The Hightower Report

Summer Fun or Slick Stunts at SeaWorld?

Let me tell you a corporate morality tale that I call "The Shame of Shamu."

Actually, Shamu is not the cause of the shame. After all, that's just the generic name given to the killer whales kept in captivity as the star attraction at three theme parks operated by SeaWorld Parks & Entertainment. The shame belongs to the corporation, which not only profits from its exploitation of the whales, but also manages to dodge paying even a penny in national or state income taxes. Based in Orlando, Fla., this giant outfit pocketed record profits of $380 million last year, but paid zero taxes on it.

This is because SeaWorld is owned by Blackstone Group, a multibillion-dollar private-equity giant that specializes in acrobatic accounting and spectacular twistings of our tax laws. For example, Blackstone structured its 2009 takeover of SeaWorld so that it could immediately begin grabbing tax deductions under the law's convoluted depreciation rules. Also, the Wall Street group paid 60% of the $2.5 billion purchase price with money borrowed at high interest rates from wealthy speculators, making the huge interest payments on that debt totally deductible from Blackstone's tax bill.

Thus – shazam Shamu! – big profits at SeaWorld, no taxes for the equity fund. True, admitted a corporate spokesman, but the group "operates entirely within the letter and spirit" of the law.

Well that's an easy trick for them, since they pour millions into lobbyists and politicians to rig the law. Blackstone is a whale in America's political pool. It has already spent $7.3 million lobbying the current Congress and $1.3 million so far on campaign donations for this year's elections, including $173,000 to back Mitt Romney – who promises, if elected, to make tax laws even more favorable to money manipulators like Blackstone.