House Panel Votes To Punish Companies Which Move Offshore

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

11 July 2002

The Republican-led House Appropriations Committee voted on Tuesday to curtail government contracts for US companies which relocate offshore in order to minimize taxes.

Sponsored by Democrat Rosa DeLauro, the provision was added to an $18.5 billion bill funding the Treasury Department and other federal agencies next year. It was originally envisaged as barring companies which have performed 'corporate inversions' - such as manufacturing company Stanley Works, or consulting firms PricewaterhouseCoopers and Accenture - from all federal contracts.

However, as drafted, the provision may only cover contracts from the Treasury Department, the Postal Service, and certain other federal agencies covered by the bill.

Introducing the proposal, Ms DeLauro spoke emotively on the issue of offshore reincorporation, suggesting to the House of Representatives panel that:

'These are corporate traitors.We should not be willing to do business, as the US government, with those who want the benefits of US citizenship without the responsibilities that go with it.'

The 41 to 17 vote in favour of adding the provision to the funding bill came as President George Bush unveiled plans to impose tougher penalties on corrupt company executives.

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