Sunday, July 30, 2017

Chinese Leverage To Kill Petro-Dollar

Chinese Leverage To Kill Petro-Dollar
Jim Willie, Gold-Eagle, July 29, 2017

The Chinese Govt is greatly irritated by the requirement to use USDollars in payment for crude oil in the global market. The Beijing officials finally have some leverage in arranging for a major deal to pay for crude oil in RMB currency, their Yuan. The negotiations have been in progress for a couple months. The development is not covered well in the financial press, not even in the alternative media. It will happen, just a matter of time. Its effect will be far reaching and likely devastating.
The global currency reserve status for the USDollar is at severe heightened risk. It will not be deposed via financial markets, like with a bond market failure or a COMEX gold market default with bust. Such is folly to imagine as likely to occur. The Western bankers are expert at rigging the financial markets, one and all. Their central bank bond support has extended to stock market support, soon to corporate bond wide support also. The USGovt is hanging onto its power base in increased isolation. The assaults are on many flanks and platforms.
Its essence is the sale of crude oil universally in USDollar terms. Typically, the payment form is the USTreasury Bill. The OPEC crew typically sock their surplus petro dollars in USTreasury Bonds. The sale proceeds never exit the USD form. The deal was struck in 1973 by the Rockefeller agent named Heinz Kissinger. It came in the wake of the abrogated Bretton Woods Gold Standard, which Nixon violated with force and audacity. In fact, the arrangement was suggested by the US side of the table. Never mind that it was Rockefeller who hatched the idea of a tripled oil price, the exact opposite of what has been inscribed in the historical annals. The other little item in the Petro-Dollar defacto standard treaty is that the Saudis, along with the Gulf Arab neighbors, would buy USMilitary hardware exclusively. The USGovt would provide them with plenty of regional conflict. Over the four decades since, the Arabs have accumulated a few cool $trillion in USTBonds. The TIC Report on foreign bond assets is a gigantic fabrication. Most Saudi bond holdings have been hijacked and stolen, used as the core to the USDept Treasury’s vaunted Exchange Stabilization Fund. They will never see at least $3 trillion in sequestered bonds. A joke here, since the ESFund is the most secretive multi-$trillion fund in human history.
The global currency reserve consists of the trade payments done in USD terms, together with the banking systems holding USTBonds as core assets. The West controls the financial markets, but the East increasingly controls the global manufacturing capacity. The USEconomy is heavily dependent upon imported goods within its massive supply chain. To some extent the producers in Asia, the Pacific Rim, and the Emerging Markets can dictate terms on trade payment.
The Saudis are the subject of occasional debate for a failed kingdom, a collapsed monarchy, a bankrupted nation, with finances bleeding red ink like never before in its brief history. Infighting has occurred to wrest the title of crown prince for Mohammed bin Salman (MbS), certain to have caused internal resentment and worse. The kingdom is depleting it financial reserves faster than it is the oil reserves. Deficits are at astounding levels. The lower crude oil price has resulted in half as much in revenues, while the filthy Yemen War has aggravated the costs within the financial ledger. The Saudis have issued bonds to finance their deficits, breaking new ground and angering some hardline Moslems. Their currency swaps are occasionally showing danger signals. The incidents with Qatar have left the Saudis with few if any friends, even in the Arab world. The arms deal charade with President Trump was one for the comic books. Even Langley is angry, as MbS screwed up their plans to stabilize the kingdom and region, with the goal of less terrorism. The other violent clown, Mohammed bin Zayed (MbZ) is the crown prince of Abu Dhabi in the UAE. Both might soon become expendable.
The big fat liars in the oil room are the Saudis. They have lied about their spare production capacity since the year 2000 or so. Such lies are used in attempts to move and to control the oil price. They have lied about their oil reserves for years also. That they have depleted oil reserves is the perfectly fitting motive for their predatory war in Yemen. They wish to steal the Yemeni oil & gas reserves, which are enormous and plentiful, even as not ever mentioned in the dutiful lapdog Western press. After 50 years of oil production, the Ghawar field is pumping over 98% water and brine. Other elephant fields are equally tapped out. The Saudis do have several smaller fields in production, but they do not compensate for the vacated elephants. Not at all. The Saudis are liars on oil reserves.
The Saudis wish to conduct an IPO stock deal on 10% of the ARAMCO assets and income. They laughingly estimate the total petro-chemical corporation to be worth US$2 trillion. In response, the Western energy analysts hopped on the wagon to provide financial analysis of value. Well, surprise surprise! The analysts estimate the ARAMCO giant to be worth $500 billion or less, at least four times less than the bloated exaggerated value posted by the Saudi liar princes. The IPO deal is stalled, possibly since underwriting brokerage houses might not wish to be the object of lawsuits in the near future. Meanwhile, the Saudis are sweating badly, very worried about not having their $200 billion payday. They will be lucky to have $50 billion in the tainted IPO deal. Below is just one site of the sprawling state owned complex.

The Chinese are always opportunistic. They invest in trade and structural placements, in the hope of winning commercial partners and friends. They do not wage war to win their way. The Chinese are observing the ARAMCO deal and its massive snag. They might hand to the Saudis an over-valued offer on a gilded platter. China has stayed away from any direct involvement in the Yemen War. However, they might be the supplier of some missiles used in Yemen by the native defenders, delivered by the Iran Military. China might over-pay for a stake in the ARAMCO company for two reasons. First, they want a toe-hold in the kingdom, in order to win other trade deals with a degree of exclusivity. They would become a favorite foreign son in the process, especially if other Western financial houses refuse to invest in the bloated over-valued petro-chemical firm. Second, the Chinese would then be in a position to demand that oil sales to China be paid in Yuan currency, in RMB terms. The ARAMCO investment, large or small, would serve as leverage to fracture the Petro-Dollar at its home base, within Saudi Arabia. The shock waves would be heard around the financial world.
Once the Chinese win the privilege to buy Saudi oil in RMB terms, the other Gulf Arab oil producers will match the offer of selling oil to the Chinese in their own currency, and NOT in the USDollar. The Petro-Dollar defacto standard is about to suffer multiple coffin nails. The rival Gulf Arabs will not wish to lose market share to the Saudis. They will permit the Chinese payment terms in RMB, a no-brainer. On the other side, Southeast Asian oil customers will wish to buy crude oil from the Gulf region generally in currency other than the USDollar. They are fast dumping their USTreasury Bonds, a trend that has endured for almost two years. The Gulf Arabs will grant the Asians the right to pay for crude oil in whatever currency they wish, being very accommodative. The result will be deeply damaging. The Gulf Region will sell crude oil in non-USD terms on a widespread basis and significant scale. To be sure, the Saudis and other Arab rivals will be pressured by the USGovt not to agree to the RMB oil deal. But Washington has lost most of its prestige and most of its power. The NeoCons in charge are diverted in their attention with the slightest temptation toward useless nonsense. The USCongress is a chamber of corrupted members and babbling fools, the majority of whom are bribed into puppet status.
When the Chinese, and Asians in general, begin to buy Saudi oil, and Gulf oil in general, the entire geopolitical balance of power will suffer a massive tectonic shift. The Petro-Dollar will be recognized as dead, no longer the standard. If not dead, it will be regarded as having left the Intensive Care ward and heading to the Morgue, a white sheet over its lifeless cadaver, with a cemetery plot being selected. With logic on the argument’s side, no standard can have such large exceptions on the buyer side or seller side. The advent of the Dual Universe will have its dawn, with the USD sphere coexisting with the RMB sphere. The impact will then fall on the global banking reserves for more avid bond dumping. Concerns will be raised on how the USGovt and USFed can manage the heaping volumes of dumped USTreasury Bonds. The derivative machinery will be put to screeching strains, even given some adverse publicity.
The Asians will shed their USTBonds, in favor of both RMB bonds and Gold bullion. The game will change in a way to make clear the end of the King Dollar Era. The great transition from Western sovereign bonds to Gold bullion will begin in earnest. Forty years of exported inflation will be reversed, and wreak havoc upon the USEconomy. The United States will be compelled to create and launch a new domestic only dollar, all in time, complete with official denials. Let it be dubbed the New Scheiss Dollar, complete with a long sequence of devaluations. The $500 billion annual trade deficit will become a major talking point. It will open the door for the United States to the Third World.

