April 01, 2014
NGC 3314
Frightening Change Report
Five Key Takeaways From the Frightening IPCC Climate Change Report
The United Nation’s Intergovernmental Panel on Climate Change (IPCC) issued its latest report today. It focuses on how climate change will affect human society in coming years painting a picture of a world destabilized by a rapidly changing environment. While many of the events it details are familiar to those who follow the research on climate change, taken together in the 2,600-page report assembled by more than 300 scientists, they’re almost overwhelming to consider.
“Throughout the 21st century, climate-change impacts are projected to slow down economic growth, make poverty reduction more difficult, further erode food security, and prolong existing and create new poverty traps, the latter particularly in urban areas and emerging hot spots of hunger,” the report declared.
The longer we dither about taking action, it warns, the worse the impacts of climate change will be.
Here are five takeaways from the report:
1. The food supply is in trouble –> “Nobody on this planet is going to be untouched by the impacts of climate change,” Rajendra K. Pachauri, chairman of the IPCC, said at a news conference presenting the report. Climate change has already affected the global food supply; crop yields for wheat, for example, are beginning to decline even as the human population continues to grow.
2. The poor will be hit hardest, but the rich will feel it too –> As with most natural disasters and food shortages, the poor will be hit hardest. But the rich will also feel it. “A warmer world will push food prices higher, trigger ‘hotspots of hunger’ among the world’s poorest people, and put the crunch on Western delights like fine wine and robust coffee,” Seth Borenstein reports for the AP. “Food prices are likely to go up somewhere in a wide range of 3 percent to 84 percent by 2050 just because of climate change, the report said.”
3. The world will become less stable –> A dwindling food supply coupled with an increase in natural disasters will exacerbate tensions in already-tense areas “by amplifying well-documented drivers of these conflicts such as poverty and economic shocks,” the report says. This could mean more or worse regional conflicts and civil wars, like what has unfolded in recent years in drought-stricken Syria, with national security implications for the US.
4. Wealthy countries are minimizing their responsibility –> The World Bank estimated that poor countries would need as much as $100 billion per year to offset the affects of climate change. Yet, as Justin Gillis reports for The New York Times, wealthy countries, including the US, tried to have that figure stricken from the 48-page executive summary that most readers and the press would peruse before turning to the full report. Gillis writes, “The edit came after several rich countries, including the United States, raised questions about the language, according to several people who were in the room at the time but did not wish to be identified because the negotiations were private.… Many rich countries argue that $100 billion a year is an unrealistic demand; it would essentially require them to double their budgets for foreign aid, at a time of economic distress at home. That argument has fed a rising sense of outrage among the leaders of poor countries, who feel their people are paying the price for decades of profligate Western consumption.”
5. The next big chance to do something is later this year –> It’s possible to stave off the worst affects of climate change now if countries move quickly to cut emissions, the report says. World leaders will have that chance when they meet this autumn in New York City for the United Nations Framework Convention on Climate Change, which will be completed in 2015. As part of the UN’s effort to push international leaders to do something about climate change, UN Secretary-General Ban Ki-Moon has challenged attendees to bring “bold pledges” and to “[i]nnovate, scale-up, cooperate and deliver concrete action that will close the emissions gap and put us on track for an ambitious legal agreement.”
Profits Parking
Carl Levin: Caterpillar used Swiss unit to skirt U.S. taxes
The 91-page report is the result of nearly a nearly nine-month investigation into the corporate structure and tax practices employed by Caterpillar and devised by advisers at PricewaterhouseCoopers. It is the first time that Levin has focused on a domestic manufacturer primarily engaged in large-equipment sales rather than intellectual property-heavy technology firms like Apple, HP or Microsoft.
But like the tech firms that preceded Caterpillar, executive Julie Legacy and company tax advisers will testify at a Tuesday hearing on the report that the tax planning they did was responsible and entirely legal.
“Caterpillar takes very seriously its obligation to follow tax law and pay what it owes,” Legacy, the financial services division vice president, will say, according to prepared testimony. “We comply with the tax laws enacted by Congress, by the states and by all of the many jurisdictions in which we conduct business.”
The complicated tax strategy removed Caterpillar from the legal chain of selling parts outside of the U.S. so that existing third-party suppliers could sell Caterpillar-branded parts directly to the subsidiary in Switzerland. That company, known as CSARL, took care of the sales. Over 70 percent of the parts they sold were manufactured in the United States.
Caterpillar received royalty payments of 15 percent or less of the profits and CSARL pocketed 85 percent of the cash. CSARL also remained on Caterpillar’s consolidated financial statement.
Levin said that is a system that no company would ever agree to with an outside distributor, thus violating the so-called arms-length standard that requires such transactions be made at fair market value to mimic real world deals with third parties.
Levin said the restructuring also violated the economic substance doctrine, which requires all transactions to have a real-world economic purpose beyond avoiding taxes.
“No business would trade an 85 percent share of the profits that it has for a 15 percent share with no buy-in payment while at the same time doing the work and continuing to bear the economic risk,” he said.
“Caterpillar only did the deal because it was transferring its crown jewels to a wholly owned part of the company.”
