Scam for the day

Attn:
My name is Viktor Kuznetsov, I am an External Financial Auditor; I was invited by the United Nation Financial Committee (UNFC) to audit Helima Security Storage company in Baghdad, Iraq. During my investigation I discovered that in 2004, two US soldiers from the 3rd Infantry Division deposited a box from an unknown top Saddam Hussein aide with the company during the war. Both soldiers died in an acting service, since then no one has come forward for the box. This box contains $13.2 million USD (Thirteen Million, Two Hundred Thousand United States Dollars).
Due to my position in the investigation, I was able to track down the deposit made by the dead soldiers to an Affiliate Security Firm (Information Withheld) and the content inside the box was not declared to the Security Firm as the content were declared to be a family treasure kept for security reasons. Right now as I speak, the box of money can be delivered to any designation of your choice.
As a UNFC Audit agent, I cannot lay claim to this box but I can instruct that the box be delivered to you as the original depositor/owner intended by providing you the necessary information's and document needed for claims.
I will give you more details and what to do if you are interested in my proposal, I am ready to go 50/50 sharing ratio with you on the receipt of your consent. Anxiously anticipating your prompt and affirmative response through this email: dhs.audit@blumail.org

Yours sincerely,
Viktor Kuznetsov
External Auditor (UNFC)

Rico says there's no such agency, no such box, and no money. You have been warned...

Another one gone

The New York Times has an article (and great photos; go there to see them) by Douglas Martin about the death of Stalin's daughter:

Her three successive names were signposts on a twisted, bewildering road that took her from the Kremlin, where she was the “little princess”, to the West in a celebrated defection, then back to the Soviet Union in a puzzling homecoming, and finally to decades of obscurity, wandering, and poverty. At her birth, on 28 February 1926, she was named Svetlana Stalina, the only daughter and last surviving child of the brutal Soviet tyrant Josef Stalin. After he died in 1953, she took her mother’s last name, Alliluyeva. In 1970, after her defection and an American marriage, she became and remained Lana Peters.
Peters died of colon cancer on 22 November in Richland County, Wisconsin, the county’s corporation counsel, Benjamin Southwick, said on Monday. She was 85.
Her death, like the last years of her life, occurred away from public view. There were hints of it online and in Richland Center, the Wisconsin town in which she lived, though a local funeral home said to be handling the burial would not confirm the death. A county official in Wisconsin thought she might have died several months ago. Phone calls seeking information from a surviving daughter, Olga Peters, who now goes by the name Chrese Evans, were rebuffed, as were efforts to speak to her in person in Portland, Oregon, where she lives and works.
Peters’ initial prominence came only from being Stalin’s daughter, a distinction that fed public curiosity about her life across three continents and many decades. She said she hated her past and felt like a slave to extraordinary circumstances. Yet she drew on that past, and the infamous Stalin name, in writing two best-selling autobiographies.
Long after fleeing her homeland, she seemed to be still searching for something: sampling religions, from Hinduism to Christian Science, falling in love, and constantly moving. Her defection took her from India, through Europe, to the United States. After moving back to Moscow in 1984, and from there to Soviet Georgia, friends told of her going again to America, then to England, then to France, then back to America, then to England again, and on and on. All the while she faded from the public eye.
Peters was said to have lived in a cabin with no electricity in northern Wisconsin; another time, in a Roman Catholic convent in Switzerland. In 1992, she was reported to be living in a shabby part of West London in a home for elderly people with emotional problems. “You can’t regret your fate,” Peters once said, “although I do regret my mother didn’t marry a carpenter.”
Her life was worthy of a Russian novel. It began with a loving relationship with Stalin, who had taken the name (meaning Man of Steel) as a young man. (He was born Ioseb Besarionis dze Jughashvili.) Millions died under his brutally repressive rule, but at home he called his daughter “little sparrow,” cuddled and kissed her, showered her with presents, and entertained her with American movies.
She became a celebrity in her country, comparable to Shirley Temple in the United States. Thousands of babies were named Svetlana. So was a perfume. At eighteen, she was setting the table in a Kremlin dining room when Churchill happened upon her. They had a spirited conversation.
But all was not perfect, even then. The darkest moment of her childhood came when her mother, Nadezhda Alliluyeva, Stalin’s second wife, committed suicide in 1932. Svetlana, who was six, was told that her mother had died of appendicitis. She did not learn the truth for a decade. In her teenage years, her father was consumed by the war with Germany and grew distant and sometimes abusive. One of her brothers, Yakov, was captured by the Nazis, who offered to exchange him for a German general. Stalin refused, and Yakov was killed.
In her memoirs, she told of how Stalin had sent her first love, a Jewish filmmaker, to Siberia for ten years. She wanted to study literature at Moscow University, but Stalin demanded that she study history. She did. After graduation, again following her father’s wishes, she became a teacher, teaching Soviet literature and the English language. She then worked as a literary translator.
A year after her father broke up her first romance, she told him she wanted to marry another Jewish man, Grigory Morozov, a fellow student. Stalin slapped her and refused to meet him. This time, however, she had her way. She married Morozov in 1945. They had one child, Iosif, before divorcing in 1947.
Her second marriage, in 1949, was more to Stalin’s liking. The groom, Yuri Zhdanov, was the son of Stalin’s right-hand man, Andrei Zhdanov. The couple had a daughter, Yekaterina, the next year. But they, too, divorced soon afterward.
Her world grew darker in her father’s last years. Nikita S. Khrushchev, Stalin’s successor as Soviet leader, wrote in his memoirs about the New Year’s party in 1952 when Stalin grabbed Svetlana by the hair and forced her to dance.
After Stalin died in 1953, his legacy was challenged, and the new leaders were eager to put his more egregious policies behind them. Svetlana lost many of her privileges. In the 1960s, when she fell in love with Brijesh Singh, an Indian Communist who was visiting Moscow, Soviet officials refused to let her marry him. After he became ill and died, they only reluctantly gave her permission, in early 1967, to take his ashes home to India.
Once in India, Alliluyeva, as she was known now, evaded KGB agents and showed up at the United States embassy in New Delhi seeking political asylum. The world watched in amazement as Stalin’s daughter, granted protection, became the most high-profile Soviet exile since the ballet virtuoso Rudolf Nureyev defected in 1961. The United States quickly dispatched a CIA officer to help her travel through Italy to neutral Switzerland, but American officials worried that accepting her into the United States could damage its improving relations with Moscow. Finally, President Lyndon B. Johnson, on humanitarian grounds, agreed to admit her, but asked that there be as little fanfare as possible.
Unknown to Washington at the time, the KGB was discussing plans to assassinate Alliluyeva, according to former agency officials who were quoted by The Washington Times in 1992. But, they said, the KGB backed off for fear an assassination would be traced back to it too easily.
Her arrival in New York, in April of 1967, was more triumphant than low-key. Reporters and photographers were waiting at the airport, and she held a news conference in which she denounced the Soviet regime. Her autobiography, Twenty Letters to a Friend, was published later that year, bringing her more than $2.5 million. In 1969 she recounted her journey from the Soviet Union in a second memoir, Only One Year.
Settling in Princeton, New Jersey, Alliluyeva made a public show of burning her Soviet passport, saying she would never return to the Soviet Union. She denounced her father as “a moral and spiritual monster”, called the Soviet system “profoundly corrupt”, and likened the KGB to the Gestapo.
Writing in Esquire magazine, Garry Wills and Ovid Demaris, under the headline How the Daughter of Stalin Denounced Communism and Embraced God, America and Apple Pie, said the Svetlana Alliluyeva saga added up to “the ultimate Reader’s Digest story”.
As the Kremlin feared, Alliluyeva became a weapon in the cold war. In 1968, she denounced the trial of four Soviet dissidents as “a mockery of justice”. On Voice of America radio, Soviet citizens heard her declare that life in the United States was “free, gay, and full of bright colors”.
In interviews, however, she acknowledged loneliness. She missed her son, Iosif, who was 22 when she left Russia, and her daughter, Yekaterina, who was then 17. But she seemed to find new vibrancy in 1970, when she married William Wesley Peters, who had been chief apprentice to the architect Frank Lloyd Wright and, for a time, the husband of Wright’s adopted daughter.
Wright’s widow, Olgivanna Wright, encouraged the Peters-Alliluyeva marriage, even though the adopted daughter was Mrs. Wright’s biological daughter from a previous marriage. That daughter was also named Svetlana, and Mrs. Wright saw mystical meaning in the match.
The couple lived with Mrs. Wright and others at Taliesin West, the architect’s famous desert compound in Scottsdale, Arizona. There, Peters began chafing at the strict communal lifestyle enforced by Mrs. Wright, finding her as authoritarian as her father. Mr. Peters, meanwhile, objected to his wife’s buying a house in a nearby resort area, declaring he didn’t want "a two-bit suburban life". Within two years, they separated. Ms. Peters was granted custody of their 8-month-old daughter, Olga. They divorced in 1973.
Information about the next few years is sketchier. Ms. Peters became a United States citizen in 1978 and later told The Trenton Times that she had registered as a Republican and donated $500 to the conservative magazine National Review, saying it was her favorite publication.
She and Olga moved to California, living there in several places before uprooting themselves again in 1982, this time for England so that Olga could enroll in an English boarding school. She also began to speak more favorably of her father, Time magazine reported, and perhaps felt she had betrayed him. “My father would have shot me for what I have done,” she said in 1983.
At the same time, Stalin was being partly rehabilitated in the Soviet Union, and Soviet officials, after blocking Ms. Peters’ attempts to communicate with her children in Russia, relaxed their grip. Iosif, then 38 and practicing as a physician, began calling regularly. He said he would try to come to England to see her.
“For this desperate woman, seeing Iosif appeared to herald a new beginning,” Time said. Abruptly, however, Iosif was refused permission to travel. So, in November of 1984, Ms. Peters and thirteen-year-old Olga— who was distraught because she had not been consulted about the move— went to Moscow and asked to be taken back. Lana Peters now denounced the West. She had not known “one single day” of freedom in the West, she told reporters. She was quoted as saying that she had been a pet of the CIA. Any conservative views she had expressed in the United States, if they still existed, went unexpressed. When an ABC correspondent in Moscow tried to question her a few days later, she exploded in anger, exclaiming: “You are savages! You are uncivilized people! Goodbye to you all.”
Peters and Olga were given Soviet citizenship, but soon their lives worsened. The son and daughter who lived in Russia began shunning them both. Defying the official atheism of the state, Olga insisted on wearing a crucifix. They moved to Tbilisi, Georgia, but it was no better than Moscow.
In April of 1986, they returned to the United States, with no opposition by the Soviet authorities. Settling at first in Wisconsin, Peters disavowed the anti-Western things she had said upon her arrival in Moscow, saying she had been mistranslated, particularly the statement about being a pet of the CIA. Olga returned to school in England.
Peters said she was now impoverished. She had given much of her book profits to charity, she said, and was saddled with debt and failed investments. An odd, formless odyssey began. Friends said she appeared unable to live anywhere for more than two years.
Her husband died in 1991. Ms. Peters’ son, Iosif, died in November of 2008. Besides her daughter Olga, now Ms. Evans, Peters is survived by her daughter Yekaterina Zhdanov, a scientist who goes by Katya and is living on the Kamchatka Peninsula in Eastern Siberia studying a volcano, according to The Associated Press. Reached by email, Evans told the AP that her mother had died in a nursing home in Richland Center, where she had lived for three years. “Please respect my privacy during this sad time,” the wire agency quoted her as saying.
Peters was said to enjoy sewing and reading, mainly nonfiction, choosing not to own a television set. In an interview with The Wisconsin State Journal in 2010, she was asked if her father had loved her. She thought he did, she said, because she had red hair and freckles, like his mother. But she could not forgive his cruelty to her. “He broke my life,” she said. “I want to explain to you. He broke my life.” And he left a shadow from which she could never emerge. “Wherever I go,” she said, “here, or Switzerland, or India, or wherever. Australia. Some island. I will always be a political prisoner of my father’s name.” 

