Employes of the embassies, foreign missions and the U.N. and such carry special cards which exempt them from the payment of all U.S. taxes such as DC sales, Federal amusement tax, etc. They are, of course, exempt from income tax, too.
It’s a racket in Washington to borrow a friend’s card when making any expensive purchase like a mink coat, where the sales and luxury tax swindle comes to 22 per cent by this means.
A racket begun in UNRRA and now going on in other foreign aid organizations is engaged in by top administration figures and important diplomats:
Most of the durable goods aid sent abroad goes with the proviso that it must be resold in the currency of the country to which it is consigned, and the money must be used to provide local home relief, such as food, clothes, etc.
So the way it works is this: The embassy wangles a shipment of, shall we say, locomotives. They arrive in the country of destination. They are then duly and dutifully resold in the currency of the country. But the law doesn’t say for how much.
Some locomotives were sold in Greece for 10 drachmas each. The drachma runs about 1,000 to the dollar. The local poor get the ten drachmas. The local political bosses, gangsters and crooked diplomats split the resale profits with their opposite numbers in America.
That’s big racketeering. A couple of Washington sisters have a petty, but profitable one. They operate a so-called Embassy social list and charge chumps to get on it, dangling invites to diplomatic balls as the bait, which they obtain from legation employes for a “cut.”
Some fall for it. Our confidential advice is, don’t pay. You can crash almost any Embassy party—but who wants to?