Cold Arm of ‘Jihad’ Sponsored by the West is Reaching Rebellious Philippines

22.07.2017 Author: Andre Vltchek

Cold Arm of ‘Jihad’ Sponsored by the West is Reaching Rebellious Philippines

7823234234A month ago I wrote an essay exposing the complex network of Western-sponsored terrorism in Asia (“Washington Jihad Express: Indonesia, Afghanistan, Syria and Philippines”). I argued that in the 1980’s, Indonesian and Malaysian jihadists, indoctrinated by the Southeast Asian brand of extreme anti-Communism, went to fight in Afghanistan against the socialist governments of Karmal, and then Mohammad Najibullah, with the ultimate goal of destroying the Soviet Union. Hardened and further brainwashed, they returned home to Southeast Asia, participated in several ethnic strifes and pogroms (including those in Ambon and Poso), and then, in order to ‘bridge the generational gap’, embarked on the coaching of young generation of terrorists, who eventually ended up fighting in Syria and recently in the Philippines.
My essay was full of facts, and I put into it various testimonies of Southeast Asian academics, thinkers, and even of one active and prominent ‘jihadi cadre’ who is now living in Jakarta.
In the Indonesian city of Bandung, Mr. Iman Soleh, a professor at the Faculty of Social and Political Science (University of Padjadjaran- UNPAD) offered his take on why the West is now so obsessed with destabilizing and smearing the Philippines and its current rebellious administration:
“Since World War Two, the U.S. was afraid of so-called ‘domino effects’. Among other things that are now happening in the Philippines under president Duterte, the government is curbing activities of the multi-national mining conglomerates, and the West cannot accept that. Philippines are putting its environmental concerns above the short-term profits! For the millions of left-wing activists here in Indonesia and all over Southeast Asia, President Duterte is a role model.” 
It is no secret that the West punishes such ‘bad paradigms’ brutally and decisively.
Prof. Soleh continued:
“I think all that is happening is not just to ‘destabilize’ the Philippines, but also because the country has conflict areas that could be ‘nurtured’. The best example is the predominantly Muslim island of Mindanao, vs. the rest of the Philippines, which is predominantly a Catholic country…” 
Jihadi cadres dreaming about establishing caliphate, ‘color revolutions’ type politicians, several ‘perpetual conflicts’, as well as ‘vibrant civil society’ and NGOs that are clearly on the pay list of the West: you name it and the Philippines (for decades an obedient colony of the West) has them all. Their sole purpose is to destabilize the country and to overthrow the current administration in Palacio de Malacañán in Manila.
After a prolonged saga, I finally received a permit to visit Marawi City, which until now is torn by the war.
Before being given an army convoy and then expedited to the front, I was detained in Saguiaran town, at the army base, for almost 12 hours, and interrogated by the pro-US/anti-Duterte faction of the military. Using text messages I was immediately informed by my contacts in Manila: it was obvious that someone high up in the military command didn’t want me to witness what was really happening in the besieged city.
When I finally reached Marawi, I clearly understood why some anti-Duterte people wanted to stop me: almost everything on the ground was exactly the opposite of what the Western and the servile local media wanted to show the public.
Things were actually better, much better than I expected.
The Martial Law imposed on the area was ‘mild’ and rational. There was hardly any administrative interference from the military top brass. Relief operations to help tens of thousands of IDP’s were well organized and, given the difficult circumstances, extremely effective.
The army was busy fighting the terrorists who were holed up in about one square kilometer of the center of the city. The rest of Marawi was liberated and almost intact. My estimate was that around 20-30 percent of the houses were either destroyed or damaged, while the countless mass media reports have been speaking about the “entire city” or “most of the city” having been reduced to ruins.
I can testify to all this, as I was there, even facing the very core of the fighting, and I’m in possession of the photo evidence to illustrate what I’m claiming here.
I spoke to several internally displaced people (IDP) and I spoke to the civilians who are still living in Marawi and in the surrounding area. I met the highest commanding officers, including Brigadier General Ramiro Rey (head of the Joint Task Force Group, Ranao) and Lt. Colonel Jo-Ar Herrera, and grilled them with my questions, about the situation on the battlefield. I travelled with ordinary soldiers and I visited hospitals and relief centers.
General Rey explained during our meeting in the Municipality of Marawi City (now also serving as the headquarters of the war theatre):
“The ISIS wants to establish their state on the island of Mindanao – an Islamic caliphate – right here in the Province of Lanao del Sur.”
”On the 23th May there was a report about existence of a safe house of the terrorists. Our forces attacked and when this resulted in a firefight, we were surprised, realizing that the terrorists have already occupied almost the entire area. Later, after studying evidence and seeing videos, we found out that the terrorists were actually planning to take over the entire Marawi by May 26th, which was the start of Ramadan. The fighting continued for the entire day of the 23rd. If we would have failed that day, the situation would have been much worse. But our forces liberated most of Marawi and the terrorist forces had to withdraw east of the Agus River.”
The war has been brutal. There have been killings by the terrorists. Internally displaced people told me that ISIS set up checkpoints and divided people into Muslims and infidels. Non-Muslims were immediately killed, or taken as hostages and used until now, as human shields.
“The corpses of victims were all around Marawi, decomposing under the burning sun,” recalled Ms. Ima Mimbalawag. “Some were being eaten by dogs.”
After May 23rd, things deteriorated rapidly, and tens of thousands of local people were forced to hit the road, searching for safe havens all over the island and the country.
“The terrorists began using captured women as sex slaves,” explained Major Malvin Ligutan, standing in front of a temporary military base in Saguiaran, from which the deafening Howitzer salvos have been fired over the hills and towards the terrorist positions inside Marawi City.
Despite all the horrors of the Marawi war, the army refused to use brutaltactics, even after it found out that various local citizens clearly miscalculated and before the conflict began, offered substantial support to the ISIS-related terrorists.
Captain John Mark Silva Onipig clarified:
“These people belonging to the ISIS are not only terrorists, but they are also criminals. They were dealing in drugs… And some local people knew that… Actually, locals knew quite a lot; they knew about the presence of the terrorists in the area long before all this started, but they never reported it to the authorities.”
“How did they get hold of so many weapons?” I wanted to know.
“In the Philippines, those who have money can buy as many weapons as they want on the black market.”
Several high-ranking army officials confirmed on and off the record, that there has been the involvement of foreign fighters in the battle of Marawi.
“In one of the safe houses, we found passports issued in Indonesia, Malaysia and several Arab countries.”
Ms. Drei Toledo, an educator, renowned social media journalist and pro-Duterte activist, originally from Mindanao, pointed a finger at both Malaysia and the United States:
“For Malaysia: it is aiming at serving its own interest by expanding/restoring the Caliphate across Mindanao. Malaysia has been directly funding destabilization in order to put Mindanao in perpetual chaos, since 1968. Malaysia benefits from Mindanao being in a perpetual state of chaos and conflict because this means we can never reclaim oil-rich Sabah.”
“As for the United States: they are primarily interested is retaining control over Philippines and our seas, because China’s ‘One Belt One Road’ (OBOR) system will be finally completed soon. Philippines is the last and the most critical trans-shipment point.”
For the US: it is retaining control, by all means and at any cost. For some individuals in Malaysia: the establishment of a caliphate in Mindanao. For countless Indonesian anti-Communist jihadists: perpetual battle against anything left-wing in this part of the world.
The result: tremendous suffering of people in Marawi, in fact all over the entire Mindanao Island. Hundreds of thousands of men, women and children displaced, hundreds of people killed, as well as brutal, continuous poverty.
President Duterte who took office only a little over one year ago, has managed to implement great changes, siding with the poor. But he is now under tremendous pressure.
From the beginning, he tried to reach peace agreements with the Marxist guerillas, with the Muslims seeking further autonomy in Mindanao, and of course with China.
This war is putting his goodwill through a great test. However, there is no doubt that he is passing it with flying colors, no matter what the Western and local anti-government propagandists are declaring.
I drove at the back of military trucks and I saw adults and children waving and saluting, with no fear in their eyes. I spoke confidentially with the locals and they were all hoping for victory by the troops, over the jihadists.
General Rey who is de-facto in charge of the military operations, explained to me:
“The difference between this Martial Law and those that were imposed during the reign of Ferdinand Marcos, is that now the military is mainly doing real fighting, while providing assistance to the civilians. I absolutely don’t interfere in the work of local elected government officials. I’m actually encouraging them to do their job as before, asking them to contact me only when my assistance is needed. I never took, and I don’t intend to take, control of the area.”
I checked with the local officials and they confirmed his words.
I also checked with several relief volunteers, and was told that Manila does all it can to help, and in those cases when it fails, it is simply due to the scarcity of resources, not because of the lack of goodwill.
I witnessed both outgoing and incoming fire of Howitzers, as well as the bombing of jihadi positions by the air force, and it was clearly targeted.
It is real war, and wars are never a hundred percent “clean”. However, this one is as clean as it gets, and I can say it with authority, after witnessing and covering dozens of them, in all corners of the world.
To claim the contrary would mean spreading outright anti-government propaganda, or showing ignorance, or both. But propaganda is exactly what the Western and pro-Western local mass media and NGOs are disseminating all over the Philippines and the world.
I happened to be one of the extremely few foreigners who have managed to enter Marawi City, and to see first-hand the impact of the fighting. However, hundreds of Western reporters who have never even come near the city are constantly speaking and writing about the situation as if it was first-hand reporting. Their hostile intentions are clear and obvious.
Local jihadi cadres and foreigners have already done great damage to the city and the country. Some analysts are now comparing the situation in Marawi and the Philippines to the early stages of the foreign-ignited conflict in Syria.
But Marawi is not Aleppo. Here the military acted decisively, and the extremists were quickly contained in just one small neighborhood.
Near the front line I was told by one of the top army officers:
“We could take the city in just one day, but there would be great civilian casualties, as civilians are used as human shields by the terrorists. The houses in this area are very sturdy; they are 2-3 stories high and fortified, as there are constant and brutal family feuds, called’ rido’, raging here, and have been for centuries.”
If the army attacks frontally, thousands of civilians would lose their lives. There is no appetite for such carnage, in Manila or on the ground in Marawi. And so the war drags on. The positions of the terrorists are bombed; hostages that manage to escape and cross the river are quickly brought to safety. The area controlled by the terrorists is hermetically sealed. Hope is that the ISIS-related extremists will soon run out of ammunition, of food, or both.
Marawi is just one new chapter in the already long book of horrors of brutal religious terrorist acts, most of them directly or indirectly triggered by Western imperialism. In the first wave of its fight again the secular socialist Muslim governments, the West destabilized Iran, Egypt and Indonesia. Then came the Afghanistan ‘gambit’, followed by the arch-brutal destruction of Iraq and Libya. Then it was Syria’s turn.
‘Jihad’ is consistently used against Russia, China as well as the former Central Asian Soviet republics.
All this I described in my 840-page book: “Exposing Lies Of The Empire”, but one can never write fast enough and fully catch up with the crimes committed by the West.
It is often easy to pinpoint Western involvement in the religious conflicts, particularly in such places as Afghanistan and Syria. In the Philippines, the link is still indirect, well concealed, but it certainly exists.
To rebel against the Western Empire is always a costly and bloody affair. It often leads to coups sponsored by Washington, London or Paris, and even to direct military conflicts, interventions and full-scale wars.
But by now, the people of the Philippines have had it ‘up to here’. They had enough of being submissive; enough of being plundered while remaining silent. They are assembling behind their president. Duterte’s popularity is still around 75%. The army is clearly winning the war against the hardened local and foreign jihadists. Relief operations are effective and well organized. Things are just fine.
In only one year, the country has diametrically changed. For the first time in decades, there is great hope. To break the spirit of the liberated masses, to force people back onto their knees would be difficult, perhaps almost impossible, even if jihadi terror is unleashed brutally.
Andre Vltchek is philosopher, novelist, filmmaker and investigative journalist. He’s a creator of Vltchek’s World in Word and Images, a writer of revolutionary novel Aurora and several other books. He writes especially for the online magazine “New Eastern Outlook.”

