Many of the most profitable US corporations paid little or no federal income tax from 2008 to 2012, according to a five-year study issued by a left-leaning tax activist group.
Citizens for Tax Justice looked at 288 profitable Fortune 500 companies and said that 26 of them – including Boeing Co (BA.N), General Electric Co (GE.N) and Verizon Communications Inc (VZ.N) – paid no federal income tax in the five-year period.
The group also said that 111 of the 288 companies paid no federal income tax in at least one of the five years measured.
In a reflection of how the tax code’s complexity leaves many issues open to question, corporations sometimes dispute the way Citizens for Tax Justice calculates its numbers.
Some of the companies singled out took exception to the findings. GE spokesman Seth Martin said: “For each year cited by Citizens for Tax Justice, GE paid income taxes in the US, as well as billions in other state, local and federal taxes in the US.”
He added, “CTJ inaccurately uses the current tax provision – a book accounting number – to make definitive statements about our U.S. income taxes. This is not the same as the cash income tax that we pay for a given year.”
A key player in Washington’s tax debate, Citizens for Tax Justice regularly issues studies making similar findings about corporate taxes. U.S. lawmakers often cite them in criticizing the tax code as too complex and riddled with loopholes.
Despite complaints about it from across the political spectrum, the tax code seldom changes. It has not been thoroughly overhauled in 27 years. Congress is unlikely to do that in 2014, said Senate Republican Leader Mitch McConnell.
“I have no hope for that happening this year,” he told reporters at the US Capitol on Tuesday, blaming lawmakers’ stubborn fiscal gridlock on Democrats seeking tax increases.
Republican Representative Dave Camp, who heads the top tax-writing committee in the House of Representatives, is slated to unveil tax reform draft legislation on Wednesday, though it is widely expected to sit on the shelf with previous such drafts.
One of the main obstacles to reform is the abundance of tax breaks in the code that benefit corporations and individuals, lowering the effective tax rates of both and giving them ample reason to resist tax changes that would harm their interests.
Boeing spokesman Chaz Bickers said the aerospace manufacturer’s tax bills are largely deferred until it starts generating revenue from airplane sales. “We play by the rules. We pay our taxes,” he said, adding Boeing’s total effective tax rate for 2013 was 26.4 percent.
Verizon spokesman Bob Varettoni said the telecommunications group complies with all tax laws and pays its fair share of taxes. He said Verizon paid more than $2.9 billion in income taxes from 2008 to 2012.
Residents and business owners in Broad Channel, N.Y., are protesting skyrocketing insurance rates that are part of a new federal law designed to keep FEMA afloat. The new law increases the number of areas that are deemed flood zones and stipulates that homeowners in those areas raise their houses or face increased premiums. Don Dahler reports.
Congress tried to cut subsidies for homes in flood zones. It was harder than they thought.
Back in 1968, Congress first began subsidizing flood-insurance policies for homeowners across the nation. That change allowed more Americans to move into coastal areas and floodplains without paying full price for the risks involved.
Flooding during Superstorm Sandy in 2012 (The Washington Post)
By 2012, however, lawmakers were rethinking the whole scheme. The National Flood Insurance Program was subsidizing premiums for 1.1 million policies and running multi-billion-dollar deficits. On top of that, scientists were predicting that sea-level rise would make flooding even more common in the years ahead. Environmentalists and fiscal conservatives alike argued that it made little sense to encourage building in high-risk areas.
So, that summer, Congress voted to revamp the program.* The Flood Insurance Reform Act of 2012 aimed to end subsidized rates for 438,000 insurance policies in flood zones — mainly second homes, businesses, and repeatedly flooded properties. Subsidies for the rest (about 715,000 properties) would get rolled back more gradually, as the homes got sold. A separate set of properties could also face premium hikes as the government revises its flood maps.
Qatari women with their children and housemaid strolling in Doha. Photograph: Stock Connection/REX
Foreign maids, cleaners and other domestic workers are being subjected to slave-like labour conditions in Qatar, with many complaining they have been deprived of passports, wages, days off, holidays and freedom to move jobs, a Guardian investigation can reveal.
