We got 'em.
Finally, KBR, subsidiary of Halliburton, has lost a battle, this time their craven tax sheltering racket in the Cayman Islands. The Boston Globe first reported back in March of yet another outrage coming from KBR in an article titled "War profiteering by tax dodge". It was a bad move all the way around: they weren't responsible for employee benefits and they didn't have to pay U.S. taxes. After the article came out, Congress started flexing its muscle as even the most right wing of Republicans would have trouble defending a defense contractor being paid by the government, while not paying any taxes on its profit from those government contracts. John Kerry and Barack Obama led the effort in the Senate, and now we are only one presidential signature away of righting one wrong from the private contractors. The icing on the cake? The KBR tax money to be paid is going to the troops.
The legislation was passed unanimously in the Senate by voice vote, and has also passed the House:
Having passed in identical form in both the House and Senate, this bill now awaits the signature of the President before becoming law.
May 22, 2008: This bill passed in the Senate by Unanimous Consent. A record of each representative's position was not kept.
Before I go any further, please note that one certain Senator from the state of Arizona (cough McSame cough) did not even bother to show up in the Senate, since he was too busy at a fundraiser with fat cats in California to vote on important legislation like this one. And we all know his weaselly answer on the Webb bill, which makes his support for veterans' care an unremarkable record. He also has been silent on this KBR abuse, as he has on the war profiteering issue in general in Iraq. This puts Obama squarely in the reformer role, and McCain in the DC-business-as-usual role.
Here are the details of the bill:
Senate Passes Kerry-Obama Legislation To Close KBR Tax Loophole, Provide Tax Relief For Troops
05/22/2008 -- WASHINGTON, DC – Senators John Kerry and Barack Obama today announced that the Senate passed the Heroes Earnings Assistance and Relief Tax Act of 2008 (The "HEART Act"). The Act would provide tax relief to the men and women in our nation's armed services and others volunteering service on behalf of the United States, including Peace Corps volunteers and AmeriCorps volunteers – and is paid for by the Kerry-Obama tax reform that closed the tax loophole that allowed defense contractor KBR to avoid paying its fair share of taxes.
Kerry and Obama were instrumental in ensuring that the funds that will be used to pay for these benefits came from defense contractors that were not paying their fair share of taxes. In March, they introduced the Fair Share Act of 2008 to close the loophole that had allowed KBR to fleece the American taxpayer by almost $100 million a year. It was discovered that KBR and another defense contractor have avoided paying their fair share of Social Security and Medicare taxes by creating shell companies in the Cayman Islands. The Fair Share Act of 2008 will end the practice of U.S. government contractors setting up sham companies in foreign jurisdictions to avoid payroll taxes.
We then hear from Senator Kerry, who will be coasting this year to his 5th term serving in the U.S. Senate for the people of Massachusetts:
"Now thousands of military families in Massachusetts will receive the benefits they deserve and big companies will pay their fair share of taxes rather than leaving hard working Americans with the bill," said Senator Kerry.
And the co-sponsor of the bill, Senator Barack Obama, who will hopefully be taking his reformer spirit with him to the Oval Office, come January 20, 2009:
"This important bill will provide much needed tax relief to our brave service members and hold American companies accountable for paying taxes and guaranteeing that employees receive the benefits they are entitled to through their employment," said Senator Obama. "For the sake of transparency and fairness in our tax system, we cannot allow Federal contractors to set up shell corporations in tax shelters and shirk their responsibility to pay payroll taxes for their American employees. I commend Senator Kerry for his leadership on behalf of America's small businesses, workers, and service members and I call on the President to sign this bill into law."
If you go to the link, you will see all the ways the extra money will be spent in benefiting the troops, including small business owners and those who may go on disability. Reading through all the changes that will take effect because of this bill, I am struck by all the ways our troops can be screwed by little known loopholes that deprive them of benefits they should be receiving. Good for Senators Kerry and Obama for making their lives just a little bit easier with these changes.
Finally, I would like to point out what I have been saying for many months about Barack Obama and what is important to him: REFORM. He has consistently supported open government anti-corruption measures, and this is just one more example of him getting involved to stop business as usual deals like the one KBR was up to in the Cayman Islands. And when you look at this topic of abuses and war profiteering by private contractors in Iraq, it is also remarkably clear that John McCain has shown little interest in fixing these problems. I do not see John McCain as a real reformer; instead I think it will be revealed that he is a "Show Horse" reformer -- he'll do something high profile that will give the perception of wanting to fight corruption and waste, yet he allows a real fleecing of American tax payers by KBR continue without even a mild protest. Keep this in mind as we transition to the general election and the contrasts based on their real legislative records start to show a pattern of Obama acting the way he talks, while McCain's straight talk hides behind a "look the other way" mentality in Washington.