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>>> Coming up next on "Arizona
Horizon," we'll take a closer
look at last week's court
ruling, that the Maricopa County
sheriff's office engaged in
racial profiling.
We'll learn more about a court
ruling earlier this month
regarding a proposed tribal
casino near glendale.
And a tax expert discusses the
impact of U.S. companies
shifting profit and expenses to
other countries.
Those stories next on "Arizona
Horizon".
"Arizona Horizon" is made
possible by contributions from
the friends of eight.
Members your Arizona PBS
station.
Thank you.
>>> Good evening and welcome to
"Arizona Horizon."
I'm Ted Simons.
A Federal judge ruled Friday
that Maricopa County sheriff Joe
Arpaio's office engaged in
racial profiling, that the
practice must be stopped.
Here to tell us more is J.J.
Hensley that has been covering
the story for the Arizona
Republic, and you have been
covering this.
This is a job I've been doing,
give us an overview of what did
U.S. district judge Murray snow
rule?
>> The overview is key, it's a
142-page ruling, detailed.
But the take away were the seven
particular items, that prohibits
the sheriff's office from doing
now, as part of his injunction.
And one of them is, they cannot
call ice any more, when they
have someone detained on the
side of the road.
>>> Without an underlying state
charge, so, if there is no
speeding or, or jaywalking or
drugs, then, then there is no,
no call to ice.
And that's probably the most
significant immediate impact.
The sheriff's office is trying
to figure out what this means
for their enforcement operation,
and for any patrolling that they
mid do on the highways.
>> Want to get more of those
factors in a second but this
trial is, is, wrapped up eight
months ago or something like
that?
What took so long for this
ruling?
>> That's a good question, and a
lot of people who I talked to
said I was surprised it took
that long and when you say, what
do you think about the ruling?
They were like, man, it was
detailed, and I think that
that's the key, he took, took
point by point, through what
they said on the stand, and went
to the reference material that
the sheriff's office provided,
and that the aclu provided, and
then drew on outside resources,
and was able to kind of take
each issue and, and distinctly
discuss it and look at the legal
arguments there.
And it's thorough and detailed,
and I think that that's why it
took more than eight months to
come down.
>> And just to be clear the
judge really was the only
arbitrator, correct?
No jury?
>> No jury.
Just a judge and a bench trial.
They were asking for injunctive
police to prevent the sheriff's
office from engaging in this
discriminatory policing, and
that's what snow has done.
>> What do we know about Murray
snow?
>> He was a bush appointee.
He went to law school and
undergrad at byu, so, I would
say that, that his point of view
on a lot of issues should mirror
that of a lot of Arizonans.
>> And you said a detailed and
comprehensive, was it a clear
ruling?
>> Yeah.
I think that it was -- everyone
I talked to, who has got a
national perspective on this,
thinks that it's very, very
thorough, a thorough rebuke of
this inherent authority
philosophy that we have come to
discuss in Arizona, particularly
in the last six years when it
comes to immigration
enforcement.
Our local law enforcement
agencies, do they have the
authority to enforce Federal
immigration law, Chris coback,
the Secretary of State of
Kansas, the one who trained on
this immigration enforcement, he
says yes.
Judge snow says no.
He took it point by point to say
why that's not the case.
>> Who are the plaintiffs in
this case?
>> Sure, there is a group of, of
individuals that started with
one person who was here on a
tourist visa who got picked up
outside of a church in cave
creek in 2007 as a day labor
work site it, expanded to
include five other plaintiffs,
and then the judge opened it up
to a class of all Latino
residents, who were stopped by
the sheriff's office since 2007.
But, there was no money involved
here, they were not seeking any
monetary relief, just injunctive
relief.
>> Exactly what they did, and an
equal amendment kind of thing.
>> A 14th amendment, and then
a fourth amendment issue on
search and seizure.
>> So what was the Maricopa
County sheriff's office, what
were their arguments in this,
and how much did the arguments
wind up in that court ruling?
