Schweigegeld oder Schmiergeld?

“Silence money or shmear money”; blackmail or bribery?

How do you show that a quiet illicit payment was corruption and not extortion?

The Bavarian Landesbank BayernLB came into some unexpected Formula One stock (through a series of events after a Deutsche Bank manager said things in a television interview that led to the end of Leo Kirch’s ability to get more loans and the subsequent implosion of the Kirch media empire). One of BayernLB’s managers started asking questions, in Germany and England, to learn about how Formula One was run in order to learn how much his bank’s new stock was worth. He found the racing empire curiously opaque. He found Bernie Ecclestone had a strange veto right, and filed lawsuits to counter it. Then, say prosecutors, Bernie Ecclestone decided to “turn” the diligent bank manager. A 44-million-euro payment was made (disguised as consulting fees and transferred in several installments to accounts in Austria).

The bank manager testified it was a bribe was to obtain BayernLB’s support for the sale of Mr. Kirch’s Formula One shares to a buyer Bernie Ecclestone preferred.

At his trial in Munich, Bernie Ecclestone’s lawyers are saying it was a blackmail payment to buy the bank manager’s silence after he made threats.

(SHVY gah geld   ode ah   SHMEAR geld.)

Der sogenannte Chatham-House-Rule

The so-called Chatham House Rule is, apparently, that after meetings at Chatham House attendees may say things that were said but not who said them or who attended the meeting.

(Dare   zoh gah n’awned ah   CHOTTUM   haus   rool.)

NSA-Untersuchungsausschuss

N.S.A. investigative committee of the Bundestag, which began meeting on 03 Apr 2014.

The committee’s chair is Clemens Binninger (C.D.U.), a former policeman.

It is tasking itself with investigating the involvement of German police and intelligence agencies—domestic, foreign and military—in the massive spying on people and companies that is now known to have been done by the U.S. and U.K. governments and their contractors.

Also it will now be investigating Germany’s culpability in the U.S.’s drone wars. Since the Süddeutsche Zeitung, Norddeutscher Rundfunk (NDR) and Westdeutscher Rundfunk (WDR) reported that the U.S. is using its Ramstein airbase inside Germany to support drone attacks in Somalia, Yemen and Pakistan, violating international law while killing hundreds of civilians, Germany’s government (C.D.U./C.S.U. + S.P.D.) can no longer pretend they don’t know this is happening.

The committee repeated that they would like Edward Snowden and other informed whistleblowers to give statements and answer questions for these Bundestag inquiries. Journalists repeated that the whole world will be watching this inquiry to see what the committee discovers and which stones they leave unturned.

Update on 09 Apr 2014: Clemens Binninger stepped down as chair of the N.S.A. investigative committee after only six days. He said he was resigning from the position because he felt people from the opposition parties were too interested in hearing from N.S.A. whistleblower Edward Snowden.

Update on 10 Jul 2014: A Spiegel article about Germans’ angry responses to spying by the U.S. mentioned that Clemens Binninger is chairing the Parlamentarisches Kontrollgremium, the secret Bundestag committee supposed to monitor Germany’s intelligence agencies.

(Enn ess ah   oon tah ZOO chh oongs OW! ss shoes.)

Wasser|Wasser-Wärmepumpe

Water/water heat pump, which can be used e.g. for heating a residential home via groundwater according to one German manufacturer.

The U.K. government announced that to reduce its dependence on natural gas it will incentivize development of carbon-neutral water-based networks that bring heat to multiple buildings. From any body of water, such as rivers or lakes, that is exposed to sunshine the networks will take water, filter it twice, remove the extra heat via heat exchangers, concentrate that heat to 45°C via “reverse refrigeration” and pipe it to nearby buildings.

If the water is taken from a river, the current can be used to generate the electricity running the system.

England’s first such network will serve ~150 homes and a hotel|conference center in South London, said Energy Secretary Ed Davey (LibDem). He has asked the U.K.’s Department of Energy and Climate Change to draw up a map of England showing where such water-energy networks can be built.

(VOSS ah   VOSS ah   VAIR ma POOMP ah.)

44%

The amount of incoming solar radiation that might currently be convertable into electricity, in laboratory experiments.

Solar panels on the nonmilitary market produce electricity with ~14% to ~19% efficiency, said Spiegel.de. Conventional silicium solar panels can’t convert more than 34% of incoming sunlight into electricity. In 2012, Cambridge University researchers said they’d developed a new approach that could improve that by making electricity out of nonvisible light, such as heat. Their two-part system’s components each converted a different section of the spectrum of solar radiation. At least one of the two components is in the form of nanoparticles. The idea of “printing” solar panels that consist of a mix of small particles each specializing in conversion of different light wavelengths is a thrilling one.

(Fee ah oont fee ah tsig   prote CENT.)

Vorteil nehmen von rechtsstaatlicher Abwesenheit daheim und rechtsstaatlicher Anwesenheit in London

Benefitting from the absence of rule-of-law in Russia and from the presence of rule-of-law in London.

An argument that Russia’s economic elites’ use of the relative safety of western countries’ financial and legal systems should depend on whether in Russia those people have participated in what would be considered lawbreaking in the western systems.

An interesting pundit said on Australian radio, for example, that money from selling exported Russian oil and gas is often moved through western financial leveraging instruments before being imported into Russia, to make it harder for that cash to be arbitrarily seized there. Even well-connected Russians are just as hostage to Vladimir Putin as the Crimean Tatars.

He said a counterargument holds that oligarchs will learn from living and working in rule-of-law countries and import some of that back to their homeland. Yet with the west’s inadequate oversight members of these groups might likewise grow corruption in their partner countries and firms. It does look as if German power utility companies who worked with post-Soviet Russian partners who demanded bribes in Russia might have started using extralegal shortcuts to achieve their goals at home; at the very least, their German competitor utilities would have had to compete with them while they were using such methods. Corruption really does seem to breed more corruption: apparently after the multinational Siemens developed streamlined procedures for paying bribes in corrupt countries it began offering them in relatively clean countries.