Casinos’ inclusion in dirty-money surveillance alone not enough to keep PHL out of blacklist

Casinos’ inclusion in dirty-money surveillance alone not enough to keep PHL out of blacklist

Posted on July 27, 2017

THE RECENT INCLUSION of casinos under the watch of the Anti-Money Laundering Council (AMLC) does not automatically assure that the Philippines has completely cured its deficiency in curbing dirty money flows.

A new law signed by President Rodrigo R. Duterte on July 14 now counts casinos as institutions that should report covered amounts to the Anti-Money Laundering Council (AMLC). AFP
In a recent e-mail, international watchdog Financial Action Task Force (FATF) said the enactment earlier this month of Republic Act 10927 -- which requires casinos to report to AMLC transactions worth at least P5 million -- will be considered in upcoming assessments on the Philippines, even as the review will be system-wide.

The Philippines has been on the FATF’s “grey” list since 2012, averting the blacklist as the watchdog acknowledged the previous government’s “high-level political commitment” to plug loopholes in existing laws that allow illicit funds to flow through the country.

“The effectiveness of a country’s efforts can’t be determined by looking at one specific measure in isolation,” according to an e-mail from the office of FATF Executive Secretary David Lewis.

“Rather, during mutual evaluations, the assessment teams will look at the country’s entire legal, law enforcement and operational framework to protect the integrity of the financial system. They will also look for evidence that the action that the country has taken is delivering the right results,” the e-mail explained.

“In the case of the Philippines, the assessment team will determine whether the steps that the country has taken since their [sic] last assessment have improved the effectiveness of their AML/CFT (combating the financing of terrorism) framework.”

The FATF evaluation is conducted through the Asia/Pacific Group (APG) on Money Laundering, a regional body that counts the Philippines as a member.

The global body sets international standards for combating money laundering and terrorism financing, placing countries under any of three categories, namely: “grey list,” “dark grey list” and “black list.”

Blacklisting entails sanctions that would make financial transactions with the affected country expensive.

Gaps identified in the APG’s 2009 assessment report include the AMLC’s “limited authority” to directly access bank records, as well as the limited coverage of the law in requiring non-financial businesses and professions to report big-volume and suspicious transactions. AMLC’s limited resources to carry out its mandate of investigating and lodging criminal cases were also cited as a weaknesses. In particular, the APG said the exclusion of casinos raised “significant concerns” for efforts to curb dirty money flows, citing the big volumes that pass through gaming tables.

In early February 2016, Philippine casinos were used by still-unknown thieves to launder $81 million stolen from the Bangladesh central bank’s accounts with the Federal Reserve Bank of New York.

Of the amount that found its way into the Philippines, only about $15 million has so far been returned to Dhaka.

The new law signed by President Rodrigo R. Duterte on July 14 now counts casinos, including Internet and ship-based facilities, as institutions that should report covered amounts to the AMLC.

BSP Governor Nestor A. Espenilla, Jr. has said that the new law will “plug a critical gap” and should boost efforts to stop the entry and circulation in the country of illegally obtained funds.

In March, the US State Department tagged the Philippines as a “major” money laundering site in 2016 largely due to a “high degree of corruption” among public officials, human trafficking and its use as a venue for “drug transit” and transnational organized crime.

