Blackwater: Dubious claims
Last updated March 16, 2008 4:52 p.m. PT
SEATTLE POST-INTELLIGENCER EDITORIAL BOARD
Earlier this month, The Boston Globe reported that former Halliburton subsidiary Kellogg Brown & Root uses offshore shell companies to avoid paying hundreds of millions in Social Security taxes and Medicare.
To circumvent tax laws, the firm registers its American contractors in Iraq as employees of one of its two Caribbean shell companies.And now a House Democrat is seeking a federal investigation into Blackwater Worldwide, a major war contractor. Rep. Henry Waxman says he has concerns that Blackwater's claims of business status, which he wrote in a letter sent out last week, "appear dubious." Indeed. Blackwater lists its security guards as independent contractors in order to be eligible for certain benefits, including federal small-business contracts.
How can a company that earns $1.25 billion in business contracts be eligible for $144 million in small-business contracts as well? Doing so, according to The New York Times, afforded Blackwater more than $31 million in avoided taxes.Waxman points out that when it comes to protecting Blackwater guards, the company maintains that they are employees, but when it financially benefits from it, the company claims them only as independent contractors.
Given that U.S. taxpayers are on the hook for the contractors' insurance benefits and premiums, it seems only fair that the company pay its share in taxes.Knowing what we know about Blackwater, we urge federal investigators -- especially the Internal Revenue Service -- to take a close look at the company's dealings.
Enough is enough.
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Raymond Lutz, CoordinatorCitizens' Oversight Projects (COPs)
P.O. Box 252
El Cajon (San Diego Cty), CA 92022
USAVoice 619-820-5321
