Corporations Using Offshore Tax Dodges Are Deserting America In A Time Of Trouble, Says The Bermuda Project

Republican Leadership in House of Representatives
 Blocks Legislation from Moving Forward

Washington, DC -- At a time of soaring budget deficits, proposed cuts in veterans' benefits, and with the war in Iraq costing $75 billion and counting, corporations such as Halliburton, Tyco and Accenture, along with wealthy individuals, are costing the nation over $70 billion a year through offshore tax dodges, reported leaders of the new Bermuda Project while announcing the launch of a campaign to crack down on such practices.

"These companies enjoy America's many freedoms but don't want to pay their fair share to support schools, law enforcement, and homeland security. They desert the country for Bermuda’s beaches, even as our young men and women are putting their lives on the line in Iraq's deserts," said author, syndicated columnist, and co-founder of The Bermuda Project, Arianna Huffington. "They are cheating America, and they are cheating every American taxpayer who plays by the rules."

"Across America, teachers, firefighters police officers, and others are feeling the squeeze," said Robert L. Borosage, co-director of the Institute for America's Future and co-founder of The Bermuda Project. At the same time, Republican leaders in Congress are blocking a vote on legislation that could recover billions of dollars a year from expatriate tax dodgers. Something is profoundly wrong with this picture."

A new ad campaign launched by The Bermuda Project graphically contrasts the corporate behavior with the sacrifices young men and women are making at a time of war. The ad features images of soldiers in Iraq juxtaposed with paunchy CEOs in three-piece suits at a tropical resort. The voice-over intones:
"In the sands of Iraq, our soldiers risk their lives for our country. At the same time, big corporations are abandoning our country and setting up phony tax shelters in the sands of Bermuda."

The new television advertisement will run in several markets, including Washington, DC, and the home districts of House Majority Leader Tom Delay (R-TX) and Speaker Dennis Hastert (R-IL). Delay and Hastert are refusing to allow a vote on legislation -- the Corporate Patriot Enforcement Act -- that would crack down on these shelters and that would pass overwhelmingly if allowed to come to the floor.

The Bermuda Project highlighted Halliburton as an example of shameless corporate behavior.

"While Vice President Cheney was at the helm of Halliburton, Halliburton hiked the number of subsidiaries sheltered in offshore tax havens from 9 in 1995 to 44 in 1999," reported Huffington, whose book Pigs at the Trough documents such corporate behavior. "Halliburton went from paying taxes to collecting rebates from the public trough. Yet Halliburton continues to receive government contracts, including a 10-year deal with the Army that comes with no lid on potential costs. It was also awarded -- without competitive bidding -- a contract to fight oil fires in post-war Iraq that could be worth up to $1 billion. This corporate expatriate bilks and milks the American people at the same time. Such selfish cynicism not only offends hardworking Americans about to pay their taxes, it contrasts sharply with those young American soldiers making the ultimate sacrifice in Iraq."

The Bermuda Project plans an extensive campaign, including the on-line mobilization of citizens by MoveOn.org, the network of more than 1.3 million online activists, and Working Assets, another of the nation's most powerful on-line activist groups with over 700,000 members. MoveOn.org and Working Assets will use on-line petitions and organizing to enable outraged Americans to let the corporations and the Congress know what they think about this practice.

"Congress isn't just allowing this corporate betrayal to happen, it is aiding and abetting it," said Zack Exley of MoveOn.org. If we all agree that this kind of corporate desertion is un-American, then why are Republican leaders like Speaker Dennis Hastert and Majority Leader Tom Delay blocking efforts to crack down on it?"

Legislation to close some of the corporate loopholes has been introduced by Senator Harry Reid (D-NV) and Rep. Richard Neal (D-MA). Congressman Neal has introduced the Corporate Patriot Enforcement Act, HR 737 with over 125 bipartisan co-sponsors in the House to outlaw the practice of American businesses reincorporating in tax havens overseas to avoid their responsibility to this country. Similar legislation was introduced by Senator Reid last year.

The Bermuda Project is a joint project of The Institute for America's Future, MoveOn.org, Arianna Huffington and Working Assets.

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