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                        Viacom Transcript








































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                                                The Federal Zone:


Reader's Notes:























































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                                                       Appendix E


                                
                                
                                
                                
                                
                     "Federal Income Taxes,
                                
                           The IRS and
                                
                      The Federal Reserve"
                                
                                
                                
                                
                                
                                
                                
                                
                                
                               by
                                
                                
                                
                                
                                
                                
                                
                                
                    Mitch Modeleski, Founder
                 Account for Better Citizenship
                    c/o Post Office Box 6189
                 San Rafael, California Republic
                   Postal Zone 94903-0189/TDC
                                
                                
                                
                                
                                
                                
                  A Transcript of the Videotape
                Pre-Recorded on December 10, 1991
                 in the Professional Studios of:
                                
                       Viacom Cablevision
                       1111 Andersen Drive
                 San Rafael, California Republic
                      Postal Zone 94901/TDC









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Hello, ladies and gentlemen.

My name is Mitch Modeleski.

I am the founder of the Account for Better Citizenship.

For the  next 30  minutes, I will be talking to you about federal
income taxes, the IRS, and the federal reserve system.

If you  have a  VCR, you  might want  to insert  a blank tape and
record the  next half-hour.   You  are going  to hear some things
that you might want to hear again, or to replay later on for your
family, friends, and neighbors.

If you  don't have a VCR, at the end of this program we will tell
you how to obtain a transcript of this program.

Let me  first introduce  myself.  Before founding the Account for
Better Citizenship,  I studied to be a Catholic priest for almost
6 years.

I have a Bachelor's degree from UCLA in Political Science.

I have  a Master's  degree  in  public  administration  from  the
University of California at Irvine.

I have  also completed 5 of the required 7 courses for a Master's
degree in  the Program  in Social Ecology, also at the University
of California at Irvine.

I have  more than  20 years  of professional experience in public
policy, environmental planning, and computer systems development.

Now, before you get the wrong idea, I want you to understand that
I have always had to work for a living.

When I graduated from college, I was over $6,000 in debt to banks
for student loans and other financial aid.

I have always paid the taxes I owed.  I have obeyed the law.  And
I have never been arrested.

During those  20 years  of experience,  I came  to  tolerate  the
normal shenanigans I witnessed in American politics ...

... until  June of  1990, when I was presented with real material
evidence that  the 16th  Amendment to  the U.S.  Constitution was
never ratified.

You may  already know  that the  16th Amendment  is the so-called
"income tax" amendment.





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                                                       Appendix E


I  investigated   and  found  that  some  17,000  State-certified
documents have been assembled to prove that the 16th Amendment is
really a fraud.

The U.S.  Secretary of  State in the year 1913, a man by the name
of Philander  Knox, simply "declared" it ratified, in the face of
serious problems  which he  knew existed with the ratification in
several of the States.

You should  know that  it takes three-fourths (3/4) of the States
to ratify an amendment to the Constitution for the United States.

Let me  give you  just a few examples of the obstacles which this
amendment encountered in some of the States.

In the  State of  Illinois, a  State court  ruled that  "it never
became a  law, and  was as  much a  nullity as if it had been the
act,  or   declaration,  of   an   unauthorized   assemblage   of
individuals."

In the  State of  Arkansas,  the  Governor  vetoed  the  proposed
amendment and the State Legislature never overrode his veto.  You
should know  that  the  Arkansas  Constitution  does  not  exempt
amendments from requiring a Governor's signature.

In Kentucky, the Senate Journal contains a clear statement that 9
Kentucky Senators  voted FOR  the amendment, and 22 voted AGAINST
the amendment.   And  yet, Philander Knox declared that the State
of Kentucky ratified the 16th Amendment.

This is  obviously a serious matter, because we now have evidence
that one  or more  federal officials  have actually tampered with
the supreme law of the land, contrary to their own sworn oaths of
office.

The year was 19131, an ominous year in the history of America.

In that same year, the Federal Reserve was established.

Look in  your wallet for a moment, and pull out a Federal Reserve
Note.  Already, you have a big problem in your hands.

First of  all, the  Federal Reserve  is not  "federal".  It is no
more federal  than Federal Express, or Federated Hardware Stores.
There is  no government  copyright or trademark on using the word
"federal".