In a worst-case outcome, it would be interesting to see how western jurists would determine culpability in a country without an independent judiciary.

(FORE tile   nay men   fun   rect SHTOTT lichh ah   OB vaze en height   da HIME   oont   rect SHTOTT lichh ah   ON vaze en height   inn   LAWN dawn.)

Bildungsbroker-Blödsinn

Education broker balderdash.

A British charity called the Universities and Colleges Admissions Service (Ucas.com) which “controls admissions to U.K. universities,” charging fees of ~£23 per student to help >700,000 students sign up for university courses in the U.K. each year, has been selling marketers the data of those students and the data of ~15,000 of their parents and the data of younger children aged 13 to 16 who sign up for courses via another program they offer.

The charity has a “commercial arm” that apparently made £12 million in 2013 from selling the students’ information, to customers such as mobile phone companies, a large software company and a beverages company. The charity’s spokesperson told reporters they are “strictly legal,” selling children’s data within the requirements of British law.

The level of civilization this implies is lower than expected.

Achtung: an analyst said the sort of “carefully selected third parties” checkbox Ucas used “is usually preceded by a triple negative question so you don’t know if ticking the box gets you more mail or less.” In the case of Ucas, students didn’t dare opt out of sharing their contact data for fear of not receiving college offers.

(BILL doongz broke ah   BLID zinn.)

ISDAfix-Referenzwert

ISDAfix benchmark reference.

The International Swaps and Derivatives Association, Inc., website at ISDA.org said the ISDAfix is “the leading benchmark for annual swap rates for swap transactions worldwide.” Bloomberg* BusinessWeek.com’s April 2013 article called ISDAfix “a benchmark in the $379 trillion market for interest rate swaps, which corporations and governments use to fine-tune their borrowing costs.” Süddeutsche Zeitung’s August 2013 estimate was that a $450 trillion market was affected by this benchmark. A Reuters.com* Jan. 2014 market estimate was even higher: “The organization’s ISDAfix benchmark is an important reference point underlying contracts in the $630 trillion derivatives market, and ICAP collects data for the U.S. dollar-denominated part of it.”

The data used to set the US$ section of the ISDAfix benchmark were provided by thirteen banks to the New Jersey office of a U.K. broker or “intermediary trader” known as ICAP. U.K. financial data company Thomson Reuters* calculated the benchmark prices from ICAP’s banks’ data for the US$ section and from data it collected directly from banks for the other currencies. ICAP published its ISDAfix benchmark prices on a Reuters page every morning at 11 a.m. and updated them throughout the day based on reported transactions. ICAP’s data entry was not automated.

The S.Z. said Germany’s BaFin finance regulator started investigating ISDAfix fixing after Bloomberg reported that the U.S.A.’s Commodity Futures Trading Commission financial regulator was investigating perhaps fifteen banks and about a dozen current and former ICAP traders for possible pricing collusion.

Background from Bloomberg BusinessWeek.com:

“In their simplest form, swaps are used by investors to exchange a fixed interest rate for a floating one, or vice versa. They also come in profoundly more complicated flavors, and altogether they constitute more than half of the $639 trillion global derivatives market. ISDAfix, used by traders to settle contracts and value positions, is commonly found in hybrid securities known as structured notes that are popular with wealthy investors. While they affect everything from pension annuities to commercial real estate investments, ISDAfix rates are esoteric even by the standards of structured finance. …

“…Banks could earn millions by persuading ICAP brokers to delay their manual entry of data. Publishing stale prices can boost profits for banks dramatically. On a $500 million swap that matures in 20 years, for example, a delay that prevents the instrument from moving one basis point (0.01 percent) equals $1 million in profit for the dealer. […Also, ICAP’s] brokers match dealers by phone, then enter transactions into the 19901 screen by hand. The firm is paid commissions based on the size of the trades it matches.”

FT.com described a 2010 FT.com article saying that “prices capable of influencing Isdafix through the rate-setting process sometimes appeared to move in ways beneficial to a handful of banks.”

The ICAP brokerage was also hired to execute many ISDAfix-related trades for reasons that could have included exerting extra influence on ICAP-mediated benchmarks, said an online article from Rupert Murdoch’s Wall Street Journal*.

A 25 Sep 2013 Bloomberg.com article seemed to indicate that brokers were particularly able to game off-market trading price benchmarks, particularly in slow economic times when those relying on brokers’ reported pricing data had fewer sales of their own to glean comparable pricing data from. “To promote market integrity, it is critical that benchmark interest rates be anchored in observable transactions,” said C.F.T.C. chair Gary Gensler in 2013.

Update on 26 Sep 2013: ICAP was fined £55 million “for control failures that allowed employees to engage in Libor rigging” said an online Financial Times article. After admitting L.I.B.O.R. control failures, which the U.K.’s Financial Conduct Authority also called a poor compliance culture, the huge brokerage firm argued against reducing its ISDAfix role, saying that would give undue influence to the banks submitting ISDAfix pricing data. ICAP, the world’s largest broker for interbank transactions, couldn’t have been gaming the ISDAfix benchmark’s timing because people would have noticed, ICAP said.

Update on 26 Jan 2014: It was announced that ICAP was to be removed from its middleman role in ISDAfix, which was to be restructured so that banks would submit US$ pricing data to Thomson Reuters directly, said Rupert Murdoch’s WSJ.com. Thomson Reuters has been collecting the non-US$ ISDAfix data directly from banks for years, said Reuters.com, but the US$ data from ICAP for >15 years: “[ICAP] had been providing ‘snapshots’ using transaction-based information from its BrokerTec platform in addition to information from recent deals, the second source said, but the process would now return purely to a poll of participating banks.” Apparently the snapshots involved removing some outliers and averaging the data. ICAP said, “We appreciate ISDA’s interest in having a consistent polling process across each of the relevant currencies and fixings.”

