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2000 Ron Paul Chapter 88
Ron Paul’s Congressional website
... Cached
Contents Congressional Record (Page E1868) Cached
October 19, 2000
THREATS TO FINANCIAL FREEDOM
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Statement of
HON. RON PAUL
OF TEXAS
[Page: E1868 - E1869]
2000 Ron Paul 88:4
I take as my
theme two
quotations,
one
from the Gospel of St. Matthew, 20:15 — ‘Do not I have the right to do
what I want with my own money?’
2000 Ron Paul 88:5
The second is
from
Mayer Amschel Rothchild (1743-1812), founder of the famous banking
dynasty, the House of Rothchild, who said: ‘Give me control over a
nation’s currency and I care not who makes its laws.’ Both quotes have
relevance to what I have to say.
2000 Ron Paul 88:6
If you are
fortunate
enough to fall into the estimated group of six million millionaires
worldwide now in existence, a number noted in a study by Merrill Lynch
last year, you automatically may be a criminal suspect.
2000 Ron Paul 88:7
I say
‘suspect’
because Citibank views these wealthy people, who control approximately
21 trillion-six hundred billion dollars, as potential financial
criminals simply because of their wealth. Citibank announced last year
that their 40,000 private banking clients, each of whom had to prove a
personal net worth of $3 million in order to qualify for the bank’s
services, are watched every minute of every day to see if they may be
engaged in money laundering or other financial crimes. I am certain
other banks do as well.
2000 Ron Paul 88:8
The constant
surveillance is accomplished, as is most privacy invasion these days,
by a special banking computer software program called ‘America’s
Software’ which allows every transaction in any account to be watched
constantly. It produces a daily record for bank officials, who now have
certain obligations imposed by US law that require the reporting of
‘suspicious activities’ to federal agents. Transfers of large amounts
of cash or other unusual account activity rings alarm bells and results
in an investigation not revealed to the ‘suspect’ banking client under
penalty of law.
2000 Ron Paul 88:9
We can
conclude from
this Draconian arrangement, for one thing, that a person of great
wealth who establishes a private banking relationship with a major bank
now is presumed to be a
2000 Ron Paul 88:10
I was at a
conference
on April 22, 1999 in Miami sponsored by the respected publication,
Money Laundering Alert. Lester Joseph, Assistant Chief of Asset
Forfeiture and Money Laundering for the Criminal Division of the U.S.
Department of Justice, said that the U.S. Government officially views
any offshore financial activity by US persons — any offshore financial
activity — especially the use of tax havens, as potential criminal money
laundering activity.
2000 Ron Paul 88:11
Now, it’s
quite
obvious that financial activities in which a person engages when wealth
is moved offshore for asset protection, for broader investment
potential, for any number of legitimate reasons, for possible tax
savings, any of these moves, are innocent in themselves. Former
Secretary of the US Treasury, Robert Rubin, admitted in congressional
testimony last year, it is the intention behind these innocent
financial moves that government agents want to police for possible
criminal investigation and prosecution.
2000 Ron Paul 88:12
So now we have
the
government money police targeting normal financial activities that
until recently have been perfectly legal, simply because a person
decides in his own best interests, to go offshore. We all know that in
the US, African-American, Latino, Asian-American and other racial
minorities have been unfairly subject to police ‘profiling.’ Add to
that list of ‘presumed guilty,’ Americans who engaged in offshore
financial activity.
2000 Ron Paul 88:13
I’m not a
defender of
wealth per se. I wish I had wealth to defend, but I am a defender of
freedom. There can be no freedom, personal or otherwise, without
wealth, without the right to own and use one’s own property as one see
fit. Remove property rights and you have no means to sustain life for
yourself or your family. But now the acquisition and accumulation of
productive wealth has become officially suspect in America.
2000 Ron Paul 88:14
For the last
20 years
the policies adopted by the United States and allied governments have
constituted a stealth war against wealth and against financial privacy.
While the free flow of capital is extolled as appropriate and
essential, the governments of major nations have turned upside down the
traditional role of banks and banking. As a child I was made to believe
that the people you dealt with at your bank and other financial
institutions were fiduciaries to whom you could entrust your money.