Why universal basic income is gaining support, critics

> Why universal basic income is gaining support, critics
> By Kathleen Pender
> July 15, 2017 Updated: July 17, 2017 11:49am
>     28
> The idea of government giving every person a universal basic income has been gaining traction thanks in part to endorsements from some Silicon Valley celebs. Elon Musk, Mark Zuckerberg, venture capitalist Marc Andreessen and others want to explore the idea.
> The idea of government giving every person a universal basic income has been gaining traction thanks in part to endorsements from some Silicon Valley celebs. Elon Musk, Mark Zuckerberg, venture capitalist Marc Andreessen and others want to explore the idea.
> The idea of a universal basic income — monthly cash payments from the government to every individual, working or not, with no strings attached — is gaining traction, thanks in part to endorsements from Silicon Valley celebs.
> Some see it as a way to compensate for the traditional jobs with benefits that will be wiped out by robotics, artificial intelligence, self-driving vehicles, globalization and the gig economy. Others see it as a way to reduce income inequality or to create a more efficient, less stigmatizing safety net than our current mishmash of welfare benefits.
> “I think ultimately we will have to have some kind of universal basic income, I don’t think we are going to have a choice,” Tesla CEO Elon Musk said at the World Government Summit in Dubai in February.
>     SEATTLE, WA - JUNE 16: A visitor checks in at the Amazon corporate headquarters on June 16, 2017 in Seattle, Washington. Amazon announced that it will buy Whole Foods Market, Inc. for over $13 billion. (Photo by David Ryder/Getty Images)
>     Zillow shares fall on hint Amazon could offer Realtor referrals
>     CUPERTINO, CA - APRIL 28: An aerial view of the new Apple headquarters on April 28, 2017 in Cupertino, California. Apple's new 175-acre 'spaceship' campus dubbed "Apple Park" is nearing completion and is set to begin moving in Apple employees. The new headquarters, designed by Lord Norman Foster and costing roughly $5 billion, will house 13,000 employees in over 2.8 million square feet of office space and will have nearly 80 acres of parking to accommodate 11,000 cars. (Photo by Justin Sullivan/Getty Images)
>     Bay Area property assessments hit $1.6 trillion after 7.4% rise
>     Brad Bao, co-founder and chairman of Lime Bike, takes a spin on a bicycle in San Mateo, Calif. on Tuesday, July 11, 2017. Lime Bike hopes to deploy as many as 3,000 of its undocked and station-less bike-share bicycles on the streets of San Francisco as soon as the permitting process is completed.
>     San Francisco issues permit rules for stationless bike shares
> In a commencement speech at Harvard University in May, Facebook CEO Mark Zuckerberg said, “We should explore ideas like universal basic income to give everyone a cushion to try new things.” And in a July 4 blog post, Zuckerberg praised Alaska’s Permanent Fund Dividend, the nearest thing to universal income in this or any country. Since 1982, Alaska has been distributing some of its oil revenue as an annual payment, ranging from about $1,000 to $3,000, to every resident including children.
> Facebook co-founder Chris Hughes, venture capitalist Marc Andreessen and Y Combinator president Sam Altman have all said it’s worth exploring. Y Combinator’s nonprofit research lab started a basic income pilot with fewer than 100 people in Oakland last fall with the goal of gathering information to structure a larger research proposal, its director, Elizabeth Rhodes, said.
> The concept has been around, with different names and in different countries, for centuries, said Karl Widerquist, co-founder of the Basic Income Earth Network.
> It enjoyed a wave of U.S. popularity in the 1910s and ’20s and again in the ’60s and ’70s when it was championed by free-market economist Milton Friedman, Martin Luther King and, for a while, Richard Nixon.
> It resurfaced again after the 2008 financial crisis, when soaring unemployment and corporate bailouts focused attention on the “99 percent.” The concept picked up steam in recent years as studies started predicting widespread unemployment because of automation.
> Basic income has fans across the political spectrum, but for very different reasons. Libertarian backers would replace all or most welfare programs with a monthly cash payment as a way to prevent poverty, reduce government bureaucracy and let people decide for themselves how to use the money.
> Facebook CEO Mark Zuckerberg (right), shown in May receiving an honorary degree from Harvard, also supports the universal income concept. Photo: Paul Marotta, Getty Images
> Photo: Paul Marotta, Getty Images
> Facebook CEO Mark Zuckerberg (right), shown in May receiving an honorary degree from Harvard, also supports the universal income concept.
> By contrast, “those left of center like the idea of using (basic income) as a supplement to the existing safety net,” said Natalie Foster, co-chairwoman of the Economic Security Project, a two-year fund devoted to researching and promoting the idea of unconditional cash.
> In a “utopian version,” the money would “sit alongside existing programs” and go to every man, woman and child, Foster said. But if you made it enough to keep people above poverty — $1,000 a month is a popular number — “it starts to add up to a very significant portion of the GDP,” Foster said.
> That’s why some proposals would reduce or eliminate payments to children or to adults over 65 if they are getting Social Security and Medicare. Some would limit the benefits going to high-income people, either directly or indirectly by raising their tax.
> “In the simple model, everyone in the lower half (of the income distribution) would be a net beneficiary, everyone in the upper half would be net payers,” Widerquist said.
> Charles Murray, a libertarian political scientist with the American Enterprise Institute, has proposed a basic income plan that would replace all transfer payments including welfare, food stamps, housing subsidies, the earned income tax credit, Social Security, Medicare and Medicaid. It would also eliminate farm subsidies and “corporate welfare.”
> In exchange, each American older than 21 would get a monthly payment totaling $13,000 a year, of which $3,000 would go to health insurance. After $30,000 in earned income, a graduated tax would “reimburse” some of the grant until it dropped to $6,500 at $60,000 in income. However, the grant would never drop below $6,500 to compensate for the loss of Social Security and Medicare.
> Murray admitted that many seniors get more than $6,500 worth of benefits a year from those two programs, which is why it would have to be phased in.
> “What I’m proposing would actually be cheaper than the current system,” Murray said. It would give adults a “living income” and “liberate people” who are tied to a job or welfare program in a particular city because they can’t risk leaving to pursue a new opportunity.
> Tesla CEO Elon Musk favors universal basic income to compensate workers displaced by automation. "I don’t think we are going to have a choice," he said at a February event in Dubai. Photo: KARIM SAHIB, AFP/Getty Images
> Photo: KARIM SAHIB, AFP/Getty Images
> Tesla CEO Elon Musk favors universal basic income to compensate workers displaced by automation. "I don’t think we are going to have a choice," he said at a February event in Dubai.
> Andy Stern, a senior fellow at the Economic Security Project, has proposed a “left-of-center” plan that would give every adult 18 to 64 a monthly cash payment of $1,000. It would replace welfare programs such as food stamps, the earned income tax credit, unemployment and Supplemental Security Income. But it would keep Social Security, Medicare, Medicaid and Social Security disability.
> He figures the plan would cost about $1.75 trillion a year. Ending welfare programs would save about a third of that. Another third could come from ending the tax deduction for mortgage interest and other write-offs. The remaining third could come from new sources such as a tax on carbon emissions or financial transactions.
> Stern would not reduce payments to the rich or raise their taxes because that would bring back the problem he is trying to eliminate — determining who is “worthy and unworthy” to receive benefits. But many of the tax increases he envisions “would have a disproportionate effect on higher-income people,” he said.
> Some opponents of guaranteed income say it will encourage laziness. Proponents say the current system discourages work by taking away some benefits as income goes up.
> Zipcar founder Robin Chase, now a speaker and author, said universal income would encourage and reward important work that “does not get monetized,” such as child care and volunteer work. It would also spur business creation. “I had the luxury of taking risks because I had a husband who had a full-time job with health care. A majority of the population cannot take any risks in pursuing innovation or higher-value, non-remunerative things.le providing critically needed labor in fields ranging from infrastructure to education to child and elder care,” Bernstein, who was an economist in President Barack Obama’s administration, wrote in the American Prospect.
> Jason Furman, who chaired Obama’s Council of Economic Advisers, doesn’t like guaranteed jobs or guaranteed income. Furman, now a professor at the Harvard Kennedy School, said universal income suffers from three problems.
> “One is that it’s very hard to make the numbers add up. To get to (incomes) like $12,000, you need huge increases in taxes. Two, there are a lot of benefits to targeting. You only get unemployment if you don’t have a job and are looking for a new job. If anything, I might toughen the work search requirement” to receive unemployment.
> Finally, he said, “I believe there is no reason that people can’t be employed in the future. We have thousands of years of experience of technological progress not leading” to mass unemployment. He pointed out that technologically advanced countries do not have higher unemployment rates than those that are less advanced.
> “We should put more effort into how to create jobs and prepare people for jobs in the future,” he said. Universal basic income “is giving up on work and giving up on people. I’m not prepared to do that.”
> Kathleen Pender is a San Francisco Chronicle columnist. Email:  Twitter: @kathpender