ISDA said moving ISDAfix pricing data for all currencies to Reuters is a first step toward their goal of defining the benchmark based on actual trades (“live prices from trading venues” said FT.com), not just data submitted by banks. The new system will also be automated: “The second stage will be the move to an automated, market-based ISDAfix rate setting process, which is expected to begin in the second quarter of 2014,” said an ISDA spokesperson. ISDA said they will create a code of conduct and oversight committee for the benchmark.

ICAP’s C.E.O. Michael Spencer helped create the ISDAfix benchmark fifteen years ago. Reporting on the ISDAfix benchmark described ISDA as the benchmark’s “overseer” and as a lobbying group.

Update on 09 Mar 2014: Thomson Reuters has been granted U.K. regulatory approval to create a benchmark services subsidiary to handle the ~160 benchmarks the company helps calculate, including L.I.B.O.R. International benchmark regulations are about to be tightened this summer, according to a letter sent last summer by the International Organization of Securities Commissions (“a global body of central banks. They include oversight of third parties and policies for managing conflicts of interest” –FT.com) warning companies they had one year before new stricter rules. “Administrators of financial market benchmarks have to prove by the July deadline that they have improved systems for monitoring submitted figures,” said FT.com.

* The U.K.’s Reuters press agency was reporting on financial news related to the ISDAfix and it belongs to Thomson Reuters (since the Canadian Thomson Corp. bought Reuters in 2008). The parent company of Bloomberg News “competes with ICAP in some businesses, including foreign-exchange and swaps trading, and with Thomson Reuters in providing financial news and data” according to their disclaimer in an ISDAfix article. Rupert Murdoch’s News Corp. owns the Wall Street Journal and owned Dow Jones from 2007 to 2010, when it sold it to the C.M.E., Chicago Mercantile Exchange/Chicago Board of Trade group.

(EESS dah feex   ref ah R-R-RENTS veaht.)

Cuando bandoleaba

“When I was a bandit,” according to Eric Hobsbawm*. These “violent popular heroes” in “individual or minority rebellion within peasant societies” may have been aspirational to crooked central bankers.

Bankers at England’s central bank may have been among those manipulating currency exchange rates to line their own pockets, said Süddeutsche.de. Several members of the “Chief Dealers Subgroup” of the Bank of England’s “London Foreign Exchange Joint Standing Committee” were among >20 currency dealers recently suspended from large banks around the world. The dealers have been accused of using chatrooms and nicknames such as “The Cartell” or “The Bandits Club” to discuss prices for currency markets.

Süddeutsche Zeitung said there’s gossip that UBS, which also suspended a currency dealer who was a member of the subgroup, might again seek immunity in return for testimony in a potential trial, as it did in the L.I.B.O.R. scandal.

“What’s hanging in the air is whether this central bank knew about the manipulation for years and whether its employees were involved in the affair,” wrote Süddeutsche.de, saying [corruption] at a central bank would add “a new dimension” to recent banking scandals. The Bank of England published minutes of the subgroup’s meetings from 2005 to 2013 this week that are said to be of interest in possible shenanigans. The subgroup last met in February 2013.

In the U.K., the Bank of England acts as a regulator to help ensure financial stability, Süddeutsche.de said. The government body investigating possible currency market manipulation is Britain’s Financial Conduct Authority.

“Currency markets,” said a Süddeutsche.de op-ed, “are the world’s biggest financial market, with a daily turnover of US$5.3 trillion. …London is the center, [where] about half the world’s currency business is transacted. That’s also where the London Fixing is calculated. It is a fixed exchange rate between currencies, the most important one is published every day at 4 p.m. The business is controlled by a few major banks.” Investigations of about 15 banks for currency manipulation began in fall 2013, but the Bank of England was supposedly warned about a potential problem in 2006.

* Eric Hobsbawm’s book Bandits describes three subtypes: noble robbers like Robin Hood, avengers like the Brazilian cangaçeiro Lampiao and haiduks or “primitive resistance fighters.”

Patienteninformation & Patienteneinwilligung

“Patient information form and patient consent form,” often translated into English as “informed consent” which sounds like a single document rather than the German pair of patient information materials + patient’s consent statement [Einwilligungserklärung].

Medical ethics require patients agreeing to participate in pharmaceutical testing to be adequately informed about the drug or device trial and associated risks and benefits, and then to give their written consent to participate in the trial so described. Translators of these forms must take extra pains to render them in clear language because the people reading them might not be in the best of health.

As recovering law student and standup comedian Susan Calman said, “there’s no consent without informed consent!”

General practitioners in the U.K. are concerned, she said, that people there have not been sufficiently informed about the National Health Service’s plans to put physicians’ records and hospitals’ records on a “superserver,” central database, to which more than just health professionals will have access. The patient data will be at least partially anonymized, proponents said. It’s unclear what the rules will be for selling or sharing patients’ data with third parties.

People not worried about data privacy might nevertheless be concerned about any unclarity in David Cameron’s government’s communications about how it will share or not share the U.K.’s digitized medical records because his coalition’s recent privatization projects have been accused of selling at too-low prices. Protection adequacy is also in question now since the Snowden revelations.

Update on 24 Feb 2014: Despite reassurances from the British agency currently in charge of patient medical records in the U.K., the Health and Social Care Information Centre, that “data held in the new giant database would never be used for insurance purposes, stating that any such actions would represent a criminal offence,” the Telegraph.co.uk has discovered that David Cameron’s government already sold the N.H.S. medical records, to an actuarial firm that advises “insurers and actuaries on how to ‘refine’ critical illness cover,” in 2012, for two thousand pounds.

