HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering
HSBC’s headquarters in London. Facundo Arrizabalaga/European Pressphoto Agency
In 2010, Lanny A. Breuer, left, head of the Justice Department’s criminal division, created a task force on money laundering. Jonathan Bachman/Reuters
By BEN PROTESS and JESSICA SILVER-GREENBERG December 10, 2012, 4:10 pm
4:37 a.m. [December 11]| Updated
State and federal authorities decided against indicting HSBC [ http://dealbook.on.nytimes.com/public/overview?symbol=HBC ] in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.
Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.
While the settlement with HSBC is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and interconnected, are too big to indict. Four years after the failure of Lehman Brothers [ http://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html ] nearly toppled the financial system, regulators are still wary that a single institution could undermine the recovery of the industry and the economy.
But the threat of criminal prosecution acts as a powerful deterrent. If authorities signal such actions are remote for big banks, the threat could lose its sting.
Behind the scenes, authorities debated for months the advantages and perils of a criminal indictment against HSBC.
Some prosecutors at the Justice Department’s criminal division and the Manhattan district attorney’s office wanted the bank to plead guilty to violations of the federal Bank Secrecy Act, according to the officials with direct knowledge of the matter, who spoke on the condition of anonymity. The law requires financial institutions to report any cash transaction of $10,000 or more and to bring any dubious activity to the attention of regulators.
Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.
A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.
“The Justice Department asked Treasury for our view about the potential implications of prosecuting a large financial institution,” David S. Cohen, the Treasury’s under secretary for terrorism and financial intelligence, said in a statement. “We did not believe we were in a position to offer any meaningful assessment. The decision of how the Justice Department exercises its prosecutorial discretion is solely theirs and Treasury had no role.”
Still, some prosecutors proposed that Attorney General Eric H. Holder Jr. meet with Treasury Secretary Timothy F. Geithner, people briefed on the matter said. The meeting never took place.
After months of discussions, prosecutors decided against a criminal indictment, but only after securing record penalties and wide-ranging sanctions.
The HSBC deal includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $700 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.
As part of the deal, one of the officials briefed on the matter said, HSBC must also strengthen its internal controls and stay out of trouble for the next five years. If the bank again runs afoul of the federal rules, the Justice Department can resume its case and file a criminal indictment. An independent auditor will also monitor the bank’s progress to strengthen its internal controls, and will make regular assessments on the firm’s progress.
On Tuesday, HSBC said it had “reached agreement with United States authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws.” The bank is also expected to reach a settlement over the matter with Britain’s Financial Services Authority, according to a person with direct knowledge of the matter.
“We accept responsibility for our past mistakes,’’ HSBC’s chief executive, Stuart T. Gulliver, said in the statement. “We are committed to protecting the integrity of the global financial system. To this end, we will continue to work closely with governments and regulators around the world.”
The HSBC case is part of a sweeping investigation into the movement of tainted money through the American financial system. In 2010, Lanny A. Breuer, the head of the Justice Department’s criminal division, created a money-laundering task force that has collected more than $2 billion in fines from banks, a number that is set to double with the HSBC case.
On Monday, federal and state authorities also won a $327 million settlement from Standard Chartered [ http://topics.nytimes.com/top/news/business/companies/standard-chartered-plc/index.html ], a British bank. The bank, which in September agreed to a larger settlement with New York’s top banking regulator, admitted processing thousands of transactions for Iranian and Sudanese clients through its American subsidiaries. To avoid having Iranian transactions detected by Treasury Department computer filters, Standard Chartered deliberately removed names and other identifying information, according to the authorities.
“You can’t do it. It’s against the law, and today Standard Chartered is being held to account,” Mr. Breuer said in an interview.
HSBC’s actions stand out among the foreign banks caught up in the investigation, according to several law enforcement officials with knowledge of the inquiry. Unlike those of institutions that have previously settled, HSBC’s activities are said to have gone beyond claims that the bank flouted United States sanctions to transfer money on behalf of nations like Iran. Prosecutors also found that the bank had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.