Welcome To The Era Of Artificial Intelligence And Technological Deceit

Welcome To The Era Of Artificial Intelligence And Technological Deceit

By Daisy Luther/The Organic Prepper July 27, 2017 Share this article:

The era of artificial intelligence and technological deceit is upon us. If you think "fake news" and propaganda is bad right now, just wait.

And you won't have to wait very long, at that.

Pretty soon, computer wizardry and artificial intelligence will allow video footage to be created that is practically indiscernible from the real deal. Add to this holograph technology, and soon a person could appear to be speaking, live, in front of you, and you'd never even know it was all fake.

The ethical ramifications of AI and technology are simply mind-boggling. In fact, some folks even believe it will signal the beginning of the end of humanity.

But apocalyptic AI aside, let's look at the manipulative potential of our current tech. We are very close to real life meeting science fiction; and if you think we are being deceived now, once these technologies are rolled out, you won't be able to believe your eyes or your ears.

There are several unsettling parts to this story.

First, there's the video editing to a new soundtrack.

Researchers at the University of Washington have developed an artificial intelligence software so powerful that it can put words in the mouth of just about anybody.

It's basically like artificially intelligent long as there's an audio source to use, the video can include realistic mouth shapes that are almost perfectly aligned to the words being spoken.

Those synthesised shapes can then be grafted onto an existing video of someone talking...

...There are two parts to the system: first a neural network is trained to watch large volumes of videos to recognise which audio sounds match with which mouth shapes.

Then the results are mixed with moving images of a specific person, based on previous research into digital modelling carried out at UW. 

Here's a clip of the software in action.

U of W says that this is actually a good thing and has been developed to help identify fake videos. Because, you know, no one has ever misused technology before.

Then, there's audio technology that can imitate anyone's voice with access to a few recordings.

And if that were the only new tech development, it would be bad enough. But a new start-up called Lyrebird can actually create audio that sounds exactly like someone else using "deep learning and artificial neural networks."

This is an example. It's kind of rough right now, but how long before it gets polished up?

Even more alarming, this is something that ordinary folks will soon be able to get their hands on. If this is for the layman, can you even imagine what the government and military have access to?

Then, there are holograms.

Do you recall when Tupac  showed up a Coachella on the stage back in 2012? If you speed ahead to 2:20 in this video (warning - graphic language), the hologram Tupac is on stage with a real person, Dr. Dre, and the difference is nearly indistinguishable.
Fascinating, yet terrifying at the same time.

Think about the ramifications of this.

With all of this technology, some of it soon to be available on our smart phones, how can we believe anything?

Think about it.

How difficult would it be to completely fabricate "videos" of anyone that we are expected to hate?

We live in an era in which false flags are the norm and those in power profit from war. It's a regular occurrence to create a new bogeyman whenever a conflict is the desired outcome.

Here's an example.

Consider the whole chemical attack presumably undertaken by Bashar al-Assad in Syria against his own people. All we had to go on in the news were suppositions, a video of the aftermath, and some heart-rending emotional coverage.

But, honestly, some of us never really believed this was legitimate because there was no motive. However, lots of folks did believe it, hook, line, and sinker, without any video or any claim by Assad that he was, in fact, responsible. (In fact, he denied it the entire time.) These people were ready for us to go to war against Assad immediately to stop the suffering of those poor, dying children.

Now, let's add technology into the mix.

What if there had been an AI video and soundtrack of Assad? People tend to believe their eyes and ears, particularly if they have already been prompted to feel a certain emotion. What if there was a "live" speech in front of thousands that was just a hologram?

Let's take the what-ifs further.

What if there were AI soundtrack recordings of the infamous "Russia" collusion? What if there were hologram speeches from leaders who had been assassinated stating that, no, they escaped, and here's what they want their mourning followers to do next.

What if there is an AI speech and an AI video that appeared to be our "enemy" making threats against us? 

Maybe one of Jong-un telling his people that yep, we're striking the US tonight with an EMP that will devastate them for decades. What better way to get our country to be fully behind a military "preemptive" attack than that?

Is this is far-fetched?

Call me a Luddite (trust me, you wouldn't be the first) but AI is becoming more acceptable every day with Alexa and Siri in every other home in America. We're being gently lulled into it by "convenience" but are we opening the door to something that could go horribly wrong?

I hope my imagination is getting the best of me, but I certainly wouldn't put it past the people pulling the strings to use artificial intelligence to manipulate the masses. If the technology exists to deceive people, someone is going to use it.

Editors Note - Is it possible many of the technologies that Revelation speaks of in regards to the Antichrist are technological deception - such as the image that speaks in Revelation 13:15?  Food for thought.

Originally published at the Organic Prepper - reposted with permission.

How Long Can the U.S. Rely on Russian Titanium?

SOL: China and Russia are the number 1 & 2 producers of Titanium in the world. There is very little titanium produced in the U.S. so the bulk of the U.S. needs must be imported and our major source is Russia. With the latest sanctions against Russia by the DS Congress, includes metals/mining, anyone with common sense would know we are now in self-destruction mode.
How Long Can the U.S. Rely on Russian Titanium?
By Daniel McGroarty
August 12, 2014
Select Language

With the U.S. ratcheting up Russian sanctions in response to Vladimir Putin's unrepentant assault on Ukraine, word comes that U.S. manufacturers Boeing and United Technologies are building up aerospace-grade titanium stocks from their key supplier in Russia. Given that Russia's VSMPO-Avisma is, as the Wall Street Journal reports, a subsidiary of Rostec, the government-owned defense conglomerate whose CEO Sergei Chemezov (in the 1980s, he and former KGB officer Vladimir Putin lived in the same apartment building in East Germany) is on the U.S. sanctions list -- stocking up on titanium parts isn't a bad idea.

After all, titanium is critical for jetliner fuselage skins like Boeing's 787 Dreamliner. Not noted in the news reports is that titanium is also must-have metal for advanced military aircraft like Boeing's F/A-18 Super Hornet. A RAND study notes that the F/A-18 -- which has just completed bombing missions against the ISIS terror group in northern Iraq -- contains "21 percent titanium in its airframe structure."

And that's just a fraction of the titanium needed for the U.S. defense industrial base, as it takes far more titanium to construct a modern fighter aircraft than is contained in the final product. Defense contractors call it the "buy-to-fly ratio": how much titanium must be bought versus how much is ultimately built into the aircraft. The titanium Material Buy Weight for a single F-35 Joint Strike Fighter is 30,000 pounds, or 15 tons.

But the statistic that says most about Boeing and United Technology's Russian titanium stockpiling is this one: The U.S. is import-dependent for 79 percent of the titanium it consumes each year.

Are there other sources for titanium if Putin decides to "counter-sanction" the U.S. and cut off exports?