But the company said its Swiss unit is “no mere shell” but a unit with hundreds of employees making marketing, pricing and discounting decisions, calling the division an “entrepreneur for sales.”
“The removal of Caterpillar Inc. from the transactional flow has produced a simpler supply chain that better reflects the reality that CSARL is a true entrepreneur for sales of machines, engines, and parts in its territories,” company executives wrote in joint written testimony. “Many sales of replacement parts into non-U.S. markets are made by a Caterpillar affiliate based in Geneva, Switzerland, known as Caterpillar Sarl, or CSARL. CSARL and its predecessor entity have had a large marketing and sales presence in Geneva for more than 50 years.”
That type of planning falls into a kind of legal gray area, according to Rebecca Wilkins, a senior policy analyst at the left-leaning Citizens for Tax Justice.
“It is not clear that everything they’re doing is completely legal,” she said. “It certainly violates the spirit if not the letter of the law. If the IRS had enough resources and enough motivation to go after these transactions they might not stand up.”
The IRS did not respond to a request for comment by the time of publication.
The report calls on the IRS to clarify when a transaction violates the economic substance doctrine and to require parent companies to identify and value the function of related parties in structures like that set up by Caterpillar.
Sen. John McCain, (R-Ariz.), the top Republican on the committee, said the tax planning Caterpillar did does not measure up to the kind of profit-shifting and avoidance that big tech firms have used to cut their tax bills nearly to zero.
“I don’t agree with the conclusions of the investigation.” McCain said. “We don’t think that they’ve committed the same kind of egregious abuse that has been in the past.”
Some critics of the report said that not only was Caterpillar acting legally, it didn’t even cut its tax bill very much. Ken Keis, a former chief of staff at the Joint Committee on Taxation who now represents Caterpillar on unrelated tax issues, noted that the company still pays a relatively high 29 percent effective tax rate.
“I’ve seen a lot of corporate tax-planning over the years and with all due respect to the Levin staff, I wouldn’t describe this as aggressive, I would describe this as fairly routine tax-planning,” he said. “It is perfectly appropriate for companies to structure themselves to minimize the amount of tax they pay the federal government.”
Levin said he’s not concerned with the level of avoidance or how successful a company is at gaming the system.
“Whether or not these tax strategies are appropriate, that’s the question for the public,” he said. “The question is, is it tolerable. And I don’t think it is.”
Levin’s panel discovered the tax strategy as a result of a lawsuit from a former Caterpillar tax executive who had complained internally.
Heavy equipment manufacturer Caterpillar used complicated corporate maneuvers to avoid $2.4 billion in U.S. taxes by parking profits in a unit in Switzerland, Sen. Carl Levin charged in a report released on Monday.
The report is the latest in a series of probes by the chairman of the Permanent Subcommittee on Investigations into corporations shifting profits overseas to skirt U.S. income taxes. Panel investigators found that over about a decade, Caterpillar restructured operations to shift $8 billion in profits of a parts unit, and take advantage of a tax rate between 4 and 6 percent, well below Switzerland’s 8.5 percent rate and a far cry from the 35 percent rate in the United States.
The report is the latest in a series of probes by the chairman of the Permanent Subcommittee on Investigations into corporations shifting profits overseas to skirt U.S. income taxes. Panel investigators found that over about a decade, Caterpillar restructured operations to shift $8 billion in profits of a parts unit, and take advantage of a tax rate between 4 and 6 percent, well below Switzerland’s 8.5 percent rate and a far cry from the 35 percent rate in the United States.
“Prior to 1999 [when] Caterpillar booked over 85 percent of the profits from its international sales of parts, they were booked here in the United States,” Levin (D-Mich.) told reporters. “Then in 1999 Caterpillar flipped that profit split, sending 85 percent or more of its parts’ profits to Switzerland and keeping 15 percent or less here in the United States. Nothing changed in the real world after that except Caterpillar’s tax bill.”
But like the tech firms that preceded Caterpillar, executive Julie Legacy and company tax advisers will testify at a Tuesday hearing on the report that the tax planning they did was responsible and entirely legal.
“Caterpillar takes very seriously its obligation to follow tax law and pay what it owes,” Legacy, the financial services division vice president, will say, according to prepared testimony. “We comply with the tax laws enacted by Congress, by the states and by all of the many jurisdictions in which we conduct business.”
The complicated tax strategy removed Caterpillar from the legal chain of selling parts outside of the U.S. so that existing third-party suppliers could sell Caterpillar-branded parts directly to the subsidiary in Switzerland. That company, known as CSARL, took care of the sales. Over 70 percent of the parts they sold were manufactured in the United States.
Caterpillar received royalty payments of 15 percent or less of the profits and CSARL pocketed 85 percent of the cash. CSARL also remained on Caterpillar’s consolidated financial statement.
Levin said that is a system that no company would ever agree to with an outside distributor, thus violating the so-called arms-length standard that requires such transactions be made at fair market value to mimic real world deals with third parties.
Levin said the restructuring also violated the economic substance doctrine, which requires all transactions to have a real-world economic purpose beyond avoiding taxes.
“No business would trade an 85 percent share of the profits that it has for a 15 percent share with no buy-in payment while at the same time doing the work and continuing to bear the economic risk,” he said.