The contract to extract and anonymize patient data from individual physicians’ office records for the new central database has been awarded to a company called Atos. Atos has asked for early release from its previous government contract because of death threats to its employees.

Update on 03 Mar 2014, from the Guardian:

“A prominent Tory MP on the powerful health select committee has questioned how the entire NHS hospital patient database for England was handed over to management consultants who uploaded it to Google servers based outside the UK.”

This database contained H.E.S., hospital episode statistics, and these management consultants called themselves PA Consulting. In addition to Google, anyone tapping communications lines leading to Google, actuaries and consultants, N.H.S. patient records might have already been obtained by or available to “pharmaceutical firms, government departments [including police] and private health providers.”

(Pot YENT en in foh mah tsee own   oont   pot YENT en eye n vill ee goong.)

Neue E.U.-Grenzen für Spekulation mit Nahrungsmitteln

New E.U. limits on food speculation.

As part of the reforms to the E.U.’s Markets in Financial Instruments Directive [much more comprehensible in German: financial markets guideline, Finanzmarktrichtlinie], negotiators from the E.U. Commission, Member States and Parliament agreed to create new upper limits capping possible food speculation, in an attempt to calm the markets and prevent investment-driven hunger around the world. Now that this agreement has been reached, it will take about 2.5 years for the Member States to implement the new caps in their national laws.

The British government under Prime Minister David Cameron (Tory party) held out for a long time against putting limits on commodities markets, even for foodstuffs. Proponents for the limits included some banks that voluntarily announced they would stop trading in food commodities. ARD tagesschau.de reported 100,000 people also signed a petition to the E.U. last year asking for this reform.

(NOY ah   eh OO grents en   fooeah   shpeck oo lah tsee OWN   mitt   GNAW roongz mitt elln.)

College Bescherming Persoonsgegevens

Dutch for “Data Protection Authority,” a government office in Holland.

Google has been invited to testify at a data protection hearing in Holland. Süddeutsche.de ‘s 29 Nov 2013 article said the head of Holland’s data protection office said, “Google is spinning an invisible network out of our personal data without our permission, and there’s laws against that.”

Update on 15 Dec 2013: Google said U.K. privacy complaint plaintiffs should sue the company in California courts. The U.K. plaintiffs wanted to sue the company for secretly tracking their internet browsing “by circumventing privacy settings” in Apple’s Safari web browser on different devices. The Guardian.co.uk said the company’s lawyers were expected to argue in court on Monday, 16 Dec 2013, that a similar privacy complaint had recently been dismissed from a U.S. court “and that no European regulators are currently investigating this issue.”

Spiegel.de said Google has already had to pay two fines for this privacy practice in the U.S.: $22.5 million to the F.T.C. in August 2012 for tricking Safari into accepting cookies on various devices even when the consumer had set tracking to “off” and again $17 million in a Nov 2013 settlement to the attorneys general of ~37 U.S. states for the same issue.

Update on 08 Jan 2014: France’s data protection authority fined Google 150,000 euros, the largest fine C.N.I.L. ever issued, for violating France’s data protection laws. Since 2012, Süddeutsche.de explained, Google has been able to create search-based profiles for users of its search engine, YouTube, Gmail, Google+ and other enterprises and that enable sending targeted ads to consumers. France told Google to inform French users about how the company was handling their data and to obtain their consent before putting cookies on their computers that would track their online behavior. Google did not comply.

Update on 14 Dec 2013: Canada’s antitrust Competition Bureau is investigating Google’s business practices, to see “whether Google is abusing its dominance of the Internet search market to stifle competition and drive up digital advertising prices.”

Apparently authorities in Spain, Italy and France were also examining Google’s business practices, according to the Süddeutsche.de article.

Bankenberatung bemängeln

German consumer protection groups “criticized the deficiencies in investment advice banks give to consumers,” saying the old issue persists that bank advisors’ recommendations depend more on the commission the advisor will earn from the investment than the return the customer will reap, the risk they will be exposed to, whether they can afford the product, and/or possibly also the harm propagated by the company invested in.

ZDF heute journal’s financial correspondent Valerie Haller said consumer protection groups such as the Verbraucherzentrale Baden-Württemberg warned that better and qualified bank advising would only happen if investment advisory services and investment sales were separated within the banks. Bank investment advisors ought to have specialist qualification (usually this means courses and a test) and the quality of their advice ought to be monitored by government with sanctions applicable after violations. These systemic changes need to be made via new legislation from the Bundestag, a consumer protection rep said.

Ms. Haller added that the banks countered by claiming ~90% of their customers said they were satisfied with the investments they’d been advised to make, to which the consumer protection groups responded that they had evidence many customers didn’t understand what they’d bought.

Apparently bank advisor’s commissions have been banned by law in the U.K., though either this was done recently or it was incomplete because a new fine was just imposed on Lloyds Banking Group for two billion pounds’ worth of bonus-fueled overselling from 2010 to 2012. The listed “products” oversold to the possibly up to 700,000 customers do not include stocks and bonds, and the Guardian quoted the U.K.’s Financial Conduct Authority’s director of enforcement and financial crime as saying customers will not be “‘put first'” while companies still “‘incentivise their staff to do the opposite.'” The Guardian said she mentioned that “the fine had been increased by 10% because Lloyds failed to heed repeated warnings about sales practices and because it had been fined 10 years ago for poor sales incentives.”

The Baden-Württemberg consumer protection group’s webpage reminds readers that Germany’s statute of limitations period for suing banks after incorrect investment advice was recently lengthened from three to ten years. Also that bank investment advisors have been required by law since 2010 to keep a record describing what was said in their meetings with clients and potential clients when discussing potential purchases of stocks or bonds [Wertpapiere]; this does not apply for consultations about other products, such as the ones Lloyds was just fined for overselling. After a consultation, German bank advisors must sign a copy of the protocol and give it to the consultee, who does not have to sign it even though some banks have claimed the opposite. The German law mostly lets the banks decide how the protocol will look but does define the following general requirements:

1. Reason for the consultation

2. Length of consultation

3. Advice-relevant information about the customer’s personal situation

4. Data about the financial instruments and investment services discussed

5. The customer’s wishes and investment goals, and their relevant weightings

6. Advisor’s product recommendations and reasons why

(BONK en bear AH toong   bem ENG elln.)

