Enron Accused Of Excessive Use Of Offshore Havens

by Leroy Baker, Tax-News.com, New York

21 January 2002

In the latest development in the Enron saga, it was revealed last week that the troubled former energy-trading giant made extensive use of subsidiaries in offshore jurisdictions in order to avoid paying US taxes.

Although many multinational companies, in the US and elsewhere, make use of offshore partner organisations quite legitimately, eyebrows have been raised by the sheer number of subsidiaries Enron had amassed.

According to Citizens For Tax Justice, the organisation which compiled the analysis of Enron's corporate structure, the giant company's almost 900 subsidiaries in Turks and Caicos, Mauritius, and Bermuda among other locations meant that between 1996 and 2000, Enron only paid US tax once, despite claiming hundreds of millions of dollars in refunds from the United States Government.

Two Enron subsidiaries also stand accused of engaging in bogus transactions from an offshore location, according to the Federal Bankruptcy Court in New York.

Mark Palmer, a spokesman for the former energy-trading company, last Wednesday refused to comment on the allegations that Enron had made rather excessive use of offshore partners for tax minimisation purposes.

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