As the war on terror shows troubling signs of becoming a war of error, the
Bush administration is waging a far more successful war on behalf of its corporate
backers. The latest victory comes courtesy of Congress' 11th hour reversal of
a provision in the Homeland Security Bill banning government contracts for companies
that move offshore to avoid paying U.S. taxes.
This vote, shamelessly draped in the American flag, is so hypocritical, so
despicable, and such an unmitigated "screw you" to every American taxpayer that
it has sent me scrambling in search of a barricade to storm.
The sleazy backroom maneuvering that yielded this year-end dividend for expat
corporations offers a perfect -- and perfectly nauseating -- case study in how
Washington works. The same leaders who never miss a chance to be seen tearfully
singing "God Bless America" with their hands over their disloyal hearts have allowed
profits to trump patriotism, even in a time of war.
Earlier this year, with the stink of Enron, Global Crossing, and WorldCom
filling the air, the House and Senate, after sensing -- and exhaustively polling
-- the public mood, voted overwhelmingly to keep corporate expatriates from milking
and bilking the government at the same time. It was a political no-brainer. A
red, white and blue slam-dunk. After all, the sooner the issue was stamped "taken
care of," the sooner those bothersome questions about Dick Cheney's serial use
of offshore shelters while running Halliburton would fade away.
And with the dogs of war in full cry, no politicians in their right mind dared
come out in favor of allowing tax dodgers to stick their hands in Uncle Sam's
pockets. Out on the campaign trail, even the most corporate-friendly campaigners
made it clear that they stood foursquare against such unpatriotic behavior.
"We ought to look at people who are trying to avoid U.S. taxes as a problem,"
roared President Bush. "I think American companies ought to pay taxes and be good
citizens." Trent Lott was equally exercised. "It agitates me that companies will
be doing that," he fumed. Cue "God Bless America."
Then Election Day came and went, and lots and lots of big corporate checks
were cashed. It was payback time. And a bipartisan who's who of power lobbyists
-- including former Senate Majority Leader Bob Dole, former House Ways and Means
chairman Bill Archer, former House Appropriations chair Bob Livingston, and former
Senate Intelligence chairman Dennis DeConcini -- made sure that the expat companies'
government gravy train was kept running, "Mussolini-style," right on schedule.
With the public's attention diverted elsewhere -- namely Iraq, and J-Lo and
Ben's engagement -- the tax haven crowd found a much more receptive audience in
Washington. Operating behind closed doors, and with next to no public debate,
the lame duck Congress made an abrupt U-Turn and sliced-and-diced the no-contracts-for-tax-cheats
rule. And without blinking an eye, the president happily signed the bill into
That barely muffled cheer you might have heard came from the Caribbean-based
corporate offices of companies such as scandal-ridden Tyco, Arthur Andersen progeny
Accenture, and Ingersoll-Rand, a corporate chicken that, in a show of national
mourning and solidarity, flew the coop a mere three months after the Sept. 11th
attacks. All have avoided paying tens of millions in taxes by reincorporating
offshore while pocketing tens of millions in federal contracts. And now, thanks
to their good friends in Congress, they'll continue to do so. Not only do they
not have to help pay for homeland security, but they're helping themselves to
the spoils of the Homeland Security Act.
Time and again since 9/11, the president has stressed that patriotism entails
more than waving the flag or reciting the Pledge of Allegiance. "Patriotism,"
he said this summer, "is proven in our concern for others -- a willingness to
sacrifice for people we may never have met." I guess the tax exiles and their
heavy-hitting lobbyists didn't get the "sacrifice" memo.
The IRS estimates that corporate émigrés are depriving the U.S. Treasury of
around $70 billion a year. Twenty years ago, one out of every six federal tax
dollars was generated by a corporation. That has now fallen to about one out of
every ten. Meanwhile, the rest of us are being asked to shovel our dollars into
the crater left by Bush's tax policies. Maybe that is what the president had in
mind when he talked about sacrificing "for people we may never have met": digging
a little deeper so corporate execs basking in the sun-dappled glow of tax-free
profits won't have to.
It's bad enough that companies that enjoy all the benefits and protections
of operating under the American system are allowed to avoid paying their fair
share -- especially when we are told, again and again, that we are at war. But
allowing those same companies to suckle at the taxpayer teat -- in the name of
keeping our homeland more secure, no less! -- is nothing less than scandalous.
Our leaders should be ashamed -- and make overturning this dreadful decision
the first order of business when the 108th Congress convenes in January. But I
won't be shocked if they don't.
Copyright © 1998-2002 Christabella, Inc.