Are Income Trusts Money Laundering

In an interesting article on Terrorism and money laundering, the old Hot Money contradiction of capitalism is exposed by Prem Sikka in the Guardian. Before the world worried about Bin-Laden Inc., the various American franchise states that got monies from the IMF and from drug running, and being clients of the CIA would ship their funds offshore, to banks in the Caribbean and Switzerland. Canadian banks have a reputation for having been early money laundering operations in the Caribbean. Today billions in hot money transeverses the globe and guess who profits?

What is interesting is that in all the debate in Canada about Income Trusts their role in money laundering was never brought up. Nor has the hot money/money laundering connection been made between mutual funds, international loans, or the infamous mutual fund IOS scandal that has become the modern model of both these.

The corporate scams that aid terrorist money launderers

With the advance of electronic money transfers, easy formation of companies and deregulation, money laundering has escalated to an estimated $2,500bn each year. The laissez-faire US washes about half of this laundry and Britain probably accounts for over $300bn. Secrecy is the key ingredient for this trade.

Banks have technologies to trace suspicious transactions, but profits always come first. Following a US Senate inquiry, it was alleged that General Augusto Pinochet, the former Chilean dictator, used British banks to launder money. There is silence from the British authorities. Of the billions stolen by General Sani Abacha, the former Nigerian dictator, at least $1.3bn turned up in 42 accounts at 23 UK banks. The British government has refused to name these banks and warn the public about their standards. Unlike Switzerland, it has failed to return any of the loot to Nigeria.

Almost every money-laundering scam reveals the use of shell companies: firms that have virtually no assets, employees, physical presence or trade, though large sums of money pass through their bank accounts. These can be formed for a few pounds and are fronted by banks, accountants and lawyers to disguise true ownership. As with other corporate vehicles, they can be owned by foreign and domestic trusts with post-office-box addresses. A recent US treasury report noted that trusts are key vehicles for disguising illicit funds. Yet there is no regulation, registration or public accountability of trusts in the UK and it is impossible to know their beneficiaries.

Also see:
Income Trusts
Corporate Welfare Bums
Criminal Capitalism
Crime



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PAKISTAN

The blind pursuit of growth

Nasir Jamal 

Published September 11, 2023 

The caretaker setup led by Prime Minister Anwarul Haq Kakar has clearly hinted at changing the course and speed of the economy.


Speaking to the media persons on Friday after six hours of deliberations on numerous issues facing the country’s moribund economy at the first session of a two-day meeting of the army-backed Special Investment Facilitation Council (SIFC), the key caretaker ministers minced few words to send across the message that the interim administration is preparing to gun for faster growth by ’revitalising an economy that has seen months of decline due to strict import regulations“.

That appears totally in line with the views of army chief Gen Asim Munir, who was quoted by Karachi-based builder and stock broker A.K. Dhedhi to have told the businesspeople that the country must now move towards growth. Mr Dhedhi had also implied that the army chief is looking beyond the current International Monetary Fund programme as he expects large official capital inflows of $75 billion from the oil-rich Gulf states in the shape of investments, with an additional $10bn as deposits from Saudi Arabia to immediately shore up the country’s foreign exchange reserves.

The ministers said the government had decided to open imports across the board to facilitate exports, job creation and economic activities affected by months of import restrictions to curb the outflow of dollars amid depleting foreign exchange reserves.

The promised investments add up to an improbable 30pc of our GDP but even if they materialise, the economy is in no shape to manage such large inflows

Caretaker finance minister Dr Shamshad Akhtar argued that Pakistan direly needed to revive the economy, for which it was necessary to remove import restrictions across the board since Pakistan was an import-intensive country.

Asked if she agreed with the timing of opening up imports given a tight foreign exchange situation, Dr Akhtar said that managing foreign exchange reserves was a “very high priority for us, and we are closely monitoring the situation”.

In response to yet another question about the strength of the economy to withstand foreign exchange requirements of a possible import splurge, she contended that fresh inflows from multilateral institutions were expected to be around $6bn during the year on the basis of ongoing discussions with agencies like the World Bank, Asian Development Bank and the IMF. Besides, she also anticipated the rollover of the deposits kept by friendly countries with the State Bank of Pakistan. “The situation is reasonably okay for now,” she assured.

Trade Minister Gohar Ejaz, always a proponent of rapid economic growth, low-interest rates and low energy prices, argued that inflation could only be effectively managed by augmenting exports, suggesting that the high dollar price of Rs300 could potentially decrease to Rs250, simultaneously mitigating inflation, by raising exports.