2000 Ron Paul 88:15
Now we have
what I
call the ‘Nazification’ of the financial system, not only in America
but worldwide. I don’t use that term lightly. As a matter of historic
fact, the civil forfeiture laws in this country mirror in many major
respects the Nazi forfeiture laws that were used to confiscate the
property of the Jews. I am a member of the board of directors of
Forfeiture Endangers American
2000 Ron Paul 88:16
The genesis of
this
‘wealth=crime’ policy can be found in that infamous political and moral
failure, the so-called ‘war on drugs.’ One of the primary weapons of
this ill-begotten war has been civil forfeiture, where police seize
cash and property based on rumor or hearsay. In 80% of the cases, the
owner is never charged with any crime, but usually the police keep the
loot. Many police have long since turned their attention away from
drugs, and instead pursue the cash and property they use to lard their
budgets. Thankfully, my former colleague, Henry Hyde of Illinois, led
the successful legislative battle for some much needed civil forfeiture
reform which recently became law.
2000 Ron Paul 88:17
As part of the
drug
war that progressed and expanded (but is never victorious), the catch
all crime of ‘money laundering’ was invented: an all purpose federal
prosecutors’ dream. The anti-money laundering statutes that have grown
like a malignancy. Charges of money laundering now routinely are shown
in with almost every possible criminal indictment, often as a
bargaining chip and/or a means to confiscate the wealth of the accused
even before trial. Try hiring a good defense attorney when your bank
account has been frozen.
2000 Ron Paul 88:18
Laws enacted
under
the banner of the war on drugs intentionally have forced bankers to
become spies for the federal financial police. The bankers’ primary
allegiance now is not to customers or clients, but to the government.
2000 Ron Paul 88:19
At the Miami
conference, scores of bank officials were instructed how to question
clients, watch account activity, and report any ‘suspicious activity’.
Suspicious activity reports (SARs) are filed by the tens of thousands
every month, produce voluminous computer records, encourage potential
criminal investigations, allow prosecutors to bully citizens, but in
the end very few SARs put criminals in jail. What this success process
has produced is the mushrooming of federal prosecutorial staffs, US
attorneys budgets, the power and costs of the US Department of Justice
and the welfare of the bureaucrats and lawyers who feast at the
taxpayers’ trough.
2000 Ron Paul 88:20
That great
economist,
Wilhelm Roepke, once wrote: ‘It is very easy to awaken resentment
against people who not only have money, but also the boldness to send
that money abroad in order to protect it against all manner of domestic
insecurity. It’s vital that people in their means of existence, that
is, capital, still have the chance to move about internationally, and
when absolutely necessary, to escape the arbitrariness of government
policy by means of secret back doors.’
2000 Ron Paul 88:21
Consider that
expressed view in the context of what is known as ‘expatriation,’ the
human right to acquire a new nationality and renounce one’s old
citizenship. We, as a nation of immigrants, should cherish that right.
2000 Ron Paul 88:22
In November
1994 Forbes
magazine
published an infamous article which identified a handful
2000 Ron Paul 88:23
In truth,
there are
very legitimate financial reasons for an American citizen to ‘go
offshore’. These include avoiding exposure to costly domestic
litigation and excessive court damage judgements and jury awards,
protection of assets, unreasonable SEC restrictions on foreign
investments, the availability of more attractive and private offshore
bank accounts, life insurance policies and annuities, avoidance of
probate and reduction of estate taxes.
2000 Ron Paul 88:24
But Americans
who
have followed this prudent course now find themselves lumped together
with drug lords, tax cheats, dirty money launderers, disease carriers
and assorted criminals. What is legal and legitimate is made to look
sinister and evil.
2000 Ron Paul 88:25
There is a
decided
international dimension to this domestic U.S. campaign against wealth.
