Letter to Popular Mechanics

Dear Editor,

Your “Congressional (Innovation) Scorecard” featured in the November issue is not a measure of innovation. It is a measure of corporate welfare.

The problem with equating federal spending with levels of innovation is that it assumes no innovation will take place unless it is funded by government. This is not the case.

Much funding for important research fails to materialize simply because taxes (and regulation) drain the productive sector of the economy of capital that would otherwise be spent on projects deemed important by market forces.

The Rand Paul “goldfish” example certainly was simplistic, but the research he refers to should have been privately funded by the entity who needed it, not taxpayers. He probably felt such drama was necessary to get through to people brainwashed into thinking nothing can be done without government.

It is interesting to note, our involvement in the Spanish American War and the wasteful war on drugs were both partially instigated by William Randolf Hearst as a way to profit from government largess.

It looks like little has changed at Hearst. If a profit can’t be made through legitimate needs, lobby for it.

I was so enthusiastic about the fun time I was having reading Popular Mechanics, and even recommending it to friends. Then this socialist glop ruined it for me.

The article can be read here: http://www.popularmechanics.com/technology/engineering/infrastructure/the-innovation-15-our-most-science-and-tech-friendly-members-of-congress#slide-1

Letter to Mason City Globe Gazette

Dear Editor,

We have received about ten giant postcards from Washington D.C. from “Save the Children Action Network.” The “action network” part is in tiny print. It is obviously intended to use name recognition from the actual Save the Children charity in England that really does save children.

The postcards thank Amanda Ragan for early childhood education. I’m sure Mrs. Ragan is well- intentioned and a very nice person, but is saving children really what this is all about?

Intact families do not need their children saved. When programs take the place of responsible people, people will become irresponsible in response.

Early childhood education addresses a problem created by big government with more big government.

If Amanda Ragan were really interested in saving children she would advocate use of the Tenth Amendment to nullify federal law that takes away the unborn’s right to choose life and return responsibility to parents for the welfare of their children.

Fritz Groszkruger

Defending our freedoms…NOT

Here is the place our military should be when defending our freedoms:

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Carole Hinders at her modest, cash-only Mexican restaurant in Arnolds Park, Iowa. Last year tax agents seized her funds. CreditAngela Jimenez for The New York Times

ARNOLDS PARK, Iowa — For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.

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The I.R.S. seized almost $33,000 from Ms. Hinders. CreditAngela Jimenez for The New York Times

“They’re going after people who are really not criminals,” said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. “They’re middle-class citizens who have never had any trouble with the law.”

On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”

Richard Weber, the chief of Criminal Investigation at the I.R.S., said in a written statement, “This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.’s mission and key priorities.” He added that making deposits under $10,000 to evade reporting requirements, called structuring, is still a crime whether the money is from legal or illegal sources. The new policy will not apply to past seizures.

The I.R.S. is one of several federal agencies that pursue such cases and then refer them to the Justice Department. The Justice Department does not track the total number of cases pursued, the amount of money seized or how many of the cases were related to other crimes, said Peter Carr, a spokesman.

But the Institute for Justice, a Washington-based public interest law firm that is seeking to reform civil forfeiture practices, analyzed structuring data from the I.R.S., which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.

The practice has swept up dairy farmers in Maryland, an Army sergeant in Virginia saving for his children’s college education and Ms. Hinders, 67, who has borrowed money, strained her credit cards and taken out a second mortgage to keep her restaurant going.

Their money was seized under an increasingly controversial area of law known as civil asset forfeiture, which allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed. Law enforcement agencies get to keep a share of whatever is forfeited.

Critics say this incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize. Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000. Last year, banks filed more than 700,000 suspicious activity reports. Owners who are caught up in structuring cases often cannot afford to fight. The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.

There is nothing illegal about depositing less than $10,000cash unless it is done specifically to evade the reporting requirement. But often a mere bank statement is enough for investigators to obtain a seizure warrant. In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years.

There are often legitimate business reasons for keeping deposits below $10,000, said Larry Salzman, a lawyer with the Institute for Justice who is representing Ms. Hinders and the Long Island family pro bono. For example, he said, a grocery store owner in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash. When he neared the limit, he would make a deposit.

Ms. Hinders said that she did not know about the reporting requirement and that for decades, she thought she had been doing everyone a favor.

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Jeff Hirsch, an owner of Bi-County Distributors on Long Island. The government seized $447,000 from the business, a candy and cigarette distributor run by one family for 27 years.CreditBryan Thomas for The New York Times

“My mom had told me if you keep your deposits under $10,000, the bank avoids paperwork,” she said. “I didn’t actually think it had anything to do with the I.R.S.”

In May 2012, the bank branch Ms. Hinders used was acquired by Northwest Banker. JoLynn Van Steenwyk, the fraud and security manager for Northwest, said she could not discuss individual clients, but explained that the bank did not have access to past account histories after it acquired Ms. Hinders’s branch.

Banks are not permitted to advise customers that their deposit habits may be illegal or educate them about structuring unless they ask, in which case they are given a federal pamphlet, Ms. Van Steenwyk said. “We’re not allowed to tell them anything,” she said.