Rico says the guy named himself the Man of Steel; no ego problems there...

Not fine, no

The New York Times has an editorial about the recent spate of abuse cases:

Prosecutors have a long way to go before they unravel the sexual abuse scandals that have engulfed the athletic departments at Pennsylvania State University and Syracuse University. What is clear from both cases is that college administrators need to contact off-campus law enforcement authorities immediately when they receive allegations of criminal conduct. It should not take prolonged inquiries or complex new standards for universities to take this common-sense step.
At Syracuse, prosecutors are looking into the claims by a former ball boy that he was molested “hundreds of times” by Bernie Fine, the associate head coach of the men’s basketball team. The accuser, Bobby Davis, now 39, said that the abuse started in 1984 shortly before he began seventh grade, and continued during the 1980s and 1990s at the coach’s home, office, and on team trips. Davis has been joined by his stepbrother, Mike Lang, 45, who also said that Fine abused him while he, too, was a ball boy.
Fine was dismissed from his job over the weekend after a third accuser came forward and a recording was made public of a telephone conversation between Davis and Fine’s wife in 2002 about Fine.
Davis reported his allegations to the university in 2005. According to school officials, the law firm that investigated the case on the school’s behalf could find no one to corroborate the story. However, the Onondaga County district attorney, William Fitzpatrick, says he finds Davis’ allegations credible, and that he found corroborating evidence recently, within days of beginning his investigation. He faults the university for not contacting his office at the time of the initial allegations.
Syracuse has turned over its files to prosecutors and hired an independent law firm to review how it responded to the charges. The National Collegiate Athletic Association and its member colleges, meanwhile, should examine how athletic programs supervise staff contact with children and set specific guidelines that can better protect minors if they are involved with program activities.

Rico says this abuse-of-power thing has gotta stop... (Maiming, if not killing, abusers would go a long way to inhibiting this.)

It is good to be the princess, too

Randy Kennedy has an article in The New York Times about doings in Newport, Rhode Island:

When Doris Duke was clearing a patch of derelict buildings in the late 1970s to create a modest patch of open space known as Queen Anne Square in Newport, she was sometimes spotted personally directing the backhoe drivers at dusk, acting as both foreman and steward of the enormous fortune that she lavished on such restoration projects. The same kind of New England pluck and perspicacity is now stoking an unusual battle, eighteen years after Duke’s death, over a plan to create a permanent, minimalist art installation in honor of her legacy on this swath of green that she left behind in a former commercial area near the harbor. The tenor of the dispute is distinctly Newportian. Many of the combatants have known one another for decades, as did many of their mothers, fathers, grandmothers and grandfathers.
Supporters of the project— which is being designed by Maya Lin and is completely underwritten with private money by some of the city’s wealthiest families— converge at an oceanside cottage on Edith Wharton’s former estate, now home to Marion Oates Charles, known as Oatsie, the president of the Newport Restoration Foundation and a close friend of Duke’s, who has spearheaded the memorial plan.
The opposition marshals its forces several blocks up gilded Bellevue Avenue, in a rambling Carrère & Hastings mansion that is now home to Laurence S. Cutler, a Harvard-trained architect and former professor, and his wife, Judy Goffman Cutler, an art dealer, who both vehemently oppose the plan, though Cutler takes pains to point out that “it is all well intentioned, and these are all very good people”.
Despite the air of politesse, the fight has taken on the intensity of a debate over the soul of Newport itself, a city that, largely because of the efforts and example of Duke, has painstakingly preserved its colonial and Gilded Age heritage over the last four decades and has kept most incursions of contemporary commercial culture and design at bay.
But when Mrs. Charles, who is 92 and a longtime Newporter, began to think about a public tribute to Duke, who founded and bankrolled the restoration foundation, she said she felt strongly that it should be “something that looked to the future, not to the past”. And so, when a foundation staff member suggested Lin, well known for the Vietnam Veterans Memorial in Washington and other public projects that use a mostly spare, abstract visual language, Charles enthusiastically sought her out.
The plan that has evolved since Lin signed on last year would place three low-walled structures around the roughly one-acre space of the square, each to be made from salvaged local stone and intended to evoke the foundations of vanished centuries-old buildings that can still be found in the woods throughout New England. Lin chose the three foundation outlines (a square and two rectangles) from historical Newport maps from the eighteenth, nineteenth and twentieth centuries, and said in an interview that they appealed to her as a way to give form to the idea of the “layers upon layers of history” that have shaped Newport.
But in the five months since the $3.5 million project, called the Meeting Room, was first presented to the public, a growing group of opponents— including a preservationist who ran the Newport Restoration Foundation during the years when Duke was building the square— has denounced it as ersatz history and as the result of a kind of celebrity-artist-shopping that they say the relentlessly pragmatic Duke would have hated.
The opponents further complain that the foundation structures will impede recreation, that the stone— which is to serve double duty as the first seating in a park that has never had benches— will be too chilly to sit on through much of the spring and fall, not to mention the winter, and that the low, wall-like forms, instead of serving as gathering places for people, will mostly just gather lots of wind-blown trash.
“It will be like some kind of fake Disneyland in the middle of town, and as a professional, I think it’s not only a bad design but a bad idea,” said Cutler, who, with his wife runs the National Museum of American Illustration, which houses the couple’s extensive collection of work by Norman Rockwell and Maxfield Parrish. (Mrs. Charles sits on the Cutlers’ museum board, now somewhat uncomfortably. “She calls me the rogue of Newport,” Cutler said.)
In an online poll completed recently by The Newport Daily News, 329 respondents said they wanted the park to remain as it is now, with grass and trees and a few boulders, while 43 said they supported the current plan. (The population of Newport is just under 25,000.) Among the more prominent opponents is Janet Alexander Pell, the daughter-in-law of Claiborne Pell, the longtime Rhode Island senator who died in 2009; in a letter to a local weekly, she repeated a shorthand putdown of the project that seems to have gained traction lately that likens the stone foundations to cat litter boxes.
Hugh D. Auchincloss III, another venerable Newporter who knew Duke, has also joined the opposition, saying in an interview in Cutler’s study that he believed that not only Duke but also another prominent preservation advocate to whom he was close— his stepsister Jacqueline Kennedy Onassis— would have disliked the proposal. “I think she would have thought it was misplaced in this public park— not necessarily in bad taste but not really in good taste,” said Auchincloss, who is known as Yusha.
Pieter N. Roos, the restoration foundation’s executive director, said that, while he thought that the opposition remained limited, he had been surprised and baffled by its fervor. “We literally were trying to think of the nicest, most innocuous thing we could do to enhance the city and give it an aesthetic gift,” he said.
Mrs. Charles, with characteristic bluntness, added: “Most of the people who are protesting are not habitués of the park, they just don’t want to see change in Newport. This may be a somewhat far-fetched reference to Doris,” she said, “but I think it will be rather a good one.” She said that she and the plan’s supporters believed that they had more than enough support on the Newport City Council, which must approve the installation because the square occupies city-owned land. (A vote on the issue is scheduled for 14 December.) But Cutler and other opponents said that they would consider pursuing legal action to try to stop the project if it were approved.
Lin, who weathered storms of criticism in the 1980s as her design for the Vietnam memorial was shaped, said it had been a long time since she had confronted the kind of opposition she is encountering in Newport. “What can you do?” she said. “You do what you think is best.” But she added that her idea for a group of symbolic and practical meeting places in the square had also been inspired by the role of Rhode Island’s founder, Roger Williams, as a father of the doctrines of church-state separation and of freedom of assembly that came to underpin the First Amendment. “In that sense it’s all about free speech,” she said, “so I guess we should welcome this, right?”
Mrs. Charles does. Dismissing the detractors with a wave of her hand, she said, “I just let them all talk.”

