Wal-Mart’s Growth Was Through Fraud Lies and Deceit
If you are old enough to remember the Wal-Mart of the 1980’s and the mood of the nation during that time about buying American, maybe this will tweak your anger button. During the late 70’s and the 80’s was when American businesses were first starting to move overseas in alarming numbers, unfortunately we Americans are used to this treason (my view) now. Plus this was a time when Americans got hooked on cheaper imports. During this time the American auto industry was in big trouble partly because Americans were buying the cheaper Japanese models. This is a time area when you would see such bumper stickers as (can you eat your Toyota). On a sidebar though, in regards to the quality of the cars the big three were putting out at that time was pretty poor in comparison to say the Toyota’s and in this case it helped force the big three to start producing a better quality product. This coincided with the decline in union membership in America which also meant that the American worker’s paycheck was starting to shrink. This meant that people were requiring better quality transportation so they could get to their lower paying jobs.
Wal-Mart at this time used America’s consumer mood to grow itself. Their TV and Radio ads as well as their traveling billboards (their semi trailers) used to tout how they only bought American goods thus trying to get patriotic Americans to do all their shopping at Wal-Mart. There was a big problem with this though, they were totally lying, they were perpetrating a total fraud on the American people.
You may fairly ask me how I know such a thing, was I in their board room? No, but I was a long haul truck driver who hauled a lot of their incoming product. I am going to give you an example of how buffaloed people were by their fraud. I picked up loads from the docks in northern New Jersey about once a month plus once in a while in California. It was a common event when we would get a load assigned to pick up but when we got there the load would be staged on the docks but we had to in some cases wait several hours while the dock workers were having to replace all the stickers on every item with tags that said made in the USA. I asked the dock workers about these things because it always made it more difficult to make your delivery appointments on time and Wal-Mart distribution centers would fine the trucking company if you were late on your delivery and most times they would reschedule your appointment for a different day. This meant that you now had to sit in a truck stop parking lot and wait for your new appointment time. When you as a driver are doing this you get no pay at all because the trucking company got no pay at all. What I was told by more that a couple of dock workers was that it was required that when a Wal-Mart load came in they all had to be re-tagged. This was so that when the American consumer came in the store and looked at the tags they thought they were buying American made products which meant that Wal-Mart was helping protect American jobs. The truth was Wal-Mart was committing a total fraud on the American worker and the American public.
I remember one time that I had picked up a load of laundry detergent at the docks in north Jersey and the load was going to a distribution center in NW Wisconsin. That night as I was driving, the chatter on the CB was some other drivers were talking about where they were headed to and or who their customers were. Somewhere in the conversation Wal-Mart’s name came up. I then mentioned what had happened with my load on the dock and how it had put me a bit behind where I was hoping to be by this time. I remember one driver who got on his radio with much indigence in his voice said to me “how dare you slander a fine company like that”. My response to him was a simple truth, if what you say about someone or something is %100 the truth, then it is not slander, it is simply the truth. That man did not say anything to me after that but a few other drivers chimed in saying the same thing about what I had said about loads for Wal-Mart.
This is why I used the title that I did on this letter to anyone who wants to read it. Wal-Mart committed a total fraud on the American people. If you think about it, this fraud helped bring more customers into their stores so that these same customers would not go to Wal-Mart’s competitors thus giving Wal-Mart an unfair advantage , unfair because they were lying. Now look at the Wal-Mart company, have you ever gone into one of their stores and looked for the made in the USA tags. Unless USA is now spelled CHINA or INDONESIA, it’s a pretty hard tag to find. I used to like to listen to Paul Harvey on the radio every chance I could. I liked the man but he was very naive. If you remember Wal-Mart was a sponsor of his and he seemed to really believe in them. Do you remember how he used to talk how if you had a Wal-Mart store in your town how you couldn’t have a better neighbor. In reality what Wal-Mart was doing then they are still doing. When a Wal-Mart moves into your community about all if not all of your local stores are forced to close because they can’t compete with Wal-Mart buying power. This caused a problem for the people/workers of the area because once all the local stores close up the employees are laid off. In many cases about the only place they can now find work is at the Wal-Mart. But, as many of you know most Wal-Mart employees are only hired as part-time worker’s which also means when these people lost their previous job they lost income and all of their benefits like insurance. At this same time look at the wealth of the owners, the kids of Mr Walton, look at how many billions each of them are worth. Yet they won’t hire most people as full-time because they say they can’t (won’t) give their people any benefits.
You know something that I have been wondering about, would Wal-Mart be anywhere near as big today if they had not been such liars and frauds in their earlier years? One of the things that was also happening during these years I speak of is that the Federal government was breaking up monster size companies like Bell Telephone Co into several smaller companies. It is my opinion that Wal-Mart should be forced to break up into about five companies because of the help they got through fraud and lies they are now a total behemoth. The American GDP (gross domestic product) is about 11 trillion per year, Wal-Mart corporation has about 1.1 trillion dollars go through their hands now each year. Folks that is %10 of our countries GDP. I totally believe that it is dangerous for any one family to have this much control of the American people’s money supply. Especially when these people have already proven that they have no problem lying to all of us.
Now, back to the bought in the USA idea, just think if Wal-Mart and or the five or so companies I wish it would get broken into would indeed only buy from American companies where only American workers and American products produced them, think what a boom to our economy this would produce. If we the American people would only buy American products then this would put many American workers back to work. But, stringent guidelines would have to be put into place to make sure that we the people were not being defrauded like we were within the Walton family before.
