BREAKING: Globalization Is Dangerous

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Globalization is dangerous.

But not, as it turns out, because it has gutted the middle class. Not even because a globalized supply chain has made it easier for our rivals to sabotage our defense programs, or that a globalized supply chain has led to a loss of manufacturing capacity that threatens our defense, to say nothing of our distinctly American commercial sectors.

Rather, retired Admiral James Stavridis, in a more popularized version of a piece he wrote for a National Defense University volume on the topic, argues that “deviant globalization,” whether that of drug traffickers, terrorists, counterfeiters, or hackers, poses a rising threat.

Convergence may be thought of as the dark side of globalization. It is the merger of a wide variety of mobile human activities, each of which is individually dangerous and whose sum represents a far greater threat.

I’m sure it is a threat. But Stavridis makes the same mistake just about everyone else makes when they consider criminal globalized networks to be a security threat: they ignore that there is little these illicit networks do that licit ones didn’t already pioneer. They ignore that the only thing that makes them illicit is state power, the same state power that corporatized globalization has weakened.

In fact Stavridis’ fourth point telling how to combat deviant globalization is notable for what it’s missing.

Fourth, we must shape and win the narrative. Many have said there is a “war of ideas.” That is not quite the right description. Rather, the United States is a “marketplace of ideas.” Our ideas are sound: democracy, liberty, freedom of speech and religion — all the values of the Enlightenment. They have a critical role in confronting the ideological underpinnings of crime and terror. Our strategic communications efforts are an important part of keeping our networks aligned and cohesive.

You see it? In spite of using the metaphor of the market to describe the realm of ideas, Stavridis neglects to mention that one of our ideas, so-called capitalism (or the marketplace itself!), that value of Enlightenment, is precisely the logic that has made globalization imperative.

If the way to beat these criminal globalized networks is to compete ideologically, but the ideological foundation our elites cling to most desperately is the same one the criminal globalized networks are exploiting so spectacularly, haven’t we already lost the battle of ideas?

Stavridis’ choice to ignore capitalism is probably why he doesn’t get the problem with his call to “follow the money.”

Third, we must follow the money. Huge sums of cash from these trafficking activities finance terrorists and insurgents such as the Taliban, as well as corruption. The money is used to undermine fragile democracies. Efforts to upend threat financing must be fused with international initiatives, move across U.S. agency lines and have the cooperation of the private-sector institutions involved.

It is true that globalized cash flows undermine weak governments (the same ones that otherwise might make these criminal globalized networks illicit). But that’s at least as true of the money looted from poorer countries and deposited, completely legally per western elites, in secrecy regimes, or of the hot money that destabilizes the global economy more generally. Moreover, one of the biggest impediments to tracking the flows of criminal globalized networks is that the so-called licit multinational banks they use to transfer their money are more interested in the profits from the money than in cooperating with increasingly weak states. So long as HSBC can get away with a wrist slap, after all, why would any multinational bank give up its customer base to American authorities?

Stavridis ends his column by citing Hardy’s warning about icebergs.

Just over a century ago , the poet Thomas Hardy wrote “The Convergence of the Twain” about the collision of the Titanic and the iceberg that sank it. “And as the smart ship grew/ In stature, grace, and hue/ In shadowy silent distance grew the Iceberg too.” There is an iceberg out there in the form of weapons of mass destruction; what is most worrisome is the convergence of such a weapon with a sophisticated global trafficking route enabled by cybercrime and the cash it generates. That is the convergence we must do all in our power to prevent.

Stavridis almost gets it. He almost gets it that these global trafficking routes, whether deemed licit or illicit by increasingly weak states, are the iceberg that is looming.

It’s just that he chooses to ignore the iceberg he can see for the parts he can’t see.

Classification Games Hiding the Afghan Defeat

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Amidst all the discussion of the Administration’s crack-down on leaks, two details have made it clear the Administration is using its own abuse of classification to hide reports of our impending defeat in Afghanistan.

