83% of big U.S companies, contractors use offshore tax havens
Jan 16 (Washington Post) - The US Government Accountability Office (GAO) has just issued a report showing that 83 of the 100 largest publicly traded corporations and 63 of the 100 largest federal contractors rely on offshore subsidiaries to do business and cut their tax bills. Some have received tens of billions in bailout money: Citigroup, for example, has received $25 billion from the bailout fund, plus $300 billion in government guarantees — and has 427 tax haven subsidiaries; 91 in Luxembourg, 90 in the Cayman Islands and 35 in the British Virgin Islands. Report summary here; full report here.
First, an indication of some of the worst offenders, in terms of numbers (sheer number of offshore subsidiaries does not necessarily provide a good guide of how bad a company is, but it probably does give a certain indication of, shall we say, a mindset. Here are some of the big ones:
Citigroup (427 offshore subsidiaries)
Morgan Stanley (273)
News Corporation (152)
Bank of America (115 - see the latest lifeline story)
Lehman Brothers Holdings (57)
Wachovia Corp. (59)
Marathon Oil (78)
Goldman Sachs (29)
Merrill Lynch (21)
We often like to criticise companies that we find doing this kind of thing. But for a change, here is a "white list" of companies that have NOT been identified by the GAO as having subsidiaries in these countries. Some of these companies (defence companies, Wal-Mart, for example) have been the target of campaigners' ire for various reasons, but they seem to have kept themselves off this list at least. They are:
Enterprise GP Holdings
"Kellogg Brown & Root, the nation's top Iraq war contractor and until last year a subsidiary of
More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands."
This kind of ongoing research that the GAO has done is essential, and we applaud it. Bit by little bit, light is starting to permeate the dark spaces of the global economy.