Powerful GOP leaders linked to tax-avoidance
WASHINGTON — Two top Republican lawmakers profited from a corporate tax-avoidance maneuver that the Treasury Department is seeking to curb.
While House Speaker John Boehner, Ohio, and Ways and Means Committee Chairman Dave Camp, Mich., have resisted calls for a crackdown on companies adopting overseas addresses to pay lower taxes, both have made money off one of the deals. They also have investments at risk of losing value because of government action.
The two lawmakers reported the sale of stock in Covidien within nine days of Medtronic saying it was planning a takeover, an announcement that sent Dublin-based Covidien’s shares near a 52-week high. The deal, one of several that have sparked a national debate over U.S. corporate tax policy, would put the combined company’s headquarters in Ireland and reduce its tax rate.
Boehner, the top Republican in Congress, and Camp, whose committee controls tax policy, haven’t backed a proposal by President Obama and Democrats for a retroactive law that would penalize the Medtronic-Covidien deal and seven others.
According to an analysis of public disclosures, the lawmakers still hold Medtronic shares — and Camp bought additional stock after the medical-device maker announced the transaction. Those holdings, though only a small part of the two multimillionaires’ stock portfolios, give them an interest in the deal’s completion, along with their ability to influence the outcome.
Their actions are legal, and spokesmen for both say the congressmen weren’t involved in the financial decisions and that the trades were made by their investment advisers. Still, the two lawmakers, who have more sway over tax policy than any other House members, are invested in deals that Obama and other Democrats say are wrong and unpatriotic.
A Bloomberg News review of public filings of congressional leaders and members of the tax committees found at least five other lawmakers with investments in companies involved in inversion deals.
“The opportunities for being swayed by that are legion,” said Miles Rapoport, president of Common Cause, a Washington- based group that advocates for open government. “This is not a small issue where we wonder whether legislators are acting entirely in the public interest or whether somewhere in their mind it’s about how they will fare themselves.”
Michael Steel, spokesman for Boehner, said in an email, “Speaker Boehner is not involved in day-to-day stock trades. He delegated that authority to an investment adviser, who has handled such transactions for years.”
Camp “releases a full and complete disclosure of his personal finances on a regular basis,” said his spokesman, Sage Eastman. “A firm handles all trades, and the chairman is not involved in the day-to-day investment decisions.”
