Citi, Morgan Stanley, Not Paying Their Taxes

Add one more thing to the "no one could have imagined" file: The GAO reports that Citigroup and Morgan Stanley have been sneaking their money off shore so as to avoid paying taxes.

The new Government Accountability Office (GAO) report, released today by Sens. Byron L. Dorgan (D-N.D.) and Carl M. Levin (D-Mich.), lists Citigroup and Morgan Stanley as having set up hundreds of tax haven subsidiaries, along with American International Group and Bank of America. Also in the tax-haven list are well-known companies and such federal contractors as American Express, Pepsi and Caterpillar.


"This report shows that some of our country’s largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government," Dorgan said. "I think we should take action to shut down these tax dodgers, and we will be introducing legislation to do just that."

To illustrate the problem, Levin said the report found that Citigroup has set up 427 tax haven subsidiaries to conduct its business, including 91 in Luxembourg, 90 in the Cayman Islands and 35 in the British Virgin Islands. He said other havens include Switzerland, Hong Kong, Panama and Mauritius.

What Levin didn’t say, of course, is that these tax havens allow them to avoid financial oversight, too.

But I’m sure that won’t stop anyone from dumping billions of money into these firms–no questions asked–so they can continue to sneak the money off to the Caymans while the US goes broke. 

  1. foothillsmike says:

    The solution seems very simple to me. If they are nationalized don’t we get the subsidiaries too?
    91 hrs & 38 min

  2. BoxTurtle says:

    And these were just the firms stupid enough to design detectable tax havens. Imagine what the SMART corporations are doing.

    Boxturtle (If I buy a CDS in Britan naming a soverign entities debt (the USA) is that taxable in Puerto Rico?)

    • Synoia says:

      Taxable in Britan. Need to what out for the domiciled/resident trap in UK taxes.

      Residency is easy to change. Domicile not.

  3. bobschacht says:

    What really rattled my cage today was the news that Bank of America was asking for another $20B so it could complete it’s acquisition of Merrill Lynch! And its acquisition is not the only one being paid for by the taxpayer: TARP Funds Fueling Global Buyouts, Not Lending.

    Our government should be breaking up the banks, reviving Glass-Steagall, not fueling merger mania on Wall Street. We don’t need more “Banks that are too big to fail”, so that they can blackmail the Federal Government to bail them out whenever their greed gets out of hand.

    Bob in HI

    • freepatriot says:

      reviving Glass-Steagall

      the solution in a nutshell

      is that so fookin hard to understand ???

      we need to repeal the commodity futures modernization act of 2000 too

      can we repeal phil gramm all together ???

    • MsAnnaNOLA says:

      Thank you Bob!!!

      That is what I keep yelling at my TV!!! Where are the proposals to stop this madness and change the lax oversight that led to all this madness?

      What is that saying about fool me once?

      The Madoff whistleblower was trying to get the SEC to look at him for 10 years! 10 years people.

      Tear the SEC down and start anew. Have people checking the checkers.

      Change the rules or our shiny dollars are going to be worth copper pennies.

  4. BoxTurtle says:

    Too big to fail means too big to exist. If the economy can’t survive if a single firm folds, that firm needs to be broken up while it’s still healthy.

    Boxturtle (That would be one way to create a few jobs)

  5. Ugh6 says:

    I’m Shocked! Shocked that American corporations do not voluntarily pay the maximum amount in taxes they could possibly owe!

    Jeebus, spare me the outrage Dorgan/Levin. This has been widely and well known for decades. But now, ZOMG! Cayman corporations! Evil evil evil!

    That’s not to say they shouldn’t try to do something about it, but let’s not pretend we’ve newly uncovered some new form of “abuse” or “not paying their fair share” nonsense.

  6. bobschacht says:

    Hey, I hear that it is now past 5 PM EST, and no last minute barrage of pardons yet. Can Bushie still grant pardons? If so, how he tell us? How will we find out?

    I have the lingering hope that Bush & Cheney have enough hubris that they honestly don’t think they will need any pardons. Part of their Unitary Executive lunacy is that they are invincible. After all, Speaker Pelosi took impeachment off the table, didn’t she?

    What’s the deal?

    Waiting with bated breath,
    Bob in HI

    • freepatriot says:

      Can Bushie still grant pardons?

      this ???

      this is not the question

      the true question is:

      how bad can presnit bunnypants fuck up with the pardon pen before he leaves office ???

      we should start a pool

      I’m bettin he pardons Nicaragua (yes, the country)

      buck a guess, payout on wednesday afternoon

      anybody in ???