As most of us knows, Wal-Mart is an international company. I do believe that such a company has stores in lets say China, I believe that Wal-Mart stores in China should first buy goods made in China. This is also what the people of China badly need. Right now most people in America know that places like China make products for the purpose of export to countries like the US. Most of us also know that almost all of these product are basically of very poor quality, so basically we are paying for lousy and or unsafe products when we buy their exports. If the American people would not buy these cheaply made products it would also help the Chinese people. The population of China is about four times that of the US and these people matter just as much as people of other countries and the working poor of China depends on exports at this time. If the export markets dried up to the companies of China they would have to finally turn inward and build products for the people of China, this would be a huge boom to their domestic companies and at the same time the quality of those products made in their country for their people would have to get much better. This would make their people have a much better quality of life both by having a better paying job and they would be able to purchase products that are out of their financial reach at this time.
I guess what I am getting at is I’m trying to show how things could truly get better for the masses here in the US as well as in places like China if we the people would force behemoth companies like Wal-Mart to be held accountable for their actions. Also force our government to hold countries and companies legally accountable when they are found to be frauds and liars.
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Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father
The president has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s.
President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found.
Mr. Trump won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help.
But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.
Much of this money came to Mr. Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings.
These maneuvers met with little resistance from the Internal Revenue Service, The Times found. The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances.
The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.
The president declined repeated requests over several weeks to comment for this article. But a lawyer for Mr. Trump, Charles J. Harder, provided a written statement on Monday, one day after The Times sent a detailed description of its findings. “The New York Times’s allegations of fraud and tax evasion are 100 percent false, and highly defamatory,” Mr. Harder said. “There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate.”
Mr. Harder sought to distance Mr. Trump from the tax strategies used by his family, saying the president had delegated those tasks to relatives and tax professionals. “President Trump had virtually no involvement whatsoever with these matters,” he said. “The affairs were handled by other Trump family members who were not experts themselves and therefore relied entirely upon the aforementioned licensed professionals to ensure full compliance with the law.”
The president’s brother, Robert Trump, issued a statement on behalf of the Trump family:
“Our dear father, Fred C. Trump, passed away in June 1999. Our beloved mother, Mary Anne Trump, passed away in August 2000. All appropriate gift and estate tax returns were filed, and the required taxes were paid. Our father’s estate was closed in 2001 by both the Internal Revenue Service and the New York State tax authorities, and our mother’s estate was closed in 2004. Our family has no other comment on these matters that happened some 20 years ago, and would appreciate your respecting the privacy of our deceased parents, may God rest their souls.”
The Times’s findings raise new questions about Mr. Trump’s refusal to release his income tax returns, breaking with decades of practice by past presidents. According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes, because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.
The findings are based on interviews with Fred Trump’s former employees and advisers and more than 100,000 pages of documents describing the inner workings and immense profitability of his empire. They include documents culled from public sources — mortgages and deeds, probate records, financial disclosure reports, regulatory records and civil court files.
The investigation also draws on tens of thousands of pages of confidential records — bank statements, financial audits, accounting ledgers, cash disbursement reports, invoices and canceled checks. Most notably, the documents include more than 200 tax returns from Fred Trump, his companies and various Trump partnerships and trusts. While the records do not include the president’s personal tax returns and reveal little about his recent business dealings at home and abroad, dozens of corporate, partnership and trust tax returns offer the first public accounting of the income he received for decades from various family enterprises.
What emerges from this body of evidence is a financial biography of the 45th president fundamentally at odds with the story Mr. Trump has sold in his books, his TV shows and his political life. In Mr. Trump’s version of how he got rich, he was the master deal maker who broke free of his father’s “tiny” outer-borough operation and parlayed a single $1 million loan from his father (“I had to pay him back with interest!”) into a $10 billion empire that would slap the Trump name on hotels, high-rises, casinos, airlines and golf courses the world over. In Mr. Trump’s version, it was always his guts and gumption that overcame setbacks. Fred Trump was simply a cheerleader.
“I built what I built myself,” Mr. Trump has said, a narrative that was long amplified by often-credulous coverage from news organizations, including The Times.
Certainly a handful of journalists and biographers, notably Wayne Barrett, Gwenda Blair, David Cay Johnston and Timothy L. O’Brien, have challenged this story, especially the claim of being worth $10 billion. They described how Mr. Trump piggybacked off his father’s banking connections to gain a foothold in Manhattan real estate. They poked holes in his go-to talking point about the $1 million loan, citing evidence that he actually got $14 million. They told how Fred Trump once helped his son make a bond payment on an Atlantic City casino by buying $3.5 million in casino chips.
But The Times’s investigation of the Trump family’s finances is unprecedented in scope and precision, offering the first comprehensive look at the inherited fortune and tax dodges that guaranteed Donald J. Trump a gilded life. The reporting makes clear that in every era of Mr. Trump’s life, his finances were deeply intertwined with, and dependent on, his father’s wealth.
By age 3, Mr. Trump was earning $200,000 a year in today’s dollars from his father’s empire. He was a millionaire by age 8. By the time he was 17, his father had given him part ownership of a 52-unit apartment building. Soon after Mr. Trump graduated from college, he was receiving the equivalent of $1 million a year from his father. The money increased with the years, to more than $5 million annually in his 40s and 50s.
Fred Trump’s real estate empire was not just scores of apartment buildings. It was also a mountain of cash, tens of millions of dollars in profits building up inside his businesses, banking records show. In one six-year span, from 1988 through 1993, Fred Trump reported $109.7 million in total income, now equivalent to $210.7 million. It was not unusual for tens of millions in Treasury bills and certificates of deposit to flow through his personal bank accounts each month.