China is a major global source of titanium, but it tends to consume what it produces. Then there's Ukraine, which produces titanium in Zaporizhzhya -- located between Russian-controlled Donetsk and Russian-reclaimed Crimea. U.S. and EU titanium users may want to cross Ukraine off their long-term supply list. U.S. titanium suppliers like RTI, Allegheny Technologies Inc. and TIMET may push to surge their production lines, but how quickly -- and how much -- is uncertain.

But doesn't the U.S. Defense Department maintain a metals stockpile? It does. And between 1998 and 2005, the National Defense Stockpile sold off its titanium reserve -- from 34,800 metric tons down to zero. (Where did the proceeds go? By order of the U.S. Congress, the Pentagon was instructed to implement the "sale of titanium from the National Defense Stockpile and allocate funds to the establishment of the World War II Memorial.")

With the Pentagon's cupboard bare, Boeing and United Technologies have little choice but to bulk-buy titanium parts -- as long as their Russian supplier is willing to sell.

But what happens if Vladimir Putin decides it's time to escalate the sanctions war as he refuses to deescalate in Ukraine?

The result could be a resource war we're likely to lose. Analyst Richard Aboulafia of the Teal Group warns that titanium is "a commodity product. If the U.S. or the West starts targeting commodity products that's dangerous, because Western Europe is so dependent on Russia for oil and gas."

"We might target defense products, debt markets for financial instruments, individuals, but if you're talking about commodities, that's not at all to the West's advantage."

No it's not, and here's why: According to the 2013 National Defense Stockpile Requirements Report submitted by the Pentagon to the House and Senate Armed Services Committees, of the 19 metals and minerals on the stockpile "shortfall" list, Russia supplies 10. For 5 of those 10 -- antimony, silicon carbide, bismuth, gallium and scandium -- the U.S. has zero on hand. And of those same five, the U.S. is 100 percent import-dependent for scandium, 99 percent for gallium, 91 percent for bismuth, 85 percent for antimony and 72 percent for silicon carbide.

And the United States' metals dependence isn't just on Russia. Of the 19 metals and minerals recommended for stockpiling in the 2013 National Defense Stockpile Requirements Report, China is a Top 3 provider for 17.

Will metals dependence prove to be the 21st Century's equivalent to America's oil dependence in the 20th Century? It doesn't have to be. As coauthor of American Resource Policy Network's national security risk report, we found that of the 46 metals and minerals we assessed, known U.S. resources exist for 40: "In other words, for 87 percent of the metals and minerals on our American Resources Risk Pyramid, domestic resources exist -- the development of which could lessen the United States' import dependency."

And yet with new U.S. mines taking seven to ten years on average to move through permitting and into production -- a 40 percent increase in time over the past five years -- and mine exploration spending in the U.S. dropping by half over the past 20 years, U.S. metals dependency seems destined to grow.

Until it does, companies like Boeing and United Technologies are doing what they can to avoid being caught short by a sudden Russian titanium squeeze. It's fair to ask Washington policymakers: When the next crisis highlights another metal shortage, can we count on Russia and China to supply us?

Daniel McGroarty, principal of Carmot Strategic Group, an issues management firm in Washington, D.C., served in senior positions in the White House and at the Department of Defense.

(AP Photo)

“Shari’ah-Compliant Jihad”: A More Complex Post-ISIS World

RSIS Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary and analysis of topical issues and contemporary developments. The views of the authors are their own and do not represent the official position of the S. Rajaratnam School of International Studies, NTU. These commentaries may be reproduced electronically or in print with prior permission from RSIS and due recognition to the author(s) and RSIS. Please email: for feedback to the Editor RSIS Commentary, Yang Razali Kassim. 

No. 141/2017 dated 27 July 2017

“Shari’ah-Compliant Jihad”:
A More Complex Post-ISIS World
By Jasminder Singh and Muhammad Haziq Bin Jani


In a post-ISIS world, some terrorist organisations have had to balance violence against rejection from the communities they operate in. Their paradoxical solution to increase recruitment is a terrorist re-interpretation of a more “Islamic” form of “jihad”.


IN JUNE 2017, Al-Qaeda in the Subcontinent (AQIS) released a publication entitled “Code of Conduct” (COC) through the As-Sahab Media wing. The publication clarified the strategy that jihadists are to take in their respective theatres of jihad, from India to Pakistan and even Myanmar. AQIS “jihadists” are expected to be “bound to act in accordance with this Code of Conduct” and would be held accountable should they not comply.

AQIS put forward a restricted scope of work for the jihadists within what it defined as “Islamic” and “permissible in Shari’ah” so that jihadists do not conduct activities that are harmful for the jihadi movement. This new strategy involves a “Shari’ah-compliant” modus operandi and target selection for jihadism. With this strategic shift, AQIS revealed that it is relying on an image rebranding to improve relations between jihadists and the “Muslim masses” in a post-Islamic State world. AQIS hopes this new strategy will increase support and improve recruitment numbers.

“Shari’ah-Compliant Jihad”

What does AQIS mean by “Shari’ah-Compliant Jihad”?

Firstly, it opines that “Shari’ah-compliancy” requires Muslims not to be attacked under any circumstance except if there are groups or individuals that participate actively in “war against the mujahideen”. It claims that every effort would be made to invite Muslims on the other side of the war to join it or to reconcile, such that AQIS would not end up having to fight Muslims.

AQIS recognises that fighting Muslims detracts it from fighting the “real enemy” – the United States of America (US) and its infidel allies. Only minimum force would be employed and there will be discrimination between fighters and non-fighters.

Secondly, AQIS intends to discriminate civilians from military personnel in its target selection, except civilians who are enemies of the Prophet (blasphemers), enemies of Islam (secularists) and enemies of the religious section of the society. The latter group was included to make AQIS seem like the defenders of the ulama or scholars.

AQIS now supposedly considers collateral damage of civilians to be “absolutely wrong”, to be “seriously avoided”, and subject to Allah’s punishment. The killing of civilians is to be avoided such that even wives and children of military personnel would be considered wrong to kill. Non-Muslim civilians and their places of residence or worship are also not to be harmed.

No Guarantee

There is no guarantee AQIS would ensure that its jihadists and affiliated groups toe its new strategy. However, regardless of whether the COC is more than just propaganda, its so-called shari’ah-compliant jihad would probably be the most deceptive terrorist ideology to date.

On the one hand, by downplaying the un-Islamic nature of terrorism and white-washing the extremism that AQIS propagates, AQIS has the potential to radicalise the naïve, vulnerable and action-oriented individuals in its recruitment campaigns and drives for support for Muslim fighters, supporters and financiers. On the other hand, any counter-ideological response that hinges solely on Muslims being victims or collateral damage would be rendered ineffective.

AQIS relies on the violence of others in countries where the US or its allies could be easily conceived as an occupying force, or where Muslims are unjustly treated, to fuel radicalisation and justify violence. The selective targeting of uniformed personnel is also a form of dehumanisation to allow terrorists, supporters and sympathisers to normalise and socialise violence in their respective societies.

Regional Security Implications

Besides AQIS, the Harakah al-Yaqin, also known as the Faith Movement, has equally undergone an image reform in its insurgency in Myanmar’s Rakhine State. Having been previously linked to al-Qaeda affiliated groups, the movement has renamed itself as the Arakan Rohingya Salvation Army (ARSA).

On 30 May 2017, Ataullah, its commander-in-chief, denied and condemned any form of terrorism on civilians regardless of ethnicity or religion in a press release. Ataullah also argued that ARSA is fighting a legitimate defensive war which he claims is backed by international norms and principles.

Through this rebranding, groups such as AQIS and ARSA, have launched a new propaganda of what they stand for and aim to achieve, including through violence. In fact, through their new declarations of target selection, it would make it harder for laypersons to differentiate between support for terrorist groups and causes with those groups that are fighting for democratic and inalienable rights.

