel’s Push to Curb Hate Speech

German Chancellor Angela Merkel has long sought to eliminate hate speech and fake news from websites such as Facebook and Twitter. A shooting near Frankfurt this week that left 11 people dead — by a far-right activist who published a racist screed online before the incident — has added momentum to those efforts.

While freedom of speech is important, “we need to make clear where the limits are,” said Merkel’s Justice Minister, Christine Lambrecht.

A few hours before the shooting on Wednesday, Merkel’s Cabinet approved a law that would force the likes of Facebook Inc. and Twitter Inc. to report hate speech on their platforms to police. The measure “is supposed to dry out the breeding ground” of rancor, Lambrecht told reporters in Berlin.

Lawmakers in the Bundestag, the lower house of parliament, still need to approve the legislation for it to become law. The next step isn’t scheduled until the end of April, but some members say they would favor accelerating that process in light of this week’s violence.

“Hate online is fertile soil for such terrible crimes,” said Alexander Throm, a lawmaker for Merkel’s Christian Democrats. “We must counter that with the full force of the law.”

The killings in the town of Hanau have prompted soul-searching in a nation gripped by concerns about the rise of the far right, which is disrupting the final stages of Merkel’s four-term chancellorship. Tech companies have long been criticized for not doing enough to curb the spread of disinformation and terrorist propaganda on their platforms.

Wednesday’s shooting — labeled by Interior Minister Horst Seehofer as a racist terror attack — is the third prominent assault by the extreme right in less than a year, after a synagogue attack in eastern Germany in October and the murder of a regional lawmaker from Merkel’s party last June.

Nine people with a migration background were killed at two bars in Hanau on Wednesday night, and the suspected perpetrator and his mother were found dead at a nearby home. Before the attack, the shooter had published a “deeply racist” manifesto that called for genocide, according to Peter Frank, Germany’s federal prosecutor.

The new legislation updates a law called NetzDG that implemented Europe’s toughest controls on hate speech and fake news online. The measure requires tech companies to delete such posts and calls for fines as high as 50 million euros ($54 million) if they fail to do so.

Under the revised bill, companies would also have to alert authorities to offensive posts containing, say, far-right propaganda or threats of rape and violence, and pass on the internet addresses of the people who make them. The bill would also raise penalties for certain crimes committed online.

Partly in response to NetzDG, Facebook — with about 30 million users in Germany — has hired hundreds of people to remove misleading articles, illegal postings such as Holocaust denials, and fake accounts from the site. Facebook and Twitter declined to comment. Google’s YouTube didn’t immediately return a request for comment.

The opposition Green Party has warned that the revised law would allow police to indefinitely keep vast files on citizens simply suspected of wrongdoing, with little due process. And Article 19, a London group focused on freedom of speech, says measures such as NetzDG should be abolished rather than tightened because they make it easier for governments to quash dissent while offloading responsibility for enforcement onto companies.

“NetzDG created a model of intermediary liability with an incentive for companies to remove content, without clear guidance on freedom of expression or sufficient legal determination on what was to be blocked,” said Barbora Bukovska, a director at Article 19. Similar laws have “already been used by countries with much weaker institutional and legal safeguards for the protection of human rights — such as Russia — to justify their own restrictive practices.”

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