Secondly, there  is no  "reserve".   If we  have  time,  we  will
explain what is meant by "fractional reserve banking".


____________________
1.   On the  pre-recorded video  tape,  Mr.  Modeleski  erred  by
     stating that the year was 1916.  The correct year was 1913.


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Thirdly, Federal  Reserve Notes  are not  real promissory  notes,
because they  do not  promise to  pay  anything,  like  gold,  or
silver, or any real substance.

The Federal  Reserve System  was conceived  by  a  conspiracy  of
bankers and politicians who met secretly off the coast of Georgia
to create the Federal Reserve Act.

This Act of Congress was designed to remove the Constitution as a
constraint on the financial operations of the U.S. government.

It created  a private  credit monopoly which Congressman Louis T.
McFadden once  called "one  of the  most corrupt institutions the
world has  ever known".  Congressman McFadden was Chairman of the
House Banking and Currency Committee from 1920 to 1933.

The  operations  of  the  Federal  Reserve  are  complicated  and
secretive.  For example, this huge syndicate of private banks has
never been publicly audited.

I will  do my  best to  simplify the  operations of  the  Federal
Reserve for you.

The Federal  Reserve System  is set  up to  encourage Congress to
spend money it doesn't have  --  lots of it.

Rather than  honestly taxing Americans for all the money it wants
to spend,  Congress runs  up a  huge deficit  which it  covers by
printing ink on paper and calling it bonds, or Treasury Bills.

Some of  these T-bills  are purchased  by hard-working  Americans
like you  and me,  with money  that we  obtained from real labor,
something that has real value.

But the  deficits have  become so  huge, the  wage earners do not
have enough money to purchase all these bonds every year.

So, Congress  walks across  the street, and offers these bonds to
the Federal Reserve.  The FED says, "Sure, we'll buy those bonds.
Your interest  rate is  8.25, or  9 and a half.  Take it or leave
it."

Congress always  takes it,  because there's nobody else with that
kind of money.  Remember, the Federal Reserve is a private credit
MONOPOLY.

Now, what does the FED use to purchase those bonds?

They CREATE  money OUT  OF THIN AIR, using bookkeeping entries to
manufacture credit out of nothing.  They used to use pen and ink,
then typewriters, now computers do the job.





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                                                       Appendix E


This artificial money would normally create very rapid inflation.
This happened  in Germany  just prior to World War II, when Louis
McFadden was  a Congressman.   It  eventually took a wheel barrow
full of Deutsche marks to buy one loaf of bread.  Can you imagine
that?

The bankers realized that a mechanism was needed to withdraw this
artificial money out of circulation as quickly as it was put into
circulation.

Enter the Internal Revenue Service.

The IRS is really a collection agency for the Federal Reserve.

The FED pumps money into the economy, and the IRS sucks it out of
the economy.

This has  the effect  of artificially  maintaining the purchasing
power of this "fiat money", as it is called by monetary experts.

This is one of the PRIMARY PURPOSES of the income tax.

We know  this to  be true,  because a  man named  Beardsley  Ruml
explained it clearly in an essay he published in 1946.  Beardsley
Ruml was  chairman of the Federal Reserve Bank of New York, so he
was in a position to know.

The shocking fact is that Federal income taxes do not pay for any
government services;   they are used to make interest payments on
the federal debt.  These interest payments are now approaching 40
percent of the federal budget.

Now,  the  Federal  Reserve  Act  is  unconstitutional  for  many
reasons, foremost  among which  is that  Congress delegated  to a
private corporation a power which Congress never had, that is, to
counterfeit money.

It is  unlawful for  Congress to  exercise a  power which  is not
authorized to it by the Constitution.  The People (you and I) and
the States  reserve ALL  powers not  expressly delegated  to  the
federal government.

Congress got  hooked on this sweetheart deal and started spending
money so fast, it quickly bankrupted the Federal Government.

This may also come as a shock to many of you.  And you might feel
that what we are about to say is paranoid or crazy.  We felt this
way too when we first discovered it.  We couldn't believe it.  So
we investigated.

Our research discovered that the bankers foreclosed on the United
States Treasury  no later  than the  year 1933.   They called the
loans and  confiscated  all  the  gold  then  held  by  the  U.S.
Treasury.


