Tag Archives: offshore

Citizens for Safe Water Around Badger: Military must pursue alternatives to burning munitions

With President Barack Obama’s signature on the 2017 National Defense Authorization Act, a nationwide grassroots campaign to ensure the safe disposal of conventional munitions stockpile secured a key victory.

The amendment, written by U.S. Sen. Tammy Baldwin, D-Wis., will benefit hundreds of communities across the country where open air burning of hazardous waste is routinely conducted by the Departments of Defense and Energy, according to a news release.

“I have been working on cleaning up the Badger Army Ammunition Plant since I first entered Congress, so I was proud to fight for this reform to help other communities facing similar challenges,” Baldwin said, according to the release. “This provision will assist the military in using safer and more environmentally-friendly technologies to properly dispose of munitions to ensure that other sites are not contaminated the way that the Badger site was.”

“I was proud to support and help shepherd through the Senate, the FY 2017 National Defense Authorization Act which includes a provision important to Madison County and the Blue Grass Army Depot community allowing the Army to use cost-competitive technologies to safely and efficiently dispose of stockpiles of legacy conventional munitions,” added U.S. Sen. Mitch McConnell, R-Ky.

The new act requires the Secretary of the Army to enter into an arrangement with the National Academies of Sciences, Engineering and Medicine to conduct a study of the alternatives to the current practice of open burning the conventional munitions stockpile of the U.S. Department of Defense.

The Department of Defense manages conventional ammunition that includes items ranging from small arms cartridges to rockets, mortars, and artillery to tactical missiles.

As of February 2015, the stockpile of conventional ammunition awaiting demilitarization and disposal was approximately 529,373 tons.

By fiscal year 2020, the stockpile is expected to more than double, making the proper management and disposal of such large quantities of explosive materiel critical. 

“Open burning and detonation of munitions causes the uncontrolled dispersion of toxic heavy metals including chromium and lead, energetic compounds, perchlorate, nitrogen oxides and other munitions-related contaminants to the environment,” said Laura Olah, executive director of Citizens for Safe Water Around Badger in Wisconsin and an organizer with the Cease Fire Campaign – a national grassroots coalition of 60 environmental, labor, veterans and social justice organizations calling for safer alternatives. 

Sites like the Holston Army Ammunition Plant in Tennessee are currently permitted to open burn as much as 1,250,000 pounds net explosive waste per year — ignoring a 2012 Army Corps of Engineers study that concluded there are cutting-edge technologies that could be successfully deployed at Holston to replace open burning.

“There are over 100 hazardous chemicals released from open burning waste explosives and explosives-contaminated construction demolition debris that can be toxic and carcinogenic,” cautioned Connie & Mark Toohey with Volunteers for Environmental Health and Justice and residents living downwind of Holston. “Dioxins are highly toxic and cause cancer, reproductive and developmental problems, damage to the immune system and can interfere with hormones.”

Also, for more than 60 years, the U. S. military used the offshore Island of Vieques, Puerto Rico for training exercises with live bombing, experimental use of conventional and non-conventional weapons, testing with napalm, agent orange, uranium and open burning and open detonation (OB/OD),” said Myrna Pagan with Vidas Viequenses Valen. “For over 10 years now there is a process of cleanup and restoration underway where OB/OD continues to contaminate this small island.”

“OB/OD is a dangerous, toxic and outdated method that feeds a health crisis of alarming rates of cancer and other catastrophic diseases,” Myrna added.  “Our little children, our teen agers have more than three times the probability of dying from cancer than their peers in the rest of Puerto Rico. We citizens depend on responsible action from the government to protect our rights to good health in a safe environment. We deserve the use of reliable, alternative, advanced technologies to repair this disaster.”

The National Academy of Sciences study is due to Congress in 18 months. 

Study: 73 percent of Fortune 500 companies playing offshore shell game

More than 73 percent of Fortune 500 companies maintained subsidiaries in offshore tax havens in 2015, according to “Offshore Shell Games.”

