Cool Things My Friends Do: Richard Bagdonas - Operation Turkey

Each Friday on this blog I enjoy highlighting some of the cool things my friends do in their work and personal lives. 

Richard Bagdonas is an entrepreneur, philanthropist, family guy and all around good person.  I have known Richard for several years, and I fondly call him "the hugger", as his friendly nature is his calling card.  He greeted me with a big hug the second time I ever met him.

In addition to a successful career in the technology community (he has founded several companies including one of Austin's hottest start-ups - SubtleData), Richard founded Operation Turkey in 2000.  Operation Turkey is an Austin non-profit that feeds and clothes the homeless and less fortunate on Thanksgiving Day.  It all began with one person and some left-overs.  He plated up the extra Thanksgiving feast and gave it to a few homeless people on Austin's 6th Street.

This year in Austin 2,200 volunteers fed over 4,600 in Austin's homeless community.  Think about how cool that is.... 4,600 people with no place to go for the holiday meal were able to eat a traditional Thanksgiving feast.  Wow.

Operation Turkey has grown beyond Austin and even Texas.  Both Dallas and San Marcos have joined in the Operation Turkey goodness and last week volunteers in each city handed out 1,000 meals.  There were 30 other participating cities around the country.

The purpose is to provide a warm meal, clothing and toiletries to the most vulnerable members of our communities.  Richard is most pleased that this program has captured the hearts of so many people in the community.  The Travis County Sheriff's Department, Austin's Police Department, the Department of Health and Human Services and countless other organizations have adopted Operation Turkey.

If you would like to support this cause you can visit the website at www.operationturkey.com.  From there you can donate your time, financial resources or food and clothing donations.

In keeping with the weekly tradition of "Cool Things My Friends Do"... this is really cool that one man's idea can have such impact on many people near and far.

Have A Great Day.

thom singer

Jersey confirms that Son of FATCA is on its way

Hot on last week's revelations in the International Tax Review that the British government is set to impose its own 'son of FATCA' on the UK Overseas Territories and Crown Dependencies, Jersey's Colin Powell (pictured) is reported in today's Jersey Evening Post confirming that, in the words of the JEP:  

"Jersey will have little choice but to hand over information to the UK tax man about UK residents who have bank accounts here, says the Island’s leading adviser on international affairs."

Despite our various caveats on this Son of FATCA arrangement (see here), not least the gigantic fact that this appears to be a unilateral move designed to protect the UK but not other countries, we welcome this steady ratcheting up of pressure from the UK government on its tax haven satellites. This, if indeed it comes to pass as reported, would be just a first step in a much wider process.

The message now needs to be firmly driven home that the time has come for these jurisdictions to seriously plan for a post-tax haven economy.  Sharpen those pencils please.

UK's tax authorities called on to "step up its game"

Ahead of the imminent publication of the report on corporate tax avoidance by the UK Parliamentary Public Accounts Committee, Committee Chair Margaret Hodge has called on Her Majesty's Revenue & Customs to strengthen its stance towards companies using tax havens to shift profits offshore.  In an interview given to International Tax Review, Hodge - a Minister in the previous government - says that HMRC should

"step up its game" and "aggressively deal with those companies that are deliberately exporting profits from the UK to low-tax jurisdictions."

Elsewhere in the same interview, Hodge backs the case for Country-by-Country Reporting and aligns with TJN in supporting the case for taxing companies on a unitary basis with profits being apportioned only to those places where genuine economic activity takes place.  She does, however, caution that negotiations on these measures might be protracted, something we'd agree on, though we do see civil society taking an active role in keeping both projects moving down the street.

Read ITR's interview here, and look out for the PAC report early next week.  We expect fireworks!

Britain's leading aid agencies unite to tackle tax havens

The Guardian is carrying the following letter in today's edition:

• The Guardian's investigation into offshore secrecy highlights a significant problem that is global in its impact. Developing countries lose vital resources for development through illicit capital flight, to such an extent that Africa is actually a net creditor to the rest of the world. Ending financial secrecy to expose corruption and tax dodging that hurts the poorest countries is a vital step in changing this reality: and that action must be global. We need a new international agreement to end the corporate anonymity and tax haven secrecy you have revealed. The prime minister has promised action at the G8, and our organisations will be working together next year to help make this happen. We are long overdue an end to the secrecy that denies resources to those in hunger and poverty.

Brendan Cox Director of policy and advocacy, Save the Children
Christine Allen Director of policy and public affairs, Christian Aid
Neil Thorns Director of advocacy, Cafod
Max Lawson Head of policy and advocacy, Oxfam
Paul Cook Advocacy director, Tearfund
Beverley Duckworth Policy, advocacy and campaigns director, Action Aid
Mariana Merelo Lobo Director of operations, Action Against Hunger UK
Glen Tarman Head of policy and advocacy, Bond
Adrian Lovett Europe executive director, One
Sol Oyuela Senior UK political adviser, Christian Aid

TJN is thrilled to have such a widely based support. Things have moved on a very long way from the days, not so many years ago, when TJN's John Christensen would roam the corridors in the development community, trying, usually in vain, to get people interested in these gigantic issues.

Will the UK Prime Minister now get with the programme?

Worth mentioning, too, that the International Consortium of Investigative Journalists (ICIJ) and the BBC have played major roles in this investigation. 

Calls for reform of Britain's 'last rotten borough'

Latest news: The Guardian has just posted this article with more details about those attending today's event.

An extraordinary coalition of activists, business leaders and politicians meets in London today to call for comprehensive reform of the City of London Corporation.  The newly created City Reform Group wants to radically overhaul the electoral processes of what is widely known as Britain's last rotten borough. CRG also requires a far higher standard of transparency of the Corporation's opaque and somewhat sinister finances, above all the so-called 'City Cash', which looks to outsiders like a slush fund for dodgy lobbying.



For those unfamilar with the political arrangements of Britain's state within a state, the City of London Corporation has survived for over a millenia, resisting each and every attempt at political reform, and using its financial and military muscle (yes, it still has its own militia and police force) to protect its special interests.

Behind the veneer of medeival pageantry and grotesque flummery, however, lies a powerful set of vested interests, which sees its role as projecting an economic model of de-regulated finance and economic liberalism across the world.  Read Ingrid Hauge Johansen's exposé of the extraordinary activities of the City's Lord Mayor, who carries the flag for this failed economic model to all corners of the globe.

For a wider exploration of the City's historical background and unaccountable powers read the penultimate chapter of Nick Shaxson's fascinating book, Treasure Islands: Tax Havens and the Men Who Stole the World.  If you have any doubts about the malignant power of the City and its political wing, this book will dispel them.