Hundreds of Filipino maids have fled to their embassy in recent months because conditions are so harsh. Many complain of physical and sexual abuse, harassment, long periods without pay and the confiscation of mobile phones.
The exploitation raises further concerns about labour practices in Qatar in advance of the World Cup, after Guardian reports about the treatment of construction workers. The maids are not directly connected to Qatar’s preparations for the football tournament, but domestic workers will play a big role in staffing the hotels, stadiums and other infrastructure that will underpin the 2022 tournament.
Our investigation reveals:
• The Philippine Overseas Labour Office (POLO) sheltered more than 600 runaway maids in the first six months of 2013 alone.
• Some workers say they have not been paid for months.
• Many housemaids do not get days off.
• Some contracts and job descriptions are changed once the workers arrive in Qatar.
• Women who report a sexual assault can be charged with illicit relations.
The non-payment of wages, confiscation of documents and inability of workers to leave their employer constitute forced labour under UN rules. According to the International Labour Organisation, forced labour is “all work which is exacted from someone under the menace of any penalty and for which the said person has not offered himself voluntarily”.
Lack of consent can include induced indebtedness and deception about the type and terms of work, withholding or non-payment of wages and the retention of identity documents. Initial consent may be considered irrelevant when deception or fraud has been used to obtain it.
“Menace of penalty” can include physical violence, deprivation of food and shelter, non-payment of wages, the inability to repay a loan, exclusion from future employment and removal of rights and privileges.
When the Guardian visited in January, at least 35 runaway maids had sought sanctuary at the POLO in the capital, Doha, which provides support to 200,000 Filipinos in Qatar. The welfare officer said most complained of pay being withheld, insufficient food, overwork and maltreatment. Some said they had endured verbal and physical abuse by sponsors of different nationalities.
Eight Filipino workers interviewed by the Guardian said they had not been paid for six months, were sometimes deprived of food while cleaning for long hours and had had their passports confiscated.
“We are afraid,” said 28-year-old Jane*. “We don’t really know what to do. We are trying to survive. That’s why we do part-time jobs secretly.” If they are caught breaching their contract, the maids face months in a deportation centre. The repatriation process is often delayed when people do not have their passports, according to James Lynch, Amnesty International’s researcher on Gulf migrants’ rights.
Qatar vigorously denies it is a “slave state” and is understood to be reviewing the controversial system that governs migrant labour, and to have stepped up inspections of businesses that use migrant labour. The Qatari labour ministry said in a statement: “We have clear laws and contractual terms in place to protect all people who live and work in Qatar and anyone found to have broken those laws will be prosecuted accordingly.” It said that non-payment of wages and confiscation of passports were illegal in Qatar, and added: “The vast majority of workers in Qatar – domestic or otherwise – work amicably, save money and send this home to improve the economic situation of their families and communities in their home countries.”
But the Philippines-based OFW (Overseas Foreign Workers) Watch, which supports Filipino migrant workers, said physical abuse, delayed and refused salaries, the misrepresentation of employers and contracts and passport confiscations were common issues in Qatar. The Guardian has already highlighted this malpractice in its investigation into the mistreatment of migrant workers as Qatar gears up for the 2022 World Cup.
As with the construction workers, the abuse of maids is systemic and brought into sharp focus by a lack of legal protection and the kafala sponsorship system, under which workers cannot leave the country or change jobs without their employer’s permission, Lynch said.
“The women we’ve spoken to who have suffered abuses in the workplace, ranging from excessive working hours to physical violence, their employers came from a variety of countries,” he added.
Many maids say they do not get any rest days and that employers confiscate their mobile phones.
Several recruitment agencies contacted by phone told a Guardian reporter pretending to be a would-be client that they routinely withheld the passports of their migrant workers. One agency volunteered that it was up to the sponsor whether the maid had a day off. “If you want to give an off day, let them rest at your house,” an Al Hadeel Manpower representative said. “Don’t give them free days outside because there is more problems outside.”
