Getting the cancer out of the system

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Senator Carl Levin has issued the follwoing press release:

A new Government Accountability Office (GAO) report released today by U.S. Senators Byron Dorgan (D-ND) and Carl Levin (D-MI) shows that a majority of the largest publicly-traded companies and federal contractors in the United States use multiple subsidiaries in offshore tax havens to conduct business. Dorgan and Levin, who have focused on combating offshore tax abuses causing an estimated $100 billion in lost U.S. tax revenues each year, point out that many of these companies are paid with taxpayer dollars and some have also received billions of dollars in taxpayer bailout funds.

"This report shows that some of our country's largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government," said Senator Dorgan. "I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that."

Senator Levin said, "We need to put an end to the use of offshore secrecy jurisdictions as tax havens. We must get to the bottom of activities such as the following: Citigroup has set up 427 tax haven subsidiaries to conduct its business, including 91 in Luxembourg, 90 in the Cayman Islands, and 35 in the British Virgin Islands. Hundreds more tax haven subsidiaries operate under strict secrecy laws in places like Switzerland, Hong Kong, Panama, and Mauritius. But not all large U.S. companies are major tax haven users and there is great contrast between competitors. For example, Pepsi has 70 tax haven subsidiaries, while Coca Cola has 8; Morgan Stanley has 273, while Fannie Mae has 0; and Caterpillar has 49, while Deere has 3." Levin chairs the U.S. Permanent Subcommittee on Investigations which has made offshore tax abuse a major subject of its investigations.

Dorgan and Levin requested the GAO report to get detailed information on both U.S. corporations and federal contractors using tax havens. Using publicly-available data filed with the Securities and Exchange Commission, GAO determined that 83 of the 100 largest publicly-traded corporations and 63 of the 100 largest federal contractors maintain subsidiaries in 50 tax havens.

The report updates a similar GAO report performed for the Senators in 2004. A complete listing of the 100 largest publicly- traded companies and the 100 largest contractors and their tax haven information is available in the GAO report, including the number of tax havens for each company and their locations.

And we wonder why Citigroup is in a mess?

Or why Lehman failed (just check it out in the report)?

Or Why Morgan Stanley is a mess?

Just look at the numbers. There is no wonder to this. It is deliberate.

Now we just have to get the cancer out of the system.