WED 9/27 SFRC PM Hearings: Hoekstra, Buchan, Grenell, McMullen, McCourt

Posted: 11:05 am PT
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Date: Wednesday, September 27, 2017
Time: 02:15 PM
Location: SD-419
Presiding: Senator Johnson

Prepared statements and live video of hearing will be posted here when available.  Hyperlinked below are the Certificates of Competency for Nominees to be Chiefs of Mission per  Section 304 of the Foreign Service Act of 1980.

NOMINEES

The Honorable Peter Hoekstra
Of Michigan, To Be Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The Kingdom Of The Netherlands
Hoekstra, Peter – Kingdom of the Netherlands – August 2017

Mr. Richard Duke Buchan III
Of Florida, To Be Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The Kingdom Of Spain
Buchan III, Richard Duke – Kingdom of Spain and the Principality of Andorra – August 2017

Mr. Richard Grenell
Of California, To Be Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The Federal Republic Of Germany
Grenell Richard Allen – Federal Republic of Germany- September 2017

Mr. Edward T. McMullen, Jr.
Of South Carolina, To Be Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The Swiss Confederation, And To Serve Concurrently And Without Additional Compensation As Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The Principality Of Liechtenstein
McMullen Jr. Edward Thomas – Swiss Confederation and Principality of Liechtenstein – September 2017

Ms. Jamie McCourtOf California, To Be Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The French Republic, And To Serve Concurrently And Without Additional Compensation As Ambassador Extraordinary And Plenipotentiary Of The United States Of America To The Principality Of Monaco
McCourt, Jamie – French Republic and Principality of Monaco – August 2017

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Renunciation of U.S. Citizenship May Not Necessarily Keep the Tax Man Away

Posted: 4:08 am EDT
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Via MainSt:

Last year, 4,279 U.S. citizens ended their long-term U.S. residency, according to the Treasury Department. That’s up 25.3% from the 3,415 individuals who shed their U.S. citizenship in 2014 and just adds to the 10,693 total who dropped their citizenship between 2013 and 2015.
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Passed in 2010 as a means of cracking down on tax dodgers, FATCA implemented rigid reporting rules for overseas banks and investment firms that hold the assets of U.S. citizens. It also imposes similarly strict rules on U.S. citizens who hold money in foreign accounts. Because the more underhanded elements of U.S. business made a habit of using accounts in Switzerland, the Cayman Islands and elsewhere to shield taxable income from the U.S. government, FATCA uses huge penalties to drop the hammer on those who won’t comply.

Read more below:

Renunciation of U.S. citizenship may not necessarily keep the Internal Revenue Service away. Last month, the Justice Department announced that a former U.S. citizen pleaded guilty to tax fraud related  to his Swiss financial account.  The DOJ announcement does not mention the Foreign Account Tax Compliance Act (FATCA) but it says that in 2012, the individual who has resided in Switzerland since 2007, went to the U.S. Embassy in Bratislava, Slovakia, to renounce his U.S. citizenship and informed the U.S. Department of State that he had acquired the nationality of St. Kitts and Nevis by virtue of naturalization. Below is part of the DOJ announcement:

Former U.S. Citizen Pleads Guilty to Tax Fraud Related to Swiss Financial Account

Used Hong Kong Entity and Foreign Accounts in Switzerland, Monaco and Singapore to Conceal Funds

A former U.S. citizen residing in Switzerland pleaded guilty today to one count of filing a false income tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.

“U.S. taxpayers have been given ample opportunity to come forward, disclose their secret foreign accounts, and come into compliance,” said Acting Assistant Attorney General Ciraolo.  “Those individuals and entities who rolled the dice in the hope of remaining anonymous are facing the consequences.  The Tax Division remains committed to investigating and prosecuting individual taxpayers with undeclared foreign financial accounts, as well as the financial institutions, bankers, financial advisors and other professionals who facilitate the concealment of income and assets offshore.  And as today’s guilty plea clearly indicates, the department’s reach is well beyond Switzerland.”

According to court documents, in 2006, Albert Cambata, 61, established Dragonflyer Ltd., a Hong Kong corporate entity, with the assistance of a Swiss banker and a Swiss attorney.  Days later, he opened a financial account at Swiss Bank 1 in the name of Dragonflyer.  Although he was not listed on the opening documents as a director or an authorized signatory, Cambata was identified on another bank document as the beneficial owner of the Dragonflyer account.  That same year, Cambata received $12 million from Hummingbird Holdings Ltd., a Belizean company.  The $12 million originated from a Panamanian aviation management company called Cambata Aviation S.A. and was deposited to the Dragonflyer bank account at Swiss Bank 1 in November 2006.

