A serious question for Sam Stone on Factual Errors

The BBQ Pit
1421

I’m not sure if I should necessarily respond to this because what I have to say is based on recollections of many of your posts and my interactions with you over the years, and I’m not about to spend hours searching for specifics, especially since a lot of the old vBulletin stuff isn’t turning up in searches (like posts I know I made, but are just not there any more). But I’m one of the ones who called you “extreme right” so I’ll offer what I can by way of general explanation.

For example, “free markets and smaller government” sounds like a reasonable conservative position, but I remember being astonished by some of your posts that sounded like flat-out anarchistic libertarianism. You’ve also suggested that environmental policies like the carbon tax will leave Canada destitute and freezing in the dark, and encourage Alberta to secede and become its own country. I don’t believe you’ve ever denied the science of climate change, but you’ve definitely slammed mitigation strategies on the grounds that the effects of climate change are fundamentally unpredictable due to complexity theory, so maybe we should do nothing. And besides, the costs would be enormous. So let’s just keep buying Alberta oil and burning it til the cows come home. And you spend a tremendous amount of time defending American Republicans when they’re in the throes of partisan lunacy.

As I said before, you’re certainly not the “moron” that some claim you are. You’re intelligent and well equipped with data from your particular rabbit hole, and have made many cogent arguments on that basis, but in my view you’re not well equipped with perspective or the ability to understand points of view that conflict with your deeply entrenched ideology. Bottom line: if Canada, the country we have in common, were run according to your ideology, we would lose our entire social infrastructure in the pursuit of libertarian individualism and become a sort of hybrid of the USA and Somalia with the worst features of both.

1422

Fair enough.

But it would be my considered opinion that you aren’t on the side of the battle that you think you are.

Y’know: if’n you care.

1423

Investment banking is a service.

I realize that you and Sam are incredibly ignorant about the way certain businesses work. That’s OK, I realize that some people have narrow lives and never think about the fact that there are businesses beyond consumer oriented retail establishments, so I’ll try to type slowly.

When people want to start or expand a business, they frequently need money to do so. Sometimes they might have this money saved up, but sometimes they don’t.
Then they either need to borrow money or find people to invest in their business. If the business is a small shop or restaurant, sometimes they need to look no further than friends and family, but some business ventures are more ambitious.

In that case, the business owner may approach people that specialize in putting businesses together with interested investors. These people are called investment bankers. It’s a sales job of sorts, investment bankers convince people of money of the solidity and profit potential of the business they are working for, and convince them to write checks in exchange for a percentage of the profits the business generates.

In exchange for that service, the investment banker gets a commission, their own little piece - or not so little- of the percentage of the profits.

Still with me?

Now, every deal that an investment banker makes is different. Different principals, different investors, different percentages. The banker can’t just take all the money from these different deals and co-mingle them in the same bank account and ask the people that he’s working with to trust him to distribute it correctly. That would not only be BAD, but possibly ILLEGAL.

The way this is handled is that a company is formed to handle each business deal. That company, typically a limited liability corporation or LLC has its own books and bank accounts. It’s a tool for accountability. The fact that they are not making a product is irrelevant. And they are selling a service, financial services are considered a service and it is an important sector of our economy.

And if a banker is successful and brokers lots of deals, he may set up lots of LLC’s. Yes, those companies exist to receive and distribute money. That’s how it works.

And the people that are involved in such business, unsurprisingly, know lots of people with money to invest, which frequently means they come from a privileged background. And the sums of money being brokered and the commissions involved are often staggering sums. That’s how it works.

And the people that are throwing around terms like “shell company” and “funnel” know this, too……but they also know that you and people like you don’t know this stuff, so they are playing to your ignorance.

Got it?

1424

I think you’re shouting in the wind, but you’re doing god’s work.

“Shell company” is this year’s Whitewater term, whatever they were calling that.

1425

Yes I do understand LLC’s and have invested in them many times over my life. But when the product or service is not clear it should be looked at especially when someone like a vice president or close relative of a VP is involved. The banks sent plenty of notices to the IRS warning of suspected money laundering and they were all squashed adding to the suspicion. We certainly don’t want a compromised person making high level decisions. Complete transparency on deals like this should go without saying. They need to be looked at closely.