“Caterpillar only did the deal because it was transferring its crown jewels to a wholly owned part of the company.”
But the company said its Swiss unit is “no mere shell” but a unit with hundreds of employees making marketing, pricing and discounting decisions, calling the division an “entrepreneur for sales.”
“The removal of Caterpillar Inc. from the transactional flow has produced a simpler supply chain that better reflects the reality that CSARL is a true entrepreneur for sales of machines, engines, and parts in its territories,” company executives wrote in joint written testimony. “Many sales of replacement parts into non-U.S. markets are made by a Caterpillar affiliate based in Geneva, Switzerland, known as Caterpillar Sarl, or CSARL. CSARL and its predecessor entity have had a large marketing and sales presence in Geneva for more than 50 years.”
Caterpillar has about 119,000 employees throughout the world, with about half working in the U.S. About 400 work in Switzerland, according to the report.
“It is not clear that everything they’re doing is completely legal,” she said. “It certainly violates the spirit if not the letter of the law. If the IRS had enough resources and enough motivation to go after these transactions they might not stand up.”
The IRS did not respond to a request for comment by the time of publication.
The report calls on the IRS to clarify when a transaction violates the economic substance doctrine and to require parent companies to identify and value the function of related parties in structures like that set up by Caterpillar.
Sen. John McCain, (R-Ariz.), the top Republican on the committee, said the tax planning Caterpillar did does not measure up to the kind of profit-shifting and avoidance that big tech firms have used to cut their tax bills nearly to zero.
“I don’t agree with the conclusions of the investigation.” McCain said. “We don’t think that they’ve committed the same kind of egregious abuse that has been in the past.”
Some critics of the report said that not only was Caterpillar acting legally, it didn’t even cut its tax bill very much. Ken Keis, a former chief of staff at the Joint Committee on Taxation who now represents Caterpillar on unrelated tax issues, noted that the company still pays a relatively high 29 percent effective tax rate.
“I’ve seen a lot of corporate tax-planning over the years and with all due respect to the Levin staff, I wouldn’t describe this as aggressive, I would describe this as fairly routine tax-planning,” he said. “It is perfectly appropriate for companies to structure themselves to minimize the amount of tax they pay the federal government.”
Levin said he’s not concerned with the level of avoidance or how successful a company is at gaming the system.
“Whether or not these tax strategies are appropriate, that’s the question for the public,” he said. “The question is, is it tolerable. And I don’t think it is.”
Levin’s panel discovered the tax strategy as a result of a lawsuit from a former Caterpillar tax executive who had complained internally.
Tax Repatriation Holiday
The Trillions of Dollars U.S. Companies Are Hoarding Overseas
And a tax repatriation holiday is no way to get them to bring it all back home.
There's a lot of cash on the sidelines, but those sidelines aren't in the U.S. They're overseas—in tax shelters.
According to a new report from ISI Research, U.S. S&P 500 companies now have $1.9 trillion parked outside the country. Now, some of that is just multinational corporations profits overseas—yada, yada, yada, globalization. But a big part of it is tax avoidance. Tech and healthcare companies in particular have created byzantine systems of subsidiaries to channel earnings from high-tax to low-tax jurisdictions. Apple, as you might recall, figured out how to legally avoid paying any corporate income tax anywhere on its $30 billion of overseas profits. It set up Schrödinger's shell company: an Irish subsidiary that didn't owe Irish taxes because it was managed and controlled from the U.S., but didn't owe U.S. taxes because it was incorporated abroad.
You can see how steadily these corporate cash hoards have increased in the chart below. As Dan McCrum points out, it follows a basic power rule: Just 45 companies account for 70 percent of this money.
Now, tax lawyers can dream up all the overseas shell companies they want, but that doesn't matter if multinationals want to bring that money back to America. The U.S. government taxes the difference between what companies pay in corporate income tax abroad and what they would have paid here, so there shouldn't be any benefit to all this avoidance when they do. Unless, of course, they think there's going to be another tax repatriation holiday.
There are a lot of bad policy ideas, but there aren't many worse than a tax repatriation holiday. It's exactly what it sounds like: Instead of paying the difference between what they were taxed overseas and what they would be taxed here, companies can bring foreign earnings home and just pay a nominal rate. The theory is that all this incoming capital will turn into investment and jobs—but in practice we know that's not true. We tried it in 2004, and as the Center on Budget and Policy Priorities points out, it failed by any metric. Growth and investment didn't increase. And even though corporations weren't supposed to use these funds for share buybacks or dividends, because money is fungible, they did. That was good news for stock owners, but not workers: Some of the companies that brought the most money back actually laid people off.
But the biggest cost was the if-you-give-a-mouse-a-cookie effect. If you give companies a tax repatriation holiday, they're going to expect another one. They're going to shift even more earnings abroad, which creates a perverse kind of logic: The more they avoid taxes, the more they say we need a tax holiday to "get that cash off the sidelines."
Our corporate income tax does need fixing, but this isn't the one we're looking for.
