Eight years ago, the IRS, tired of seeing the country’s largest corporations fearlessly stash billions in tax havens, decided to take a stand. The agency challenged what it saw as an epic case of tax dodging by one of the largest companies in the world, Microsoft. It was the biggest audit by dollar amount in the history of the agency.
Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%. Microsoft had justified this transfer with a ludicrous-sounding deal: It had sold its most valuable possession — its intellectual property — to an 85-person factory it owned in a small Puerto Rican city.
…Meanwhile, the numbers Microsoft had used to craft its deal were laughable, the agency concluded. In one instance, Microsoft had told investors its revenues would grow 10% to 12% but told the IRS the figure was 4%. In another, the IRS found Microsoft had understated revenues by $15 billion.
Determined to seize every advantage against a giant foe, the small team at the helm of the audit decided to be aggressive. It used special powers that the agency had shied away from using in the past. It took unprecedented steps like hiring an elite law firm to join the government’s side.
To Microsoft and its corporate allies, the nature of the audit posed a dire threat. This was not the IRS they knew. This was an agency suddenly committed to fighting and winning. If the aggression went unchecked, it would only encourage the IRS to try these tactics on other corporations.
“Most people, the 99%, they’re afraid of the IRS,” said an attorney who works on large corporate audits. “The other 1%, they’re not afraid. They make the IRS afraid of them.”
Microsoft fought back with every tool it could muster. Business organizations, ranging from the U.S. Chamber of Commerce to tech trade groups, rallied, hiring attorneys to jump into the fray on Microsoft’s side in court and making their case to IRS leadership and lawmakers on Capitol Hill. Soon, members of Congress, both Republicans and Democrats, were decrying the IRS’ tactics and introducing legislation to stop the IRS from ever taking similar steps again.
The outcome of the audit remains to be seen — the Microsoft case grinds on — but the blowback was effective. Last year, the company’s allies succeeded in changing the law, removing or limiting tools the IRS team had used against the company. The IRS, meanwhile, has become notably less bold. Drained of resources by years of punishing budget cuts, the agency has largely retreated from challenging the largest corporations. The IRS declined to comment for this article.
Recent years have been a golden age for corporate tax avoidance, with massive companies awash in profits routinely paying tax rates in the single digits, or even nothing at all. But how corporations manage to do this and keep the IRS at bay is mostly shrouded in secrecy
Truly despicable, on many levels. Microsoft is not teetering on the edge of financial collapse, they can afford to pay their fair share of taxes. Shameful that both political parties enable this abuse, and respond by defunding/defanging the IRS from doing its job. Meanwhile, the US debt grows by leaps and bounds, and corporate profits too.
Despite having endured lead-laden tap water for years, Flint pays some of the highest water rates in the US. Several residents cited bills upwards of $200 per month for tap water they refuse to touch.
But just two hours away, in the tiny town of Evart, creeks lined by wildflowers run with clear water. The town is so small, the fairground, McDonald’s, high school and church are all within a block. But in a town of only 1,503 people, there are a dozen wells pumping water from the underground aquifer. This is where the beverage giant Nestlé pumps almost 100,000 times what an average Michigan resident uses into plastic bottles that are sold all over the midwest for around $1.
To use this natural resource, Nestlé pays $200 per year
How is this right? Nestlé should have to provide clean drinking water to Flint as part of their deal, or even better, pay to upgrade the water mains, especially since Nestlé is trying to increase the amount of water they pump out:
Now, Nestlé wants more Michigan water. In a recent permit application, the company asked to pump 210m gallons per year from Evart, a 60% increase, and for no more than it pays today.
Access to clean water should be a human right, all over the world, including in Michigan. Private corporations shouldn’t be able to profit from a public good.
The fight continues:
Michigan’s second-highest court has dealt a legal blow to Nestlé’s Ice Mountain water brand, ruling that the company’s commercial water-bottling operation is “not an essential public service” or a public water supply.
The court of appeals ruling is a victory for Osceola township, a small mid-Michigan town that blocked Nestlé from building a pumping station that doesn’t comply with its zoning laws. But the case could also throw a wrench in Nestlé’s attempts to privatize water around the country.
The fight to stop Nestlé from taking America’s water to sell in plastic bottles
If it is to carry out such plans, then it will need to be legally recognized as a public water source that provides an essential public service. The Michigan environmental attorney Jim Olson, who did not represent Osceola township but has previously battled Nestlé in court, said any claim that the Swiss multinational is a public water utility “is ludicrous”.
