Cayman Islands Subsidiary Allows Pentagon Contractor Assisting War In Iraq To Avoid Millions In Taxes
Cayman Islands Subsidiary Allows Pentagon Contractor Assisting War In Iraq To Avoid Millions In Taxes
The Boston Globe recently revealed that two Defense Department contractors operating in Iraq — KBR and MPRI — have avoided paying hundreds of millions of dollars in federal Social Security and Medicare taxes by hiring its employees through “shell companies” based in Bermuda and the Cayman Islands.
Today, the AP reveals a third contractor assisting the U.S. military’s mission in Iraq that is also dodging Social Security and Medicare taxes. Immediately after winning a DoD contract worth more than $2 billion nearly ten years ago, Combat Support Associates established CSA Ltd. in the Cayman Islands allowing it to avoid paying the taxes and evade scrutiny from the U.S. government:
The subsidiary, CSA Ltd., now employs about 2,000 American citizens in Kuwait, where they support U.S. forces moving in and out of Iraq. Yet as a foreign corporation doing work outside the United States, CSA Ltd. does not pay Social Security and Medicare taxes for these workers.
In fact, according to the AP, “company officials” have acknowledged their immunity from U.S. law, noting that CSA Ltd. “is outside the jurisdiction of U.S. courts, so federal labor rules and anti-discrimination laws don’t apply either.” Indeed, the Globe noted that because of such practices, “workers cannot receive unemployment compensation when their jobs end and may be deprived of other protections under US law.”
But Congress has taken notice of these contractors’ unethical practices. The House passed a bill last month — despite Republican opposition — to “stop federal contractors from using foreign subsidiaries to evade Social Security and other employment taxes.”
In the meantime, companies such as KBR, MPRI and CSA Ltd. continue to avoid paying millions in taxes:
The Joint Committee on Taxation estimates shutting the employment tax loophole would bring in about $846 million in revenue over 10 years. That figure could be higher, lawmakers say, since it’s unclear how widespread use of the opening is.
Indeed, assuming that the American employees of CSA Ltd. make only $30,000 per year (online job ads place salaries much higher), the company would still “owe about $4.6 million in employment taxes.”
Sort Comments By: Top Rated | Date
28 Responses to “Cayman Islands Subsidiary Allows Pentagon Contractor Assisting War In Iraq To Avoid Millions In Taxes”
Leave a Reply
You must be logged in to post a comment.
Register
RSSLogin
Topic Cloud
ArchivesBlog RollAbout Think ProgressContact Us
Donate
Where’s the fake outrage from reich-wingers?
*crickets chirping*
May 8th, 2008 at 3:13 pmLet’s make sure we get ALL the back taxes owed by these bastards, profiting off the neocon lust for empire.
May 8th, 2008 at 3:14 pmSounds smart to me!
May 8th, 2008 at 3:14 pmPatriots one and all!
May 8th, 2008 at 3:17 pmThis bullshit has to stop. NOW!
While they wrap themselves in Flags & thump their bibles, these companies are quickly draining important fiscal resources from the USA, while trumping the Patriot card & supporting Bushitco.
They should be forced to backpay a fair share based on income & personnel. All existing contracts should immediately become null & void. Criminal charges should be considered.
In the future, contractors should be USA based only. Yeah, it’s protectionism to some degree, but if we don’t protect ourselves, who in the Hell will?
May 8th, 2008 at 3:18 pmOh, c’mon. What’s a little MORE war profiteering among the Bushies?
May 8th, 2008 at 3:21 pmIt’s not like the first half trillion was missed and we’re talking about less than $1B. Hell, that doesn’t even cover KBR’s laundry contract - or the electrocution showers for our troops.
Come on, these are Bush cronies, they don’t need to follow the law, they also don’t have to feel patriotic, that is not a Republican trait, all they need are shinny label flag pins and it’s all good.
Republicans are scum.
May 8th, 2008 at 3:24 pmThe fake patriot thing to do - Rape America(ns).
May 8th, 2008 at 3:28 pmGlad to see everyone is sacrificing for the war on terror.
May 8th, 2008 at 3:30 pmThe money stolen from our treasury and us by these RePugniScums is enough to choke an entire solar system or better yet a blackhole!!
When will the trials begin??
May 8th, 2008 at 3:32 pmGlad to see everyone is sacrificing for the war on terror.