The newly formed City Reform Group, which meets today at Spitalfields in the City centre, plans to push for reform from within the Corporation by securing pledges from candidates for the Corporation elections in March 2013 to promote a wide series of reforms.

TJN supports the CRG's calls for reform, indeed we have been publicly calling for reform for several years and debated the need for reform with senior Corporation officials on the steps of Saint Paul's Cathedral.  But we won't be holding our breath: too many of the voters (which includes banks and other financial businesses) have a vested interest in the status quo, and history tells us that the Corporation is perfectly capable of outliving those who oppose it. Reform won't come from within; it will need to be imposed by Parliament.

Ryan Rodenberg on Putter Ban

Sports Law Blog writer Ryan Rodenberg speaks to USA Today:

"My sense is that players and manufacturers would have a lot of difficulty, as courts generally defer to unilaterally-imposed sports league rules," according to Ryan Rodenberg, assistant professor of sport law at Florida State University.

. . . .

Rodenberg likens this case the "spaghetti-string" tennis case from 30 years ago, Gunter Harz v. USTA.

"The judge in the Gunter Harz district court case (before it got to the court of appeals), ruling in favor of the USTA's ban on spaghetti strung rackets, posited that 'the court is not to substitute its own judgment for the of the ITF or the USTA,' " Rodenberg wrote in an email. 

For more, click here.  For another take in Golf.com, click here.

Marvin Miller - The Most Significant Figure in Baseball in the Past 50 Years?

Professor Ed Edmonds

The following piece is written by Notre Dame Law School sports law professor Ed Edmonds, one of the best minds around on baseball and the law and founder of the Baseball Salary Arbitration website.

- - - - - - - - - - - - - - - - 

Marvin Miller - The Most Significant Figure in Baseball in the Past 50 Years?

There have been no shortage of articles this past week honoring the passing of the legendary leader of the MLBPA Marvin Miller at age 95.  Many writers have noted that he was possibly the most significant figure in baseball over the past half-century.  I certain agree that he belongs in any conversation about that topic, and I point to an earlier post on this blog by Howard Wasserman regarding his place in sports law history.  I will not attempt to go through the compilation of Miller’s many accomplishments because so many of you know and teach about this on a regular basis. 

Let me take up one point that comes together with the thoughts of Murray Chass, the long-time writer for the New York Times.  By the way, if you do not regularly read Mr. Chass’s writings on Murray Chass . . . On Baseball, I highly recommend it.  Murray Chass posits that perhaps Miller can now be elected to the National Baseball Hall of Fame because the owners and other management personnel will not be subjected to his acceptance speech or because their hatred for the man who led the players to some freedom over their playing careers and significantly better pay and working conditions would not allow them to vote into the Hall a man who so rightly deserves to be there.  I only need to mention the additional shun shown Miller when the Hall opened its doors to Bowie Kuhn.

How ironic is it that Barry Bonds, Roger Clemens, and Sammy Sosa appear this week for the first time on a Hall of Fame ballot?  We are finally at the point so many have waited for to determine how the voters will actually deal with the steroid era candidates.  There will be a renewed conversation about the integrity of the induction process if Bonds, Clemens, and Sosa are allowed the honor of enshrinement.  My point is a simple one:  If anyone is really concerned about the “integrity” of the membership in the Baseball Hall of Fame, the exclusion of Miller needs to be addressed.  Marvin Miller’s bitterness over his non-election sparked comments from him that he would not have accepted the honor in his final few years.  Perhaps now everyone can agree to do not only the honorable thing, but an honest thing.  To not have a plaque to Marvin Miller in the National Baseball Hall of Fame is a grievous oversight.  Let’s hope that it is remedied soon.

Links Nov 29

UK May Plan FATCA-Style Regime For Dependencies Tax-News
Nov 29 - "Britain’s overseas territories, including the Crown Dependencies, the British Virgin Islands and the Cayman Islands, are expected to meet UK Government officials imminently to discuss the possibility of their exchanging more information with the UK, in the wake of a report that the UK is seeking to impose its own version of the US Foreign Account Tax Compliance Act on them."

Shipwreck in tax dispute - now sustainable solutions are in demand TJN Germany Blog
Nov 24 - Bringing you the press release of our colleagues from Alliance Sud and the Berne Declaration on the collapse of the Swiss/German tax deal.

Monti Cool On Italo-Swiss Tax Agreement Tax-News
Nov 29 - "Following recent indications by both governments that the tax treaty currently being negotiated between Italy and Switzerland could be ready by the end of this year, the Italian Premier Mario Monti and the Undersecretary for the Economy Vieri Ceriani have underlined that the talks still have some way to go ... any suggestion that Italian depositors in Switzerland should remain anonymous could be a sticking point."

Prosecutors raid German UniCredit unit in tax probe Reuters
Nov 29 - "State prosecutors raided the Munich offices of UniCredit SpA's [Italian banking group] German unit HVB as part of a tax evasion probe relating to share deals several years ago."

Italian tax probe says Google failed to declare £240m income Telegraph
Nov 28 - "Google's Italian arm has failed to declare income of €240m and pay VAT of €96m, according to a probe by Italian tax authorities, which the technology giant strongly denies."

See also:
Google Joins Apple in Drawing French Tax Collectors’ Ire Bloomberg
Nov 27 - "In what may be Europe’s first such effort, President Francois Hollande’s government says it will look into changing laws next year that will block the ability of online companies to pay levies on French earnings in European countries with lower tax rates.”

Buffett Says U.S. Businesses Haven’t Been Hurt by Taxes Bloomberg
Nov 28 - Warren Buffett said "Corporate taxes have not been a problem for corporate America ... The biggest beneficiary of reductions in tax rates in the last 30 or 40 years has been corporations, and the biggest increase has been in the payroll tax."

Secrecy for Sale: Inside the Global Offshore Money Maze - Nominee Directors Linked to Intelligence, Military ICIJ
Nov 28 - "A number of so-called nominee directors of companies registered in the British Virgin Islands (BVI) have connections to military or intelligence activities, an investigation has revealed."

Offshore secrets: government refuses to act on disclosures Guardian
Nov 28 - "UK Land Registry allows buyers to conceal identities by recording anonymous offshore entity as the purchaser."

Tax and the offshore industry: when bad money drives out good Guardian
Nov - "The stories that have been turned up in the course of the Guardian's investigation this week into Britain's offshore tax-avoidance industry have been jaw-dropping sometimes, but they underline one point: tax avoidance may well be an issue that nearly all developed countries are now trying to tackle – but Britain is at the extremes of the business of financial chicanery."