Ingenieurentruppe privatisieren

“Privatizing a troop of engineers,” the ~2800 elite engineers in Britain’s Defence Support Group which is responsible for maintaining and purchasing high-tech weapons systems such as fighter jets, tanks and troop transporters, said Spiegel.de.

Spiegel said London is ignoring the U.S.A.’s request not to sell off the unit. The U.K. military fears the sale would result in loss of institutional knowledge, loss of control over military secrets, exposure to boycott risk and other problems. Spiegel said the Observer said the official call for bids to buy D.S.G. will go out in a few days despite lots of domestic opposition to the plan, which didn’t stop Mr. Cameron’s government from e.g. privatizing the Royal Mail.

The Spiegel.de article said the U.S.A.’s notoriously tight control over military technology it shares with allies was circumvented by Tony Blair in 2007 when he worked out a simplified sharing agreement in the throes of the wars. George W. Bush agreed to share important anti-terrorism military technology using streamlined processes and without requiring export licenses.

(Inn jen YOO er en troop ah   pree vot eez EAR en.)

“Daß die Pressefreiheit in Großbritannien nirgendwo rechtlich verbrieft ist, rächt sich jetzt.”

“The fact that freedom of the press is not guaranteed by law anywhere in Great Britain is now taking its revenge,” was a German reporter’s comment on a hearing held to determine whether the Guardian’s reporting on Snowden trove documents had put Britons in danger.

ARD tagesschau.de correspondent Annette Dittert went on to say, “In no other democratic country would such a campaign against a well-respected newspaper even be conceivable, and especially not a campaign ordered by that country’s government.” She said at the hearing Mr. Rusbridger “broke a lance” for freedom of the press, using good arguments and pretending to be unaffected by the enormous political pressure. Süddeutsche.de called him a stiller Stern, a quiet star.

(Doss   dee   PRESS ah fry height   inn   gross brit ON ee enn   near gen dvoh   wrecked lichh   fair BRIEFED   issed,   r-r-r-echh t   zichh   yetsst.)

L.I.B.O.R.-Klagen

L.I.B.O.R. lawsuits.

The U.S. company Fannie Mae has filed complaints seeking about half a billion euros in damages from multiple banks around the world for L.I.B.O.R. benchmark interest rate manipulation. Deutsche Bank is one of the defendants.

Update on 01 Nov 2013: ZDF heute journal financial correspondent Frank Bethmann said the many banks found to have participated in L.I.B.O.R. manipulation have been fined about 2.7 billion euros total by the world’s bank oversight authorities alone so far. Now more and more company lawsuits keep “fluttering in,” making them possibly the costlier threat. He said Deutsche Bank had now set aside 4.1 billion euros for legal fees. “But that shirt could prove too short as well, particularly in the U.S.A.”

Update on 06 Nov 2013: FAZ.net reported that insiders told Reuters news agency that before 2014 the E.U. competition commissioner wants to fine six banks a total of 1.5 billion euros for L.I.B.O.R. benchmark manipulation, including Barclays, Royal Bank of Scotland (R.B.S.), the Dutch Rabobank (“genossenschaftlich” bank meaning it started life as a mutual?), and the “broker” I.C.A.P. The Swiss bank U.B.S. will be excused from this fine—said to be the largest bank fine in E.U. history—because they were the first to testify. These six banks admitted this particular wrongdoing and as a result the E.U. said it will reduce those fines by 10%.

This set of fines is for the yen L.I.B.O.R. manipulation subscandal of the L.I.B.O.R. manipulation scandal. Deutsche Bank may be facing additional U.K. and U.S. fines for U.S. dollar L.I.B.O.R. manipulation.

Financial regulators around the world are also investigating more than a dozen banks for Eur.I.B.O.R. benchmark manipulation. On 06 Nov 2013 FAZ.net reported that insiders said the E.U. Commission was negotiating fines to half a dozen banks for that as well, including Deutsche Bank and possibly Royal Bank of Scotland and Société Générale. FAZ.net reported the U.K.’s Financial Times reported each of these six will have to pay up to 800 million euros for that set of fines. And that Bloomberg.com reported the British bank H.B.S.C. had withdrawn from those fine negotiations, giving up the proffered 10% fine rebate for admitting wrongdoing.

German Wikipedia said the Eur.I.B.O.R. is set on the basis of data submitted by 32 European “credit institutions,” minus the top 15% and bottom 15% outliers, to the “information agency” Thomson Reuters. The Eur.I.B.O.R. is then published by Reuters.

English Wikipedia said the Eur.I.B.O.R. was created by combining “domestic” benchmark rates, such as from Paris, Frankfurt and Helsinki, in 1999. It said there is still a separate Euro L.I.B.O.R. set in London, based on data from 16 banks.

(LEE boar CLOG en.)

Bankendaten-Transfer ausgesetzt

Stopped the transfer of banking data.

On 23 Oct 2013 members of the European Parliament parties the Social Democrats, Greens, Leftists and (libertarianesque) Liberals voted 280 to 254 to stop providing bank transfer data to the U.S. under the S.W.I.F.T. agreement until more is done to fix the U.S.’s disrespect for data protection worldwide. Bank transfers have replaced checking in Europe, and the E.U. had originally, reluctantly, agreed to let the U.S. access bank transfer data in order to help fight terrorism.