The new study was released this week by the U.S. PIRG Education Fund, Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

Collectively, multinationals reported booking $2.5 trillion offshore, with just 30 companies accounting for 66 percent of this total.

By indefinitely stashing profits in offshore tax havens, corporations are avoiding up to $717.8 billion in U.S. taxes.

“Corporate tax dodging may be legal, but it’s certainly not good for everyday taxpayers and responsible small businesses,” Michelle Surka, advocate with U.S. Public Interest Research Group, said in a news release. “It disadvantages small businesses that don’t have scores of tax lawyers, creates an economic environment that favors accounting tricks over innovation and real productivity, and forces the rest of us to foot the bill. We’re beginning to see a growing international interest in cracking down on corporate tax dodging, and with $717.8 billion on the line, it’s time for the United States to start doing the same.”

“Every year, corporations collectively report that they have tens of billion more in cash stashed offshore than they did the year before, “ added Matthew Gardner of the Institute on Taxation and Economic Policy. “The hard fact is that the U.S. tax code incentivizes tax haven abuse by allowing companies to indefinitely defer taxes on offshore profits until they are ‘repatriated.’ The only way to end this kind of tax avoidance is by closing the loopholes in the tax code that enable it.”

Key findings of the report:

• 367 Fortune 500 companies collectively maintain 10,366 tax haven subsidiaries. The 30 companies with the most money booked offshore for tax purposes collectively operate 2,509 tax haven subsidiaries.
• 58 percent of companies with any tax haven subsidiaries registered at least one in Bermuda or the Cayman Islands, countries with no corporate tax. The profits that American multinationals collectively claim to earn in these island nations totals 1,884 percent and 1,313 percent, respectively of each country’s entire yearly economic output, an impossible feat.
• The 30 companies with the most money booked offshore for tax purposes collectively hold nearly $1.65 trillion overseas. That is 66 percent of the nearly $2.5 trillion that Fortune 500 companies together report holding offshore.
• Only 58 Fortune 500 companies disclose what they would expect to pay in U.S. taxes if these profits were not officially booked offshore.In total, these 58 companies would owe $212 billion in additional federal taxes, equal to the entire state budgets of California, Virginia and Indiana combined. The average tax rate the 58 companies currently pay to other countries on this income is a mere 6.2 percent, implying that most of it is booked to tax havens.

The study highlights the following companies:

Apple: Apple has booked $214.9 billion offshore — more than any other company. It would owe $65.4 billion in U.S. taxes if these profits were not officially held offshore for tax purposes. A recent ruling by the European Commission found that Apple used a tax haven structure in Ireland to pay a rate of just 0.005 percent on its European profits in 2014, and has required that the company pay $14.5 billion in back taxes to Ireland, where the company was paying significantly less than even the tax haven’s standard low tax rate. A U.S. Senate investigation in 2013 uncovered Apple’s two Irish subsidiaries that were tax residents of neither the United States, where they are managed and controlled, nor Ireland, where they are incorporated.
Nike: The sneaker giant officially holds $10.7 billion offshore for tax purposes on which it would owe $3.6 billion in U.S. taxes. This implies Nike pays a mere 1.4 percent tax rate to foreign governments on those offshore profits, indicating that nearly all of the money is officially held by subsidiaries in tax havens. The shoe company, which operates 931 retail stores throughout the world, does not operate one in Bermuda.
Goldman Sachs: Goldman Sachs reports having987 subsidiaries in offshore tax havens, 537 of which are in Bermuda despite not operating a single legitimate office in that country, according to its own website. The bank officially holds $28.6 billion offshore.
The report concludes that to end tax haven abuse, Congress should end incentives for companies to shift profits offshore, close the most egregious offshore loopholes, strengthen tax enforcement and increase transparency.

Offshore accounts hide wealth, avoid taxes

Privacy has a price. For the super-wealthy, it can also have a big payoff. The use of offshore accounts and favorable laws in certain countries can allow rich individuals and families to keep their money hidden from the eyes of tax authorities, regulators and others in their home country.

