More on the KPMG Tax Shelter Case

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Yet more examples of the spaghetti that is our tax law:

  • Lynnley Browning:

    Former KPMG tax professionals who are facing criminal charges over questionable tax shelters challenged the government yesterday to prove that they had broken the law.

    The defendants filed more than two dozen motions in United States District Court in Manhattan yesterday, asking among other things that charges be dropped because no court had ever ruled the shelters in question illegal.

  • David Reilly and Paul Davies:

    One defense filing, submitted to the U.S. District Court in New York, accused prosecutors of “distorting” the facts and “obfuscating the truth-finding process” in order to win the case. By threatening KPMG with criminal indictment, the motion said, the government forced the firm to accept a “draconian” deferred prosecution agreement in which it admitted the tax strategies were fraudulent and agreed to waive attorney-client privilege.

    “The goal is obviously not justice, nor truth, but instead the unsavory desire to tack another skin to the wall,” the filing said.

Data Mining Run Amok

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John Robb:

Google is likely central to the Internet portion of this effort. There’s no doubt in my mind that Google has a fat contract with the Homeland Security Department. They can track your search behavior using cookies. Affiliates using cookies on adwords. Analyze the content of your weblog for dangerous phrases. Anonymity doesn’t help. They have your IP address and therefore can get the records they need to put a name and a credit history next to your Internet behavior (all without a warrant).

A USDA Yin to that Yang.

It’s Not The Technology That Raises Productivity, But How it’s Used

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Hal R. Varian:

Just dropping a bunch of new personal computers on workers’ desks is unlikely to contribute to productivity. A company has to rethink how business processes are handled to get significant cost savings.

As the Stanford economic historian Paul A. David has pointed out, the productivity effects from the electric motor did not really show up until Henry Ford and other industrialists figured out how to use it effectively to create the assembly line. The same is true for computers: just as the early industrialists had to learn how to use manufacturing technology to optimize the flow of materials on the factory floor, companies today must learn how to use information technology to optimize the flow of information in their organizations.

Canadian Electronic Rights Political Action

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Cory Doctorow:

In this video, shot by AccordionGuy, a geek who lives in her riding (district), Bulte is asked whether she will take the pledge, and she responds with bile, vowing not to allow “Michael Geist and his pro-user zealots, and Electronic Frontier Foundation members” to “intimidate her.” Her entire response is an embarassment to her and her party, and it’s must-see video for anyone going to the polls in Parkdale/High Park.

Local “Arful Home” Site Guild.com Raises $7M

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Judy Newman reports that Guild has raised another $7M. I am impressed that founder Toni Sikes has created an organization with so many lives – not an easy task. During the dot-com era, Guild raised several million in local funds along with over $30M in Venture Money. Those early investors lost their position when assets were purchased from Ashford (Newman briefly touches on this in her article, but doesn’t mention the amounts).

Several years ago, NBC 15 ran a story on Guild. They, too made no mention of the firm’s dot com fund raising and sale. I phoned the reporter (whose name escapes me) and asked why she did not describe the firms early investment rounds? She replied that “those people got to keep their (worthless) stock”.

In some respects, it is a sign of progress that a firm can have more than one life in Madison.

This type of incomplete cheerleading, unfortunately simply makes it more difficult for other entrepreneurs to startup and raise capital. People within the investment community are well aware of these matters.

The Case for Fanatacism

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Ryan Underwood:

For 80 years, groundbreaking aesthetics coupled with sci-fi features, such as a CD player that opens with the wave of a hand, or self-equalizing speakers, have given B&O products a magical quality that transcends the stylistic comings and goings of competitors. In the eyes of B&O’s brain trust, making that happen boils down to a shocking, and shockingly simple, strategy: Design always wins.

“Personally, I have no influence on design,” says B&O CEO Torben Ballegaard Sorensen, an always smiling, somehow exquisitely tan, square-jawed Dane. In other words, Sorensen, despite his business acumen (or because of it), serves as little more than a steward whose task it is to ensure that B&O’s design process continues unfettered, as it has since the 1960s. Sorensen runs the company’s operations, but he hands over control of product development and design to one superdominant personality–a freelance designer, no less.