Lapsi, Ukraine, February 25, 2014 — A partial view of a staggering 8,000 square metre residence that deposed Ukrainian President Viktor Yanukovych was building for himself along the Black Sea in the restive Crimean Peninsula. Work stopped on the project on Monday when workers figured out that Yanulovych, who is facing charges of mass murder, would never pay them.
LAPSI, Ukraine — Ukrainians were stunned by the opulent grandeur of Viktor Yanukovych’s presidential palace when the doors were thrown open last Saturday, hours after the deposed leader fled for parts unknown ahead of formal charges this week accusing him of mass murder.
If those who gazed in wonder at the palace in Kyiv could have traveled safely to the primarily Russian Crimean Peninsula — where ethnic Ukrainians from the north are cursed and reviled at the moment for having toppled the old, pro-Moscow order — they might have had an even bigger shock at what is being built on a remote mountainside.
Another grotesque monument to Yanukovych’s vanity and venality, with a commanding view of the sea, has been slowly rising for the past three years about 30 kilometres from the port city of Sevastopol. Or at least it had been until workers abruptly began to cart away building materials on Monday because, as several of them said, “nobody has told us anything, but we understand that everything is now frozen and we won’t get paid.”
A handful of Ukrainians and journalists was allowed into the massive work site Tuesday. What they saw was a villa so colossal that, at a guess, it was four or five times the size of the huge residence in Kyiv that provoked such disgust when the common folk were allowed inside to gawk.
A Russian website guessed that the “cottage” by the sea was about 8,000 square metres. It looked to be about six months to a year from being completed. But it was already possible to see that the basketball court-sized living room was about 20 metres high and includes a massive fireplace. Many of the floors have a network of wires running underneath to heat them.
KIEV, Ukraine — With his allies deserting him and his once-firm presidential power disintegrating, Viktor Yanukovych has fled Ukraine’s capital by car and aircraft, heading for the parts of the country where he is most likely to find friends, according to the acting head of the police.
On Monday, as Yanukovych’s exact whereabouts remained unknown, acting Interior Minister Arsen Avakhov posted on his official Facebook page a rundown of where Yanukovych has been sighted since leaving Kiev on Friday.
His departure came hours after signing an agreement on resolving Ukraine’s political crisis that reduced his powers and was seen by many as a tacit admission of defeat.
Avakhov said a warrant has been issued for the arrest of Yanukovych and several other officials for the “mass killing of civilians,” stemming from the deaths of protesters in Kiev.
Here’s a look at Yanukovych’s movements since Friday, based on one TV appearance and the account by Avakhov:
A TV INTERVIEW IN KHARKIV
Yanukovych surfaced Saturday in the city of Kharkiv, 400 kilometers (250 miles) east of Kiev, in the heartland of his base of support. In a videotaped interview, he bitterly likened opposition protesters to Nazis and declared he was still president and would not leave the country. That was his last public appearance.
FOILED AT THE AIRPORT IN DONETSK
From Kharkiv, Avakhov said Yanukovych, his chief of staff Andrit Klyuyev and his security guards flew Saturday by helicopter to the airport in Donetsk, his hometown, 230 kilometers (140 miles) to the south. There, he and his contingent transferred to two Falcon business jets and tried to fly off, but were prevented from leaving by border guards.
Seeking Viktor Yanukovych: A rundown of sightings in Ukraine
Jim Heintz, The Associated Press Published Monday, February 24, 2014 11:10AM EST Last Updated Monday, February 24, 2014 5:59PM EST
KYIV, Ukraine — With his allies deserting him and his once-firm presidential power disintegrating, Viktor Yanukovych has fled Ukraine’s capital by car and aircraft, heading for the parts of the country where he is most likely to find friends, according to the acting head of the police.
