Thursday, April 07, 2016


Just last night I finally looked to see what the furor over the Panama Papers was about.  It turned out to be the same thing as has been happening a lot: the turning out to the public light of matters hidden in the tangle of communication/
regulation that surrounds the fungibility of money.  “Fungibility” means that it can be transformed into other entities without losing value — “money-laundering,” we say.  Hidden profits.  

It seems most of the “civilized” conventions we have are now “pot-bound” as though the container is too small for the contained.  That is, our education system, our money handling, our governmental hierarchy, our health provisions and a lot of other functions have replicated and duplicated and elaborated and corrupted to the point where they do as much damage as good.  Panama Papers offers examples of how loopholes in the handling and “ownership” of money is disguised, misrepresented, and moved off-shore to avoid taxes and any other kind of accountability.

But greed works in both directions.  Around here, close to the 49th parallel, we are aware of a little feature called “asset forfeiture.”  The basic idea is that if you are a criminal or using your property for felonious activity, the government enforcing agent can take your property.  That is, cross the border with a marijuana roach or even little green flakes floating around in your nice car and you might possibly lose it for transporting drugs, even before going to trial or in spite of being found innocent.  

I’m going to quote Fenster, an on-line guy of considerable intelligence and experience:  “But the moral hazard is serious enough that police often take assets when no criminal action has been shown to have occurred, or if the owner of the asset was not aware of the crime.  Here's a fun John Oliver rant. on it.  Reform efforts are underway--slowly, slowly considering the opposition of law enforcement, which appears to now be addicted.”

Sweetgrass Port of Entry (USA side)
The Canadian side is called Coutts.

If you’re planning to cross the border this summer, best to stop and vacuum the car thoroughly before going to the Port of Entry.  We hear a lot of stories of high-end cars being impounded never to be seen again.  If you can, watch while your car is searched.  It's easy to plant a little something. 

I know a couple who were stripped of all their assets which were in the form of furs and hides coming back from Alaska because the man’s business was creating authentic reproductions of artifacts.  He was white and would have found little sympathy from tribal people.  The US border claimed they found eagle feathers and took everything, both the finished objects of considerable value (reproduction recurved bow made authentically from mountain sheep horns legally taken) and the other materials.  The couple pursued legal redress for years with no success.  The more spectacular creations were reported to have been sighted on the walls of the highest authority’s office.

Chief Mountain Port of Entry
Same name both sides, closed in winter.

Prevention is always better than regret.  As the John Oliver story points out, one can be considered a criminal simply for having large amounts of cash, lovely fungible cash, just in a car, not necessarily hidden or contaminated with cocaine.  No need to cross the border, just make the mistake of speeding.

So here’s Fenster’s proposal for a better way to handle impounded cash.

"If it is currency burn it, at least any amount above and beyond administrative overhead for managing the asset forfeiture process.

"Start with a distinction between a hard asset, like a car and a house, and currency.  The former is real.  The latter is not.  Currency is in fact nothing other than a convention we have established such that the rightful owner can store value for the acquisition of real things at a later date.  It is a shared symbol, and has legitimacy not only out of habit but out of the shared belief that the owner of the symbol has undertaken legal action, like labor, that entitles that person to store value until a later date when a real asset or real services may be obtained.

"It is for the latter reason--the legitimacy of ownership of a claim on future resources--that we deny lawbreakers their ill-gotten gains.  But what then entitles the authorities to gain access to the symbolic shared value of the currency seized?  Should it not just be destroyed?  Nothing of real value will be destroyed in the process.  The only thing that will go up in smoke is paper.  And the only real world effect would be that the authorities would not be able to avail themselves of what amounts to free assets and services.

"So I can see no conceptual justification for the transfer of symbolic assets generated in illicit ways to allow for free purchase of goods and services.  Nothing of value is destroyed in the destruction of that currency--it is only the free purchase of goods and services later that is halted.  And beyond the conceptual justification is a practical one too: the complete elimination of the moral hazard of financial incentive. I daresay that when the financial incentive is gone the temptation to what amounts to theft will be greatly diminished."

Clearly, cash is not the advantage it once was (acceptability everywhere, lightweight in comparison to coin, easy exchange with another country’s cash.)  One should explore other ways of carrying value during travel.  Even traveler’s checks are suspect now, and credit cards have various drawbacks, including theft, but I haven’t heard of any law enforcement agencies impounding credit cards.

That doesn’t help the diverting of vehicles.  Maybe it is the insurance companies who will ultimately deal with this, which means more paperwork and more points of argument.  

Yesterday I was in Shelby, a border-crossing town and inter-modal exchange point: that is, railroad and truck handling of those shipping containers big enough to use for a house.  (There’s no water access for ships and therefore no crane loading.)  But in the big truck stop service station (attached to a casino as most everything is in Montana now) there is a separate cashier for trucks taking on gasoline which can be a purchase in triple digits.  

It’s separate because it has many more double-checks: driver ID, truck ID, a phone call to the company represented, and database access for recent alerts.  In fact, for my small purchase (I buy gas in $10 increments) I had to supply my driver’s license, add my physical address to my check.  I don’t print my physical address so that people can’t connect my checkbook to where I live — same with the driver’s license.  (Montana driver’s licenses are based on birthdates, which the police and now most medical contexts use as ID.  Some people put their SSI number on their checks, but not me.)  

In Montana there is the possibility of an exemption to the formula, which I use, even though it's sort of silly that the alternative was supplied because some here still think SSI numbers are the Mark of Cain, punishment for killing Abel.  Common sense didn't work but mythology did.

I became wary of these ID numbers when I was an AC officer for the Multnomah Country sheriff.  The hermeneutics of suspicion!  It occurs to me that I’ve never really looked around to see where the security cameras are at the truck stop, not that I have any need to, but I watch British and Canadian crime shows and CCTV even in remote Wales are often the key to something.

When Bob Scriver became a Justice of the Peace, the highway patrol had at least one officer who always wrote on the back of the ticket what he thought the fine should be.  Bob ignored it on grounds that HE was the judge, specifically to provide a second opinion of both sides of the situation, and he would not be displaced by the officer, a check against officer misconduct or situational prejudice.  (Bad hair day.)  "If you set the fine, there's no need for a judge," said Bob.

"Well, that's right!" fumed the officer.  "I'M the law!"  In those days the officer sometimes set the fine and collected it on the spot.  Shortly after that a second Justice of the Peace was elected for this small town.  He was a man from the outside who took his coffee with the highway patrol and didn’t much like Indians.

Law enforcement in most places is long stretches of boredom broken by occasional incidents full of adrenaline and possibly injury or death.  Most of it isn’t very glamorous and people aren’t necessarily grateful.  To sit with one’s donut, pondering, a napkin handy for making little equations, is to tempt the devil to offer schemes.  This is aside from anything systemic like what is revealed by the Panama Papers.  When the larger culture is greed-based, marriages have been replaced by hookups, and courts are constantly struggling to know what to do with abused kids beyond enforcing child-support, there are traps everywhere.  The Port of Entry to the traps is wide open.

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