
Northern Rock could ‘be left off the balance sheet’
Tory HQ last night branded "outrageous" the prospect of Alistair Darling announcing that he is to keep the £110bn Northern Rock debt off the government balance sheet to protect one of the Chancellor's two golden rules.
The sustainable development rule states that the national debt to GDP ratio should be "prudent" and not go over 40% of national income but, if the nationalised bank's debts were included, the ratio would hit 45%.
In a pre-Budget skirmish, Philip Hammond, Shadow Chief Secretary to the Treasury, said: "Northern Rock's £110bn liabilities would blow the fiscal rules apart and destroy any shred of credibility the Chancellor has left.
"It will be outrageous if Alistair Darling tries to keep the Northern Rock liabilities off balance sheet when the Office for National Statistics ruled they should be included."
However, a spokeswoman for the Treasury told The Herald that the department had made clear in January that the UK Government's fiscal rules allowed for "temporary and exceptional events", which meant they did not have to go on the balance sheet. She said there would be an update on the policy in next Tuesday's Budget, Mr Darling's first.
Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."
Mr Darling is expected to repeat how the UK economy, faced with global turbulence in the face of a credit crunch, is well-placed to weather the storm and also to forecast a slowing of growth this year.
Public sector pay restraint is set to continue to try to keep a lid on inflation so that interest rates can be cut towards the end of the year to generate a feelgood factor ahead of a possible general election in 2009.
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Posted by: Karin, glasgae. on 12:19am Tue 4 Mar 08
[quote]However, a spokeswoman for the Treasury told The Herald that the department had made clear in January that the UK Government's fiscal rules allowed for "temporary and exceptional events", [/quote]
So we now have a new definition of temporary. How many years then is temporary?
However, a spokeswoman for the Treasury told The Herald that the department had made clear in January that the UK Government's fiscal rules allowed for "temporary and exceptional events",
So we now have a new definition of temporary. How many years then is temporary?
Posted by: democrate, central Scotland on 12:25am Tue 4 Mar 08
What a brainwave! Next time I send my accounts to HMRC I can just omit some of my income which was temporary, exceptional and under, now, what was it, £250, £520, £995, £5000, erm, how many millions?
What a brainwave! Next time I send my accounts to HMRC I can just omit some of my income which was temporary, exceptional and under, now, what was it, £250, £520, £995, £5000, erm, how many millions?
Posted by: Celtic Lion, Roar on 1:16am Tue 4 Mar 08
[quote]... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...[/quote]
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
[quote]Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."[/quote]
Will you bloody well should be. Your band of thieves and liars have spent £110b of [italic]our[/italic] money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."
Will you bloody well should be. Your band of thieves and liars have spent £110b of
our money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
Posted by: Celtic Lion, Roar on 1:16am Tue 4 Mar 08
[quote]... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...[/quote]
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
[quote]Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."[/quote]
Will you bloody well should be. Your band of thieves and liars have spent £110b of [italic]our[/italic] money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."
Will you bloody well should be. Your band of thieves and liars have spent £110b of
our money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
Posted by: Celtic Lion, Roar on 1:16am Tue 4 Mar 08
[quote]... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...[/quote]
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
[quote]Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."[/quote]
Will you bloody well should be. Your band of thieves and liars have spent £110b of [italic]our[/italic] money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."
Will you bloody well should be. Your band of thieves and liars have spent £110b of
our money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
Posted by: Celtic Lion, Roar on 1:16am Tue 4 Mar 08
[quote]... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...[/quote]
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
[quote]Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."[/quote]
Will you bloody well should be. Your band of thieves and liars have spent £110b of [italic]our[/italic] money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
... the UK Government's fiscal rules allowed for "temporary and exceptional events" ...
There will be nothing temporary about this £110b loss, and the most exceptional thing about it all is the stupidity of the buffoon Brown pupeteering the UK into ruin.
Asked to comment on Mr Hammond's remarks, she added: "We are not offering a running commentary on Northern Rock."
Will you bloody well should be. Your band of thieves and liars have spent £110b of
our money on the dodgy part of a ruined bank. Try wrapping your tongue around the word "accountable" and see how you like its taste.
Posted by: Celtic Lion, Roar on 1:26am Tue 4 Mar 08
Sorry about the duplicates folks - that's the reason I rarely post here any often.
@herald tech folks - you really need to sort out your web deployment scripts. This is the only site which routinely kills my FF2 sessions.
Sorry about the duplicates folks - that's the reason I rarely post here any often.
@herald tech folks - you really need to sort out your web deployment scripts. This is the only site which routinely kills my FF2 sessions.