HSBC was thrust into the spotlight in July after a Congressional committee outlined how the bank, between 2001 and 2010, “exposed the U.S. financial system to money laundering and terrorist financing risks.” The Permanent Subcommittee on Investigations held a subsequent hearing at which the bank’s compliance chief resigned amid mounting concerns that senior bank officials were complicit in the illegal activity. For example, an HSBC executive at one point argued that the bank should continue working with the Saudi Al Rajhi bank, which has supported Al Qaeda [ http://topics.nytimes.com/top/reference/timestopics/organizations/a/al_qaeda/index.html ], according to the Congressional report.
Despite repeated urgings from federal officials to strengthen protections in its vast Mexican business, HSBC instead viewed the country from 2000 to 2009 as low-risk for money laundering, the Senate report found. Even after HSBC’s Mexican operation transferred more than $7 billion to the United States — a volume that law enforcement officials said had to be “illegal drug proceeds” — lax controls remained.
HSBC has since moved to bolster its safeguards. The bank doubled its spending on compliance functions and revamped its oversight, according to a spokesman. In January, HSBC hired Stuart A. Levey as chief legal officer to come up with stricter internal standards to thwart the illegal flow of cash. Mr. Levey was formerly an under secretary at the Treasury Department who focused on terrorism and financial intelligence.
On Monday, the bank said it was promoting Robert W. Werner, who oversaw the group at the Treasury Department that enforces sanctions, to run a specially created division focused on anti-money laundering efforts.
Regulators have also vowed to improve. The Congressional hearings exposed weaknesses at the Office of the Comptroller of the Currency, the national bank regulator. In 2010, the regulator found that HSBC had severe deficiencies in its anti-money laundering controls, including $60 trillion in transactions and 17,000 accounts flagged as potentially suspicious, activities that were not reviewed. Despite the findings, the regulator did not fine the bank.
During the hearings this summer, lawmakers assailed the regulator. At one point, Senator Tom Coburn, Republican of Oklahoma, called the comptroller “a lap dog, not a watchdog.”
Standard Chartered, which earns most of its profit in Asia, said it expected negotiations to conclude “very shortly” over charges that it violated American sanctions against Iran.
The estimated settlement payment would come in addition to a $340 million settlement the bank reached in August with the New York State Department of Financial Services, which charged Standard Chartered with scheming with Iranian companies and banks for nearly a decade to hide 60,000 transactions worth $250 billion from regulators.
Standard Chartered is the latest big bank to have been caught up in a wide-reaching American crackdown on suspect money transfers.
Last month, HSBC Holdings [ http://dealbook.on.nytimes.com/public/overview?symbol=HBC ], another major British bank, set aside an additional $800 million to cover potential fines stemming from a money laundering investigation, bringing its total provisions for the case to $1.5 billion. HSBC is still negotiating a settlement with the American authorities, but it is expected to pay the largest fine on record for money laundering and related actions, and could potentially face criminal charges in the matter.
Before announcing the August settlement, Standard Chartered had disclosed that it was reviewing transactions it handled on behalf of Iranian companies and individuals from around 2001 to 2007, and was discussing potential sanctions violations with agencies including the Justice Department, the Office of Foreign Assets Control, the Federal Reserve Bank of New York and the Manhattan district attorney, in addition to the New York State Department of Financial Services.
Despite the big New York settlement, Standard Chartered said in a statement on Thursday that it expected pretax profit to rise for 2012. The profit estimate did not take into account the effect of the estimated $330 million settlement with the United States, which it said could be completed as early as this month.
“There is not much to say other than that we are close to reaching a final settlement with the remaining U.S. agencies,” Richard Meddings, the group finance director of the bank, said on Thursday during a conference call. “Negotiations or discussions are progressing well.”
How new rules for banks in US and the UK could have prevented the global financial crisis
Could new regulatory tools prevent a future full of sad-trader photos? AP Photo/Michael Probst
By Tim Fernholz — December 11, 2012
Bank regulators in the United States and the United Kingdom have described a new framework [ http://www.bankofengland.co.uk/publications/Documents/news/2012/nr156.pdf ] (pdf) for global financial firefighting. The idea is to make it easier to bring failing global banks in for a soft landing without taking the rest of the world’s banking infrastructure down, too.
