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Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

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Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#51

Post by 001sky »

rgbrenner wrote: post #42
recursive wrote: post #29

Earlier quoted context omitted.

In order to be fraud, doesn't there need to be some form of misrepresentation or deceit?

They claimed to be importing fuel into the US that was actually produced in the US.

Each time the loaded train crossed the border the cargo earned its owner a certain amount of Renewable Identification Numbers (RINs), which were awarded by the US EPA to “promote and track production and importation of renewable fuels such as ethanol and biodiesel.” The RINs were supposed to be retired each time the shipment passed the border, but due to a glitch not all of them were. This enabled Bioversal to accumulate over 12 million RINs

edit:

The "glich" sounds to be with the EPA system. Its not clear if the problem is technical (like an ATM giving 40 for 20 requested withdrawl) or if the system did not differentiate between "crossing" and "production and importation", by design or specification. In any event, there's not much in the article that supports any forgery or false claim about the shipment's paperwork, etc. It was more that the EPA had no or poor controls. This latter case is a grey area between willful negligence (poor design of credit-issuance-proceedures) and potential fraud (unethical re-submission).

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#52

Post by ams6110 »

rndmize wrote: post #37
coopdog wrote: post #25

As much as I dislike the idea of new government departments, it sounds like they do need some kind of 'evil' department who's only job is to think up ways to abuse proposed new laws and regulations before they go into effect. Similar to how generals have the intelligence section of their staff put on only the enemy hat and poke holes in their plans.

I don't think you need a new department for that. Take the tax code. Who knows how to exploit the tax code the best? The accountants at the IRS. Have the IRS give an employee a bonus each time they find an exploit and write a report on how it works and recommendations on fixing it. It shouldn't be that different from the way major software vendors pay rewards for reported bugs/exploits. You could provide similar ince…

So "exploit" == legal way to keep MY money. Interesting.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#53

Post by jere »

aresant wrote: post #21

A fun sci-fi read would be about a futuristic government that "subsidizes" an Industry for much-debated, but ultimately politically driven reasons. Rather than simply making cash-handouts, however, the Government & the Industry conspire to hide these handouts by creating new by-products for sale to consumers. The Industry grows and rejoices, extending its products into as far ranging lines as sweeteners, fuels, and p…

CORN SUGAR by aresant

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#54

Post by anigbrowl »

ianstallings wrote: post #43
rayiner wrote: post #16

Earlier quoted context omitted.

Yes, let's blame the government for people abusing regulations. Except the regulations we like, of course. We'll call it "arbitrage" when we abuse regulations we don't like, and "fraud" when we abuse regulations we do like (like property).

They made a gigantic mistake and we shouldn't blame them? I disagree completely. They should be blamed for this asinine regulation yes. Because it really is their fault. Good intentions don't cut it when it comes to fiscal accountability.

What is the gigantic mistake here? Per the story: The RINs were supposed to be retired each time the shipment passed the border, but due to a glitch not all of them were. Really, we have no idea whether this glitch was legislative, administrative, or database-related.

Update from the CBC story linked downthread: Once "imported" to a company capable of generating RINs, ownership of the biodiesel was transferred to Bioversel's American partner company, Verdeo, and then exported back to Canada. RINs must be "retired" once the fuel is exported from the U.S., but Bioversel says Verdeo retired ethanol RINs, worth pennies, instead of the more valuable biodiesel RINs. Bioversel claims this was all perfectly legal.

So basically Verdeo was lying to the EPA by claiming it was exporting ethanol rather than biodiesel. I would not like to be the person trying to explain to a court why that should be considered legal.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#55

Post by bmuon »

This is a typical case of how incentives have a tendency to go wrong. I recommend you to listen to this Freakonomics Radio podcast which tells a series of stories about incentive failure, for example an indian town which started farming cobras when a ruler started giving out money for each cobra head after an infestation.

http://www.freakonomics.com/2012/10/11/the-cobra-effect-a-ne...

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#56

Post by anigbrowl »

001sky wrote: post #51
rgbrenner wrote: post #42

Earlier quoted context omitted.

They claimed to be importing fuel into the US that was actually produced in the US.

Each time the loaded train crossed the border the cargo earned its owner a certain amount of Renewable Identification Numbers (RINs), which were awarded by the US EPA to “promote and track production and importation of renewable fuels such as ethanol and biodiesel.” The RINs were supposed to be retired each time the shipment passed the border, but due to a glitch not all of them were. This enabled Bioversal to accumu…

Just because you fail to lock your door does not authorize a burglar to come into your house and help himself to your stuff. You don't get to beg off responsibility by claiming the injured party made it too easy for you to help yourself.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#57

Post by mtgx »

coopdog wrote: post #25

As much as I dislike the idea of new government departments, it sounds like they do need some kind of 'evil' department who's only job is to think up ways to abuse proposed new laws and regulations before they go into effect. Similar to how generals have the intelligence section of their staff put on only the enemy hat and poke holes in their plans.

Or how cryptographers use threat models (from what I've seen).

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#58

Post by mtgx »

ams6110 wrote: post #52
rndmize wrote: post #37

Earlier quoted context omitted.

I don't think you need a new department for that. Take the tax code. Who knows how to exploit the tax code the best? The accountants at the IRS. Have the IRS give an employee a bonus each time they find an exploit and write a report on how it works and recommendations on fixing it. It shouldn't be that different from the way major software vendors pay rewards for reported bugs/exploits. You could provide similar ince…

So "exploit" == legal way to keep MY money. Interesting.

Sure, you can see it that way, but that also means that you consider all taxes to be taking your money - i.e. taxes are illegitimate. Otherwise, if you think taxes have their purpose, then everyone should play by the same rules, and not try to "cheat the system".

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#59

Post by CaveTech »

ams6110 wrote: post #52
rndmize wrote: post #37

Earlier quoted context omitted.

I don't think you need a new department for that. Take the tax code. Who knows how to exploit the tax code the best? The accountants at the IRS. Have the IRS give an employee a bonus each time they find an exploit and write a report on how it works and recommendations on fixing it. It shouldn't be that different from the way major software vendors pay rewards for reported bugs/exploits. You could provide similar ince…

So "exploit" == legal way to keep MY money. Interesting.

Exploit because it's based on a loophole. Lots of things are legally excusable because they are worded poorly or too vaguely, but it's usually easy to see the /intention/ of such wording. Taking advantage of the difference between the intention and the defined is most certainly an exploit by definition.
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