Administration leaks to enforce and protect our pro-corruption policy

One of those comes from Sarah Chayes, the former Stanley McChrystal advisor. She was last seen on the pages of this blog complaining about CIA support for corruption in Afghanistan. In a new piece, she offers one of the most interesting takes on the Administration’s pursuit of leaks.

While her main point is that if reporters were as exposed as their sources to legal consequences for leaks, they might better judge the truly important leaks, she throws some fascinating details showing how broken the classification system is.

Far too much information is protected by unwarranted classification. It’s hard to take a system seriously that places so many gigabytes of material that are not critical to national security under the same umbrella as the few nuggets that are. I’ve seen a New Yorker article included among prep documents for a National Security Council meeting stamped SECRET//NOFORN (meaning that only cleared U.S. citizens were allowed to read it).

[snip]

In September 2010, a flurry of coverage in major U.S. newspapers reported a supposed government decision on how corruption in Afghanistan would be handled. Perusing the articles with growing wonder, I looked down at a memo on my desk. Not only were passages quoted from it classified, the document was also watermarked DRAFT. No decision had been made yet because debate on the draft had not even reached the level of Cabinet secretaries. It was a classic Washington case of offensive leaking. For months, I was convinced that the perpetrator was the late Richard Holbrooke, then special representative to Afghanistan and Pakistan. But I kept asking reporters. Finally I traced the leak to a senior White House official, whose career has progressed untroubled.

She makes it very clear what the second example of classification abuse is. While she links to this early September 2010 WaPo article describing a decision to ignore corruption in Afghanistan, in her own account of what happened, she points to mid-September as the period when it became clear top figures in the Administration had bought off on supporting corruption in exchange for “progress” towards wiping out the Taliban.

Effectively, Chayes is suggesting that a top White House figure effectively won the debate in support of ignoring corruption in Afghanistan by leaking a draft classified decision as a fait accompli. Given her suggestion that this person’s career has “progressed,” it’s a safe bet that it is one of the people — like current National Security Advisor Tom Donilan, current CIA Director John Brennan, or current Deputy National Security Advisor Ben Rhodes — who got promoted since this leak.

Chayes doesn’t provide much guidance about which New Yorker article was classified SECRET and used in a National Security Council meeting, but I’m betting it was this Dexter Filkins article that rehearses the same issues of corruption. As I’ve noted, while the NYT (where Filkins had recently departed) only hinted at how badly the collapse of the Kabul Bank implicated Hamid Karzai’s corrupt administration, Filkins provided extensive details. The Filkins article, like the earlier series of articles, arises out of the decision to capitulate to CIA bagman Muhammad Zia Salehi’s blackmail to avoid prosecution.

Salehi telephoned Karzai from his jail cell. “He told Karzai, ‘If I spend one night in jail, I’ll bring the whole thing down,’ ” the Western official recalled.

Out of fear Salehi would “bring the whole thing down,” it seems, the Obama Administration chose to abuse the classification system to ignore — while hiding the true extent of — the corruption of our Afghan partners.

Selective protection of CIA’s efforts to convince our allies to remain in Afghanistan

Meanwhile, one of the things the government convinced Bradley Manning trial judge Denise Lind to keep secret even after it had been inadvertently released once appears to relate to CIA’s efforts to shore up support for the Afghan War among our European allies.

Alexa O’Brien makes a compelling argument that one of the witnesses who will testify to the harm allegedly caused by Manning’s leaks in secret is Robert Roland. She further argues that Roland will testify about 2 CIA Red Cell Memos, one of which strategizes how to ward off political opposition to the Afghan War of the kind that got our coalition partners in the Netherlands ousted (the other, which I wrote about here, pertains to concerns that other countries will figure out we export terrorism). The analysis of the memo itself is rather unsophisticated; it argues if we emphasize the benefit for women of our continued presence in Afghanistan and the support one poll showed Afghans had for our presence, it’ll be enough to keep French and German voters in line.

But I guess it is rather embarrassing to have CIA’s reflections, however naive, on how to counter democratic opposition to war out there. And I suppose Roland’s identity might have been protected until whatever reviewer missed it in one of Manning’s defense filings.

