June 29, 2009

Our bailout, their Rum

There are lots of stories like this ready to crawl out of the woodwork. From Bloomberg:
Bailout of U.S. Banks Gives British Rum a $2.7 Billion Benefit
In June 2008, U.S. Virgin Islands Governor John deJongh Jr. agreed to give London-based Diageo Plc billions of dollars in tax incentives to move its production of Captain Morgan rum from one U.S. island -- Puerto Rico -- to another, namely St. Croix.

DeJongh says he had no idea his deal would help make the world�s largest liquor distiller the most unlikely beneficiary of the emergency Troubled Asset Relief Program approved by Congress just four months later.

Today, as two 56-foot-high (17-meter-high) tanks for holding fermenting molasses will soon rise from the ground on the Caribbean island of St. Croix, the extent to which dozens of nonbank companies benefited from last October�s emergency financial rescue plan is just beginning to come to light.

The hurried legislation adopted by a Congress voting under the threat of sudden global economic collapse led to hidden tax breaks for firms in dozens of industries. They included builders of Nascar auto-racing tracks, restaurant chains such as Burger King Holdings Inc., movie and television producers -- and London�s Diageo.

�It�s kind of like the magician�s sleight of hand,� says former House Ways and Means Committee Chairman William Thomas, a California Republican who ran the committee from 2001 to 2007 and oversaw all tax legislation. �They snuck these things in a bill that was focused on other things.�
The article goes into great detail on several of these scams. Everyone in Congress had their pet project they wanted to fun. Pork writ large. What was Obama's campaign promise again? Government transparency and cutting back on Pork? Posted by DaveH at June 29, 2009 8:47 PM
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