Here’s a look at how offshore accounts are used, both legally and illegally, in the wake of an investigation by an international coalition of media outlets that shows how the rich and powerful use banks, law firms, trusts and offshore shell companies to hide their assets.

WHAT ARE THESE ACCOUNTS?

They are bank accounts or trusts established in a foreign country that take advantage of local banking and corporate laws to help hide the true identity of the owner of the money or other assets in the accounts.

Often, the person establishes a so-called shell company, which lacks any real operations and exists mainly on paper. In many jurisdictions and some U.S. states, companies can be created without identifying an owner.

The company – with no person linked to it – is listed as the official owner of the trust or account. That allows the wealthy person to control the account indirectly, through the company, and makes it harder for authorities to link the money to the individual.

While shell companies and offshore accounts aren’t illegal by themselves, they can be used to help avoid taxes, facilitate money laundering and conceal corruption.

WHERE ARE OFFSHORE ACCOUNTS HELD?

Those looking to hide assets establish accounts in countries like Panama, the Cayman Islands and Bermuda, where the banking laws are designed to vigorously protect account owners’ identities.

In recent years, the U.S. Federal Bureau of Investigation and the Internal Revenue Service have found millions of dollars in taxable income hidden in secret accounts in the Caribbean.

There also are havens like the Isle of Man off Britain, Macau off China and the Cook Islands in the South Pacific. Some European countries like Switzerland, Luxembourg and Monaco have also served as havens for those trying to avoid taxes, though many nations have tightened banking laws to combat tax cheating.

ARE THERE LEGITIMATE REASONS FOR THESE ARRANGEMENTS?

It’s possible, but don’t bank on it, says Jimmy Gurule, a former assistant U.S. attorney general and undersecretary for enforcement at the Treasury Department. The likelihood is strong that the entity has “no commercial or legitimate purpose,” said Gurule, who teaches law at Notre Dame. The Caymans, for example, “has a well-deserved reputation for being a money-laundering and tax-evasion haven.”

The country’s banking laws made it more difficult for him and his colleagues in U.S. law enforcement to investigate and prosecute cases, Gurule said.

Still, wealthy people who live in countries with unstable political situations, high levels of corruption, or high levels of criminal activity such as kidnapping or extortion could use offshore accounts and the secrecy they provide for protection, and not necessarily to avoid taxes.

ILLICIT USES OF OFFSHORE ACCOUNTS

The anonymity afforded by shell companies and offshore accounts allows them to be used by terrorists and other international criminals to hide and move money.

They’re an ideal vehicle for people “who want to keep their transactions secret to escape law enforcement or civil liability,” said Jack Blum, a Washington attorney who’s an expert on financial crime and international tax evasion.

Terrorist groups’ use of shadowy financial networks has been scrutinized by law enforcement agencies, and the U.S. government has applied sanctions to a number of groups hoping to cut off their access to the U.S. financial system. Lawmakers say they’ve been hindered, though, by a lack of consistency in policies among the various national and international agencies involved in fighting terrorist financing.

EFFORTS TO CRACK DOWN

Congress passed a law in 2010 called the Foreign Account Tax Compliance Act to target U.S. taxpayers who may be hiding money in foreign accounts. The leaders of the Group of 20 – representing 80 percent of the global economy – have recently worked to get its members to adopt stricter reporting requirements to prevent secret dealings. Anti-corruption advocates say legal standards have improved, but are not tough enough.

On Monday Angel Gurria, the secretary general of the Organization for Economic Cooperation and Development, which is working with the G-20 to restrict the use of shell companies, called on Panama to “put its house in order” and implement transparency standards. It was a leak of 11.5 million documents from a Panamanian law firm that specializes in creating shell companies that led to revelations of widespread use of these companies and accounts to avoid taxes.

Offshore wind industry has hopes for East Coast

The offshore wind industry has high hopes for establishing a permanent beachhead in the U.S. after years of disappointment.