The framework builds on Dodd-Frank, the 2010 law that overhauled US financial regulation, and reform efforts in the UK. While global banks have been a reality for quite some time now, only recently have regulators been given the powers they say they need to deal with the fallout from the collapse of such a large institution without saddling taxpayers with losses or crunching the financial system.
The biggest difference for regulators is “resolution authority,” the ability and resource to run insolvent investment banks through a kind of sped-up bankruptcy process. The second is that regulators say they are focused more on systemic global problems. In 2008, when the crisis started with banks in the United States, regulators in the UK were reluctant to extend much financial help, aiming to protect their own jurisdiction; but as the crisis spread national boundaries started to matter a lot less.
Here are some cases where the new rules might have helped during the crisis.
Lehman Brothers would have been broken up
When Lehman Bros. began running into liquidity problems in the summer of 2008, thanks to plentiful investment in over-valued mortgage bonds, federal regulators didn’t want to spend money on a rescue, insisting on a “private sector” solution. The failing company was shopped to a variety of customers who weren’t interested in buying the company. Finally Barclay’s, the British bank, seemed willing to purchase the failing company’s assets. But the UK’s Financial Services Authority put the kibosh on the deal, refusing to waive a rule that required Barclay’s shareholders approve the financing of Lehman, which would have taken months at a time when action was needed within hours. Lehman failed, sparking the financial crisis; later, Barclay’s would purchase Lehman’s US business.
What would be different now?The Federal Deposit Insurance Corporation (FDIC), which is a regulator as well as guarantor of deposits, would have already taken the axe to Lehman, to separate out its assets from its liabilities. At least according to this FDIC paper [ http://www.fdic.gov/bank/analytical/quarterly/2011_vol5_2/lehman.pdf ] (pdf, p. 15; parsed in more detail here [ http://rortybomb.wordpress.com/2011/04/26/the-new-fdic-paper-on-the-resolution-of-lehman-brothers/ ]), the result would have been that Barclays would have bought the bank. Even allowing some skepticism for the ease of hindsight, there’s a case that Barclay’s and the British regulator would have been more comfortable taking on Lehman’s on-going business after the FDIC eliminated more of the risk associated with Lehman’s bad assets by wiping out unsecured creditors and equity-holders.
AIG would have had to plan its own funeral in advance
In the case of AIG, regulators took up the exact opposite of their strategy on Lehman. They used government money to bail out the company directly because of its place at the center of a global network of financial derivatives. A particular problem was that the insurer’s primary regulator, the Office of Thrift Supervision, was focused on AIG’s US bank subsidiary but had no idea what executive Joseph Cassano was doing at AIG Financial Products in London. Which, it turns out, was cooking up an insolvent balance sheet that then-Federal Reserve official Tim Geithner called “a bag of shit.”
What would be different now?Regulators and firms are working together on funeral plans. Banks large and complex enough to fall under resolution authority will be required to come up with a plan to shut down their companies in the event of failure and submit them to their public supervisors. That means that regulators will be required to understand the firm as a whole, not just a bank subsidiary.
Citigroup wouldn’t have had a liquidity crisis imposed on it
[Citigroup's] various regulators watched the stock price, the daily liquidity, and the CDS spreads with alarm. On Friday, November 21, the United Kingdom’s Financial Services Authority (FSA) imposed a $6.4 billion cash “lockup” to protect Citigroup’s London-based broker-dealer. FDIC examiners knew that this action would be “very damaging” to the bank’s liquidity and worried that the FSA or other foreign regulators might impose additional cash requirements in the following week. By the close of business Friday, there was widespread concern that if the U.S. government failed to act, Citigroup might not survive; its liquidity problems had reached “crisis proportions.”
What would be different now?Both regulators have less reason to take precautionary measures that hurt overall liquidity, like this lock-up, if they fear a firm is soon to go under.The FSA did something that made sense—for the UK, at the time—by ensuring that if Citi went under, the London subsidiary would retain capital that could cushion the blow within its jurisdiction. Obviously, Citi didn’t fail, but the cash lockup certainly hurt its efforts to survive and broader financial stability. Under the new resolution authority, both the UK and the US have promised a top-down strategy that will, ideally, keep subsidiaries operating in the event of a failure.
