Companies that use offshore tax havens are big Capito donors
While both major candidates for U.S. Senate in West Virginia have accepted donations from big corporations accused of using offshore tax havens, some of those corporations have been significant contributors to Rep. Shelley Moore Capito, not just this year but through her entire political career.
Major American companies avoid paying about $90 billion in taxes every year by shifting profits to subsidiaries incorporated in overseas tax havens, in countries like Bermuda and the Cayman Islands.
These subsidiaries are often shell companies with few employees and no real business activity, according to “Offshore Shell Games: 2014: The Use of Offshore Tax Havens by Fortune 500 Companies.”
The United States Public Interest Research Group Education Fund (PIRG) and Citizens for Tax Justice release an updated version of this report annually.
Major companies shift billions of dollars in assets to offshore tax havens, the report states, including: Apple, American Express, Nike, Bank of America, PepsiCo, Citigroup and Pfizer.
Capito, R-W.Va., has received $123,996 from people working for Citigroup during her career, according to the Center for Responsive Politics. Citigroup has been responsible for shipping jobs to India.
Capito’s husband, Charles L. Capito, has worked for Citigroup for more than 30 years.
During her four most recent congressional campaigns, Capito’s campaign filings report donations from other companies on PIRG’s list of Fortune 500 companies, including: Bank of America, $28,000; Morgan Stanley, $23,350; JP Morgan, $21,000; American Express, $8,000; and Pfizer, $5,000.
Last week, the state Democratic party accused Capito of accepting $1.6 million in donations from Wall Street firms during her political career.
Capito is running for the Senate seat being vacated by Sen. Jay Rockefeller, D-W.Va., against Democratic opponent, Secretary of State Natalie Tennant.
Jennifer Donohue, a spokeswoman for Tennant’s campaign, said, “This is just one more clear example of Congresswoman Capito’s long record of doing Wall Street’s bidding at West Virginia’s expense.
“While Secretary Tennant has been cutting fees for businesses and making it easier to create jobs in West Virginia, Congresswoman Capito has been protecting loopholes that make it easier for Wall Street to ship those jobs overseas.”
Amy Graham, communications director for Capito’s campaign, said, “When the rest of the West Virginia delegation voted to give Wall Street banks a bailout, Shelly Moore Capito was the only one to say no — twice — because she always put West Virginia first.
“Shelley firmly believes we need bipartisan, comprehensive tax reform that incentivizes companies to invest in the US rather than holding cash overseas, and does so without chasing away jobs.”
Graham pointed out that Tennant has also received money from companies on PIRG’s list, including General Electric and Goldman Sachs.
Tennant has also served on Hewlett-Packard’s Public Sector Board of Advisors since 2011, Graham said. Hewlett-Packard is one of the companies holding the most money offshore, according to the PIRG report, ranking 13th among the Fortune 500.
Tennant allowed Hewlett-Packard “to pay for her travel on more than one occasion,” Graham said. In 2012, for example, Hewlett-Packard paid for Tennant’s lodging expenses during trips to Phoenix, Arizona, and Boston, Massachusetts.
During the last two years, Tennant also received campaign contributions of $500 from a Goldman Sachs lobbyist and $250 from a General Electric lobbyist.
Donohue said Capito has often voted to protect offshore tax havens and to protect tax breaks for companies shipping jobs overseas.
Tennant has said she supports the Creating American Jobs and Ending Offshoring Act, federal legislation that would provide tax cuts to companies that bring currently outsourced jobs back to the United States.
It would also close tax loopholes that benefit companies sending manufacturing jobs overseas.
Tennant has also criticized President Obama for negotiating the Trans Pacific Partnership trade deal in secret. If that deal is ratified by the Senate, it would make it easier for American companies to send jobs to countries on the shores of the Pacific Ocean.
The National Education Association released a recent report called “When Corporations Avoid Paying Taxes.”
Their report found corporate tax avoidance, between 2008 and 2012, cost West Virginia: $104 million in federal education funds, $28.9 million for Pell Grants and $11.78 million for Head Start programs for pre-school children.
Reach Paul J. Nyden at email@example.com or 304-348-5164.