Inside Job - How crooks set up the largest bank in Afghanistan & then robbed it for almost $1 billion Global Witness
Nov 18 - ”Which banks accepted corrupt money from Kabul Bank shareholders or politically exposed persons? What measures did they take to assure themselves that the funds were not the proceeds of corruption? The answers to these questions are necessary to understand why so much corrupt money was able to flood the international financial system, to facilitate the recovery of stolen assets, and to ensure that it doesn’t happen again.”

South Sudan’s new laws offer a blueprint for a transparent oil sector Global Witness
Nov 29 - "Building a transparent and accountable oil sector in South Sudan will require serious political engagement from the government, major capacity building, and consistent implementation of the blueprint set out in the new legislation."

Quote of the day - on the global elite

From Frederick Douglass, a leader of the 19th century abolitionist movement which brought an end to slavery:

"Power concedes nothing without a demand."

Cited in an article on tax havens in Al Jazeera on the global elite who pull the strings on tax havens.

Legal implications of the proposed ban on belly putters

I speak with David Dusek of Golf Magazine|Golf.com about the potential legal fallout of the US Golf Association banning belly putters and whether affected athletes, like Keegan Bradley, and putter manufacturers can sue. My take: any attempt to use the law to beat the ban would probably fail.

Here's an excerpt:

But McCann quickly adds that it's an unpersuasive argument. The USGA and the R&A would argue that they have decisive rule-making authority. They would also contend that it's reasonable for them to alter the rules, and the PGA Tour would argue that it's reasonable to abide by those rules. 

"Courts give leagues a tremendous amount of latitude in rules of play" he says. "It's one thing to say there is a new restriction on free agency and that it's not collectively bargained, or there is a salary cap change; it's another to change the rules of play. Courts are pretty deferential, and I think any type of lawsuit would be unlikely to prevail." 

McCann pointed out, however, that in the early 1990s, a group of golfers led by Bob Gilder joined Ping and won a favorable settlement from the USGA and the PGA Tour after Ping Eye 2 irons were banned. That club's square grooves had been ruled to have a performance-enhancing effect, but the players rebutted that argument by citing data that showed golfers using the club earned less than those who did not use it. The case ended in a settlement that allowed the club but required different grooves in future models. 

That precedent may seem to favor a player inclined to sue, but McCann cautions that the player would have to show statistics that indicated that belly putters were not providing an unfair advantage.

To read the rest, click here.

The ACC Sues Maryland over Exit Fee

The Atlantic Coast Conference filed a lawsuit in North Carolina state court on Tuesday seeking to enforce a $52,266,342 exit fee against the University of Maryland, following the recent news that the school was leaving the league to join the Big 10.  The exit fee represents a sum three times the conference's annual operating budget for the 2012-13 school year, and was approved by the ACC membership in September, with both Maryland and Florida State University voting against the measure.

The Washington Post has obtained a copy of the ACC's complaint, available here.  In the lawsuit, the conference alleges that Maryland president Wallace Loh -- a former dean of the University of Washington Law School -- has "refused to provide assurance" that the school would honor the exit fee.  The complaint also points to statements made by Loh back in September, in which he contended that the ACC's exit fee could be legally unenforceable. 

Indeed, Maryland can argue that the ACC's fee is an unlawful penalty under traditional contract law principles.  Specifically, courts will generally refuse to enforce liquidated damages provisions (like the ACC's exit fee) when the clause goes beyond simply compensating the non-breaching party for its anticipated financial injury and instead unfair penalizes the breaching party (I have summarized the law regarding the enforceability of liquidated damages provisions in the related context of college football scheduling agreements and coaching contracts in a law review article available here on pages 21-23).

Maryland can thus plausibly argue that the ACC's exit fee -- set to three times the entire conference's annual operating budget -- goes beyond mere compensation and rises to the level of an unlawful penalty.  The school can also point to the fact that the ACC's fee appears to be significantly larger than that imposed by any other conference in the country (the SEC notably has no exit fee).  Meanwhile, expect the ACC to argue that the total damage inflicted on the conference by a defecting university is so significant, and yet hard to precisely calculate, that a $52 million fee is within the realm of being reasonable.

I anticipate that Maryland and the ACC will ultimately settle the case out of court, likely for less than the full amount owed (as Missouri, Texas A&M, Syracuse, and Pitt each did following their recent defections to new conferences).  In fact, I suspect the ACC likely opted to file its suit on Tuesday in a favorable forum in hopes of obtaining some leverage in the ensuing negotiations, thereby preempting a potential suit by Maryland in a local state court.  You may recall that West Virginia University and the Big East conference both filed dueling lawsuits against one another in 2011 after the school announced it was departing for the Big XII, lawsuits that were ultimately settled earlier this year.  On the other hand, it is also possible that the ACC may refuse to settle for anything less than the entire $52 million in order to try to prevent other schools from leaving the league.

Association and Corporate Staff As The Secret Weapon For Conference Success

If your organization is hosting a conference or trade show you need to ensure that your staff members are fully participating.  If your people are corralled in the back of the room or in a side office, then you are missing out on the real value long-term the event can bring.

Sure, someone has to work the check-in table and take care of other house-keeping issues (and emergencies), but too often the association staff or company employees are not part of the community that is created when we bring people together.  Worse, sometimes the executives or sales staff get to mingle with the attendees, while everyone else has their face pressed to the window looking inward.  Meanwhile others are back at the office and not even present.  These official lines of demarcation can not only alienate team members, but also is opportunity lost to make connections and gain feedback.

Often I see staffs that do not feel "equal" to the VIP's who are attending your event.  It is clear in how they behave that they see themselves as many rungs down the ladder.  Why do they feel this way?  Because that is the message that the management and board are sending.  While wearing matching logoed shirts is a good idea to help attendees identify who works for the organization, those colorful polos and oxfords should not come with a label of second class status.  In fact, it should be just the opposite.

But why should your team be engaged and mingling side by side with your clients and vendors?  Because their participation brings stronger relationships to the overall organization and a boat load of first hand data on how people are experiencing the conference.  People cannot have a relationship with a company or association, they have those feelings for people.  But knowing someone by an email address is not the same as personal interactions.  When your constituency knows your staff personally they feel a stronger connections to the whole group.

And never forget: conference, trade show, convention or seminar is not really as much about the content as many mistakenly believe.  Oh yes, I know ... your "CONTENT IS KING" mantra is ringing in your head... but the reality is that if content were the real purpose then sending a White Paper would be a more cost effective delivery mechanism.