Rico says there's a nice illustration with the article, but you'll have to go there to see it...

Buy it, then fly

Jane Levere has an article in The New York Times about a new sales method:

Electronics “fit the airport market really well”, according to Bruce Boudreau, a director of LeighFisher, airport consultants in Burlingame, California. “There are lots of business travelers, lots of tech-savvy people who are looking to try new things or replace things they already have. They might need batteries, want to replace their headphones, kill time, or reward themselves for a good idea or a good business trip.”
One retailer, APW Brands, plans to open a new type of store next year where employees will wear electronic nametags with multimedia displays to demonstrate equipment to customers. Next year, too, OTG Management plans to rent iPads to travelers for their trips and sell downloadable content for the iPads. The Paradies Shops, which operates a variety of branded stores like Brooks Brothers and newsstands at airports, has joined forces with the video game company Electronic Arts on a new retail concept.
Mark Knight, president of Airmall USA, an airport retail developer owned by Prospect Capital, a private equity company, said sales volumes of electronics retailers at airports exceeded sales volumes of retailers specializing in items like clothing or gifts. Electronics are “hot in their sales performance”, he said, “because they have such broad appeal and are constantly changing. They’ve got natural, built-in momentum.” Knight also said that electronics retailing was a natural fit for airports because the merchandise, which is usually not large, could be sold in “small, efficient settings” like carts and shops that are essentially cubbyholes. Although some electronics stores are outside of security checkpoints, most stores are near the gates, thus providing a diversion for travelers waiting for their flights.
Boudreau said prices charged for electronics at airports were typically equal to or within ten percent of prices at retailers elsewhere.
The largest retailer of electronics at airports is InMotion Entertainment, which started out renting DVD players in 1999 and now operates 68 stores at 33 airports in the United States. Their stores go under the names of InMotion Entertainment, which sells a wide variety of electronics and accessories; Soundbalance, which offers environmentally friendly products like solar-powered batteries; and BlackBerry Store from Wireless Giant, which sells BlackBerry merchandise.
APW Brands, based in Wellington, Florida, began in 1997 as a cart at Philadelphia International Airport, where the founder, Iris Goldschmidt, sold cellphones. The company now operates fifteen TechShowcase and twenty Airport Wireless stores in about twenty airports in the United States. The Airport Wireless stores offer a wider selection of equipment and accessories than TechShowcase. The company has a joint venture with InMotion Entertainment on Soundbalance stores, and also operates Tech in a Sec carts at several airports. APW Brands’ newest retail concept, Tech Interaction, is scheduled to open at airports in Philadelphia, Pittsburgh, and Baltimore early next year. Customers will be able to research their electronics needs on touch screens on store walls, examine merchandise, and try out equipment like headphones.
Bluwire, which has been in business since 2007, has twelve outlets in eight airports. Christopher Burden, Bluewire’s co-chief executive, said headphones were his company’s best-selling item. “If you spend $700 on an iPad, you want to enjoy it with a suitable pair of headphones,” he said.
Another electronics retailer, Brookstone, has stores at fifty airports in the United States. Don Eames, Brookstone’s vice president of retail stores, said half the stores’ merchandise was electronics-related. He also said the category was the “fastest-growing part” of Brookstone’s business, with items like iPhone cases and a roll-up keyboard among top sellers.
Zoom Systems, based in San Francisco, operates Best Buy Express vending machines in most of the fifty largest airports. The machines sell sixty to seventy items carried by the retailer, including the Apple iPod Touch and Nano.
Several companies also cater to the current demand for Apple’s iPad and similar devices. OTG Management will open OTG Media Bars at its Cibo Express Gourmet Markets in Delta’s Concourse G in Terminal 1 at Minneapolis-St. Paul International Airport next year. Travelers will be able to rent an iPad or pay to download content for their own iPad; rentals, available for a minimum of one day, will start at $29.95. Virgin America, which offers Wi-Fi on all flights, in July began giving passengers on certain flights the option to try, free, a Google Chromebook at the gate or in flight. This promotion ends on 15 January.
Even airport newsstand specialists sell electronics and accessories. In September, the Paradies Shops opened an EA Sports Experience store at Charlotte Douglas International Airport in North Carolina where customers could play with and purchase Electronics Arts video games and other merchandise. Two more are scheduled to open this month. In addition, all Hudson Group newsstands carry chargers and other accessories, while the largest offer a wider selection of merchandise. The company also operates three freestanding Tech on the Go electronics stores at airports.
“This is a category that simply did not exist for us even a couple of years ago,” said Michael S. Levy, senior vice president of merchandising for the Hudson Group.
Duty-free stores at major airports worldwide outside the United States— run by companies like DFS Group, Dufry, Nuance Group, and World Duty Free— also sell consumer electronics free of local taxes and import duties to departing international passengers. Boudreau said the decision to buy at these stores should be based on a comparison of prices at the airport and at the traveler’s place of residence, where local taxes could be imposed. Savings can be considerable for travelers from high-tax countries like those in the European Union and Brazil, where local taxes can add as much as forty percent to some items.
Knight of Airmall said electronics retailing at airports was somewhat recession proof because the income level of many travelers was typically higher than that of the general population, which “mitigates some of the impact of general economic conditions.”
But Kerry Moyer, senior director of retail membership for the Consumer Electronics Association, a trade group, cautioned that retailers had to be careful with what they offered. “If it’s an impulse purchase that satisfies an immediate need, people won’t hesitate spending $50 or $100,” he said. “If you have something that’s priced too high, say over $200, then they might hesitate and think about it.”

Rico says he's already availed himself of some of this, but the Paradies bookstores have the coolest marketing tool: buy a book, return it within six months (as if; Rico returned it at the end of his flight) and get fifty percent of the cover price back in cash...

Photoshop'd

Steven Lohr has an article in The New York Times about the use of Photoshop in the media:

The photographs of celebrities and models in fashion advertisements and magazines are routinely buffed with a helping of digital polish. The retouching can be slight: colors brightened, a stray hair put in place, a pimple healed. Or it can be drastic: shedding ten or twenty pounds, adding a few inches in height and erasing all wrinkles and blemishes, done using Adobe’s Photoshop software, the photo retoucher’s magic wand.
“Fix one thing, then another and pretty soon you end up with Barbie,” said Hany Farid, a professor of computer science and a digital forensics expert at Dartmouth.
And that is a problem, feminist legislators in France, Britain and Norway say, and they want digitally altered photos to be labeled. In June, the American Medical Association adopted a policy on body image and advertising that urged advertisers and others to “discourage the altering of photographs in a manner that could promote unrealistic expectations of appropriate body image.”
Dr. Farid said he became intrigued by the problem after reading about the photo-labeling proposals in Europe. Categorizing photos as either altered or not altered seemed too blunt an approach, he said.
Dr. Farid and Eric Kee, a Ph.D. student in computer science at Dartmouth, are proposing a software tool for measuring how much fashion and beauty photos have been altered, a 1-to-5 scale that distinguishes the infinitesimal from the fantastic. Their research is being published this week in a scholarly journal, The Proceedings of the National Academy of Sciences.
Their work is intended as a technological step to address concerns about the prevalence of highly idealized and digitally edited images in advertising and fashion magazines. Such images, research suggests, contribute to eating disorders and anxiety about body types, especially among young women.
The Dartmouth research, said Seth Matlins, a former talent agent and marketing executive, could be “hugely important” as a tool for objectively measuring the degree to which photos have been altered. He and his wife, Eva Matlins, the founders of a women’s online magazine, Off Our Chests, are trying to gain support for legislation in America. Their proposal, the Self-Esteem Act, would require photos that have been “meaningfully changed” to be labeled.
“We’re just after truth in advertising and transparency,” Mr. Matlins said. “We’re not trying to demonize Photoshop or prevent creative people from using it. But if a person’s image is drastically altered, there should be a reminder that what you’re seeing is about as true as what you saw in ‘Avatar’”, the science-fiction movie with computer-generated actors and visual effects.
The algorithm developed by Dr. Farid and Mr. Kee statistically measures how much the image of a person’s face and body has been altered. Many of the before-and-after photos for their research were plucked from the Web sites of professional photo retouchers, promoting their skills.
The algorithm is meant to mimic human perceptions. To do that, hundreds of people were recruited online to compare sets of before-and-after images and to determine the 1-to-5 scale, from minimally altered to starkly changed. The human rankings were used to train the software.
His tool, Dr. Farid said, would ideally be a vehicle for self-regulation. Information and disclosure, he said, should create incentives that reduce retouching. “Models, for example, might well say, ‘I don’t want to be a 5. I want to be a 1,’ ” he said.
Yet even without the prod of a new software tool, there is a trend toward Photoshop restraint, said Lesley Jane Seymour, editor in chief of More, a magazine for women over 40.
Women’s magazine surveys, said Ms. Seymour, a former editor of Marie Claire and Redbook, show that their readers want celebrities to “look great but real.”
“What’s terrific is that we’re having this discussion,” she said. But readers, she added, have become increasingly sophisticated in understanding that photo retouching is widespread, and the overzealous digital transformations become notorious, with the before-and-after images posted online and ridiculed.
“Readers aren’t fooled if you really sculpt the images,” Ms. Seymour said. “If you’re a good editor, you don’t go too far these days. If you give someone a face-lift,” she said, adding, “you’re a fool.”