“IRS Criminal Investigation will continue to pursue those who do not pay the taxes they owe to the United States,” said Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office.  “Today’s plea is a reminder that we are committed to following the money trail across the globe and will not be deterred by the use of sophisticated international financial transactions that hide the real ownership of income taxable by the United States.”

On his 2007 and 2008 federal income tax returns, Cambata failed to report interest income earned on his Swiss financial account in the amounts of $77,298 and $206,408, respectively.  In April 2008, Cambata caused the Swiss attorney to request that Swiss Bank 1 send five million Euros from the Swiss financial account to an account Cambata controlled at the Monaco branch of Swiss Bank 3.  In June 2008, Cambata closed his financial account with Swiss Bank 1 in the name of Dragonflyer and moved the funds to an account he controlled at the Singapore branch of Swiss Bank 2.

In 2012, Cambata, who has lived in Switzerland since 2007, went to the U.S. Embassy in Bratislava, Slovakia, to renounce his U.S. citizenship and informed the U.S. Department of State that he had acquired the nationality of St. Kitts and Nevis by virtue of naturalization.

U.S. District Judge Claude Hilton of the Eastern District of Virginia set sentencing for April 15.  Cambata faces a statutory maximum sentence of three years in prison and a fine of up to $250,000.  As part of his plea agreement, Cambata agreed to pay $84,849 in restitution to the Internal Revenue Service (IRS).

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. For access to the regulations and administrative guidance related to FATCA and to learn about taxpayer obligations visit the Internal Revenue Service FATCA Page.

Click here for the list of countries where the United States has an agreement under FATCA.

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Thank You, Switzerland … Good Morning, American Embassy Havana!

Posted: 12:30 am EDT
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As announced on July 1st, the U.S. and Cuba will officially re-establish diplomatic relations today, July 20. This is the day when both interest sections will become embassies. A State Department official who gave a special briefing on the re-opening of embassies last week told reporters that there is not a legal requirement to fly a flag, so that will not happen until Secretary Kerry travels to Havana later this summer:

Secretary will be there to officiate for these very important events of raising the flag and unveiling the signage for the U.S. Embassy in Havana. He does – his presence there is ceremonial. It’s important, it’s historic, but legally the embassy will be functioning on Monday, July 20th. There is not a legal requirement to fly a flag, and we wanted the Secretary to be there to oversee these important events.

There will also be a flag installation in Foggy Bottom but this is apparently a “routine installation with no public or media component.”  All American employees of the interest section in Havana will be re-accredited as employees of the embassy but there will be no new additional employees at this time.

USAenCuba/FB

USAenCuba/FB

Our DCM in Havana, Conrad Tribble tweeted just minutes ago:

 

July 20 also marks the day when the agreement with Switzerland as the “protecting power” of the United States  in Cuba is terminated.  That will require a technical exchange of notes because the Government of Switzerland has been the United States’ protecting power for many years, and that agreement between the U.S. and Switzerland, and another agreement between Cuba and Switzerland, will be terminated as a result of the upgrade from interest sections to embassies in Havana and Washington, D.C.

Photo via US Embassy Havana/FB

Photo via US Embassy Havana/FB

 

 

The Cuban Embassy in Washington, D.C. will hold its ceremonial re-opening in the morning of July 20 with very limited attendance by a U.S. Government delegation to be lead by Assistant Secretary Roberta Jacobson.
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In the early afternoon Secretary Kerry will meet his counterpart, Cuban Foreign Minister Bruno Rodriguez, at the State Department for an historic meeting. Afterward at 1:40, they will have a joint press conference, “sort of the first historic joint press conference between the Secretary of State and the Cuban Foreign Minister,” according to the State Department.

Excerpt below from the special briefing:

QUESTION: Thank you. So starting Monday, what changes, what is different at the now-U.S. Embassy in Havana? Can anyone go? Is it like other embassies in the world where you have to have a previous appointment? What is going to happen with U.S. diplomats? Do – starting Monday, are they free to roam the country as they haven’t been before? Can you be more specific on the logistics please?