Only four E.U. countries, including Five Eyes member Britain, and the German C.D.U./C.S.U. M.E.P.’s remained in favor of the status quo (this was before revelations that the U.S. had bugged the cell phone of Chancellor Merkel (C.D.U.)!). France was leading the protest, especially after articles in Le Monde that week about the vast extent of N.S.A. spying in France, slurfing tens of millions of French phone calls in just one 30-day period. The angry M.E.P.’s wanted the U.S. to, among other things, be honest and precise about what its organizations have been doing. An anonymous committee member was quoted in Spiegel.de as saying they know now that the U.S. does not change anything until after you stand up and say no to them.

The European Parliament decision to stop providing S.W.I.F.T. transfers data still must be approved by 2/3 of the 28 member states. The coalition of proponents doesn’t quite have those numbers yet, but lately U.S. intelligence agencies tend to help their opponents by delivering new outrages rather than, say, providing honest and precise information about what they, the myriad private contractor intelligence companies the U.S. hires, and their public and private partners around the world, have been doing.

Some goals, from the press release for the nonbinding solution:

“Parliament stresses that any data-sharing agreement with the US must be based on a consistent legal data protection framework, offering legally-binding standards on purpose limitation, data minimisation, information, access, correction, erasure and redress.”

Update on 27 Nov 2013: E.U. interior commissioner Cecilia Malmström (Swedish Liberal People’s Party, conservative-liberal, liberal with the non-U.S.A meaning of libertarianesque) announced that the commission was negating the E.U. parliament’s decisions to stop sharing E.U. air passenger data and S.W.I.F.T. bank transfer data with the U.S.A. “to fight terrorism” because, she said they said, there was no evidence the U.S. had violated the agreements. And, the E.U. Commission was also not going to change the toothless self-policing “Safe Harbor” data protection agreement: justice commissioner Viviane Reding has given the U.S. a 13-point data protection homework assignment to implement by summer 2014, after which the E.U. will re-examine torpedoing “Safe Harbor.”

(BONK en dot en   TRONZ fair   OW! z’gez ets t.)

“Das Geld dafür geben die Anderen”

“Other people are paying for it,” how financial reporter Frank Bethmann commented the U.S. company Verizon’s “schwindelerregend” offer of $130 billion to buy out British partner Vodafone’s stake in their U.S. joint venture Verizon Wireless. In the 02 Sep 2013 announcement of the sale, Verizon said as part of it they intended to borrow $25 billion one week later at the currently very low interest rates; that would have been the largest amount ever borrowed by a company in the history of the world apparently.

Update on 12 Sep 2013: Verizon’s $49 billion Unternehmensanleihe [“company loan” i.e. corporate bond] “emission in eight tranches at varying interest rates and terms to investors around the globe” was the biggest ever, according to manager-magazin.de, adding that the takeover itself was also the third-biggest ever.

This is not the only vertiginous telecom merger in the works. There’s two in the German market as well.

On 23 Jul 2013, Spanish Telefónica’s German subsidiary O2 announced that it wanted to buy the Dutch KPN’s German subsidiary E-Plus, though “only” for five billion euros. The resulting company would become the German market’s largest mobile phone provider (43 million customers), followed by Deutsche Telekom subsidiary T-mobile (37 million customers) and then the British Vodafone (32 million c.). The merger required approval from German and E.U. competition authorities.

Update on 12 May 2014: The German Monopoly Commission [Monopolkommission] told the Frankfurter Allgemeine Zeitung they expect the E.U. to set serious competition-saving conditions for approving Telefónica’s acquisition of E-plus, including that there will still be four mobile telephony providers in the German market after the merger. “Abstract concessions and offers won’t do it.” Three mobile phone providers competing in the German market would not suffice because E-plus was the one that stirred up the market the most and it would be the one disappearing.

Update on 13 Sep 2013: Now British Vodafone is purchasing the Munich-based Kabel Deutschland, “Germany’s biggest cable network operator,” at ~8.5 million television households,” for ~11 billion euros (~7.7 billion for ≥75% of Kabel Deutschland’s stock and the rest to cover Kabel’s debts; stock cost to be announced Monday 16 Sep 2013), according to Spiegel.de and manager-magazin.de. This will increase Vodafone’s competitiveness with Deutsche Telekom in the German market selling wireless and landline telephonery, television cable and internet access. European competition authorities approved the deal on 20 Sep 2013.

Huge telecom mergers & acquisitions could be motivated by more than just the roseate future of voice and internet communications plus current rock-bottom interest rates. If telecom industry people believe governments will stop defending net neutrality and consumer privacy, they will fear they must join a large existing telecom and fight to expand it, or die. They will not think risky entrepreneurship or small-to-medium-sized companies are an option. If a telecom gets big enough in a deregulated market that includes suspicionless surveillance, the money will sort itself out somehow. In regulatory situations where governments have to grant unusual concessions to big telecoms, governments will grant unusual concessions to big telecoms.

(Doss   GELD   dah foor   gay ben   dee   ON dare en.)

Fluorwasserstoff, Ammoniumhydrogendifluorid, Natriumfluorid

Hydrogen fluoride, ammonium hydrogen difluoride, sodium fluoride.

What did your country’s companies export to the Assads’ Syria that could have been used to hurt civilians?

These are three of the chemicals German companies exported tons of to Syria between 2002 and 2006 that could have been used to make chemical weapons, at a time when the Assad regime was known to have a chemical weapons program.

The German government’s Ministry for the Economy [Bundeswirtschaftsministerium] drew up and published a list of such chemicals, including quantities, dates and prices, that could have been used to manufacture chemical weapons and for which the government issued export permits, in response to a question submitted by the Leftists party (Die Linken) and by Bundestag member and former U.N. weapons inspector Jan van Aken (Leftists) in particular. The government supplied this information one week before a national election.