According to a new report from ISI Research, U.S. S&P 500 companies now have $1.9 trillion parked outside the country. Now, some of that is just multinational corporations profits overseas—yada, yada, yada, globalization. But a big part of it is tax avoidance. Tech and healthcare companies in particular have created byzantine systems of subsidiaries to channel earnings from high-tax to low-tax jurisdictions. Apple, as you might recall, figured out how to legally avoid paying any corporate income tax anywhere on its $30 billion of overseas profits. It set up Schrödinger's shell company: an Irish subsidiary that didn't owe Irish taxes because it was managed and controlled from the U.S., but didn't owe U.S. taxes because it was incorporated abroad.
You can see how steadily these corporate cash hoards have increased in the chart below. As Dan McCrum points out, it follows a basic power rule: Just 45 companies account for 70 percent of this money.
Now, tax lawyers can dream up all the overseas shell companies they want, but that doesn't matter if multinationals want to bring that money back to America. The U.S. government taxes the difference between what companies pay in corporate income tax abroad and what they would have paid here, so there shouldn't be any benefit to all this avoidance when they do. Unless, of course, they think there's going to be another tax repatriation holiday.
There are a lot of bad policy ideas, but there aren't many worse than a tax repatriation holiday. It's exactly what it sounds like: Instead of paying the difference between what they were taxed overseas and what they would be taxed here, companies can bring foreign earnings home and just pay a nominal rate. The theory is that all this incoming capital will turn into investment and jobs—but in practice we know that's not true. We tried it in 2004, and as the Center on Budget and Policy Priorities points out, it failed by any metric. Growth and investment didn't increase. And even though corporations weren't supposed to use these funds for share buybacks or dividends, because money is fungible, they did. That was good news for stock owners, but not workers: Some of the companies that brought the most money back actually laid people off.
But the biggest cost was the if-you-give-a-mouse-a-cookie effect. If you give companies a tax repatriation holiday, they're going to expect another one. They're going to shift even more earnings abroad, which creates a perverse kind of logic: The more they avoid taxes, the more they say we need a tax holiday to "get that cash off the sidelines."
Our corporate income tax does need fixing, but this isn't the one we're looking for.
Hypocrisy
Hobby Lobby's Hypocrisy: The Company's Retirement Plan Invests in Contraception Manufacturers
By Molly Redden
When Obamacare compelled businesses to include emergency contraception in employee health care plans, Hobby Lobby, a national chain of craft stores, fought the law all the way to the Supreme Court. The Affordable Care Act's contraception mandate, the company's owners argued, forced them to violate their religious beliefs. But while it was suing the government, Hobby Lobby spent millions of dollars on an employee retirement plan that invested in the manufacturers of the same contraceptive products the firm's owners cite in their lawsuit.
Documents filed with the Department of Labor and dated December 2012—three months after the company's owners filed their lawsuit—show that the Hobby Lobby 401(k) employee retirement plan held more than $73 million in mutual funds with investments in companies that produce emergency contraceptive pills, intrauterine devices, and drugs commonly used in abortions. Hobby Lobby makes large matching contributions to this company-sponsored 401(k).
Several of the mutual funds in Hobby Lobby's retirement plan have holdings in companies that manufacture the specific drugs and devices that the Green family, which owns Hobby Lobby, is fighting to keep out of Hobby Lobby's health care policies: the emergency contraceptive pills Plan B and Ella, and copper and hormonal intrauterine devices.
These companies include Teva Pharmaceutical Industries, which makes Plan B and ParaGard, a copper IUD, and Actavis, which makes a generic version of Plan B and distributes Ella. Other holdings in the mutual funds selected by Hobby Lobby include Pfizer, the maker of Cytotec and Prostin E2, which are used to induce abortions; Bayer, which manufactures the hormonal IUDs Skyla and Mirena; AstraZeneca, which has an Indian subsidiary that manufactures Prostodin, Cerviprime, and Partocin, three drugs commonly used in abortions; and Forest Laboratories, which makes Cervidil, a drug used to induce abortions. Several funds in the Hobby Lobby retirement plan also invested in Aetna and Humana, two health insurance companies that cover surgical abortions, abortion drugs, and emergency contraception in many of the health care policies they sell.
In a brief filed with the Supreme Court, the Greens object to covering Plan B, Ella, and IUDs because they claim that these products can prevent a fertilized egg from implanting in a woman's uterus—a process the Greens consider abortion. But researchers reject the notion that emergency contraceptive pills prevent implantation the implantation of a fertilized egg. Instead, they work by delaying ovulation or making it harder for sperm to swim to the egg. (Copper IUDs, which are also a form of birth control, can prevent implantation). The Green's contention that the pills cause abortions is a central pillar of their argument for gutting the contraception mandate. Yet, for years, Hobby Lobby's health insurance plans did cover Plan B and Ella. It was only in 2012, when the Greens considered filing a lawsuit against the Affordable Care Act, that they dropped these drugs from the plan.
A website Hobby Lobby set up to answer questions about the Supreme Court case states that its 401(k) plan comes with "a generous company match." In 2012, Hobby Lobby contributed $3.8 million to its employee savings plans, which had 13,400 employee participants at the beginning of that year.