On Monday, as Yanukovych’s exact whereabouts remained unknown, acting Interior Minister Arsen Avakhov posted on his official Facebook page a rundown of where Yanukovych has been sighted since leaving Kyiv on Friday.
His departure came hours after signing an agreement on resolving Ukraine’s political crisis that reduced his powers and was seen by many as a tacit admission of defeat.
In this image made from video released by the Regional Administration of Kharkiv and distributed by AP Video, Viktor Yanukovych, president of Ukraine, speaks in Kharkiv Saturday, Feb. 22, 2014. (AP Photo / Regional Administration of Kharkiv)
Avakhov said a warrant has been issued for the arrest of Yanukovich and several other officials for the “mass killing of civilians,” stemming from the deaths of protesters in Kyiv.
Here’s a look at Yanukovych’s movements since Friday, based on one TV appearance and the account by Avakhov:
A TV interview in Kharkiv
Yanukovych surfaced Saturday in the city of Kharkiv, 400 kilometres east of Kyiv, in the heartland of his base of support. In a videotaped interview, he bitterly likened opposition protesters to Nazis and declared he was still president and would not leave the country. That was his last public appearance.
Foiled at the airport in Donetsk
From Kharkiv, Avakhov said Yanukovych, his chief of staff Andrit Klyuyev and his security guards flew Saturday by helicopter to the airport in Donetsk, his hometown, 230 kilometres to the south. There, he and his contingent transferred to two Falcon business jets and tried to fly off, but were prevented from leaving by border guards. Avakhov did not explain the basis for guards blocking the planes’ departure. Yanukovych spent a few hours in a state residence and then left about 10 p.m. in a convoy of automobiles, Avakhov said.
Visas giving the right to settle in Britain are already available to rich individuals under tier one of the points-based immigration system. Photograph: Gareth Fuller/PA Archive/Press Association Ima
Visas giving the right to settle in Britain could be auctioned off to the highest bidders under proposals expected to be unveiled on Tuesday by the government’s official immigration advisers.
The suggestion, expected from the home secretary’s migration advisory committee (Mac), has already been criticised by immigration lawyers for creating an “eBay culture” for permanent UK residence.
Under the proposal overseas millionaires will be invited to bid for a limited proportion of investor or tier-one UK visas which allow holders and their families to live indefinitely in Britain.
A second option would allow visas to be “bought” through donations to hospitals or universities.
The proposals are expected to be put forward in response to concerns that the existing investor visa route is failing to benefit the UK and has simply become a cheap way for some wealthy Russian, Chinese and Middle Eastern families to settle permanently in Britain.
The existing route, known as tier one of the points-based immigration system, lets rich individuals accelerate the process of being allowed to settle in the UK by between two and five years depending on how much is invested.
Applications have been running at about 600 a year to apply under this route which does not require applicants to be able to speak English or have a job to come to.
Official concern over the use being made of tier-one visas first came to light in December 2012 when the Home Office announced that leveraged investment funds held in offshore accounts could not be used to fund their investments in Britain.
PUBLISHED: 09:33 EST, 25 February 2014 | UPDATED: 05:29 EST, 26 February 2014
Britian has been handing visas to hundreds of Russian oligarchs in return for them paying at least £1million towards our £1.2trillion national debt.
Russian and Chinese businessmen have been allowed to jump to the front of the immigration queue by ‘investing’ a seven-figure sum in Government gilts.
Immigration advisers say the foreign investors and their families are the big winners because as long as they have their money stored in Treasury bonds, they can settle in the UK and enjoy its fair legal system and good schools.
The Home Office’s Migration Advisory Committee warned the British public get ‘very little out of’ the deals which allow Russian and Chinese businessmen have been allowed to jump to the front of the immigration queue
Indeed, because they receive interest on the bonds, the Government is effectively paying the wealthy to live here – where they can then also invest in our lucrative property market. If they take their money out of the bonds the visa is revoked.
But the British public gets very little out of the deal, according to the Home Office’s Migration Advisory Committee.