It would also mean that terrorist groups would be able to disguise their claims and activities as championing of legitimate social causes, as seem to be undertaken by some radical groups in Indonesia. This was most evident in the role of groups such as Majelis Mujahidin Indonesia (MMI) in the anti-Ahok demonstrations in November and December 2016.

More Complex Post-ISIS World

Through this new modus operandi, a net effect could be increased radicalisation of society. More people can be expected to join radical groups as they will have great difficulties in distinguishing between terrorist and radical groups from those that are legitimately championing bona fide causes.

In many ways, it is through championing of what appears to be innocent and legitimate causes that terrorist groups are formed with broad-based mass support. With the free flow of information that champions legitimate social causes, moderate leaders and groups would have to be careful about what they are accessing online.

While societal anger may be fuelled further through these means, at the same time, governments have to be determined and clear that no room should be given to these groups to develop, what more, gain support for violent discourses and actions.

Clearly, the post-ISIS world is likely to become more complex as terrorist groups become polymorphic by finding and developing new ways to survive and mobilise support. AQIS and ARSA have clearly confirmed that terrorist groups are ‘learning organisations’ and to neutralise these groups, the authorities must always be a few steps ahead in the learning curve.

Jasminder Singh is a Senior Analyst and Muhammad Haziq Jani a Research Analyst with the International Centre for Political Violence and Terrorism Research (ICPVTR), at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.


Once again, there is a move to abolish the Presidential Commission on Good Government (PCGG) owing to its prolonged inability to recover multi-billion-peso martial law ill-gotten wealth in some difficult to prosecute 200 forfeiture cases before the Sandiganbayan. This move is not advisable because it is the prelude to burying the ill-gotten wealth cases into oblivion. What is needed at present is not to abolish PCGG but to compel it to do its job right—that is, do what it really takes to recover the ill-gotten wealth.     
To Begin With, Why PCGG Is Unable
to Recover the Martial Law Ill-Gotten Wealth
To address the problem, we have to know its root. PCGG seems unable to achieve its mission of recovering all martial law ill-gotten wealth because of the following:
  1. Either gross incompetence or outright intention to lose in the forfeiture cases, which could have deserved not only the stinging rebuke already done by the Supreme Court in one of its decisions but also disbarment.
  1. Failure to think outside the box: since inception to the present, PCGG officials appear to have been boxed in or trapped by the recovery method provided in Executive Order (EO) No. 1 dated February 28, 1986 which created PCGG, as well as by the implementing rules issued by the first PCGG Chairman. They failed to think of sanctions against tax evasion and other legal remedies provided in the Tax Code, such as issuance of warrants of distraint and levy on the not only ill-gotten but also UNTAXED wealth. Invoking the legal remedies in the Tax Code would have been more feasible, expeditious, and fruitful had it been initiated right after EDSA I.      
On Gross Incompetence or
Intention to Lose in the Case
PCGG’s seeming gross incompetence if not intention lose in its forfeiture cases before the Sandiganbayan can be deduced from the following quote from the final note in a Supreme Court decision on the P200-BILLION PCGG forfeiture case against the Marcos heirs: 
“As earlier adverted to, the best evidence rule has been recognized as an evidentiary standard since the 18th century. For three centuries, it has been practiced as one of the most basic rules in law. It is difficult to conceive that one could have finished law school and passed the bar examinations without knowing such elementary rule. Thus, it is deeply disturbing that the PCGG and the Office of the Solicitor General (OSG) the very agencies sworn to protect the interest of the state and its people could conduct their prosecution in the manner that they did. To emphasize, the PCGG is a highly specialized office focused on the recovery of ill-gotten wealth, while the OSG is the principal legal defender of the government. The lawyers of these government agencies are expected to be the best in the legal profession.
“However, despite having the expansive resources of government, the members of the prosecution did not even bother to provide any reason whatsoever for their failure to present the original documents or the witnesses to support the governments claims. Even worse was presenting in evidence a photocopy of the TSN of the PCGG proceedings instead of the original, or a certified true copy of the original, which the prosecutors themselves should have had in their custody. Such manner of legal practice deserves the reproof of this Court. We are constrained to call attention to this apparently serious failure to follow a most basic rule in law, given the special circumstances surrounding this case.” (Republic of the Philippines vs. Ma. Imelda Imee R. Marcos-Manotoc, Ferdinand Bongbong Marcos, Jr., et al, G.R. No. 171701, February 8, 2012.) 
The Supreme Court decision which rebuked PCGG and OSG lawyers was promulgated on February 8, 2012. In the same year, or on September 2, 2012, I issued my first email to PCGG on the probable expeditious means of recovering the ill-gotten wealth—the Al Capone or tax evasion method. As shown on ANNEX A, I followed it up on November 13, 2012 but I got no reply. One of my subsequent repeated follow ups was even published in the Letter-to-the-Editor section of the Philippine Daily Inquirer on July 27, 2015, but neither PCGG nor the “Daang Matuwid” Aquino administration bothered to respond let alone act on my suggestion.     
On Failure to Think Outside the Box
EO No. 1 and its implementing rules provided for recovery of martial law ill-gotten wealth through PCGG sequestration then forfeiture through the court or Sandiganbayan. This scheme is anchored on the ground that the wealth is ill-gotten or illegally acquired. Consequently, all of PCGG’s recovery efforts were devoted to the difficult and tedious process of proving that the sequestered assets were unlawfully acquired—the very reason why to this day some 200 forfeiture cases are still unsuccessful and struggling with  Sandiganbayan.
In effect, PCGG has unwisely imposed upon itself the difficult role of proving that the wealth  is illegally acquired, which needs airtight evidences that are difficult to muster. It has wittingly or unwittingly failed to pursue the approach where the difficult burden of proof is easily shifted to defendants—filing of tax evasion criminal and civil cases, the method which nailed down Al Capone in the US in the 1930s, not prosecution on his alleged racketeering activities.
Instead of focusing alone on the recovery of martial law loot as ill-gotten wealth as provided in EO No. 1 and its implementing rules, PCGG should have noted and followed the subtle import of other provisions of the Executive Order.  As stated in its reply to me, PCGG’s excuse in not pursuing the Al Capone method in attaining its objective—that its mission is recovery of ill-gotten wealth and that the filing of tax evasion cases toward collection of unpaid taxes is the job of the Bureau of Internal Revenue (BIR)—is untenable.
EO No. 1 provides that PCGG shall assist the President in the recovery of martial law ill-gotten wealth. It can also seek and secure the assistance of any office, agency, or instrumentality of the government. This means that, as part of assistance to the President in the recovery of ill-gotten wealth, PCGG has the obligation to inform the President of all feasible means of recovery. If the more expeditious and feasible method—filing of tax evasion cases—falls under the primary responsibility of the BIR than of PCGG, as part of PCGG’s primary duty to recover the ill-gotten wealth, it should either request the President to instruct BIR to file the needed tax evasion cases, or, as stated in EO No. 1, PCGG can go directly to the BIR for assistance and have it file the necessary tax evasion cases.        
Sample Result of PCGG’s Failure
To Do What it Really Takes to Recover
Martial Law Ill-Gotten Wealth
“The government has lost its decades-old bid to recover from the two brothers of former First Lady Imelda Romualdez-Marcos more than 60 assets that were allegedly acquired illegally during the term of former President Ferdinand Marcos. The Sandiganbayan dismissed the P11-billion civil forfeiture case against Alfredo T. Rolmualdez, Armando T. Romualdez and his wife Vilma, after state lawyers failed to prove that the properties had been acquired unlawfully.” (DJ Yap, “Gov’t loses forfeiture case vs Imelda kin,” Philippine Daily Inquirer, August 25, 2016, page A4)   
Has the Filing of Tax Evasion Cases
Prescribed Due to the Failure of PCGG
to Pursue it on a Timely Basis?
Legal experts in PCGG and in the Duterte administration should explore the feasibliity of pursuing at present the Al Capone or tax evasion method in the recovery of discovered and identified martial law ill-gotten wealth, but the illegal acquisition of which is difficult to prove before Sandiganbayan. There may be no forum shopping on still existing forfeiture cases or double jeopardy on already decided and lost cases. Reason:  the tax evasion cases will not be running after the ill-gotten wealth per se but on the evaded and still unpaid taxes on it—and tax evasion is a continuing crime for as long as the delinquent taxes, interest charges, and penalties are not yet paid, therefore filing of cases may still be explored.
Forfeiture of the ill-gotten wealth is only incidental and will only follow as and when the BIR wins in the tax evasion cases. It will be resorted to only if the losing defendants will not voluntarily comply to the order of the court to pay the income and estate taxes due. If the defendants will not voluntarily pay, that will be the only time that the court sheriff have to run after the ill-gotten wealth to enforce the decision of the court.      
In Brief, Why is Ill-Gotten Wealth Recovery
Through Tax Evasion Charges Under the Tax Code
More Feasible and Less Cumbersome than Forfeiture
as Ill-Gotten Wealth Under Executive Order No. 1
Under EO No. 1, forfeiture of the PCGG-sequestered wealth would have been easy if the defendants would not claim ownership of the wealth as lawfully acquired because by doing so, they would be at risk of criminal prosecution as tax evaders under the Tax Code. However, this did not happen as the defendants came forward and claimed lawful ownership of the wealth. As a result, the difficult burden of proving that the wealth is illegally acquired has rested on PCGG, something which it has failed to successfully do over the years.
Under the legal remedies in the Tax Code, especially the filing of tax evasion charges, PCGG and the BIR do not need battalion of witnesses and truckloads of documentary evidences to successfully prosecute the tax evasion cases. As was done in the successful prosecution for tax evasion of Al Capone in the US in the 1930s (ANNEX B), they have to simply follow two expeditious steps in prosecution:
  1. Proving that there is wealth owned by the defendants, and the best evidence is the claim of ownership promptly presented by defendants when PCGG sequestered the assets and have it forfeited in favor of the government through Sandiganbayan.  In the US, proving that Al Capone had untaxed income was the hard part because there was no similar ownership claim for supposedly legally acquired wealth in a forfeiture court case.
  2.  Have the BIR testify that that there are no income tax returns (and later estate tax returns as well) filed by the defendants. If the wealth is ill-gotten, it would be kept secret and obviously no income tax returns would be filed on it.
As illustrated in ANNEX C, the government’s total claim for unpaid income tax, interest charges, and penalties in the tax evasion cases will be much bigger than the amount of the untaxed wealth itself—because of the much higher income tax rates applicable to the wealth during its unlawful acquisition in the martial law years.   
* * *
For the information and appropriate action of all concerned.
A Concerned Citizen
July 29, 2017
San Miguel, Bulacan
C/o San Juan and Associates
27S Midland Manor 2
Ortigas Avenue
Greenhills, San Juan City 1500
----- Forwarded Message -----
From: Marcelo Tecson <>
To: PCGGChair Andres Bautista <
DBMSec Butch Abad<>; etc...
Sent: Tuesday, November 13, 2012 6:33 AM
Subject: 1st Follow Up: Fw: WHY DIDN'T PCGG RUN ALL-OUT AFTER
Pursuant to Section 5 (a) of RA No. 6713, this is to respectfully follow up PCGG's reply to the question raised in the herein forwarded email (dated September 2, 2012).  
Thank you.
A Concerned Citizen
San Miguel, Bulacan
November 13, 2012
By Douglas O. Linder (2011)
Al Capone, head of the most profitable crime syndicate of the Prohibition Era and mastermind of the notorious 1929 "Valentine's Day Massacre," seemed above the law.  In the end, however, Capone would be brought to justice not for murder, extortion, or bootlegging, but for failing to pay his income tax. 
Capone in 1929 might have been worth about $30 million, but no income tax return had ever been filed in his name…. While successful in tracking down evidence of expenses, investigators encountered considerable difficulty in finding direct evidence of income….  

