KBR’s $500 Million Tax Scam
Remember Kellogg, Brown and Root (KBR)? They�re scamming the American people and their own employees out of hundreds of millions in tax dollars and retirement benefits. [Boston Globe]
A reminder: KBR is a defense contractor who, until one year ago, was part of Halliburton� a notorious contractor headed by Vice President Cheney from 1995 to 2000.
Their footprint in Iraq: The firm �currently has more than 21,000 employees in Iraq, and between 2004 and 2006, received more than $16 billion in government contracts � far more than any other corporation.� [Think Progress]
The scam: The Boston Globe reports that KBR hires employees through shell companies based in the Cayman Islands to avoid paying Medicare or Social Security taxes on their workers in Iraq.
The scope: â��21,000 people working for KBR in Iraq â�� including about 10,500 Americans â�� are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard… in the Caribbean.â��
Cheney�s connection: Overseas Administrative Services, one of the two shell companies, which, though based in the Cayman Islands, has neither offices nor a phone number there, �was established two months after Cheney�s appointment� as CEO of Halliburton.
What employees lose: Employees who think they�re being hired by KBR but who are actually hired by these shell companies lose access to retirement benefits, unemployment assistance, and will receive less Social Security because of their years not paying into the system.
What U.S. taxpayers lose: If these employees had been paying into Medicare and Social Security like they were supposed to, �their tax bill would have been more than $500 million.� That�s money out of your pocket, folks.
KBR�s hypocrisy: Even as they claim these employees aren�t theirs to pay taxes on, �when a group of [shell-company] workers accused KBR of knowingly exposing them to cancer-causing chemicals at an Iraqi water treatment plant,� KBR claimed they were immune from the lawsuit under �the Defense Base Act of 1941 [in which] employers working with the military have immunity in most cases from such employee lawsuits.�
In other words, �When it benefits them, KBR takes the position that these men really are employees,� said Michael Doyle, the lawyer for nine American men who were allegedly exposed to the dangerous chemicals. �You don�t get to take both positions.� [Boston Globe]
What a scam!
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