The information on Hobby Lobby's 401(k) investments is included in the company's 2013 annual disclosure to the Department of Labor. The records contain a list, dated December 31, 2012, of 24 funds that were included in its employer-sponsored retirement plan. MorningStar, an investment research firm, provided Mother Jones with the names of the companies in nine of those funds as of December 31, 2012. Each fund's portfolio consists of at least dozens if not hundreds of different holdings.
All nine funds—which have assets of $73 million, or three-quarters of the Hobby Lobby retirement plan's total assets—contained holdings that clashed with the Greens' stated religious principles.
Hobby Lobby and the Becket Fund for Religious Liberty, the conservative group that provided Hobby Lobby with legal representation, did not respond to questions about these investments or whether Hobby Lobby has changed its retirement plan.
In their Supreme Court complaint, Hobby Lobby's owners chronicle the many ways in which they avoid entanglements with objectionable companies. Hobby Lobby stores do not sell shot glasses, for example, and the Greens decline requests from beer distributors to back-haul beer on Hobby Lobby trucks.
Similar options exist for companies that want to practice what's sometimes called faith-based investing. To avoid supporting companies that manufacture abortion drugs—or products such as alcohol or pornography—religious investors can turn to a cottage industry of mutual funds that screen out stocks that religious people might consider morally objectionable. The Timothy Plan and the Ave Maria Fund, for example, screen for companies that manufacture abortion drugs, support Planned Parenthood, or engage in embryonic stem cell research. Dan Hardt, a Kentucky financial planner who specializes in faith-based investing, says the performances of these funds are about the same as if they had not been screened. But Hobby Lobby's managers either were not aware of these options or chose not to invest in them.
Documents filed with the Department of Labor and dated December 2012—three months after the company's owners filed their lawsuit—show that the Hobby Lobby 401(k) employee retirement plan held more than $73 million in mutual funds with investments in companies that produce emergency contraceptive pills, intrauterine devices, and drugs commonly used in abortions. Hobby Lobby makes large matching contributions to this company-sponsored 401(k).
Several of the mutual funds in Hobby Lobby's retirement plan have holdings in companies that manufacture the specific drugs and devices that the Green family, which owns Hobby Lobby, is fighting to keep out of Hobby Lobby's health care policies: the emergency contraceptive pills Plan B and Ella, and copper and hormonal intrauterine devices.
These companies include Teva Pharmaceutical Industries, which makes Plan B and ParaGard, a copper IUD, and Actavis, which makes a generic version of Plan B and distributes Ella. Other holdings in the mutual funds selected by Hobby Lobby include Pfizer, the maker of Cytotec and Prostin E2, which are used to induce abortions; Bayer, which manufactures the hormonal IUDs Skyla and Mirena; AstraZeneca, which has an Indian subsidiary that manufactures Prostodin, Cerviprime, and Partocin, three drugs commonly used in abortions; and Forest Laboratories, which makes Cervidil, a drug used to induce abortions. Several funds in the Hobby Lobby retirement plan also invested in Aetna and Humana, two health insurance companies that cover surgical abortions, abortion drugs, and emergency contraception in many of the health care policies they sell.
In a brief filed with the Supreme Court, the Greens object to covering Plan B, Ella, and IUDs because they claim that these products can prevent a fertilized egg from implanting in a woman's uterus—a process the Greens consider abortion. But researchers reject the notion that emergency contraceptive pills prevent implantation the implantation of a fertilized egg. Instead, they work by delaying ovulation or making it harder for sperm to swim to the egg. (Copper IUDs, which are also a form of birth control, can prevent implantation). The Green's contention that the pills cause abortions is a central pillar of their argument for gutting the contraception mandate. Yet, for years, Hobby Lobby's health insurance plans did cover Plan B and Ella. It was only in 2012, when the Greens considered filing a lawsuit against the Affordable Care Act, that they dropped these drugs from the plan.
A website Hobby Lobby set up to answer questions about the Supreme Court case states that its 401(k) plan comes with "a generous company match." In 2012, Hobby Lobby contributed $3.8 million to its employee savings plans, which had 13,400 employee participants at the beginning of that year.
The information on Hobby Lobby's 401(k) investments is included in the company's 2013 annual disclosure to the Department of Labor. The records contain a list, dated December 31, 2012, of 24 funds that were included in its employer-sponsored retirement plan. MorningStar, an investment research firm, provided Mother Jones with the names of the companies in nine of those funds as of December 31, 2012. Each fund's portfolio consists of at least dozens if not hundreds of different holdings.
All nine funds—which have assets of $73 million, or three-quarters of the Hobby Lobby retirement plan's total assets—contained holdings that clashed with the Greens' stated religious principles.
Hobby Lobby and the Becket Fund for Religious Liberty, the conservative group that provided Hobby Lobby with legal representation, did not respond to questions about these investments or whether Hobby Lobby has changed its retirement plan.
In their Supreme Court complaint, Hobby Lobby's owners chronicle the many ways in which they avoid entanglements with objectionable companies. Hobby Lobby stores do not sell shot glasses, for example, and the Greens decline requests from beer distributors to back-haul beer on Hobby Lobby trucks.