While we will hopefully get more clarity over the caretaker government’s economic strategy under the SIFC framework for the interim period to the next elections in the coming few days, many remain sceptical of an early turnaround of the economy or the Gulf nations’ promises to invest large amounts.

“The amount of investments the government claims the Gulf states have committed is enormous, almost 30 per cent of our GDP. I don’t think they will be ready to pour this kind of money into Pakistan’s economy even if they have promised it. Nor do I think that our economy is in a shape to handle and absorb such large inflows,” a financial analyst based in Karachi says on the condition of anonymity.

As a small economy, even tiny inflows of $5-7bn can rev it up but that is not a sustainable or long-term solution to our structural problems

Some businessmen who participated in recent meetings with the army chief in Lahore and Karachi have quoted him saying that both Saudi Arabia and the UAE have committed $25bn each. Others claim that Qatar will also invest a similar amount. On top of that, Riyadh is said to have promised to provide a $10bn deposit to shore up Pakistan’s foreign exchange reserves in the near term. Most expect the money to start pouring into the country over the next six months.

“The markets and investors also remain sceptical of these claims. Otherwise, there wouldn’t be a need for the stick to control the rupee’s free fall in recent weeks. That said, even if we accept the claim for a moment, these investments will be staggered over a long period. For perspective, we should remember that China has invested $25bn in the last eight years under the China-Pakistan Economic Corridor initiative (CPEC),” the analyst said.

“No amount of investment and dollar inflows can fix our economic problems on a sustainable basis unless we implement fiscal and governance reforms and boost our industrial and agricultural productivity. The CPEC investments haven’t solved our structural issues either. Rather, these have multiplied our debt problem.”

Fahad Rauf, the head of research at Ismail Iqbal Securities, agrees. “I think that the focus of the interim setup should be on the issues that the political governments are always afraid of dealing with.”

He says the focus of the caretakers should be on stopping smuggling for good, privatising state-owned enterprises, fixing the energy sector and handling other structural issues facing the economy to increase productivity.

“Pakistan is a small economy. Even tiny inflows of $5-7bn can rev up it. But that is not a sustainable or long-term solution to our structural problems. Personally, I doubt the kind of Gulf investments we are talking about will come due to the global economic conditions,” he says.

He is of the view that political and economic uncertainty in the country means foreign investors would not come to Pakistan. “We have seen that no commercial loans are rolled over, and foreign direct investment is decreasing in spite of the IMF’s $3bn programme.

“Not even hot money is flowing in, although our interest rates have gone up 22pc and increasing. Back in the day, we were successful in attracting hot money at 13pc interest rates. It is because the investors do not have confidence in Pakistan’s economy at present. Local companies will not invest at the present borrowing costs.”

Mr Rauf warns against the blind pursuit of growth without restructuring the economy, as it always results in long periods of economic depression after a brief growth boom.

“A company suffering losses first focuses on eliminating those losses before moving on to making profits. So, we should first fix our issues. Once we fix the issues impeding economic growth, we will start attracting private foreign investment, which is more sustainable rather than always looking for a few billion in deposits.”

Published in Dawn, The Business and Finance Weekly, September 11th, 2023Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

LA REVUE GAUCHE - Left Comment: Search results for HOT MONEY 

'DEBT HAPPENS': Goldman Sachs just ran its first-ever ads trying to sell you something

Consumer debt in Canada is, frankly, a problem.

According to a recent report from credit monitoring agency TransUnion, the typical Canadian now owes $21,686 excluding their mortgage — a number that has not stopped increasing for over a decade now. To give you a sense of the severity of our consumer debt situation, for every $1 of disposable income, the average Canadian owes $1.65. In fact, Canada’s household debt — the amount of money that all adults in a household owe financial institutions—is the highest among its Group of Seven peers, even exceeding the size of our own economy!

SEE 5000 YEARS OF DEBT DAVID GRAEBER

Let us remember that the current Financial capitalist system is the result of the evolution of Capitalism post Bolshevik revolution when for a period of time post WWI the Austrian School of Anti Marx Anti Socialism pseudo market economics, as Karl Polanyi says they crashed the Austrian Kroener causing a depression but hey it proved their theory right.

