William K. Black, author of THE
BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri
Kansas City (UMKC). He was the Executive Director of the Institute for Fraud
Prevention from 2005-2007. He has taught previously at the LBJ School of Public
Affairs at the University of Texas at Austin and at Santa Clara University,
where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied
Ethics. Black was litigation director of the Federal Home Loan Bank Board,
deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan
Bank of San Francisco, and senior deputy chief counsel, Office of Thrift
Supervision. He was deputy director of the National Commission on Financial
Institution Reform, Recovery and Enforcement. Black developed the concept of
"control fraud" frauds in which the CEO or head of state uses the
entity as a "weapon."
Control frauds cause greater financial losses than all other forms of property
crime combined. He recently helped the World Bank develop anti-corruption
initiatives and served as an expert for OFHEO in its enforcement action against
Fannie Mae's former senior management.
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The
Real News Network. I'm Paul Jay in Baltimore. And welcome to this week's
edition of The Black Financial and Fraud Report with
Bill Black, who now joins us from Kansas City, Missouri.
Bill is an associate professor of economics and law at the University of Missouri-Kansas
City. And he's the author of the book The Best Way to Rob a Bank Is
to Own One.
Thanks for joining us, Bill.
BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC:
Thank you.
JAY: So I
guess you've been following the Apple tax cases or issue.
BLACK: Yeah.
So Senator Levin continues to do virtually the only real investigation being
done in the United States of the elite entities. And he has summarized this as
Apple achieving the holy grail of tax evasion, which
is that Apple has succeeded in creating the stateless corporation that makes
literally tens of billions of dollars and pays taxes to absolutely no one. And
at the hearing that was just conducted, it turned into a love fest for Apple
instead of a crackdown on this behavior, with even Levin holding up his iPhone
and giving them a free advertisement about what a great product it was and how
he loved them. And then Ron Paul attacked the Senate for how dare you criticize
Apple for evading taxes.
JAY: Ron
Paul or Rand Paul?
BLACK: I'm
sorry. Rand Paul.
JAY: Right.
And so what was it that Apple said that won them over? I mean, why bother to
have them come testify if it's going to turn into this love fest?
BLACK: Well,
what they said was it's all your fault and we had nothing to do with it. And,
of course, that's completely untrue, because it is the corporate lobbyists that
have created this tax. And so they ended up with this really wonderful example
of chutzpah, which is if you get criticized for paying virtually no taxes, your
proposal is: let's reduce U.S. tax rates so that they're virtually nonexistent.
And this is called repatriation, when you bring these profits home.
Now, these profits are really home, but they're
not home in the United States in a taxable fashion. So they would bring them
home in a taxable fashion, but only if, they said, the tax rate for this kind
of corporate income tax was reduced to single digits. And we did this before at
the behest of the largest U.S. corporations, and there was a study done, and it
found that when they brought these sums back for taxable purposes under a
special repatriation legislation, 92 percent of the money went to corporate
buy-backs of stock. Now, that's designed to increase the stock value so that it
will increase the value of the senior officers' bonuses that are largely paid
in stocks and to dividends and to direct executive compensation. And the same
study found that there was no increase in jobs from all of this.
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