At this point, however, both are public. Yet Roland’s identity and the CIA reports are being treated with far more sensitivity than far more damning State reports that will be discussed publicly.

Ah well. The report I want to see is the CIA plan to shore up support for the Afghan war as it becomes more and more clear the war serves only to prop up the crooks the CIA has been bribing for 12 years.

Philip Mudd Makes the Case for Signature Strikes against Banksters

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Last Friday, former Deputy Director of CIA’s Counterterrorism Center and FBI Philip Mudd defended the use of signature strikes when used against multinational networked organizations that hide in safe havens.

Signature strikes have pulled out these lower-level threads of al Qaeda’s apparatus — and that of its global affiliates — rapidly enough that the deaths of top leaders are now more than matched by the destruction of the complex support structure below them. Western conceptions of how organizations work, with hierarchal structures driven by top-level managers, do not apply to al Qaeda and its affiliates. These groups are instead conglomerations of militants, operating independently, with rough lines of communication and fuzzy networks that cross continents and groups. They are hard to map cleanly, in other words.

[snip]

Part of the reason signature strikes have become so prominent in this global counterterror war is, simply put, geography. Local terrorist groups only become international threats if they have leadership that can execute a broad, globalist vision, and if that leadership has the time and space to plot without daily distractions from armies and security services — as in safe havens like Yemen, Somalia, the Sahel, and the tribal areas of Pakistan. These are exactly the places where the United States cannot apply conventional force and where local governments lack the capability or will to counter the threat. Exactly the places where drones offer an option to eviscerate a growing terror threat that has a dispersed, diffuse hierarchy. [my emphasis]

Of course, Mudd is crazy to suggest that the networked organization of terrorism is not found in the West. Indeed, corporations in the West pioneered the concept, with cell structures that provided them legal opacity. Though the safe havens they hid in were named Jersey and Cayman Islands rather than Yemen or Somalia.

So it seems this defense of signature strikes should be read as one of two things. Either, a case that the best defense against the damage banksters have caused is the fairly indiscriminate killing of their mid-level managers. Or, if that solution seems barbarous at its core, then perhaps this is a good case study in how extreme the idea of signature strikes would seem if it weren’t couched in a sloppy kind of Orientalism advocating it for others but not for our own.

The Blame Game Begins: Who Will Be Held Responsible for Creating the Afghan “Vertically Integrated Criminal” Government?

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Last Sunday, the Beltway professed to be shocked — shocked!! — that the CIA has been bribing Hamid Karzai for years.

Moreover, there is little evidence that the payments bought the influence the C.I.A. sought. Instead, some American officials said, the cash has fueled corruption and empowered warlords, undermining Washington’s exit strategy from Afghanistan.

“The biggest source of corruption in Afghanistan,” one American official said, “was the United States.”

Fred Kaplan, author of a fawning David Petraeus biography, described how Petraeus tried to fix that corruption but was stymied by practicality.

Petraeus was impressed with their analysis but found their proposals impractical. First, he couldn’t simply bypass Karzai. One of his strategic goals was to help stabilize Afghanistan. Overhauling the districts’ governing boards and transferring power to new officials—who may themselves just be a new array of warlords—was hardly a recipe for stability. Second, the plan would undermine another strategic goal—protecting the Afghan population. The local officials who were taking bribes and extorting merchants were also helping out with local security, sometimes guarding convoys of NATO supply trucks. If the cash spigot were shut off, they might let the Taliban attack those trucks, maybe even join in.

Then Sarah Chayes, one of the civilian advisors who fought against Afghan corruption in the transition period from Stanley McChrystal to Petraeus, wrote an account of what Petraeus really did.

Our PowerPoint presentation spelling out this plan ran to more than 40 slides. We selected a dozen we really planned to brief, but at a meeting with the entire command staff, General Petraeus read through every one. With a calculated flourish, he marked a check on each page as he turned it over. Petraeus was on board.