As Hilferding correctly analysed Capitalism has moved from productive capital, industrialization, to Fiance Capital, banking Monopolies cartels, stock exchanges dominating the market, it was the post war expansion of Capital as Capital for the first time in the past three hundred years,

It lead to Depression globally, despite the magical thinking of Von Mises and Freddy Hayek, and in fact it was Keynes who saved Capitalism , first by clawing back financial speculation which is all the Austrian school is about, Keynes observing the workers revolution in Russia provided capitalism with a future free of revolution, by ending finance dominance and returning to production, in other words State Capitalism, which was historically hegemonic pre and post WWII. See Tony Negri Marx Beyond Marx

Finance capitalism did not return until Nixon ended the use of the gold standard and made the American dollar the basis of the world economy. American Imperialism then spent the seventies crashing economies in Latin America through Hot Money see Robert Naylor Dictatorships and brutal market capitalism ensued With a further financialization of the market Reaganism created the conditions for the financial tech bubble of the nineties.

For the 2000's we spent 16 years evolving into a told financial capitalist economy, where our debt was the 99% is what is fueling capitalist growth, our mortgages, our cars, appliances, our lives are a slavery to debt and capitalism can no longer produce with out our debt. Even if you pay off your debt next week you will quickly once again get into debt, because the system requires it.

The capitalist economists, and the executive of the state and the banks, tell us debt is bad, terrible, and then they offer us unlimited debt through credit cards, car financing a creation of the nineties, mortgages that last thirty and forty years, this is the real capital in circulation.

The 99% are capitalism, the 1% are parasites, coupon cutters, a rentier class, they are not capitalism, we are, only when the proletariat understands this can we say we are seeing a rise in class consciousness.

We have always created capital that is the secret Marx revealed, under advanced capitalism, it reaches a period of decadence where its expansion becomes a contradiction a negation of the negation. Here we see it in the ironic nature of post modern capitalism , it requires us to be in debt to grow, it requires our money, that it pays us to come back to it, to circulate as money M-C-M the earlier productive period of industrialization until the 20th Century was C-M-C which is why the politicians and pundits as well as journalists,today tell you on the one hand you should not be in debt and get out of it as quickly as possible bemoaning our debt load, while the Bloomberg, WSJ, etc. tell us we need to spend more to go into debt in order to keep the market going, its called SPENDING capitalism now requires capital not as production or property but as money, money is making money off money.

During Occupy Wall Street the Tobin Tax was renamed the Robin Hood Tax and was promoted as a way of reducing debt, since trillions of dollars trade in the FOREX minute by minute. Today those minutes and nanoseconds of computer time, which was created for the international monetary exchange markets, a late twentieth century development,

But let’s broaden the scope. The LinkNYC stations are maintained by CityBridge, a consortium of telecom, hardware, and media companies (notably, the Alphabet subsidiary Sidewalk Labs) under contract with the city government. It’s the kind of public-private infrastructure that excites the urban planners and technologists who imagine New York as a data-driven utopia, a so-called “smart city.”

Today you have M-B-M money bit money; Bitcoin and Fintech, which still maintain the language of capitalism in its industrial stage. It is even applied to this cloud based virtual business interface. You data mine for Bitcoins. Virtual currencies are bits of information, their value is zero yet they increase in value through exchange. The reality is that of course they do we live in an capitalist exchange value system which will twist all to its end of M-C-M.

However bits are just information, calculations, no more real now than when the Tulip Crash happened in the very first bourse. With the advent of fintech capital becomes redundant since all that is transferred now is information, bits and bits of information, and used cybernetically could act as a transformative element for the evolution of autonomous self managed socialism.

           Pricewatch: You'll never guess how much the average Irish family spends

A family of four in Ireland spends about €50,000 a year on basic outgoing the average Irish homeowner were to add up all their spending over the course of a year, the chances are they would be pretty shocked by the total.

When all bills including food, mortgage payments, utilities, insurance and motoring costs, phones, entertainment, education and childcare are totted up, the cost of living for a family who bought even a modest home during the boom years could easily top €50,000.

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The Plutocrats are Overplaying Their Hand: How About Doing Something About It?

The growing power of the small group of far-right-American oligarchs is slowly grinding our democratic institutions into dust.

By Steven Day

July 28, 2024

Source: Common Dreams


When will big money’s corruption of democracy become so obnoxious people will find it intolerable?

Perhaps a couple of troubling “hypothetical” examples will do the trick. Let’s pretend, as absurd as it sounds, that an American citizen, the wealthiest person in the world, happens to also be a rabid conspiracy theorist and, frankly, a bit of a political nutcase. And let’s further hypothetically pretend this person decides that by throwing enough of his money around he, together with other far-right billionaires, can effectively turn America into a plutocrat’s Shangri-La.