It is calling for a major shake-up of the scheme to get more benefit for the British taxpayer.
Currently, non-EU nationals who invest £1million, £5million or £10million can apply for permanent residency after five, three or two years respectively.
Under proposed new rules, the minimum amount they would need to invest to come here would be doubled to £2million and they would be allowed to apply for permanent residency after five years.
Instead of going into bonds, MAC suggests the money could be ploughed into large infrastructure projects.
More controversially, the committee also wants around 100 visas to be auctioned off to the highest bidder every year.
A controversial trade deal being touted by the White House is expected to give American corporations broad new authority if approved. Now according to newly released documents, big banks gave millions to the execs that are now orchestrating the agreement.
Investigative journalist Lee Fang wrote for Republic Report on Tuesday this week that two former well-placed individuals within the ranks of Bank of America and CitiGroup were awarded millions of dollars in bonuses before jumping ship to work on the Trans-Pacific Partnership on behalf of the White House.
The Trans-Pacific Partnership, or TPP, is a widely-contested trade deal between the US and 11 other nations adjacent to the Pacific Rim, and has been negotiated by representatives for those countries in utmost secrecy. According to leaked excerpts of the TPP and remarks from experts following the news closely, though, it’s believed that the arrangement would allow corporations to oppose foreign laws while at the same time limiting the abilities for governments to regulate those entities.
On Tuesday, Fang wrote that two major United States-based financial firms have significantly awarded former executives who have since attracted the attention of President Barack Obama and subsequently been offered positions that put them directly involved in TPP talks.
Former Bank of America investment banker Stefan Selig, Fang acknowledged, received more than $9 million in bonus pay after he was nominated to join the Obama administration in November. And Michael Froman, the current US trade representative, was awarded over $4 million from Citigroup when he left them in 2009 in order to go work for the White House. Republic Report were provided those statistics through financial disclosures included in Fang’s article.
When Selig was asked to head the International Trade Administration by the White House last November — a Commerce Department job — the New York Times considered it “a rare appointment of a Wall Street banker by the Obama administration.” If he is confirmed by the Senate as expected, he will work directly with US trade officials on hammering out final arrangements for the TPP. Froman has been the US trade representative since last June, and according to his biography on that department’s official website, is directly overseeing TPP discussions.
Why Taxpayers Will Bail Out the Rich When the Next Storm Hits
By Bill Dedman
GULF SHORES, Ala. — As homeowners around the nation protest skyrocketing premiums for federal flood insurance, the Federal Emergency Management Agency has quietly moved the lines on its flood maps to benefit hundreds of oceanfront condo buildings and million-dollar homes, according to an analysis of federal records by NBC News.
The changes shift the financial burden for the next destructive hurricane, tsunami or tropical storm onto the neighbors of these wealthy beach-dwellers — and ultimately onto all American taxpayers.
In more than 500 instances from the Gulf of Alaska to Bar Harbor, Maine, FEMA has remapped waterfront properties from the highest-risk flood zone, saving the owners as much as 97 percent on the premiums they pay into the financially strained National Flood Insurance Program.
NBC News also found that FEMA has redrawn maps even for properties that have repeatedly filed claims for flood losses from previous storms. At least some of the properties are on the secret “repetitive loss list” that FEMA sends to communities to alert them to problem properties. FEMA says that it does not factor in previous losses into its decisions on applications to redraw the flood zones.
And FEMA has given property owners a break even when the changes are opposed by the town hall official in charge of flood control. Although FEMA asks the local official to sign off on the map changes, it told NBC that its policy is to consider the applications even if the local expert opposes the change.
“If it’s been flooded, it’s susceptible to being flooded again. We all know that,” said Larry A. Larson, director emeritus of the 15,000-member national Association of State Floodplain Managers. “FEMA is ignoring data that’s readily available. That’s not smart. And it puts taxpayer money at risk.”