[snip]

But when he stood up to address the assembled brass, Petraeus seemed to skip past — or even argue against — the slides we had prepared explaining the new governance approach. We were stunned. What had happened? Had we misunderstood? Had he changed his mind?

For another month, we kept at it; I hammered out a detailed implementation of our general concept to be employed in Kandahar province, alongside the troop surge. But by mid-September 2010, it was clear to me that Petraeus had no intention of implementing it, or of pursuing any substantive anti-corruption initiative at all. Four months later, in an intense interagency struggle over the language of a document spelling out objectives for Afghanistan by 2015, the U.S. government, at the cabinet level, explicitly reached the same decision.

That was the moment I understood the Afghanistan mission could not succeed.

Like Kagan, Chayes ultimately blames CIA. But she does so, specifically, in the context of the attempted July 2010 arrest of the CIA’s bagman, Muhammad Zia Salehi.

I spent weeks wracking my brain, trying to account for the about-face. Eventually, after a glance in my calendar to confirm the dates, it came to me. It was the Salehi arrest. The Salehi arrest had changed everything.

[snip]

Throughout the unfolding investigation, two senior U.S. officials have told me, through Salehi’s arrest and release after a few hours of police detention, CIA personnel never mentioned their relationship with him. Even afterwards, despite pressure in Kabul and Washington, the CIA refused to provide the ambassador or the key cabinet officials a list of Afghans they were paying. The CIA station chief in Kabul continued to hold private meetings with Karzai, with no other U.S. officials present.

So whom did Salehi call from his jail cell the afternoon of his arrest? Was it Karzai, as many presumed at the time? Or was it the CIA station chief?

However lethal our bribes to Karzai have been to our so-called strategy in Afghanistan (though I wonder: have they simply forestalled an all-out civil war?), he’s still going to proudly receive the cash.

“Yes, we received cash from the CIA for the past 10 years. It was very useful, and we are very thankful for this aid,” the president said during a news conference Saturday in Kabul.

“Yesterday, I thanked the CIA’s chief in Kabul and I requested their continued help, and they promised that they will continue.”

If all this sounds vaguely familiar, it should.

That’s because much of this dispute played out in reporting at the time. After NYT first reported CIA’s ties to Salehi a month after the attempted arrest in 2010 — and quoted one official saying “Fighting corruption is the very definition of mission creep” — the WaPo reported more anonymous sources almost boasting of the bribes (and reminding they went back to the mujahadeen era). Read more →

The Find Every Terrorist at Any Cost Industry

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As a thought experiment, replace the word “terrorist” in this paragraph with “soldier” or “military.”

All terrorists fundamentally see themselves as altruists: incontestably believing that they are serving a “good” cause designed to achieve a greater good for a wider constituency—whether real or imagined—which the terrorist and his organization or cell purport to represent. Indeed, it is precisely this sense of self-righteous commitment and self-sacrifice that that draws people into terrorist groups. It all helps them justify the violence they commit. It gives them collective meaning. It gives them cumulative power. The terrorist virtually always sees himself as a reluctant warrior: cast perpetually on the defensive and forced to take up arms to protect himself and his community. They see themselves as driven by desperation——and lacking any viable alternative—to violence against a repressive state, a predatory rival ethnic or nationalist group, or an unresponsive international order.

The paragraph comes from Bruce Hoffman, a Georgetown Professor/ThinkTanker whose studies of terrorism predate 9/11 by decades. It forms part of his explanation, post Boston, for why people become terrorists: because they, like our own country increasingly, see violence as a solution to their grievance.

That’s not all of Hoffman’s description of what makes people terrorists, mind you. He goes onto discuss religion and the human relations that might convince someone to engage in violence. But the paragraph has haunted me since I read it over a week ago for how clearly it should suggest that one of the few things that separates terrorism from our country’s own organized violence is official sanction (and at least lip service about who makes an appropriate and legal target).

Which is one reason why Jack Levin, in a piece debunking four myths about terrorism, offers this as one solution.

Somehow, we must reinstate the credibility of our public officials — our president, our Congress, and our Supreme Court Justices — so that alienated Americans do not feel they must go outside of the mainstream and radicalize in order to satisfy their goals.