Posted by: Politically-incorrec
t Man, Glasgow on 2:03am Tue 4 Mar 08
The fact that Darling would consider such a tactic just to satisfy some stupid figure that Brown "picked out the air" shows just how detached these ego's are from the world you and I belong to.
Its all a game of point scoring against the other boys in their private circle.
The fact that they are taking a gamble with £110 billion of your and my money seems to have escaped them.
Just what will actually happen if the bank founders again or never becomes a going concern that recoups our investment.
How will they fudge the books then?
The fact that Darling would consider such a tactic just to satisfy some stupid figure that Brown "picked out the air" shows just how detached these ego's are from the world you and I belong to.
Its all a game of point scoring against the other boys in their private circle.
The fact that they are taking a gamble with £110 billion of your and my money seems to have escaped them.
Just what will actually happen if the bank founders again or never becomes a going concern that recoups our investment.
How will they fudge the books then?
Posted by: wisnaeme, wisnae there on 2:27am Tue 4 Mar 08
.
Apart from banana republics, What government employs toy town economics? Who are they trying to kid with their sort of accounting?
PFI/ PPP off the books is bad enough but this is bluidy scandalous.
Meyer Lanski and Arnold Rothstein could learn a thing or two from this shower of cretins in the black art of creative book keeping, that's for sure.
Aye, ...and in other associated endeavours as weel.
.
.
Apart from banana republics, What government employs toy town economics? Who are they trying to kid with their sort of accounting?
PFI/ PPP off the books is bad enough but this is bluidy scandalous.
Meyer Lanski and Arnold Rothstein could learn a thing or two from this shower of cretins in the black art of creative book keeping, that's for sure.
Aye, ...and in other associated endeavours as weel.
.
Posted by: george alexander, north lanarkshire on 6:40am Tue 4 Mar 08
[quote][bold]Karin[/bold] wrote:
[quote]However, a spokeswoman for the Treasury told The Herald that the department had made clear in January that the UK Government's fiscal rules allowed for "temporary and exceptional events", [/quote] So we now have a new definition of temporary. How many years then is temporary?[/quote] I was about to post the same question.
Like the old 'B' movie comedy 'Evil Roy Slade' when Slade is playing cards in a saloon he puts down 5 cards that have no relevance whatsoever. "That's" not a winning hand" says one of his opponents "I make the rules" says Roy "and my rules now say it wins today".
Karin wrote:
However, a spokeswoman for the Treasury told The Herald that the department had made clear in January that the UK Government's fiscal rules allowed for "temporary and exceptional events",
So we now have a new definition of temporary. How many years then is temporary?
I was about to post the same question.
Like the old 'B' movie comedy 'Evil Roy Slade' when Slade is playing cards in a saloon he puts down 5 cards that have no relevance whatsoever. "That's" not a winning hand" says one of his opponents "I make the rules" says Roy "and my rules now say it wins today".
Posted by: OHO, Glasgow on 6:47am Tue 4 Mar 08
At least the American's prosecuted the Enron executives....we get to have the same creative accounting carried out by Government. No wonder the NatWest 4 felt aggrieved to have been handed over by this bunch of crooks. I wonder if they feel proud of themselves? Chuckle at their creative accounting? Meanwhile we are the ones who will be bankrupt.
At least the American's prosecuted the Enron executives....we get to have the same creative accounting carried out by Government. No wonder the NatWest 4 felt aggrieved to have been handed over by this bunch of crooks. I wonder if they feel proud of themselves? Chuckle at their creative accounting? Meanwhile we are the ones who will be bankrupt.
Posted by: OHO, Glasgow on 6:49am Tue 4 Mar 08
And if I was the SNP, I would be having a field day - just as Wendy tries a relaunch, we have yet another example of how Labour simply bend the rules to suit their needs.....
And if I was the SNP, I would be having a field day - just as Wendy tries a relaunch, we have yet another example of how Labour simply bend the rules to suit their needs.....
Posted by: Jimmy the Pie, Orkney on 7:33am Tue 4 Mar 08
Who said in 1997, "We will clean up politics...
The Conservatives are afflicted by sleaze and prosper from secret funds from foreign supporters. There is unquestionably a national crisis of confidence in our political system, to which Labour will respond in a measured and sensible way."???
Lies, lies and more lies.
Who said in 1997 "Remember, you are not here to enjoy the trappings of power, but to do a job and to uphold the highest standards in public life, we must be purer than pure" ????
Lies, lies and more lies.
Who said in 1997, "We will clean up politics...