Fred Trump was relentless and creative in finding ways to channel this wealth to his children. He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.
Much of his giving was structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal. Although Fred Trump became wealthy with help from federal housing subsidies, he insisted that it was manifestly unfair for the government to tax his fortune as it passed to his children. When he was in his 80s and beginning to slide into dementia, evading gift and estate taxes became a family affair, with Donald Trump playing a crucial role, interviews and newly obtained documents show.
The line between legal tax avoidance and illegal tax evasion is often murky, and it is constantly being stretched by inventive tax lawyers. There is no shortage of clever tax avoidance tricks that have been blessed by either the courts or the I.R.S. itself. The richest Americans almost never pay anything close to full freight. But tax experts briefed on The Times’s findings said the Trumps appeared to have done more than exploit legal loopholes. They said the conduct described here represented a pattern of deception and obfuscation, particularly about the value of Fred Trump’s real estate, that repeatedly prevented the I.R.S. from taxing large transfers of wealth to his children.
“The theme I see here through all of this is valuations: They play around with valuations in extreme ways,” said Lee-Ford Tritt, a University of Florida law professor and a leading expert in gift and estate tax law. “There are dramatic fluctuations depending on their purpose.”
The manipulation of values to evade taxes was central to one of the most important financial events in Donald Trump’s life. In an episode never before revealed, Mr. Trump and his siblings gained ownership of most of their father’s empire on Nov. 22, 1997, a year and a half before Fred Trump’s death. Critical to the complex transaction was the value put on the real estate. The lower its value, the lower the gift taxes. The Trumps dodged hundreds of millions in gift taxes by submitting tax returns that grossly undervalued the properties, claiming they were worth just $41.4 million.
The same set of buildings would be sold off over the next decade for more than 16 times that amount.
The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.
After this article was published on Tuesday, a spokesman for the New York State Department of Taxation and Finance said the agency was “reviewing the allegations” and “vigorously pursuing all appropriate areas of investigation.”
All told, The Times documented 295 streams of revenue that Fred Trump created over five decades to enrich his son. In most cases his four other children benefited equally. But over time, as Donald Trump careened from one financial disaster to the next, his father found ways to give him substantially more money, records show. Even so, in 1990, according to previously secret depositions, Mr. Trump tried to have his father’s will rewritten in a way that Fred Trump, alarmed and angered, feared could result in his empire’s being used to bail out his son’s failing businesses.
Of course, the story of how Donald Trump got rich cannot be reduced to handouts from his father. Before he became president, his singular achievement was building the brand of Donald J. Trump, Self-Made Billionaire, a brand so potent it generated hundreds of millions of dollars in revenue through TV shows, books and licensing deals.
Constructing that image required more than Fred Trump’s money. Just as important were his son’s preternatural marketing skills and always-be-closing competitive hustle. While Fred Trump helped finance the accouterments of wealth, Donald Trump, master self-promoter, spun them into a seductive narrative. Fred Trump’s money, for example, helped build Trump Tower, the talisman of privilege that established his son as a major player in New York. But Donald Trump recognized and exploited the iconic power of Trump Tower as a primary stage for both “The Apprentice” and his presidential campaign.
The biggest payday he ever got from his father came long after Fred Trump’s death. It happened quietly, without the usual Trumpian news conference, on May 4, 2004, when Mr. Trump and his siblings sold off the empire their father had spent 70 years assembling with the dream that it would never leave his family.
Donald Trump’s cut: $177.3 million, or $236.2 million in today’s dollars.
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Politically Correct: The Acidic Evil That Is American Politics
Good evening folks, tonight I wish to speak with you about a subject matter that is not near or dear to my heart, it is called political correctness. This subject matter touches each and every one of us on a regular basis in our daily lives. In its simplest form political correctness is the attempt to avoid offending anyone at anytime regardless of the subject matter. I believe that when most of us hear the term political correctness it is not a smile that crosses our face, it is more likely to be a disgusted frown. Today if a person says anything about a subject matter when it may in any way shed a light of truth on the events of today, if that truth in the slightest degree has any measure of negatives then you will be labeled as a hater. There was a time in this country when people were allowed to be honest in their speech but unfortunately that is not the case these days. Now if you say anything about anyone person or persons even if you are speaking the total truth to the best of your knowledge, you have become a hater or some kind of a bigot whom is very likely to be sued in court because you dared to be honest. In the past we could describe a dirty old man in simple terms/truths, these days political correctness (stupidity) airbrushed the truth stains away so that you don’t offend that dirty old man. These days that person is a sexually focused chronologically gifted individual. Laziness is now referred to as motivationally deficient. I am now no longer short being only five feet eleven and three-quarters inches tall, I am vertically challenged because I didn’t make it to at least six feet. It is comforting to know that I didn’t really have trouble with algebraic equations in college, I simply had a memory deficiency.
We could all just sit back in our Lazy Boy recliners with a glass of Jose Cuervo in one hand and a big blunt in the other and just sit back and laugh at American politicians and media talking heads as they spout this stupidity. The scary part of this is that what we the people call stupidity/political correctness, some of the fore mentioned people cultivate this ignorance as their personal gospel. This ignorance is a gospel of re-education and it does show via the ignorance and apathy we see and hear when today’s streamlined, bought and paid for politicians open their mouths. Today at almost all of our college campuses as well as the secondary and primary schools this re-education propaganda is widely referred to as diversity education. This ignorance that our politicians and the media push down our throats tries to please everyone all of the time and to never offend anyone any of the time. This is a nice story line if it were in a small child’s fantasy or Fantasy Island handbook but in the real world it is simply poison. Most all of us adults know that political correctness if allowed to play out and to become the laws of the land, we are all doomed to be the laughing-stock of the whole world. Today if people dare attempt to speak the truth about real world issues they are branded as haters or we are people with stone-age ideologies. Truth is that when people do dare to speak the truth on real issues what you say will most likely offend some people whom do not happen to agree with you. When we are cultivated away from the truth and told we can’t say such things isn’t this the same thing as saying to advance in our society today that you must either be and idiot, or an habitual liar?