Blaming terrorism on our dysfunctional political system feels far too easy, but it’s worth remembering that in Afghanistan, Somalia, and parts of Yemen, Al Qaeda has at times won support from locals because it offered “justice” where the official government did not or could not.

In any case, the common sense descriptions Hoffman and Levin offer haven’t prevented a slew of people responding to Boston — some experts, some not — from demanding that we redouble our efforts to defeat any possible hint of Islamic terrorism, no matter the cost.

Batshit crazy Texas Congressman Louie Gohmert claims the Boston attack is all Spencer’s fault: because FBI purged some its training materials of some of the inaccurate slurs about Muslims (but did not even correct the training of Agents who had been taught that claptrap in the first place), it can no longer speak a language appropriate to pursuing terrorists. “They can’t talk about the enemy. They can’t talk about jihad. They can’t talk about Muslim. They can’t talk about Islam.” Which elicited the equally batshit crazy response from Glenn Kessler of taking Gohmert’s premise as a valid one that should be disproven by weighing how much offensive language remains in FBI materials, rather than debunking the very premise that only people who engage in cultural slurs would be able to identify terrorists. I award Kessler four wooden heads.

Somewhat more interesting is this piece from Amy Zegart, another Professor/ThinkTanker. She admits we may not know whether Boston involved some kind of intelligence failure for some time.

Finding out what happened will be trickier than it sounds. Crowdsourcing with iPhones, Twitter, and Lord & Taylor surveillance video worked wonders to nail the two suspects with lightning speed. But assessing whether the bombing constituted an intelligence failure will require more time, patience, and something most people don’t think about much: understanding U.S. counter-terrorism organizations and their incentives and cultures, which lead officials to prioritize some things and forget, or neglect, others.

But that doesn’t stop her from insisting FBI’s culture remains inappropriate to hunting terrorists “pre-boom.”

But it is high time we asked some hard, public questions about whether the new FBI is really new enough. Transformation — moving the bureau from a crime-fighting organization to a domestic intelligence agency — has been the FBI’s watchword since 9/11. Read more →

Maybe Dzhokhar’s Buddies Just Wanted a Job at HSBC?

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A lot of people on Twitter are talking about how dumb-as-shit Dzhokhar Tsarnaev’s college buddies, Azamat Tazhayakov, Dias Kadyrbayev, and Robel Phillipos were when they allegedly removed evidence relating to the Boston Marathon bombing and threw it in the trash or (in the case of Phillipos) lied about those activities.

I’m not convinced, though.

I’m not defending what the young men did. Nor am I vouching for their intelligence. Nor am I saying they shouldn’t be prosecuted — they should!

But I’m having a hard time distinguishing what they did from what, say, HSBC did, for years. Aside from the fact that HSBC affirmatively helped terrorists, rather than just covered up that help. And aside from the fact HSBC made a billion dollars doing so.

As a reminder, where’s what HSBC did — eliciting nary a blink of an eye from the same DOJ that is now (rightly) prosecuting these dumb-as-shit kids. They were a key — perhaps the key — bank providing Saudi al-Rajhi bank cash dollars. Details emerged in 2001 that the bank had been providing the dollars terrorists used in their plots, including the 9/11 plot. It took four years for HSBC to begin to get worried about it. But it still only halted the dollar trade for al-Rajhi while its US regulator, OCC, looked into its money laundering practices (it says something about HSBC’s awareness of the sensitivity of this issue that they didn’t halt their other abundant money laundering activities).

And then, once OCC was out of its hair, HSBC moved back into the cash dollar business with al-Rajhi, a bank reportedly involved with the most spectacular terrorist acts of recent years.

Just HSBC’s brief exit from the cash business with al Rajhi is similar to what Dzhokhar’s dumb-as-shit buddies did when they put his backpack in the public trash. Covering up terrorism.