Bringing dozens, hundreds or even thousands of people together for a meeting is expensive.  But that does not mean there is not value (quick, someone tell the US Government this, as they are trying to pass laws that will hurt the $263 Billion industry that employs over 1.7 million people!).  No online webinar can replace the meaningful human-to-human connections and the powerful learning that happens in a face-to-face environment.  People are experiential beings and meetings have the power to anchor their feelings to the experience.

Sending your team into the crowd as an equal participant in the meeting is invaluable.  I have facilitated round-table conversation sessions at major conferences for companies and associations.   Those that have their properly trained staff at all the tables get the most value from these interactive sessions.  Those who do not get their people engaged miss out on the give and take in conversations that lead to meaningful connections.  Do not waste the chance to create bonds.

On occasion a hosting organization will worry if their team is professionally experienced enough to mingle with their members or clients.  YIKES.  You should not hire anyone who cannot converse with your target audience.  Besides, if given the opportunity and the right level of briefing, your team do great.  Do not sell them short!

I witnessed one association who recently had their people embedded in the crowd at one of their annual  conferences and the feedback from the staff and the attendees was all positive.  They had never tried this before because their previous leader had seemingly looked down on the staff.  The new CEO had a different opinion and the results were strong.  Give your people a chance to stand shoulder to shoulder with your VIP's and everyone will benefit from the interactions.

Your staff can be the secret weapon that makes your event spectacular.  Both the experience for all involved and the information you can collect will bring long-term rewards.

Is your staff involved in your event or are they standing off on the side?

Have A Great Day

thom singer

Thom Singer is known as "The Conference Catalyst". He works with meeting planners and conference organizers to set the tone for a meeting. His presentations educate, inspire and motivate attendees to engage deeper in the event and make meaningful connections.  http://www.conferencecatalyst.com 

www.ConferenceCatalyst.com

Zig Ziglar 1926 - 2012

I heard online this morning that legendary speaker and author Zig Ziglar has passed away.  It would be difficult to be in the speaking business and not have been inspired by Mr. Ziglar.  I first saw him present in the early 1990s, and the way he touched the audience at the level of their soul was impressive.  It was the great orators like this man that made me want to be a speaker.

I had only met him once, and I am not one who feels worthy of writing a long honorarium about his life, career, etc...  I just did not feel that you can be active in any industry and not take pause when one of the legends passes away.

I take this moment on my blog to tip my hat (if I was wearing a hat) to Zig Ziglar.  Thank you for the information you shared in your books, tapes and live presentations.  And more importantly, thank you for helping shape the speaking industry.

My thoughts and prayers are with his family.

thom singer

*Photo linked from Mr. Ziglar's Facebook page.

Two-thirds of millionaires left Britain to avoid 50p tax rate.

Or at least that's the headline in the UK's Telegraph newspaper. The Telegraph is often a very good newspaper, and this story is clearly going to get a lot of attention.

But this time, it has completely misunderstood the data.

Read this comprehensive demolition of the Telegraph story by TJN's Senior Adviser, aptly entitled The Telegraph’s claim that all the rich have run away because of 50p tax is completely bogus.

Did it not occur to this journalist that if most of Britain's rich people had left the country overnight, someone might have noticed?

Links Nov 28

The UK's approach has attracted many post-Soviet billionaires, including some on the run Guardian
Nov 27 - Continuing the Offshore Secrets series (blogged here), noting that use of BVI entities to disguise Russian movement of funds into Britain appears to be widespread. See also, highlighting the New Zealand connection: At Least Half of the 21,500 Companies Revealed by the Guardian/ICIJ Offshore Investigation Have Connections With Rogue Agent GT Group naked capitalism

Treasury to crack down on UK’s offshore tax havens BVI news
Nov 26 - Interesting to read, in the British Virgin Islands press, this story on "Radical plans to force the UK’s tax havens to reveal the names behind hidden companies, account holders and trusts have been drawn up by the Treasury."

See also:
UK clampdown on ‘tax havens’? Isle of Man Today
Nov 28 - "Another dark cloud is looming on the horizon for the island’s finance sector with the UK poised to introduce more regulation aimed at clamping down on tax avoidance."

Indebted Caribbean tax havens look to tax foreign investors The Christian Science Monitor
Nov 26 - Industry analysts say new fees and taxes could bring in needed money to a region where some debts are near that of Greece. But could they scare off investors?

Tax avoidance: time for a FairTax logo to reward the good guys Guardian
Nov 27 - "HM Revenue & Customs will never name and shame tax avoiders so what about a FairTrade-style labelling system to reward those who can pay and will pay."

CEO Council Demands Cuts To Poor, Elderly While Reaping Billions In Government Contracts, Tax Breaks Huffington Post
Nov 25 - More on a story linked previously. "The companies represented by executives working with the Campaign To Fix The Debt have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies' tax bills."

We have the power to change the rules Al Jazeera
Nov 28 - On how "Tax havens are are allowing a "tiny global elite" to "extract trillions of dollars" from rich and poor countries alike." And expressing beautifully: "Frederick Douglass, a leader of the 19th century abolitionist movement which brought an end to slavery, once said, 'Power concedes nothing without a demand'. If we want to change rules that have been written by the few and for the few, we must look outside existing power structures to the power of the many. We know from history that when people demand their rights, they can move mountains and change whole systems. Right now, there is a special moment of opportunity."

John Kay in the FT supports unitary taxation

Following Prof. Sol Picciotto's and Nicholas Shaxson's comment piece in the Financial Times, the newspaper's regular columnist John Kay has followed it up with some commentary of his own.

Among other things, he takes to task the notion that tax competition is good:

There is an argument that low rates of corporation tax are one enticement a business friendly government can use to attract economic activity from other jurisdictions, and that such tax competition is beneficial. I am not sure this argument is very strong – the outcome is a beggar-my-neighbour process in which the winning country’s gain is necessarily smaller than its rival’s loss.

He then looks at the case of U.S. states which successfully implement what he calls 'profit apportionment' - a much nicer and more instructive term than the tax profession's term 'formulary apportionment - noting how lobbying by British multinationals in particular helped constrain the use of unitary taxation.

"Instead of attempting to estimate what fraction of a company’s total profit was earned in California and what amount in Wyoming, apportionment states taxed corporations on a share of their aggregate US profits corresponding to the share of their total US activity that took place in the state."

And his brief conclusion:

"Well conceived apportionment is the best – perhaps only – answer to the problem presented by multiple company tax jurisdictions."

Quite so. 