Unfortunately, this Shangri-La will be run by an authoritarian leader who throws his political opponents into jail, reverses environmental regulations while all but embracing climate change, subverts the Constitution, makes the ridiculously wealthy even more ridiculously wealthy, finishes the job of stuffing the federal courts with ultra-right political hacks, and so much more. To accomplish this, he will join with other ultra-right billionaires in opening his checkbook to help propel former U.S. President Donald Trump back into the White House. He is doing this by way of his own pro-Trump PAC. (He now denies making a $45-million-a-month commitment).

The combination of power and money easily grows into greater power and greater money, and both can continue to grow until they become unbreakable.

Or how about when another group of wealthy individuals—admittedly less rich, less nutty, and less evil in a Lex Luthor sense—decide to publicly join together to put pressure on the incumbent Democratic president to get out of the race by withholding campaign contributions? Now, to be hypothetically fair to this hypothetical group, unlike the Lex Luthor wannabe, most of these folks’ hearts are largely in the right place. But, leaving aside whether asking President Joe Biden to withdraw was politically wise, does it bother anyone that they felt so free to try to dictate to the broader electorate who should run for president? Is that a privilege we really want to cede to the wealthy?

But if we don’t want either of these things, where’s the public outrage?

Do we as a nation really believe the fact someone inherits a fortune, or makes a fortune through stock manipulation, creates a hot new internet startup, makes popular movies, or even builds a fortune through wise business practices means that person is wiser and more knowledgeable than everyone else about… well, everything?

Think how much more power Elon Musk (the unnamed billionaire/Lex Luthor imitator mentioned above, of course) has to impact government policy on issues such as climate change, education policy, and economic policy and taxation than the most talented experts in these fields?

It is tempting to think Elon Musk’s motive in at least claiming to intend to invest substantial funds in politics is purely for the fun of making a splash. What’s a few hundred million dollars to a guy worth around $200 billion? His actual political spending probably works out to a lower percentage of his annual income than many people spend on golf or bowling. This sort of pure joy in projection of power could also explain why he overpaid $40 billion dollars for Twitter only to then destroy much of its value by turning it into a swamp increasingly filled with far-right lunatics. He gets to play the King of Twitter (yeah, I know, X), or if you prefer, mayor of Crazyville, leaving him free, whenever he pleases, to share his political nonsense with millions of readers. But, of course, there is almost certainly more at play in his political investments than fun and games. Follow the money, as they say. Donald Trump’s election would save Elon Musk billions of dollars through tax and regulation changes. It must also never be forgotten that much of Musk’s profits come from the federal government. What’s a few dollars in contributions compared to all that?

If we truly want to preserve democracy for the long-term this has to change. True, the immediate threat is Donald Trump, but even if he loses, American democracy is far from safe. The growing power of the small group of far-right-American oligarchs is slowly grinding our democratic institutions into dust. Money from these economic grandees, and their predecessors going back decades, has financed right-wing organizations, advocacy groups, political campaigns, media sources, think tanks, and more.

Their money built the Federalist Society, and with the help of Republican presidents and senators has also created the right-wing Supreme Court majority. This in turn led to the court’s constitutional sanctification of money in politics with Citizens United. Thanks to these wealthy conservatives’ money, and the court that money helped to buy, it is now constitutionally established that money in politics is speech, subject to protection under the First Amendment. Personal liberties of actual human beings haven’t always done that well before the court, but the power of money, in all its glory, always wins. To the court’s majority nothing smells as sweet as the stench of money in politics.

With only the fewest of exceptions, election to political office requires this money—and in increasingly large piles. And with economic inequality growing like pancreatic cancer, big money is increasingly concentrated in relatively few hands. Ambitious politicians know better than to get on the wrong side of this group of wealthy donors. Small donors are important, but support from those with substantial assets remains critical to most candidates for major office and increasingly for minor offices as well.

This is true for the left as well as the right. It’s hard not to think this has something to do with the fact liberalism in recent decades has been so closely associated with social, rather than economic, issues—abortion rights are very important and a major focus as opposed to union rights, also very important, but less of a focus. Democrats are, of course, much better than Republicans on union rights, and got even better under Biden, but economic inequality has continued to grow during Democratic as well as Republican administrations. And as this inequality grows stronger, democracy grows weaker. The combination of power and money easily grows into greater power and greater money, and both can continue to grow until they become unbreakable.

I wrote a novel a few years ago titled, The Patriot’s Grill. It was anything but a best seller, but its topic, a recounting of a future post-democratic America, is relevant here. One sentence in particular: “The truth is no one took freedom from us. In the end, we just gave it away.”

