WASHINGTON, DC—Representatives Rosa DeLauro and Lloyd Doggett today proposed a ban on Pentagon contracts with corporations that were incorporated in the United States, but have been reincorporated in the tax havens of Bermuda and the Cayman Islands. The proposal was offered as an amendment to the 2015 Department of Defense funding bill and was accepted by voice vote. They offered a similar amendment to the Fiscal Year 2015 Transportation-Housing and Urban Development Appropriations bill, which was included in the version passed by the House of Representatives last week.

“Companies should not be allowed to effectively renounce their US citizenship and then be rewarded with Pentagon contracts,” DeLauro said. “Just this week news broke that medical device maker Medtronic wants to buy its competitor Covidien and then 'move' to Ireland to avoid paying taxes. We have seen this game time and again with Chiquita, Pfizer and many others using the same playbook. They should not be allowed to pretend they are an American company when it is time to get defense contracts, then claim to be an offshore company when the tax bills comes. Awarding them contracts over companies who pay their fair share is adding insult to injury. In an era where we are cutting funding for education and biomedical research to not be cracking down on this kind of behavior is unconscionable."  

“Corporations that renounce their citizenship not only invert their business operations but pervert our laws,” said Doggett. “Today’s action sends a message to executives that they can pretend their company is located on some Caribbean beach to avoid taxes, but Congress is not going to put its head in the sand about their tax dodging.”

The ban would apply only to fiscal year 2015.


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