Rico says, because he's been warned, you'll have to go to the article to see the illustration: From left to right, photographs show the five levels of retouching in a system by Hany Farid of Dartmouth. The effect, from slight to drastic, may discourage retouching. “Models, for example, might well say, 'I don't want to be a 5. I want to be a 1,' ” he said.

Eyeless in Gaza, headless in Afghanistan

Ray Rivera, Sharifullah Sahak, and Eric Schmitt have an article in The New York Times about Afghanistan:

As targeted killings have risen sharply across Afghanistan, American and Afghan officials believe that many are the work of counterintelligence units of the Haqqani militant network and al-Qaeda, charged with killing suspected informants and terrorizing the populace on both sides of the Afghanistan-Pakistan border.
Military intelligence officials say that the units essentially act as death squads and that one of them, a large group known as the Khurasan that operates primarily in Pakistan’s tribal areas, has been responsible for at least 250 assassinations and public executions.
Another group, whose name is not known, works mainly in Afghanistan and may be responsible for at least twenty killings in Khost Province over the summer alone, including a mass beheading that came to light only after a video was found in the possession of a captured insurgent. The video shows ten headless bodies evenly spaced along a paved road, while their heads sit nearby in a semicircle, their faces clearly visible.
It is another indication that the Haqqanis, a mostly Pakistan-based faction, remain the most dangerous part of an insurgency that makes full use of a porous and often ill-defined border, as the NATO strike that killed two dozen Pakistani soldiers over the weekend showed. Though the circumstances of that strike remain murky, it has now further upset relations between Pakistan and the United States, even as it once again demonstrated how havens inside Pakistan remained a critical part of the insurgent strategy.
The Americans have geared their offensive around bloodying the insurgents as they enter Afghanistan. But the new wave of assassinations shows that, even as NATO portrays the insurgents as a weakening force, the Haqqanis can still assert their influence, not only with headline-grabbing bombings but also through intimidation and by controlling perceptions.
One chilling case attributed to the second death squad came after American forces captured the senior Afghanistan-based leader for the Haqqanis, Hajji Mali Khan, and killed his top deputy this summer. Just days later, the bodies of two men accused of helping the Americans turned up near the village where Khan was captured. Scalding iron rods had been shoved through their legs. One victim had been disemboweled, and both had been shot through the head and crushed by boulders. Fear shot through the entire village. “You could hardly recognize them,” said a witness who viewed the bodies.
Across Afghanistan, assassinations have jumped sixty percent, to 131 reported killings, through the first nine months of this year, compared with the same period in 2010, according to NATO statistics. United Nations officials say they began noticing a sharp increase in 2010, with 462 assassinations according to their records, double the number from the previous year. The figures may not include many killings in remote areas, like the mass beheading, because fearful villagers never reported them.
American intelligence officials say the unnamedAfghanistan-based group and the Khurasan seem to operate in much the same manner. The Khurasan is believed to have formed in early 2009 in the North Waziristan area of Pakistan, the Haqqanis’ headquarters, in response to intensified drone attacks by the United States. The group is said to wear black clothing with green armbands bearing its full name, Itihad al-Mujahedeen Khurasan, and works closely with al-Qaeda in the region. Estimates of its size range from one hundred to two thousand members.
During his interrogation, Khan suggested that other weapons were involved in the battle for influence, as well. According to four officials familiar with the questioning, the Haqqani leader told his interrogators that the Taliban had been approaching Afghan government and military officials throughout the summer, persuading them to sign a five-page document secretly pledging their loyalty to the Taliban leadership. Khan boasted that he had signed up twenty officials himself.
“They tell the officials that the Taliban is going to be back in power within twenty days of NATO leaving, so if they want to live, they’ll sign,” said one of the American officials, who spoke on the condition of anonymity to discuss the classified interrogations. Officials say they have found no confirmation of such oaths, however.
In places like Sabari, a rural district in Khost that sits about a dozen miles from the Pakistani border, the targeted killings are producing their intended effect. After a daylight execution of three men in a bazaar in the village of Maktab about four months ago, shop owners were so traumatized that they never reported the killings to the authorities.
Often, the victims may have had little more than passing encounters with coalition forces, or no involvement at all, according to officials, witnesses, and friends and relatives of victims. American and Afghan officials learned about the killings only later when a video of the episode was found on a captured insurgent’s cellphone. Even then, American officials who showed the video to a New York Times reporter could cite the place where the killings had taken place but believed that they had occurred in October, about three months after witnesses say the actual episode happened.
The video showed a number of gunmen shooting to death two men as shop owners scrambled for cover. The militants then shot a third man as he sat in a white plastic chair in front of his shop. As the man fell backward, one of the gunmen shot him ten more times in the face and chest. “Whoever tries to help the Americans and spies for them will face this,” one of the men shouted after the killings, according to a witness, Ahmadullah, 25, a shop owner who like many Afghans goes by one name. Ahmadullah said no one dared report it, even the men’s families, who carried the bodies away. “We just had to watch and stand quiet and watch what was happening to these poor people,” he said. “I knew those men,” he added. “One was just a shop owner, the other two were laborers. They were innocent.”
An American military official who saw the video said he was not surprised that local villagers failed to report the episode. “People in Sabari are living in abject terror, 24 hours a day,” he said, speaking on the condition of anonymity because he was not authorized to publicly discuss the death squad. “When we conduct a raid on a Haqqani leader,” he said, a group of about fifteen death-squad members “go in and massacre people”.
Last month, insurgents killed another man in the bazaar, about two days after a night raid in the village by Afghan and American troops. This time the victim was a visiting merchant from Khost City named Nasib, who was pulled out of his car as his five-year-old son watched from the passenger seat. His abductors dragged him to the bazaar and killed him in broad daylight. Yet when asked about the killings, the district governor and the local police chief in Sabari said they knew nothing about them. “I totally deny such reports,” said Dawlat Khan Qayoumi, the district governor. “I can tell you in the last five months we have not seen any such incidents.”
Questions also surround the videotaped beheadings. Muhammad Zarin, the commander of a special undercover police unit that has been investigating the death squads, would say only that the men were from Khost and were killed about three months ago in the Mangal area in the province’s mountainous Musa Khel district, where Khan was active. Neither NATO nor the United Nations, both of which track assassinations, had any record of the mass beheadings, of the Maktab Bazaar killings, or of the two men killed after Khan’s capture, reflecting the intense secrecy with which villagers have guarded the deaths.
After an earlier raid that failed to capture Khan in the Musa Khel area, coalition forces got a report that three village elders had been kidnapped and three teenagers had been beheaded. “When we went up to investigate, we could never get any bodies or any proof,” said Colonel Christopher R. Toner, commander of the First Infantry Division’s Third Brigade Combat Team, based in Khost and Paktia Provinces. “But there was enough going around that I suspect it was true.”
Public health officials likewise say they hear of dozens of such killings but are seldom able to confirm them. “People don’t bring the bodies in to the hospital for fear of the Taliban,” said Dr. Fazal Mohammad Mangal of the Khost provincial hospital.
Zabit Amen Jan, a former Musa Khel resident, has lost four brothers to insurgents, including two students in their twenties whose bullet-ridden bodies were found in June. A hand-scrawled letter found on one of the bodies said the men had ignored repeated warnings to stop working with the coalition forces. “There was no other way except this,” the letter said. Jan said his younger brothers had no connection to the coalition and were killed only because he and another brother had been involved in politics. “People used to come to our district for picnics because our area is full of mountains and covered with pine and walnut trees,” he said. “Now people are fleeing to Khost City or Kabul or Pakistan, because there are so many killings and they know the government can’t protect them.”

Rico says there'd be a picture, except he'd get smacked by Blogger again...

No more pictures, dammit

Rico says he got this rocket from Google today:

Blogger has been notified, according to the terms of the Digital Millennium Copyright Act (DMCA), that some of your images allegedly infringe upon the copyrights of others. The URLs of the allegedly infringing images may be found at the end of this message.
The notice that we received, with any personally identifying information removed, may be found at this link.
Please note that it may take several weeks for the notice to be posted on the above page.
The DMCA is a United States copyright law that provides guidelines for online service provider liability in case of copyright infringement. We are in the process of removing from our servers the images that allegedly infringe upon the copyrights of others. If we did not do so, we would be subject to a claim of copyright infringement, regardless of its merits.
See here for more information about the DMCA, and here for the process that Blogger requires in order to make a DMCA complaint.
Blogger can allow you to reupload these images upon receipt of a counter notification pursuant to sections 512(g)(2) and 3) of the DMCA. For more information about the requirements of a counter notification, use this link to a sample counter notification.
Please note that repeated violations of our Terms of Service may result in further remedial action taken against your Blogger account. If you have legal questions about this notification, you should retain your own legal counsel. If you have any other questions about this notification, please let us know.
Sincerely,
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More Anonymous

Rico says that the problem with allowing anonymous posting of comments is that, unfortunately, you get all kinds of crap, including this:

Anonymous has left a new comment on your post Your tax dollars at work:

Greetings. Sorry if perhaps I am in the wrong thread with this blog post. I'm having some issues connecting my loudspeakers to a new amplifier device. The loudspeaker type is static. I assume that such speakers act differently when compared with standard speakers. According to the speaker datasheet, the speakers have an impedance which is similar to a capacitor. Regretably, the amplifier is going to oscillate, i.e. be unstable whenever I have these loudspeakers attached. When I employ ordinary loudspeakers the amplifier works fantastic. Then again with my static loudspeakers there's always a deafening hissing noise. Would a power transformer or just a load resistor make the amp stable? Could this compromise efficiency of the amplifier? I value your comments.