Similar options exist for companies that want to practice what's sometimes called faith-based investing. To avoid supporting companies that manufacture abortion drugs—or products such as alcohol or pornography—religious investors can turn to a cottage industry of mutual funds that screen out stocks that religious people might consider morally objectionable. The Timothy Plan and the Ave Maria Fund, for example, screen for companies that manufacture abortion drugs, support Planned Parenthood, or engage in embryonic stem cell research. Dan Hardt, a Kentucky financial planner who specializes in faith-based investing, says the performances of these funds are about the same as if they had not been screened. But Hobby Lobby's managers either were not aware of these options or chose not to invest in them.
Torture didn't help
Senate panel says torture didn't help U.S. in hunt for Osama bin Laden
Associated Press
A hotly disputed Senate report on torture concludes that waterboarding and other harsh interrogation methods provided no key evidence in the hunt for Osama bin Laden, according to congressional aides and outside experts familiar with the investigation.
The CIA still disputes that conclusion.
From the moment of bin Laden's death almost three years ago in what was America's biggest counterterrorism success, former Bush administration and some senior CIA officials have cited the evidence trail leading to the al-Qaeda mastermind's compound in Pakistan as vindicating the "enhanced interrogation techniques" they authorized after the Sept. 11, 2001, attacks.
But Democratic and some Republican senators have disputed that account. They described simulated drownings, sleep deprivation and other such practices as cruel and ineffective. With the release edging closer for the Senate Intelligence Committee's report on interrogations, renditions and detentions, they hope to make a persuasive case.
The report, congressional aides and outside experts said, examines the treatment of several high-level terror detainees and the information they provided on bin Laden. The aides and people briefed on the report spoke on condition of anonymity because they were not authorized to speak publicly about the confidential document.
The most high-profile detainee linked to the bin Laden investigation was Khalid Sheikh Mohammed, whom the CIA waterboarded 183 times. Mohammed, intelligence officials have noted, confirmed after his 2003 capture that he knew an important al-Qaeda courier with the nom de guerre Abu Ahmed al-Kuwaiti.
But the report concludes that such information wasn't critical, according to the aides. Mohammed only discussed al-Kuwaiti months after being waterboarded, while he was under standard interrogation, they said. And Mohammed neither acknowledged al-Kuwaiti's significance nor provided interrogators with the courier's real name.
The debate over how investigators put the pieces together is significant because years later, the courier led U.S. intelligence to the sleepy Pakistani military town of Abbottabad. There, Navy SEALs killed bin Laden in a secret mission.
The CIA also has pointed to the value of information provided by senior al-Qaeda operative Abu Faraj al-Libi, who was captured in 2005 and held at a secret prison.
U.S. officials have described how al-Libi made up a name for a trusted courier and denied knowing al-Kuwaiti. Al-Libi, they said, was so adamant and unbelievable in his denial that the CIA took it as confirmation he and Mohammed were protecting the courier.
But the report concludes evidence gathered from al-Libi wasn't significant either, the aides said.
Essentially, they argued, Mohammed, al-Libi and others subjected to harsh treatment confirmed only what investigators already knew about the courier. And when they denied the courier's significance or provided misleading information, investigators would only have considered that significant if they already presumed the courier's importance.
The aides did not address information provided by yet another al-Qaeda operative, Hassan Ghul, captured in Iraq in 2004. Intelligence officials have described Ghul as the true linchpin of the bin Laden investigation after he identified al-Kuwaiti as a critical courier.
In a 2012 news release, Sen. Dianne Feinstein, D-Calif., the head of the Senate Intelligence Committee, and Sen. Carl Levin, D-Mich., acknowledged an unidentified "third detainee" had provided relevant information on the courier. But they said he did so the day before he was subjected to harsh CIA interrogation. "This information will be detailed in the Intelligence committee's report," the senators said at the time.
In any case, it still took the CIA years to learn al-Kuwaiti's real identity: Sheikh Abu Ahmed, a Pakistani man born in Kuwait. How the U.S. learned of Ahmed's name is still unclear.
Without providing full details, aides said the Senate report illustrates the importance of the National Security Agency's efforts overseas. Intelligence officials have previously described how in the years, when the CIA couldn't find where bin Laden's courier was, NSA eavesdroppers came up with nothing until 2010 - when Ahmed had a telephone conversation with someone monitored by U.S. intelligence.
At that point, U.S. intelligence was able to follow Ahmed to bin Laden's hideout.
Feinstein and other senators have spoken only vaguely of the contents of the classified review.
But they have made references to the divergence between their understanding of how the bin Laden operation came together and assertions of former CIA and Bush administration officials who have defended harsh interrogations.
Responding to former CIA deputy director Jose Rodriguez's argument that Mohammed and al-Libi provided the "lead information" on the bin Laden operation, Feinstein and Levin said, "The original lead information had no connection to CIA detainees."
They rejected former CIA Director Michael Hayden's claim that evidence on the couriers began with interrogations at black sites and Attorney General Michael Mukasey's declaration that intelligence leading to bin Laden began with Mohammed.
The facts, they said, show that the CIA learned of the courier, his true name and location "through means unrelated to the CIA detention and interrogation program." They have cited a "wide variety of intelligence sources and methods."
Terror suspects who were waterboarded "provided no new information about the courier" and offered no indication of where bin Laden was hiding, the senators said.