STATE DEPARTMENT OFFICIAL: Right. Yes, on Monday they will – all of the employees of the – the American employees of the interest section will be re-accredited as employees of the embassy. So it is an upgrade in status for the – for all the U.S. employees there. The chief of mission will be upgraded to charge d’affaires, and they will be then entered as a member of the diplomatic corps in Havana, and that will mean that they are invited to diplomatic functions just like any other country. That has not been the case previously. And yes, there are conditions that we have talked about previously, about – when we made the agreement to open the embassies. And there will be some – those conditions will all be active and effective on July 20th and will begin to function under those new conditions. Those new conditions do include greater freedom for U.S. diplomats to travel throughout Cuba.

QUESTION: Hi, thank you. Quickly, will the charge d’affaires, Jeffrey DeLaurentis, be in Havana, and will he do anything in Havana on Monday? Did you get the new employees that you asked for and will they be there start this – starting next week? And you said they get an upgrade of employees that are at the Interests Section. Do they also get a pay upgrade?

STATE DEPARTMENT OFFICIAL: The – actually, Jeff DeLaurentis will be – and I should have mentioned that earlier – he will be in the delegation that is here in Washington, and that’s a fairly standard practice and especially for a historic meeting that our representative in the embassy would come back for that meeting. So he will be here in Washington. And so our deputy chief of mission in Havana will actually on that day be in charge of the post. And again, there is no other activity other than we’re going to have a statement put out by the embassy announcing that they have indeed elevated status to an embassy that morning.

There also will be a technical exchange of notes because the Government of Switzerland has been providing us protecting power for many years, and that will now be – that agreement between the U.S. and Switzerland, and another agreement between Cuba and Switzerland, will be terminated as a result of the upgrade.

As for the employees, there may be some confusion in that the discussion of personnel and staffing that we had with the Cubans referred specifically to American employees, and that’s a personnel issue that we’ll work out in the months to come. So on that day, we would not get new employees. In fact, the employees at the Cuban Interests Section will be the same employees and they – as I understand it, they’re excited about becoming (inaudible) of the U.S. embassy.

Read more here.

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Secretary Kerry Breaks Leg in Bike Accident, to Return Home Via Air Ambulance (Updated)

Posted: 10:07 am PDT
Updated:10:26 am PDT
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Statement by the U.S. Department of State Spokesperson Regarding Secretary John Kerry’s Injury
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Secretary Kerry broke his right femur in a bicycling accident this morning in Scionzier, France. Given the injury is near the site of his prior hip surgery, he will return to Boston today to seek treatment at Massachusetts General Hospital with his doctor who did the prior surgery. The Secretary is stable and never lost consciousness, his injury is not life-threatening, and he is expected to make a full recovery.

Secretary Kerry is in good spirits and is grateful to the French and Swiss authorities, doctors, and nurses who assisted him after the accident.

The Secretary very much regrets not being able to visit Spain to meet with one of our close allies for discussions on a range of issues, as well as being unable to attend the counter-ISIL coalition ministerial meeting on Tuesday in Paris in person. The Secretary plans to participate in the counter-ISIL coalition meeting remotely.

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Sending best wishes for a speedy recovery!

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The State Dept’s Most Expensive Assignments in the World (February 2015)

Posted: 11:31 EST
Updated: 21:57 PST

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The “cost-of-living” allowance or COLA is officially called “post allowance” in the State Department.  It is an allowance based on a percentage of “spendable income,” i.e. money you can really put your hands on to spend on goods and services.  The allowance is calculated by comparing costs for goods and services in multiple categories – including food (consumed at home or in restaurants), tobacco/alcohol, clothing, personal care items, furnishings, household goods, medical services, recreation, public transportation, or vehicle-related expenses – to the cost of those same goods and services in Washington, D.C.

The State Department’s Office of Allowances determines a ratio between the average cost of goods and services at the foreign post to costs in Washington, D.C.  It then evaluate expenditure patterns between the foreign location and Washington, D.C. to establish an overall cost index, which may be adjusted biweekly for exchange rate fluctuations.  If the overall cost of goods and services at a foreign post, taking into account expenditure patterns, is at least 3% above the cost of the same goods and services in the Washington, D.C. area, the office  establish a post allowance. See DSSR section 220 for more information.

According to state.gov, this allowance is a balancing factor designed to permit employees to spend the same portion of their basic compensation for current living as they would in Washington, D.C., without incurring a reduction in their standard of living because of higher costs of goods and services at the post.  The amount varies depending on salary level and family size.

We put together a list of countries and posts with the highest State Department COLA rate as of January 2015. Posts in Europe (EUR), Africa (AF), East Asia Pacific (EAP) and the Western Hemisphere (WHA) are represented.  No posts from South Central Asia (SCA) and Near East Asia (NEA) made it to this top list.  The traditionally expected expensive posts like Tokyo, Vienna, Hong Kong, Sydney and Rome are all in the 35% COLA rate and are not included in this list (we chopped the list at 42%; representative posts in France at the 42% rate are included).