1426

An LLC is a business entity, usually closed to all except those invited to invest. Are you sure you know what you’re talking about?

LLC vs. Corporation - What is the difference between an LLC and a corporation?.

1427

Not clear <> I don’t know or I don’t understand.

@Ann_Hedonia excellent post.

Just to point to one specific in support of Ann’s post:

Look at the deals they made, and the money involved. Rosemont Seneca’s 10% equity stake could translate to a great deal of money.

1428

Tell me, and us, that you don’t know what the fuck you’re talking about with just one word.

1429

What high level decisions is Hunter Biden making? He’s not like the Trump kids, he’s never been in business with his father or involved with his father’s political career.

And the sole reason for the “suspicious activity” reports was that the banks had become aware of the investigations into Hunter Biden. The only reason the activity was considered suspicious was that he was being investigated.

And you must be reading impaired, because I’m very clear on what services Hunter Biden was providing and I think I explained it well.

1430

Many years ago I was watching a TV drama, and a man was talking with some potential business partners and expressing some skepticism about a particularly strait-laced appearing fellow. Although I can’t remember the exact phrasing, he said something to the effect of wanting partners that were clean, but not squeaky clean.

If Joe Biden had been acting with nothing but his political career in mind, he would’ve denounced and disowned his son once his son’s problems became apparent. He would’ve thrown his family under the bus in order to avoid being publicly associated with a drug abuser. He wouldn’t have called his son begging him to seek help, for fear that right wing media might leak the tape, and imply that his offer to help his son was an offer to help him obtain drugs.

And he wouldn’t have continued to associate with his son once his son got clean, for fear that if his son’s potential business partners knew that he still loved and cared about his son, that he sometimes socialized with his son and his associates, he might be accused of trying to help his son succeed, because I have no doubt that Hunter’s potential business partners were reassured by the fact that his father supported and believed in him.

Because if Joe was a squeaky clean perfect politician, he would’ve put the appearance of propriety above faith, family and love and treated his son no better than any other random ex-drug addict, for fear that any gesture of support would be misconstrued as an impropriety.

And that would make Joe Biden a squeaky clean politician and a horrible person.

1431

The same applies to the oft-blared allegations that some impropriety must have occurred because Hunter Biden wasn’t a subject expert in energy or the Ukraine and yet had a seat on the Burisma board. Anyone with even the slightest knowledge of corporate boards knows that subject experts are very much the minority on such boards - many have only one or two experts in the actual business of the firm, and a few unwise ones have none. Most corporate board members have expertise in finance, corporate law, accounting and/or corporate governance. Hunter is a corporate lawyer who had prior board experience (mostly notably Amtrak) before joining the Burisma board; this is not an unusual profile for a board member. I’m not saying he was a particularly good one personally, but his background aligns with the norm.

The other point often mentioned is that Hunter was appointed for his personal connections, to which one can only reply “Well, duh”. If you rid all corporate boards of people who were appointed for their personal connections to other people who might be of benefit to the firm, you’d at best decimate every board and many of them you’d clear out completely. But again, the people and organizations claiming all this as evidence of wrongdoing do so with the certain knowledge that their target audience doesn’t know any better.

One could also point to the hysteria around Suspicious Activity Reports (SARs), trumpeted as

as if every SAR was undeniable proof of wrongdoing. But SARs get filed for a lot of banal reasons, such as reporting large or atypical transactions which might be a red flag for money laundering, or might just be a large or atypical transaction. The vast majority of them don’t lead to money laundering investigations after review, but they get reviewed in case they might lead to something larger or in case in aggregate they show a suspicious pattern.

The rules triggering SARs vary by country. In the US, triggers for required reporting include

  • individuals who transport more than $10,000 in currency into or out of the country;
  • shippers and receivers involved in the transfer of $10,000 in currency into or out of the country;
  • businesses that receive more than $10,000 in currency in a single transaction or in related transactions; and/or
  • people who have control over more than $10,000 in financial accounts outside of the country during a calendar year.

As @Ann_Hedonia has already pointed out, the nature of the investment banking business will trip these triggers on a regular basis (particularly the last one). The mere existence of the SARs is not a sign that something is dodgy; it’s to ensure that there isn’t. And just because no action followed doesn’t mean they were “squashed”; it may simply mean that no cause to pursue them further was found.