Copyright 2012 Quartz (format/emphasis per original)
The government sold the 234.2 million shares at $32.50 each, a small discount from the closing price of $33.36 on Monday. The block of shares represented a 15.9 percent stake in the insurer.
The stock sale also means that A.I.G. is a fully private enterprise once more, after the government owned as much as 92 percent of its shares. After the sale, the Treasury Department will hold only warrants to buy about 2.7 million shares of A.I.G. common stock, which will also be sold to generate a profit.
“On behalf of the 62,000 employees of A.I.G., it is my honor and privilege to thank America for giving us the opportunity to keep our promise to make America whole on its investment in A.I.G. plus a substantial profit,” Robert H. Benmosche, the insurer’s chief executive, said in a statement. “Thank you America. Let’s bring on tomorrow.”
Four years after it almost died, American International Group is finally getting off life support.
The Treasury Department announced [ http://www.treasury.gov/press-center/press-releases/Pages/tg1794.aspx ] Monday afternoon that it is getting ready to sell 234,169,156 shares of AIG stock, which it received as part of a massive, $182 billion taxpayer-funded bailout of the failing insurer in 2008. The shares, which amount to 16 percent of the entire company, represented the government's last remaining major investment [ http://dealbook.nytimes.com/2012/12/10/u-s-to-sell-last-holdings-of-a-i-g-common-stock/ ] in AIG, which had to be essentially nationalized when a gigantic pile of credit-default swaps underwritten by its Financial Products division went kaboom, and threatened to take the entire global economy down with it.
The Treasury Department still owns a small number of AIG warrants, which allow it to buy more stock in the company if it chooses. But with the last remaining Treasury-owned stock about to be sold into the public markets, AIG is going to be free of government assistance, and the 2008-era bailouts will be all but over.
AIG CEO Bob Benmosche, who was profiled by New York's Jessica Pressler [ http://nymag.com/news/features/bob-benmosche-aig-2012-10/ ] in October, expressed chagrin that the government failed to convey appropriate gratitude for AIG's efforts to climb back from the brink.
“Everybody said it’s just not going to happen, they’ll never pay [the bailout] off,” he goes on. “SIGTARP, Elizabeth Warren, Gretchen Whatshername in the New York Times. The fact is we now have succeeded in getting the Fed back all of their money, and we’re just close to getting the Treasury paid back. And do you know,” he adds, an indignant note creeping into his voice, “neither of them have ever said ‘Thank you’?
Now that the bailout funds are close to being paid back, Benmosche can watch his mailbox for a thank-you note from 1500 Pennsylvania Avenue. But given the hell AIG put the Treasury through in the first place, he probably shouldn't hold his breath for a muffin basket.
China’s Wanxiang Wins A123 Auction for $260 Million
A123 Systems Inc, which received a $249.1 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. Jeffrey Sauger/Bloomberg
By Michael Bathon & Dawn McCarty - Dec 8, 2012 7:50 PM CT
China’s Wanxiang Group bid $260 million for assets of car-battery maker A123 Systems Inc., winning a bankruptcy auction, officials said.
The assets purchased may include A123’s automotive segment, energy-grid storage business, commercial business and U.S. government business.
“I can tell you that we have won the bid, and the total value is about $260 million,” said Mo Xiaoping, a spokesman for Wanxiang Group based in Hangzhou, Zhejiang province. “From our side, we see no additional obstacles to complete the deal.”
A123, which received a $249.1 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. The auction began on Dec. 6 with prospective bidders including Johnson Controls (JCI), Wanxiang, Siemens AG (SIE) of Germany and Tokyo-based NEC Corp. (6701)
The company will seek court approval to sell the assets from U.S. Bankruptcy judge Kevin Carey at a Dec. 11 hearing in Wilmington, Delaware.
A123’s automotive business includes facilities in Livonia and Romulus, Michigan. A123 used $132 million of the grant toward building the two Michigan factories.
