November 2009 Mailbox

RE: “Special Report: Municipal Missteps”
October 2009
Thank you for your relentless reporting of the problems municipalities face from the dramatic slowdown in tax revenue and the poor advice from bankers. I’ve enjoyed your coverage on “Milan’s Financial Fiasco,” “California’s Schoolyard Deals” and the issues surrounding Alabama’s Jefferson County. The uncovered story here is that each of these local municipalities (and others) have had to raise property taxes significantly, which is exacerbating the foreclosure crisis. This has continued to suppress local tax revenue-a vicious cycle that could be considered the housing crisis 2.0.
Colbey Arden, New York

The tragedy in “California’s Schoolyard Deals” is that tax­payers have to keep paying for decades. If these expenses showed up as a line item on tax bills, there would be mass rebellion. But because the costs are hidden, no one knows or feels ­empowered to do anything.
Jill Escher, San Jose, California

RE: “Malaysia’s Capital of Cronyism”
October 2009
Congrats on the sort of in-depth article the world needs to understand what lurks behind the relentless economic growth in Malaysia and elsewhere in Southeast Asia. Far from being a shining example of progress, today’s Malaysia is a muddle of authoritarianism, hypocrisy and encroaching religious dogma. Dr. Mahathir’s old development master plan, Vision 20-20, turned out to be a hurried get-rich scheme based on discrimination, disregard for environmental and human consequences and crony capitalism (as you document nicely).

Malaysia’s educated middle class has been showing its resolve to push for political accountability and end nepotism-as-usual. They deserve the opportunity to try their hand at governing Malaysia. The whole of Southeast Asia requires investigative reporting like this.
Derek Vertongen, Montreal, Canada

RE: “Faith, Friendship and Fraud”
October 2009
You stated that Mormons are taught that they can get into heaven by following a prescribed path of good works. As a member of the church, I can attest that there is a gullible tendency in regards to investments and get-rich-quick schemes, but the people are generally very good folk who are not often very wise to the ways of the world.

I can also attest that members are very clearly taught that the exercise of faith, along with submission to simple ordinances (such as baptism) combined with good works as an expression of that faith, are necessary to please God. Though there may be a greater emphasis on works than in many Christian denominations, this idea is not strange to most Christians. I hope your article helps scare members of my faith away from fraudulent schemes. Sometimes hard experience combined with mild correction is the best teacher.
Bret Nelson, Draper, Utah

RE: “Greening the Grid”
September 2009
As a power company analyst, I’ve been hearing about smart meters for a long time. Your article is the most comprehensive I’ve read.
Andy Devries, Creditsights Inc., New York

I wondered about U.S. public opinion toward privacy issues connected to these smart meters. In the Netherlands, the rollout of this type of meter has been halted due to a public debate relating to individual privacy. Many are afraid that electricity companies will track when people are home, cooking dinner, taking a shower and going to bed. This debate will result in thick reports and an agreement whereby utilities promise to keep privacy secure. Nevertheless, it would be surprising if U.S. citizens accept these meters without any question.
Arnold Bon, Orbit Private Asset Management, Luxembourg

Update

Prying Open UBS
A six-month court drama over Swiss bank secrecy ended in August. UBS AG, Switzerland’s largest bank as measured by assets, agreed to reveal data on 4,550 accounts to settle a U.S. lawsuit seeking the names of Americans suspected of evading taxes. The U.S. Internal Revenue Service sought the information in a crackdown on tax evasion.

In “Confessions of a Billionaire Tax Felon” (July 2009), Bloomberg Markets reported how former UBS banker Bradley Birkenfeld wooed California real estate developer Igor Olenicoff and others to invest in secret Swiss accounts. Birkenfeld, who pleaded guilty to conspiracy, cooperated by laying out how UBS courted clients such as Olenicoff.

Birkenfeld was sentenced by a federal judge in Fort Lauderdale, Florida, to 40 months in prison on Aug. 21. Justice Department trial ­attorney Kevin Downing told the judge that Birkenfeld initially failed to reveal his own role in the fraud when he blew the whistle. Downing also said Birkenfeld’s cooperation unlocked the conspiracy and led to criminal probes of 150 UBS clients.
DAVID VOREACOS

A Billionaire Expands
Mian Mohammad Mansha’s MCB Bank Ltd., Pakistan’s largest lender by market share, acquired Royal Bank of Scotland Group Plc’s Pakistan unit in August for about $87 million. The purchase will help Mansha’s Nishat Group strengthen its position in a nation where economic growth is poised to accelerate. Bloomberg Markets profiled the billionaire in “Prince of Pakistan” (January 2009), showing his ambition to keep expansion plans on track despite extremist-inspired terrorism and the worst economic crisis in almost a decade.
YOOLIM LEE