For those who might think that this mental disease is a spin-off of the 1960’s and 70’s hippy drug culture then you need to crack open some college level history books and increase your knowledge on this subject matter. My friends, political correctness has been around and practiced through other cultures around the world far longer than any of us have been alive. Political correctness is really nothing more than cultural Marxism in some professors views and I can’t say that I disagree with them. If we compare the basic tenets of political correctness with classical Marxism the parallels of the two are very obvious. When Marxist Communists take over a country such as Russia, China, North Korea or Cuba the personal freedom of speech ceases to exist.
I leave you tonight with just one last observation, isn’t it amazing how much Russia and her politics have turned to look more like our politicians rhetorical babbling? Or, is it more correct to say that our government is starting to look more like the Russia of President Putin or even that of Germany of the mid 1930’s in that free honest intelligent conversation can be construed as a hate crime? Is political correctness in places like D.C., Hollywood and New York City going to be a nail in America’s coffin? Time will tell us all what the truth is but I totally have my doubts that anyone alive today will live long enough to see that day. Friends, good night, stay well, God Bless.
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Former Chairman of IDB Group Nochi Dankner seen at the Supreme court in Jerusalem on April 23, 2018. (Yonatan Sindel/Flash90)
The Supreme Court has increased the sentence of one of the country’s most prominent businessmen to three years in prison for securities fraud.
The court ruled Wednesday that former IDB Holding Corp. controlling shareholder Nochi Dankner will begin serving his prison term on October 2 for his role in carrying out millions of dollars’ worth of fraudulent transactions in an attempt to influence the share price of the troubled company.
Dankner — once one of the richest men in Israel — was also given a one-year suspended sentence and ordered to pay a fine of NIS 800,000 ($209,000).
His co-defendant, Itay Strum, owner of a company that manages assets for wealthy families, had been sentenced to a single year behind bars, a year’s suspended sentence and a NIS 500,000 fine ($130,760).
Nochi Dankner (left) and Itay Strum, both sentenced for insider trading, at the Tel Aviv District Court on October 30, 2016. (Flash90)
However, both men appealed their sentence. In Monday’s ruling the court increased Dankner’s sentence to three years and Strum’s to two years.
In the ruling Judge David Mintz said that their actions had harmed public confidence in the stock market, adding that it increased suspicion that trading prices for securities do not accurately reflect the economic activity of the economy or the market.
The judges said that they felt the initial sentence was not commensurate with the severity of the crimes.
“A review of the sentence showed that even though it used harsh language against the actions of Dankner and Strum, and even stressed the clear need to eliminate white collar crime in general and within the capital market specifically, this approach was not adequately expressed in the sentence and the punishment,” they wrote in their ruling.
Both men had been convicted for their involvement in insider trading in the run-up to a stock flotation for Dankner’s holdings company, IDB Group, in 2012.
Dankner had sunk into massive debt with the banks and had met a brick wall trying to raise cash or get further loans.
IDB took on millions of dollars in debt following a series of bad business deals. The courts wrested control of IDB from Dankner as a result.
Dankner, a favorite of Israel’s business community, was often credited with helping rescue Israel’s economy at the height of a Palestinian uprising. Under his leadership, IDB became Israel’s largest holding company and Dankner became a celebrity.
During his original trial, Dankner did not deny his “failures and poor decisions,” but tried unsuccessfully to convince the court that his actions had not been criminal. He tried to put much of the blame for IDB’s collapse on reforms in the cellular market introduced by Finance Minister Moshe Kahlon in his previous cabinet role of communications minister.
Illustrative image of bitcoins (Courtesy BitsofGold)
Cryptocurrency-related attacks will surpass all other types of cyberattacks in 2018, a leading expert warned.
Issuing the bleak prediction, Lotem Finkelsteen, a threat intelligence analyst with the Israeli cybersecurity company Check Point Software Technologies, said “not a day goes by without our hearing about a new ICO [initial coin offering] scam or mining attack.”
By “cryptocurrency-related cyberattacks,” he appeared to be referring to any form of cybercrime involving or related to cryptocurrencies, including financial scams and hacking.
Blockchain, the technology that underpins cryptocurrencies, “is suffering from reputational damage,” said Finkelsteen. “And that is one of the main obstacles for blockchain technology to move forward.”
Lotem Finkelsteen (Twitter)
Finkelsteen was speaking on a panel at an event entitled “Blockchain, The New Digital Age” at Tel Aviv University’s annual Cyber Week cybersecurity conference. Other panelists at the event were more optimistic about the positive potential for blockchain and cryptocurrency technology.
“There are real projects rolling out,” said John Velissarios, Principal Director and Global Blockchain Technology Lead at Accenture, a global management consulting company. “We’re seeing blockchain applications for capital markets, exchanges, clearing and settlement systems and payment systems. The technology is evolving and the applications are becoming more significant.”
Blockchain technology is the underlying technology of Bitcoin and other cryptocurrencies. A blockchain is a database that is maintained by numerous collaborators, like a Google document. The computers of the collaborators decide through a consensus mechanism how to update the database. Once they decide, the update is rendered immutable through cryptography. The resulting record can be used as proof of ownership without the need for a central authority deciding who owns what.