Rico says 'wrong thread'? You think? Since Rico has never talked about stereo equipment, nor speaker installation, he cannot imagine what led this poor benighted person to his blog in the first place...

History, sort of, for the day

Rico says his arch-perv friend Dave sends along this interesting piece of history:

In 1272, the Arabs invented the condom, using a goat's lower intestine.
In 1873, the British somewhat refined the idea by taking the intestine out of the goat first.

Neutering Newt

Trip Gabriel has an article in The New York Times about Newt Gingrich:

Newt Gingrich is a historian. He earned a Ph.D. in history. If you’ve forgotten, he’ll remind you. During a six-candidate forum in Iowa recently, Gingrich dropped references to the Northwest Ordinance of 1787, Captain John Smith’s leadership of Jamestown, the French Revolution and, as a bonus, the Latin root of “secular”. A few days earlier, as guests at a fund-raising breakfast forked into slabs of coffeecake, Gingrich told a lengthy anecdote about John Quincy Adams. And, in New Hampshire before that, he referred, at a Tea Party forum, to the Louisiana Purchase, Thomas Jefferson’s abolition of federal judgeships and, again, the Northwest Ordinance of 1787.
Gingrich taught college history before entering politics, and his historical references on the campaign trail are such a feature of his public remarks as to be nearly a rhetorical tic. They strike some as evidence that Gingrich is the smartest candidate in the room and others that he is a man determined to let you know how much he knows.
In an election season rife with factual misstatements, deliberate and otherwise, Gingrich sometimes seems to stand out for exhibiting an excess of knowledge. It is hard to imagine him not knowing that the Battle of Lexington and Concord took place in Massachusetts, not New Hampshire, where Representative Michele Bachmann of Minnesota located it this year.
But in some ways Gingrich seems not just to know history, but to think of himself very self-consciously as part of it, and not always in a small way. In an interview with The New York Times in 2009, he said he subscribed to the historian Arnold J. Toynbee’s theory of “departure and return”, the notion that certain great leaders must endure a long political exile before returning to power. He indicated that Charles de Gaulle, the French general who became president only after years out of power, was a role model.
“Some people say he sounds arrogant. I see it as confidence,” said Josh Byrnes, an Iowa state representative who threw his support to Gingrich after he spoke at his daughter’s school. “I think what Newt’s doing, he’s using historical lessons to take on this current situation we’re in.”
Gingrich’s deep identification with this role was highlighted recently when he said in a debate that Freddie Mac, the home mortgage giant, had hired him as a “historian”, not a lobbyist, as it fought off government regulators before the financial crisis.
When it came out that Gingrich had earned nearly two million dollars from Freddie Mac, he was mocked by liberal critics as the best-paid historian ever.
At a forum in Charleston recently, Gingrich fingered his lapel pin and said it represented George Washington’s campaign flag, with “thirteen stars on a gold background representing the thirteen states.”
Fellow historians are generally pleased that Gingrich brings history into the national conversation, even if some dispute his insights. Last year, he said he agreed with a controversial essay linking President Obama to a “Kenyan, anti-colonial” world view. On Conservativenet, a listserv of historians, Professor Lawrence Squeri of East Stroudsburg State wrote the other day: “I always did feel that Gingrich should have stayed in academia, conducting seminars that would make students rave or fume and send impassioned posts to the Rate My Professors website.”
Gingrich has been out of power since quitting Congress under pressure in 1998, but has surged in recent polls, and he is fond of citing historical crucibles to dramatize the stakes he sees for the 2012 election. In South Carolina this month, he said the country was facing a “choice comparable, I think, to 1860 and it may be comparable, in some ways, to 1788”, a brainy reference, apparently, to the year the Constitution was debated and ratified.
Gingrich reminded the same audience, “I studied American history” and offered a lengthy back story to the Lincoln-Douglas debates. “In 1858, Stephen Douglas was the most famous man in the United States Senate,” he began.
The Civil War era is one he often comes back to. He and a co-author have written three counterfactual historical novels, beginning with Gettysburg, in which Pickett’s Charge succeeds and the Lost Cause is redeemed.
“Every politician believes he can be president,” said Richard Brookhiser, the author of biographies of James Madison and George Washington. “Because Gingrich is also interested in history, he has it to an unusual degree, so naturally he sees himself in this progression of titans.”
While stumping, he frequently mentions his academic career, often to contrast his Main Street credentials teaching at West Georgia College (now the University of West Georgia) with Obama’s elite education at Columbia and Harvard Law School.
Gingrich’s Ph.D. is from Tulane. His dissertation was on Belgian Education Policy in the Congo: 1945-1960. While teaching history and environmental science for eight years at West Georgia College, Gingrich ran unsuccessfully for Congress twice; he succeeded on his third attempt in 1978.
As Speaker of the House, a history course he taught by satellite television was the focus of an ethics investigation in which he was fined three hundred thousand dollars. He was found to have misused money from a political action committee to underwrite the course, Renewing American Civilization. In the inquiry, a document emerged from the conservative scholar James Q. Wilson offering feedback on the course: “It is bland, vague, hortatory and lacking in substance,” Dr. Wilson wrote about a chapter he had been asked to review by a Gingrich aide. “Historically, it does not represent Adam Smith correctly,” he added. “The Founders are also treated somewhat cavalierly. It is true that George Washington spoke often of the importance of virtue, but he didn’t write the Constitution; Madison and a few others did.”
Professional historians are divided in their assessments of Gingrich’s analysis of the past. He has called for the abolition of the United States Court of Appeals for the Ninth Circuit, which many Republicans detest for its liberal rulings, citing the precedent of Jefferson’s repeal of the Judiciary Act of 1801, which eliminated some federal courts. “If something happened once two hundred years ago, to what extent is that really a precedent?” said Geoffrey Kabaservice, the author of a coming book, Rule and Ruin, on the decline of Republican moderates since the 1950s. “My problem with Gingrich as an historian,” Kabaservice added, “is that history’s a big grab bag. You can find precedents for anything you want in there. Gingrich’s approach to history is like his approach to politics: sloppy, undisciplined, occasionally brilliant, but more often missing the mark.”
Sean Wilentz, a Princeton historian, said in an interview: “I have a weakness for any public figure who talks about history in any way that is at all serious. I find the Speaker is serious,” said Professor Wilentz, who has written books about Andrew Jackson and Ronald Reagan. “I just don’t find him profound in any way.”

Rico says the University of West Georgia sure as hell beats Columbia and Harvard Law... (Sarcasm, in case you hadn't noticed.)

Lowering Cain

Susan Saulny has an article in The New York Times about the latest troubles of Herman Cain:

An Atlanta woman came forward in an interview broadcast with details about what she called a thirteen-year affair with Herman Cain, the Republican presidential contender whose campaign was already struggling to overcome damage from accusations of sexual harassment. The woman, Ginger White (photo), made the disclosure in an interview with Fox 5 News in Atlanta, becoming the fifth person to accuse Cain of improper behavior. White is not, however, claiming that harassment took place. Rather, she described what amounted, in her words, to a romance. “It was pretty simple,” White said. “It wasn’t complicated. I was aware that he was married. And I was also aware I was involved in a very inappropriate situation, relationship.”
White showed the news station some of her cellphone bills, including sixty phone calls or text messages to and from a number she said was for Cain’s private cellphone. The contacts were made during four different months as early as 4:26 a.m. and as late as 7:52 p.m. The most recent were in September.
The television station said that it had sent a text message to the number White gave it and that Cain had returned the call. In the call, Cain said that he “knew Ginger White” and that she had his number because he was “trying to help her financially”.
Cain, speaking to Wolf Blitzer on CNN, acknowledged knowing White, whom he called an acquaintance, but denied having a sexual relationship with her. “I have nothing to hide,” he said. “I did nothing wrong.” When asked directly by Blitzer: “Was this an affair?”, Cain responded: “It was not.”
The accusations come as Cain’s standing has been falling in recent polls, with his campaign battling not only the earlier accusations of sexual misconduct, but also the reaction to the candidate’s trouble answering questions on subjects like President Obama’s handling of the conflict in Libya.
In her interview, White told Fox 5 News that Cain had showered her with gifts and flown her around the country to meet him at various engagements after they met in the late 1990s in Louisville, Kentucky, when Cain was president of the National Restaurant Association.
After that first meeting, White said, she and Cain had drinks, and he invited her back to his hotel room, where they planned their next meeting. It went on like this for years, she said, until Cain began to seriously consider the presidency. She said their sexual relationship ended about eight months ago.
White said she came forward after seeing how Cain, a businessman who lives in Atlanta, treated the women who had accused him of harassment. “It bothered me that they were being demonized,” White said. “I felt bad for them.” She said she also “felt trapped” after a tipster alerted the local Fox station about her and other news outlets began to call. “I wanted to give my side before it was thrown out there and made out to be something filthy,” White said. “Some people will look at this and say that is exactly what it is. I’m sorry for that.”
A lawyer for Cain, L. Lin Wood, released a statement about White’s claim: “This appears to be an accusation of private, alleged consensual conduct between adults, a subject which is not a proper subject of inquiry by the media or the public,” he said.
White is an unemployed single mother. Before the interview, Fox learned that she had filed a sexual harassment claim against an employer in 2001. That case was settled. The station also found a bankruptcy filing nearly 23 years ago in Kentucky, and several eviction notices in the Atlanta area over the past six years.
The station also reported that White had a former business partner who once sought a “stalking temporary protective order” against her for “repeated e-mails & texts threatening lawsuit and defamation of character”. The case was dismissed, but it was followed by a libel lawsuit against White. A judge entered an order against White because she failed to respond to the lawsuit, Fox reported.
Cain went on CNN to pre-emptively address White’s claims, saying, “I want to give you a heads-up and everyone a heads-up.” Cain took a nonchalant attitude in his attempt to get ahead of the story, saying he was not concerned for himself or his reputation. “I am more worried that this is going to hurt my wife and my family,” he said. “I can take the lumps.”
He refused to go into any detail about White, and also told Blitzer that he had already informed his wife, whose response was: “Here we go again.”
Accusations of sexual harassment against Cain began surfacing at the beginning of this month, all dating from the years that he ran the National Restaurant Association in the 1990s. Cain has repeatedly denied the allegations.
Asked on CNN whether he would consider dropping out of the race, as his campaign has been in crisis mode and off its message for weeks now, Cain said: “We’re going to stay focused on this campaign.”