Shanghai Automotive
As part of the purchase, the buyer may get A123’s stake in a joint venture with Shanghai Automotive Industry Corp.
The grid business focuses on energy generation, transmission and distribution while the commercial division develops products for industries such as telecommunications, industrial robotics and power tools, according to court papers. A123 works with the government on portable power solutions, unmanned aerial vehicles, pulsed power weapons as well as small energy cells for remote devices.
A123 announced in August that it was working on a deal with Wanxiang, China’s largest auto-parts maker, for financing in exchange for a majority ownership stake. The battery-maker needed a lifeline after recalling faulty batteries supplied to its main customer, Fisker Automotive Inc.
Fisker Chief Executive Officer Tony Posawatz said last month the Anaheim, California-based automaker was awaiting the sale of A123’s Michigan plant that makes lithium-ion batteries for its Karma so it could resume production of the $103,000 plug-in sedan.
Stake
Wanxiang had planned to invest as much as $465 million in A123, giving the Hangzhou, China-based company a stake of as much as 80 percent, A123 said in an Aug. 16 statement.
Wanxiang has been pursuing approval from the Committee on Foreign Investment in the U.S. CFIUS, a multiagency group led by the Treasury Department, reviews mergers and acquisitions for national-security concerns when a takeover may give a foreign owner control of a U.S. company.
A123, based in Waltham, Massachusetts, filed for bankruptcy in October after the Wanxiang deal was scuttled amid congressional Republicans’ reluctance to allow the sale of the government-funded company to a Chinese company.
A123 listed assets of $459.8 million and debt of $376 million as of Aug. 31 in court documents.
The case is In re A123 Systems Inc. (AONEQ), 12-12859, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporters on this story: Michael Bathon in Wilmington at mbathon@bloomberg.net; Xin Zhou in Beijing at xzhou68@bloomberg.net To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net
Google Avoids $2 Billion In Taxes By Offshoring Profits In Bermuda
Google co-founder and CEO Larry Page at Google headquarters in New York on May 21, 2012. (Emmanuel Dunand/AFP/Getty Images)
By Bonnie Kavoussi Posted: 12/10/2012 10:54 am EST | Updated: 12/10/2012 10:54 am EST
Google is the latest multinational to come under scrutiny for skirting U.S. taxes.
On Monday, Bloomberg's Jesse Drucker reported that the tech giant avoided paying $2 billion in global income taxes [ http://www.bloomberg.com/news/2012-12-10/google-revenues-sheltered-in-no-tax-bermuda-soar-to-10-billion.html ] by moving $10 billion in revenue, or 80 percent of its pretax profit, to Bermuda, which does not have a corporate income tax. Google has nearly doubled the amount of money that it is sheltering in Bermuda since 2008.
The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.
By Jonathan Chait December 11, 2012
Politico editors Jim VandeHei and Mike Allen [ http://www.politico.com/story/2012/12/crafting-a-boom-economy-84878.html ( http://dyn.politico.com/printstory.cfm?uuid=55F59122-520B-4C54-925D-0E5C296F75D2 )] today have published what may be the most revealing piece I have ever read about the Washington power elite. The value of the piece is almost entirely anthropological. That is to say, read at face value, it tells the reader almost nothing new. But examined as a cultural specimen, it offers profound insight. The piece reads as if it were written by Upton Sinclair, if he were taken prisoner and trying to smuggle messages out to the world past a particularly literal-minded group of censors.
The subject of the piece is Allen and VandeHei’s report that broad agreement exists on the correct policy agenda, as revealed to them through “conversations we have had over the past three months with top lawmakers, officials, their senior aides and the CEOs who advise and lobby all of them.” The story proceeds to describe the obviously sensible agenda agreed upon by these sources: It is vital to reduce the deficit through tax reform and stingier entitlements, along with more free trade, resource extraction, and liberalized immigration.