Read more →

When the Preet Promotion Industry Speaks, the Nation Gets Nervous

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In an article with the URL “when-preet-bharara-speaks-the-shady-get-nervous,” the WaPo repeats a now familiar formula for stories boosting US Attorney Preet Bharara’s fortune: lots of quotes from political powerful allies…

“If [Bharara] smells corruption, he’ll go after it and figure out a way to corral it,” [Chuck] Schumer said. “But he will not make up cases for the sake of making up cases.”

Lots of celebration of recent headlines (I mean, cmon, as I understand it, indicting corrupt NY officials has become the prosecutorial equivalent of shooting fish in a barrel)…

“For the second time in three days, we unseal criminal charges against a sitting member of our state legislature,” Bharara, 44, said during the Thursday afternoon news conference in downtown Manhattan. This time, the U.S. attorney accused a Bronx assemblyman of accepting bribes as part of a scheme to aid developers, which Bharara called “a fairly neat trick” that amounted to “a legislator selling legislation.”

And lots of hints that scream “Pick Preet! Promote Preet!”

It is now highly unlikely that the White House would forget about Bharara, as administration officials somehow did in 2009, when they failed to invite the Indian American powerhouse to the Indian state dinner.

[snip]

Such concerns are unlikely to slow down Bharara. Considered politically astute by observers in Washington and New York, Bharara made a point of not taking sides in the 2008 Democratic presidential primary that pitted then-senators Barack Obama and Hillary Rodham Clinton. He has been rumored as a possible successor to his boss, Attorney General Eric H. Holder Jr., either in the current administration or the next Democratic one.

But not one word about his failure to hold anyone accountable for the 2008 financial crash (aside from citing last year’s Time magazine story that falsely claimed “This Man Is Busting Wall Street”).

But Chuck Schumer and Preet’s other boosters appear to believe that’s the formula that will get Preet nominated to replace Eric Holder.

Sadly, they’re probably right.

VirginLeak

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A number of journalistic outlets are cooperating in a project to describe the contents of 200 gigabytes of financial information from private incorporation agencies in the British Virgin Islands. The International Consortium of Investigative Journalists has links to all the stories using the data. The CBC has some of the most interesting graphics.

But I have yet to see a really good explanation of where this data came from–or why it was leaked in this form. The Guardian has one of the best explanations of what’s out there.

The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.

[snip]

The whistleblowing group WikiLeaks caused a storm of controversy in 2010 when it was able to download almost two gigabytes of leaked US military and diplomatic files.

The new BVI data, by contrast, contains more than 200 gigabytes, covering more than a decade of financial information about the global transactions of BVI private incorporation agencies. It also includes data on their offshoots in Singapore, Hong Kong and the Cook Islands in the Pacific.

And CBC offered this explanation of why they are shielding the identity of 450 Canadians who are stashing their money offshore.

The documentation provided to CBC News includes the names of some 450 Canadians who have set up these offshore accounts or holdings. We have already reported details concerning one such account-holder and expect to produce more such reports in the weeks and months to come.

At the same time, we are mindful of the reality that holding an offshore account is not evidence of wrongdoing and may not be controversial. So we are not simply reproducing the raw information we have received through the consortium. Our journalists are working through that information in a careful and methodical way to confirm the information received, identify appropriate stories, and complete them with appropriate context.

We shall see — both whether the elite of the world respond to this leak with the outrage they responded to Bradley Manning’s leaks, and whether the thus far selective nature of the stories on this betray whose agenda the leaks are serving.

While this data may just come from an insider releasing the information publicly (but then why not leak it all?), it is not inconceivable that BVI’s competitors in the secrecy business might want to cut into their market.

Add Sovereign Citizens Who Have to Play by Rules HSBC Doesn’t

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Remember how HSBC facilitated massive money laundering, around the globe, for over a decade, but got away with a hand slap? Remember how a single check cashing store in LA got very different treatment?

Well, add sovereign citizens to the list of Americans who don’t get the treatment HSBC got.

A man known to reject government authority as a member of the “sovereign movement” was slammed with a federal sentence Wednesday of 98 months in prison and ordered to forfeit more than $1.29 million in assets.