The neighboring resorts of Gulf Shores and Orange Beach on the South Alabama coast include a stretch of beach that was flooded by Hurricanes Erin and Opal in 1995, Danny in 1997, Georges in 1998, Ivan in 2004, and Katrina in 2005. The map changes here offer a vivid example of the risks that come with such reclassifications.
The direct hit by Ivan was the worst, bringing not gently rising floodwaters but a 14-foot wall of water that leveled buildings and flooded more than a mile inland. That’s why flood maps show most of this beach as a “coastal velocity wave zone,” the area with the highest risk of damage from storm surge.
But nearly all of the condominium towers are no longer in that high-risk zone, including a 17-story condominium built where the old Holiday Inn was wiped away by Ivan’s winds and waves, and another where the McDonald’s was a total loss. From 2011 through 2013, FEMA granted applications remapping 66 out of 72 waterfront condo towers in Gulf Shores to lower-risk flood zones or off the flood maps entirely. Four others have applications pending. Just two applications have been denied. And next door in Orange Beach, the map lines have been redrawn around four high-rise condo buildings.
On a single day, Oct. 25, 2012 — a day when FEMA was closely monitoring Hurricane Sandy as it barreled toward the Atlantic Coast — a FEMA manager issued a document reclassifying a full mile of the coastal property in Gulf Shores. That document, just one of the 533 cases found nationwide by NBC News, redrew the lines to exclude 25 condo buildings from the highest-risk flood zone.
This beachfront condo, the Island Tower, collected $11,562 for its damage from Katrina, and more than $250,000 from Ivan.
The Island Tower’s condo association was paying $143,190 a year into the National Flood Insurance Program. Now that it’s been reclassified into a lower-risk flood zone, its premium is $8,457 a year, a saving of 94 percent, according to records examined by NBC News.
Just down the beach is the Royal Palms. It collected $58,230 for damages during Katrina, and $889,730 from Ivan. The Royal Palms was paying $218,484 a year, but after being changed to a lower-risk flood zone, now pays only $6,845, saving 97 percent.
The map changes in just these two towns resulted in at least $5 million a year in lost revenue to the flood insurance program, according to records examined by NBC News. All of these changes were approved by FEMA despite opposition from the city officials in charge of floodplain management.
Elsewhere in Gulf Shores, homeowners are paying as much as $12,000 a year in flood insurance premiums for their single-family homes, according to insurance records. These homeowners are paying as much as several large condo buildings combined.
Properties from Alaska to Maine
Because waterfront properties are expensive, and it costs thousands of dollars to hire an engineer to press a case with FEMA, the remapped properties tend to be luxurious, either the first or second homes of industrialists, real estate developers and orthopedic surgeons.
The 533 properties include a $4 million home in the Hamptons resort on Long Island, N.Y., owned by a married couple who direct Wall Street investment firms.
In Miami, the beneficiaries include the twin 37-story condos at ritzy Turnberry Isle in Sunny Isles Beach, and also the Regalia, “the most luxurious building in South Florida.”
In Naples, Fla., a $19 million home was remapped last year out of the high-risk zone. The owner, Robert A. Watson, former president and CEO of units of Westinghouse Electric and Transamerica, said his property is protected by a floodwall, and he sought the map change last year not to save money but because FEMA has changed the map elevations in that area so many times. He said he wanted to know for sure that a guesthouse would be permitted. (He called mandatory flood insurance “a massive scam on the American people.”)
In New York, FEMA granted the Mamaroneck Beach & Yacht Club’s request to be remapped from the high-risk flood zone in August 2012 — just two months before the club was damaged and its outbuildings destroyed by Hurricane Sandy, which stacked up yachts at its docks like pick-up sticks. The club told NBC that its engineering study showed that FEMA’s map was wrong.