Many entrepreneurs and computer scientists see enormous potential in blockchain, and believe that the fact that money and other assets can be transferred from person to person without going through a central authority has many real-world applications.
But Haim Pinto, the CTO of Bank Hapoalim, Israel’s largest bank, asserted that there are no blockchain applications that are dependably usable at present, least of all for a trusted institution like a major commercial bank.
“Blockchain is still in a hype cycle,” he said in the panel discussion, arguing that the technology is not yet ready for widespread adoption. “We can’t just take it and use it.”
Pinto said cryptocurrencies present problems for banks seeking to comply with anti-money laundering and privacy regulation.
“As long as we are under anti-money laundering and FATCA rules, we have to know the source of customers’ money,” he said. This requirement, he said, does not jibe with the nature of cryptocurrencies, which can be transferred anonymously.
In addition, said Pinto, cryptocurrencies present a challenge for banks seeking to comply with the EU’s “right to be forgotten” laws, which require that businesses erase clients’ sensitive personal data if they are asked to do so.
“Distributed general ledgers cannot erase anything,” he said, referring to the fact that most blockchains are immutable. “That’s just one of the challenges. In addition, there are mathematical challenges. Distributed general ledgers can’t scale up to the volume of transactions we need to serve.”
Pinto said that most banks around the world are running mainframe computers as their core platforms. Before they can adopt blockchains or distributed general ledgers, they will probably first adopt “open banking,” a new trend in the banking world that refers to the practice of allowing third-party developers to build applications around the bank.
In recent years in Israel, some experts have touted cryptocurrency and blockchain as the next major driver of the Israeli economy, but as The Times of Israel has reported, it is unclear how much of the activity in this new high-tech field is legitimate, how much is mere hype, and how much is outright fraud perpetrated by malevolent actors, including transnational criminal organizations.
A second panel at the event dealt with the non-financial applications of the blockchain.
At that session, Gideon Lichfield, the editor-in-chief of the MIT Technology Review, described enthusiasm about using blockchain technology for supply-chain management.
Gideon Lichfield (Courtesy Cyber Week)
“Businesses see it as a way to track bananas or lettuce from the supplier to the supermarket shelf.”
If some lettuce turns out to be bad, he said, blockchain technology can be used to find out which farm the lettuce came from.
Lichfield questioned why blockchain is a good solution for this, as opposed to a centralized database or some other solution. Nevertheless, he said, if blockchain is an adequate solution, it could become the de facto standard, simply because there is so much hype around, and money being poured into, blockchain technology.
“Big companies don’t want to be left behind,” said Lichfield, ”They jump into this.”
Steve Bassi, the CEO of the cybersecurity company Polyswarm, agreed with the other panelists that blockchain is often proposed as a solution to a problem where a centralized database might work just as well.
Attempting to distill the circumstances under which blockchain could be useful, he asked, “Where do we always cheat each other unless someone else is watching? That is where blockchain might be applicable.”
Another speaker at the final session of the conference on Thursday, Tel Aviv University Economics professor Neil Gandal, presented a paper called “Price Manipulation in the Bitcoin Ecosystem” that he and his colleagues first published in January.
Tel Aviv University Economics Professor Neil Gandal speaks at Cyber Week, June 21, 2018 (Simona Weinglass/Times of Israel)
Gandal contended that Bitcoin’s first major price spike, when it rose from $150 to over $1,000 in late 2013, was likely caused by a single person using trading robots.
Editor’s Note:To get ahead of new problems related to disinformation and technology, policymakers in Europe and the United States should focus on the coming wave of disruptive technologies, write Chris Meserole and Alina Polyakova. Fueled by advances in artificial intelligence and decentralized computing, the next generation of disinformation promises to be even more sophisticated and difficult to detect. This piece originally appeared on ForeignPolicy.com.
Russian disinformation has become a problem for European governments. In the last two years, Kremlin-backed campaigns have spread false stories alleging that French President Emmanuel Macron was backed by the “gay lobby,” fabricated a story of a Russian-German girl raped by Arab migrants, and spread a litany of conspiracy theories about the Catalan independence referendum, among other efforts.
Europe is finally taking action. In January, Germany’s Network Enforcement Act came into effect. Designed to limit hate speech and fake news online, the law prompted both France and Spain to consider counterdisinformation legislation of their own. More important, in April the European Union unveiled a new strategy for tackling online disinformation. The EU plan focuses on several sensible responses: promoting media literacy, funding a third-party fact-checking service, and pushing Facebook and others to highlight news from credible media outlets, among others. Although the plan itself stops short of regulation, EU officials have not been shy about hinting that regulation may be forthcoming. Indeed, when Facebook CEO Mark Zuckerberg appeared at an EU hearing this week, lawmakers reminded him of their regulatory power after he appeared to dodge their questions on fake news and extremist content.
The problem is that technology advances far more quickly than government policies.
The recent European actions are important first steps. Ultimately, none of the laws or strategies that have been unveiled so far will be enough. The problem is that technology advances far more quickly than government policies. The EU’s measures are still designed to target the disinformation of yesterday rather than that of tomorrow.
To get ahead of the problem, policymakers in Europe and the United States should focus on the coming wave of disruptive technologies. Fueled by advances in artificial intelligence and decentralized computing, the next generation of disinformation promises to be even more sophisticated and difficult to detect.
To craft effective strategies for the near term, lawmakers should focus on four emerging threats in particular: the democratization of artificial intelligence, the evolution of social networks, the rise of decentralized applications, and the “back end” of disinformation.