“What this lays bare is the extent to which private water marketers like Nestlé, and others like them, go [in] their attempts to privatize sovereign public water, public water services, and the land and communities they impact,” Olson said.
The ruling, made on Tuesday, could also lead state environmental regulators to reconsider permits that allow Nestlé to pump water in Michigan.
The Osceola case stems from Nestle’s attempt to increase the amount of water it pulls from a controversial wellhead in nearby Evart from about 250 gallons per minute to 400 gallons per minute. It needs to build the pump in a children’s campground in Osceola township to transport the increased load via a pipe system.
The township in 2017 rejected the plans based on its zoning laws, and Nestlé subsequently sued. A lower court wrote in late 2017 that water was essential for life and bottling water was an “essential public service” that met a demand, which trumped Osceola township’s zoning laws.
However, a three-judge panel in the appellate court reversed the decision.
The New York Times reports on the latest slap on the wrist regarding corporate malfeasance and indifference:
The credit bureau Equifax will pay at least $650 million … to end an array of state, federal and consumer claims over a 2017 data breach that exposed the sensitive information of more than 147 million people. The breach was one of the most potentially damaging in an ever-growing list of digital thefts.
The settlement, which was announced on Monday and still needs court approval, would be the largest ever paid by a company over a data breach. The deal requires Equifax to put a minimum of $380.5 million into a restitution fund for American consumers who file claims showing that they were financially harmed.
A portion of that money will pay for lawyers’ fees, but at least $300 million must go to victims, according to settlement documents filed in federal court in Atlanta. If the initial cash is depleted, the company will add up to $125 million more to settle consumers’ claims, bringing the total fund size to more than $500 million.
Equifax will pay an additional $175 million in fines to end investigations by 50 attorneys general. Forty-eight states — all except Indiana and Massachusetts, which separately filed their own lawsuits against Equifax — are part of the deal, along with the District of Columbia and Puerto Rico
So the government gets a ‘taste’, but individual consumers get spit in their eye. $300,000,000 to be distributed to a portion of 147,000,000 people who Equifax screwed. $2 each. Whooo hooo! Lawyers get plenty of money, average people, not so much.
The fine print is that you have to prove that Equifax harmed you by giving away your social security number, bank info, drivers license, date of birth and whatever else.
Equifax will also pay $20,000 to consumers who can prove that they suffered “fraud, identity theft, or other misuse” because of the data breach. Equifax will also pay them $25 per hour for up to 20 hours of time they had spent trying to safeguard their data. Equifax will also reimburse them for out-of-pocket losses and up to 25% of the cost of Equifax credit or identity monitoring. Exactly how Equifax will require consumers verify their costs is unknown.
In the category of saying the quiet parts out loud, consider this statement by Nirmal Mulye, the chief executive of drug company Nostrum Laboratories:
“I think it is a moral requirement to make money when you can … to sell the product for the highest price.”
Mulye was responding to questions posed by the Financial Times about his quadrupling the price of an essential antibiotic to $2,392 per bottle. The drug, nitrofurantoin, is used to treat urinary tract infections. It has been on the market since 1953 and is listed by the World Health Organization as an essential medicine for “basic healthcare systems.”
In his interview with the Financial Times published Tuesday, Mulye defended Martin Shkreli, the former drug company CEO who became the face of the industry’s profiteering in 2015 when he jacked up the price of a generic anti-parasitic drug needed by HIV patients by more than 5,000%.
So which definition of moral were you referring to, Mr. Mulye? I think the moral response would be for the federal government to start regulating the price of drugs such as this one.
The 23rd Commissioner of the U.S. Food and Drug Administration, Scott Gottlieb, responded
1/2 Regarding @FT story today @bydavidcrow; there’s no moral imperative to price gouge and take advantage of patients. FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine
Earlier this month, after a three-month probe, the investigators from the US Chemical Safety and Hazard Investigation Board concluded that a faulty valve at the plant caused the explosion. The board plans to issue recommendations that aim to prevent such an accident from happening again at a refinery.
But despite the warm welcome in Superior—and wide recognition of its expertise in chemical plant disasters—this small, independent federal agency is teetering on the brink of elimination.
The Trump administration has twice in its budgets attempted to shut down the Chemical Safety Board; so far, Congress has rejected the attempts. For the 2019 fiscal year, both the House and Senate have proposed restoring full funding.
But the assaults appear to be taking a toll. Hostility from the Trump administration and disarray from its efforts to eliminate the agency follow years of leadership turmoil and high turnover that started during the Obama administration. In 2015, its chairman, who was embroiled in a congressional investigation into poor management, resigned under pressure—yet leadership problems remain.