“Sandy was a once in a millennium event, and therefore cannot be the sole determination for planning,” said Eric L. Gordon, attorney for the yacht club.
http://usawatchdog.com/united-states-… – Can we pull the world out of this economic calamity? Former World Bank Attorney Karen Hudes says, “It may be that we don’t, in which case, we end up in what happened just before we went into the dark ages, when gold went into hiding . . . . We can bring this gold that belongs to humanity out of its cloak of secrecy and out of hiding or we can go back into the dark ages. And we can have pestilence and starvation. . . . Civilization breaks down. We cannot pay for our international trade. Either we take back our gold, our legality, and we tell this group that thinks it’s above the law that it is not above the law, or we can kiss ourselves goodbye. Humanity will not continue, we will have World War III. Join Greg Hunter as he goes One-on-One with former World Bank Attorney Karen Hudes.
YOU MUST SEE THIS!: Karen Hudes World Bank Whistleblower
“Mr. Chambers! Don’t get on that ship! The rest of the book, “To Serve Man”, it’s – it’s a cookbook!” The Twilight Zone.
This is Greg Hunter’s interview with Karen Hudes. She is a World Bank whistleblower.
If you like Mr. Hunter’s work please sub to his channel. Link below. Peace! http://www.youtube.com/user/usawatchd…
Karen Hudes: We’re Running Out of Time! We’re Dealing with Whether We Can Continue as Humanity
‘Dollar valueless, about to crash’ – World Bank whistleblower
Published on Oct 8, 2013
The US government shutdown – a temporary ailment or a symptom of a grave disease? Are the Republicans right in their move to block Obamacare spending? Who gains from the shutdown turmoil? Do the politicians care about their citizens? Our guest comes from the very heart of the banking system: Karen Hudes was World Bank lawyer when she blew the whistle on major corruption cases in the system and was fired as a result.
LONDON (Reuters) – Barclays said it would axe up to 12,000 jobs this year even as it raised bonuses for investment bankers, prompting fury among politicians and unions who said it had not learned the lessons of the financial crisis.
Britain’s third-biggest bank said up to 9 percent of employees could go, including 7,000 in Britain, as it tries to lower costs. The cuts are not concentrated in any one business area.
It said it paid 2.4 billion pounds ($3.9 billion) in incentive awards last year, raising bonuses at the investment bank by 13 percent despite a slump in its profits. The average bonus for the investment bank’s 26,200 staff was 60,100 pounds.
Critics of the bonus hike said it showed Britain’s biggest banks were still failing to heed the lessons of a financial crisis caused by dangerous risk taking and excessive pay.
“Today Barclays has stuck two fingers up to hard-pressed families across Britain by announcing another multi-billion pound bonus pool,” said Frances O’Grady, General Secretary of the Trades Union Congress.
Barclays Chief Executive Antony Jenkins, who took the helm in 2012 after an interest rate rigging scandal, has vowed to improve culture and standards at the bank while also reducing risk and strengthening the balance sheet.
But its investment bank profits slumped 37 percent last year to 2.5 billion pounds and analysts voiced concern about whether Jenkins can reach his target of a return on equity above 11.5 percent by 2016.
Getting costs down looked more challenging than expected, they said, while increased regulatory pressure and a grim outlook for fixed-income revenue made the target on returns look difficult to achieve.
Barclays shares were down 5 percent at 261 pence by 7.55 a.m. ET, underperforming a 0.7 percent rise by an index of European banks.
“WE NEED THE BEST PEOPLE”
The higher bonuses lifted the compensation-to-income ratio in the investment bank to 43.2 percent last year from 40 percent in 2012. Jenkins, who gave up his own bonus for 2013, said he still aimed for a ratio in the “mid-30s” across the bank.
He defended the bigger bonus pot, saying the bank had to recruit the best staff to compete with global rivals and continued to have “constructive” talks with investors over pay.
“We need to recruit people from Singapore to San Francisco. We need the best people in the bank to drive long-term sustainable returns for our shareholders,” Jenkins told reporters on a conference call.
“I understand that there will be some (people) who feel that this decision is the wrong one for Barclays. But it is the decision of the board and myself that this entirely is the right decision for the group and in the long-term interests of shareholders,” he said.
But business leaders’ group the Institute of Directors said the bank’s bonus policy raised the question of whether it was being run for its shareholders, or its staff.
