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FederalDaily - October 25, 2005

Alleged FBI Abuse of Patriot Act

The Electronic Privacy Information Center (EPIC) announced that documents it received through a Freedom of Information Act request showed 13 violations of intelligence gathering laws in the FBI’s use of the Patriot Act. One case faulted the bureau for illegal electronic surveillance when an error led to unintentional, but unauthorized, monitoring. EPIC said another instance affirmed the violation of an executive order dictating use of the least intrusive means possible and that only the FBI may conduct non-consented searches of foreign powers or agents. According to EPIC, most of the infractions stemmed from the FBI’s failure to abide by regulations requiring the submission of a letterhead memorandum to the Office of Intelligence Policy and Review (OIPR) within 90 days of the beginning of all “full investigations.” The regulation is to ensure OIPR’s oversight duties are not obstructed. Each case was referred to the Intelligence Oversight Board for appropriate action. For more, go to www.epic.org/.

New Tax Rule Proposed for Reservists

Sens. Judd Gregg, R-N.H., Pat Roberts, R-Kan., and Lamar Alexander, R-Tenn., have sponsored legislation to change an IRS ruling that affects Guardsmen and Reservists who have been called into service in Iraq and Afghanistan. Many employers voluntarily offer “differential pay” when an employee who is a member of the National Guard or Reserve is called to active duty. These are payments that represent wages the individual would have received if he or she were still performing work for the employer. A 36 year-old IRS ruling requires deployed men and women in the Reserves and the National Guard to make quarterly income tax payments if they receive differential pay from their employers. But the new Uniformed Services Differential Pay Protection Act amends the IRS code to treat differential wage payments as a regular payment of wages for tax purposes and retirement plans, eliminating the quarterly payment rule for Reserve and Guard members.

Keeping Federal Contracts Stateside

The Senate adopted an amendment offered by Sen. Carl Levin, D-Mich., to bar the award of future contracts through the Departments of Transportation, Treasury or Housing and Urban Development to U.S. companies that have dodged U.S. taxes by reincorporating and setting up headquarters in offshore tax havens. The Levin amendment has been included in the Senate appropriations bill for the Departments of Transportation, Treasury, Housing and Urban Development, and other independent agencies for the 2006 fiscal year. The ban would be similar to the ban that already applies to Department of Homeland Security contracts. “The companies targeted by this amendment claim to have moved their headquarters to a tax haven when, in reality, their primary offices and production or service facilities remain right here in the U.S.,” said Levin.

Committee Votes on Native American Vets’ Housing Loan Program

The House Veterans’ Affairs Committee recently approved legislation that includes language from Rep. Stephanie Herseth, D-S.D., to make permanent a Native American veterans’ housing loan pilot program. The Veterans Administration's Native American Home Loan program directs home loans to eligible Native American veterans who wish to purchase, construct or improve a home on tribal trust lands. Since its inception of the pilot program in 1992, the VA has made 443 direct loans to Native American veterans. The VA direct loans are generally limited to either the cost of the home or $80,000, depending on which is less. Last year, Herseth passed legislation to extend the pilot program until 2008. This year’s bill makes it permanent. Herseth is the ranking member on the Veterans’ Affairs Subcommittee on Economic Opportunity.