Note that we added a couple of columns for the cost of a McDonald’s meal (or equivalent) and cost of a regular cappuccino from numbeo.com, a crowdsourcing site for cost of goods and services around the world. For another snapshot  on most expensive cities for expat employees, click here with data from the Economist Intelligence Unit’s Worldwide Cost of Living ranking (costs compared to NYC) and Mercer’s Cost of Living surveys from 2014.

DOS | Most Expensive Assignments in the World (February 8, 2015)

DOS | Most Expensive Assignments in the World (February 8, 2015)

 

 Update:
Corrected the spelling for Ediburgh. Also the Allowances Bi-Weekly Updates dated February 8, 2015 indicate several changes on the COLA table, so we updated it to reflect that newest data. Switzerland went from 90% to 100% in this latest update. Shanghai, Copenhagen, Auckland and Wellington went from 50% to 42% COLA posts.  Helsinki, Paris, Lyon, Marseille, Versailles and Oslo were all downgraded from 42% to 35%, so we took them off this table. It is conceivable that the rankings in allowances will change again in a couple of weeks or in a few months.  The bi-weekly updates are located here.  The original list we did based on end of January data is located here.

 

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US Ambassador Gets on Reddit, Not/Not Nearly as Funny as Anonymous FSO

— Domani Spero
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In February this year, we had an anonymous Foreign Service Officer who did an AMA on Reddit (see IamA United States Diplomat: Anonymous FSO Gets on Reddit and He’s a Riot!).  Last June, USCG Toronto also did an AMA on consular issues (see U.S. Consulate General Toronto Joins ‘Ask Me Anything’ on Reddit). Yesterday, the U.S. Ambassador to Switzerland and Liechtenstein Suzi LeVine joined Reddit for what we think is the first “Ask Me Anything” session conducted by a chief of mission.  Unlike the anonymous FSO’s AMA, this one is official and done on your dime; no need to report her to the FBI or Diplomatic Security.

You might also remember her as the first U.S. ambassador to be sworn-in on a Kindle this past June. Below is her intro on Reddit:

Hi Reddit! I’m Suzi LeVine, the American Ambassador to Switzerland and Liechtenstein. I am also a former technology exec and a mom to two amazing kids. It’s an honor to serve the American people as an Ambassador and I can personally attest to the critical role Ambassadors play in U.S. foreign policy making. Right now there are 60 Ambassadorial nominees who are still awaiting confirmation by Congress – that’s 60 countries where the U.S. isn’t representing its foreign policy interests as well as it could. Fun fact: My first trip to Switzerland was when I kicked off a solo 6 week backpacking trip from Zurich. I was 18 and, after buying my first Swiss Army knife, promptly learned how sharp they are when I cut straight through an apple into my hand. Let’s just say that I learned how excellent the Swiss healthcare system is. Verification: https://www.flickr.com/photos/statephotos/15302277727/

UPDATE: Merci viel mal. What terrific questions! Let’s do this again sometime! And, feel free to reach out to me on Twitter @AmbSuzi.

photo via state.gov

photo via state.gov

 

Here are some of the questions Ambassador LeVine answered:

Reddit user: Do you think your background which lacks diplomatic experience prior to your appointment as ambassador is a handicap or do you see it as a positive thing to bring another perspective? Or something totally different?  Where do you see issues in the relations between the USA and Switzerland? Where do the countries work well together?
AmbSuzi:  Diplomatic experience does not just derive from work in the Foreign Service. Let me tell you about team oasys from Jordan or team onebuzz from New Zealand. These were two teams and two groups of students with whom I had the honor of working in my capacity at Microsoft to shine a spotlight on innovators using technology to change the world. That’s diplomacy.

Reddit user: It’s always been a dream of mine to work for an embassy–or in the foreign service. I’m fluent in French, 24 years old, and I love America. How do I go about making this dream a reality? EDIT: I forgot to say I am an American…and of course I love it.
AmbSuzi: First off, go for it! http://careers.state.gov (In fact, I think the deadline for summer internships is next week, and that’s a great way to get a taste of this career. Stop wasting time on Reddit and go apply. 🙂

Reddit user: Do you have to deal with a lot of people revoking their US citizenship nowadays? Because it isn’t exactly easy being a dual citizen these days ever since FATCA came around.
AmbSuzi:  I have deep empathy for those who are wrestling with this decision and situation right now. My team and I are actively working to alleviate some of the concerns.