  7. freepatriot says:


    bill frist weighs in with his load of bullshit about george bush’s legacy

    apparently there is verifiable proof that george bush saved 10 million lives

    would that be, ah, “VIDEO” evidence, mister frist ???

    at the end of the day, you gotta admire frist’s stacking skills

    I come from a family of known bullshitters, and I never seen it stacked that high

  8. klynn says:

    So how do we put through legislation recalling bailout funds to those avoiding taxes with off shore accounts?

    How do we put through legislation for firms winning government contracts who then work at avoiding taxes with off shore financial havens?

    My guess is, if we were to receive the taxes based on the off-shore shelters, it just might cover the current bailout totals.

    • jussumbody says:

      Simple. We just tell them they need to pay back the TARP money immediately. If they can scrounge up the money from overseas, fine. Anyone who can’t scrounge up the money anywhere gets nationalized, and then we go bring the money back to the US cuz now it belongs to us.

    • MsAnnaNOLA says:

      Contractors who steal or break the law get on the black list for EVER!

      There should be no getting back in good graces.

      Bushies have not enforced any companies accused of stealing or fraud (Haliburton overbilling anyone?) being removed from being able to get a new contract with the government.

      This is kind of like the principal of Bush getting away with his crimes. If you can get away with it why would you ever stop. Oh and your bonus will be that much bigger too if you steal.

      Taxpayers will never miss the money.

  9. prostratedragon says:

    Then there’s this:

    Are greedy wolves making government-insured mortgages?

    Now that subprime is a dirty word and Wall Street firms are no longer making securities backed by loans to people with low credit scores, brokers and bankers are filling the void with a little help from Uncle Sam. They are making loans insured by the Federal Housing Administration (FHA).

    But who are these brokers and bankers doing FHA, which is meant to expand credit to folks of modest means?

    The same unregulated, nonunderwriting folks who inflated the last “subprime” bubble, that’s who. Only during the last tilt of the board they were kept out of the FHA line until almost the very end. That kept the FHA mortgage insurance pool relatively safe. Then.

    Therefore, a key regulatory priority for the new administration and presumed HUD secretary Donovan.

  10. masaccio says:

    The report is here. The study doesn’t tell us how much money we lost to tax havens. Here is the purpose:

    We had two objectives. Our first objective was to determine how many of the 100 largest publicly traded U.S. corporations in terms of revenue have subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions and the amount of federal contract obligations these corporations have, if any. Our second objective was to determine how many of the 100 largest publicly traded U.S. federal contractors in terms of contract obligations have subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions. We did not determine if corporations or contractors with subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions engaged in transactions or took other actions with regard to their subsidiaries in order to reduce their tax burden.

    Maybe we can do this in a future study.

  11. MartyDidier says:

    I just wrote a post on Turley Speaks Out On The Bush “Policy Of Crime”, please read. In this post I mention that we are in a White House Coup and give a couple of links to show you who my family is as they are involved. Please note the companies above as these people are involved in the Coup among others. Again, how I know is because I was in a family for more than 26 years who are directly involved. Again, the huge CIA involved Drug system is creating profits to FUND Clack-Ops in support of the Coup. It’s been going on for decades and involves many federal people including former Presidents. Remember Mena? That was Clinton’s baby and I heard all about Clinton while married.

    The Banks are near the top of this mess if my memory servers me correctly. The Coup was supposed to go into action after when “Something big was to happen” 911! We were supposed to see a collapse of our economy starting with Lending. If you look closely at how the laws were changed that once guarded this from happening following the Depression, you’ll notice that they were changed slowly and then picked up speed when Bush was President. Their goal is to eventually put us into Marital Law where the Detention Camps will open up. Remember the $380 million Bill granting Halliburton to build and run the Dentention Camps? When I was told all about this in the 90’s they were called Prisons. I was threatened then that “When “The Change” comes you’re either with us or not with us. Those with us will be thrown into the many prisons around the US.” This was back in the 90’s. Reading about the White house Coup in 1933 will explain more as it involves the same groups this time only there are many more of them. The Military back then wasn’t involved but this time there aer members who are. Californian is already experiencing Martial Law in some areas.

    There is a lot more for another time….

    Marty Didier