Update on 30 Sep 2013: After the national election the government supplied more information. German companies were issued export permits for “dual-use” chemicals even until 2011, after the Assads were killing peaceful Syrian protestors. From 1998 to 2011, ~300 tons of such chemicals, which could be used for civilian or military purposes, were delivered from Germany to Syria. Klaus Barthel (S.P.D.) criticized the Bundeswirtschaftsministerium for, among other things, phased provision of the truth. The Bundeswirtschaftsministerium said they reviewed the investigation and remain convinced of the plausibility of the civilian uses cited, but the C.D.U. said plausibility is not enough when dealing with regimes like the Assads’. Reporter Arnd Henze said Germany has to be especially careful in these matters because the world knows that chemical weapons were produced in Libya and Iraq “with German support.”

On 01 Sep 2013 it was announced that Britain had issued licenses to export sarin gas precursors potassium fluoride and sodium fluoride to Syria in January 2012, ten months into the uprising against the Assad family. The export licenses were revoked in July 2012 after the European Union agreed to sanctions against the Assad regime. Prime Minister David Cameron (Tory)’s office initially responded by saying the U.K. has the the most rigorous export control regime, with a computer system called C.H.I.E.F., which is how they know that though the export permits were issued at that unfortunate time no chemicals were exported under the permits. Later it was indicated this was not so. Following up, Business Secretary Vince Cable (LibDem) subsequently reported that other licenses to export sarin precursor chemicals to Syria were issued by previous U.K. governments between 2004 and 2010 (the year Mr. Cameron’s Conservative-LibDem government came to power).

Update on 09 Jul 2014: U.K. foreign minister William Hague sent a written statement to the British parliament announcing that British companies had probably exported hundreds of tons of chemicals to Syria in the 1980’s that could have been used to make chemical weapons such as sarin and VX.

(FLEW or voss ah SHTOFF,   a MOAN ee oom hee dro GAIN dee FLEW oar EAT,   NOT ree oom FLEW oar EAT.)

Unabhängiger Revisor für die Terrorismusgesetzgebung

The U.K.’s “independent reviewer of terrorism legislation,” who is looking into the police’s invocation of Britain’s “antiterror” laws when they interrogated David Miranda for nine hours without a lawyer after he tried to change planes at Heathrow—a difficult connection airport even when you’re not terrorized by authorities. They confiscated Mr. Miranda’s computer, phone and all other electronic gear.

David Anderson, Q.C., has also been called “U.K. Terror Law Watchdog” in English-language headlines.

(OON ob HENG iggah   reVISor   foor   dee   tare or IZ moose geh ZETZ gay boong.)

Rüstungsfirmen wegen mutmasslichen Schmiergelder untersucht

“Razzias Searched Weapons Manufacturers for Evidence in Bribe Accusations.” Bremen prosecutors confirmed police had searched the offices of two German arms manufacturers on 23 Aug 2013 for evidence in corruption charges brought against the firms. Rheinmetall Defence Electronics and Atlas Elektronik are being investigated for paying bribes to Greek politicians and bureaucrats and for not paying taxes in sales of German submarine equipment to Greece.

Süddeutsche.de said it’s thought each firm paid Greek officials about 9 million euros in bribes or “Schmiergeld,” shmear money, lubrication funding.  The bribery charges go back a long way in time, in Atlas Elektronik’s case to before the current owners’ purchase of the firm. Payments were made to a British “letterbox” company that belonged to a Greek company.

Despite the British background in this investigation, there’s a long history of corruption in German submarine sales to Greece according to Süddeutsche.de. Munich prosecutors have been investigating it for years because an Essen company Ferrostaal caught paying bribes to Athens used to be owned by MAN SE, a transport vehicles manufacturing company based in Munich. Most of the extra Ferrostaal submarines sold to Greece via the shmear were built at ThyssenKrupp shipyards, and Bremen prosecutors say Ferrostaal involvement hasn’t been ruled out yet in the current investigation of Rheinmetall and Atlas.

Prosecutors of multiple German districts have known about these problems for years but reportedly only found enough evidence to take action in 2012. For example, the Süddeutsche wrote that EADS (now Airbus) and ThyssenKrupp are joint owners of naval electronics specialist Atlas Elektronik. After buying the company in 2006 from the British firm BAE, they stopped payment of the bribes in 2007, bribes that had apparently started with a consultant contract in 2002. Atlas informed prosecutors about it in 2010 but nothing happened until further info was received from a 2012 tax audit at Rheinmetall Defence Electronics, they said. Rheinmetall denies all bribery charges.

(RISS toongs firm men   vay gen   moot MOSS lichh en   SHMEAR geld ah   oont ah ZOOCHHT.)

Autonome Tötungsroboter

Autonomous killer robots.

A Süddeutsche.de article said for years now billions have invested annually in research and development of these types of weapons by the U.S.A., United Kingdom, Israel and soon China as well. The U.S. Navy for example is working on unmanned killer submarines. The U.S. Air Force notoriously has its drones. Companies like iRobot Corp. have been delivering land-based battle robots for years, on wheels, caterpillar treads, four legs and they’re working on bipedal. Post-mounted or mobile Samsung sentries (“SGR-1”) have been erected along the North Korean border that can now be set to automatically shoot anything detectable by motion, heat or, presumably, video-analyzing software.

Opponents of the technology say it’s only a question of time until remotely operated killing machines become autonomous decision-makers. The time for people to decide on an international framework for these types of weapons is now, said a United Nations expert on extralegal killing.

Sweden, wrote Süddeutsche.de, has called for an international test ban [Testverbot] on L.A.R.’s, lethal autonomous robots, asking each country’s government to announce a national moratorium on them and to unilaterally decline to manufacture and test autonomous killer robots.

(Ow! toe NOME ah   TƏ TOONGS roe BOT ah.)

Totalüberwachung: Londoner Verhältnisse

“Total surveillance: London conditions.” The U.K. situation.