Unpicking the illogic in Switzerland's "White Money" strategy

Switzerland, now recognising that its poisonous "Rubik" spoiler strategy to protect financial secrecy is dying, has rapidly swiveled its position, and its politicians and bankers are now pushing hard for what is being calling a "White Money" (Weissgeld) strategy to try and persuade other countries to go easy on the secrecy that it provides (the strategy isn't new, but the renewed emphasis seems to be, on our interpretation). The clear and regular message now is 'don't worry about our secrecy: we're going to take care of this ourselves.' Trust us.

Now who could argue against a "White Money" strategy for Swiss banks? Not us, certainly. Unless, of course, that label is merely a fig leaf: a dose of reassuring Alpine spin layered over a world of business as usual.

So which is it? Alpine spin, or real change?

Start with this headline from a Swiss online newspaper, which reflects the thrust of a number of articles currently out there. Tax evaders become pariahs for Credit Suisse. The mighty Swiss bank is going to be turning away tax evaders from its doors, apparently:

Credit Suisse does not intend to allow tax evaders to remain on as clients, he stressed. If potential clients refuse to report their assets to the tax authorities in their countries, "the bank will clearly tell them that it does not want their business," Rohner said, adding that the bank would also ask existing clients to leave if they did not declare their assets.

It sounds good, but consider the first problem. What happens when the "client" is, say, a Liechtenstein foundation or a (more Anglo-Saxon-style) discretionary trust? Under Swiss rules, there is literally no beneficial owner at all for these structures. Germans who stash money in these things -- which are bread and butter structures for the tax evasion industry -- place themselves firmly outside the scope of legislation that is supposed to relate to Germans. These assets are not, from the Swiss banks' perspective, "German." They are, to be precise, legally "ownerless", even if ultimately some Germans have the power to enjoy the income. (For a further explanation of the slippery nature of these structures, see Section 3.1 here). So if this money has no owner, who is going to declare it to their tax authority? Nobody: ownerless money doesn't have a home tax authority. That is, of course, the whole point.

But one can go a lot further than this.

Consider how, exactly, the Swiss banks are supposed to refuse tax evaders (who haven't made their assets 'ownerless' as above.) Look at this, from Suddeutsche Zeitung (translated here):

"Not all banks go so far. Especially smaller private banks are balking at a self-declaration, and they are supported by the Swiss Bankers Association. According to the trade association, this system [self declaration] does not exist anywhere else in the world. It also offers no guarantee against new black money. If someone is prepared to deceive their own tax offices, then it will not be hard for them to lie to the bank. The banks have to take the information provided by their customers at face value: they cannot, may not and should not check the declarations."

That bit in bold is key. And this brings us to the following wonderful piece of logic.
Take a European tax evader with assets in a Swiss bank. Under the European Savings Tax Directive, they have two options: either they submit to the 'declaration' option whereby information about their income will be transmitted automatically to the home country's tax evader, or they choose the 'withholding tax' option, where tax is withheld but their identity is kept secret from their home tax authorities.

Consider each option in turn. First, if the client opts for 'declaration' under the current system, then the 'self declaration' described by Credit Suisse is quite pointless. They are already declaring.
As for the 'withholding' option, consider this. What client is going to want to declare their income to their home tax authorities (and hence be taxed) - then get the Swiss bank to withhold taxes on it? What ever would the point of that be? If you choose the information exchange option, you don't get the taxes withheld.  So you would certainly not do this for tax reasons, and you would not do it for non-tax confidentiality reasons either: the client has already declared that they have broken confidentiality by self-declaring.

To conclude: if you see Switzerland subsequently handing over any money to Germany from this withholding tax option, you will know that the white money strategy is a hoax.
So what ever could the point of this white money strategy be?

Not a whitewash, surely!

If Switzerland were serious about having 'white money' in its banks, the solution would be very simple indeed: sign up for full automatic information exchange under the EU Savings Tax Directive.
And why not renounce banking secrecy while they are at it? Then we can start talking about white money.

Why Britain is still the world's money laundering centre

From Rowan Bosworth-Davies, a voice of authority on financial crime, commenting on the excellent offshore investigations by the International Consortium of Investigative Journalists, together with the Guardian and the BBC:

All in all, it was a very grubby tale of greed and as blatant a piece of criminal law-breaking as you could expect. In one scene, a corporate services provider proposed that he would invite a local bank officer to come to a meeting in his offices to meet the purported launderer, and complete the banking formalities. Easier than going to the bank, was how he put it.
What made it all so acutely depressing was that there was no evidence that HMRC had ever prosecuted any of the corporate services providers under their supervision, for any breaches of the Money laundering Regulations, or indeed for straight-forward money laundering itself.

And then some colourful but apt further commentary:

The real problem in all of this is that the Money Laundering Regulations have never been properly policed, and never effectively enforced. That is where the answer to money laundering interdiction lies, in the enforcement of the Regs, but why will no-one, absolutely fucking no-one, step up and take the lead on this?

Bosworth-Davies, a former detective with many years' experience fighting financial crimes, notes that the UK's Financial Services Authority (FSA)

"have consistently refused to accept their Parliamentary responsibilities to enforce the Money Laundering law within the financial sector. HMRC cover another sector, and other agencies have input, but absolutely nothing gets done, and eventually the industry realises that there is no point bothering with a compliance regime because no-one enforces it.
I have been forced to come to the conclusion that Government does not really want the AML [Anti Money Laundering] laws to be enforced - they cannot do so, because they spend such little time and effort insisting on enforcement. . . . in practice, just keeping their noses out of the issue, for fear that too much regulation and compliance with international laws might mean putting off some of the slew of dirty money that is constantly flowing around the world looking for a safe haven, from coming to the UK."

For anyone who has even just dipped into Treasure Islands, they will see how true this is. This is the business model.

"we might as well fill our coffers with the profits from the drug trade and other people's tax evasion, and as long as we pay lip-service to the FATF guidelines, and make sure that we don't get put on some nasty blacklist (which we won't because we make sure we are well-represented at FATF meetings), and as long as we keep pointing the finger of non-compliance at Iran or Pakistan or wherever, we will get away with it."

So very unpleasantly true. And there is much more in there, well worth reading.

See our earlier blog on the issue, here.

Others' thoughts on Marvin Miller

I don't have a whole lot to say about the life of Marvin Miller, who died on Tuesday at age 95, other than that Miller might be the most significant figure in sports law; in fact, by introducing true labor law in sports, he arguably invented the field. Ironic, given that he was not a lawyer.

Instead, have a look at this piece by Tim Marchman in Slate, which argues that Miller achieved success by taking incremental steps, waiting for the right moment to attack the big issues (he was union head for almost a decade before the reserve clause fell, although he recognized that as a winning issue immediately), and being fortunate enough to go up against generally incompetent people on the other side of the table.