Business leaders and politicians who gathered for an industry conference in Boston this week said wealthy investment firms and seasoned European offshore wind companies are increasingly committing to projects along the East Coast. That, they said, is evidence a domestic industry dreamed about for nearly two decades is finally on its way.

“There’s a palpable sense that it’s finally happening,” said Bryan Martin, a managing director at D.E. Shaw & Co. That New York hedge fund is the principal backer of Deepwater Wind, a Rhode Island-based company looking to launch the country’s first offshore wind farm off Block Island by the end of the year. “The U.S. tends to start small and ramp up very fast. I believe that will happen with offshore wind.”

Among the significant new players to emerge in the past year is DONG Energy, a Danish firm that operates more than a dozen wind farms, including some of Europe’s largest.

The government-owned company has leased roughly 187,000 acres of federal waters about 15 miles south of Martha’s Vineyard in Massachusetts and recently announced intentions to seek a second federal lease in waters off New Jersey.

“Massachusetts has some of the best offshore wind conditions in the world, and the peak wind speeds match the peak demand times for energy, so that is why we see so much potential,” says Lauren Burm, a Boston-based spokeswoman.

OffshoreMW, which is owned by the private equity giant the Blackstone Group and has ties to a company that recently completed a wind farm in Germany’s North Sea, has also joined the fray in Massachusetts, securing federal development rights to an area near DONG’s lease. So, too, has Deepwater Wind.

Elsewhere, Renexia, an Italian company specializing in renewable energy projects, is backing a project about 15 miles off Ocean City, Maryland.

The new players are helping the industry move past the stumbles of Cape Wind, the once-high-profile project proposed for the waters off Cape Cod, Massachusetts, that never quite got off the ground. The project has been bogged down for years in a bitter and costly legal fight with wealthy property owners, including billionaire William Koch.

“To have steel in the water and to be talking about an existing domestic offshore wind industry is really critical,” says Nancy Sopko of the American Wind Energy Association, referring to Deepwater Wind’s Rhode Island project. “We’re talking about an industry that is here, not one that is coming.”

Matthew Morrissey, head of Offshore Wind Massachusetts, an industry advocacy group, says the expected closure of a number of coal and nuclear-powered energy plants in New England in the coming years also presents an opportunity for the industry. The region faces a major energy-production drop-off, and Morrissey says his industry is positioned to help fill that void.

But Audra Parker, head of the Alliance to Protect Nantucket Sound, the opposition group fighting the Cape Wind project, says it remains to be seen how much power will cost from these offshore wind projects. Offshore wind power, she noted, is more costly to produce than natural gas or other forms of renewable energy like solar power or land-based wind turbines.

Martin, of D.E. Shaw & Co., says technological advances already in place in Europe — like larger, more powerful turbines — will help bring the cost of offshore wind power down, though he and other developers have so far declined to say by how much, citing the competitive nature of the business.

Study: Offshore wind v. offshore drilling

Offshore wind could produce twice the number of jobs and twice the amount of energy as offshore drilling in the Atlantic Ocean, according to the environmental group Oceana.

The group challenges recent claims by the oil and gas industry that opening the East Coast to offshore drilling would lead the United States to energy independence, generate millions of dollars in revenue for states and create thousands of jobs.

Oceana said in its analysis, the benefits projected by the industry are exaggerated, due to the inclusion of oil and gas resources that are not economically recoverable. Industry estimates also rely on an assumption of a state revenue-sharing system that does not exist.

Oceana, in a report released in mid-January, also finds that offshore oil and gas development along the Atlantic could put at risk some of the nearly 1.4 million jobs and over $95 billion in gross domestic product that rely on healthy ocean ecosystems, mainly through fishing, tourism and recreation.

Other key findings:

• In 13 years, offshore wind could generate more energy than could be provided by all of the economically recoverable offshore oil and gas resources.

• In the next 20 years, offshore wind could create about 91,000 more jobs than offshore drilling — about double the job creation potential of offshore oil and gas.

• A modest and gradual development of offshore wind on the East Coast over the next 20 years could generate enough energy to power over 115 million households.