Combined, these problems threaten to cripple the agency’s investigations of chemical plant disasters
In a much-watched case, a Michigan agency has approved Nestlé’s plan to boost the amount of water it takes from the state. The request attracted a record number of public comments — with 80,945 against and 75 in favor.
Nestlé’s request to the Michigan Department of Environmental Quality to pump 576,000 gallons of water each day from the White Pine Springs well in the Great Lakes Basin was “highly controversial,” member station Michigan Radio reports. But despite deep public opposition, the agency concluded that the company’s plan met with legal standards.
Under the plan, Nestlé will be approved to pump up to 400 gallons of water per minute from the well, rather than the 250 gallons per minute it had been extracting. The company first applied for the new permit in July 2016.
Water is a complicated and sore subject in many areas, but in few places more so than in Michigan, where a crisis has raged for years over high levels of lead and other dangerous heavy metals in the water in Flint. And back in 2014, Detroit resorted to shutting off water to thousands of customers as it fought bankruptcy.
With that recent history as a backdrop, Nestlé’s plan to boost the amount of water it takes from the Great Lakes State drew attention and added another dimension to a debate over whether water should be seen as a commodity, a commercial product — or a human right.
Nestlé’s well is in western Michigan, near the town of Evart…The company bottles the water for sale under its Ice Mountain label.
Disgusting, really that Nestlé gets to sell, for profit, water that is taken from the public at a rate of 400 gallons a minute. By my quick math: 400 gallons x 60 minutes x 24 hours x 365 days= approximately 210,240,000 gallons a year; roughly 1,681,920,000 Iron Mountain 16 ml bottles that are sold for $3.99 in airports, or cheaper at, for instance, Target). Even accounting for the costs of “extraction”, plastic bottles, shipping, labeling, and so on, that’s a damn nice profit margin. Almost 2 billion 16 ml bottles a year, for basically free!
Thirsty? Side view of discarded plastic water bottles
Especially because of this:
in Mecosta County, Nestlé is not required to pay anything to extract the water, besides a small permitting fee to the state and the cost of leases to a private landowner. In fact, the company received $13 million in tax breaks from the state to locate the plant in Michigan. The spokesperson for Nestlé in Michigan is Deborah Muchmore. She’s the wife of Dennis Muchmore—Governor Rick Snyder’s chief of staff, who just retired and registered to be a lobbyist.
Have we reached a tipping point for drug pricing yet? Seems close, at least, to a public consensus that pharmaceutical companies cannot set prices so high they shock the conscience. We have to weigh public health against private profits.
The attorney general of Massachusetts said on Wednesday that she had opened an inquiry into whether Gilead Sciences had violated state consumer protection laws by charging too much for its hepatitis C drugs.
The notification, which was contained in a letter to the company from the attorney general, Maura Healey, is the latest challenge to the practices of Gilead, which has become the largest and most profitable biotechnology company by dominating the market for drugs used to treat both H.I.V. and hepatitis C.
On Tuesday, the AIDS Healthcare Foundation, a nonprofit organization that treats patients with H.I.V. and AIDS, filed a lawsuit seeking to invalidate patents covering the new version of Gilead’s mainstay H.I.V. drug, tenofovir. The lawsuit also says that Gilead, to maximize product life span but to the detriment of patients, delayed the introduction of the new, safer version of tenofovir until the old version was about to lose patent protection.
The hepatitis C drugs, Sovaldi and Harvoni, are widely considered breakthroughs — curing most patients in 12 weeks with few side effects. But Sovaldi has a list price of $1,000 per daily pill, or $84,000 for 12 weeks, and Harvoni costs $94,500. Those prices, and the great demand for the drugs, have strained the budgets of state Medicaid programs and prison systems, forcing many of them to restrict treatment to those most seriously ill.
In her letter to Gilead’s chief executive, John C. Martin, Ms. Healey said her office was examining whether Gilead’s pricing would be an “unfair trade practice,” in violation of Massachusetts law.
“Because Gilead’s drugs offer a cure for a serious and life-threatening infectious disease, pricing the treatment in a manner that effectively allows H.C.V. to continue spreading through vulnerable populations, as opposed to eradicating the disease altogether, results in massive public harm,” she wrote, referring to the hepatitis C virus by its initials.