Rico says the latest news has Cain 'rethinking' his candidacy, as if much thinking were necessary... (But surely the National Restaurant Association is tired of having its name dragged into every news story about Cain.)

Long hours? Hard work? Loud boss?

Rico says he lived all that at Apple, years back, but Evelyn Rusli has an article in The New York Times about the poor bastards at Zynga who're dealing with it now:

Zynga’s chief executive, Mark Pincus, got an earful from employees last month. In dozens of e-mails to a companywide list, frustrated workers complained about the long hours and stressful deadline periods. The quarterly staff survey solicited 1,600 responses, with plenty of criticism, including one person who said he planned to cash out and leave after the initial public offering.
Pincus took note, going through the comments and highlighting select excerpts. At a Zynga meeting several days later, he read some of the most acerbic words. Pincus said he was aware of the problems, but needed the staff’s guidance to fix them.
Few Internet start-ups have grown as swiftly as Zynga, creator of a sprawling network of virtual farms, cities, and poker tables that is preparing to go public in one of the most highly anticipated offerings this year.
Led by the hard-charging Pincus, the company operates like a federation of city-states, with autonomous teams for each game, like FarmVille and CityVille. At times, it can be a messy and ruthless war. Employees log long hours, managers relentlessly track progress, and the weak links are demoted or let go.
But that culture, which has been at the root of Zynga’s success, could become a serious liability, warn several former senior employees who agreed to speak on the condition of anonymity because of fear of reprisals.
As the discord increases, the situation may jeopardize the company’s ability to retain top talent at a time when Silicon Valley start-ups are fiercely jockeying for the best executives and engineers. It could also hamper deal-making, a critical growth engine for Zynga, which has spent about $119 million on acquisitions in the last two years.
“Zynga should be an example of entrepreneurship at its best,” said Roger McNamee, a co-founder of the venture capital firm Elevation Partners. “Instead it’s going to be a Harvard Business School case study on founder overreach; this will be a cautionary tale.”
Already, signs of trouble are emerging. In July, Zynga lost a bid for PopCap, a mobile game company. Zynga offered $950 million in cash. But PopCap’s founders were worried about the company’s reputation after hearing rumors of the company’s rescinding share awards and fierce internal competition, said two people with first-hand knowledge of the situation. Instead, PopCap agreed to a rival offer from Electronic Arts, worth $750 million in cash and stock and the potential of an additional $550 million if certain earnings goals were met.
Several start-ups have also rebuffed Zynga this year, including Rovio. This summer, Rovio, the maker of the popular mobile game Angry Birds, walked away from discussions of a deal worth roughly $2.25 billion in cash and stock, three people briefed on the situation said.
With its IPO fast approaching, competitors are preparing to poach disgruntled staff members. This month, one recruiting firm sent cookie baskets to some 150 Zynga employees. “I expect a lot of game and tech companies will begin recruiting Zynga’s talent after their equity becomes liquid,” said Gabrielle Toledano, head of human resources for Electronic Arts. “Competitors will make the case that they offer much more compelling opportunities for creative people.”
Zynga declined to comment, citing the mandatory quiet period before its IPO.
While, from the outside, Zynga may appear to have the fun and whimsy of the Willy Wonka chocolate factory, the organization thrives on numbers, relentlessly aggregating performance data, from the upper ranks to the cafeteria staff.
General managers submit weekly reports, measuring factors like traffic and customer satisfaction. Every quarter, teams assess their priorities under an Intel-pioneered system called “objectives and key results.” And Pincus, a professed 'data obsessive', devours all the reports, using multiple spreadsheets, to carefully track the progress of Zynga’s games and its roughly three thousand employees.
“It’s very similar to a New York investment bank,” said Lou Kerner, an analyst at the brokerage firm Liquidnet, who has followed Zynga for years. “It’s data-driven, and it’s intense.”
The data pipeline allows Zynga to fine-tune its games to optimize engagement, helping the company attract some 270 million unique users each month, many through Facebook. The four-year-old Zynga, which has emerged as the Web’s largest social game company, recorded $828.9 million in revenue in the first nine months of 2011, more than double the period a year earlier. It is also the rare profitable Internet start-up, earning $121 million since the start of 2010.
But the heavy focus on metrics, in this already competitive industry, has also fostered an uncompromising culture, one where employees are constantly measured and game designers are pushed to meet aggressive deadlines. While some staff members thrive in this environment, others find it crushing. Several former employees describe emotionally charged encounters, including loud outbursts from Pincus, threats from senior leaders, and moments when colleagues broke down into tears.
For the top performers, the rewards are handsome. Zynga dispenses lavish gifts like vacations and $100,000 in vested stock. After the game Mafia Wars reached a milestone two years ago, Zynga sent the team to Las Vegas to celebrate, buying some eighty plane tickets and providing $500 in cash for each person plus luxury hotel accommodations, according to one former senior employee.
But those who do not perform can perish. In March of 2009, Zynga hired its chief people officer, Colleen McCreary, who formalized the hiring structure and started to trim weak performers, cutting about thirty employees by that summer. Pincus began drafting “MIA” (missing-in-action) lists to keep track of senior employees who were not doing a good job or who needed to be placed on more ambitious projects.
That year, Zynga also started to reduce equity packages through demotions. Some employees were offered a choice: take another role with the same salary and a smaller equity package, or leave the company. It affected only a limited number of senior employees, several people close to the company said. “If I was egregiously failing, then maybe it would be okay,” said one former senior employee, who left after being asked to give back some equity. But “it seemed systematically driven”.
The practice, even if rarely applied, runs counter to the traditional Silicon Valley model, where people join risky, unproven start-ups in exchange for substantial equity. But Pincus, a graduate of Harvard Business School and a former Wall Street hand, sees Zynga in a different mold, aiming to build a more perfect meritocracy, according to people close to him. “Mark Pincus has the reputation that he is driven to the point of a madman,” said Michael Pachter, a Wedbush Securities analyst. “Zynga is driven because it has a gigantic competitive advantage right now.”
But Zynga could face a serious reaction. In the spring of 2009, Zynga was courting MyMiniLife, a game company that later developed the underlying technology for FarmVille and many of Zynga’s games. During one meeting, the topic turned to compensation. A Zynga senior vice president, clad in jeans and leather cowboy boots, whipped out his wallet and a stack of hundred-dollar bills. He chucked the money at a MyMiniLife founder and asked him if that was enough, said one person present at the meeting. “It was insulting,” this person said.
While MyMiniLife eventually agreed to a deal that formed the backbone of FarmVille, discontent soon surfaced. The team was stretched, juggling tough deadlines, technical flaws, and demands for more data, according to two former employees. A few months later, as FarmVille approached twenty million users a day, a respected project manager abruptly quit the team. Soon after, the majority of the game’s staff members, including those of the just-acquired MyMiniLife team, threatened to walk out unless Zynga replaced the group’s general manager, these people said. The company relented.
While such a culture is not uncommon in the game industry, it can create problems. Employees at Electronic Arts and Activision Blizzard have filed lawsuits against their employers, with claims of hostile work conditions and withheld compensation. In 2006, Electronic Arts settled two class-action lawsuits by game artists and programmers for about $15 million each. The Activision suit is still pending.
Zynga has made efforts to change its ways. The company has added data centers and expanded teams to ease the burden on its engineers. It is also encouraging managers to schedule a bigger buffer between project phases, and to give teams the week off before a game’s debut. Zynga offers employee perks like acupuncture, Friday happy hours, and a cafeteria with organic food, and is also spending millions on focus groups and other initiatives to strengthen its manager training programs.
Pincus is also trying to soften his managerial style. McCreary has spent significant time with the executive, coaching him on his tone and constructive criticism. In 2010, the company also hired an outside consultant to do a “360-degree review” of Pincus. The consultant interviewed employees and board members and produced a report filled with feedback.
Still, rivals say Zynga will have to do more to bolster its image, or risk losing its appeal as an employer at a time when resources are scarce. Zynga’s towering public valuation, while a boon for investors, may only further dissuade recruits, who may turn to younger start-ups with more potential.
“We’ve learned that when companies treat talent as a commodity, the consequences are severe,” said Toledano of Electronic Arts. “It takes years to repair a reputation.”

Rico says he hears Sheldon saying Bazinga! when he hears this wacky company name. But they should have read the Steve Jobs' biography (or any history of Silicon Valley) before they signed on; that way, they'd know what to expect...