Links Nov 27

The Real Story Of How A Hedge Fund Detained A Vessel In Ghana And Even Went For Argentina's 'Air Force One' Forbes
Oct 5 - More on a big story linked previously. "The country has vowed to fight those remaining bondholders. They accused NML of using the Cayman Islands to avoid legal and tax issues (“a [tax haven] that has been denounced by the G20 and the UN”)."

If we want to make poverty history we've got to tackle corruption first Guardian
Nov 26 - Op-ed by Global Witness. "Why do governments ignore offshoring? It's the biggest obstacle to alleviating poverty."

Where is Africa's share of the spoils? The Independent
Nov 26 - Dr Vince Cable, UK's Secretary of State for Business, Innovation and Skills, outlines the need for transparency in the extractives industries.

Pictet joins list of banks investigated by US swissinfo
Nov 26 - "Pictet & Cie has confirmed that it is under investigation by the United States justice department as part of a probe into Swiss banks allegedly aiding wealthy US clients avoid tax." Pictet is Switzerland’s largest unlisted private bank, with an international presence including offices in several secrecy jurisdictions.

Swiss banks terminate accounts of German clients WirtschaftsWoche (In German)
Nov 26 - Following the collapse of the Swiss/German tax treaty, Swiss banks are reported to be telling their German clients to come clean on their taxes or close their accounts.

Liechtenstein Eyes New Tax On Top Earners Tax-News
Nov 27 - Liechtenstein, amongst other tax havens, is now feeling the pinch and trying to pull in greater revenues from it's own taxpayers.

A Minimum Tax for the Wealthy NY Times
Nov 25 - Warren Buffet renews his call for the wealthy to pay their fair share of tax, and notes that "it’s sickening that a Cayman Islands mail drop can be central to tax maneuvering by wealthy individuals and corporations."

A Failed Experiment NY Times
Nov 21 - On a decline of public services accompanied by the rise of private workarounds for the wealthy.

A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts IPS 
Nov 27 - Report from The Institute for Policy Studies looks at the enormous executive retirement plan and underfunded worker retirement plans of the Fix the Debt companies who are calling for a territorial tax system funded by cuts to Social Security and Medicare. Hat tip: Scott Klinger. See also: 'Fix The Debt' CEOs Underfund Employee Retirement, Demand Cuts For Elderly Huffington Post and the last report from IPS on the 'Fix the Debt' Campaign The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks (linked previously).

Kabul Bank 'diverted £540 million to group of 12 in massive fraud' The Telegraph
Nov 27 - "Afghanistan's biggest private bank was a massive fraud scheme from its founding, with £540 million ($861 million) diverted to a clique of beneficiaries including the president's brother, a British-funded audit has found."

Quote of the day - regulatory competition

The quote is:

“We often encounter pressure from some sections of the industry that ‘If you don’t do X . . . then we will go somewhere else and Hong Kong will suffer’,” he said. “We always, always take that with a very heavy pinch of salt.”

Who is this Socialist firebrand? None other than Ashley Alder, lead market regulator in the tax haven of Hong Kong. Every now and then, the offshore world can surprise you. 

Majoring in college sports

Last year, I wrote about a proposal by Sally Jenkins of the Washington Post to allow college athletes to major in their sport, building a (hopefully) rigorous curriculum around participation on the team. Now here is David Pargman, an emeritus professor of educational psychology (and a self-described sports fan) making a similar proposal in Monday's Chronicle of Higher Education (H/T: Deadspin). Like Jenkins, Pargman uses performing arts majors as the analogue. He goes one step further and lays out what the last two years of the program would look like, with the first two years spent in basic studies. The advantage of this, Pargman argues, is honesty--students, coaches, family members, and universities all can openly acknowledge exactly why these young men and women (mostly men) are on campus.

As I wrote last time, this is an interesting idea with some potential, but the devil is in the details. Ultimately, my deepest question is whether this solution addresses the real problem facing college athletics. Pargman argues that not forcing student-athletes to pick a major in which they are not interested--when they really want to study their sport and become a professional athlete--is "integral" to a good portion of the other travesties that surround college sports. But is forcing a football player to major in, say, "Leisure Studies" really integral to all the other problems? Or are the real problems that 1) many of these people have no interest in being in college or studying at all, regardless of what classes they can take or what they can declare as a major, and 2) universities and coaches are making boatloads of money because of the skills of these students and the students are not seeing a dime. Honesty in their major does not change that.

Which is not to reject the proposal out of hand. It is just to emphasize that the problems inherent in college sport go much deeper than this.

The Contractual Implications of Auburn Firing Gene Chizik

As many had predicted over the last few weeks, Auburn University announced on Sunday that it was firing head coach Gene Chizik just two years after he led the Tigers to an undefeated season and BCS national championship.  Because the school decided 17 months ago to give Chizik a contract extension through 2015, Auburn is now on the hook for an expensive buyout of its football coaching staff.  Specifically, Chizik is owed a total of $7.5 million -- to be paid in monthly installments of $208,334 for each of the next 36 months -- pursuant to the early termination clause in his contract.  Had he not been fired, Chizik would have received an additional $3 million over the life of his contract.  However, because many of his assistant coaches were also given guaranteed contracts (in some cases running through June 2014), the total cost of the buyout for Auburn will actually exceed $11 million.

Anticipating Chizik's likely termination, the Columbus (GA) Ledger-Enquirer explored Auburn's contractual commitments to its football coaching staff, as well as the general trends in football coaches' buyout provisions nationally, in a story last week.  Here is an excerpt:

A June 2011 release by Win AD stated of the coaches who were dismissed in 2010 or 2011 with buyout clauses written into their contracts, 70 percent of those buyouts were based on their remaining total or base salary.

The other 30 percent were guaranteed a partial take on their full salary -- either a certain amount of money per month or year remaining on the contract, a percentage of the remaining base salary, or one year's total or base salary.

Read more here: http://www.ledger-enquirer.com/2012/11/21/2285781/auburn-football-a-lot-has-changed.html#storylink=cpy

You can check out the full story (including quotes from myself and Rick Karcher) by clicking here.

Links Nov 26

Spain: Technology giants, tax dwarves El País
Nov 23 - Apple, Microsoft, Google, Facebook, Yahoo, Ebay and Amazon generated billions of Euros in sales but paid only 25 million Euros to the Treasury in the past three years.

Cayman networks in China Cayman News Service
Nov 23 - On Cayman's representation at a China Offshore Summit. "Besides private-sector firms such as law firms and company formation specialists, jurisdictions in attendance included Cook Islands, Samoa, the Bahamas, Cyprus, and the British Virgin Islands."

