TO THE EDITOR:
“A French Shift on Africa Strips a Dictator’s Son of His Treasures” (Paris Journal, Aug. 24) highlights the need for Congress to take action to abolish anonymous shell corporations. These secretive entities helped enable President Teodoro Obiang Nguema Mbasogo’s son to launder more than $100 million of ill-gotten gains through American banks to finance his lavish lifestyle while ordinary Equatorial Guineans remain mired in poverty.
Corporate America, in part through the now-dissolved WIN America Campaign, has spent a good portion of the last few years lobbying for a tax holiday. They asked Congress to allow them to repatriate deferred tax dollars that are sitting offshore and pay a very low tax rate, instead of the 35 percent that they owe. U.S. companies are allowed to wait to pay taxes on “foreign” income until they bring the money back into the United States. I put the word foreign in quotes because we know that “foreign” income is often just the result of abusive transfer pricing, not real income, as evidenced by a story in the New York Times this spring. Billions and billions of dollars from corporate profits sit in offshore bank accounts, often completely untaxed.
Rafael Espada
Global Financial Integrity
Several Latin American leaders have proposed legalizing aspects of the drug trade in recent months, clearly acknowledging that the current strategy in the war on drugs is not working. They are correct in highlighting the flaws in the traditional approach to battling illicit narcotics, but do we really need to wave the white flag? Or do alternative approaches still exist to curtail the illicit drug trade?
The United States has a strong national interest in economic, political and civil stability in Mexico. Its war against transnational drug cartels has dramatically highlighted Mexico’s problems, but the truth is that the nation has had deep, unsolved, structural problems in its economy and an opaque international financial system for decades.
Global Financial Integrity’s report on Mexico found that $872 billion in illicit finances left the country from 1970 through 2010. Although some laundered drug money may be included in that figure, it overwhelmingly represents tax evasion by both domestic and multinational corporations doing business in Mexico, as well as corruption, kickbacks and bribery from wealthy Mexican public officials and business leaders.
Why Not Address the Practical Difficulties of Retrieving the Illicit Assets Held Abroad by Indian Citizens
In his forward to the government’s white paper released on May 16, the finance minister acknowledged that black money has a “debilitating effect” on governance and the conduct of public policy in India. The paper’s review of the work done at Global Financial Integrity (GFI) on illicit financial flows from the country is clear and comprehensive and we commend the government’s efforts to develop policy measures to curtail the generation and cross-border transmission of these flows. Ongoing discussions among and between various stakeholders in the world’s largest democracy can in time coalesce public opinion on the required policy measures.
TO THE EDITOR:
Holman W. Jenkins Jr.’s ambivalent portrait of the Wal-Mart of Mexico bribery scandal in his April 25 Business World column “Wal-Mart Innocents Abroad” overlooks the fact that bribery is not a victimless crime. If the allegations are true, Wal-Mart was bribing local government bureaucrats to skirt environmental regulations, rewrite zoning laws and intentionally expand itself faster than any of its competitors could possibly, legally, match.
Tom Cardamone
TO THE EDITOR:
James B. Stewart does such an entertaining job of illustrating the effort many of New York’s richest non-residents put into avoiding city taxes that a reader might be excused for cheering them along, just as I did with Leonardo DiCaprio’s character in the similarly named movie (“Tax Me If You Can,” March 19th). However, the actions of such tax evaders do a great disservice not only to working-class New Yorkers but to all Americans currently suffering from cuts in health care, education, and other essential services as a result of empty government coffers. Amusing as the games of the rich might be, one need only look at Athens in order to see the possible consequences. At the end of the day, even DiCaprio’s character ended up behind bars.
Amendment Would Raise $900 Million Over 10 Years
WASHINGTON, DC – Global Financial Integrity (GFI) today joined several other civil society organizations encouraging U.S. Senators to support the offshore tax evasion amendment (S.A. 1818) to the highway reauthorization bill. The amendment, sponsored by Senators Carl Levin (D-MI) and Kent Conrad (D-ND), is expected to come up for a vote this evening.
