Paul Wellstone

Mr. WELLSTONE

Mr. WELLSTONE. I sent the list over to you. I think you have a list that lists some of the companies that would be affected by this.

Mr. WELLSTONE. These are the countries that reincorporated.

Mr. WELLSTONE. It would apply to only those companies--what I am trying to do----

Mr. WELLSTONE. That is correct.

Mr. WELLSTONE. I am trying to follow the list and where the Senator is.

Mr. WELLSTONE. That is right. You mentioned it, but I have to go down and find it in the column.

Mr. WELLSTONE. I say to my colleague, if I could, since he asked the question--let me say this and be real clear about it. I wrote probably the first legislation here eliminating this action and that is moving through the Finance Committee and it will come to the floor. I hope in the future all these companies will be covered, period. Second, if you want to reach back, you can do so and that would be just fine with me. My thinking is that I took a look at--I am thinking of two issues. No. 1, just sort of this loophole and, No. 2, I think of 9/11 and I say, look, given 9/11, you can give companies some flexibility to understand that it doesn't seem very patriotic to continue to do this. For God's sake, from the beginning of this year on, all companies-- anybody that does this in the future is in trouble.

Mr. WELLSTONE. You will find a number of them.

Mr. WELLSTONE. Department of Defense.

Mr. WELLSTONE. That is correct.

Mr. WELLSTONE. That is right. But there is a portion of the tax that they should be paying that they are deliberately evading. That is unacceptable. If that is their practice--and that is what this amendment does--don't expect to be getting these contracts any longer.

Mr. WELLSTONE. That is correct.

Mr. WELLSTONE. I am told--I say to my colleague, I am not a tax expert--they may not actually pay all their taxes on U.S. contracts. But, in addition, what is egregious about this--and I say to my colleague from Oklahoma, if he wants to vote no, he can vote no. This is a pretty simple proposition, which is, if you are going to renounce your U.S. citizenship so you can locate in some other country where you don't do business so you can avoid paying part of the taxes you should be paying so that other businesses and other companies and other Americans have to pay those taxes, you renounce your citizenship and you will not be eligible for these defense contracts. It is that simple.

Mr. WELLSTONE. That is correct. But I say to my colleague, this is about American companies. I am going to be clear about that. This is about an egregious practice. This is about good corporate citizenship. This is about being patriotic and about saying to these companies, in all due respect, you can come back home. You don't need to renounce your citizenship, in which case you are eligible. But if you continue to exploit this egregious tax loophole, then you are not going to be eligible. It is that simple.

Mr. WELLSTONE. I say to my colleague, maybe they should be, but they are not. It is after December 31.

Mr. WELLSTONE. If the Senator wants to make it tougher, we will make it tougher.

Mr. WELLSTONE. Mr. President, I will take 10 seconds because I know the Senator from Texas wants to speak, and then I will respond later before the vote. I first want to thank the whip and make a technical point. Actually, contracts are not----

Mr. WELLSTONE. I would be pleased to.

Mr. WELLSTONE. I would say to the whip, I am trying to be a moderate today. I do not know whether I want to respond to that question, but it sounds to me as if the question is going in the right direction. I point out that I do not really think this is a big issue, but technically--I have already thanked about four or five times both Senator Baucus and Senator Grassley for moving this bill. I introduced the bill that says we ought to eliminate this egregious tax loophole. Technically, the Finance Committee does not have jurisdiction over contracts. Let me make that clear. Second, let me also make one other thing clear: That to the people in the coffee shops in Minnesota and the coffee shops in all of our States, American citizens, this whole jurisdictional battle is not really all that important to them. They believe if these companies are going to renounce their citizenship, go abroad, set up these dummy corporations--and by the way, quite often they use those new structures to shift earnings from the U.S. branch to the foreign branch so they do not have to pay their fair share of taxes--and that could include earnings from Government contracts--that they do not pay their fair share of taxes. Frankly, most people in the country say: Come home, declare your American citizenship, then you are eligible. If not, you are not. It is that simple. I hope this amendment will have a strong vote. I can talk a lot more about it, but I know my colleague from Texas is in the Chamber, and I always look forward to what he has to say.

Mr. WELLSTONE. Mr. President, we had a long debate this afternoon. My understanding is that my colleagues are going to accept the amendment. I am appreciative of that. I think it is a very good amendment. I think it is important to have good, strong bipartisan support. I thank Senator Durbin and Senator Reid, our whip, for their help. And if it is OK with them, I ask unanimous consent they be added as cosponsors to my amendment.

Mr. WELLSTONE. I am looking at just a few editorials and op-ed pieces. I will quote from them and do it in 3 minutes so we can get on with this vote: The trouble is that hinting, even by silence, that it's O.K. not to pay taxes is a dangerous game, because it can quickly grow into a major revenue loss. Accountants and tax planners have taken the hint; they now believe that it's safe to push the envelope. . . . Furthermore, what does it say to the nation when companies that are proud to stay American are punished, while companies that are willing to fly a flag of convenience are rewarded? That was from columnist Paul Krugman of the New York Times, May 14: Even more galling is the fact that many of the same companies are giving the taxman the brushoff as they shield themselves with their Bermuda ZIP codes think nothing of holding out their hand when Uncle Sam is doling out government contracts. That is from columnist Arianna Huffington, LA Times, May 15. I ask unanimous consent material from the New York Times to the Houston Chronicle, to the Springfield Union News editorial, to the Philadelphia Inquirer--there is a ring of editorials and opinions on this question, and I ask unanimous consent they be printed in the Record.

Mr. WELLSTONE. I am pleased to yield.

Mr. WELLSTONE. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. WELLSTONE. I thank the Senator from Connecticut. Mr. President, I just want to also, for the record, say I have spoken to Senator Grassley, who said he would be very proud to be a supporter. And I talked with the staff of both Senator Grassley and Senator Baucus, and we want to work together on exactly what the reach of this is. We will work hard on that in conference. The date of 9/11 has been mentioned more than once. The truth is, it also ties into Enron and WorldCom and all the rest. Frankly, people are tired. Thank goodness there are many corporations and businesses that are very good corporate citizens, but people are really tired of this. This is an egregious practice. Again, this amendment puts everybody on notice, forthwith, actually reaching back to January 1 of this year, if you are going to go to another country and set up a dummy corporation and then shift some of your profits to that corporation and not pay taxes, you are not going to be eligible for any of the defense contracts.

Mr. WELLSTONE. I move to reconsider the vote.