The Conservatives are afflicted by sleaze and prosper from secret funds from foreign supporters. There is unquestionably a national crisis of confidence in our political system, to which Labour will respond in a measured and sensible way."???
Lies, lies and more lies.
Who said in 1997 "Remember, you are not here to enjoy the trappings of power, but to do a job and to uphold the highest standards in public life, we must be purer than pure" ????
Lies, lies and more lies.
Posted by: crieff resident, strathearn on 7:35am Tue 4 Mar 08
This is a joke. The disaster that is PFI has been kept off the books. Now Northern Wreck joins it. This government treats us like idiots hoping we'll be too stupid to realise the deceit it's indulging in. Nobody surely believes the government's statistics now do they? Inflation at 2.2 per cent officially and unemployment historically low officially! Alice in Wonderland makes more sense than this lot.
This is a joke. The disaster that is PFI has been kept off the books. Now Northern Wreck joins it. This government treats us like idiots hoping we'll be too stupid to realise the deceit it's indulging in. Nobody surely believes the government's statistics now do they? Inflation at 2.2 per cent officially and unemployment historically low officially! Alice in Wonderland makes more sense than this lot.
Posted by: Wardog, Buckie on 8:16am Tue 4 Mar 08
Labour's Economic Mismanagement & the 'mortgaged future' that is PFI/PPP is coming home to roost....
Labour are headin for a decade in opposition and Broon knows it.
No fiddling the figures and skirting around the issue is going to save this bankrupt party that has setback the socialist cause for a decade atleast with it's warmongering, short changing of our kids and wasteful spending to get no improvement whatsoever from the Health Service and our children's education's
[bold]NEW LABOUR - ALL GLOSS[/bold]
Labour's Economic Mismanagement & the 'mortgaged future' that is PFI/PPP is coming home to roost....
Labour are headin for a decade in opposition and Broon knows it.
No fiddling the figures and skirting around the issue is going to save this bankrupt party that has setback the socialist cause for a decade atleast with it's warmongering, short changing of our kids and wasteful spending to get no improvement whatsoever from the Health Service and our children's education's
NEW LABOUR - ALL GLOSS Posted by: Jimmy Mac, Shetland on 9:28am Tue 4 Mar 08
From this morning’s Herald
Pig farmers in No.10 'crisis' rally
9:11am today
Pig farmers are heading for Downing Street to highlight what they say is a crisis threatening the industry.
Do the the words, “Too many snouts in the trough” spring to mind?
From this morning’s Herald
Pig farmers in No.10 'crisis' rally
9:11am today
Pig farmers are heading for Downing Street to highlight what they say is a crisis threatening the industry.
Do the the words, “Too many snouts in the trough” spring to mind?
Posted by: turpie, clydesdale on 10:08am Tue 4 Mar 08
I am no economist but I watch Alistair Darling's financial antics with amazement. I suspect he learned his trade at Gordon's Knee. I remember Gordon for doing two clever things...he carried forward Kenneth Clarke's financial plan ...and was hailed as a"Brilliant Chancellor" in consequence....and I remember too that he passed on his power to decide the Interest Rate to the Bank of England . I feel too strongly about his financial support for the war in Iraq and so I make no comment here. But I remember him best for persisting with PFP. or PPP or whatever is the fashionable term for the Blair/Brown policies which made the City men very happy and let them make mind-boggling amounts of money leaving the next generation to keep paying and keep paying and keep paying for schools and hospitals, sometimes of dubious quality,(see Eye passsim.) which they will never own. And all for the sake of being able to say "Look at the wonderful schools and hospitals Labour has built for you!" I have heard such antics described as smoke and mirrors, creative accounting etc. but this latest Northern Rock ploy takes the biscuit. Mr. Darling sets an arbitrary figure of 40% and by a sorry blunder reaches 45%. and he solves the problem by taking said problem Northern Rock off the books. That great philosopher, Marx,(Groucho) is supposed to have said "These are my principles, if you don't like them, I have others."
Bring back Kenneth Clark.