Thanks to bigger data, better algorithms, and custom hardware, in the coming years, individuals around the world will increasingly have access to cutting-edge artificial intelligence. From health care to transportation, the democratization of AI holds enormous promise.
Yet as with any dual-use technology, the proliferation of AI also poses significant risks. Among other concerns, it promises to democratize the creation of fake print, audio, and video stories. Although computers have long allowed for the manipulation of digital content, in the past that manipulation has almost always been detectable: A fake image would fail to account for subtle shifts in lighting, or a doctored speech would fail to adequately capture cadence and tone. However, deep learning and generative adversarial networks have made it possible to doctor imagesand video so well that it’s difficult to distinguish manipulated files from authentic ones. And thanks to apps like FakeApp and Lyrebird, these so-called “deep fakes” can now be produced by anyone with a computer or smartphone. Earlier this year, a tool that allowed users to easily swap faces in video produced fake celebrity porn, which went viral on Twitter and Pornhub.
Deep fakes and the democratization of disinformation will prove challenging for governments and civil society to counter effectively. Because the algorithms that generate the fakes continuously learn how to more effectively replicate the appearance of reality, deep fakes cannot easily be detected by other algorithms—indeed, in the case of generative adversarial networks, the algorithm works by getting really good at fooling itself. To address the democratization of disinformation, governments, civil society, and the technology sector therefore cannot rely on algorithms alone, but will instead need to invest in new models of social verification, too.
At the same time as artificial technology and other emerging technologies mature, legacy platforms will continue to play an outsized role in the production and dissemination of information online. For instance, consider the current proliferation of disinformation on Google, Facebook, and Twitter.
A growing cottage industry of search engine optimization (SEO) manipulation provides services to clients looking to rise in the Google rankings. And while for the most part, Google is able to stay ahead of attempts to manipulate its algorithms through continuous tweaks, SEO manipulators are also becoming increasingly savvy at gaming the system so that the desired content, including disinformation, appears at the top of search results.
For example, stories from RT and Sputnik—the Russian government’s propaganda outlets—appeared on the first page of Google searches after the March nerve agent attack in the United Kingdom and the April chemical weapons attack in Syria. Similarly, YouTube (which is owned by Google) has an algorithm that prioritizes the amount of time users spend watching content as the key metric for determining which content appears first in search results. This algorithmic preference results in false, extremist, and unreliable information appearing at the top, which in turn means that this content is viewed more often and is perceived as more reliable by users. Revenue for the SEO manipulation industry is estimated to be in the billions of dollars.
On Facebook, disinformation appears in one of two ways: through shared content and through paid advertising. The company has tried to curtail disinformation across each vector, but thus far to no avail. Most famously, Facebook introduced a “Disputed Flag” to signify possible false news—only to discover that the flag made users more likely to engage with the content, rather than less. Less conspicuously, in Canada, the company is experimenting with increasing the transparency of its paid advertisements by making all ads available for review, including those micro-targeted to a small set of users. Yet, the effort is limited: The sponsors of ads are often buried, requiring users to do time-consuming research, and the archive Facebook set up for the ads is not a permanent database but only shows active ads. Facebook’s early efforts do not augur well for a future in which foreign actors can continue to exploit its news feed and ad products to deliver disinformation—including deep fakes produced and targeted at specific individuals or groups.
Although Twitter has taken steps to combat the proliferation of trolls and bots on its platform, it remains deeply vulnerable to disinformation campaigns, since accounts are not verified and its application programming interface, or API, still makes it possible to easily generate and spread false content on the platform. Even if Twitter takes further steps to crack down on abuse, its detection algorithms can be reverse-engineered in much the same way Google’s search algorithm is. Without fundamental changes to its API and interaction design, Twitter will remain rife with disinformation. It’s telling, for example, that when the U.S. military struck Syrian chemical weapons facilities in April—well after Twitter’s latest reforms were put in place—the Pentagon reported a massive surge in Russian disinformation in the hours immediately following the attack. The tweets appeared to come from legitimate accounts, and there was no way to report them as misinformation.
Blockchain technologies and other distributed ledgers are best known for powering cryptocurrencies such as bitcoin and ethereum. Yet their biggest impact may lie in transforming how the internet works. As more and more decentralized applications come online, the web will increasingly be powered by services and protocols that are designed from the ground up to resist the kind of centralized control that Facebook and others enjoy. For instance, users can already browse videos on DTube rather than YouTube, surf the web on the Blockstack browser rather than Safari, and store files using IPFS, a peer-to-peer file system, rather than Dropbox or Google Docs. To be sure, the decentralized application ecosystem is still a niche area that will take time to mature and work out the glitches. But as security improves over time with fixes to the underlying network architecture, distributed ledger technologies promise to make for a web that is both more secure and outside the control of major corporations and states.
If and when online activity migrates onto decentralized applications, the security and decentralization they provide will be a boon for privacy advocates and human rights dissidents. But it will also be a godsend for malicious actors. Most of these services have anonymity and public-key cryptography baked in, making accounts difficult to track back to real-life individuals or organizations. Moreover, once information is submitted to a decentralized application, it can be nearly impossible to take down. For instance, the IPFS protocol has no method for deletion—users can only add content, they cannot remove it.
For governments, civil society, and private actors, decentralized applications will thus pose an unprecedented challenge, as the current methods for responding to and disrupting disinformation campaigns will no longer apply. Whereas governments and civil society can ultimately appeal to Twitter CEO Jack Dorsey if they want to block or remove a malicious user or problematic content on Twitter, with decentralized applications, there won’t always be someone to turn to. If the Manchester bomber had viewed bomb-making instructions on a decentralized app rather than on YouTube, it’s not clear who authorities should or could approach about blocking the content.