One motivation for Ms. Healey’s letter was a class-action lawsuit filed against Massachusetts’ Department of Correction asking for more inmates to be treated for hepatitis C. Ms. Healey’s letter said that treating everyone at the list price of Sovaldi would “easily exceed our entire budget for prisoner health care.”
Take Action With Your Money, or we’ll call you at dinner…
How insanely misguided!
PayPal users, this is for you.
The payments company is rolling out an update to its user agreement that threatens to bombard you with “autodialed or prerecorded calls and text messages” — and worse, by agreeing to the updated terms, you’re immediately opted in.
PayPal can even reach you at phone numbers that you didn’t provide. Through undisclosed means, PayPal says it has the right to contact you on numbers “we have otherwise obtained.”
A PayPal spokesperson said it’s the company’s policy to “honor customers’ requests to decline to receive auto-dialed or prerecorded calls.”
But PayPal’s new terms don’t make that very clear.
“If you do not agree to these amended terms,” the revised document says, “you may close your account within the 30 day period and you will not be bound by the amended terms.”
If this does in fact become policy, and PayPal1 start robocalling, I may have to rip my phone out of the wall. If I start getting spam texts from PayPal2, I may have to join that class action lawsuit that’s being written right now3.
Here’s the offensive language:
You consent to receive autodialed or prerecorded calls and text messages from PayPal at any telephone number that you have provided us or that we have otherwise obtained. We may place such calls or texts to (i) notify you regarding your account; (ii) troubleshoot problems with your account (iii) resolve a dispute; (iv) collect a debt; (v) poll your opinions through surveys or questionnaires, (vii) contact you with offers and promotions; or (viii) as otherwise necessary to service your account or enforce this User Agreement, our policies, applicable law, or any other agreement we may have with you. The ways in which you provide us a telephone number include, but are not limited to, providing a telephone number at Account opening, adding a telephone number to your Account at a later time, providing it to one of our employees, or by contacting us from that phone number. If a telephone number provided to us is a mobile telephone number, you consent to receive SMS or text messages at that number. We won’t share your phone number with third parties for their purposes without your consent, but may share your phone numbers with our Affiliates or with our service providers, such as billing or collections companies, who we have contracted with to assist us in pursuing our rights or performing our obligations under this User Agreement, our policies, applicable law, or any other agreement we may have with you. You agree these service providers may also contact you using autodialed or prerecorded calls and text messages, as authorized by us to carry out the purposes we have identified above, and not for their own purposes. Standard telephone minute and text charges may apply if we contact you.
Shocking, I know, but Exxon Mobil and Chevron, et al, don’t want to alter their profit streams, asking to be able to continue sending bomb trains throughout the country. The reason? Updating the safety equipment would cost money. What a compelling argument, worthy of a 6th grade debate team.
The American Petroleum Institute, the industry’s main trade group, petitioned the United States Court of Appeals for the District of Columbia Circuit to block key provisions of the rules, which were unveiled this month by Anthony Foxx, the transportation secretary. The petition was filed on Monday.
The trade group, which represents companies like Exxon Mobil and Chevron, has long argued that forcing oil producers and shippers to use newer tank cars and replace older models would impose high costs on the industry and lead to a shortfall in tank car capacity.
The petition seeks to block a requirement that older tank cars be retrofitted with new safety features designed to prevent them from spilling oil or rupturing in a derailment. It also challenges a requirement that tank cars be equipped with new electronic braking systems or face operational restrictions.
If Exxon Mobil were forced to spend $100,000,000 updating the bomb cars, ((a number I just pulled out of the air, and probably a lot more than they would actually pay)) would it be a large enough number to reduce their annual profits measurably? In 2014 alone, ExxonMobil reported revenue of $394,105,000,000. Chevron’s reported revenue for 2014 was $211,970, 000,000 by the way. I would hazard a guess their accountants are top notch, and most of the costs of updating bomb trains would be written off as operating expense, right? The oil industry has been making immense, unimaginable profits for decades, or more.
In other words, protesting that updating the rail cars so that they don’t blow up communities and cause fires that last for weeks because updating the rail cars would cost too much is a lame argument. Cries pleading poverty from corporations as wealthy as Chevron is laughable.
Love Is Letting Go
Not that the Transportation Department and Barack Obama will listen to me, but my negotiation points would include the tax subsidies the oil and gas industry currently enjoy: fix the bomb trains and you get to keep half of your tax subsidies.
The oil industry’s lobbyists like to argue that its array of tax write-offs (which allow companies to deduct everything from drilling costs to the declining value of their wells) aren’t any different than other deductions for less publicly reviled companies. Cutting them will discourage new exploration and put jobs at risk, they claim.
