Fort Lowy

There are those among us who cannot bear the idea of Australia missing out on a slice of the imperial action de jour in the Middle East. Apparently, Iraq was just an appetizer. But while there might be more than enough murder and mayhem in Afghanistan to satisfy them for the present, what are we going to do when - perish the thought! - it's time to cut and run? Just sit around and twiddle our thumbs down here in the south Pacific?

Not to worry, over at the Lowy Institute, they're working on it:

"As part of this approach [formulating a government strategy paper on Australia's relationship with the Middle East to articulate our strategic interests in the region and to allow for the development of a policy framework] the government should send a signal to the region regarding our long-term interest. This could be done by transforming Australia's present military commitment in the UAE in support of our troops in Afghanistan to a much smaller military presence following the withdrawal of combat troops from Afghanistan in 2014. Such a commitment could be tailored to meet Gulf and Australian training or perhaps maritime surveillance needs. Its practical and symbolic benefits in advancing the national interest would outweigh the small resource commitment. It would reinforce the impression among Gulf rulers that Australia is a committed middle power, with potential flow-on benefits in other areas of our bilateral relationship. For Australia, it would provide a small regional base with access to civilian aviation and maritime hubs that could be used in a range of future military contingencies, from Pakistan to North Africa."* (Troops should be kept in the Middle East: A small regional base makes a lot of sense, Rodger Shanahan, The Australian, 18/8/11)

Bet you can't wait to put it up the Pakistanis or mix it with the Moroccans, eh?

But, despite the Lowy Institute's breezy assurance that it'd only cost peanuts for the pleasure, mowing down brown people these days always seems to have a nasty habit of running into the trillions. So wouldn't you think Frank and the lads would at least put their money where their mouth is (over at the Lowy Institute). But no, judging by Shanahan's piece, the understanding seems to be that the cost of Australia's future imperial adventures in the Middle East will be borne almost exclusively by those who manage to pay their taxes without the tax office looking over their shoulder and who probably don't automatically think of Israel when the word charity crops up. Speaking of which, here's the latest:

"The US tax office's long-running investigation into the Lowy family's financial affairs has extended to Bermuda in a bid to unmask who owned and controlled a Liechtenstein-based foundation that US authorities believe was used for tax evasion. The US Internal Revenue Service in April 2009 asked the Bermuda government for help in determining the ownership and control of two companies, Adelphi Ltd and Clareville Ltd, which the IRS suspects are controlled by the Lowy family. The IRS is investigating Westfield Group's Los Angeles-based managing director, Peter Lowy, and his wife Janine, over their tax returns for the year to December 2005. It is also scrutinising the 2004-05 tax return of Beverly Park Corporation, a Delaware-registered company ultimately owned by the Frank Lowy Family Trust, and certain aspects of Beverly Park's returns for the 10 years from 1997 to 2007...

"It is noted that the Liechtenstein-based Luperla Foundation was set up in 1997 'for the benefit of all the members of the Frank Lowy family...' and that it received a loan repayment from Adelphi. In its request, the IRS contended that Adelphi's ownership and control in the 10 years to 2007 was relevant to the ownership and control of Luperla, and that understanding Luperla's ownership would help resolve whether the Lowys should have filed information about the Liechtenstein foundation with US tax authorities... Details of the Bermuda inquiries have emerged in a California court where Peter Lowy is suing the IRS, under the Freedom of Information Act. Mr Lowy wants the US District Court to force the IRS to hand over thousands of pages of documents related to his US tax investigation. The IRS has repeatedly baulked at releasing at least 5402 pages, saying they had to remain confidential because they were the product of exchanges between US tax authorities and the Australian Taxation Office. But Mr Lowy's lawyers now claim that while some material from Bermuda about the Lowys was handed to US authorities, the IRS has 'not identified the existence of such records or identified any grounds for withholding such records'. According to memos stolen from LGT Bank, published by a US Senate committee in 2008, Luperla received $US53 million as founding monies from Adelphi in 1997 by way of a 'credit repayment'. In 2001, LGT Bank was instructed to disperse Luperla's proceeds of $US68 million. The Lowys have said publicly that they never benefited from the Luperla structure, that all its proceeds went to Israeli charities and they met all tax obligations in Australia and the US." (US tax authorities followed Lowy's trail to Bermuda, Leonie Wood, The Age, 18/8/11)

[*Presumably, if Shanahan's proposal - Fort Lowy? - were implemented by an Australian government, our existing base in Dubai (See my 12/11/09 post Billabong Flats) would become permanent.]