>> I think one of their main
arguments was this is the way we
have been training, and it came
directly from ice, that we can
use ethnicity as one factor in
helping us to develop reasonable
suspicion someone's legal status
in the country.
Judge snow said, that might have
been the training you got but
that training was wrong.
And it's been the training that
you have operated under for
number of years.
And so, it's going to take some,
some corrective action to
rectify that.
>> And again, can't check on the
status of those not charge and
you cannot use ancestry or race
for law enforcement decisions
regarding status.
That's kind of the bottom line,
right?
>> Right, that's the theme of
this, that you should not be
making any decision on law
enforcement maneuvers based on
ethnicity or race.
And this came back to issues in
the trial where there are
letters presented to the
sheriff's office from concerned
citizens in the southeast valley
saying that there are a group of
Hispanic men standing on the
street corner come to a raid,
and with two days there is a
raid, and, and so snow took
exception to that.
And I think that really came
through in this ruling.
>> How much it what sheriff's
office Joe Arpaio, who has never
been shy around cameras and
microphones, says a lot and is
quoted a lot, how much were
those quotes at play in this
whole thing?
>> It ended up playing a big
role, and that's why we may be
haven't heard from him.
He has been conspicuously quiet
for him.
But throughout the ruling snow
would take the statements that
Joe Arpaio played in 2007, 2008,
2009 and contrast them with what
his deputies or he, himself, was
trying to say on the stand, and
basically, said that these can't
both be true.
Is, your contemporaneous
statements that this is a pure
immigration enforcement effort,
that is the only one that really
targets illegal immigration in
the United States when he
launched this.
That's really what snow kind of
hung his hat on and it came back
to bite the sheriff.
>> So this comprehensive ruling,
this detail and clarity, are we
like to see an appeal?
>> They promised to appeal.
And the legal experts, I guess,
who reviewed this say that there
is not a lot of room for appeal
here, that it's factually based,
not on snow's point of view or
his judicial philosophy, and so,
and so it's going to be tough,
but they vowed to appeal, and
you know, when you listen to Joe
Arpaio's attorney, it sounds
like he wants to take it all the
way to the supreme court.
Last question, speaking of the
department of Justice case,
that's still out here, how does
this impact that case?
>> I think that in one, one
immediate potential significant
way, immediately.
There is a hearing coming up on
June 14th where they are going
to talk about remedies, you
know, where the aclu will come
in with its proposed remedies,
ncso will say we can't stand for
that, and the judge will
determine who is right there.
Among those things, he could
appoint monitor there to oversee
this, and that's an issue that's
been the subject of the main
dispute between the Justice
Department and mcso on their
civil rights' lawsuit.
So, let's say snow appoints a, a
monitor and, and suddenly, that
issue is resolved with doj so,
it could be an issue where,
where some of the remedies that
are ordered here, resolve some
of the issues that, that are in
dispute in that case.
>> So instead of piling on
evidence, it, basically, kind of
runs the back door here and, and
takes care of some of the
remedies?
>> Yeah.
>> But, I mean, we have got
another what, we waited eight
months for this, so, we'll wait
another three weeks.
>> But we have got to keep busy.
Thanks so much, great stuff and
good to have you here.
>> My pleasure.
>>> The Tohono O'Odham indian
tribe plans to build a casino on
land near glendale have survived
seller court challenges,
including Federal Court summary
that favored the tribe just
three weeks ago, we're joined by
Heidi McNeil-Staudenmaier of the
law firm Snell and Wilmer.
It's good to have you here,
thanks for joining us.
>> Thank you.
>> What is the status of this
dispute?
>> Well, there is, actually,
about multiple prongs going on
with this dispute.
It's not just one lawsuit, but
there have been multiple
lawsuits, and there's also a
pending legislation so it's not
one single thing at this time.
So.
>> Yeah, and very complicated.
As for that ruling three weeks
ago in Federal Court, what was
that all about?
>> Um, there is, there's been
two Federal Court rulings, the
one, the one that you are
talking about, it's the Arizona
Federal Court.
And what happened there was,
was, essentially, the State of
Arizona and the hila river and
salt river tribe, who are all
bordering here in Phoenix,
brought a lawsuit against the
Tohono O'Odham tribe.