Over the last three years, renewed attention to Russian disinformation efforts has sparked research and activities among a growing number of nonprofit organizations, governments, journalists, and activists. So far, these efforts have focused on documenting the mechanisms and actors involved in disinformation campaigns—tracking bot networks, identifying troll accounts, monitoring media narratives, and tracing the diffusion of disinformation content. They’ve also included governmental efforts to implement data protection and privacy policies, such as the EU’s General Data Protection Regulation, and legislative proposals to introduce more transparency and accountability into the online advertising space.
While these efforts are certainly valuable for raising awareness among the public and policymakers, by focusing on the end product (the content), they rarely delve into the underlying infrastructure and advertising marketsdriving disinformation campaigns. Doing so requires a deeper examination and assessment of the “back end” of disinformation. In other words, the algorithms and industries—the online advertising market, the SEO manipulation market, and data brokers—behind the end product. Increased automation paired with machine learning will transform this space as well.
To get ahead of these emerging threats, Europe and the United States should consider several policy responses.
First, the EU and the United States should commit significant funding to research and development at the intersection of AI and information warfare. In April, the European Commission called for at least 20 billion euros (about $23 billion) to be spent on research on AI by 2020, prioritizing the health, agriculture, and transportation sectors. None of the funds are earmarked for research and development specifically on disinformation. At the same time, current European initiatives to counter disinformation prioritize education and fact-checking while leaving out AI and other new technologies.
As long as tech research and counterdisinformation efforts run on parallel, disconnected tracks, little progress will be made in getting ahead of emerging threats.
As long as tech research and counterdisinformation efforts run on parallel, disconnected tracks, little progress will be made in getting ahead of emerging threats. In the United States, the government has been reluctant to step in to push forward tech research as Silicon Valley drives innovation with little oversight. The 2016 Obama administration report on the future of AI did not allocate funding, and the Trump administration has yet to release its own strategy. As revelations of Russian manipulation of digital platforms continue, it is becoming increasingly clear that governments will need to work together with private sector firms to identify vulnerabilities and national security threats.
Furthermore, the EU and the U.S. government should also move quickly to prevent the rise of misinformation on decentralized applications. The emergence of decentralized applications presents policymakers with a rare second chance: When social networks were being built a decade ago, lawmakers failed to anticipate the way in which they could be exploited by malicious actors. With such applications still a niche market, policymakers can respond before the decentralized web reaches global scale. Governments should form new public-private partnerships to help developers ensure that the next generation of the web isn’t as ripe for misinformation campaigns. A model could be the United Nations’ Tech Against Terrorism project, which works closely with small tech companies to help them design their platforms from the ground up to guard against terrorist exploitation.
Finally, legislators should continue to push for reforms in the digital advertising industry. As AI continues to transform the industry, disinformation content will become more precise and micro-targeted to specific audiences. AI will make it far easier for malicious actors and legitimate advertisers alike to track user behavior online, identify potential new users to target, and collect information about users’ attitudes, beliefs, and preferences.
In 2014, the U.S. Federal Trade Commission released a report calling for transparency and accountability in the data broker industry. The report called on Congress to consider legislation that would shine light on these firms’ activities by giving individuals access and information about how their data is collected and used online. The EU’s protection regulation goes a long way in giving users control over their data and limits how social media platforms process users’ data for ad-targeting purposes. Facebook is also experimenting with blocking foreign ad sales ahead of contentious votes. Still, the digital ads industry as a whole remains a black box to policymakers, and much more can still be done to limit data mining and regulate political ads online.
Effectively tracking and targeting each of the areas above won’t be easy. Yet policymakers need to start focusing on them now. If the EU’s new anti-disinformation effort and other related policies fail to track evolving technologies, they risk being antiquated before they’re even introduced.
(THIS ARTICLE IS COURTESY OF NPR AND THE BROOKINGS INSTITUTE)
What The World Needs To Do After Venezuela’s Vote
Marcos Carbono (center) joins a protest against the weekend’s election in Venezuela in front of that country’s consulate in Miami. President Nicolás Maduro may have won the vote count but in the process lost the legitimacy to govern, one expert writes.
Joe Raedle/Getty Images
Ted Piccone (@piccone_ted) is a senior fellow in foreign policy at the Brookings Institution.
Venezuela’s latest electoral affair only worsened the country’s continued slide from a relatively stable middle-income democracy to a socialist authoritarian system stricken with hyperinflation, rising poverty, declining oil production and record levels of violent crime. Rather than boost President Nicolás Maduro’s standing after five years in power, the low voter turnout — down from 80 percent in 2013 to 46 percent on Sunday — coupled with a clear rejection of the results by the United States, Canada and a group of 13 Latin American nations, leaves the protégé of former President Hugo Chávez with a crisis of governability. Maduro may have won the vote count but in the process lost the legitimacy to govern.
Venezuela’s deterioration toward despotism and despair comes as little surprise. For years, experts have warned that increasing executive control of the country’s democratic institutions alongside gross mismanagement of its oil-dominated economy would lead to worsening conditions for its 30 million citizens. Hundreds of thousands of Venezuelans have left the country in the past two years, many of them desperate to escape the confluence of food and medicine shortages, lack of decent jobs, terrible crime and political repression.