Still lawyers say it is not unusual for depositors to be advised by financial professionals, or even bank tellers, to keep their deposits below the reporting threshold. In the Long Island case, the company, Bi-County Distributors, had three bank accounts closed because of the paperwork burden of its frequent cash deposits, said Jeff Hirsch, the eldest of three brothers who own the company. Their accountant then recommended staying below the limit, so for more than a decade the company had been using its excess cash to pay vendors.

More than two years ago, the government seized $447,000, and the brothers have been unable to retrieve it. Mr. Salzman, who has taken over legal representation of the brothers, has argued that prosecutors violated a strict timeline laid out in the Civil Asset Forfeiture Reform Act, passed in 2000 to curb abuses. The office of the federal attorney for the Eastern District of New York said the law’s timeline did not apply in this case. Still, prosecutors asked the Hirsches’ first lawyer, Joseph Potashnik, to waive the CARFA timeline. The waiver he signed expired almost two years ago.

The federal attorney’s office said that parties often voluntarily negotiated to avoid going to court, and that Mr. Potashnik had been engaged in talks until just a few months ago. But Mr. Potashnik said he had spent that time trying, to no avail, to show that the brothers were innocent. They even paid a forensic accounting firm $25,000 to check the books.

“I don’t think they’re really interested in anything,” Mr. Potashnik said of the prosecutors. “They just want the money.”

Bi-County has survived only because longtime vendors have extended credit — one is owed almost $300,000, Mr. Hirsch said. Twice, the government has made settlement offers that would require the brothers to give up an “excessive” portion of the money, according to a new court filing.

“We’re just hanging on as a family here,” Mr. Hirsch said. “We weren’t going to take a settlement, because I was not guilty.”

Army Sgt. Jeff Cortazzo of Arlington, Va., began saving for his daughters’ college costs during the financial crisis, when many banks were failing. He stored cash first in his basement and then in a safe-deposit box. All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do.

“She said: ‘Oh, that’s easy. You just have to deposit less than $10,000.’”

The government seized $66,000; settling cost Sergeant Cortazzo $21,000. As a result, the eldest of his three daughters had to delay college by a year.

“Why didn’t the teller tell me that was illegal?” he said. “I would have just plopped the whole thing in the account and been done with it.”

Father’s Day

We head to another funeral tomorrow. This time for a young cousin, a nurse taken swiftly by cancer. Between Dawn’s musical talents needed for funerals and the funerals of friends and relatives, over-population seems the remotest of worries. We look back on these losses and are assured they did not become more valued just because we now miss them so.

At Dad’s funeral three years ago, his business partner did such a grand job painting his memory that the preacher forgot I had prepared a little speech myself. I was nervous as all-get-out and relieved, yet disappointed. But on scrolling through my documents list I found it and thought it might lend some guidance to us today. I’m not so nervous now:

I consider myself to be a radical and a gentleman because of my dad.

I let ladies go first, stand when they enter a room and take off my hat indoors. People think it’s refreshing and quaint.

The radicalness he gave me, even makes me hate suits and ties. So I still rebel against him in a harmless sort of way. I don’t think he cared so much because he really was a ‘live and let live’ sort of guy.

He taught me to not ignore possibilities. The stories of the poor folks he helped save for retirement, thanked him years later. He worked for free and without permission at a gas station until he was hired. I was a lousy athlete so he taught me golf and it taught me to accept failure and go on. And also to value those exceptional moments.

I respect myself and so I respect others because of the example of Dad. Whenever we were together in public, he always treated others as equals. He went out of his way to treat others better than he expected from them.

Even in the years after my parents’ divorce, when I was angry at him, he was always there in spirit, being a positive influence. I’d go out of my way to help a stranger, thinking it would please him. I’d correct a cashier if she gave me too much change, because he told me never to lie.

He explained, “If you lie once, you’ll have to lie one hundred times to cover it. And no one can do that.” In that lesson, he taught me it is practical to be moral. They don’t conflict.

He’s gotten me in trouble because of that. I can be brutally honest. But the short term pain, yields long term gain in greater understanding between people.

He was no fighter. He often called himself a coward. But I think he had a positive definition of coward. His kind of coward is careful to stay out of trouble. To not be a coward is reckless. And to be reckless puts a burden on those around us. He felt he was a burden in those final days and as much as I hate it…that is why it is good he is gone.

I am so grateful I became best friends with my dad. He is greatly responsible for the external joy that I find every day in my relationships with family, friends and strangers.

ISIS or Assad?

Upon further thought, Madison was right. As was Pogo. We have met the enemy and he is us. The war on terror is, every day more obviously against… us. The powers that be are so desperate to “not let a crisis go to waste,” they can’t even decide who the enemy is.

The remote control for our new shop door doesn’t work unless we are within shrapnel distance due to regulations in a reaction to 9/11. We are guilty until proven innocent if we want to fly. These are only a couple things making living standards decline. Our own government has proven to be a tool of Islamic extremists.

Letter to War Street Journal on Compromise

Dear Editor,

William A. Galston finds public sentiment for compromise growing (Hunger Grows for Progress Through Compromise, Oct. 22 WSJ). But Mr. Galston only sees compromise as the other side seeing things his way, not the other way around.

Compromise enabling any big government program at all is what led us to the unaffordable mess of debt that haunts our children today. I agree, Mr. Galston. Compromise, it’s your turn.

Fritz Groszkruger