The Lay of the (Home) Land

"Just because you do not take an interest in politics doesn't mean politics won't take an interest in you."

Pericles (495 BC-429 BC)

Five days of constant motion and ever since we returned to the apartment last night I've been trying to organize my thoughts with an eye toward giving you my impressions, observations and conclusions.  Reading Steven Mopsick's post this morning I decided to use his thoughts as a springboard for mine.  

So, in no particular order, here are the things that a Washington newbie and American citizen fresh off the boat from abroad found interesting, encouraging and disheartening.  And, yes, it was a little bit of all those things.  I do want to say before I begin that the opinions and impressions that follow are my own and do not reflect the positions of the different diaspora organizations I work with.  On this blog, I own my own words.

1.  FATCA is not going away.  Even the people I listened to who hated it and might even have some clout if they wanted to work harder against it, are resigned to it.  It's gone too far and too much work has been done to make it happen.  Yes, there is awareness that it will be a "train wreck" and "chaotic" on July 1, 2014 but that is not going to be enough to stop it.  The most any one can hope for at this point would be a delay until the end of 2014 and the chances of that are slim.

2.  No Champions in Congress.  Today almost no one in Congress with the exception of Rand Paul will publicly go to bat for the people who are the eggs being broken in the making of the FATCA omelet.  And when I say "go to bat" I mean publicly defending the victims of FATCA or introducing laws to repeal or revise it.  Some of this reticence has to do with how the homeland public views Americans abroad - those champagne-swilling, yacht-owning residents of exotic lands- and some of it is the partisan nature of American politics which is leading to gridlock on any number of topics.  Asking these folks to vote for legislation on our behalf, be it a repeal FATCA attempt or trying to change to a residence-based tax system, is just about impossible right now.   

3.  Consequences Are Known.  What was encouraging is that almost everywhere we went people were aware of the banking discrimination and the renunciations.  The few who didn't know, we were more than happy to educate and they were horrified by the stories. I was at more than one meeting with people who had relatives living abroad and had heard from them directly about the consequences of FATCA.  Others had letters from constituents. Quite a few of them brought up the renunciations as well  and wanted more information about that.  

There was a great deal of sympathy on the part of the people we talked to in Washington.  Over and over I heard things like "disproportionate penalties", "collateral damage" and "you are being punished for the actions of a few bad actors."  But, frankly, most had no idea what could be done about it.  Repeal FATCA was clearly off the table and so they were struggling to find something that they could do.

4.  Mitigation.  As I said most were receptive to ideas that would address some of the worst consequences of FATCA.  The proposal to redefine "foreign" and exclude reporting on accounts located in the same country as those US citizens - like my bank which I pointed out was right across the street from my house and was certainly not "offshore" - was one that many thought was quite reasonable.  My understanding is that this would not require legislation and so it would be easier to do.

Another possibility comes through the IGA's  some of which have clauses that say that financial institutions are not to discriminate against US Persons.  It was pointed out that the IGAs have not yet been implemented and so one avenue Americans abroad have is to watch the host country legislative process carefully and jump in if we don't see those non-discrimination clauses included in the local laws that implement FATCA.

5.  Next Steps.  So where does that leave us?  What can we do at this point that stands a chance in hell of making a difference?

Letters:   Keep those letters to lawmakers coming.  If you have written before, write again.  They are receptive and if you don't get an answer, call them and insist on one.  It really does make a difference.

Media:  Give interviews to the media.  I was told in more than one case that after getting a letter from a constituent, the staffers went and looked for information on the Net.   The more articles (and the more recent the articles), the better.

Friends & Family in the US:  I heard more than once that the staffers and agency staff had a relative living abroad or who was thinking about moving abroad.  Ask your contacts back in the US to write or call.  I also noticed that some of the staffers we met had been Americans abroad themselves and that made them even more empathetic.

Local Parliaments:  Whether you are a legal resident or you are living in your other country of citizenship, find out where FATCA implementation is at in the legislative process.  Read the IGA, follow the implementing legislation, and keep the pressure on local lawmakers.  Look for rules that would prohibit discrimination against US Persons.  If it isn't there, insist on it.

Vote:  If you are still a US citizen one of the most powerful acts is to vote and to let your US lawmakers know that you are a voter and a constituent.  The meetings I attended where I was a constituent as well as an AARO delegate, I was listened to all the more attentively.  It does make a difference.  

Last word.  For years we have been going about our lives outside the United States with the impression that U.S. politics does not directly concern us while we are outside the homeland.  We certainly never imagined a FATCA in our future.  This is our wake up call.  American politics is a blip on our radar, but now we are certainly on theirs and not always in a good way.  We are being forced by the homeland to make decisions.  