I am no economist but I watch Alistair Darling's financial antics with amazement. I suspect he learned his trade at Gordon's Knee. I remember Gordon for doing two clever things...he carried forward Kenneth Clarke's financial plan ...and was hailed as a"Brilliant Chancellor" in consequence....and I remember too that he passed on his power to decide the Interest Rate to the Bank of England . I feel too strongly about his financial support for the war in Iraq and so I make no comment here. But I remember him best for persisting with PFP. or PPP or whatever is the fashionable term for the Blair/Brown policies which made the City men very happy and let them make mind-boggling amounts of money leaving the next generation to keep paying and keep paying and keep paying for schools and hospitals, sometimes of dubious quality,(see Eye passsim.) which they will never own. And all for the sake of being able to say "Look at the wonderful schools and hospitals Labour has built for you!" I have heard such antics described as smoke and mirrors, creative accounting etc. but this latest Northern Rock ploy takes the biscuit. Mr. Darling sets an arbitrary figure of 40% and by a sorry blunder reaches 45%. and he solves the problem by taking said problem Northern Rock off the books. That great philosopher, Marx,(Groucho) is supposed to have said "These are my principles, if you don't like them, I have others."
Bring back Kenneth Clark.
Posted by: dws on 12:35pm Tue 4 Mar 08
[quote]Tory HQ last night branded "outrageous" the prospect of Alistair Darling announcing that he is to keep the £110bn Northern Rock debt off the government balance sheet to protect one of the Chancellor's two golden rules.[/quote]
Aye, just leave it off the balance sheet. The great unwashed won't notice.
Will they ever bloody learn?
Tory HQ last night branded "outrageous" the prospect of Alistair Darling announcing that he is to keep the £110bn Northern Rock debt off the government balance sheet to protect one of the Chancellor's two golden rules.
Aye, just leave it off the balance sheet. The great unwashed won't notice.
Will they ever bloody learn?
Posted by: JABRE, FEARN on 1:08pm Tue 4 Mar 08
ROLL ON THE GENERAL ELECTION TO GET RID OF THIS ROTTEN BUNCH OF CHARLATANS
ROLL ON THE GENERAL ELECTION TO GET RID OF THIS ROTTEN BUNCH OF CHARLATANS
Posted by: Carlung, Haddington on 1:15pm Tue 4 Mar 08
What is astonishing about the Northern Wreck affair is that it is now the safest bank in Britain!
They are guaranteeing all deposit no matter how large., and their saving rate is the highest at 6.49%.
All other UK banks have a maximum of £35.000 guarantee and you will be lucky to get above a 5.5% rate.
Mickey Mouse economics or what?
What is astonishing about the Northern Wreck affair is that it is now the safest bank in Britain!
They are guaranteeing all deposit no matter how large., and their saving rate is the highest at 6.49%.
All other UK banks have a maximum of £35.000 guarantee and you will be lucky to get above a 5.5% rate.
Mickey Mouse economics or what?
Posted by: Observer, Glasgow on 1:55pm Tue 4 Mar 08
Is this legal ? Can we all do it ? Do we have a Darling defence now to add to the Wendy and the Charlie ? Did he unintentionally bail Northern Rock out with our money and that's why he doesn't have to declare it ? This is nonsense.
Is this legal ? Can we all do it ? Do we have a Darling defence now to add to the Wendy and the Charlie ? Did he unintentionally bail Northern Rock out with our money and that's why he doesn't have to declare it ? This is nonsense.
Posted by: dws on 2:07pm Tue 4 Mar 08
[quote][bold]Observer[/bold] wrote:
Is this legal ? Can we all do it ? Do we have a Darling defence now to add to the Wendy and the Charlie ? Did he unintentionally bail Northern Rock out with our money and that's why he doesn't have to declare it ? This is nonsense. [/quote] Nah, it's Labour up to their old tricks a La Brown. If the figures don't add up, massage them. If putting £100 plus billion in the red column makes your balance sheet look like it's on a shoogly peg, omit to put it in.
Meanwhile, look for a way to delay the inevitable so the other lot is in power when it all comes crashing down, and you're safe in the opposition benches with a queasy smirk on yer coupon.
Observer wrote:
Is this legal ? Can we all do it ? Do we have a Darling defence now to add to the Wendy and the Charlie ? Did he unintentionally bail Northern Rock out with our money and that's why he doesn't have to declare it ? This is nonsense.
Nah, it's Labour up to their old tricks a La Brown. If the figures don't add up, massage them. If putting £100 plus billion in the red column makes your balance sheet look like it's on a shoogly peg, omit to put it in.
Meanwhile, look for a way to delay the inevitable so the other lot is in power when it all comes crashing down, and you're safe in the opposition benches with a queasy smirk on yer coupon.
Posted by: Jwil, Lanarkshire on 2:37pm Tue 4 Mar 08
Its not a muddle or a fuddle, its a fiddle.
Its not a muddle or a fuddle, its a fiddle.
