Friday, June 18, 2004

$10 Billion Homeland Security Contract Goes To Tax-Evader

The parent company, Accenture Ltd., has an administrative office in Bermuda staffed by three to six people, said Roxanne Taylor, the company's chief of corporate communications in New York.

- The Guardian UK

1 comment:

Sheryl said...

Let me throw in a quote from the Congressional Record on Accenture to add some context to the discussion:

Rosa L. DeLauro:

"Mr. Chairman, the American people should be outraged by
the actions on this floor just a short time ago, actions that would
allow the Department of Homeland Security to move forward with a $10
billion contract for a corporate expatriate. A corporate expatriate, a
company that goes offshore, Bermuda, Cayman Islands, other places, sets
up a shell corporation all for the purpose of diminishing their tax
liability; that is, not paying the taxes that they should be paying to
the United States of America.
The Republican leadership has finally after 18 months relented on
their opposition to closing the loopholes in the ban on Department of
Homeland Security contracts to corporate expatriates, but as so often
happens with the Republican House leadership, they have said yes on the
one hand and no on the other. They agree that it is wrong for the
government to contract with companies who go offshore in order to avoid
their tax liability, but at the first possible chance they grant an
exemption to this ban by allowing the largest Homeland Security
contract to date to go to one of the worst offenders, Accenture of
Bermuda.
That is why I am offering this amendment with the gentleman from
Arkansas (Mr. Berry), the gentleman from Texas (Mr. Doggett), the
gentleman from Massachusetts (Mr. Neal), and the gentlewoman from New
York (Ms. Slaughter).
Our amendment will prohibit the Department of Homeland Security from
spending any appropriated funds to carry out any contracts with an
entity which qualifies as an inverted company or partnership under the
law. The underlying bill will close loopholes that allow companies
which have already incorporated in Bermuda and their domestic
subsidiaries to receive contracts, loopholes that essentially gutted a
ban that this House passed in July of 2002 by a vote of 318 to 100. But
at the same time, without this amendment we will allow the Department
of Homeland Security to move forward on a $10 billion contract to just
such a company.
Accenture claims they were never an American company. Let us look at
the facts. They were a part of Arthur Andersen until 2000. They
incorporated in Bermuda in 2001. Their chief executive officer is based
in Dallas, Texas. Their stock is traded on the New York Stock Exchange.
More importantly, let us look at numbers. Even as Accenture reported
that its American earnings increased by over $319 million in 2003, its
U.S. tax liability decreased by almost $240 million. Simply stated,
their revenues are going up; their tax liability is going down.
Accenture, this is a company which has set up an elaborate corporate
structure ranging from Bermuda to Luxembourg to Switzerland so that they can shift income overseas and reduce their overall U.S. tax
burden.
What is the result? Good corporate citizens loyal to the United
States, companies that live up to their responsibilities like the two
who were underbid in this contract, they are put at a competitive
disadvantage. These are other bidders, and it has been said that we
would not be able to move quickly. There were two other bidders in this
effort. We can move quickly on getting this task done.
Stanley Works is a Connecticut company, which considered incorporated
in Bermuda, reconsidered, and they have said: Not only are we
disadvantaged against our foreign competitors, but two of our major
U.S. competitors have a significant advantage over Stanley Works
because they are already incorporated in Bermuda.
Our Tax Code should not reward companies for moving overseas. It
should reward them for staying here, for contributing to our economy,
for creating good jobs. And by giving lucrative government contracts to
companies setting up a post office box in Bermuda, Mr. Chairman, we are
making matters worse.
The fact is we are in a time of war. We have troops serving overseas.
They are in harm's way every single day to protect this great country.
We are struggling to fully equip, as this bill points out, our first
responders, ensure the safety of our ports and our air transit. We
simply cannot afford to reward companies that accept the benefits of
American citizenship without living up to their responsibilities. We
are talking about $5 billion in revenues. Such behavior is wrong. It
offends our values as Americans.
Very quickly, I might add, some will say that we are going to be
wound up in lawsuits if we do not go forward. Not true. It is untrue.
All of the legal research has concluded that the government would have
little liability beyond the $10 billion contract minimum even if that
work has been performed. So do not let them get up and talk about
spurious argument. The fact of the matter is this is a company that has
gone offshore not to pay its taxes, and they are getting a $10 billion
reward. We should level the playing field and help good corporate
citizens."

6/21/2004 04:17:00 AM

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