We can choose to engage or disengage, but invisibility or simply being left alone is clearly no longer an option for any of us.

Learning to Like Washington

I think I mentioned in another post that my last visit to Washington, D.C. over 20 years ago left me with a very poor impression of the capital city.

I'm now in a position to make a more nuanced evaluation.  Here's what I like and don't like so far about the city.

I'm not fond of the gray.  All the buildings around the the Hill are certainly imposing but rather stark.   Now I'm someone who thinks that the Versailles castle is a gaudy monstrosity but the architecture around the capitol left me cold and yearning for color.

Perhaps it all looks better in the spring and summer when the trees bloom, turn green and give the eyes some relief from the monotonous gray stone.

The security is also a real pain.  Every door at every building had the same drill:  run everything through the machine, including yourself.  Fortunately there are tunnels that run under the street from one building to another so if you don't care about sunshine and fresh air, you can avoid the security hassle by staying underground the entire day.


I do like the neighborhood we are staying in:  Adams Morgan.  It's a residential area that looks to be gentrifying.  Some lovely houses and apartment buildings. Lots of color - a real relief from the Hill.  The apartment we are renting for the week is lovely with hardwood floors, a kitchen and two bedrooms.  Here are a few pictures:

Apartment/houses in Adams Morgan

Senator Patty Murray's office

This morning we had a meeting with the American Bankers Association and then we returned to the Hill for a few more meetings.  I had a chance to meet with someone in Senator Patty Murray's office (Washington State).  The senator's offices were really something - wood paneling on the walls and nice cushy chairs to sit in.

There was also a stunning sculpture by Calder in the courtyard of the Hart building.

After that meeting we had to be over at Treasury in the late afternoon so we decided to walk and finally I found something to love in Washington:  the Botanic Garden.

I could have stayed there all day but the last meeting of the day was a must (Treasury) so we left, walked past the Washington Monument and arrived at our destination with enough time to sit on a bench, rest our feet, and have something to eat and drink before entering the building.

And the day ended with a debriefing and a drink at the Old Ebbitt Grill.

Day 3 of Overseas Americans Week

It's already Wednesday - Day 3 of Overseas American Week here in Washington, D.C. - and my feet are tired and my brain is fried.

We had a full day of back-to-back meetings yesterday and this morning was filled with one that was every bit as good as the meeting with the IRS Taxpayer Advocate Service.

But before we talk about that meeting, let me explain a bit about what exactly we are doing here in D.C.  Overseas Americans Week sounds grand but what does mean?

Meetings.  Lots and lots of meeting.  The AARO/FAWCO delegation is talking with the staffs of U.S. lawmakers, the Congressmen and women who make the laws that impact us, and with different government agencies like the IRS, the folks who implement them.

With the staff meetings we have a very brief window (about 20-30 minutes) to make our points so we have to be clear and concise.  And then it's off to the next meeting to do it again.  Believe me, after walking from floor to floor, not to mention from one building to another, my feet were about to fall off at the end of the day.  Our meetings are with the staff but a few times we've met their bosses as well.  Just before one meeting Congressman Steny Hoyer, the House Democratic Whip was walking through the office and when he saw us he stopped to talk and to shake our hands.

Sometimes we go to these meetings wearing two hats:  an AARO/FAWCO member and a constituent of that lawmaker.  I have already met with the staff of my representative in Seattle, Jim McDermott, and will be meeting with the staff of one of my senators later in the week.

The meetings with the agencies are longer and it's more of an exchange - there is more time to go into detail and ask each other questions.  I already talked about the meeting with TAS but this morning we met with people at the State Department responsible for overseas citizens services.  

Everywhere we go we are talking about what's happening right now to Americans abroad.  One observation I would make is that, with very few exceptions, when we talk about banking discrimination, people start nodding their heads.  Some of their information has come from media reports, but also from constituents abroad.  I found that encouraging - they are reading their mail from abroad.  So if you were wondering (as I was) if it really is worth sending them a note (and struggling with their websites), the answer is "yes" because I have seen firsthand that it does help.  A lot.  When we start talking and they can connect the issue to something that came in from a constituent(s), it make a world of difference in how they view that information.

So that's what it's all about, folks.

One last word before Ellen and I have dinner.  In one meeting I was asked point blank if I was planning to renounce.  And I was filled with so much anger.  I will do everything I can, I replied, so that day never comes.  I will send letters, I will knock on doors, I will write, I will do whatever I have to including annoying the hell out of people like you until I've exhausted all possibilities.