Shawn Rice, 50, was convicted last July on one count of conspiracy to commit money laundering, 13 counts of money laundering, and four counts of failure to appear, the U.S. attorney for the district of Nevada said in a release.

Once again, after winning a harsh sentence, DOJ’s representative talked tough about the importance of prosecution.

“Persons who commit financial crimes victimize organizations, government and the public,” said U.S. attorney Daniel Bogden. “Our office and our federal partners will work jointly with local and state law enforcement to ensure that these persons are caught and prosecuted.”

If I weren’t officially on vacation, I’d check the docket on this, though for the moment I’ll accept that Rice warranted such tough treatment.

But these tough words would sure be more credible if DOJ consistently treated money launderers with this seriousness.

Emergency Manager Kevyn Orr’s Nanny Factory

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When I wrote this post, describing Detroit Emergency Manager Kevyn Orr’s significant (and serial) tax lien in Maryland, I noted that the lien was very very high for just one nanny (which is the excuse Orr offered for the lien).

Using the numbers from the original Detroit News article, the average tax due from 2011 per delinquent Detroit property owner is about $1,790. Orr has been underpaying MD several times that every year, effectively asking the state to float his unemployment insurance obligations for two years until he gets around to paying them.

[snip]

Here’s another neat detail: The median household income in Detroit is $27,862. Orr consistently owes about $7,000 just in unemployment insurance for his nanny. It seems like most Detroit residents could get themselves a raise if only they tended Orr’s kids.

Scribe even did the math to show how high that lien was.

That’s a hell of a big paycheck to a nanny, to create UI liabilities in the $6500-9500/year range.

Calculating the actual tax rate can be a bit of a challenge, but this snip from a 10/14/2011 article (http://articles.baltimoresun.com/2011-10-14/business/bs-bz-unemployment-insurance-tax-rate-20111014_1_unemployment-insurance-maryland-employers-trust-fund ) says a lot: “Maryland has been stuck at “Table F” — rates ranging from 2.2 percent to 13.5 percent of the first $8,500 in wages paid, depending on an employer’s layoff history — since last year.”

Even assuming the worst layoff history, he’s paying a lot:
13.5 percent of 8500 is 850 + 255 + 42.50 = 1147.50
2.2 percent of 8500 is 170 + 17 = 187.00

It takes a lot more salary to get those liabilities up to where he’s finding himself. And I’m betting that, for the happiness of the kid(s) and parents who have to interview nannies, there is not much turnover and thus a lower layoff history, so his percentage is most likely toward the bottom of the scale.

Turns out Scribe was right.

Some, though, question how a baby sitter alone could be responsible for such a debt. The outstanding liens for unemployment taxes were for $6,595 for the 2010 tax year and another for $9,409 for the 2010-11 tax years.

“That’s an awful lot of taxes for a baby sitter. Are you sure he’s not running a day care?” joked Maryland tax attorney Jeffrey Katz.

He said the numbers don’t add up. In Maryland, unemployment taxes are capped at about $1,150 a year per employee, Katz said, so Orr would have to go through more than five baby sitters in one year to reach $6,500 in back taxes for one year.

[snip]

Orr said he doesn’t know why the tax bills were so high. The same baby sitter has watched his two children for a couple of years, arriving in the morning and leaving in the afternoon. No former employee has filed for jobless benefits, Orr said.

There is no way this lien is about Orr’s single nanny, who has never filed for jobless benefits.

Either Orr has far more staff members than he let on–more even than five, given that he hasn’t been laying them off. Which would itself be notable for a guy who is about to lay off a bunch of Detroit workers.

Or the lien is for something else entirely, and Orr just invented the nanny story because it’s the convenient excuse rich people always use for being tax deadbeats.

Governor Snyder is begging the press to move on now, so I’m guessing he has a pretty good sense that the nanny is just a cover story and that, at a minimum, Orr will soon have to admit he’s not just a tax deadbeat but also a fibber.

But the underlying excuse for the lien sure seems like it might be relevant to Orr’s fitness to fire a bunch of Detroit workers.