I want to mention that there is one building that is a five-story building in the Cayman Islands located on Church Street. I have brought a photo of it to the Senate floor previously, and I should do that again at some point. That building is the official residence and address for 12,748 corporations.And rewarding those involved in doing it. I wrote this in a column published in February 2005:
Now, one might ask, how is it 12,748 corporations can share a residence or an address in a 5-story white building in the Cayman Islands? Simple. It is nothing more than an address.
What is the purpose of having an address in a 5-story white building in the Cayman Islands? So that one does not have to pay taxes to this country. Money can be moved through a tax haven and avoid paying U.S. taxes. So one is a U.S. company, they are chartered probably in Delaware, have all the advantages of being an American, but now the new economics tell them they should produce in China, sell in this marketplace and set up an address in a 5-story white building mailbox in the Cayman Islands, so that they can have all the opportunities that come with being an American, except the responsibilities to hire American workers or to pay American taxes. That is what is happening.
People say, well, that is just an anticorporate rant. It is not. I think there are some wonderful corporations in this country, some terrific corporations with inventive people, creative people, who have advanced this country, have produced wonderful, breathtaking products, but I think there is a culture in this country, with respect to trade and corporate responsibility, that has gone off the track. ... We are selling this country piece by piece.
I'm lucky; things are beginning to improve. But it's been tough watching our manufacturing base bleed away, watching one factory after another close. And why? Last year, 290 employees at Cooper Bussman in Black Mountain heard they would lose their jobs. Days earlier, Houston-based Cooper Industries reported solid fourth-quarter growth. After Cooper Industries announced it would reincorporate in Bermuda to avoid paying U.S. taxes, John Ong, Cooper board member and Bush Pioneer, went to Norway as U.S. ambassador. Workers in Black Mountain didn't even get a lousy T-shirt.Stunningly, Cooper was quite matter-of-fact about why it was reincorporating offshore:
“We are excited about the opportunities presented by a Bermuda reincorporation and are confident that it is in the best interests of our shareholders and other constituencies,” said H. John Riley, Jr., chairman, president and chief executive officer. “This change will enhance Cooper’s strategic flexibility and our reduced global tax position will significantly increase cash flow -- enabling us to further strengthen our balance sheet and better position us to pursue worldwide growth opportunities.Translation? Screw you, Uncle Sam.
[. . .]
Under the plan to change its place of incorporation from Ohio to Bermuda, previously announced on June 11, 2001, Cooper Industries, Ltd., a newly-formed Bermuda corporation, will become the parent holding company of Cooper Industries, Inc. The reincorporation offers strategic advantages not available under the Company’s current corporate structure. Cooper’s effective tax rate post-reincorporation will be reduced to a range of 20 to 25 percent from approximately 32 percent, creating immediate value for Cooper shareholders. The improved global tax position is expected to generate additional cash flow of approximately $55 million annually, and add approximately $.58 per share to earnings.
Curmudgeon-in-Residence, Ralph Nader, weighs in today at Tom Paine:
Uncle Sam has bent over to give Big Business what it has demanded in the past 25 years. Huge tax reductions, compared to the prosperous 1960s. Massive deregulation, or the abandonment of law and order against criminal, negligent or defrauding corporations. Your tax dollars were transferred in the form of subsidies, handouts, giveaways and bailouts to demanding, mismanaged or corrupt large businesses.Because they are not real people. As I wrote in a column in July 2005:
Still, it was not enough coddling to keep these giant companies from casting aside what allegiance they had to our country, its communities and people. The companies’ standard is to control them or quit them as these CEOs see fit.
When BusinessWeek magazine answered a resounding “yes” to its cover story in 2000, "Too Much Corporate Power?," the editors were not kidding. They even wrote an editorial saying that “corporations should get out of politics.” I guess they meant that since corporations do not vote, and are not human beings, that they should not be honing in on what should be the exclusive domain of real people.
. . . there’s nothing natural about the corporation. It’s an artificial life form engineered to relentlessly pursue profit. As actor Michael Biehn said of “The Terminator,” that’s what it does. That’s all it does.The corporation is a very clever invention that has grown beyond the ability of its creators to control it. We have difficulty seeing that because the corporation has become such a part of the warp and woof of our culture. And because popular fiction depicts inventions gone awry as being biological or technological. This out-of-control invention is legal.
The flaw is not in capitalism or business. Capitalism and business existed for centuries before the appearance of corporations. The corporation is but one model for organizing a business. A very successful model, to be sure, but by no means the only one. The problem is that the corporation was badly designed ... by us. Its design flaws are becoming manifest as corporations increasingly supplant citizens as the principal clients of government. It is a technology badly in need of a security upgrade.
“The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being. There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done.”
— Theodore Roosevelt, 1910