The situation today is a tragic reversal of the heady days when Chávez first launched his Bolivarian revolution in 1998, promising to spread Venezuela’s vast petroleum wealth more fairly among the majority poor. For years, the charismatic revolutionary rode the wave of high oil prices to deliver social benefits to his constituents, helping him not only to overcome general strikes, mass protests and a coup attempt, but also to win relatively free and fair elections multiple times. He abused that electoral popularity and government largesse to rewrite the constitution in his favor, create paramilitary “Bolivarian circles,” stack the courts and electoral council with his loyalists, control the state-owned oil firm, and stifle free media.
Re-Election Of Venezuelan President Nicolás Maduro Condemned Widely By World Leaders
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Chávez also effectively used the country’s oil reserves, the world’s largest, to insulate his regime from U.S. pressure, securing favorable loans from China and new military equipment and energy deals from Russia.
By the time Chávez died in March 2013, the winning formula for an elected authoritarian was well-entrenched. His hand-picked successor, Maduro, narrowly won elections a month later and quickly consolidated control by digging even deeper into the trough of state resources to buy off the military, nationalize industries and woo enough voters to stave off electoral defeat.
This strategy, however, has probably run its course. With mounting foreign debt, falling oil production, increased sanctions, diplomatic isolation and a spreading humanitarian crisis on his hands, Maduro can survive only by taking painful steps to reform a system that fuels his regime’s authority. Since this is unlikely, we should expect to see an increasingly desperate hardening of his administration’s tactics against his opponents, domestic and foreign, and an intensified reliance on China and Russia for support.
For the United States and the international community, Venezuela presents a particularly tricky case. The goals are relatively clear — weaken Maduro enough to force him to negotiate a peaceful exit while preventing a worsening humanitarian crisis that is already destabilizing neighboring Colombia and fragile Caribbean states and could bring thousands of desperate Venezuelans to U.S. borders.
Washington, however, is not well-positioned politically to lead the charge. Threats of military intervention, already uttered by President Trump, are a non-starter. Support for a military coup likewise would seriously set back U.S. standing in the region. For the past three decades, the U.S. has mostly stood firm in support of democratic and negotiated solutions to the Latin America’s internal political crises. That leaves expanding the list of targeted economic sanctions, coordinated with partners in the region and Europe, to pressure Maduro and his allies to come to the negotiating table in a serious way.
Up until now, Maduro has managed to avoid such a negotiated pact with the opposition, which remains divided and demoralized. They are not, however, defeated. They will likely return to the streets to protest the government’s abuses and economic malfeasance. As the country becomes more ungovernable, moderates in the ruling socialist party may realize that the benefits of the current system can only be preserved through compromise.
A new mediation process should be launched as soon as possible, facilitated by the United Nations under the secretary-general’s banner of conflict prevention, and supported by a coalition of states that includes not only key South American countries like Peru, Chile and Argentina, but also the United States, France, Germany, China and the Vatican. An early agreement should be reached to allow international agencies to deliver humanitarian assistance to malnourished and sick Venezuelans before they attempt to leave the country. And a package of economic incentives should be assembled to prepare for a post-Maduro scenario.
In sum, while Maduro may claim a historic victory that solidifies his hold on power, the reality is just the opposite. If the domestic opposition can rally, it will signal to the international community that a coordinated plan of increased sanctions and facilitated talks is feasible.
So, Trump Is Mad At The FBI For Them Doing Their Job, Are You Mad At Them Too?
I am not a fan of Donald Trump nor am I a fan of Hillary Clinton, personally I believe that these two should have gotten married, they are just alike. In November of 2016 we the people of the U.S. knew going in to election day that we were all going to end up with an habitual liar as our next President, the only question was, male of female. I have no doubts at all that both of these people as well as several of the people who are close to them are nothing but liars and crooks. It is my personal belief that Hillary, Bill, Donald, Donald Jr, Erick, Jarred Kushner and Ivanka should all be forced to live out the rest of their lives in one 4×8 jail cell in the basement of Leavenworth Prison in Kansas. In that last election I voted for the third-party candidate Gary Johnson, not because I thought that he could win, I never even knew what he said he stands for, I just couldn’t drag myself to have to say that I voted for Donald or for Hillary.
Now to the main part of this article. As most everyone who lives here in the States probably knows President Trump is very mad at the FBI because he strongly feels that they should never ever have been investigating reported crimes being committed during the election cycle by himself and his indentured whores. Yet he does feel that they should have been investigating crimes he says that the Hillary Campaign were/are guilty of. I have no doubt that Hillary and her campaign committed many federal, state and local crimes, yet Trump feels that his campaign should get a free pass from the FBI for their crimes. It appears to me that Donald and his henchmen committed about every election crime that is possible to be committed including treason with several foreign and even hostile governments. Personally I would be very upset if the FBI and several of the other ‘Policing Agency’s’ weren’t still investigating Hillary and Donald’s crimes, after all, that is their job! How do you feel about this issue? Should the FBI just give political campaigns a free hand to do any thing with anyone no matter how many laws they are breaking?I still strongly believe that the Special Council should be working hard on ‘the money trail’ and this would include the filed taxes of these fore mentioned players. Remember, Donald still has not made his taxes public, there is a reason for his lies on this matter. On just one issue, one business, his golf club in Ma-largo Florida shows how crooked his is and how willing he is to commit tax fraud. He tells his visitors and golfing buddies that this business is worth over a 100 million dollars yet when he filed his property taxes on it he reported that it was only worth 1 million dollars so that he would only have to pay 1% of the taxes due. Folks, almost all of the houses around this club are valued at more than one million dollars. Donald, just like Hillary, is nothing but a fraud a thief and a liar and he should be in prison, not the Oval Office!
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