I guess that is the ultimate question. Are we prepared to work to save our democracy, first, by defeating Donald Trump, then, second, by struggling to build a fairer and with it more democratic nation, or in the end, will we end up just giving it away?

Steven Day practices law in Wichita, Kansas and is the author of The Patriot's Grill, a novel about a future America in which democracy no longer exists, but might still return.

DEMILITARIZE, DISARM, DEFUND
Dark Money Is Paying for the Police’s High-Tech Weapons

Corporate donors are funneling hundreds of millions of dollars into police foundations without public oversight, allowing for the police to buy specialized surveillance technology and high-tech weapons that they might otherwise struggle to justify.

By Katya Schwenk

March 30, 2024

Source: Jacobin



Private donors including big-box stores, fossil fuel companies, and tech giants are secretly giving hundreds of millions of dollars annually to law enforcement agencies and related foundations, allowing police to buy specialized weapons and technology with little public oversight.

Experts say this huge deluge of police “dark money” funding, detailed in a new University of Chicago working paper and in an additional analysis shared exclusively with the Lever, leaves law enforcement beholden to the companies and powerful donors bankrolling them, rather than the communities that officers are sworn to serve.

“The big-picture finding is that the world of private donations to police is a lot bigger and more complex than previously estimated,” said Robert Vargas, a professor of sociology at the University of Chicago and a coauthor of the study.

The study, which analyzed a database of nonprofit tax returns, found that from 2014 to 2019, more than six hundred private donors and organizations collectively funneled $461 million to police and to other nonprofits supporting police — a figure that, Vargas said, was “without a doubt an undercount,” as it was based on organizations’ own disclosures about their giving.

The private money comes in part from big retailers like Target and Walmart; oil companies like Chevron and Shell; and Microsoft and other Big Tech players — companies that have touted their support of law enforcement for years.

The new research exposes how easily private donors can secretly funnel money to police. Anonymous donors use asset managers like Fidelity Investments to fund the litany of police foundations and other opaque nonprofit organizations that support police work, the researchers found. The clandestine funds have made Fidelity’s charitable arm one of the largest private donors to police in the country.

In many jurisdictions, private funding for police comes with virtually no oversight and can be used to buy surveillance technology, high-tech weapons, and other items that agencies might otherwise struggle to justify.

For instance, the Baltimore Police Department for years used private money to fund a secret aerial surveillance program that could track the locations of people throughout the city in real time. Billionaire philanthropists in Texas provided money for the program, but routed the funds through a nonprofit in Baltimore, which allowed the program to stay, for a time, out of the public eye. When news of the program became public, it caused an outcry, and was eventually ruled unconstitutional in court.

In Los Angeles, the city’s police department used money from Target — also routed through a local police foundation — to purchase software from Palantir, venture capitalist Peter Thiel’s data analytics company, that provides police massive amounts of sensitive data and purports to identify crime “hot spots.”

In Philadelphia, privately funded police nonprofits have purchased ballistic helmets, drones, motorcycles, and even horses for the city’s police department.

Such surveillance technology and military gear is deployed disproportionately in black communities and low-income neighborhoods. The heightened surveillance intensifies local policing, which research has shown can harm community health and well-being.

Private funding represents a tiny fraction of the money that states and cities spend on police, which by some estimates amounts to more than $100 billion annually.

“In comparison to their municipal budgets, it seems like a drop in the bucket,” said Gin Armstrong, the executive director of LittleSis, a group that researches corporate power and influence.

But the money has an outsized impact, Armstrong argued.

“It’s really important to look at how this [private] money is being spent,” she said. “Most of the money in municipal budgets is going to salaries and benefits. This is going to equipment and experimental technology, and it’s all outside of public discussion, and often even outside of public reporting.” It was, Armstrong continued, a “huge slush fund that is completely unaccountable.”

“Now we have a sense of just how big that slush fund is,” she said.

“A Kind of Shell Corporation”

One of the most common ways that private donations, whether from oil companies, billionaires, or big-box retailers, make their way to law enforcement is through police foundations, nonprofits established to support law enforcement in a particular city, such as the New York City Police Foundation and the Los Angeles Police Foundation.

According to public data from the city of New York, the New York City Police Department reported $30 million in private donations from 2019 to 2022, of which $26.8 million — nearly 90 percent — came from the New York City Police Foundation.

