The Hightower Report

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A Tax-Dodging Freeloader

Poor little Accenture. It’s feeling terribly picked on by those mean ol’ corporate reformers in Washington.

Accenture is the worldwide consulting firm formerly known as Andersen Consulting, a division of Arthur Andersen, the noted accounting crook. Split off from Andersen in 2001, there’s nothing little about Accenture, which had $11 billion in revenues last year.

But it’s upset because eager-beaver Congressional reformers are about to pass a law that will bar any federal contracts from going to corporations that dodge their taxes by re-incorporating in such offshore tax havens as Bermuda. This new law would sting Accenture, first, because it is incorporated in Bermuda, and second, because it presently enjoys nearly $700 million a year in contracts from Uncle Sam, including, ironically, a contract for running the IRS Web site.

But, cries Accenture, it is not a U.S. company that recently re-incorporated in the Bermuda tax haven. Instead, it “never was an American company,” having been incorporated in Bermuda from the start. Thus, rationalizes Accenture, since it’s technically not a “runaway” American company, but a “never was,” it shouldn’t have to give up its annual ladling of government gravy.

You’d think Accenture executives would have to wear clown costumes when they make such a ridiculous argument. But instead of sending in the clowns, Accenture has sent in a Who’s Who of powerhouse lobbyists to try to weasel a special Accenture loophole into the new law. Among its lobbying hires are Ronald Reagan’s former chief of staff, two former U.S. senators, and the former chairman of the house appropriations committee. By buying these former public officials to lean on current officials, Accenture hopes to keep its Bermuda address, continue to dodge its share of American taxes, and keep being paid hundreds of millions of dollars a year by us taxpayers.

If this freeloader prefers to be a Bermuda citizen, fine … but let it get its government contracts from that country.

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Hoisting O’Neill on His Own Petard

Time for another Gooberhead Award, presented periodically to those in the news who’ve got their tongues running 100 miles per hour … but forgot to put their brains in gear.

This week’s Goober is a high-ranker: Paul O’Neill, George W.’s secretary of the treasury, who previously was making millions as CEO of Alcoa Inc., the world’s largest maker of aluminum.

Paul was one of the corporate CEOs that Bush so proudly hailed when filling his cabinet with them only 18 months ago. George bragged then that executives like O’Neill would bring the discipline and efficiency of corporate governance to Washington. But that was B.E. — Before Enron. And before WorldCom, Tyco, Arthur Andersen, Global Crossing, etc.

Now, the corporate connections of O’Neill, Dick Cheney, Bush himself, and all the rest of the cabinet are downplayed — and, instead, these corporatists are loudly posing as populist reformers.

O’Neill has been especially noisy, even getting up on his high horse recently to bellow that villainous corporations should get the death penalty and that executives who profit from abuse of their public trust should be “strung up from the highest tree!”

Police detectives have a rule of thumb: At a crime scene, pay particular attention to anyone who’s talking a lot and pointing fingers at others. So let’s check out O’Neill.

As CEO, he made millions on stock payments that were based in part on extra profits the company banked by illegally avoiding the installation of pollution-control equipment. Instead of buying the equipment, Alcoa’s smelters simply kept pumping massive amounts of health-damaging pollutants into the air. In Texas alone, Alcoa has just been fined $4 million for this gross violation of the Clean Air Act.

By abusing his public trust, O’Neill and Alcoa reaped millions in ill-begotten profits at the expense of neighbors whose air they carelessly contaminated. Shall we string him up from the highest tree?

This article appears in September 6 • 2002.