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Wal-Mart’s Friendly Landord Is- Wal-Mart! February 2, 2007

Posted by publicpolitics in Coporate Policies.
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As the world’s biggest retailer, Wal-Mart Stores Inc. pays billions of dollars a year in rent for its stores. Luckily for Wal-Mart, in about 25 states it has been paying most of that rent to itself — and then deducting that amount from its state taxes.

The strategy is complex, but the bottom line is simple: It has saved Wal-Mart from paying several hundred million dollars in taxes, according to court records and a person familiar with the matter. And Wal-Mart is far from alone.

Jesse Drucker Wall Street Journal Online

Jessie Drucker’s report about a Wal-Mart tax strategy is available only by subscription to the Wall Street Journal, but Drucker’s content ensures that very soon the story will propagate to more open sources: Wal-Mart corporation, among others, has figured out a way to pay rent to itself and then to deduct its rent from corporate state income taxes.

This entirely legal strategy works as follows. One Wal-Mart store pays rent to a real-estate investment trust, or REIT, structures entitled to tax breaks as long as all profits are paid out in dividends. That REIT is owned by another Wal-Mart store or subsidiary, which receives the dividends sans any taxes. Notice that all the money remains within Wal-Mart, and almost none of it will find its way into state tax coffers, since Wal-Mart then proceeds to deduct the rent it paid to the REIT.

Clearly, we are in wonderland. Landlord and tenant are as one- no, they are one.

Court challenges are on the way: North Carolina argues that the ploy serves to distort the company’s “true net income”. Whatever the legal situation, as Drucker points out, state and local corporate taxes are on the wane, from an effective rate of a paltry 6.7% to a pitiful 5%.

These loopholes should be closed. What is legal is not always justifiable, or even ethical.

Tags: deducting | taxes | Strategy | saved | RETAILER | Rent | RECORDS | PAYS | familiar | dollars | court | billions | biggest | amount | according | Wal-Mart | stores | Politics | luckily


Global Internet Freedom Conference: Corporate Moral Dilemma February 1, 2007

Posted by publicpolitics in Censorship, Coporate Policies.
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Google, Yahoo and Microsoft representatives on Tuesday implored the U.S. government to help set ground rules for complying with demands by foreign law enforcement agencies for user records or censorship.

Anne Broache, CNET

The U..S State Department has just wrapped up its first annual Global Internet Freedom Conference, an event that is sure to grow in importance as private Web companies deal with the various countries attempting to filter content and stop dissent. Faced with a confusing welter of international laws governing content of both personal communications and web sites, Microsoft and the other corporate giants have come belatedly to the recognition that only a unified government policy can provide them with the legal and moral stance they need to answer the censors in consistent ways.

Under United States law corporations are legal “persons”. In pure form, Internet companies are the same as soap manufacturers, and legally have a one dimensional morality- they are obligated to increase and preserve shareholder profits by any means possible. Of course, a company that kills off large numbers of people with a contaminated or dangerous product will not last long (unless it is a tobacco company). Stakeholder , as opposed to shareholder considerations mitigate this process somewhat, and most companies view their constituencies as being much larger than a limited group of shareholders.

However, the legally simple moral imperative remains, and it is inadequate to the task of coping with the ethical dilemmas posed by governments that use stored information to imprison or eliminate dissidents, usually a relatively small portion of the public. Clearly, it is in the interest of Google shareholders to have a presence in China, even if it is a modified presence, and since government censorship or filtering does not affect most Chinese (let alone most residents of the United States), Google or any other corporate entity has no built-in way to solve the problem, even if it wishes to do no evil.

As the CNET story indicates, there are a variety of solutions. One is for government to take up the idea that censorship constitutes a kind of trade barrier. Another is more purely political, and demands that censorship be treated as a key human rights concern. That’s the approach supposedly advocated by the U.S. State Department’s Global Internet Freedom Task Force.

Whatever the approach, the companies clearly need the guidance and authority that a clear government policy can provide. In order to make that policy both credible and persuasive,however, the U.S. will have to apply its policy at home as well as abroad. Transparency and consistent efforts to roll back the current program of domestic spying will go a long way toward establishing any U.S. efforts to combat censorship in the rest of the world.

Tags: implored | user | Rules | representatives | RECORDS | Government | global | giants | freedom | feds | ENFORCEMENT | demands | complying | Censorship | agencies | Yahoo | Web | Washington | tuesday | Politics | Microsoft | internet

Googlepealago:China Censorship Bad for Business January 29, 2007

Posted by publicpolitics in Censorship, Coporate Policies.
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Google’s decision to censor its search engine in China was bad for the company, its founders admitted yesterday.

Google, launched in 1998 by two Stanford University dropouts, Sergey Brin and Larry Page, was accused of selling out and reneging on its “Don’t be evil” motto when it launched in China in 2005. The company modified the version of its search engine in China to exclude controversial topics such as the Tiananmen Square massacre or the Falun Gong movement, provoking a backlash in its core western markets.

Jane Martinson, The Guardian

Finally, the Google founders have admitted that conforming to the wishes of Chinese government censors in the designing search engines was not such a good idea, if only because the decision to build in censorship caused a Western backlash. What in fact is happening is that Google, by agreeing to government restrictions on what Internet sites can be viewed in certain countries, is creating a Web equivalent to the Gulag Archipelago, the network of scattered areas of Soviet moral darkness so well described years ago by Alexander Solzhenitsyn.