Police foundations position themselves as charities, soliciting donations and then providing that money to local law enforcement. Their supporters say that the work can improve officer morale and that the additional funding can supplement strained public budgets — although municipal police tend to be flush with public resources.

“I refer to [police foundations] as a kind of shell corporation,” said Kevin Walby, an associate professor of criminal justice at the University of Winnipeg who studies police foundations in the United States and Canada. “They can move money around in ways that public bodies can’t. They don’t really have robust reporting or disclosure mechanisms.” The term “dark money,” he said, was an appropriate way to describe their support.

Police foundations, like most charities, do not have to publicly report their donors. Until an exposé from the Intercept, for instance, the New York City Police Foundation did not disclose that it received a $1 million donation from the United Arab Emirates in 2012, even when that money was passed directly along to the police to support “criminal investigations” in the city.

There are some two hundred fifty police foundations in the United States, of which nearly 80 percent say that they fund technology and equipment for police, as well as programming for officers and public relations campaigns. While such organizations have been around for decades, Walby said they have grown steadily since the 1990s, particularly in response to calls to limit the ever-increasing public funding for police, which has nearly tripled over the last several decades. Research has documented increasing revenues for police foundations year after year.

“A big period of growth happened after 2020,” Walby said, adding that it was in “direct response” to the protests over the murder of George Floyd in May of that year. “They were using corporate money as a kind of backstop to buttress themselves against the defund [the police] movement.”

The corporate bankrollers of police foundations often appear to get a good return on their investments. Target, for instance, has long funded surveillance and anti-crime programs in cities across the country, successfully promoting crackdowns on retail theft and petty crime in disinvested neighborhoods over other, arguably more pressing, community concerns.

In St Louis, the city’s police chief receives $100,000 a year directly from the local police foundation in addition to his salary, an arrangement that critics say has ensured that the department is beholden to local business interests.

“No Paper Trail”

Previous research has shown that police foundations receive tens of millions of dollars annually from private donors. But the new research by Vargas and his coauthors shows that such local foundations are in fact part of a far broader network of nonprofits and funds dedicated to funneling private money and in-kind gifts to police — one that involves hundreds of millions of dollars.

The new study identified hundreds of dark-money organizations that finance police departments — sometimes donating directly to law enforcement, and sometimes donating to other police nonprofits, creating a tangled web of donors and intermediaries.

Collectively, those organizations gave more than $826 million in donations over a six-year period, and reported revenues of more than $16 billion, according to additional analysis that the researchers shared with the Lever.

The organizations include associations of sheriffs and police chiefs, national nonprofits like the police charity 100 Club, and private foundations like that of wealthy police advocate Howard Buffett, the son of billionaire Warren Buffett. Furthermore, the researchers found, some police foundations — like those in New York City, St Louis, and San Diego — donated not only to the police agency in their own city, but to other law enforcement agencies around the country.

“This is an important set of findings because it reveals in real terms the amount of capital that is flowing, and it reveals the number of corporate nodes in the network,” Walby said.

Financial services companies like Fidelity Investments and Charles Schwab also appear in the data as some of the biggest donors to police dark-money groups. Both companies allow wealthy individuals to funnel money to nonprofits through “donor-advised funds,” charitable investment accounts that are an increasingly popular way to anonymize donations and get a tax break at the same time. Various police foundations have begun advertising this funding arrangement as one way to donate.

“The truth is that if somebody wanted to donate a lot of money and hide their tracks, all they would do is make a donation to a police nonprofit from a donor-advised fund, and then there’s essentially no paper trail,” Vargas said.

While critics have pushed for additional transparency and regulation around donor-advised funds, describing them as an unaccountable form of billionaire philanthropy, federal regulators have appeared hesitant to launch a major crackdown. Last November, the Internal Revenue Service proposed some modest limitations on their use to rein in spending on lobbying and other noncharitable causes — and police charities are among the entities that have opposed the new rules.

Police foundations and other private donors have also found ways to limit disclosure about the gifts they provide to police, the researchers found. When the researchers looked at Chicago as a case study, they found that 90 percent of private donations to police went unreported, revealing, they wrote, “police finance organizations’ interest in keeping their funding of police secret.”

A Push for Accountability

For the most part, the millions in dark-money funding that police agencies receive each year is perfectly legal — presenting a challenge for those who want to see greater transparency.

“There are largely no laws or policies governing foundation donations to the police,” said Evan Feeney, the deputy senior campaign director at Color of Change, an advocacy group that has opposed corporate backing of police.