“The concept of a withholding tax has failed” swissinfo
Nov 24 - "Most Swiss newspapers have given the last rites to the withholding tax model, following the “no” from the German upper house of parliament to a tax treaty aimed at legalising undeclared assets held by Germans in Swiss banks ... 'The time has come for Plan B,' reckoned Le Temps in Geneva, adding that this officially didn’t exist."

If you thought tax evasion was insignificant think again – managing it represents 6 – 7% of the Swiss economy Tax Research UK
Nov 25 - Commenting on the Austria and UK governments continuing to support the Rubik agreements.

Swiss probe $139M SNC-Lavalin laundering case CBC
Nov 25 - The case involves a network of Swiss bank accounts and BVI companies with lone directors. "SNC-Lavalin knowingly allowed and condoned the use of millions of dollars to fund lobbyists in the Middle East to get lucrative contracts with major leaders of some countries, particularly in Libya," the suit claims.

Kodi Katika Afrika ATAF
Link to the newsletter Kodi Katika Afrika (meaning 'Tax in Africa' in Swahili), which we have linked before. Latest issue is Nov 20.

Africa Lost 1.6 Trillion in Capital Flight and Odious Debt Over Forty Years The Real News
Nov 26 - Featuring new research from new research from one of the authors of Africa's Odious Debts, Léonce Ndikumana.

U.S.: Early Dividend for Wal-Mart Is Latest Move in Tax Tactics NY Times
Nov 19 - "The Walton family, which founded Wal-Mart, could save as much as $180 million in federal income taxes after the huge retailer announced Monday that it would pay out its quarterly dividend on Dec. 27 instead of Jan. 2, as was scheduled."

Inequality is Killing Capitalism Project Syndicate
Nov 21 - Although not a new analysis, this is a good account.

Quote of the day: the City of London’s Good Chaps Treasure Islands
Nov 26 - From Rowan Bosworth-Davies, on the UK’s Financial Services Authority: "They think that by staffing themselves with former civil servants and Bank of England careerists, all of them suffering from the ‘Good Chaps’ syndrome to the core, that they think they can somehow regulate a market full of some of the most evil crooks and wide boys under the sun."

UK, France, Germany to supercharge tax avoidance fight?

TJN's Senior Adviser Sol Picciotto and writer Nicholas Shaxson mentioned this in their Financial Times comment article last week:

George Osborne, the UK chancellor of the exchequer, and his German counterpart Wolfgang Schäuble have said they will engage with the OECD to tackle the problems in international tax.

How serious is this? Well, thanks to The Telegraph, we have more details:

"George Osborne, Wolfgang Schaeuble, the German finance minister, and Pierre Moscovici, the French finance minister, have written to the Organisation for Economic Co-operation & Development (OECD) with a pledge to provide €150,000 (£120,000) each to help stamp out “profit shifting” and ensure major companies pay their fair share of tax."

£360,000 to solve this gigantic, corrupting faultline in global capitalism. That should do it!

Hat tip: Nick Mathiason

Offshore secrets: new ICIJ/Guardian investigation

The UK's Guardian newspaper has, together with the BBC's Panorama and the Washington-based International Consortium of Investigative Journalists (ICIJ,) put together a large-scale investigation of the offshore industry and its secrets. Read the opening article, and follow the associated links at the Guardian and also the ICIJ website, which promises to have even more. None of what in this excellent investigation will surprise readers of Treasure Islands, but it is extremely important to have such an in-depth investigation bolstering our case.

The investigation begins:

The existence of an extraordinary global network of sham company directors, most of them British, can be revealed.

BBC Panorama tonight will show an undercover investigator asking James Turner, of Turner Little in York, to help him hide money stashed in a Swiss bank, and he offers nominee directors in Belize and says:

"They won't even know that they were a director, they just get paid."

That bit in bold is extraordinary, and it seems it's not uncommon either: another company representative explained "that many of its nominees are not even aware of how their names are being used." The investigation finds 21,500 companies through just nominee directors. They find the British Virgin Islands (BVI) particularly troubling - something that TJN has been shouting about for a long time: while Cayman is the first Caribbean jurisdiction most people think of in the context of tax havens, the BVI has not got nearly enough attention. This needs to change, dramatically. The UK appears to have some plans to clean up, but as we've noted, while this appears to be significant we don't have a lot of confidence in its potential for real change.

"This Caribbean territory, which is ultimately controlled by the UK, has sold more than a million anonymously-owned offshore entities since launching itself in 1984 as a tax haven."

We are also delighted to read that a worldwide research effort has been launched this year by the ICIJ. It aims to identify, country by country, thousands of the true owners. 

"We are applying specialist software to crunch through literally hundreds of thousands of offshore entities to look for patterns. We are marrying our findings with old-fashioned shoe leather and interviews from key insiders who can provide further context on this little known and loosely regulated world."

An official from one of the companies approached, in Hertfordshire in the UK, said:

"if we were approached by the Indian tax authorities and they say we believe you are acting for this client and he is doing money laundering, we would give the information. If they said we were acting for this client and they are doing tax evasion, we wouldn't give a monkey's."

 And the subsequent conversation made matters somewhat worse. Another official is described:

"(he) offers his customers "anonymity of the ultimate owners". He tells them: "The prime advantage … is to place the 'management and control' issue firmly outside a high tax jurisdiction." This allows the owners to claim the company is being run from an overseas tax haven, rather than from where they live."

Now read on. This is what the Fourth Estate is for. Gradually, bit by bit, fragments of Britain's "second empire" are being dragged out into the light of day. Why has Britain not reformed this swamp?

"The UK government refuses to step in and make reforms. One reason was candidly spelled out by Michael Foot, a former Bank of England official and Financial Services Authority managing director. He reported to the then Labour chancellor, Alistair Darling, in a Treasury paper published in 2009, saying that to abolish the BVI's secrecy regime "would be likely to result in a loss of business".

It really is as sordid as that. There are of course many other aspects of this we'd like to see covered, for instance:

• they don't talk very much about layering - where nominee directors and shareholders are other shell companies, or trusts. This is an essential component of any "sophisticated" scheme.
• The investigation seems to focus more on nominees being independent service providers or small firms: they (perhaps for reasons of libel management) don't really talk about where nominee directors and shareholders are provided by and within banks & trust companies, wealth management arms of some well-known names. That would make a very interesting area to explore (see more on that in our intermediaries project.)