Beginning last June, the news media took belated notice of offshore tax
havens and their thriving financial centers as a newly discovered
international threat. A frenzy of publicity surrounded the serial
publication of spurious ‘blacklists’ by previously unnoticed
international organizations. None of these self-appointed,
self-important groups enjoy any legal standing, but they proceeded to
announce exactly how the international financial world should conduct
its affairs. Those nations in disagreement with the OECD world view
were threatened with financial boycotts and unexplained ‘sanctions’ to
be imposed by June 2001.
2000 Ron Paul 88:26
These
organizations
include the Paris-based organization for Economic Cooperation and
Development (OECD), which loudly denounces what it calls ‘harmful tax
competition’ is composed of representatives from major high tax
nations. An OECD subsidiary is the Financial Action Task Force (FATF),
a sort of financial Gestapo that pronounces who is legal and who is not
legal in terms of money laundering activity.
2000 Ron Paul 88:27
Yet a third
group
without no basis in international law calls itself the ‘Financial
Stability Forum.’ This is a subgroup of the G-7 nations and has taken
it upon itself to decide which nations are good or bad in cooperation
for capital flows.
2000 Ron Paul 88:28
All of these
organizations are self-anointed and don’t have any more standing than
the International Tennis Association as far as legal capacity to impose
their decisions. They are little more than public relations mouthpieces
of an international cartel of rich nations trying to suppress tax
havens and other nations that have profited from fully legal tax
competition.
2000 Ron Paul 88:29
In an
obviously
co-ordinated effort starting last May, these organizations each issued
its own ‘blacklist’ of nations it found deficient in various ways. The
FSF attached those it claimed were disruptive to international
financial activity. FATF issued a list of countries allegedly lax on
money laundering. The OECD came out with list of nations engaged in
‘unfair tax competition’. It was no coincidence that most of the
world’s no-tax financial haven nations were on all these phony lists. A
small coterie of statist bureaucrats in the financial ministries of the
major nations had coordinated their propaganda work well: an
uneducated, gullible global news media swallowed this phony story
whole.
2000 Ron Paul 88:30
Every one of
the
wealthy nations that are pushing this attack on tax havens are
controlled by high-tax, socialist governments who see a tax and wealth
hemorrhage occurring among their citizens. Yes, millions, billions of
dollars, pounds and francs are pouring out of high tax nations flowing
to offshore tax havens — and for very good reasons. Why would anyone in
his right mind continue to pay confiscatory taxes when you can move
your financial activity to another nation where you pay no personal or
corporate income tax, no estate tax, no capital gains tax?
2000 Ron Paul 88:31
Ignored in this concerted attack on small tax haven nations is the simple fact that
under current U.S. and UK tax laws the biggest tax savings for
foreigners can be found in Britain and in the United States. The United
States is one of the biggest tax havens in the world — but only for
non-U.S. persons. And in spite of the known fact that most of the dirty
money laundering in the world takes place in London and New York,
neither nation is on the FATF money laundering blacklist.
2000 Ron Paul 88:32
All this is
really a
smoke screen for increased tax collection. Feeling the tax drain, the
rich nations want an end to all those factors that make tax haven
attractive: They demand that taxes be imposed where there are none,
want an end to financial and banking privacy and ‘free exchange’ of
information, want complete ‘transparency’, and want these small nations
to become tax collectors for the rich, welfare state nations. In other
words, they want tax havens to become just like the profligate major
nations.
2000 Ron Paul 88:33
This new
cartel of
high-tax nations, limping along with their huge, unsustainable welfare
state budgets, are engaged in a grotesque rebirth of colonialism and
imperialism of a financial nature. They are willing to trample the
sovereignty of small nations. In fact, the United Nations last year
said national sovereignty must be compromised in order to impose a
world financial order of high taxes and no financial privacy. Such a
radical demand mocks international law. It makes vassal states out of
sovereign nations.
2000 Ron Paul 88:34
This wrong
headed
approach flies in the face of every development that is producing the
new prosperity: the Internet, e-commerce, globalization, cross border
investment worldwide. For that reason alone, this effort will fail.
Just as the legendary King Canute could not hold back the ocean tides,
the rich nations will be swept away in their effort to impose their
will on the world.
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