Drilling and dodging offshore
If the president sincerely believes that "American companies ought to pay taxes here," he should make sure his Treasury Secretary and his Republican colleagues in Congress understand him. Except for a brief hiatus after Sept. 11 -- when they realized that terrorists use tax havens to move money -- Paul O'Neill and the Congressional Republican leadership have undermined international efforts to crack down on corporate tax evaders and their Caribbean enablers. The same Los Angeles Times story that quotes Bush on this topic today also includes more about past events at Harken Energy. Both he and a retired Harken executive claim that he opposed the company's drilling venture off the coast of Bahrain (which included the creation of a Cayman Islands tax-sheltered subsidiary). The only document cited in the article, however, shows that director Bush voted in favor of the Bahrain deal.
"It wasn't set up to be a tax dodge or anything," says the former Harken official who vouched for Bush. Besides, the Cayman arrangement was made on the advice of the Harken accountants at Arthur Andersen. Maybe they all just like rum drinks and snorkeling.
Loving Medicare to death
For a sense of how nervously Republicans now view their future in November, glance at the National Republican Congressional Committee's Website text. Featured there is a piece celebrating this week's anniversary of the passage of Medicare, which avoids any mention of the unyielding opposition to the historic advancement in health care from most Republicans, the medical establishment and the insurance industry. It only passed during the summer of 1965 because in the previous November's landslide defeat of Barry Goldwater, the Democrats had picked up the largest majorities in both Houses since the New Deal. In unguarded moments, the Republicans still talk about killing the program, as when Newt Gingrich planned to let it "wither." But now the House Republicans praise Medicare as "an indispensable part of every American family, giving all of us peace of mind in knowing our health care needs will be taken care of when we retire. " The prospect of an election, like a hanging, has a wonderful way of concentrating the mind.
Wolfson growls
The opposing perspective on the midterm election can be found at the Democratic Congressional Campaign Committee's site, where they track the nastier Republican primary contests now under way. The site has an aggressive tone -- "NRCC Lies Again!!" -- that can probably be attributed to executive director Howard Wolfson, scarred veteran of the harshest of all Senate races -- Clinton versus Lazio 2000. Correction: Halliburton paid (Some) taxes
Citizen Works issued a correction today of its report on Halliburton (mentioned below). The number of company subsidiaries in offshore tax havens during the vice president's tenure there grew from nine in 1995 to 44 in 1999. More importantly, the company was reimbursed $85 million in federal taxes for 1999, but paid taxes every other year while Cheney was CEO except 1995. It paid $302 million in 1998, rather than being reimbursed that same amount. "We apologize for any confusion," says the Citizen Works correction. How much Halliburton reduced its potential tax liability through its offshore subsidiaries will require further study.
It's the crooked economy, stupid
Ruy Teixeira explains why Republicans are cowering and Democrats are confident.
[3 p.m. PDT, August 1, 2002]
Gerth's latest opus
Republicans used to love Jeff Gerth during the Clinton era, but they must be having second (and third) thoughts about the New York Times sleuth today. His byline appears along with Richard W. Stevenson's on a lengthy, front-page exegesis of the asbestos woes of Halliburton Corp. The headline is scary but the point remains elusive even with the aid of an elaborate graph. Ultimately, the story suggests that a certain former Halliburton CEO may have performed inadequate "due diligence" concerning the asbestos exposure of Dresser, Inc. before the two oil-services firms merged in 1998. No great scandal there, although the disaster left in Dick Cheney's wake deflates any boasts about his executive competence.
The vice president served as an influence peddler and not much more than that, I suspect. One explanation for Cheney's carefree attitude about asbestos is that he and other corporate leaders expected their lobbyists to convince Congress to take care of the multibillion-dollar problem, perhaps with a bailout or a cap on damages. Halliburton's lobbying expenses and campaign contributions approximately doubled during Cheney's tenure.
Aside from the alleged accounting irregularities, however, there are other intriguing questions about the Veep's old firm that the Times and the rest of the mainstream media have yet to explore. Did the Bush family still possess any significant interest in Dresser at the time of the questionable merger? Many years ago, the president's grandfather sat on Dresser's board; later his father worked for the company, and named one of his sons (Neil) after its president. If the Bush interests no longer own any Dresser/Halliburton shares, when were they sold?
Picking Uncle Sam's pocket
Actually, Cheney's reign at Halliburton marked a series of notable achievements beyond that lousy Dresser deal: the company avoided paying federal taxes almost every year, while gorging on federal contracts. Citizen Works (a nonpartisan Washington group founded by Ralph Nader) released an analysis today of Halliburton's use of offshore tax havens. In five of the six years while Cheney was CEO, the company received millions in federal tax
Mississippi sweating
The New York federal prosecutors who busted those WorldCom executives this morning want the scalp of former CEO Bernie Ebbers next. While they contemplate potential testimony and plea agreements, they should also consider asking a few questions about politicians and lobbyists who dined at the WorldCom trough. The former Senate Majority Leader -- whose "Trent Lott Leadership Institute" at Ole Miss got a million-dollar donation from WorldCom a few years ago -- is probably as innocent as a newborn baby. But prosecutors must practice due diligence, too.
[11:33 a.m. PDT, August 1, 2002]
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