This is far from the Randian paranoia that has spread among so many millionaires in the Obama agenda. Indeed, I find most of it fairly sensible as policy. What makes the consensus so astonishing, and even nauseating, is the degree to which those who share it show no awareness of their own insularity. Their shared sense of a smart economic growth strategy excludes any monetary or fiscal plan to bring down unemployment through higher consumer demand, a position that commands strong support among economists. Their list of ailments also excludes skyrocketing income inequality and out-of-control carbon emissions. (Though, at the end of a passage extolling the glorious possibility that American oil production will exceed that of Saudi Arabia within a decade, VandeHei and Allen do note, “No doubt, there are environmental concerns, especially for drinking water.” Well, yes. Also for the future of the human race.)
Obviously, the CEOs, lawmakers, and top aides have a shared economic interest in defining the agenda this way. Mass unemployment doesn’t hurt them, and rising inequality helps them. They not only support more free trade (as I do) but lack any sense that its corrosive effect on the bargaining power of labor might make it anything less than an unalloyed blessing. Non-self-interested rationales exist for all these policies, but the role of self-interest in making them attractive to the economic elite ought to be obvious. Yet all seem to believe implicitly that what is good for the CEO class is by definition what’s good for America.
Even more remarkable is the approach Politico’s editors take toward the consensus. They have on their hands the most ripe material for a scathing exposé of a chummy, self-interested business-political elite. VandeHei and Allen, by contrast, understand their role here not as exposing the insider nexus but as uncritically transmitting its point of view. The authors begin by describing the consensus as the opinions of the CEO-Beltway class but never bother to mention dissenting opinions. By the middle of the piece, they dispense altogether with the convention of describing the opinions as such and merely repeat them as obvious truths (i.e., "Tax reform would raise more money to pay down the debt and help create the 'certainty premium' Moynihan spoke of.")
That mainstream journalists feel comfortable doing so is itself further confirmation of the extraordinary and almost unchallenged power commanded by the business and political elites. The Politico story is fairly typical of Washington reporting in its basic endorsement of the business-political elite consensus. The Sunday talk shows and editorial pages are filled to the brim with right-thinking people who would read this piece and nod along happily. What makes this one unusually valuable is that it approaches unusually close to what ought to be a moment of self-awareness — by making explicit rather than implicit the social web that produces the Beltway consensus — but then sprints as fast as can be in the other direction. It should be preserved for generations as the early-21st-century cri de coeur of an incestuous, self-satisfied economic and political elite.
By Alana Horowitz Posted: 12/09/2012 2:40 pm EST | Updated: 12/10/2012 11:41 am EST
Paul Krugman has made it clear: he really, really doesn't like Paul Ryan's budget.
"The Ryan budget is full of -- is full of magic asterisks, too. It's not a real budget. It's a fake document. I mean, I'm amazed that people haven't gotten that. You know, we're now a couple of years into the Ryan thing, and the fact that he doesn't actually present real budgets," he said on Sunday [ http://abcnews.go.com/Politics/week-transcript-powerhouse-roundtables/story?id=17914264 ].
His comments came in the middle of a heated debate on ABC's This Week's roundtable discussion.
Krugman said he blamed the lack of a fiscal cliff deal on Republicans' failure to provide a comprehensive plan to match that offered by the White House.
"Republicans are unable to actually make concrete proposals," he said. "If you actually look, all that talk we just heard about, you know, deficits and China and Greece, which is all nonsense, but all that talk about how we need to deal with this and ask, what is the Republican Party currently proposing? What have they actually put on the table? They put down some numbers, but what specifics?"
The specifics they did offer, he said, are "almost nothing."
"How is the president supposed to negotiate with people who say, "Here's my demands. By the way, I can't give you any specifics. Just make me happy"?
A net 35 percent of NFIB members expect the economy will get worse over the next six months. A month earlier, a net 2 percent thought the economy would get better — not very optimistic, but at least they didn't think the sky was falling.
What changed? Well, Hurricane Sandy disrupted businesses on the East Coast, but it was Obama's re-election that drove many NFIB members over the edge.
"Nearly half of owners are now certain that things will be worse next year than they are now," said NFIB Chief Economist Bill Dunkelberg [ http://www.bizjournals.com/bizjournals/search/results?q=Bill%20Dunkelberg ]. "Washington does not have the needs of small business in mind. Between the looming fiscal cliff, the promise of higher health care costs, and the endless onslaught of new regulations, owners have found themselves in a state of pessimism."