What the Bavarian state data protection officer mentioned as undesirable in a newspaper interview earlier this month. Even the act of putting cameras in public places, which England has notoriously taken to new levels, creates a social selection process, he said. He did not want a society that produces only conformists.

(Tote OLL über VOCHH oong:   Lun done ah fur HAIL t niss eh.)

Das SIGAD-Sharing

Signals intelligence activity designator sharing, i.e. data-collection-site data sharing between intelligence agencies from different countries.

Germany: Spiegel and Süddeutsche Zeitung reported that the German foreign intelligence agency, the Bundesnachrichtendienst or B.N.D., has been sharing on a massive scale communications data collected at e.g. its Bavarian Bad Aibling S.I.G.A.D. site with the U.S.A.’s National Security Agency. The data include mobile phone numbers that the B.N.D. admitted they’ve been passing on to the N.S.A. for years now supposedly under the strict condition that said phone numbers must not be used to kill people (e.g. via phone towers triangulation + drone strike); the B.N.D. also denied that it’s technologically possible to use for location purposes the G.S.M. mobile phone numbers they’ve been passing on (“G.S.M.-Mobilfunknummern sind für eine zielgenaue Lokalisierung nicht geeignet”). The German foreign intelligence agency furthermore is said to have given software it developed to the N.S.A. And the N.S.A. gave the B.N.D. its X-Keyscore software and X-Keyscore software training, including in “behavior detection.”

In an interesting parallel, the Washington Post report on 15 Aug 2013 about an audit of just a few N.S.A. branch offices which found thousands of violations of U.S. privacy rules each year also included a similarly scarcely credible excuse saying phone technology limitations were keeping the N.S.A. from snooping more: “One major problem is largely unpreventable, the audit says, because current operations rely on technology that cannot quickly determine whether a foreign mobile phone has entered the United States.”

England: The N.S.A. has apparently been paying money, such as 100 million pounds, to Britain’s G.C.H.Q., a disproportionately über-representational intelligence-gathering partner for a country of that size. The N.S.A. receives so much communications data from the U.K. that reporters said “it’s almost the same thing” whether G.C.H.Q. or the N.S.A. initially collects it.

(Doss   ZIG odd   CHER ingk.)

Kaskade von Haftung

“Cascade of responsibility.” New package of banking rules agreed by the European finance ministers on 27 Jun 2013 defining an order of responsibility for saving failed banks: first the banks’ shareholders will pay/lose money. Next, people who loaned the banks money to make loans will pay. Then, owners of large accounts >100,000 euros will pay. Last, the taxpayers will pay. Savings accounts <100,000 euros at failed banks are guaranteed to be refunded, if need be by taxpayers.

CNN.com reported that a hierarchy was also defined among large depositors, with big businesses being asked to pay before small and medium-sized businesses.

Details the day after the announcement: Under the new rules, being called a “bail-in regime,” when a bank is unable to meet its financial obligations, 8% of its debt will be paid by the bank’s shareholders, creditors/bondholders and large depositors. The next 5% will be paid by country bank funds (that will have to be set up). If that’s still not enough, the country will have to decide what to do.

The Guardian.co.uk reported that the second layer, country bank funds, responsible for rescuing 5% of failed banks must “come from a resolution fund which has to be built up over 10 years and cover 0.8% of the insured deposits in any given country.” The UK got excused from having to create or at least fund that fund because they said they wanted to collect a “bank levy” instead, for what sounds like an FDIC-type scheme in which banks (help) pay for failed banks. CNN.com reported that the resolution funds would also contain mandatory bank contributions, however.

(Coss CAW deh   fon   HAWF toong.)

Auge in Auge in Auge in Auge in Auge

“Eye to eye to eye to eye to eye,” the Five Eyes alliance of data-sharing intelligence agencies from the countries of UK, USA, Canada, Australia and New Zealand.

(OW! geh   in   OW! geh   in   OW! geh   in   OW! geh   in   OW! geh)

Steuersparmodelle für Grossunternehmen angehen

“Having a go at tax savings models for large companies,” what the EU is doing now that US firms have started testifying before Congress about still-legal systems of international tax loopholes partially revealed by the “Offshore Leaks” data trove.

From the Süddeutsche Zeitung’s description of some results from the 22 May 2013 EU summit in Brussels:

“At their meeting Wednesday the 27 leaders also talked for the first time about actions to be taken against tax savings models for large companies. With an eye on corporations like Apple, Amazon or Google, which avoid taxes on a large scale, British leader David Cameron said it is time to close the loopholes. He said one has to be sure that companies are really paying taxes. France’s president François Hollande demanded action against the ‘corporations’ tax tricks.’ Irish premier Enda Kenny was put under pressure because for years Apple has been using Irish subsidiaries to save billions of euros. Kenny said there aren’t any exception rules for international corporations. Ireland’s rules for taxing companies are ‘transparent and clear.’ The EU commission now plans to submit proposals for closing corporate tax loopholes by the end of 2013.”

(SHTOY ah SHPAH mode elle ah   foor   GROSS oont ah NAME en   ON gay hen.)

Gießkannenprinzip

“Watering can principle,” in which subventions are distributed evenly throughout a group without regard to individual needs or priorities, a principle some European arms exporters say they won’t follow if allowed to resume exporting weapons to Syrian rebels. They say they will only give guns to good guys. The UK and France don’t want to renew the EU’s embargo on Syrian arms shipments, which is about to expire.

Update on 27 May 2013: Because the member states could not reach a unanimous decision, the EU embargo on sending more weapons to Syrian rebels will expire. The UK indicated they were only proposing voting against renewal of the embargo because they want to increase pressure on the Assad family (which is currently fighting to the death, of all its members, unless they agree to a better solution at the upcoming peace talks in Switzerland). We shall see whether France and the UK now indeed export more weapons to that corner of the world.

(GEESE Cannes en prints EEP.)

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