Yet, some of the breaks are anachronisms that date back almost to the days of John D. Rockefeller. And in a world of permanently high crude prices, there’s very little rationale for subsidizing the bottom lines of companies like ExxonMobil and BP.
Make no mistake, either: Those profits are perfectly healthy. Between drilling and refining, Exxon’s U.S. operations alone earned $7.5 billion after taxes in 2012. California-based Occidental Petroleum Corporation, one of the so-called “independent” oil companies and the top oil driller in Texas, raked in $7.1 billion via its oil and gas division.
Here are real world consequences of removing all vestiges of restraint of corporate purchase of elected officials, only partially hidden corruption. We are getting the best politicians money can buy, in other words, with the obvious point being it isn’t our money, but corporate dollars that have all the buying power.
The letter to the Environmental Protection Agency from Attorney General Scott Pruitt of Oklahoma carried a blunt accusation: Federal regulators were grossly overestimating the amount of air pollution caused by energy companies drilling new natural gas wells in his state.
But Mr. Pruitt left out one critical point. The three-page letter was written by lawyers for Devon Energy, one of Oklahoma’s biggest oil and gas companies, and was delivered to him by Devon’s chief of lobbying.
The email exchange from October 2011, obtained through an open-records request, offers a hint of the unprecedented, secretive alliance that Mr. Pruitt and other Republican attorneys general have formed with some of the nation’s top energy producers to push back against the Obama regulatory agenda, an investigation by The New York Times has found.
Attorneys general in at least a dozen states are working with energy companies and other corporate interests, which in turn are providing them with record amounts of money for their political campaigns, including at least $16 million this year.
Cheap for corporations, $16,000,000 isn’t very much when gutting environmental law is the end result. Remember your high school history books and how indignant the outrage was when discussing the Teapot Dome Scandal? Well, this is a gazillion or two times worse…
Here’s a brief refresher of the Teapot Dome Scandal via Wikipedia:
In the early 20th century, the U.S. Navy largely converted from coal to oil fuel. To ensure the Navy would always have enough fuel available, several oil-producing areas were designated as Naval Oil Reserves by President Taft. In 1921, President Harding issued an executive order that transferred control of Teapot Dome Oil Field in Natrona County, Wyoming, and the Elk Hills and Buena Vista Oil Fields in Kern County, California from the Navy Department to the Department of the Interior. This was not implemented until 1922, when Interior Secretary Fall persuaded Navy Secretary Edwin C. Denby to transfer control.
Later in 1922, Albert Fall leased the oil production rights at Teapot Dome to Harry F. Sinclair of Mammoth Oil, a subsidiary of Sinclair Oil Corporation. He also leased the Elk Hills reserve to Edward L. Doheny of Pan American Petroleum and Transport Company. Both leases were issued without competitive bidding. This manner of leasing was legal under the Mineral Leasing Act of 1920.
The lease terms were very favorable to the oil companies, which secretly made Fall a rich man. Fall had received a no-interest loan from Doheny of $100,000 (about $1.32 million today) in November 1921. He received other gifts from Doheny and Sinclair totaling about $404,000 (about $5.34 million today). It was this money changing hands that was illegal, not the leases. Fall attempted to keep his actions secret, but the sudden improvement in his standard of living prompted speculation.
Sound familiar? Except in this case, the public isn’t outraged, or even well informed that elected officials are getting paid off in such a brazen manner.
Out of public view, corporate representatives and attorneys general are coordinating legal strategy and other efforts to fight federal regulations, according to a review of thousands of emails and court documents and dozens of interviews.
“When you use a public office, pretty shamelessly, to vouch for a private party with substantial financial interest without the disclosure of the true authorship, that is a dangerous practice,” said David B. Frohnmayer, a Republican who served a decade as attorney general in Oregon. “The puppeteer behind the stage is pulling strings, and you can’t see. I don’t like that. And when it is exposed, it makes you feel used.”
For Mr. Pruitt, the benefits have been clear. Lobbyists and company officials have been notably solicitous, helping him raise his profile as president for two years of the Republican Attorneys General Association, a post he used to help start what he and allies called the Rule of Law campaign, which was intended to push back against Washington.