The Trial of Alphonse Capone opened on the morning of October 5, 1931 at the federal courthouse in downtown Chicago …. After…Assistant U. S. Attorney Dwight Green outlined the 23 charges of tax evasion against Capone in the government's opening statement, (US Attorney) George Johnson called his first witness. Charles W. Arndt, a tax collector for the United States , told jurors that Al Capone failed to file any tax return at all for the years 1924 through 1929….
The prosecution presented evidence that Capone owned gambling halls and derived substantial profits from those businesses…. Leslie Shumway, the cashier at the Hawthorne Smoke Shop, presented the most damning evidence of the day.  Shumway described the accounting procedures used at the gambling hall and estimated that the profits for the two years he worked there were over $550,000…. 
A series of prosecution witnesses presented evidence of Capone's lavish lifestyle….  
Prosecutor Jacob Grossman noted in his summation that Capone… lived "like a bejeweled prince" and "spent thousands of dollars without thinking twice." (Prosecutor) Samuel Clawson… added that "even a child" could deduce from Capone's lavish lifestyle that he had a huge income. 

(In the end), Judge (James) Wilkerson imposed a prison sentence of eleven years, the longest term ever handed down for tax evasion….  
Owing to much higher income tax rates during martial law years when the ill-gotten wealth was acquired out of hidden taxable income, the total  TAX ASSESSMENT—had tax evasion cases been pursued by the government—would have been much bigger than the entire amount of the ill-gotten wealth itself.     
The Marcos’ and cronies’ untaxed wealth is subject to income tax rates during martial law years, or the time the wealth was “earned” through legal or illegal means. During martial law, our income tax rates were very high. As of 1976, the top personal income tax rate for top personal income bracket of more than P500,000 was a whopping 70%, reduced to 60% by 1985, then adjusted further to 32% shortly after EDSA I.   
Following are calculations of total TAX ASSESSMENT for deficiency income tax and penalties based on applicable income tax and penalty rates during martial law period, when the hidden taxable income was “earned” and now exposed as untaxed ill-gotten wealth:
(1) In percent or relative terms:
Top personal income tax rate on income over P500,000 .............   70%
Add:  Penalties:
    Surcharge for willful neglect to file income tax returns 
        or for filing false and fraudulent returns, 
        50% x 70% income tax .......................................................  35%
     Interests at 14% per annum but not to exceed 3 years,
        or total of 42% x 70% income tax  ......................................  29%
     Total Percent of Deficiency Income Tax & Penalties,
       to be Claimed by PCGG against the Ill-Gotten Wealth  ....... 134%  
(Note: If the top income tax rate used is 60%, the total unpaid tax and penalties will be 115%, still more than enough for PCGG to claim the whole amount of ill-gotten wealth as assessed deficiency income tax, surcharge, and interests.)    
As can be seen, if the Tax Code is strictly followed, the government's total TAX ASSESSMENT would have been much bigger than the amount of ill-gotten wealth itself.  
(2) In absolute amount or absolute terms:
To illustrate, using hypothetical amount of $10 billion as ill-gotten wealth and applying the foregoing actual income tax and penalty rates during martial law, the TAX ASSESSMENT would be calculated as follows: 
If the ill-gotten wealth in excess of P500,000 is say 
$10 billion, then the income tax is:
70% X $10 billion……………………………..……. =   $7.0 billion
Add:  Surcharge for willful neglect to file
          income tax returns:   50% X $7 billion  ......  =     3.5 billion
         Interest charge at 14% per annum for
         maximum of 3 years (for conservatism
         in this example, interest calculation is
         based just on basic tax, exclusive of
         surcharge):  42% X $7 billion  ………...........  =     2.9 billion
 Total Deficiency Income Tax & Penalties (134%)... =  $13.4 billion         
Thus, the total TAX ASSESSMENT of $13.4 billion is much bigger than the UNTAXED WEALTH of $10 billion.