The foundations have thus created a kind of loophole, one that “legally allows officers and departments to take gifts from vendors, sidestepping conflict of interest and donor disclosure rules,” Feeney said. Palantir, for instance, has donated to police foundations that subsequently funded law enforcement purchases of Palantir’s own data analytics technology.

Even in places that require official city approval of gifts from foundations, like Los Angeles, such a process has often appeared to be a formality, with gifts being rubber-stamped by local officials over the opposition of local communities and activists.

“Cities must end these untraceable donations and require that any equipment, device, technology, or software that is purchased or donated through a police foundation is subject to disclosure, oversight, and accountability laws,” Feeney said.

There has been some movement on the issue. In January, New York City enacted a law, with the grudging support of the local police, that will require the police department to provide an annual report on how it spends the millions in private donations that it receives, both from the foundation and other sources. Unlike its use of public dollars, the department has not previously been required to disclose how it uses private funding.

The law also requires the New York Police Department to provide information on its private donors. But because many of these donations are routed through the New York City Police Foundation, the donors will likely still remain anonymous.

Category ‘6’ tropical cyclone hot spots are growing

Climate change is making massive hurricanes and typhoons more likely in the western Pacific, North Atlantic and Gulf

American Geophysical Union

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NEW ORLEANS — The oceanic conditions that churn up the very strongest of hurricanes and typhoons are heating up in the North Atlantic and Western Pacific, fueled by warm water that extends well below the surface. Human-caused climate change may be responsible for up to 70% of the growth of storm-brewing hotspots there, according to new research.  

These hot spots are making it more likely that stronger Category ‘6’ tropical cyclones may hit landfall in highly populated areas.  

“The hot spot regions have expanded,” said I-I Lin, a chair professor in the Department of Atmospheric Science at the National Taiwan University. 

Lin will present the findings during an oral session on tropical cyclones at AGU’s 2025 Annual Meeting in New Orleans, Louisiana, on Wednesday, 17 December. From 15-19 December, AGU25 brings together more than 20,000 scientists to discuss the latest in Earth and space science research. 

Lin has been interested in the strongest hurricanes and typhoons for more than a decade. Typhoon Haiyan—also known as Super Typhoon Yolanda—struck the Philippines at maximum intensity in November 2013, killing thousands of people. The next year, Lin and her colleagues published a paper calling for the need for creating a new category of tropical cyclones—6—for the very strongest storms like Haiyan, in the AGU journal Geophysical Research Letters.  

Category 6 tropical cyclones would include those that exceed a wind intensity of 160 knots, Lin and her colleagues argue. Previously, any storm with winds above 137 knots were considered Category 5—most official weather agencies still recognize Category 5 tropical cyclones as the strongest. But since most other categories include a window of about 20 knots, Lin said it makes sense to create a Category 6. Category 4, for example, includes storms with wind intensity of 114-137 knots.  

Some of the best-known of these storms include Hurricane Wilma in 2005, the most intense hurricane recorded in the Atlantic basin, Typhoon Haiyan and Typhoon Hagibis, which struck Tokyo in 2019. The latter was among the costliest in terms of destruction from rain and wind, Lin said, even though it had downgraded in intensity by the time it hit the Japanese capital. Finally, Hurricane Patricia, which formed in the Pacific Ocean off the coast of Mexico, was the strongest tropical cyclone ever recorded, with wind intensity of up to 185 knots—enough to make it considered a Category 7 storm, if such a thing existed, Lin said. “Patricia was the king of the world,” she added.  

Burgeoning ocean hotspots feed big storms 

Lin and her colleagues looked back at all large storms recorded in the past four decades or so, and found that these Category ‘6’ storms are increasingly common. In three decades from 1982 to 2011, there were eight tropical cyclones that had wind intensity of more than 160 knots. In the more recent decade she examined, from 2013 to 2023, there were 10 Category 6 tropical cyclones. So, of 18 Category ‘6’ cyclones that occurred the past 40 years or so, 10 of them happened in the last decade.  

Lin’s ongoing recent work, the topic of her discussion at the upcoming session in the American Geophysical Union’s 2025 Annual Meeting, reveals that most of these Category ‘6’ tropical cyclones occur in hot spots. The largest hot spot for these massive storms is in the Western Pacific east of the Philippines and Borneo, while another hot spot lies in the North Atlantic around and to the east of Cuba, Hispaniola and Florida.  

Their work also reveals that these hot spots are growing in size—the North Atlantic hot spot has expanded eastwards past the northern coast of South America and westwards into much of the Gulf, while the Western Pacific has grown as well.  