As we’ve discussed previously, we don’t know how this is considered acceptable behavior. Are the shareholder pressures on Walgreen Co. really so intense that the board would consider this drastic move to shave a few pennies off of their operating costs? Really? Maybe they should look to fire management, and find more competent oversight. Oh wait, Walgreen Co. CEO Greg Wasson was paid $13,700,000 last year. How about returning some of that to shareholders instead? Not to mention, per Walgreens “Net earnings for fiscal 2013 ended Aug. 31 determined in accordance with GAAP were $2.5 billion”. I guess that’s not enough. More, more, more…
The nation’s largest drugstore chain is considering a move that would allow it to significantly cut its tax bill and increase profits. But it’s being painted by critics as un-American for looking to make money for shareholders through financial engineering at the expense of the communities that it grew up in. Walgreen is considering a so-called corporate tax inversion, in which an American company is able to incorporate abroad by acquiring a foreign company. The buyer, in effect, becomes a subsidiary of a foreign parent.
The average person who pays taxes cannot take advantage of the tax loopholes exploited by corporations, and they don’t think it’s fair, said Klaus Weber, associate professor of management and organizations at Northwestern University’s Kellogg School of Management.
“I do think people now more than before care because of rising issues of income inequality and justice and the fact that large companies have come under more scrutiny,” Weber said. “People expect corporations to fulfill their citizen duties as taxpayers like everyone else.”
While several U.S. companies have moved to lower-tax countries since 2012, Walgreen has caught the attention of taxpayer groups and unions that have criticized the potential tax maneuver. They have blasted Walgreen for contemplating fleeing the United States even though it benefits from government insurance programs. Nearly one-quarter of Walgreen’s $72 billion in sales in its last fiscal year came from Medicaid and Medicare, according to a report by Americans for Tax Fairness and Change to Win Retail Initiatives, a union-backed group.
“It is unconscionable that Walgreen is considering this tax dodge — especially in light of the billions of dollars it receives from U.S. taxpayers every year,” Nell Geiser, associate director of Change to Win Retail Initiatives, said in a statement. “Walgreen should show its commitment to our communities and our country by staying an American company.”
Walgreen Co. is busily calculating the cost of moving corporate infrastructure, relocating executives and staff, and the very real risk of losing their Medicaid/Medicare cash cow, not to mention the also very real risk of consumer boycott to save a few percentage points of tax revenue. Sleazy, no? And ironic, since Medicaid and Medicare is responsible for about 21% of our national budget. Why should Walgreen’s get any of taxpayer money for it when they refuse to pay in?
Things Walgreens Is Opposed To
Would shareholders care if Walgreen Co. was kicked out the the S&P 500? Probably, but Walgreens executives will get handsomely paid either way.
[The CtW Investment Group] said an inversion could hurt Walgreen’s stock price.
“Reincorporation carries risk of removal from the S.&P. 500 and other stock indices,” it said, citing the examples of Ace and Transocean, which were removed from the index after they moved to Switzerland. It added that some investors like big pension funds could be required to sell shares of the company if it were not included in the S.&P. 500-stock index.
If Walgreen reincorporated in Switzerland, where Alliance Boots is based, the influence of shareholders could be diminished, CtW said. Swiss law gives shareholders less protection, CtW said, making it harder for investors to seek remedies through courts in the event of fraud or a dereliction of board duties.
CtW also said it was sensitive to the brewing political debate about inversions. In recent months, several senators and President Obama have proposed legislation that would curtail the practice. No new laws are yet in place, but there is a belief on Wall Street that the window for such deals could close soon.
“In addition to the concerns outlined above, we fear that there could be political and reputational risks following an inversion, which would pose a clear contradiction with Walgreen’s quintessentially American brand,” CtW wrote. “Accordingly, we strongly urge you to end the controversy over Walgreen’s potential
Senator Dick Durbin is troubled by this cowardly plan as well:
As Walgreen Co, the largest U.S. drugstore chain, edged closer to potentially moving its tax home base abroad, the senior U.S. senator from its home state said on Wednesday that he hoped the company would not take such a step.
Illinois Democrat Richard Durbin told Reuters in an interview that he spoke with a Walgreen lobbyist on Tuesday. “I told him I hope that the rumor’s not true,” Durbin said.
Durbin, the Senate’s second-highest ranking Democrat, said Walgreen, now based in a Chicago suburb, would be ill-advised to pursue an “inversion” deal with Switzerland’s Alliance Boots Holding Ltd.
“Because of their national reach, they are a uniquely American company, and I think it would really hurt their image if they decided to give up on this country and to head overseas to make a couple extra dollars,” he said.
and despite the Patriot Employer Tax Credit Act bill having a slim chance of passing through the reactionaries in the US House, Sen. Durbin is at least trying:
Sen. Richard Durbin said Monday he will introduce legislation this week that would close tax loopholes for corporations that take jobs out of the country.