Feinstein will push to release a summary of the intelligence committee's review later this week, starting a declassification process that could take several months before any documents are made public.
Senate investigators and CIA officials already are locked in a simmering dispute over competing claims of wrongdoing in the congressional investigation. Feinstein accuses the agency of improperly monitoring the computer use of Senate staffers and deleting files, undermining the Constitution's separation of powers. The CIA says the intelligence panel illegally accessed certain documents. The Justice Department is reviewing criminal complaints against both sides.
Aides said Levin and Sen. John McCain, R-Ariz., who himself was tortured as a prisoner war in Vietnam more than four decades ago, are among those pushing hard to ensure the investigation's findings related to the bin Laden pursuit and CIA interrogations are made public.
They and Feinstein were among Congress' critics of how the hunt was portrayed in the film "Zero Dark Thirty," which they said was fictional.
The CIA still disputes that conclusion.
From the moment of bin Laden's death almost three years ago in what was America's biggest counterterrorism success, former Bush administration and some senior CIA officials have cited the evidence trail leading to the al-Qaeda mastermind's compound in Pakistan as vindicating the "enhanced interrogation techniques" they authorized after the Sept. 11, 2001, attacks.
But Democratic and some Republican senators have disputed that account. They described simulated drownings, sleep deprivation and other such practices as cruel and ineffective. With the release edging closer for the Senate Intelligence Committee's report on interrogations, renditions and detentions, they hope to make a persuasive case.
The report, congressional aides and outside experts said, examines the treatment of several high-level terror detainees and the information they provided on bin Laden. The aides and people briefed on the report spoke on condition of anonymity because they were not authorized to speak publicly about the confidential document.
The most high-profile detainee linked to the bin Laden investigation was Khalid Sheikh Mohammed, whom the CIA waterboarded 183 times. Mohammed, intelligence officials have noted, confirmed after his 2003 capture that he knew an important al-Qaeda courier with the nom de guerre Abu Ahmed al-Kuwaiti.
But the report concludes that such information wasn't critical, according to the aides. Mohammed only discussed al-Kuwaiti months after being waterboarded, while he was under standard interrogation, they said. And Mohammed neither acknowledged al-Kuwaiti's significance nor provided interrogators with the courier's real name.
The debate over how investigators put the pieces together is significant because years later, the courier led U.S. intelligence to the sleepy Pakistani military town of Abbottabad. There, Navy SEALs killed bin Laden in a secret mission.
The CIA also has pointed to the value of information provided by senior al-Qaeda operative Abu Faraj al-Libi, who was captured in 2005 and held at a secret prison.
U.S. officials have described how al-Libi made up a name for a trusted courier and denied knowing al-Kuwaiti. Al-Libi, they said, was so adamant and unbelievable in his denial that the CIA took it as confirmation he and Mohammed were protecting the courier.
But the report concludes evidence gathered from al-Libi wasn't significant either, the aides said.
Essentially, they argued, Mohammed, al-Libi and others subjected to harsh treatment confirmed only what investigators already knew about the courier. And when they denied the courier's significance or provided misleading information, investigators would only have considered that significant if they already presumed the courier's importance.
The aides did not address information provided by yet another al-Qaeda operative, Hassan Ghul, captured in Iraq in 2004. Intelligence officials have described Ghul as the true linchpin of the bin Laden investigation after he identified al-Kuwaiti as a critical courier.
In a 2012 news release, Sen. Dianne Feinstein, D-Calif., the head of the Senate Intelligence Committee, and Sen. Carl Levin, D-Mich., acknowledged an unidentified "third detainee" had provided relevant information on the courier. But they said he did so the day before he was subjected to harsh CIA interrogation. "This information will be detailed in the Intelligence committee's report," the senators said at the time.
In any case, it still took the CIA years to learn al-Kuwaiti's real identity: Sheikh Abu Ahmed, a Pakistani man born in Kuwait. How the U.S. learned of Ahmed's name is still unclear.
Without providing full details, aides said the Senate report illustrates the importance of the National Security Agency's efforts overseas. Intelligence officials have previously described how in the years, when the CIA couldn't find where bin Laden's courier was, NSA eavesdroppers came up with nothing until 2010 - when Ahmed had a telephone conversation with someone monitored by U.S. intelligence.
At that point, U.S. intelligence was able to follow Ahmed to bin Laden's hideout.
Feinstein and other senators have spoken only vaguely of the contents of the classified review.
But they have made references to the divergence between their understanding of how the bin Laden operation came together and assertions of former CIA and Bush administration officials who have defended harsh interrogations.
Responding to former CIA deputy director Jose Rodriguez's argument that Mohammed and al-Libi provided the "lead information" on the bin Laden operation, Feinstein and Levin said, "The original lead information had no connection to CIA detainees."
They rejected former CIA Director Michael Hayden's claim that evidence on the couriers began with interrogations at black sites and Attorney General Michael Mukasey's declaration that intelligence leading to bin Laden began with Mohammed.
The facts, they said, show that the CIA learned of the courier, his true name and location "through means unrelated to the CIA detention and interrogation program." They have cited a "wide variety of intelligence sources and methods."