And then we'll see.

Overseas Americans Week Off to a Great Start

It's Overseas Americans week and the weather is cold and clear here in Washington, D.C.

The first day was a whirlwind of activity which started with an early morning kickoff in the House cafeteria and ended with a debriefing at Bullfeathers.

It was quite a day.  So many meetings, so much to say.  In some cases it was a chance to say "thank you" to those US lawmakers who are part of the Americans Abroad caucus and in others it was an opportunity to educate those who don't know a lot about us and the issues we are facing (tax issues, banking discrimination...)

But the high point of the first day was a trip over to the Internal Revenue Service (IRS) for a meeting with Nina Olson, the National Taxpayer Advocate, and her team.  For those of you who are not familiar with their work, have a look at their 2013 report to Congress and you'll see that our top issues make their list of the Taxpayers Advocate Service's Most Serious Problems.

Toward the end of the meeting I had the chance to fulfill my promise to all of you who asked me to convey our appreciation for her work.  Americans all over the world read your reports, I said, and it means so much to all of us to know that you are in our corner.

Frankly, meeting Nina Olson and her team was all by itself worth the trip.  Everything after this will  be the cerise sur le gâteau (the cherry on the cake).

More pictures up on the official AARO Facebook feed if you are interested. And Ellen Lebelle just posted about Day 1 on her blog Thinking Out Loud.

Tuesday's agenda is even busier than Monday's.

Wish us luck and à demain.

Third Culture Kids and Identity

A very good video So Where's Home? by Adrian Bautista.  It's about American Third Culture Kids and identity in their own words.

Third Culture Kids, a term coined by Sociologist Ruth Hill Useem, refers to anyone who spent his or her formative years in a country/culture (sometimes more than one) other than that of his parents.

It's an interesting category because these kids are not intentional migrants or expatriates. Nobody gets to choose where he or she is born and children are seldom consulted when the parents made decisions about where to live and work.

The concept of moving the family abroad is something that is likely to meet with general approval.   Broadening every one's horizons! Learning a second language like a native! Multiculturalism and global citizenship education galore!

My experience has been that it starts with more or less every one's approval but when it's years of living outside the parent's home country, a certain ambivalence sets in.

A French child, for example, who was not born in France (or who left at a young age) and has lived in Canada, the US, and Japan, but never actually in France.  What are people in the Hexagon to make of that? Legally, the child is a French citizen and has a French passport (and perhaps a few others) but France's influence on the making of that child and his identity is, well, rather limited to vacations, what the parents transmit and whether or not they send that child to a French or a local school.  Learning about Liberté, Egalité, Fraternité from parents, teachers and books while sitting smack in the middle of another world that doesn't share those values, changes them in subtle ways.

The same is true for American children.  To my knowledge my Frenchlings have never recited the American Pledge of Allegiance.  Now that I think about it, I have to wonder if they even know what that is.

And that leaves those in the home country scratching their heads trying to figure out just how much of a genuine attachment these kids have to "home".  From what I've seen, there is an attempt to push them into a box that says "French" or "American" and then close the lid and pretend that all those other formative experiences don't matter or aren't relevant in the current context.

That generates real frustration and sometimes resentment on the part of both Third Culture Kids and Adults:  Who are you to tell me that I can only be this thing and nothing else?

It's important here to make the distinction between citizenship which is controlled by the home and host countries and identity which isn't.  No government and no people on this planet can control how people feel, and efforts to make a perfect match between identity and citizenship will always fail.


  So Where's Home? A Film About Third Culture Kid Identity from Adrian Bautista on Vimeo.

FATCA: La chasse aux coupables

“If the soul is left in darkness, sins will be committed. The guilty one is not he who commits the sin, but the one who causes the darkness."

Victor Hugo
Les Misérables

There is an excellent article, How to Avoid FATCA – Tips From Senator Levin, by Virginia La Torre Jeker, an international tax lawyer in Dubai,  up on AngloInfo.

The article is an analysis of a report that was published last month by the U.S. Senate Permanent Subcommittee on Investigations called Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts.

A great read and I recommend it to all of you.  Allow me to make a few additional points just to stir the grey matter a bit more:

Billions, Billions Out There!  The American government has no clue how many American citizens there actually are outside the United States, only estimates.  So how do they know how much potential tax revenue there is out there beyond the borders of the United States?   They don't. Those much cited figures of 150 - 200 billion USD in uncollected U.S. taxes were pulled out of thin air.