Essentially, contending that the
deal that was struck when the
original gaming compacts were
negotiated in the State of
Arizona for gaming, not just for
the Tohono O'Odham tribe but for
all the tribes, did not intend
that there would be an
additional casino built in
Phoenix.
I mean, there is a lot of, a lot
of other legal issues in that,
but that was kind of the crux
that.
>> What does that say regarding
new casinos in the Phoenix area?
>> And that's what the judge
came down on.
Ruled specifically that, that
the four corners of that
contract did not specifically
prohibit another casino in the
Phoenix area.
And that was the whole argument
around the case, was that there
was intent that the Tohono
O'Odham nation, they already
knew that they wanted to have
the casino built in glendale,
but they did not disclose it to,
to anyone else, while they were
negotiating the compact, but the
judge, essentially, said look,
I'm going to look at the
contract, itself, what does it
say?
And the contract did not have
specific language in there
prohibiting it.
And he said, based on that, I do
not see a claim here.
But, he left it open.
There is still one remaining
issue in that lawsuit.
Which he's asked both sides to,
to submit more briefings.
>> And is that the issue what
exactly the state understands
this compact to say?
>> Yes.
I mean, it really comes down to
the intent, what did the state
understand it was negotiating in
this compact in terms of casinos
and where they would be located,
and also, who was it that, that
was the representative of the
state?
What -- who is the state?
Is it what the Governor
understands?
Is it what, what the voters
understand?
Because the voters were the ones
to pass proposition 202
approving the compacts so that's
part of the argument here is, is
what was understood, and when
this compact was being
negotiated, so the judge is
asking for a little more
evidence, a little more briefing
to go behind what was going on.
>> Does it matter what the tribe
knew about the state's
understanding?
>> Maybe.
That's, that's, also, the judge
wanted a briefing in terms of
not only what did the state
understand and were was the
state's understanding
reasonable.
But, also, what did the tribe
know that the state knew?
>> And again, not to get too
complicated but why is
understanding so important?
>> Well, I think that it's
important because, because these
compacts were proved through
proposition 202, which was the
voters.
And so, I think that the judge
really wants to make sure that
this is done with some intent
about what the people of Arizona
wanted.
>> Now, I have not heard this,
but glendale's efforts to annex
that land.
Is that still in court?
>> That was one of the lawsuits,
that was brought early on, the
tribe brought a lawsuit to, to,
to dismiss or to, basically,
prohibit the state, or the city
from doing that, and that,
essentially, was through the
whole court process.
>>> And the tribe won on that,
and it's essentially exhaust all
appeals, so I think, I think
when I say I think, I think that
safely that, that issue, itself,
that legal issue is, is now
resolved.
And dead.
>> I was not sure if, if they
were allowed, the tribe was
allowed to go and put this into
trust yet or if that was still
hanging.
>> Well, there is yet a third
lawsuit.
>> Ok.
>> There was another lawsuit
brought, which is still pending,
and that lawsuit was brought by
the State of Arizona again, and
the Hila river tribe and the
salt river tribe, and against
the secretary of the interior.
And the secretary of the
interior is, is who has the
authority and the power to take
land into the trust for tribes.
So, they brought a lawsuit
saying that you don't have the
authority to take this land into
trust because this all goes back
to the original act.
Permitting the land to be taken
into the trust in the first
place, which is the hila bend
act, which was passed by
Congress to help the tribe
replace traditional lands that
were flooded by the U.S.
Government dam built in the
1970s.
And so under the hila bend act
there were conditions that had
to be met for the tribe to buy
replacement land.
And one of the conditions was
that it can't be land that is
within city limits.
And the tribe went and bought
this land in glendale.
It is surround by three sides of
glendale surround it.
>> Right.
>> So it's, essentially, a
county, un, incorporated county
island.
And in the middle of glendale.
And so, that issue has been
litigated where they have
challenge the secretary of
interior saying that you did not
have the authority to take this
land into the trust, and because
it does not fall within the hila
bend act.