Terror suspects who were waterboarded "provided no new information about the courier" and offered no indication of where bin Laden was hiding, the senators said.
Feinstein will push to release a summary of the intelligence committee's review later this week, starting a declassification process that could take several months before any documents are made public.
Senate investigators and CIA officials already are locked in a simmering dispute over competing claims of wrongdoing in the congressional investigation. Feinstein accuses the agency of improperly monitoring the computer use of Senate staffers and deleting files, undermining the Constitution's separation of powers. The CIA says the intelligence panel illegally accessed certain documents. The Justice Department is reviewing criminal complaints against both sides.
Aides said Levin and Sen. John McCain, R-Ariz., who himself was tortured as a prisoner war in Vietnam more than four decades ago, are among those pushing hard to ensure the investigation's findings related to the bin Laden pursuit and CIA interrogations are made public.
They and Feinstein were among Congress' critics of how the hunt was portrayed in the film "Zero Dark Thirty," which they said was fictional.
Santorum's follies
The follies of Santorum's Hitler analogy
The recent op-ed by Rick Santorum and Joel C. Rosenberg is yet another attempt to stymie and shackle Iran and international negotiators in ongoing talks about Iran's peaceful nuclear program.
Iran should be able to enjoy its
right to peaceful nuclear energy while avoiding further hostilities and
instability.
Particularly illogical is their
joining in the decades-old rhetoric, comparing who they see as their foe -- Iran
-- to Adolf Hitler.
Their view of the diplomatic path
is misguided. Their attempt to compare the Iranian government to the murderous
Third Reich is ludicrous, counterproductive and unfortunate.
The Hitler analogy has a long and
tortured history. For many decades, those seeking to circumvent peaceful
conflict resolution have resorted to the crude Hitler analogy, comparing others
to the hideous ruler.
Santorum and Rosenberg affirmed
comparisons of Russian President Vladimir Putin to Hitler earlier in the same
article.
But their comparisons to Hitler
carry some insidious inferences. They say that since Hitler's claim that he
desired peace was a lie, Iran's claims to want peace cannot be believed.
Therefore diplomacy in general can't happen and thus nations are locked in a
policy of continuous war and aggression.
They also seek to undermine any
constructive debate about policy, and instead have the public and policy makers
act out of sheer panic rather than thoughtful
statesmanship.
Those favoring a rush to
hostility have always used the Hitler comparison to circumvent sensible
deliberation and intimidate others. They want nations to support the impulsive
use of force at times when they know using force is the wrong path and that
diplomacy is best for national and global security.
This is not to say that there
aren't many valuable lessons to be learned from the failure to quickly confront
the menace of the Third Reich.
The world should not have stood
by as Hitler invaded his neighbors. Iran, by contrast, has not invaded any of
its neighbors over the past 250 years. Thus, comparing Iran to Nazi Germany is
illogical and should be condemned for the sake of peace and global security.
The current efforts by the
Iranian government to reach a diplomatic resolution on the nuclear file is not a
tactic but, as many independent observers have noted, reflects its will to
compromise and re-engage the world with mutual respect and the peaceful
resolution of conflict.
President Hassan Rouhani, who
won an election that had a voter turnout of 73%, campaigned on the platform of
reaching understanding with the West on a number of issues, including the
nuclear file. That is the basis of Iran's current policy.
Santorum and Rosenberg also
recommend President Barack Obama support efforts by some in Congress to pass new
sanctions. But those sanctions would violate the terms of the interim agreement,
or at the very least, impose the strictest possible parameters on the American
negotiators. Those parameters would either significantly harm sensitive
international negotiations or derail the process altogether.
Also, the interim accord reached
in Geneva is a very transparent agreement based on verification as well as
strict inspections, so both sides feel assured as they seek a final status
agreement.
Santorum and Rosenberg also
point to a poll commissioned by Rosenberg that they claim indicates popular
support for their perception of Iran. It's worth noting that neither Rosenberg
nor the conservative polling firm have disclosed the full results of the poll or
their methodology.
But even if this poll was to be
given weight, the spread of this extremely negative perception of Iran among
some in the American public -- championed by people like the authors -- is not a
logical rationalization.
Additionally, if we are to look
at polls, numerous ones published by major nonpartisan polling firms show strong
support for diplomacy among the American people, according to some by a 2-to-1
margin. For example in a
CNN/ORC International Poll, three out of four Americans support diplomacy
over conflict, including 87% of Democrats and 68% of Republicans.
Rosenberg is a former Israeli
official. Israeli Prime Minister Benjamin Netanyahu's complete opposition to any
peaceful solution has been on full display since the potential of diplomatic
conflict resolution became apparent.
Santorum's attempt to put out
hawkish statement is understandable in light of his electoral ambitions.
But since global security is on
the line, the decisions that guide this process should not be made based on
political posturing or hysteria. And they should not give outsized consideration
to the overzealous hyperbole of those who reflexively oppose diplomacy, who
still consider the Iraq boondoggle a prudent war.
They should rather be made with
meticulous consideration of the national interests and with an eye -- and
cautious optimism -- toward a negotiated settlement that could relieve tensions
and even a reversal of the current dynamic of hostility.
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