Molly Ivins

Bermuda Buddies


OK, Republicans, justify this. I want to hear why your leadership went against the will of 318 members to grant an unconscionable gift to corporations that set up offshore tax shelters to avoid paying their U.S. taxes. Come on, Rush, I really want to hear this one–and do, please, include the word “patriotism.”

According to Citizens for Tax Justice, the offshore tax-shelter dodge costs this country as much as $50 billion annually.

The House leadership–that would be your speaker, Dennis Hastert, and your majority leader, Dick Armey–going against the will of both the House and the Senate, took out the “Wellstone Amendment,” sponsored by the late populist senator. This amendment would not have shut down the loophole–though Lord knows that needs to be done. But it would have prevented runaway companies, those that set up mailboxes in Bermuda in order to avoid paying their taxes, from getting government contracts related to homeland security. They replaced it with a toothless provision.

The polite term for these corporate tax-dodgers is “corporate inversion” or “corporate expatriates,” but they are tax cheats, pure and simple. They don’t move anywhere, they just get a shell address so they won’t have to pay their share of the taxes. And now we’re going to reward these tax cheats with government contracts.

Here’s Rep. Richard Neal of Massachusetts on how it works: “Let’s take Tyco, formerly of New Hampshire, now of Bermuda, for example. Tyco avoids paying $400 million a year in U.S. taxes by setting up a shell headquarters offshore, but it was awarded $182 million in lucrative defense and homeland security-related contracts in 2001 alone. If Tyco had just paid its tax bill, Congress could easily have paid for 400 explosive detection systems (EDS), which are badly needed to protect U.S. travelers at airports around the nation.

“Or let’s examine corporate expatriate Ingersoll-Rand, formerly of New Jersey, and now also in Bermuda. Ingersoll-Rand earned as much last year in U.S. defense and homeland security federal contracts as it avoids in U.S. taxes annually merely by renting a mailbox in Bermuda and calling it ‘home.’ If Ingersoll-Rand paid its U.S. tax bill, Congress could easily afford to fund the Cyberspace Warning Intelligence Network, estimated to cost $30 million, or it could also buy 400,000 gas masks for American citizens.”

If this is what Republicans want to stand for, fine with me. Their leadership has thwarted all efforts to have a debate and vote on a separate bill, the Corporate Patriot Enforcement Act, a bipartisan bill to deny benefits to corporations that flee to tax havens. In Texas, the home of the blunt, we call legislators who sell out the people in order to kiss the butts of their campaign contributors “whores.”

And why would Republicans do such a despicable thing? Well, let’s look at the lobbyists hired to fight the offshore provision: former Republican presidential candidate Robert Dole (paid by Tyco), former House Ways and Means Chairman Bill Archer, Bush family confidant Charlie Black, former House Appropriations Committee Chair Robert Livingston, former Sen. Dennis DeConcini (one of the Keating Five) and Reagan White house Chief of Staff Kenneth Duberstein.

Here’s the good news: If the people ever put up enough money, we could get exactly the same team to argue for our side. That’s what I mean by “whores.”

The D’s, plus Sen. John McCain, tried to get this and other obnoxious special-interest provisions taken out of the bill. So the R’s promised to “tone down” the offensive amendments with corrective legislation–sometime next year. But the incoming House Majority Leader Tom DeLay has already announced that he agreed only to “consider” such changes, not actually make them. Don’t put any money on this prospect.

The Homeland Security bill was 35 pages long when President Bush, who had long opposed it, did a 180 in the summer and pretended he invented it. He decided to support it instead of ignoring the proposal by Democrats (one of those “down the memory hole” moments for the D.C. press corps, which keeps announcing the bill’s passage is “a major victory” for the Bush administration). By then, the “Homeland Security” bill had become a 435-page behemoth, so larded with pork and special-interest legislation that Sen. Robert Byrd (no stranger to pork) kept dropping the triple-phone-book sized bill on his desk, repeatedly calling it “this mon-stros -ity.”

The other special provisions tucked in the bill to reward other big Republican contributors are almost as disgusting. I must admit that the amendment protecting the Eli Lilly Co. from future lawsuits is a fine example of really fast service for a contributor. Not long ago The New York Times ran the first serious look at Thimerosal, the vaccine preservative that may be related to autism, and–wham, bam–no problem for the Lilly company. (And don’t give me that bull about how it’s just an arbitration panel, parents can still sue, yadda, yadda, yadda. The purpose of that stinking amendment could not possibly be clearer. The Lilly Co. bought itself a very nice piece of legislation indeed.)

It’s one thing to pass this kind of special interest legislation. It’s another to call it “patriotism.” That could gag a maggot.

Molly Ivins is a nationally syndicated columnist. Her book with Louis Dubose, Shrub: The Short But Happy Political Life of George W. Bush, is out in paperback.