"Hopefully the president takes note and chooses to address small business concerns, rather than pursue an agenda that has noticeably made entrepreneurs more pessimistic," said Rep. Sam Graves, R-Mo., who chairs the House Small Business Committee [ http://smallbusiness.house.gov/ ]. "As fiscal cliff negotiations continue, I hope the president ends his campaign to raise small business taxes [ http://www.bizjournals.com/bizjournals/washingtonbureau/2012/11/14/obama-insists-on-raising-tax-rates-on.html ] and instead focuses on tax reform and creating a more business-friendly regulatory environment."
The meeting, originally scheduled to take place in January, will now be held in April. Charles Koch announced the postponement in an email obtained by National Review, where he also addressed the "disappointing" results of the 2012 election [ http://www.huffingtonpost.com/news/elections-2012/ ].
"Despite November’s disappointing election results, I am convinced that America’s long-term decline is far from a foregone conclusion," Koch wrote. "Our goal of advancing a free and prosperous America is even more difficult than we envisioned, but it is essential that we continue, rather than abandon, this struggle."
Koch said the meeting was delayed while key data on the state elections -- needed to "re-examine our vision and the strategies and capabilities required for success" -- is being collected.
At a private three-day retreat in California last weekend, conservative billionaires Charles and David Koch and about 250 to 300 other individuals pledged approximately $100 million to defeat President Obama in the 2012 elections.
A source who was in the room when the pledges were made told The Huffington Post that, specifically, Charles Koch pledged $40 million and David pledged $20 million.
The semi-annual, invitation-only meeting attracts wealthy donors, Republican politicians and conservative activists. Last year, hundreds of activists gathered outside the walled-off resort to protest the meeting. This year, however, the conference went off quietly.
"Conference organizers and their guests successfully slipped in and out of the Coachella Valley without being detected, by buying out nearly all of the 500-plus rooms at the Renaissance Esmeralda resort in Indian Wells," reported The Desert Sun. "The resort closed its restaurants, locked down the grounds with private security guards and sent many workers home."
This is the ninth straight year the Kochs have hosted the conference. As Politico reported last year, the meetings often adjourn "after soliciting pledges of support from the donors -- sometimes totaling as much as $50 million -- to nonprofit groups favored by the Kochs."
"I happen to be in a unique business where winning and losing is the basis of the entire business," Adelson told the Journal. "So I don't cry when I lose. There's always a new hand coming up."
Blind Trust Experiment - Aboriginal Girl Puts Her Faith in Humanity
"Hate mail won't stop church from hosting Muslim convention"
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Blindfolded Muslim takes to the street for hugging experiment
A blindfolded Muslim man stands on a street in Toronto with a sign asking passersby to give him a hug - and films the reaction
Mustafa Mawla didn't know what kind of reception he would get from the Canadian public Photo: Blind Trust Project/YouTube
By Rachel Jones, Social Media Content Editor
4:25PM GMT 11 Feb 2015
"I am a Muslim. I am labelled as a terrorist. I trust you. Do you trust me? Give me a hug."
Those were the words at Mustafa Mawla's feet as he stood blindfolded with outstretched arms on a busy Toronto street, while a camera rolled a few feet away.
The Canadian Muslim was taking part in the 'Blind Trust Project' - a social experiment to "to break down barriers and eliminate the fear and ignorance projected towards Muslims and Islam."
(Picture: Blind Trust Project/YouTube)
The project was the brainchild of 24-year-old Canadian Muslim Assma Galuta - who teamed up with film-makers Time Vision to shoot the video.
“Blindfolded, anyone could harm him or feel very angered," she said. "He’s giving people his full trust and he wants to see if people trust him enough to give him a hug.”
To date nearly 800,000 people have watched the video to see what the public's response to the experiment would be.
And to the delight of everyone involved in the project, that response was overwhelmingly positive.
Dozens of passers-by of all ages, genders and colours, stopped and embraced Mustafa Mawla in a hug.