Especially those who profit from it.
May 8th, 2008 at 3:32 pmSomeone probably told them, “Hey, don’t worry about it. By the end of the war Social Security and Medicare will all be privatized anyway.”
May 8th, 2008 at 3:34 pmThese companies are treasonous bastards and their actions represent the lowest common denominator of human filth.
May 8th, 2008 at 3:40 pmTheir actions hold indifference to the values young men and women hold as they pledge to go into harms way while the CEO’s of these companies take extra profits from the treasury which could have been used to equip those soldiers.
When I read about these “white-collar” criminals with their cheating of the U.S., my nose, my lips, my heart and my soul curl in repugnance. When will these rotten people learn that democracy and capitalism are necessarily linked to have the best of both. Some dollars in the pockets of these creeps are just not worth the toll on the American infrastructure. Ultimately we all pay MORE for their self-serving ways.
May 8th, 2008 at 3:52 pmAll the while, what is the Senate Judiciary committe going to do about this?
May 8th, 2008 at 3:52 pmCrickets….
Current tax laws allow hundreds of billions of taxes to be uncollected each year. This is just a tip of the iceberg. If people could see how much money wall street companies and executives are hoarding overseas through various tax shelters and laundering schemes, they’d be in shock!
May 8th, 2008 at 4:00 pmI bet the commerce department count these jobs as a part of U.S. employment figures - which is FALSE if they are under a foreign corporation.
I’m really not surprised - remember, the Republicans want to kill Medicare and Social Security any way they can.
May 8th, 2008 at 4:10 pmI would just LOVE an opportunity to look over the investment portfolios of the Repukes in Congress and the White House…
Wanna bet they all have LOTS of stock in Halliburton, KBR, etc. etc. …?
Sweet!
May 8th, 2008 at 4:12 pmThis has been known for how long now? I remember hearing about Halliburton’s subsidiary doing this as soon as they got the contract. Why are we just now getting around to tring to do something about this? Contract with the US? Pay taxes! It’s that simple - put it in the contract if they want to do business with the goverment.
May 8th, 2008 at 4:15 pmleftcoast Says:
These companies are treasonous bastards and their actions represent the lowest common denominator of human filth.
Their actions hold indifference to the values young men and women hold as they pledge to go into harms way while the CEO’s of these companies take extra profits from the treasury which could have been used to equip those soldiers.
I agree 100%, but what makes me angrier is that the Democrats in congress are just as culpable as BushCo & the Republicans.
May 8th, 2008 at 4:42 pmNamtillaku Says:
Democrats in congress are just as culpable as BushCo & the Republicans.
That is true and needs repeating…
We have to stop the DemoRats (those who will sell us out too) from being placed back in office in 2008!!!!!
May 8th, 2008 at 4:50 pmHi whitedude who is afraid of black dudes. What’s up?
May 8th, 2008 at 4:52 pmOT…
RePugniScums…The gift the just keeps giving…
http://www.wcbs880.com/ -I-Have-a-Child-Out-of-Wedlock-/ 2150906
This a$$wipe is a “family values” Facist!!!!! Couldn’t happen to a bigger scumbag!!!!
May 8th, 2008 at 5:05 pmSurprise…..they don’t need to pay no stinkin’ taxes.
May 8th, 2008 at 5:10 pmTaxes are for poor folks…..without loopholes. And
lawyers. We just wanna use their kids in the Army…..
Paying taxes on war profits is an unproductive use
of capital. The taxes might go to pay for this debacle.
Knowing the huge effects the $600 rebate will have, imagine what $84 mill would throw into the economy.
PLUS - but not providing for Social Security, etc. they are leaving their employess to further criple Social Security and increase the cost of any bailout. Why does KBR hate AARP?
May 8th, 2008 at 5:11 pmKBR is the modern day Nazi SS
May 8th, 2008 at 6:44 pm.
So,
I CAN profit from starting a war IF I keep my arrangements of the finances off shore?
I looked up Hypocrisy in the dictionary the other day and it said: PLEASE REFER TO AMERICA.
.
.
May 9th, 2008 at 1:21 amDifferent Countries, Different laws. Cayman is not USA.
Neither is IRAQ.
Americans would not have this problem if they stayed on their side of the world.
May 10th, 2008 at 1:20 pm