The “bad for business” argument is weak, although probably true. What would be better is for Brin and Page to take a firm stand against such actions in the future, and to take corrective action on Google China. Would Google be completely excluded from censoring countries were the company to oppose them? Probably. And that would create work-arounds, the search engine equivalents of Samizdat, unrest among internet users in the information gulags, and a massive groundswell of support, both for Google and for an end to censorship in the “core Western markets.” That kind of defiance would not only earn the respect of users world wide. It would also be consistent with Google’s “Don’t be evil” corporate mantra.

Tags: reneging | Western | version | topics | SELLING | regret | provoking | movement | MOTTO | modified | massacre | launched | Founders | exclude | evil | DROPOUTS | decision | DAMAGED | core | controversial | Censorship | Censor | backlash | admit | accused | university | Tiananmen | stanford | Sergey | Politics | Larry | Google | GONG | FALUN | China | brin

Is the NSA in Your OS? January 10, 2007

Posted by publicpolitics in Coporate Policies, Surveillance.
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When Microsoft introduces its long-awaited Windows Vista operating system this month, it will have an unlikely partner to thank for making its flagship product safe and secure for millions of computer users across the world: the National Security Agency.

Washington Post

Microsoft has acknowledged receiving security help in the manufacture of Windows Vista from the National Security Agency. That is the same agency that brought us unannounced and unwarranted (literally) domestic spying, and so the idea of a corporate-government collaboration on the construction of an OS that will soon be in widespread use is, to some of us, not exactly comforting, and I am unabashedly one of those people who turns a little green given the idea that a company with a large, to say nothing of dominating, potential to collaborate with the government on creating back doors for unauthorized access to my hard drive may be doing just that.

Of course, there is no overt reason to think that Microsoft has willingly allowed such intrusions, nor is the collaboration any reason to run out and buy a computer from Apple, whose OSX was also developed with help from the NSA. The problem is, we don’t have any evidence that the NSA is not up to something both nefarious and secret. Their recent track record is enough to induce skepticism about their motives, and they are certainly powerful enough to compel corporate silence.

In short, while we cannot say that the NSA is up to something bad, we cannot gain any peace of mind from their recent record. And that distrust is the high price of their secret spying.

Tags: long-awaited | users | unlikely | SECURE | PARTNER | operating | Millions | making | introduces | FLAGSHIP | Computer | windows | Vista | Pros | Politics | Microsoft | called | agency

Target Removes Che Guevara Mechandise December 23, 2006

Posted by publicpolitics in Coporate Policies.
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Target Corp said on Friday it had pulled a CD carrying case bearing Ernesto “Che” Guevara’s image after an outcry by critics; some who label the Marxist revolutionary a murderer and totalitarian symbol; while others say Guevara is a philosophically improbable candidate for merchandising.

Target made itself the target by displaying Guevara related merchandise. Guevara , killed with the assistance of the CIA as he made a futile attempt to incite revolution in Bolivia, would have despised Target anyway, and would be delighted if he could see this little furor he has caused in the American economy. The Guevara legend lives on, and apparently is more potent than I thought. Of course, mass marketing Che through Target would have defanged him as a figure appealing to the radically chic. After all, what self respecting cutting edge stylehorse wants someone who appears on metal lunchboxes? Che continues to bedevil conservatives, and will become even more desirable to leftist consumers, presumably in the form of a T-shirt with the familiar beret, and a target drawn across his chest.

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Google Books: Evil or Not? December 20, 2006

Posted by publicpolitics in Coporate Policies, Information policy, Libraries, Technology.
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Already facing a legal challenge for alleged copyright infringement,
Google’s crusade to build a digital library has triggered a
philosophical debate with an alternative project promising better
online access to the world’s books, art and historical documents.

Michael Liedtke, AP

Google has made tremendous inroads in scanning books from several libraries, including Harvard and the University of California. Google will not say how many books it has scanned so far, but admits to scanning about 3,000 books per day. The problem, according to a new coalition called the Open Content Alliance, is that Google wants the books to appear only on Google’s search engine. The Alfred P. Sloan Foundation has just awarded the Internet Archive, a leading member of the Open Content Alliance, a $1 million dollar grant to create digital copies of items owned by the Boston Public Library, the Getty Research Institute, and the Johns Hopkins University Library. Internet Archive founder Brewster Kahle has been critical of Google’s restrictions on scanned books, and the grant represents the culmination of efforts to call attention to the situation.

Google says that its scanning arrangements are a fair deal because agreements with providers do not restrict them from entering into other digitizing arrangements. And to make matters more complicated, Microsoft and Yahoo are both members of the OCA, and Microsoft recently launched its own scanning initiative, marked by its own exclusivity deal.

The OCA ‘s Kahle is disappointed by Microsoft’s move, but he is more worried about the aggregate power of Google, as well he might be. Google, as its present corporate arrangements with publishers show, is not entirely evil, but it does represent an accumulated clout that will probably outlast the ideals of its founders. An organization such as the OCA, as long as it plays no favorites, is better placed to ensure the future availability of a world wide library than is any corporate entity simply because at the end of the day, a corporate entity is strictly responsible only to share holders, while an alliance of publishers and librarians can hold and maintain a less restrictive charter. In view of Microsoft’s creation of its own exclusive book search, the company’s participation in the OCA is a kind of PR exercise at best.

And of course, there are dozens of other digitizing projects that have been well underway for years: the most important and the most open of these is Project Gutenberg, alibrary of free e-books with expired copyrights. Perhaps the ultimate answer is to divide and conquer, but in that scenario the corporate behemoths will eventually control the information, with truly open source projects picking up the remnants. It is true that politics remains too important to be left to politicians,and it is probably true that the future world library is too important to be left in the hands of one or two corporations, even if they aren’t evil.

Tags: livraries | digitizing | Project Gutenberg | Open Content Alliiance | Kahle | SCANNING | books | Yale | Yahoo | Microsoft | Harvard | Google