The Federal Court judge here in
Arizona disagreed and said,
nope, it falls within the act.
It's all appropriate, and end of
story.
So, of course, that has been
appealed to the Ninth Circuit
court of appeals.
And the Ninth Circuit ruled, in
September, that they agreed with
the Arizona judge.
And said that we agree with you.
The state then asked for
reconsideration of that
decision, and just in the last
week, the Ninth Circuit did
reverse part of the opinion, and
said that, that we think that
there is some ambiguity of what
is meant by within the city
limits.
>> Oh, my goodness.
And last question here and, and
in the grand scheme of things,
30,000-foot view, why does the
tribe keep winning or at least
getting favorable rulings and
why does the state and the city
keep losing?
>> Well --
>> It sieges as though, this
issue should be resolved by now
because the scoreboard looks
like a lopsided game.
>> You know, I think that the
state and the other parties
involved in this would probably
disagree that it is lopsided,
and obviously the Tohono O'Odham
tribe would --
>> Yes.
>> Would contour with you saying
that it is lopsided, and but
that's the beauty of the law.
That's why I enjoy practicing
law.
There is always different
arguments to make, and depending
on the judge that, that rules on
it, or looks at it, may have a
different viewpoint.
And so, it has been to date the
tribe has been winning a lot of
the battles, but, will the war
ultimately be won by them?
I don't know.
>> That's a good way to put it.
Great information and good to
your you here, and thanks for
joining us.
>> Thank you very much.
>>> Apple, the High-tech giant
being criticized as one of the
hyper-profiled U.S. companies
moving profits off-shore in an
alleged effort to avoid U.S.
taxes.
Here to talk about the issue of
profit shifting is Adam
Chodorow, he's a tax professor
at ASU and associate Dean for
innovative ventures at the
O'Connor college of law.
Good to have you here and thanks
for joining us.
>> Thank you for having me.
>> What is this controversy
involving apple and taxes?
>> Well, what apple has managed
to do is to shift its profits
overseas, and in a way that
actually allows it to avoid
paying taxes on a huge portion
of the income.
>> And apple testified, in an
executive that, at the new Steve
Jobs did this or someone close
to him, they paid 6 billion of
taxes last year at a 30% rate.
Valid?
>> Not really.
So the U.S. has what we call a
territorial tax system, or
rather, a worldwide tax system
where the ideas we're going to
tax you on income wherever you
earn it.
And but, we also have, have
this, this deferral system.
Where if you earn the income
overseas, you don't have to pay
tax on it, and until you take
the money back to the United
States.
And, and so, what apple and a
number of companies have done,
is that, that they have figure
out a very clever way to shift
income and have it appear to be
earned overseas, subject to
deferral, and not subject to any
U.S. tax.
>> Now, subject to a deferral,
meaning eventually that's got to
come back home, doesn't it?
>> If they bring the money back
home.
>> Yes.
>> But, what happened, I can't
remember how many years ago now,
about five years ago, is that
they convinced Congress to have
a tax holiday.
Where they were allowed to bring
home hundreds of billions at a
very low, a 5% tax rate.
And so, since then, companies
like apple have, have stockpiled
something in the hundreds of
billions of dollars again in the
last five years, and now, they
are saying hey, this money is
trapped, we would love to bring
it home and fix the economy and
help hire people but we cannot
because of the tax rates so
could you give us a tax holiday
again?
>> They are just waiting on the
holiday, and apparently, apple
now with this worldwide taxes,
only 14%, as opposed to the 30%,
something along those lines?
>> Correct, and what apple has
done is more clever than many
others.
The idea is that you want to
shift profits to a country with
low taxes.
So, let's say that you make an
apple phone and it cost you $10
to make, and you sell it for
$100, that's a $90 profit.
If you do that here, you pay tax
on the profit.
And but what if you, you, apple,
make it through a subsidiary,
and say, a low tax country and,
and it cost you $10 to make but
you charge apple U.S. 98.
For the phone.
So now you have got all this
profit occurring in this low tax
country.