You heard me.  All those figures being cited in the media by various organizations and by US lawmakers are just wild ass guesses.   Professor William Byrnes took a stab at tracking down the origin of these numbers and they seem to have originated in magazine articles.  Not one can cite a reliable methodology that might make these figures credible.  In fact when the former IRS Comissioner was asked about them in 2009, he admitted:

“Not that I am aware of. I mean, estimating how much money that is overseas and not being paid to the government. As far as I am aware, there is no credible estimate because it is kind of a chicken and egg. It is over there and we have not found it, it is hard to estimate what is there. And all estimates that I have seen have not broken down criminal versus civil because, again, until we see the cases, it is hard to say.”

So FATCA is basically a fishing expedition.  They have no idea how much money is out there in uncollected U.S. taxes.

FATCA is Already a Failure?:  Reading the Senate report one is struck by their pessimism. They are saying that FATCA as it is being implemented isn't going to work: 

"FATCA will not, in fact, solve the disclosure problem. FATCA’s implementing regulations have created multiple loopholes, with no statutory basis, in the law’s disclosure requirements (page 6). 

In this Forbes article, Andrew Quinlan of the Center for Freedom and Prosperity agrees but he talks about something the report was completely silent about:  reciprocity.  

A Blame Game?:  So here we have an extraterritorial U.S. law passed in 2010 to deal with a "problem" that no one can define with any precision, and for which no actual cost-benefit analysis was ever done. 

Furthermore, even before implementation, FATCA already has had a number of serious consequences:  it's costing countries all around the world an arm and a leg; it's making it very tough for US Persons abroad to have checking, savings and retirement accounts in their host/home countries; and it's generating expectations of information exchange reciprocity that everyone admits will be a very tough sell in the United States.  

Now, four years later, the very people who passed the law are saying it's doomed and it's not their fault.  It's those darn bureaucrats who are responsible if FATCA fails to find those tax evaders because they weakened FATCA when they wrote the regulations and negotiated those foreign agreements:

"They point out that the Swiss have signed an intergovernmental agreement that requires all Swiss banks to comply with FATCA’s disclosure requirements. But FATCA’s disclosure requirements have been limited and weakened by its implementing regulations, and may allow many U.S. taxpayers to continue to conceal their accounts in Switzerland and elsewhere." (Page 172)

This looks an awful lot like what the French call  la chasse aux coupables (the hunt for the guilty). 

The report implies that elements of the final regulations and those negotiated agreements do not have the support of U.S. lawmakers.  That's a very troubling message to send to banks that desperately need those final regulations to be frozen, and to all the countries that have signed (or are about to sign) FATCA IGAs.  

It's too soon to tell if FATCA will be a catastrophic failure, a limited success, or a rousing triumph, but it's not a good sign that U.S. politicians are already looking to assign responsibility for its shortcomings.  

Success or failure, pro-FATCA or anti-FATCA, let's put the blame for the outcome of this legislation squarely where it belongs:  the U.S. lawmakers who made the darkness.

Overseas Americans Week 2014

Next weekend I'm on a flight to (of all places) Washington, D.C.  It's the city I love to hate but that's due to a very bad first impression.  I went there once back in 1992 for the COSPAR/IAC World Space Congress.  It was hot, polluted, and I had to work 14 hour days as support staff for the scientific meetings.  I missed the opening ceremonies and the cocktail at the Smithsonian.  The only fun I had was the chance to party at the Bulgarian embassy.

It was not a good experience.  Ever since I heard that I would be going I've been chanting "Beginner's Mind" over and over again.  It makes no sense to base an opinion on one brief experience over 20 years ago.

So what's going on next week?

Overseas Americans Week and I'm part of the Association of Americans Resident Overseas' delegation.  The Federation of American Women's Clubs Overseas (FAWCO) will be there as well.

OAW is a yearly event and this is the 13th year that organizations like FAWCO and AARO head for the capital city "to draw Washington’s attention to issues where current American law excludes, penalizes or denies access to overseas Americans. These issues involve Medicare, Social Security, Citizenship, Taxation and Access to US and foreign banking facilities."  This means that we will be knocking on doors and meeting lawmakers, staff at various U.S. government agencies, and other organizations.

It's going to be a very full week. I am a very junior junior delegate so my job is to observe and to listen.   I won't give away the agenda but I will be meeting with the staff of my senator, Patty Murray (Washington State).  I plan to write one or two posts for the Flophouse while I'm there but if you want to follow the action more closely we will be updating every day the AARO Facebook and Twitter feeds.