Durbin announced the “Patriot Employer Tax Credit Act” at Wheatland Tube in the Back of the Yards neighborhood. He plans to introduce the measure Thursday, a spokeswoman said.
The proposal would give tax credits to companies “that provide fair wages and good benefits to workers while closing a loophole that allows corporations to claim tax savings for activities such as building a manufacturing plant overseas,” according to a news release from Durbin’s office.
To qualify for the credits, a company must maintain its corporate headquarters in the U.S., maintain the same number or increase the number of U.S. workers compared with the number overseas and provide health insurance benefits that comply with the Affordable Care Act.
Wisconsin voters, here is your reward for electing Scott Walker: the upcoming destruction of Penokee Hills and the Bad River. Gee, thanks…
But now, after the recent passage of a bill that would allow for the construction of what could be the world’s largest open-pit iron ore mine, Wisconsin’s admirable history of environmental stewardship is under attack.
The mine, to be built by Gogebic Taconite (GTac), owned by the coal magnate Chris Cline, would be in the Penokee Hills, in the state’s far north — part of a vast, water-rich ecosystem that President John F. Kennedy described in 1963, in a speech he delivered in the area, as “a central and significant portion of the freshwater assets of this country.”
The $1.5 billion mine would initially be close to four miles long, up to a half-mile wide and nearly 1,000 feet deep, but it could be extended as long as 21 miles. In its footprint lie the headwaters of the Bad River, which flows into Lake Superior, the largest freshwater lake in the world and by far the cleanest of the Great Lakes. Six miles downstream from the site is the reservation of the Bad River Band of Lake Superior Chippewa, whose livelihood is threatened by the mine.
To facilitate the construction of the mine and the company’s promise of 700 long-term jobs, Gov. Scott Walker signed legislation last year granting GTac astonishing latitude. The new law allows the company to fill in pristine streams and ponds with mine waste. It eliminates a public hearing that had been mandated before the issuing of a permit, which required the company to testify, under oath, that the project had complied with all environmental standards. It allows GTac to pay taxes solely on profit, not on the amount of ore removed, raising the possibility that the communities affected by the mine’s impact on the area’s roads and schools would receive only token compensation.
According to the Wisconsin Democracy Campaign, a campaign-finance watchdog, GTac executives and other mine supporters have donated a total of $15 million to Governor Walker and Republican legislators, outspending the mine’s opponents by more than 600 to 1.
Your tears are wasted
If Governor Scott Walker does in fact run for President, this issue will not play well in the minds of most. Even many Republicans don’t want to turn our great country into a wasteland worse than Mordor. It’s hard to go hunting or fishing knee deep in mining slag and asbestos…
Special interests that back loosening mining regulations for a Florida company that wants to dig an open pit iron ore mine in northern Wisconsin have contributed $15.6 million to the Republican-controlled legislature and GOP Governor Scott Walker who are likely to approve mining permit changes in the coming months.
The Democracy Campaign review also found the campaign contributions made by mining deregulation interests swamped those of mining deregulation opponents – environmental groups – by a ratio of $610 to $1. Environmental groups which oppose the Republican mining proposal introduced in mid-January contributed only $25,544 to legislators between 2010 and June 2012 and to the governor between 2010 and April 23, 2012.
Support for a nearly identical GOP proposal last session to reduce groundwater, wetland, waste rock disposal and other environment laws for iron ore mining and impose deadlines on the state to review mine proposals so companies can get permits faster was led by manufacturing, construction, business, banking, transportation and four other special interests, according to state lobbying records.
This array of powerful special interests support mining deregulation because they will benefit from the short- and long-term construction and operation of Gogebic Taconite’s proposed mine in Ashland and Iron counties. Gogebic Taconite is a Wisconsin-based subsidiary of the Cline Group which controls large coal mining operations in Pennsylvania, West Virginia, Illinois and Ohio.
Walker, who has campaigned around the state to gin up support for changing rules to attract mining projects, received $11.34 million from 2010 through April 23, 2012 from interests that support mining deregulation (Table 1) including $67,068 from the prospective mine’s owner, Christopher Cline, his employees and other mining industry executives. During the same period, Walker received only $650 from environmental groups.