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An Act  of Congress caused all that gold to be transferred to the
Federal Reserve  banks.   Remember, those are private banks.  And
the Treasury Department is NOT the U.S. Treasury Department.

To secure  the rest  of their  debt,  Congress  then  liened,  in
effect, on  the future  property and earnings of all the American
people, through Social Security taxes, payroll withholding taxes,
inheritance taxes, and the like.

Congress mortgaged  the American  people, using our labor and our
property as collateral.

What Congress  did was  analogous to  this:   I walk into a large
department store  and see a new toaster I want.  I tell the sales
person to  ship it  to my  home tomorrow, and to send the bill to
Willie Brown.

Now, when Willie Brown gets the bill for this toaster, he's going
to be  pretty mad,  and rightly so.  He didn't order the toaster;
he doesn't own the toaster; he wasn't a party to the transaction.
In fact,  he didn't  even know  about it.   And yet, I am holding
him responsible to pay for the toaster.

In this  example, I  am Congress;   the  department store  is the
Federal Reserve;    and  Willie  Brown  represents  the  American
people.

This is  fraud,  because  Congress  did  not  openly  and  freely
disclose the real reasons for its actions.

Lack of  full disclosure  is grounds  for fraud  in any contract.
The Uniform Commercial Code says so.

And yet,  all Americans  are being  unlawfully enslaved  by  this
fraud, to  help discharge  the debt  which Congress  has tried to
impose upon all of us.


Now, at  this point, we will show you how to contact us to obtain
more information  about this fraud.  If you're not recording this
program, get a pencil and write down our mailing address:


                 Account for Better Citizenship
                    c/o Post Office Box 6189
                 San Rafael, California Republic



If you  will send  us a stamped, self-addressed envelope, we will
be happy  to send  you a  free reading  list, and  also a list of
organizations which  you can  contact to  obtain more information
and to get yourself more involved.


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                                                       Appendix E



We will  also send  you a  list of  other documents which you can
purchase directly from us.

For example, we have already filed several formal complaints with
the Congress  of the  United States concerning the 16th Amendment
fraud.   These complaints  include a  request for  a  Grand  Jury
Investigation right here in Marin County.

Another document  is a  formal letter to all the Governors of the
50 States,  putting  them  on  notice  of  the  great  fraud  and
deception under  which the  American people  now  suffer.    This
letter includes  a series of attachments which fully document the
fraud and deception.


Now, I  want to  talk a  little bit  about the  law  itself,  the
Internal Revenue Code, and the IRS administration of that law.

The law  and its  administration  are  two  completely  different
things.

Under the  Constitution, federal direct taxes on private property
must  be   apportioned.     Your  wages   are  private  property.
Apportionment means  that California pays 10 percent of the bill,
if California has 10 percent of the nation's population.  This is
one of the reasons why we have a census every decade.

In its  administration of  the internal  revenue laws, the IRS is
now imposing  income taxes as direct taxes without apportionment,
and cites  the 16th  Amendment for its authority to do so.  Well,
you now know that the 16th Amendment never happened.

Another big problem is the legal definition of "income".  Believe
it or  not, the  term "income"  is not  defined anywhere  in  the
Internal Revenue  Code.  All by itself, this renders the law null
and void for vagueness.

On numerous occasions, the U.S. Supreme Court has already decided
that "income" means profit or gain, and wages are not income.  In
one of the most famous of cases to decide this question, the case
of Eisner versus Macomber, the Supreme Court said:


     ... it  is essential to distinguish between what is and what
     is not  income, and  to apply  that distinction according to
     truth and substance, without regard to form.


And, in  what must  have been  one of its finest hours, that same
Court also said:





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     Congress cannot  by any definition it may adopt conclude the
     matter [of  defining income], since it cannot by legislation
     alter the  Constitution, from  which alone  it  derives  its
     power to  legislate, and within whose limitations alone that
     power can be lawfully exercised.


Now, the  law  is  something  entirely  different  from  the  IRS
administration of  that law.   In  order to  understand  the  law
itself, we  have consulted  with legal  investigators, attorneys,
professors, and paralegals.  With their expert help, we have come
to conclude the following:

The citizens  and residents  of the United States are required to
pay income  taxes.  But what is meant by the term "United States"
in the Internal Revenue Code?