 Further articles so far:

• BBC's Panorama shows staff admitting nominee directors are often a sham (with associated video)
• Sham directors: the woman running 1,200 companies from a Caribbean rock (with associated video). A focus on Nevis. "If Britain is crying about its tax dollars, that is not really a problem for us," a Nevis official says. And, of course, Britain is just one of many, many countries suffering.
•  The 'Sark Lark' Britons scattered around the world.
• British Virgin Islands, land of sand, sea and secrecy. The world's biggest provider of offshore entities, yet the UK refuses to step in and force it to reform. We have for some time been strongly encouraging journalists to put a spotlight on the BVI. We are delighted to see this scrutiny. "The paperchase can often be costly and almost endless, giving suspects time to empty their accounts and cover their tracks."
• The offshore trick: how BVI 'nominee director' system works. A handy graphic, showing three letters that the nominees send to their clients, included an undated resignation letter, allowing the nominee to duck liability at the drop of a hat; a general power of attorney handing back all control to the client, and the use of couriers to send information. We will post this on our 'mechanics of secrecy' web page.
• Vince Cable promises to investigate offshore sham director industry.
• Post-Soviet Billionaires Invade UK ... Via British Virgin Islands
  

And the Guardian's investigation will continue through the week. Read about it here. The ICIJ is promising a multi-year investigation, which will be an important global resource on tax havens for years to come. Click here.

Be Thankful For The People In Your Life

For the past few years I have used the Thanksgiving weekend as a trigger to remember those that I am thankful for in my life.

I am not sure where I got the idea, but each year I make a list of the 25 people I am most thankful are along for the ride in my journey. The list includes those who have been influential in my whole life and those that made a specific impact in the current year.  I do not publish this list, as it is not a brag sheet, but instead I use it to contemplate on those who make a difference in my world.  I then try to make sure that I let them know in some way that I appreciate their presence.

There is some poetic license uses in my list making.  I give a single slot to groups, couples and families that together contribute in some ways.  This might include the whole group of people I am actively engaged with in a business organization, or a family (husband, wife and kids, etc....) that are all part of my circle.  Yes, this means the list is bigger than 25 people, but it also allows me to think about the big picture and not worry about the numbers on the list.

My own immediate family gets individual lines, as I like to think of my wife, kids, brothers, parents, etc... with a highlight on the individual joy they bring.

With each person (or group) added to the list I contemplate the how and why I appreciate having them in my life and how they make me a better person. Some reasons are clear, some are broad, but all leave a mark in my heart.

I am thankful for the people in my life.  I know who they are, and I hope that I find ways to give back to their lives.  By taking the time to write down a list it ensures that I am not taking them for granted.

Who is special in your world?

Have A Great Day.

thom singer

Loss of NHL games with Gary Bettman as Commissioner

Updated for NHL's additional cancellation of games on Dec. 10, 2012: As of December 10, the NHL has cancelled 526 of the 1230 regular season games scheduled for the 2012-13 NHL season.  10.1% 9.5% of regular season games under Gary Bettman have been cancelled.  No other commissioner is close and even when they are combined, they aren't close.

Back in October, I tweeted about loss of regular season games by commissioner by percent and in the aggregate.  With the 2012-13 NHL season on the brink (as Nathaniel Grow explained), I figured it might be helpful to see some updated math.

Here are my calculations for NHL commissioner Gary Bettman:

NHL Season    Regular S Games    Games Lost

1992-93             384*                         0

1994-93           1092                          0

1994-95           1092                      468               

1995-96           1066                          0               

1996-97           1066                          0               

1997-98           1066                          0               

1998-99           1107                          0               

1999-00           1148                          0               

2000-01           1230                          0               

2001-02           1230                          0               

2002-03           1230                          0               

2003-04           1230                          0               

2004-05           1230                    1230                   

2005-06           1230                         0               

2006-07           1230                         0               

2007-08           1230                         0               

2008-09           1230                         0               

2009-10           1230                         0               

2010-11           1230                         0               

2011-12           1230                         0               

            Total:               22,781                1698 = 7.4% of games cancelled through 2011-12 season.

 

------------------------------------------------------------------------------------

2012-13           1230             To 12/10/2012: 526 games cancelled = 9.5% 

                                            

                                                                

                                             If 12-13 season lost: 12.2%

To date, 9.5% of games under Bettman's nearly 20 years as commissioner have been cancelled.  But if this season is cancelled, the number jumps to 12.2% of games.  That's a lot of games lost -- for owners, players and the numerous businesses (souvenir stores, restaurants/bar) dependent on NHL games being played.

Explanatory Notes and Assumptions

• NHL used 84-game regular season in 92-93, 93-94, and 94-95 seasons; in other seasons, 82-game regular season used. 

• NHL had 24 franchises in 92-93, 26 franchises from 93-94 to 97-98; 27 franchises in 98-99; 28 franchises in 99-00; and 30 franchises from 00-01 to present.

• Bettman became commissioner on Feb. 1, 1993.  By that date most of the 92-93 season had been played.  The Boston Bruins, for instance, had played 52 of their 84 regular season games.  Other teams had played about the same, give or take a game.  Assuming the 24 franchises had 32 games left, then Bettman was commissioner for 384 games in the 92-93 season (768 remaining games to be played by teams, divided by two since each game has two teams).

 

Context and Caveats

• It's important to stress that loss of games has many explanations, and not just who is the person occupying the commissioner’s job.  Clearly, the wishes of individual franchise owners and their level of unity in bargaining matter.  The willingness and ability of players’ associations to organize players and reasonably compromise with the league also matter.

• Evaluating a commissioner invites numerous metrics, including growth of revenue and popularity of sport.  Most would say Bettman has done well on those and other fronts, though expansion into southern U.S. states remains a questionable business strategy.

Key Take Away:

While context matters and while blame should be shared with owners and players, it's hard to escape these numbers when compared to other leagues' commissioners: Far more games have been lost under Bettman's watch than have been lost under commissioners of the NFL, NBA and MLB. 

In fact, no games have been lost under Roger Goodell’s leadership (6 years on the job), and just 2% of games have been lost under the leadership of David Stern (28 years on the job) and Bud Selig (20 years on the job). Those commissioners can certainly be criticized for many things, but they have succeeded in ensuring that scheduled games are played.  Games being played is obviously not only a concern for owners and players - the two groups who have the authority to resolve a labor dispute.  It's also one for those who have no formal say at the bargaining table: fans who buy tickets, networks that enter into broadcasting contracts to televise games, and apparel stores and restaurants that enter into business contracts assuming they will generate business from games being played.

If Bettman's games lost percent rises to 12%, it will be a percent of games much higher than all of the other commissioners combined -- and it's already higher as it is.