The conditions that drive Category ‘6’ storms are driven by warmer subsurface water as well as warm surface water. In other regions, big storms often churn up the ocean. As cool water is drawn into the surface, it can cool the storm itself, reducing its intensity. But since warm water is so deep in these hot spot regions, the cyclones don’t have a chance to cool as much. Just the same, Lin cautions that not every storm that arises in these hot spots will become a Category ‘6’ tropical cyclone—the atmospheric conditions have to be right as well. “The hot spots are a necessary but not sufficient condition,” she said. 

Analysis of the factors driving this expansion of deeper warm water in these hot spots has revealed that global warming and natural variability in temperature both play a role. But overall, the team estimates that human-caused climate change is responsible for about 60-70% of the increased size in these hot spots—and consequently, of Category ‘6’ tropical cyclones.  

Lin said that recognition of Category ‘6’ tropical cyclones by weather agencies could help cities plan more appropriately for the impact of coming storms—especially in hot spot areas where they are becoming more common. “We really think there is a need just to provide the public with more important information,” Lin said.  

Contributed by Joshua Rapp Learn 

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Abstract information: 

A31A-06 Category ‘6’ Tropical Cyclone Hot Spots in the Warming Climate 
Wednesday, 17 December, 9:34 – 9:45 Central Time 
Room 278-279 (NOLA Convention Center) 

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AGU’s Annual Meeting (#AGU25) will bring more than 20,000 Earth and space scientists to the Ernest N. Morial Convention Center in New Orleans, LA from 15-19 December. Members of the press and public information officers can request complimentary press registration for the meeting now through the end of the conference. Learn more about the press AGU25 experience in our online Press Center. 

AGU (www.agu.org) is a global community supporting more than half a million professionals and advocates in Earth and space sciences. Through broad and inclusive partnerships, AGU aims to advance discovery and solution science that accelerate knowledge and create solutions that are ethical, unbiased and respectful of communities and their values. Our programs include serving as a scholarly publisher, convening virtual and in-person events and providing career support. We live our values in everything we do, such as our net zero energy renovated building in Washington, D.C. and our Ethics and Equity Center, which fosters a diverse and inclusive geoscience community to ensure responsible conduct. 

Sri Lanka plans $1.6 bn in cyclone recovery

spending in 2026

Colombo (AFP) – Sri Lanka's government announced plans on Thursday for $1.6 billion in extra spending in 2026 to fund the country's recovery from Cyclone Ditwah, which killed more than 640 people.


Issued on: 18/12/2025 - RFI

The natural disaster affected 2.3 million people, more than 10 percent of Sri Lanka's population, and floods and landslides caused by the cyclone left extensive damage throughout the country.

The government convened parliament on Thursday, interrupting a month-long recess, to discuss what President Anura Kumara Dissanayake has described as the most challenging natural disaster to hit the island.

Dissanayake presented a request for an additional 500 billion rupees ($1.66 billion) for rebuilding devastated homes, roads, bridges and railways, as well as for cash handouts to help people regain lost livelihoods.

"We need to allocate an additional 500 billion rupees for disaster relief and reconstruction over and above the money allocated for government spending in calendar 2026," Dissanayake told parliament.

The national assembly, where his party holds a more than two-thirds majority, is expected to approve the mini-budget on Friday.

However, Dissanayake said the government does not intend to raise its borrowing limit to meet the additional expenditure.

He previously said he was banking heavily on foreign grants, and the finance ministry on Wednesday announced that it would call an international donor conference early next month.

The government has already asked the International Monetary Fund (IMF) for $200 million from a rapid relief fund and has secured World Bank agreement to repurpose $120 million from an ongoing project for disaster recovery spending.

On Tuesday, Sri Lanka also secured a $200 million loan from the Asian Development Bank to finance water management, the first such funding since the cyclone.

The finance ministry said the funds would be used to complete a canal network in the North-Central Province (NCP), which was among the worst affected by flooding last month.

"The objective of the project is to enhance agricultural productivity, farmer incomes and climate resilience in the NCP," the ministry said in a statement.

The World Bank has said it is in the process of assessing the damage caused by the cyclone, while Colombo has said preliminary estimates suggest it may need up to $7 billion to rebuild.

The cyclone struck as the country was emerging from its worst ever economic meltdown in 2022, when it ran out of foreign exchange reserves to pay for essential imports such as food, fuel and medicines.

Following a $2.9 billion bailout from the IMF approved in early 2023, the country's economy has stabilised.

© 2025 AFP