Well, this  term has  three different  meanings, depending on the
context.   First, it  may mean  the name  of a  sovereign  nation
occupying the  position of  other sovereigns  in  the  family  of
nations.

Secondly, it may mean the collective name for the 50 States which
are united by and under the Constitution.

Thirdly, it  can also  mean the  territory over which the federal
government has  exclusive jurisdiction.   This territory includes
only the  District of  Columbia, and  the limited territories and
possessions which  belong to  the Congress  of the United States.
These are places like Guam, Midway, and the Virgin Islands;  they
do NOT include the 50 States of the Union.  Congress does not own
California, for example.

When the  law states  that citizens  and residents  of the United
States are  required to  pay income  taxes, the  law is using the
term "United States" in this third sense.

The law  says that  if you're not a "United States citizen", then
you're an  "alien".   Also, the  law says  that if  you're not  a
"resident of the United States", then you're a non-resident.

Accordingly, most  American Citizens,  born free in one of the 50
States, living and working in one of the 50 States, are therefore
NONRESIDENT ALIENS according to the Internal Revenue Code.

I know  it sounds  strange, but  the  law  is  not  referring  to
creatures from  outer  space.    The  law  is  referring  to  the
creations of  lawyers.   You are  "alien"  with  respect  to  the
federal government's areas of exclusive jurisdiction, if you were
born outside those areas.






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                                                       Appendix E


You are a "citizen" of the federal government if you were born in
the District  of Columbia or in one of these limited other areas,
or if  you elected  to become a "citizen" through a process known
as naturalization.

There are  only 2 reasons why NONRESIDENT ALIENS must pay federal
income taxes:


     (1)  They either  have income  that is effectively connected
          with a  trade or  business  inside  the  United  States
          (using the  third, limited  definition  of  the  United
          States), and/or

     (2)  They have income from a source inside the United States
          (again, using this third, limited definition).


Aside from  these exceptions,  nonresident aliens pay no taxes on
their earnings.

So, talk  with your  CPA or  tax attorney, and be sure to clarify
your status.   You  may want  to consider  filing IRS Form 1040NR
next April  15.  If you have no income which falls into these two
categories, then you can put ZERO on line 23, the income total.

Be careful  about attaching  any W-2 or 1099 forms.  Section 6065
of the  Internal Revenue  Code requires  that such  documents  be
certified.  If they are not certified, they are not valid.

Now, if  you have  ever filed one or more 1040 forms in the past,
the government  is entitled  to presume that you are a person who
is required to file a return and to pay federal income taxes.

This is  called the "law of presumption", and your 1040 forms can
be used  as evidence  to prove that you are required to pay, even
when you  are not.   So, you may need to reverse this presumption
on their part, to prevent this from happening.

Thus, you  should consider setting the record straight by sending
a formal  AFFIDAVIT to  the Secretary of the Treasury, which will
clarify your actual status and leave no doubt about their lack of
jurisdiction over you.

On the  list of  organizations we  will send  to you,  there  are
several groups around the country who can assist you in preparing
and executing this affidavit.

Enough of these details for now.

To summarize,  chances are,  you have  been volunteering  federal
income taxes  in  the  past,  and  there  is  actually  no  legal
requirement for you to continue doing so in the future.



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If you  would like  me to  speak with your CPA or tax attorney, I
will be happy to share the results of our research with them.

In  the   meantime,  get   yourself  involved,   and  study   the
Constitution.  Find out how interesting and exciting it can be.

You have  often heard  that we  get the  government  we  deserve.
Let's do  everything we  can to  deserve the very best government
that any nation has ever had.

I say  these things  because I  hold these  truths  to  be  self-
evident:

That all of us are created equal;

That we  are endowed  by our  Creator  with  certain  unalienable
rights;

That among  these, are  the rights  to  life,  liberty,  and  the
pursuit of happiness;

That, to  secure these  rights, governments  are instituted among
us, deriving their just powers from our consent;

And that,  whenever any form of government becomes destructive of
these ends,  it is  our right  to alter  or abolish  it,  and  to
institute  a  new  government,  laying  its  foundation  on  such
principles, and  organizing its  powers in  such form,  as to  us
shall seem most likely to effect our safety and our happiness.

And to  this end,  I dedicate  my life, my fortune, and my sacred
honor.

Thank you very much.


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