Posted by: Luigi, Aberdeen on 3:29pm Tue 4 Mar 08
Yes, it is one gigantic fiddle. The sad thing is that hardly anyone in the country will be very surprised at this. And they wonder why so many people despise politicians.
Yes, it is one gigantic fiddle. The sad thing is that hardly anyone in the country will be very surprised at this. And they wonder why so many people despise politicians.
Posted by: ChrisCook, Linlithgow on 4:10pm Tue 4 Mar 08
It IS a fiddle, but not quite the one you all seem to think.
Firstly, the government is currently making in excess of £30m A WEEK out of Northern Rock. They do so simply because the credit the Bank of England has created and loaned costs the same as that used for bank notes.
ie zero.
The Bank of England is paying nothing in respect of counterbalancing bank deposits ("reserves") and the result is what is known as "Seignorage" income to the taxpayer, throughthe Bank of England.
As for £100 billion of "tax payers money" lost, that is absolute nonsense.
The first in line for losses - which can themselves only occur following defaults and THEN only to the extent there may be "negative equity" - is the £4bn of shareholder capital the government has "nationalised".
After that is the accumulating cushion of "seignorage" collected by the Bank on its lending to the Rock, which is totting up quite nicely, thank you.
The true workings of Central Banking is financial pornography you will not read in any decent newspaper.
So the the "Inconvenient Truth" (to coin a phrase) is that the money lent to Northern Rock has never been anywhere near a "taxpayer".
If you don't believe me, Tim Congdon set out the facts here a while ago in the FT
http://www.ft.com/cm
s/s/0/49352a46-88e6-
11dc-84c9-0000779fd2
ac.html
It is the banking system that is smoke and mirrors - tax payers are currently gaining at over £30m per week, and in fact stand to lose very little, unless the system melts down, in which case there will be plenty more where Northern Rock came from (and that is the reason why the legislation to nationalise Northern Rock gave a general, not specific, power to nationalise).
It IS a fiddle, but not quite the one you all seem to think.
Firstly, the government is currently making in excess of £30m A WEEK out of Northern Rock. They do so simply because the credit the Bank of England has created and loaned costs the same as that used for bank notes.
ie zero.
The Bank of England is paying nothing in respect of counterbalancing bank deposits ("reserves") and the result is what is known as "Seignorage" income to the taxpayer, throughthe Bank of England.
As for £100 billion of "tax payers money" lost, that is absolute nonsense.
The first in line for losses - which can themselves only occur following defaults and THEN only to the extent there may be "negative equity" - is the £4bn of shareholder capital the government has "nationalised".
After that is the accumulating cushion of "seignorage" collected by the Bank on its lending to the Rock, which is totting up quite nicely, thank you.
The true workings of Central Banking is financial pornography you will not read in any decent newspaper.
So the the "Inconvenient Truth" (to coin a phrase) is that the money lent to Northern Rock has never been anywhere near a "taxpayer".
If you don't believe me, Tim Congdon set out the facts here a while ago in the FT
http://www.ft.com/cm
s/s/0/49352a46-88e6-
11dc-84c9-0000779fd2
ac.html
It is the banking system that is smoke and mirrors - tax payers are currently gaining at over £30m per week, and in fact stand to lose very little, unless the system melts down, in which case there will be plenty more where Northern Rock came from (and that is the reason why the legislation to nationalise Northern Rock gave a general, not specific, power to nationalise).
Posted by: Luigi, Aberdeen on 4:19pm Tue 4 Mar 08
Chris,
Thanks for this - very informative. Pardon my ignorance though - I'm still confused - surely the money comes from somewhere (or do banks create cyber money in the same way they used to try and print their way out of crises?
At the end of the day - who are the losers?
Chris,
Thanks for this - very informative. Pardon my ignorance though - I'm still confused - surely the money comes from somewhere (or do banks create cyber money in the same way they used to try and print their way out of crises?
At the end of the day - who are the losers?
Posted by: dws on 5:02pm Tue 4 Mar 08
[quote]At the end of the day - who are the losers?[/quote]
One things for sure, it won't be the politicians, they've all been at the game too long.
At the end of the day - who are the losers?
One things for sure, it won't be the politicians, they've all been at the game too long.
Posted by: Jwil, Lanarkshire on 8:15pm Tue 4 Mar 08
It seems that this stratagem is on a par with setting up bogus companies as fronts for secret donations, and hidden waiting lists in the NHS, and calling donations 'loans' to avoid them being declared.
It seems that this stratagem is on a par with setting up bogus companies as fronts for secret donations, and hidden waiting lists in the NHS, and calling donations 'loans' to avoid them being declared.