T-shirts for the day

Rico says his arch-perv friend Dave sends along these:

 This one has no tits in it (sorry), but a lot of truth on it:

More history for the day

Alan Cowell and Rick Gladstone have an article in The New York Times about the latest in Iran:

In the latest sign of deteriorating relations with the West, around twenty Iranian protesters entered the British Embassy compound in Tehran, chanting “Death to England”, tearing down a British flag, and ransacking offices, news reports said. The episode came a day after Iran enacted legislation to downgrade relations with Britain in retaliation for intensified sanctions imposed by Western nations last week to punish the Iranians for their suspected nuclear development program. Britain promised to respond “robustly”.
The British Foreign Office in London said it was “aware of the reports” from Tehran, but declined to comment further. There was no immediate word on the whereabouts of the embassy staff, but an Iranian news agency said personnel had fled “by the back door”. The Associated Press identified the intruders as hard-line Iranian students, who were said to have burst into the building and thrown documents from windows. They also chanted: The embassy of Britain should be taken over.
The episode was shown live on Iranian state television. The invaders threw stones at windows, and one was seen climbing over the high wall around the compound with a looted portrait of Queen Elizabeth II. While some reports said the protesters clashed with riot police, other accounts said the authorities did nothing to prevent the attack.
While a small group of people entered the embassy, hundreds more gathered outside demanding the immediate departure of the British ambassador. Demonstrators waved flags symbolizing martyrdom, and held up portraits of Iran’s supreme leader, Ayatollah Ali Khamenei, according to Reuters, adding that a second British compound in northern Tehran had also been attacked by demonstrators who seized what the state IRNA news agency called “classified documents”.
While Iranian riot police were reported to have stood by during the incursions, officers climbed the embassy gates to help protesters get back to the street, television pictures showed, according to Reuters. Then they began to slowly move the demonstrators away. It was not immediately clear if the episode was supposed to mirror the storming of the American embassy on 4 November 1979, that led to the continuing breach in diplomatic relations with Washington.
The moves against Britain’s diplomatic representation followed action by the Guardian Council, an Iranian clerical body that has oversight on bills passed by Parliament, which unanimously endorsed a bill to expel the ambassador and downgrade diplomatic contacts, Iranian news agencies reported. The council determined that the legislation was “not in violation of Islamic principles or articles of the Iranian constitution”, the Fars news agency quoted a council spokesman as saying.
The United States and the European Union imposed harsher sanctions on Iran on 21 November after the United Nations nuclear monitoring agency released a report on 8 November that said Iran might be working on a nuclear weapon and missile delivery system. Iran has denied those accusations and insists that its nuclear program is peaceful. It has called the United Nations report a false and shameful propaganda display done at the behest of the United States and its allies.
The sanctions imposed by Britain were considered the most severe because they required that all contacts with the Iranian Central Bank be severed, a step that other countries, including the United States, did not take. Iranian lawmakers had signaled last week that they would move quickly to downgrade diplomatic ties with Britain. The Foreign Office in London responded to the passage of the bill by calling the action “regrettable”.
William Hague, Britain’s foreign secretary, told British lawmakers that “if the Iranian government confirms its intention to act on this, we shall respond robustly in consultation with our international partners”, news agencies reported from London.
The Guardian Council’s speedy approval of the measure cleared the way for it to have the force of law and reflected Iran’s deepening anger over the sanctions. Under its terms, Britain’s ambassador, Dominick John Chilcott, must leave Tehran within two weeks, according to a report on the legislation by Press TV, a state-run English-language news site in Iran.
Iranian anger at the West was also evident in news reports that Iran’s foreign minister, Ali Akbar Salehi, had been forced to cancel a trip to The Hague (Rico's note: the city, not the British foreign secretary) because Hungary had refused permission for his aircraft to cross its airspace. It was not immediately clear why Hungary had taken such a step. Salehi is not on a list of Iranian officials who are banned from travel to the European Union under the current sanctions. Iran state television said the Hungarian ambassador had been asked for an explanation. Salehi had planned to attend a UN conference on the prohibition of chemical weapons.
Concern that Iran may be close to producing a nuclear weapon has grown since the release of the United Nations report, particularly in Israel, which considers Iran its most dangerous enemy. Iranian warnings to Israel against trying a pre-emptive military strike on Iran’s nuclear installations have also escalated in recent weeks. The heightened sensitivities to the possibility of such a strike were apparent when a few Iranian news agencies reported on a suspected explosion near the central city of Isfahan, where the Iranians process uranium. The accounts of a blast being heard in the city were skimpy and contradictory, but that did not stop the Israeli news media from leading their evening broadcasts with the news. It was also the top item on the website of Haaretz, a major Israeli newspaper, with the headline: Explosion rocks Iran city of Isfahan, home to key nuclear facility.

Rico says this is going to get worse, not better, but making those thugs into martyrs might not be a bad idea...

History for the day

On 29 November 1947, the UN General Assembly passed a resolution calling for Palestine to be partitioned between Arabs and Jews.

Rico says that, from such humble beginnings, a century (if not more) of pain...

As ever, it is good to be the prince

David Kocieniewski has an article in The New York Times about the Lauder family:

As he stood in the opulent marble foyer of a Fifth Avenue mansion, greeting the coterie of prominent guests arriving at his private art gallery, Ronald S. Lauder was doing more than just being a gracious host. To celebrate the tenth anniversary of the Neue Galerie, his museum of Austrian and German art, Lauder exhibited many of the treasures of a personal collection valued at more than one billion dollars, including works by Van Gogh, Cézanne, and Matisse, and a Klimt portrait he bought five years ago for $135 million.
Yet for Lauder, an heir to the Estée Lauder fortune whose net worth is estimated at more than three billion dollars, the evening went beyond social and cultural significance. As is often the case with his activities, just beneath the surface was a shrewd use of the United States tax code. By donating his art to his private foundation, Lauder has qualified for deductions worth tens of millions of dollars in federal income taxes over the years, savings that help defray the hundreds of millions he has spent creating one of New York City’s cultural gems.
The charitable deductions generated by Lauder— whose donations have aided causes as varied as hospitals and efforts to rebuild Jewish identity in Eastern Europe— are just one facet of a sophisticated tax strategy used to preserve a fortune that Forbes magazine says makes him the world’s 362nd wealthiest person. From offshore havens to a tax-sheltering stock deal so audacious that Congress later enacted a law forbidding the tactic, Lauder has, for decades, aggressively taken advantage of tax breaks that are useful only for the most affluent. The debate over whether to reduce tax shelters and preferences for the rich is one of the most volatile in Washington and will move to the presidential campaign, now that repeated attempts in Congress to strike a grand bargain over spending cuts and an overhaul of the tax code have failed.
A handful of billionaires like Warren E. Buffett and Bill Gates have joined Democrats in calling for an elimination of the breaks, saying that the current system adds to the budget deficit, contributes to the widening income gap between the richest and the rest of society, and shifts the tax burden onto small businesses and the middle class. Republicans have resisted, saying the tax increases on the wealthy would harm the economy and cost jobs.
An examination of public documents involving Lauder’s companies, investments, and charities offers a glimpse of the wide array of legal options for the world’s wealthiest citizens to avoid taxes both at home and abroad.
His vast holdings— which include hundreds of millions in stock, one of the world’s largest private collections of medieval armor, homes in Washington, D.C., and on Park Avenue as well as oceanfront mansions in Palm Beach and the Hamptons— are organized in a labyrinth of trusts, limited liability corporations, and holding companies, some of which his lawyers acknowledge are intended for tax purposes. The cable television network he built in Central Europe, CME Enterprises, maintains an official headquarters in the tax haven of Bermuda, where it does not operate any stations.
And earlier this year, Lauder used his stake in the family business, Estée Lauder Companies, to create a tax shelter to avoid as much as ten million dollars in federal income tax for years. In June, regulatory filings show, Lauder entered into a sophisticated contract to sell $72 million of stock to an investment bank in 2014 at a price of about 75 percent of its current value in exchange for cash now. The transaction, known as a variable prepaid forward, minimizes potential losses for shareholders and gives them access to cash. But, because the IRS does not classify this as a sale, it allows investors like Lauder to defer paying taxes for years.
It was a common tax reduction strategy for chief executives and wealthy shareholders a decade ago, but in 2006 the IRS said it appeared to be an abusive tax shelter and issued tighter restrictions to regulate the practice. That ruling was enough to persuade most wealthy taxpayers to abandon the technique, according to tax lawyers and records at the Securities and Exchange Commission.
Advisers to Lauder maintain that his deal “was made in compliance with published IRS guidance on these types of transactions and was fully reported as required by SEC rules,” said his spokesman, Gary Lewi. In theory, Lauder is scheduled to pay taxes on the $72 million when the shares are actually delivered in 2014. But tax experts say wealthy taxpayers can use other accounting techniques to further defer their payment.
The tax burden on the nation’s superelite has steadily declined in recent decades, according to a sliver of data released annually by the IRS. The effective federal income tax rate for the four hundred wealthiest taxpayers, representing the top 0.000258 percent, fell from about thirty percent in 1995 to eighteen percent in 2008, the most recent data available.
When Lauder ran (unsuccessfully) for the Republican nomination for mayor of New York City and released his tax return to the public, he reported paying thirty percent in total federal, state, and city taxes on about $30 million in income in 1988. At the time, his net worth was estimated at nearly a quarter of a billion dollars. Lauder’s more recent tax returns remain private, and he declined to make them available for this article.
Lauder, now 67, was born into a storied American fortune. His mother, Estée Lauder, the daughter of Eastern European immigrants, began selling homemade beauty creams at a few New York City hair salons in the 1940s, and built her product line into a multibillion-dollar global empire.
As the son of a fabulously wealthy fashion icon, Lauder developed aristocratic tastes— and grand aspirations— at an early age. He summered in Vienna as a boy, developing a passion for Austrian art and medieval armor. At age thirteen, he bought his first Schiele with money from his bar mitzvah. Lauder grew so enthralled by politics as a young man that he told friends he dreamed of becoming the first Jewish president of the United States.
After studying in Brussels and Paris, and at the Wharton School at the University of Pennsylvania, he joined the family business in 1964 and served in a variety of limited roles. While his older brother Leonard rose to become Estée Lauder’s chief executive, Ronald engaged in a variety of pursuits: becoming a major Republican fund-raiser; serving a rocky tenure as ambassador to Austria; running for mayor (an unsuccessful bid in which he spent $363 for each vote he received); and starting an assortment of business ventures in Eastern Europe, one of which went bankrupt during the technology bubble.
While the family’s wealth was created by hard work and ingenuity, it was bolstered by aggressive tax planning, a skill that has become Ronald Lauder’s specialty. When Lauder’s father, Joseph, died in 1983, family members fought the IRS for more than a decade to reduce their estate tax. The dispute involved a block of shares bequeathed to the family— the estate valued it at $29 million, while the IRS valued it at $89.5 million. A panel of judges ultimately decided on $50 million, a decision that saved the estate more than $20 million in taxes.
Estée Lauder Companies went public in 1995, and Ronald Lauder and his mother cashed in hundreds of millions of dollars in stock but managed to sidestep paying tens of millions in federal capital gains taxes by using a hedging technique known as shorting against the box. Together, Lauder and his mother borrowed 13.8 million shares of company stock from relatives and sold them to the public during the offering at $26 a share. Selling borrowed shares in this way is referred to as a short position. Since the Lauders retained their own shares, the maneuver allowed them to have a neutral position in the stock, not subject to price swings. Under IRS rules at the time, they avoided paying as much as $95 million in capital gains taxes that might otherwise have been due had they sold their own shares.
Such transactions allowed investors to cash in their shareholdings without paying taxes. But the Lauders’ use of the technique was so aggressive that Congress enacted a law afterward that limited the length of the tax deferral. And the Lauders eventually paid tens of millions in stock from the transaction.
Still, the family’s tax planning was effective enough that, after Estée Lauder died in 2004, she passed down nearly $4 billion to her heirs, according to tax experts who studied the case and estimated that the estate was taxed at an effective rate of sixteen percent, about a third of the top estate tax rate at the time.
Ronald Lauder has not been a director of the company since 2009, but he still serves as the president of its Clinique Laboratories subdivision. He also sublets a full floor of office space from Estée Lauder, on the 42nd story of the General Motors Building in Manhattan, which serves as the hub for the matrix of foundations, investment funds, partnerships, and trusts used to control his businesses and personal finances.
His stake in Estée Lauder Companies, according to regulatory filings, is valued at more than six hundred million dollars. Nearly four hundred million of that is pledged to secure various lines of credit. Many financial planners consider it imprudent for principal shareholders in a company to borrow against their stock. But it remains a popular way for wealthy taxpayers to get cash out of their holdings without selling and paying taxes.
There is a certain irony that Lauder has used $72 million worth of his Estée Lauder shares to carry out his latest state-of-the-art tax reduction tactic. These contracts emerged as a popular tool about a decade ago and were developed by accountants and tax planners after Congress closed down the loophole on the Estée Lauder public offering. The IRS began cracking down on these contracts in 2008, and has pursued a prominent case against the billionaire Philip Anschutz, who used one to avoid more than $140 million in federal taxes.
Whether or not the IRS agrees with Lauder’s contention that his contract is legitimate, some tax policy experts say the deal illustrates how the wealthy take advantage of the system: “There’s real truth to the idea that the tax code for the one percent is different from the tax code for the ninety-nine percent,” said Victor Fleischer, a law professor at the University of Colorado. “Any taxpayer lucky enough to have appreciated property is usually put to a choice: cash out and pay some tax, or hold the property and risk the vagaries of the market. Only the truly rich can use derivatives to get the best of both worlds: lots of cash and very little risk.”
While Lauder’s stock holdings in publicly traded companies show some of his tactics, much of his wealth is harder to examine because it is controlled by a maze of privately held trusts and companies. Court documents, SEC filings, and property tax records spotlight a few of the more ordinary tax breaks used by affluent people.
Significant portions of his inherited stock are held in family trusts, which reduce the ultimate estate tax. Lauder and his wife have also established their own family trusts, allowing them to bequeath their wealth to their heirs with minimal taxes.
Other trusts and partnerships control his real estate properties in Palm Beach and the Hamptons and at 740 Park Avenue, a building that was once home to John D. Rockefeller, and is known as one of the world’s wealthiest apartment buildings.
United States tax law allows taxpayers to deduct mortgage interest on one’s homes up to $1.1 million in debt. Households with more than $1 million in income claimed more than $27 billion in such deductions from 2006 to ’09, according to a report this month by Senator Tom Coburn of Oklahoma, who said some wealthy taxpayers even deducted mortgage interest on their yachts. There is no limit on the amount of property taxes that can be deducted from federal income. So Lauder is entitled to deduct the $400,000 he pays annually on his Palm Beach mansion, as well as what he pays on his home on Park Avenue and his holdings in the Hamptons.
“This welfare for the well-off— costing billions of dollars a year— is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and i.o.u.s to be paid off by future generations,” said Senator Coburn, a Republican, who has called for limits on tax breaks for high earners.
Lauder deducts property taxes on all of his holdings, his spokesman said. Lauder declined to say how much that reduced his federal taxes, but said he did not receive tax benefits in some years because of the alternative minimum tax and other limits.
A week before the opening at the Neue Galerie last month, Lauder appeared at another gala, forty blocks south, at the New York Public Library, to receive the Carnegie Foundation’s Medal of Philanthropy. The program honored people who have given profusely to charities, including Lauder’s brother Leonard and his wife, Evelyn (who died on 12 November), whose causes include the Whitney Museum and the 'pink ribbon' campaign for breast cancer awareness. Ronald Lauder and his wife, Jo Carole, were honored for a variety of contributions: the work of their joint foundation supporting hospitals, rebuilding monuments, and refurbishing American embassies around the world with more than a quarter of a billion dollars over the last five years, according to his spokesman.
The Ronald S. Lauder Foundation has donated tens of millions of dollars to rebuild Jewish communities devastated by the Holocaust and communist rule. Lauder has also given to a variety of Jewish and Israeli organizations, including the World Jewish Congress, where he has served as president since 2007. Richard Parsons, the former Time Warner chairman, presented the award, calling Lauder and his wife two of “the nation’s pre-eminent supporters of the arts and civic causes.”
Lauder said his life was changed 25 years ago when he visited a kindergarten in Austria and met a classroom full of Jewish children who were refugees from Russia. Still, he said he found it odd to be referred to as a philanthropist. “I did what I wanted to do,” he said. “What I thought was right.”
In the United States, Lauder has focused on what he calls his greatest passion: art. In 1976, at age 32, his generous donations helped him become the youngest trustee of the Metropolitan Museum of Art. He later served as chairman of the Museum of Modern Art and remains an honorary chairman. He has donated and lent artwork to an assortment of museums. Part of his collection of lavishly decorated ceremonial armor is on display at the Met, in a gallery named for him.
As all art collectors may, Lauder is entitled to deduct the full market value of artworks donated to museums. (For years, Lauder availed himself of a quirk in the tax code that allowed donors to take a deduction for donating a portion of an artwork, without actually turning over the art. That break, known as fractional donation, was eliminated in 2006.) The tax code also allows artwork in offices to be deducted as a business expense.
Unlike some wealthy collectors who are criticized for using tax breaks to underwrite private collections that offer little access to the public, Lauder is widely praised for making his artwork a community asset.
The Neue Galerie, created by Lauder and Serge Sabarsky, who died in 1996, in a mansion once owned by Cornelia Vanderbilt, offers public viewing of an exquisite collection worth more than $200 million even before Lauder added dozens of pieces for its tenth anniversary.
Sheldon Cohen, a former IRS commissioner, said that when used as intended, the tax code’s breaks for art collectors balance private interests with the public good. “If an art collector makes significant contributions, and the public actually gets access to the works they are donating, then the major thing the collector gets is prestige and social status,” said Cohen, now a lawyer in Washington.
At times, Lauder’s efforts to enhance his art collection have coincided with tax avoidance techniques. In 2006, three months after he agreed to pay $135 million, a record at the time, for the Gustav Klimt painting Adele Bloch-Bauer I (photo), Lauder sold a $190 million stake in his broadcast network CME. When asked about the sale, Lauder’s spokesman said the proceeds were taxable in the United States at the full capital gains rate. Even then, though, CME’s complex corporate structure— it operates in Central Europe, is organized as a Netherlands holding company, keeps its headquarters in Bermuda, and routed the $190 million sale through two Cayman Island companies— allowed Lauder to minimize taxes in countries outside the United States where it does business.
Some tax reform advocates say that it is unfair that the wealthiest can subsidize their lifestyles using myriad offshore maneuvers and complex accounting strategies. “It’s admirable when people back their charitable impulses up with donations,” said Scott Klinger, tax policy director of the group Business for Shared Prosperity. “But the tax code shouldn’t allow the wealthy the kind of loopholes that let them, essentially, force other taxpayers to underwrite donations to their pet causes.”

Rico says that it's a classic: 'a decision that saved the estate more than $20 million in taxes'. Yeah, like they needed the money...