It is not easy for one bank to anger more people with one announcement than what Barclays did in the past 24 hours. In one fell swoop, the British bank infuriated shareholders after announcing dismal earnings (an adjusted Q4 profit of about 200 million pounds and a statutory profit of less than 100 million as investment banking income slumped 37% as income fell 9% to 10.7 billion due to a fall in fixed income, and it took further charges related to a cleanup of the banking industry in the wake of the 2008 financial crisis) which sent the share price sliding, it then pissed off UK workers and taxpayers after it announced it would hike investment bank bonuses by 13% despite the abovementioned profit slump, and finally it crushed 9% of its workforce, or 12,000 workers, who are set to prepare pink slips as the bank “streamlines.”
Barclays said 820 senior roles would go, and half of those were cut at the investment bank in the last two weeks. It cut 7,650 jobs last year, including 1,400 in the investment bank, as part of a restructuring unveiled a year ago by Jenkins to cut 1.7 billion pounds of annual costs. There were 139,600 Barclays employees by the end of the year.
Stepping up efforts to cut costs, Barclays said up to 9 percent of employees could go, including 7,000 in Britain, where half of the affected staff had already been notified. The cuts are not concentrated in any single business area.
Britain’s third-biggest bank said it paid 2.4 billion pounds ($3.9 billion) in incentive awards last year after raising bonuses at the investment bank by 13 percent despite a slump in profits from the business. The average bonus across the investment bank’s 26,200 staff was 60,100 pounds.
Baton Rouge’s Rich Want New Town to Keep Poor Pupils Out: Taxes
February 6, 2014 12:00 AM ET
By Margaret Newkirk
Saying they want local control, they’re trying to leave the 42,000-pupil public-education system. They envision their own district funded by property taxes from their higher-value homes, which would take money from schools in poorer parts of state-capital Baton Rouge, home of Louisiana State University. They even want their own city.
Similar efforts have surfaced in the past two years in Georgia, Alabama, Texas and Tennessee, some of them succeeding as the end of court-ordered desegregation removed legal barriers. The result may be a concentration of poverty and low achievement. A 2012 report by ACT, the Iowa-based testing organization, found only 10 percent of low-income students met college benchmarks in all subjects, less than half the average.
“It’s going to devastate us,” said Tania Nyman, 45, who has two elementary-age children in the Baton Rouge system. “They’re not only going to take the richer white kids out of the district, they are going to take their money out of it.”
U.S. educational funding varies by state, often relying heavily on local taxes. The South, once notorious for segregated schools, by 2011 had the nation’s second-narrowest funding disparity among districts, according to a study by the Federal Education Budget Project, a Washington-based research organization that is an offshoot of the nonpartisan New America Foundation.
Louisiana, however, scored worst in the nation, according to the study. A December report by three LSU economics professors found that breaking up the East Baton Rouge Parish school system would depress total per-pupil spending to $8,870 from $9,635. It would rise to $11,686 in the breakaway district.
Eighty percent of the current district’s students are black, and 82 percent poor enough to qualify for free or reduced school meals. Nyman and other district boosters say a split would set a dire precedent.
“Every affluent community in the state will want to create their own little school system,” said Carnell Washington, president of the East Baton Rouge Federation of Teachers.“They are taking money away that would help the entire school system and the entire city.”
Backers of the split, whose website is called Local Schools for Local Children, say the district has been failing for at least a dozen years, with some schools performing so poorly that the state took them over. In the 2011-2012 school year, six of 10 students attended a school ranked failing or almost failing by the state and the drop-out rate was 20 percent, according to Baton Rouge Area Chamber, a business group.
“Baton Rouge is one of the best job markets around, and the middle class is moving out,” said Republican state Senator Mack “Bodi” White. “Those who stay have their kids in private schools.”
About 30 percent of children within district lines were in private schools in 2009, according to Tulane University’s Cowen Institute for Public Education Initiatives.
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