But the words “Suspicious Activity” make for good “booga booga!” fodder to rile up the rubes, and so the FUD-based media make sure to make use of them at every opportunity.

1432

A lot of terrific explanation in this thread, directed at one person in particular who is several gray cells short of actually processing it into comprehension. Good work nonetheless.

1433

Another excellent post.

Just to amplify the SARs part of this discussion:

How many SARs would a large bank file in a year? A BPI study found that, in 2017, a sample of the largest banks reviewed approximately 16 million alerts, filed over 640,000 SARs, and received feedback from law enforcement on a median of 4% of those SARs. Ultimately, this means that 90-95% of the individuals that banks report on were likely innocent. How many of these SARs are really illegal activity versus false positives? Our data indicate that about 4 percent of SARs result in any follow-up from law enforcement. A tiny subset of these results in an arrest and ultimately a conviction.

SOURCE

The House GOP knows this. I know this. It’s shocking and repugnant how free the GOP feels in lying to their base.

1434

Yeah, I’d be pretty insulted after the 50th time I was just lied to by my supposed leaders (in a week or two) and probably leave the party. I mean, they just assume their followers are idiots – why would I want to be part of a club where the leaders made it obvious they thought I was stupid?

1435

With regards to Burisma’s board, another reason people are selected to serve on a board of directors is their ability to bring in investment dollars, which would’ve been right in Hunter’s wheelhouse.

As many have pointed out, it wasn’t really a good look for the VP’s kid to serve on the board of a foreign country, and I can’t say I disagree, although Joe has no control over his adult children’s employment decisions.

But I’m fairly well-versed in the subject of Eastern European and Russian corruption, and at the time it was the policy of the US to encourage the appointment of Americans and other Westerners to the boards of these Russian and Ukrainian companies as part of their anti-corruption initiatives.

This was often a risky proposition for the Westerners involved as the people whose ill-gotten gains were being threatened were often very powerful and there was a risk of being framed for serious crimes, falsely imprisoned and sometimes even murdered. If you want a good account of this type of persecution, I can recommend Bill Browder’s book Red Notice, which details his experience.

This is why I found Donald Trump’s attempt to extort Ukraine into falsely persecuting Hunter Biden in order to hurt his father’s electoral chances particularly offensive. The US is supposed to be fighting corruption, not aiding and abetting it by trying to goad foreign countries into torturing and imprisoning American citizens for political gain.

1436

I second this! Nightmare of a true story.

1437

One more thing:

Well, not the sole reason but you’ve reminded me of another key term to throw into the mix:

Politically Exposed Persons (PEPs)

Again, the definition of this varies by country and I’m more familiar with its use in a UK context than a US one, but I’ll post the key generic one from that article:

The relevant point here is that PEPs often draw a higher level of scrutiny simply on the basis of their status as a PEP, and may thus be the subject of more SARs than someone engaged in a similar activity who is not a PEP.

Note that this is not a bad thing - that higher level of scrutiny is there for a very good reason. But it doesn’t mean that PEPs are inherently more corrupt. It just means that they have greater opportunity to be so, and the impact of such corruption would likewise be greater.

1438

I’ve probably been the subject of a few of these in my time, because most of my invoices were for amounts over 10K and many of clients were foreign nationals - I even took large amounts of money from companies controlled by Russian oligarchs. It was all perfectly legitimate, oligarchs renovate houses just like other people do.

1439

I’ve never been the subject of one, but I’ve reviewed a few and just submitted one a few weeks ago. Will it lead to anything? Probably not, but it’s now out there in case it ever becomes useful.

Also: I do so love when Pit threads become informative and thought-provoking, like the Huckleberry Finn hijack. Only on the SDMB.

1440

Another point – update on what we recently learned (that James Comer [GASP] has an LLC of his own):

Here’s the headline – not to be missed:

Last month, Democrats railed on the Kentucky Republican following a Daily Beast report that revealed the first inklings that Comer had engaged in his own shell company, involving intra-family business dealings. At the time, Commer [sic] snapped back that it was the kind of thing “only dumb, financially illiterate people pick up on.”

Quiet part > out loud. Perfect.