As veteran critics of the post-crash financial industry well know, one thing that has allowed big banks to maintain their rosy outlook is a rule change from the Federal Accounting Standards Board that allows these entities — still flush with toxic assets — to avoid having to mark their assets “to market.” Instead, banks are allowed to essentially treat these assets as “marked to fantasy,” a hoped-for future value that is unlikely to ever be realized. The banks have fought, and beaten back, any attempt to return to a “mark to market” regime, and it’s easy to see why: Reality comes with a cost. Should they ever have to realize the true value of the assets on their balance sheets, their false façade will fall, and it will be revealed that they are more structurally insolvent than they prefer to let on.
Two Democratic congressmen are investigating whether the U.S. Chamber of Commerce’s tenacious attack on a key anti-bribery statute has less to do with high-minded economic principles and more to do with the fact that nearly one in four board members of the Chamber’s “legal reform” arm represents a company that has been caught up in a bribery investigation itself.
Top Walmart executives sit on the board of the Chamber’s well-funded Institute for Legal Reform — a connection that became considerably more newsworthy after The New York Times reported last month that a vast bribery inquiry involving Walmart’s Mexico subsidiary had been hushed up by top executives in the company’s Arkansas headquarters.
The Institute for Legal Reform has been leading a powerful and unprecedented lobbying campaign to persuade Congress to rewrite key provisions of the Foreign Corrupt Practices Act, a 35-year-old statute that criminalizes bribes to foreign officials, on the grounds that prosecutors have been enforcing it too aggressively.
In a letter (PDF) to the Chamber released Tuesday, Reps. Henry Waxman (D-Calif.) and Elijah Cummings (D-Md.) — the ranking Democrats on the House Oversight and Government Reform Committee and the House Energy and Commerce Committee, respectively — describe how committee staff looked through the institute’s tax filings and found that 14 of the group’s 55 board members between 2007 and 2010 “were affiliated with companies that were reportedly under investigation for violations or had settled allegations that they violated the Foreign Corrupt Practices Act.”
Among those companies: Pfizer and Johnson & Johnson.
That 14-out-of-55 figure may even be an understatement, the lawmakers write, as privately held companies aren’t required to report potential violations or investigations. For instance, Koch Industries has had a representative on the institute’s board since 2007, the congressmen note, and has reportedly engaged in bribery abroad.
In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts. “I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue. By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France. “Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.
Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination.
The FCPA, passed in cooperation with over 30 countries concerned about corruption of their own officials, as well as foreign corporations, made it a crime for US corporations to launder money and bride foreign officials. But earlier this year the Chamber and it’s mega-corporate lobbyists complained the Act was too stringent, too broad, and too vague. The underlying message, however, was that everybody does it and it’s just not fair to hamstring American companies trying to compete in a global market. And besides, enforcing it used up too many resources that our Justice Department and FBI should be using on more egregious conduct, . . . like prosecuting banks and mortgage services for massive fraud.
Given the egregiously corrupt practices reportedly carried out by senior and/or the highest officials at Wal-Mart, I assume the Chamber of Commerce and other representatives of America’s corporate elite will now publicly shame the corporate heads of Wal-Mart, demand they be purged to protect the good name of the business community, and devise some means to rebate ill-gotten profits to the Mexican people.
With equal probability, I’m also expecting the United States Attorney General to announce a real, comprehensive investigation of Wal-Mart — because they just read about this — and all other reports of corporate bribery in violation of the Corrupt Foreign Practices Act. Because if they don’t, they’re just part of the coverup and they, too, should be purged. And I want a pony, too.
Good job by the Trib: doing actual journalism, getting results.
Since the Tribune published its “Playing With Fire” series, momentum has been building for stricter oversight of flame retardants and other toxic chemicals.
The newspaper’s investigation documented a deceptive campaign by industry that distorted science, created a phony consumer watchdog group to stoke the fear of fire and organized an association of top fire officials to advocate for greater use of flame retardants in furniture and electronics.
Promoted as lifesavers, flame retardants added to furniture cushions actually provide no meaningful protection from fires, according to federal researchers and independent scientists. Some of the most widely used chemicals are linked to cancer, neurological deficits, developmental problems and impaired fertility.
“Your series was an eye-opener,” said Joseph Erdman, legislative director for the New York Senate Committee on Environmental Conservation. “We hope other people around the state and nation read it.”
The committee has revived legislation targeting a chemical known as chlorinated tris, or TDCPP, that was voluntarily taken out of children’s pajamas more than three decades ago after studies found it could cause cancer. Recent tests have found that chlorinated tris now is commonly added to strollers, highchairs, rockers, diaper-changing pads and other baby products.