Reddit user: What do you think of the common criticism that too many ambassadors are appointed because they were fundraisers for the President & the Democratic/Republican party? You can look up individual donations here and it appears that you’ve donated quite a bit to the President & the Democratic Party? Do you think that more ambassadors should be career diplomats or is there value in having individuals close to the President serve as ambassadors?
AmbSuzi:  Fair question. I believe that there is tremendous value in a blend. The answer is not “or.” It is “and.” Different skill sets are appropriate in different situations and places around the globe. For example, my professional and volunteer experience as someone who has created partnerships, organized communities, led teams, initiated start-ups, etc., is a terrific match for Switzerland where I work with the likes of Nestle, Novartis, and ABB. Alternatively, someone like my friend, Michael Hoza, the new U.S. Ambassador to Cameroon, brings decades of foreign service experience and is equipped to take on the likes of Boko Haram.

Reddit user: What is the most challenging moment of your Career thus far, and how did you overcome it
AmbSuzi:  I tend to approach challenges as opportunities. What can I learn? How can I grow? With whom can I learn from their mistakes? The hardest element of this ambassadorial job so far was frankly, waiting to get confirmed. In my overall very nonlinear career, the hardest moment was going back to work in 2009 after four and a half years home with my kids and hearing people say that I was no longer qualified.

Reddit user: Ambassador, you were the first in such a position to be sworn in with your hand on an e-reader instead of a book. That made the news on some tech sites, but the news reports lacked some kind of background. Whose idea was it, and what was the thought behind it?
AmbSuzi:  Great question! (By the way, what is the plural of octopus?) As for the e-reader, I wrote about this in my blog post here: http://go.usa.gov/wnBz. After reading, let me know if you have any additional questions.

Reddit user:  How regularly do you speak with State Department officials back in Washington DC? Who is your immediate superior? Wendy Sherman? How much of the day to day operations of an embassy come from officials in DC?
AmbSuzi:  We have regular communications, and it’s important to share what’s happening in Switzerland with D.C. My technical, immediate superior is the President. That said, we do a lot of coordination within the European and Eurasian Bureau, which is run by the awesome Toria Nuland.

Here are the some other interesting questions from Reddit users that the ambassador did not respond to:

  • Do you think that presidents should continue to appoint plush state dept posts to their highest donors? I do realize this goes both ways, and both parties are involved in this practice.
  • Do you have a Swiss bank account, and are they all they’re cracked up to be?
  • Do you get paid double?
  • Among the other ambassadors in Switzerland, who are the best to party with?
  • Can I move in with you? I’m tired of this shit country!
  • How many push ups can you do?
  • Anyway to hook me up with a trip?
  • How did you get the gig? Did you have to go to a special college, was it more about who you knew than what you knew?
  • How much did you have to “donate” to get the Ambassador position????
  • What advice would you give somebody interested in becoming an Ambassador (or at least working abroad for the State Department)?
  • Does it get boring being the ambassador to a neutral country while we are on the brink of WW3?

We were sorely disappointed there were no questions about Jason Bourne, TP, prostitutes, crashed UFOs, Argo, or Benghazi.  Maybe next time?

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Senate Confirmations: Suzan G. LeVine, Peter A. Selfridge, Pamela K. Hamamoto

— Domani Spero

The Senate confirmations of the Obama nominees continue to trickle down.   Ambassador LeVine’s nomination was announced on January 30, 2014 and she was confirmed by the full Senate on May 1st. Ambassador Selfridge who moved from the WH to the State Department was nominated in December 2013.  Ambassador Hamamoto was nominated in August 1, 2013 and had waited over nine months for her Senate confirmation.

 

  • May 01, 2014 | Suzan G. LeVine, of Washington, to be Ambassador Extraordinary and Plenipotentiary  of the United States of America to the Swiss Confederation, and to serve concurrently and without additional compensation as Ambassador Extraordinary and Plenipotentiary of the United States of America to the Principality of Liechtenstein.

 

  • May 05, 2014 | Peter A. Selfridge, of Minnesota, to be Chief of Protocol, and to have the rank of  Ambassador during his tenure of service.

 

  • May 08, 2014 | Pamela K. Hamamoto, of Hawaii, to be Representative of the United States of  America to the Office of the United Nations and Other International Organizations in Geneva, with the rank of Ambassador.

 

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