And when apple sells it in the
U.S. it reports $2 of profit.
So, but apple has taken that
further.
Because they figured out way to,
to, to say, basically, look, the
company that is making this
profit, it's subject to deferral
in the U.S., no U.S. tax, but,
they went to Ireland and set it
up in a way where the Irish say,
well, actually, it's not subject
to Irish tax, either.
>> Right.
>> So it's not that they are
paying low taxes, on, on this to
another country, they are paying
no taxes on a lot of the income
that they earn.
>> How common is this?
>> It's getting more common
because once one person figures
out how to do this, there are a
lot of copycats, and so what um
find is that the cfos the
multi-national companies, have
come to understand that tax
management is, is, is, you know,
sort of a big part of their job.
And they are constant looking
for ways to reduce their taxes.
>> What are these other -- the
Irelands of the world, what are
these other countries saying
about this?
Are they willing partners?
Are they tired of it?
What's happening?
>> A number of them are willing
partners.
Because what they get, it
depends on the structure, so,
sometimes, what they are getting
is U.S. moving manufacturing
over to their country.
So, say, you know, it's basic
tax competition.
If you build it in the U.S. you
will pay a ton of taxes, if you
build it in Ireland, you will
pay less.
And well, what does what does
that mean?
That Ireland gets a business,
which employs people, and so, if
those cases, Ireland has
everything to lose.
The latest ploy that we're
talking about here, where
neither the U.s. nor Ireland
taxes it, I don't think either
of the countries really want
that.
That, that's a crack in the
system that, that apple has
found and is exploiting.
But Ireland doesn't really gain
because that's just a paper gain
being played.
>> What are some of the other
countries involved?
Both in profit and expense
shifting?
>> Well, the people use the
Netherlands, and there is,
obviously, the Cayman islands
and tax havens, oddly enough, in
warm sandy places.
And, and that people tend to go,
and, but there are a bunch of
countries, a lot of the banks
secrecy laws in Europe allow
people to, you know, to create
bank accounts that people don't
know about and, and do all kinds
of interesting tax planning.
>> How is this all playing on
Capitol Hill?
Are we going to see the changes
afloat here?
>> You know, it's hard to say.
On the one hand, when something
like this happens I have hope, I
think, oh, finally they are
going to fix it.
But, one of the solutions being
ban tested about the problem is,
we're trying to tax people on
the worldwide income and we
should be territorial, only tax
it on, in the U.S. and income
earned elsewhere be taxed
elsewhere.
And that would exacerbate the
problems.
Because they are going to be
more and more these cracks in
the system that people will
find.
And, and there is a lot of talk
now about lowering the corporate
tax rate.
And because the idea is this is
happening because our tax rate
is so high, and our corporate
tax rate is high.
The nominal rate is high but the
effective rate, is far less.
Because, because there is so
many ways to gain the system,
and shift either income overseas
or take expenses from elsewhere
and apply them against the U.S.
income.
>> Last question, quickly here,
country-by-country reporting so
everyone can see what's going on
and where it's happening.
Is that possibly on the horizon?
>> It may be.
We're making steps now.
We're, we're trying to get
information reporting automated
and, and, and built up.
But, it's really hard to get
into the financials here.
>> All right.
Good information, and good to
have here.
Thanks for joining us.
We appreciate it.
>> My pleasure.
>>> And Wednesday on "Arizona
Horizon" we'll have the latest
on the fight over Medicaid
expansion in our weekly update
with the Arizona Capitol Times.
And we'll learn about a new
commercial project in Mesa that
looks to extract Bio-Rubber from
a desert plant, that's at 5:30
on the next "Arizona
Horizon."
That is it for now, I'm Ted
Simons.
Thank you very much for joining
us.
You have a great evening.
>>> "Arizona Horizon" is made
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Support for eight comes from
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>> After the Boston bombings,
the race to catch the killers
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What tools helped to crack the
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Manhunt, Boston bombers on Nova.
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The Kings and queens of comedy.
Each crown with our nation's
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Tune in this year as the comedy
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To honor the next recipient of
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